Gauhati High Court Rules Work Contracts Excluded from Public Procurement Policy 2012

ENA MSME 2025-01-17 16:19:50 New Delhi, Jan 17 (KNN) The Gauhati High Court has ruled that work contracts do not fall under the purview of the Public Procurement Policy, 2012 (PPP-2012) issued by the Central Government, and the exemptions granted to Micro and Small Enterprises (MSEs) under the policy do not extend to such contracts. Delivering the judgment, Justice Michael Zothankhuma observed: On considering the PPP-2012 and the clarification given by the Government of India vide letter dated 31.08.2023, coupled with the decisions of various High Courts, this Court holds that the work contracts do not come within the purview of PPP-2012, i.e. the exemptions provided to MSEs do not cover work contracts. It has been a contentious issue for long. That is why we have been requesting government for early amendment of MSMED Act to include the Works Contracts in the purview of MSME definition explicitly, commented Federation of Indian Micro and Small & Medium Enterprises (FISME). The Court emphasized that the petitioner, having participated in the tender process with full knowledge of the updated conditions, could not challenge the terms retrospectively after disqualification. It also relied on precedent from the Supreme Court's Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. & Another (2016), which held that tendering authorities are best placed to interpret their own requirements and tender conditions. The Court noted that such decisions should be interfered with only in cases of mala fide or gross perversity. The case involved a petitioner—a registered MSE—who had filed a writ petition challenging their disqualification from the technical bid process for 'Composite Works' tendered on April 16, 2024. The petitioner contended that, under the PPP-2012, they were exempt from submitting the Earnest Money Deposit (EMD). However, the Court noted that the Ministry of Micro, Small & Medium Enterprises had issued a clarification in August 2023 stating that benefits under the PPP-2012, such as EMD exemptions, do not apply to traders or work contracts. The tender in question had explicitly incorporated this clarification, striking out the EMD exemption clause for MSEs in work contracts. The Court further referred to its prior judgment in Sibaram Deka v. State of Assam, which held that participants who enter a tender process without objection are barred from challenging its terms later. As the petitioner had not objected to the terms while participating, the writ petition was dismissed. (KNN Bureau) 40692 https://knnindia.co.in/news/newsdetails/msme/gauhati-high-court-rules-work-contracts-excluded-from-public-procurement-policy-2012 2025-01-17 16:19:50 knnindia.co.in Gauhati High Court Rules Work Contracts Excluded from Public Procurement Policy 2012