ORDER
M.Y. Eqbal, J.
Page 1334
1. This matter has been placed before us on reference made by the learned Single Judge in terms of order dated 8.2.2007 for deciding the following issues:
(i) Whether in terms of Clause 32.1.1 of the Jharkhand Industrial Policy, 2001, the Small Scale Industrial Units located within the State should be given preference in the purchases by the State Government Departments and its agencies under its control to the extent of 75% of the total orders placed in respect of any tendered item?
(ii) Whether the Purchase Committee of the govt. department(s) can deviate from the said Industrial Policy of the Government in making recommendation(s) for purchases covered by the said Policy?
(iii) Any other issue(s) as may be deemed proper in the circumstance of the case.
2. The writ petitioners have challenged the decision of the Purchase Committee of the Drinking Water and Sanitary Department, Government of Jharkhand dated 11.10.2006 whereby the Committee recommended that if the local industrial units (tenderers) agree to supply at the rate quoted in outsiders’ tenders, then they Page 1335 may be allowed to supply 33% of the total purchase made by the Government Department.
3. The petitioners further seek a direction to give them preference being the Small Scale Industrial Units located in the State of Jharkhand in respect of purchase made by the Government Departments and its agencies to the extent of minimum of 75% of the total requirement in terms of Jharkhand Industrial Policy, 2001.
4. Mr. Y.V. Giri, learned Senior Counsel appearing for the petitioners, assailed the impugned decision of the Committee as being illegal and in the teeth of the judgment passed by this Court in W.P. (C) No. 4076 of 2004. Learned Counsel submitted that in the aforementioned judgment, the Jharkhand Industrial Policy, 2001, particularly Clause 32 of the Policy has been considered and it was held that the respondent-State is under obligation to ensure that 75% of the total orders placed with respect to any item under the total tender notice shall be allotted to manufacturing industrial units located within the State of Jharkhand.
5. Learned Advocate General appearing for the State, on the other hand, submitted that so far the tender, in question, is concerned, all the local manufacturing industrial units including the petitioners were second lowest tenderers, whereas the outsiders tenders were the lowest. Even then, the Purchase Committee in its wisdom, decided to give 33% of the total work to the local tenderers which is in consonance with the Industrial Policy.
6. In the judgment rendered in W.P. (C) No. 4076 of 2004, the learned Single Judge considered the Jharkhand Industrial Policy, 2001, particularly Clause 32 of the Policy which speaks about the preference to be given to the Industrial Units located within the State of Jharkhand. After considering Clause 32 of the Policy, the learned Single Judge held as under:
7. The respondents, in their counter affidavit, have not disputed the existence and validity of the Industrial Policy. In that view of the matter, if there is no legal impediment, the respondent-State is under obligation to ensure that 75% of the total orders placed with respect to any item under the tender notice shall be allotted to manufacturing industrial units located within the State of Jharkhand but in no case the departments of the State Government will compromise with the quality.
7. From the aforesaid operative portion of the judgment, it transpires that the learned Single Judge clearly held that if there is no legal impediment, the respondent-State is under obligation to ensure that 75% of the total orders placed with respect to any item under the tender notice shall be allotted to manufacturing industrial units located within the State of Jharkhand, but in no case, the Departments of the State will compromise with the quality.
8. Clause 32.1.1 of the Policy is reproduced herein below for better appreciation of the said clause:
32.1.1 The policy of the State Government is to ensure that Stale Government departments and various agencies under its control purchase their requirement of store items for industries located within the State.
In order to achieve this, the product of industries located within the State will be eligible for the facilities of preferential purchase by State Government departments and the agencies under its control. Various departments of the Page 1336 State Government and the various agencies under its control would ensure, without compromising the quality, that minimum 75% of the total order placed with respect to any such tendered item be supplied exclusively by the manufacturing industrial units located within the State.
It would also be ensured that 33% of the total annual purchase by any department/agency should be exclusively supplied by the manufacturing small scale industrial units located within the State. In order to provide the price preference facilities, with respect to certain identified item(s) being manufactured by the Small Scale Industries located within the State, with the objective of providing competitiveness to such item(s), a High Level Committee would be constituted by the State Government, which shall duly assess the competitiveness of such items as referred and make recommendations. The State Govt. shall ensure appropriate action with respect to such recommendations to encourage such small scale industrial units. Price preference shall be admissible as per the provisions to the industrial products of the small scale industrial units.
The Central Government, its various agencies and private/joint sector industries located within the Slate will be persuaded to accord similar facilities to the products of local industries. New industrial units coming up in the State will be persuaded to patronize local industries/ firms for construction/ supply of materials.
9. From bare reading of the aforesaid clause, it is clear that the Government shall ensure that the State Government Departments and its various agencies in the matter of purchase, shall give preference to the small scale industries located in the State of Jharkhand and at least 75% of the total orders placed with respect to any such tendered item shall be purchased by local units. However, the clause further clarifies that in respect of total annual purchase by any department, a maximum of 33% shall be purchased from the manufacturing small scale industrial units located within the State, but in no case, the Departments shall compromise with the quality and shall act in the interest of public exchequer.
10. In the light of the aforesaid clause, we shall now examine whether the impugned decision taken by the Purchase Committee is in the teeth of the decision of this Court and the provisions contained in the Industrial Policy. A copy of the impugned decision has been annexure as Annexure 4 to the writ petition. From the decision of the Committee, it transpires that both the local industrial units and outsiders submitted their tenders and after scrutiny of all the tenders, the outsider manufacturing industrial units were found the lowest tenderers, whereas the manufacturing industrial units located within the State were the second lowest tenderers. The Tender Committee further took notice of the fact that the tenders were invited for the total annual purchase by the Department. On these two grounds, the decision was taken that if the local manufacturing units, who are the second lowest tenderers, agree to supply at the rate quoted by the lowest tenderers, then 33% of the total purchase shall be made from the local manufacturing industrial units within the state. In our considered opinion, therefore, the Purchase Committee has taken a right decision after taking into consideration Clause 32 of the Industrial Policy and the judgment rendered by this Court in W.P. (C) No. 4076 of 2004.
Page 1337
11. After considering the entire facts and circumstances of the case, we come to the following conclusions:
1) In term of Clause 32.1.1 of the Jharkhand Industrial Policy, 2001, the Small Scale Industrial units located within the State should be given preference by the State Government departments and its agencies to the extent of 75% of the orders placed in respect of any tendered item, but they shall be given preference to a maximum of 33% of the total annual purchase of all the Government orders. This is, however, subject to the condition that the Departments shall not, in any case, compromise with the quality and other conditions of the tender.
2) In order to maintain the quality and to ensure supply, the Purchase Committee of the Government Departments may deviate in making recommendations, but that must not be arbitrary, mala fide or any ill-motive.
12. In the aforesaid premises, we are of the view that this writ petition has no merit which is, accordingly, dismissed.
D.K. Sinha, J.
13. I agree.