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"7. No provision of the 2006 Act bids us to deconstruct a works contract into elements relating to supply of goods and provision of service. Neither section 11 nor the Public Procurement Policy, 2012 appears to envisage a composite and distinct category of contract such as a work contract actually is. The classification of the tender work under Tenders 45 and 48 were correctly classified by the respondents in terms of the operating manual to be a works contract. There was no challenge to this classification. Consequently we find no error in the decision of the respondents in holding the petitioner to be 12 of 53 Shridhar Sutar 13 wp(L)-1261.17.doc ineligible for the grant of exemptions and benefits under the Public Procurement Policy, 2012. Their decisions to cancel the tender in the absence of deposit of tender cost and earnest money is upheld. Consequently the writ petitions fail and are accordingly dismissed".
40 A plain reading of these provisions clearly indicate that 31 of 53 Shridhar Sutar 32 wp(L)-1261.17.doc the MSMED Act empowers the Government to notify preference policies for procurement of goods and services produced and provided by MSEs, by its Ministries, Departments and Public Sector Undertakings. In exercise of these powers, the Central Government notified the Public Procurement Policy of 2012 in respect of procurement of goods and services produced and provided by Micro and Small Enterprises. Clauses 3 and 6, of the Public Procurement Policy 2012, read thus:-

46 Considering the scope and object of the Act and the relevant provisions under the Act and the Public Procurement Policy, we are of the considered view that the purchase preference 36 of 53 Shridhar Sutar 37 wp(L)-1261.17.doc is restricted only to "goods and services" provided by MSEs. 47 The next question, which falls for consideration is whether the tender contract issued by the Respondent no.2 pertains to procurement of Goods and Services within the meaning of the Act or whether it is a work contract and is excluded from the purview of Public Procurement Policy. 48 The term "Goods" has been defined under section 2(f) of the MSMED Act as under:

49 of 53 Shridhar Sutar 50 wp(L)-1261.17.doc 58 As stated earlier, the MSMED Act and the Public Procurement Policy is applicable only to procurement of goods and services. The contract under tender not being a contract for sale of goods and predominantly a work contract, the benefits of the Act and the Policy could not be extended to the MSEs registered under the Act. Clause 15.5 of the tender is therefore not in consonance with the provisions of the MSMED Act and the Policy framed thereunder and does not sub-serve the purpose of the Act and the policy. The said clause is therefore illegal, arbitrary and contrary to the provisions of the policy and the Act. In the light of above, the fact that the petitioner no.1 had not challenged the said clause pales into insignificance, as it is well settled that there is no estoppel against law. Hence, the fact that the petitioner no.1 had not challenged the condition in the tender would not per se entitle the respondent no.2 to extend the benefits under MSMED Act and Public Procurement Policy to the respondent no.3, when the policy itself does not apply to the work contract. 59 It is also pertinent to note that the Petitioner no.1 was the lowest bidder (L1). He was neither disqualified nor held to be 50 of 53 Shridhar Sutar 51 wp(L)-1261.17.doc ineligible for any other reason. The Petitioner no.1 was not awarded the contract mainly because it was not a MSE. The Respondent no. 3 (L2) was allowed to match the price bid of the petitioner no.1 (L1) solely on the basis of the provisions of MSMED Act and Public Procurement Policy and clause 15.5 of the tender. As stated earlier, the Policy was not applicable to the contract under tender, despite which the respondent no.2 has sought to legislate a benefit to the respondent no.3 which has not been contemplated either by the policy or the Act. The decision of the respondent no.2 to award the tender to the respondent no.3, by taking refuge to clause no.15.5 of the tender is illegal, arbitrary and based upon incorrect reading and interpretation of the Public Procurement Policy. Therefore, awarding the tender to the respondent no.3 would be arbitrary, discriminatory and contrary to the provisions of the Act and the policy.