Jammu & Kashmir High Court
Ram Kour Behari Lal vs State Of J&K And Ors on 8 March, 2012
Author: J.P.Singh
Bench: J.P.Singh
HIGH COURT OF JAMMU AND KASHMIR AT JAMMU. OWP No. 1696 OF 2011 Ram Kour Behari Lal Petitioners State of J&K and ors Respondent !Ms. Vishal Goel, Advocate ^Mr. Z.S.Watali, Dy.AG. Mr. Rajnesh Raina, Advocate Honble Mr. Justice J.P.Singh, Judge. Date: 08.03.2012 :J U D G M E N T
The Government of Jammu and Kashmir issued Abbreviated Tender Notice inviting tenders from Government/Semi Government Department/Approved Suppliers/Original Manufactures/Authorized Distributors for supply of Nutrition items. One of the items indicated in the Notice was for supply of 450 quintals of Nutri Reputed brands only.
The petitioner M/S Ram Kour Behari Lal and Ajay Food Products-respondent No.3 submitted their Tenders along with other contenders. Whereas the petitioner offered Rs.34.48 per kilogram, the respondent quoted Rs.35.25 to supply Nutri. The Contract was later issued in favour of respondent No.3 to supply of Nutri at the rate of Rs.34.00 per kilogram.
The petitioner has approached this Court questioning 2 the Award of Contract for supply of Nutri to respondent No.3.
Learned counsel for the petitioner contended that being an authorized Distributor of R.S.Industries, a Small Scale Industrial Unit Gangyal, Jammu, it was entitled to supply Nutri to the state-respondents in view of its lower tendered rates than that of respondent No.3. It is submitted that respondent No.3 was not entitled to any Price Preference in terms of the New Industrial Policy, 2004 promulgated vide Government Order No.21-Ind of 2004 dated 27.01.2004, for, the Price Preference would become relevant only if there was an Outside State Unit seeking consideration for allotment of Contract. According to the petitioner, the State-respondents had acted illegally in inviting respondent No.3 alone for negotiations ignoring the petitioners right to participate in the negotiations for supplying material on rates lower than the one it had offered earlier.
Learned counsel appearing for the State and private respondent submitted that the petitioner was not entitled to Price Preference or participation in negotiation because it had not participated as an agent or distributor of the Small Scale Industrial Unit. It is submitted that the Price Preference was available to Small Scale Industrial Units even if there were no Outside State Unit(s) in competition. According to the State-respondents the petitioner had participated in competition as General Trading Unit and deposited Rs.5.00 lac, which was required to be deposited by 3 such type of Units and in this view of the matter it could not claim Price Preference which was available only to Small Scale Industrial Units, which had to deposit only Rs.5000/- for participation in competition and not Rs.5.00 lac which Units other than Small Scale Industrial Units would do. I have considered the submissions of learned counsel for the parties and perused the Industrial Policy, 2004 and Package of Incentives for development of Industries in Jammu and Kashmir promulgated vide Government Order No.21-Ind of 2004.
The first plea projected by the petitioner that it was entitled to Price Preference like any other Small Scale Industrial Unit is found without merit, in that, having participated in the competition for award of Contract as a General Trading Unit depositing FDR of Rs.5.00 lac and not as a Small Scale Industrial Unit, the petitioner was not entitled to the incentives which were available only to Small Scale Industrial Units.
Before dealing with the second issue that falls for consideration as to whether or not the respondent was entitled to Price Preference because of its status as Small Scale Industrial Unit, regard needs to be had to the provisions of Clause 3.7 of the Package of Incentives forming part of Government Order No.21-Ind of 2004. It reads thus:-
3.7 Price/Purchase Preference
i) Upto 15% Price Preference shall be available on the landed cost of the product to the local SSI units, in all government purchases. The price preference shall also apply in case of any goods purchased by the public sector 4 undertakings/boards purchased for their own noncommercial use.
Explanation:
A local SSI units will be entitled to upto 15% price preference vis-a-vis lowest tendered rates by an out side unit, which means that if the rates quoted by a local SSI unit is within the difference of 15% between the rates as quoted by local units and lowest outside tender, the orders shall be placed with local unit. In other words a unit holder shall be entitled to payment as per his quoted rate provided the same is within the maximum limit of 15% of the lowest quoted rate by an outside unit holder.
ii) The price preference shall not cover items purchased by the public sector undertakings and boards who may use such goods as raw material, consumables, or packaging materials, which are, in turn meant to be sold on commercial basis either to the government departments or to the private consumers or to the private consumers or in the open market.
