MAHARASHTRA ASBESTOS PRIVATE LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) BY a resolution dated August 19, 1985, the Government of Maharashtra took a policy decision that whenever tenders are called for procurement of Asbestos Cement Pressure Pipes by various Corporations/councils and autonomous bodies sponsored by government, orders be placed on units situated in Maharashtra to the extend of their manufacturing capacities Further, while placing the orders, priority be given to small scale industries to the extent of their manufacturing capacities and only thereafter the orders be placed on medium and large scale units to the extent of their manufacturing capacities. However, as far as the standards and price are concerned, there could be no preference to small scale industries and they are to participate in the tender pari pabsu with others. This is further clarified by a subsequent resolution dated October 14, 1986, whereby the Government has directed that the Asbestos Cement Pressure Pipes and related components should be purchased from Industrial Units in Maharashtra State upto their manufacturing capacity. If the orders to be placed are beyond the capacity of the Industrial Units in Maharashtra State, then alone the Units out side the Maharashtra State may be considered. It appears that earlier by a resolution dated August 21, 1984, the Government had reserved 50% of the quantity of each item for purchase through small scale industrial units in the District area leaving the remaining 50% of the quantity to be purchased from other medium and large scale units. The appellants/petitioners, who are medium scale industrial units in a backward area at Bhandara, think that by virtue of the present policy of getting the entire purchase from the small scale industrial units, to the extent of their manufacturing capacity, a monopoly has been tended to be created in favour of such small scale units, while eliminating any chance for any medium or large scale units to procure such purchase orders. This they contend, is ultra vires Articles 14 and Article 19 (1) (g) of the Constitution of India.

(2.) THE immediate cause of action is the invitation to tender called by the Directorate of Industries, the Central Stores Purchasing Organisation (Respondent No. 2), for the supply of Asbestos Cement Pressure Pipes of various diameters and classes. This tender was published in the Government of Maharashtra Gazette, Part II, dated June 1, 1989. This tender contained a clause which is as follows:

(3.) THE petitioners contention is that this would in effect eliminate petitioners and other medium scale units and that, therefore, they submit that this condition is totally arbitrary and discriminatory.