JAISWAL PLASTIC TUBES LTD. Vs. STATE OF ORISSA

JUDGEMENT

(1.) IN both the writ petitions challenge has been made to the purported action of Managing Director, Orissa Lift Irrigation Corporation Ltd. ( in short, "OLIC"), opposite party no.2 in overriding the principles contained in the Orissa General Financial Rules (for short, "O.G.F.R.") of Government of Orissa for the purchase of casing pipes, strainer with well cap through the "Tender Call Notice No. IT -12/20211 -12 -03/MD, OLIC dated 30.6.2011 by including the same for installation of Bore wells with VES and yield test under 'BKVY -Deep Bore Well Secha Karyakrama".

(2.) MR . R.K. Rath, learned Senior Advocate and Mr. S.P. Mishra, learned Senior Advocate appearing for the petitioners in both the cases challenge the action of opposite party no.2 and opposite party nos.6 to 11 on the ground that the Tender Call Notice in Annexure -1 has been issued in clear violation of statutory provisions and with mala fide intention and without jurisdiction overriding the principles contained in the Industrial Policy Resolution,2007 ( for short, 'IPR, 2007) of Government of Orissa and Micro, Small and Medium Enterprise Development Policy, 2009 (in short, 'MSME Policy, 2009) for the purchase of EPM Rate Contract items i.e. ISI Mark UPVC casing Pipes, as per IS: 12818/92. The petitioners are Small Scale Industrial Units duly registered under the Director of Industries, Opposite party no.5 and are also registered with the Director of Export Promotion and Marketing, opposite party no.3( for short, 'EPM) and Bureau of Indian Standards for manufacturing of PVC pipes and fittings of different diameters. Petitioner nos.1 and 3 are manufacturing PVC pipes and fittings from 15 mm to 250 mm diameters and usually from 15 mm to 150 mm diameter pipes are used for general purpose including the household purpose, but from 160 mm to 250 mm diameter pipes are mainly and exclusively required for Lift Irrigation Projects by the OLIC. After announcement by the Ministry of Fertiliser and Chemical of Govt. of India declaring Balasore District as a priority sector for Petrochemical i.e. Polymer based Industrial Cluster, all industries in this cluster have gone for modernization and technology up -gradation by investing substantial amount availing financial assistance from commercial banks. While considering financing to these Units, the Bank had taken into account purchases of PVC pipes by the OLIC thereby ensuring service of term loan with interest.

(3.) THE State Government in Finance Department has already amended Appendix 6 of the Orissa General Financial Rules of Vol.II before Rule -1 inserting therein that in respect of items of stores for which Rate Contract has been entered into by the Director of Export Promotion and Marketing, purchase of such items by all Departments of government, quasi -government Agency and State owned Corporations should be only from sources with whom such Rate Contract has been entered into by placing order in accordance with para 17 of the procedure outlined in Government of Orissa, Industries Department Office Memorandum dated 27th February, 1973. The Rate Contract system was introduced at the behest of OLIC and RWSS Department, Government of Orissa and the said system of rate contract for PVC pipes for SSI is in force since last twenty five years. The rate contract is now in the domain of opposite party no.3. The rate contract system in respect of specific store items not in the exclusive list and manufactured by the local small scale industrial units were finalised by the DEPM. This was done on the basis of competitive offers received from local units, cost structure obtained from these offers, market price of similar items and other consideration relevant to fixing the price of the product. Periodic extensions were granted by the DEPM extending the validity of rate contract with these local MSMEs.