The Government to the local SSI unit departments/public sector undertakings Board etc. shall give preference to the local SSI unit over an outside state unit for purchase of items if otherwise of equivalent quality and if it has enough registered capacity.
iii) Nothing contained in a proceeding para shall, mean to restrain the government from purchasing or allowing any of its departments/boards corporations to purchase any consumption commercial goods from another manufacturing organizations of the Government such as JKI, JKML, SIDCO, Agro Industries Corporation, J&K Handloom, Development Corporation, KVIB etc. whether without or after inviting tenders.
iv) In all other cases, where the price preference applies, the following procedure shall be followed, in suppression of any other government departmental instructions, if issued to the contrary, to encourage the sustainability and growth of SSIs in the State:-
a) Every purchase committee of the Government departments shall include a member from the Directorate of the I&C, not below the rank of a General Manager.
Any Committee constituted without any such representatives of DIC shall void ab initio.
b) If the goods offered by a registered SSI unit carry quality mark for example of BIS, FPO etc. or if the goods otherwise are of standard quality, duly verified an certified by the user department, and if the rate quoted by the SSI unit is within 15% of the lowest rate quoted by any other tender not being another local registered SSI unit, then the Purchase Committee shall decide to place order on such local registered SSI units without further negotiating the price. If the local SSI unit has the requisite registered capacity to meet the tendered requirement.
c) If the rate quoted by the local registered SSI unit(s) is 5 not within 15% of the Committee may negotiated rate with the local registered unit(s) and place orders on such negotiated rate.
d) No tender from a local registered SSI unit shall be rejected in contravention of the aforementioned instruction. In case the purchase committee faces any difficulty in carrying out these instructions, it will refer the matter to the I&C Department in the secretariat and the decision of the Department in the matter shall be final and binding on the purchase committee/the department.
e) If a local registered SSI unit is on rate contract with the DGS&D, DG QA, NSIC etc. for a particular item needed by a Government department, it may purchase the item from such SSI unit without inviting tenders.
f) It would be lawful for any local registered SSI unit to quote through SICOP or to seek supply order through SICOP or to request/authorize SICOP to represent its case before the purchasing department. In all cases, SICOP shall be treated at par with the SSI unit or units whose case it may be representing for all matters connected with the finalization of the contract, delivery of supplies and the price preference.
g) No purchasing department shall force or cause any local registered SSI unit to get more quality tests conducted at its own cost if such limit is registered with the BIS, DG S&D, DG QA etc. for ISI/ISO 9000/FPO mark.
h) No purchasing department shall tender for purchase of any item with branded/patented name of any manufacturer or supplier if such items of acceptable specifications are available from the local industry.
i) If the department supplies raw material to a local registered SSI unit, directly or through SICOP, such as steel billets, wire rods for conversion into the end product required, such as structural steel, crate wire etc. the conversion rate may be worked out by the concerned administrative department (such as PWD) and a rate contract sanctioned.
j) For any item where the market price for the goods manufactured by mills are controlled by statutory orders, which are not applicable to the SSI units, the price preference may be negotiated on the basis of such statutory rates. A plain reading of the Clause appearing in the Package of Incentives indicates the governmental intention of allowing Price Preference on the landed cost of the product to local SSI Units on all government purchases. The intention gets further demonstrated from Clause 3.7 (b) and (c) of the 6 Package of Incentives. Petitioners learned counsels plea that Price Preference was available only when there was an Outside State Unit in competition relying on the explanation appended to Clause 3.7 is found untenable, in that, the explanation refers to the contingency where there was an Outsider State Unit as well in competition and in such a situation how 15% Price Preference was to be worked out. The explanation does not in any way take away the demonstrated unambiguous and unequivocal intention of the State Government to give the incentive of Price Preference to the local SSI Units which is writ large by the provisions of Clause 3.7 of the Package of Incentives.
Such being the case, the petitioners plea that respondent No.3 was not entitled to Price Preference is found without substance. The status of respondent No.3 as SSI Unit having not been disputed, the State-respondents were within their power to allot the Contract to the local SSI Unit which on negotiation had offered to supply Nutri at Rs.34.00 per kilogram, which was within 15% of the rate quoted by the Trading Unit other than the SSI Unit.
For all what has been said above, no merit is found in the Writ Petition, which is, accordingly, dismissed lifting interim order dated 29.12.2011.
(J.P. SINGH) JUDGE JAMMU 08.03.2012 Vinod.