High Court of Delhi

The Mining and Engineering Corporation Vs. Union of India and Ors.

MANU/DE/1617/2020

25.08.2020

Contract

An MSE ought to be registered with the Appropriate Authority for claiming exemption from EMD and Tender Fee

The instant writ petition has been filed by the Petitioner under Article 226 of the Constitution of India, 1950 for issuance of a writ of mandamus, directing the Respondents to consider its technical bid for Tender No. BBNLIMM/PIA for Bharat Net Project/Andaman & Nicobar/2020/004 issued on 18th May, 2020, in the light of a Gazette Notification No. CG-DL-E-01 062020-219680 dated 1st June, 2020 issued by the Ministry of Micro, Small and Medium Enterprises and for a writ of mandamus, putting on hold the opening of the financial bid for the aforesaid tender till the Petitioner's bid is considered in the light of the Gazette Notification dated 1st June, 2020.

The Petitioner, a sole proprietorship firm which is owned by a private limited company under the name of Vindhya Industries Private Limited, is engaged in the business of execution of works contract in various States in the country. The Petitioner states that, there was no necessity for the Petitioner to submit the security deposit on the ground that, it had become a MSE by virtue of the Notification dated 1st June, 2020.

The Petitioner states that, by virtue of the above Notification, it became a Micro and Small Enterprises (MSE) and was therefore, exempted from depositing Earnest Money Deposit (EMD) and the Tender Fee. Instructions to the bidders under the NIT stipulated that, the bidders (MSEs) who are registered with the Appropriate Authority, are exempted from payment of EMD and Tender Fee. Clause 8 provides that the documents, which are to be uploaded on the e-tendering portal and the list of documents as per Annexure E, are also to be supplied offline.

A perusal of Clauses 8 and 15.2 shows that, for being exempted from paying the EMD and Tender Fee, a MSE ought to be registered with the Appropriate Authority and proof regarding the registration of the MSE with the Appropriate Authority had to be attached along with the bid.

Admittedly, the Petitioner has not attached the proof of its registration with the Appropriate Authority. Even assuming that, the Petitioner had become a MSE by virtue of the Notification dated 1.06.2020, it had to furnish proof of registration with the Appropriate Authority for being eligible for exemption from payment of EMD and Tender Fee. In any event, the Notification dated 26th June, 2020 stipulates that the benefit of the Notification dated 1st June, 2020 in view of reverse-graduation of an enterprise, will be available from 1st April, 2021.

The Respondent No. 2 is therefore correct in submitting that, the Notification dated 1st June, 2020 has been superseded by the Notification dated 26th June, 2020 and the benefit of being a MSE was available to the Petitioner from 1st April, 2021 and therefore, it was not exempted from paying EMD and the Tender Fee. Even otherwise, in the absence of proof of being registered with the Appropriate Authority, the Petitioner could not have been exempted from payment of the EMD and Tender Fee.

In the light of the admissions made in the writ petition and in the absence of the proof of registration with the appropriate authority, the Petitioner is not entitled even to the benefit of the Notification dated 1st June, 2020, since the Tender documents make it mandatory that the MSEs intending to get the exemption from payment of EMD and Tender Fee, have to supply the proof regarding registration of MSE with the Appropriate Authority and that certificate had to be attached along with the bid in order to be eligible for exemption.

Admittedly, on 9th June, 2020, the Petitioner knew that its technical bid had been rejected for non-payment of EMD and the Tender Fee. However, the Petitioner has filed the instant petition after a month and a half, on 17th August, 2020. In the interregnum, the technical bid and the financial bid has been opened and the contract has been awarded to Indian Telephone Industries Ltd., a PSU. The delay has been sought to be explained by the Petitioner by stating that, it was submitting representations to the Respondent No. 2 and was writing letters to the Minister of Communication. It is well settled that, the power of the High Court to issue an appropriate writ under Article 226 of the Constitution of India is discretionary and normally, Courts do not come to the aid of the indolent and lethargic.

The contract has already been awarded and third party rights have been created. Therefore, the writ petition cannot be entertained on the ground of delay and latches, apart from the fact that even on merits, the Petitioner has not been able to make out a case for present court to exercise jurisdiction under Article 226 of the Constitution of India as it has failed to file the requisite documents, as stipulated in the Notice Inviting Tender. Writ petition dismissed.

Tags : Tender Exemption Fees

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