DUROLAC Vs. STATE OF KERALA

JUDGEMENT

(1.) The captioned appeal is preferred by the Petitioner in W.P.(C) No.4692 of 2021, challenging the common judgment of the learned Single Judge dtd. 12/10/2021, in the above specified writ petition and other connected matters, whereby, the learned Single Judge dismissed the writ petition holding that the works tendered by the Public Works Department, State of Kerala, is a civil contract and the appellant is not entitled to get the benefits of Exts. P3 ,P4 and P5 order / notifications issued by the Central and State Governments, extending benefits of public procurement policy for Micro and Small Enterprises registered under the National Small Scale Industrial Corporation. Brief material facts for the disposal of the appeal are as follows:

(2.) Appellant is a newly registered Micro, Small and Medium Enterprise Unit (MSME Unit) manufacturing paints and allied products. According to the appellant, the unit provides services such as painting and allied works in connection with the products manufactured by the unit. It is the case of the appellant that, as it is a small enterprise, it is eligible for certain incentives while participating in tenders for public procurements as per Exts.P3 to P5 orders/notifications issued by the Union as well as the State Governments, for promoting the small scale sector. It is further submitted that the incentives so declared by the respective Governments include exemption from EMD, Waiver of Security Deposit and Tender set free of costs. While so, the appellant submitted a bid for participating in Ext.P10 tender notice, for painting and other repair works without remitting EMD and tender fee. However, by Ext.P12, the tender submitted by the appellant has been rejected, stating that EMD exemption certificate is not valid. According to the appellant, the rejection was made as per Ext.P13 Government Order issued by the Finance Department, wherein it is directed that the incentives extended by the State and Central Governments for M.S.M.E Units cannot be applicable for Civil/Electrical/Infrastructure contracts. According to the appellant, Ext.P13 is not applicable to the appellant unit, since the appellant is a newly registered manufacturing unit and hence, the service of painting and allied works rendered with their own products would not come under the ambit of civil contract. Therefore, according to the appellant, rejection of the tender of the appellant is illegal and it adversely affects the legal rights of the appellant pursuant to Exts.P3 to P5 orders/notification issued by the Central and State Governments, to protect the interest of Small Scale Enterprise Units.

(3.) The Executive Engineer, PWD Department; the 2nd respondent, has filed a detailed statement in the writ petition, refuting the claims and demands raised by the appellant. According to the 2nd respondent, Ext.P3 order issued by the Government of India, Ministry of Micro, Small and Medium Enterprises, dtd. 14/10/2011, is confined to Government purchase and price preference policy for Micro and Small Enterprises in order to help them to market their products; however the facility is not extended to civil works. It is also submitted that Ext.P4 order issued by the Ministry of Micro, Small and Medium Enterprises is also a Public Procurement Policy which has not mentioned any activities relating to civil works to be undertaken by the Micro and Small Enterprises. It is further submitted that Ext.P5 notification issued by the State Government also is in respect of the price procurement policy of the State Government in relation to the Micro and Small Enterprises, however, it is not granting any benefit to civil contracts. Therefore, according to the State and its officials, Ext.P10 notification inviting tender is a civil work relating to special repairs of the new building of the IHRD College of Engineering, Chengannur, which is a rate contract. Thus it is stated that, the appellant and such Micro and Small Enterprises are not entitled to get the benefit of the notifications relied upon by the appellant in so far as civil works are concerned.