Bombay High Court Dismisses Petition for MSE Purchase Preference, Citing Justified Tender Process and Price Adjustments; “Public Interest in Project Continuation Outweighs Procedural Concerns Amid Alleged Oversights”

Court’s Decision:
The Bombay High Court dismissed the writ petition, finding no merit in the petitioner’s claim for Micro and Small Enterprise (MSE) purchase preference under the tender process. The court concluded that the petitioner failed to establish that it had exercised the purchase preference option during the bidding stage. The court also noted that significant progress had been made on the project by the successful bidder, making interference unwarranted.

Facts:
The case centered around a government tender for a “Track and Trace” system, where the petitioner, an MSE, alleged that it was improperly denied purchase preference, as provided under the MSE policy, despite being the lowest bidder (L-1). Respondent No.1, a government entity, invited bids through the Government E-Marketplace (GeM) platform. The petitioner claimed that it fulfilled all tender requirements, including uploading an MSE registration certificate, which, it argued, should have automatically qualified it for purchase preference.

Issues:

1. Whether the petitioner was entitled to MSE purchase preference in the tender process.
2. Whether respondent No.1 acted arbitrarily in awarding the contract without considering the petitioner’s MSE status.
3. The legality of the bid price modification granted to respondent No.3.

Petitioner’s Arguments:
The petitioner argued that its MSE status entitled it to purchase preference under the tender terms, which should have been applied automatically upon uploading the MSE certificate. It contended that the tender document did not clearly delineate the procedure for opting into purchase preference and alleged that respondent No.1’s actions were arbitrary and discriminatory.

Respondent’s Arguments:
Respondent No.1 countered that the tender required bidders to specifically select the purchase preference option on the GeM platform. It argued that the petitioner did not choose this option, resulting in its classification as a non-MSE bidder. Respondent No.3, the successful bidder, claimed it had selected the purchase preference option and had already commenced substantial work on the project, making any relief for the petitioner prejudicial at this stage.

Analysis of the Law:
The court examined the Public Procurement Policy for MSEs, which allows MSE bidders to match the lowest bid price within a certain range if the preference option is explicitly selected. The tender documents and the GeM platform also contained provisions requiring MSE bidders to affirmatively choose the preference option to be eligible for benefits.

Precedent Analysis:
The court referenced Jagdish Mandal v. State of Orissa and Tata Motors Ltd. v. BEST, which emphasize that judicial review of tender processes should be limited, especially absent arbitrariness or violation of statutory provisions. The court underscored that public interest and efficient project completion often outweigh procedural errors if the tender process overall serves its intended public purpose.

Court’s Reasoning:
The court found that the tender requirements clearly necessitated that bidders opt into purchase preference. The petitioner’s failure to produce evidence showing that it selected the MSE preference led to its treatment as a non-MSE bidder. Additionally, the modification of the bid price to reflect the reduced scope due to the closure of a project facility was deemed a procedural adjustment within the tender’s framework, not an arbitrary change favoring respondent No.3.

Conclusion:
The petitioner’s failure to exercise the purchase preference option and the delay in challenging the tender outcome undermined its case. The court found that the continuation of the project was in the public interest, as a substantial portion of work had been completed by respondent No.3. The writ petition was accordingly dismissed.

Implications:
This decision reinforces the requirement for MSE bidders to clearly follow tender specifications when seeking policy benefits. It also underscores judicial restraint in tender matters, particularly when significant public interest and project progress are at stake.

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