W.P.(C) Nos. 11817 and 12427 of 2016. Case: Mohapatra Binders and Ors. Vs State of Odisha and Ors.. High Court of Orissa (India)

Case NumberW.P.(C) Nos. 11817 and 12427 of 2016
CounselFor Appellant: R.K. Mohanty, Sr. Advocate, D. Mohanty, S. Mohanty, D. Baradwaj and A. Mohanty, Advocates and For Respondents: S.P. Mishra, Advocate General, Sisir Kr. Das, Sr. Standing Counsel and A.K. Pandey, Standing Counsel
JudgesVineet Saran, C.J., Dr. Akshaya Kumar Rath and Dr. B.R. Sarangi, JJ.
IssueConstitution of India - Article 19(1)(g); Customs Act, 1962 - Section 25(1); Micro, Small and Medium Enterprises Development Act, 2006 - Sections 1, 11, 2
Judgement DateJanuary 13, 2017
CourtHigh Court of Orissa (India)


Vineet Saran, C.J.

  1. The dispute involved in these writ petitions is whether the petitioners herein, who are small book binding units and cover/text printers of the State of Odisha, would be entitled to exclusive right of State Government work of book binding and printing, under the provisions of Industrial Policy Resolutions (for short 'IPR') issued by the State Government, as well as the Micro, Small and Medium Enterprises Development Act, 2006 (for short 'MSMED Act'), and the Odisha MSMED Policy of 2009 (for short 'OMSMED Policy) issued there under by the State Government; or can such work be awarded by way of inviting national tender.

  2. The petitioners claim benefit under the various IPRs issued from time to time, as well as the MSMED Act and the policy framed there under and contend that in case the benefit of exclusive work/purchase (of book binding/printing) is not accorded to them, it would amount to frustrating the objectives of the IPRs as well as the MSMED Act and the policy of the State Government issued there under.

  3. The petitioners in the leading writ petition No. 11817 of 2016 are proprietors of small book binding units covered under the definition of "micro industries" under the MSMED Act, and the petitioners in the other writ petition No. 12427 of 2016 are covers and text printers registered with the District Industries Centres (for short 'DIC') and carry on their business as Small Scale Industries (for short 'SSI') defined under the IPR 1980 and subsequent IPRs issued by the State Government. The challenge in these writ petitions is to the tender call notice dated 09.06.2016 issued by the Director, Textbook Production and Marketing, Bhubaneswar inviting national tender for "Printing and Binding of Nationalised Textbooks for the academic session 2017-18".

  4. In the State of Odisha, there are as many as 5000 printing press and binding units, which are set up under the approval of respective District Industries Centres (for short "DICs") under the Industrial Policy framed by the Industries Department, Government of Odisha. Thereby, they are all covered as SSI units as per IPR 1980 and subsequent IPRs issued from time to time by the Government of Odisha. The respective proprietors of such units, as per the schemes, have modernized their printing and binding units by installing modern equipments by incurring huge loans from different banks as well as non-banking organizations. Most of them are technicians, skilled and unskilled labourers, who are maintaining their livelihood from the printing and binding work of nationalized text books. A large number of skilled workers/labourers are being engaged in such type of micro industries so as to earn their livelihood.

  5. The State Government continued to procure the nationalized text books from the small scale industrial (SSI) units of the State for a period not less than 18 years, facilitating thousands of workers to maintain their livelihood. However thereafter, the opposite party No. 1, deviating from the said procurement policy of the Government, vide Resolution dated 25.08.2009, decided to procure nationalized text books through national tender for the first time for the academic session 2010-11 and, accordingly, the national tender was floated on 11.02.2010.

  6. For about two decades, till the academic session 2009-10, the benefit of exclusive purchase from small book binding and cover/text printing units of the State was being given to such units, without open competitive tenders, which benefit, the petitioners were enjoying.

  7. Then the nationalised tender, which was issued for "Printing and Book binding" for the academic session 2010-11, was challenged by the petitioners in W.P.(c) No. 2862 of 2010. By judgment and order dated 19.05.2010 in the case of Orissa Printers and Binders Mahasangha v. State of Orissa AIR 2010 Ori 154, the said tender was quashed, which was not challenged and the same benefit of tender limited to SSI units of the State, as given to the petitioners up to the academic session 2009-10, was continued till the year 2013-14.

  8. Then on 07.06.2013, for the academic session 2014-15, the State Government again resorted to and issued a national tender. The same was challenged by the petitioners and others in W.P.(C) No. 13203 of 2013. The Division Bench of this Court, vide its judgment and order dated 20.12.2013 passed in the aforesaid writ petition of Mohapatra Binders v. State of Odisha 2014 (Supp. 1) OLR 490, quashed the tender dated 07.06.2013 after rejecting the view of the State Government relating to change of circumstances and held that "there is no need to re-examine the issue which has already been decided by this court vide its order dated 19.05.2010 passed in W.P.(C) No. 2862 of 2010 and has attained finality." However while parting with the case certain directions were issued, which are reproduced hereunder:

    (i) Opposite parties shall entrust the Printing and Binding Works of Nationalized Text books to the petitioners like the preceding years;

    (ii) For the purpose of negotiation of rate, the petitioners/their representatives shall present themselves before the competent authority, i.e., opposite party No. 2-Director of Text Book Production and Marketing, Bhubaneswar on 26th of this month;

    (iii) Opposite parties must ensure timely supply of papers to the Printers, who in turn complete their printing work in time. The binders must ensure timely completion of their binding work.

    (iv) It is open to the opposite parties to take necessary action as permissible if delay is attributable to any Printers and/or Binders in completing their work in time.

    As such, for the academic session 2014-15, the State Government decided to start the work with the petitioner at the previous year rates. For the subsequent academic session 2015-16 also the State floated tender for SSI units only.

  9. The judgment of this Court dated 20.12.2013 was challenged before the apex Court, and on 01.07.2015, the apex Court granted interim relief in the SLP filed by the State, staying the implementation of the judgment of the High Court dated 20.12.2013 until further orders. Then on 22.08.2015, while the stay order granted by the Apex Court was in force, the State Government again floated National Tender for the year 2016-17.

    In the meantime, on 24.08.2015, another IPR 2015 was issued, which also provided for similar incentives for micro and small enterprises, enlisting the items for purchase from such units, but the said list again did not include printing and binding.

    Then on 22.09.2015, the SLP filed by the State was disposed of as having become infructuous, with the observation that "However, it would be open to the petitioner to reconsider its policy with regard to getting its text books printed and bound and to take appropriate decision after having due deliberation on the subject matter of these petitions."

  10. After the disposal of SLP by the apex Court, the petitioners and others challenged the National Tender dated 22.08.2015 (issued for the academic session 2016-17) before this Court in W.P.(C) No. 19062, 19099 and 20138 of 2015. On 26.10.2015, this Court, as an interim measure, directed that in view of the earlier decision of this Court dated 20.12.2013, the tender process may continue, but it shall not be finalised without leave of the Court. However, for just and proper adjudication, the matter was referred to Larger Bench of three Judges. The Larger Bench, vide its order dated 18.01.2016, vacated the interim order dated 26.10.2015, assigning reasons in paragraphs 14, 15 and 16 of its order, which are extracted below:

    "14. It is accordingly submitted that as the policy decision to procure the Nationalised Text Books through process of tender on All India basis is bona fide and in the interest of the students, the interim orders be vacated and the State be permitted to finalise the tender, to ensure supply of books to the concerned schools before beginning of the academic session 2016-17.

  11. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review, will not be permitted to be invoked to protect private interest at the cost of public interest or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a Court would interfere in a tender or contractual matters in exercise of its power of judicial review, only if the process adopted or decision taken by the authority is found to be mala fide or arbitrary or irrational, which affects public interest. (See-Jagdish Mandal v. State of Orissa and others, (2007) 14 SCC 517).

  12. In the present case, inspite of repeated opportunities, the petitioners have...

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