Kerala High Court
Kalloor Electronics And ... vs State Of Kerala on 20 October, 2021
W.P.(C)Nos.3490 & 5045 OF 2021 1
"CR"
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
WEDNESDAY, THE 20TH DAY OF OCTOBER 2021 / 28TH ASWINA, 1943
WP(C) NO. 3490 OF 2021
PETITIONERS:
1 KALLOOR ELECTRONICS AND LIGHTINGS PVT. LTD.
MUNDAKKAYAM, KOTTAYAM REPRESENTED BY ITS MANAGING
DIRECTOR JACOB K JACOB, S/O. JACOB, AGED 36
YEARS,KALLOOR HOUSE, MUNDAKKAYAM P.O,KOTTAYAM 686 513
2 ALLUMMINA ELECTRONICS,
KAKKADAMPOYIL, MALAPPURAM - 673 604
REPRESENTED BY ITS PROPRIETOR RASHAD E.K, AGED 26,
S/O. RASHEEED E.K., RASHY VEEDU, CHUNGAM, FEROKE,
KOZHIKODE 673 631
3 TRANSFORM ELECTRICAL INDUSTRIES,
DOOR NO.V/774-A, NORTH KALAMASSERY, ERNAKULAM-683104
REPRESENTED BY ITS CEO KIRAN P.P, AGED 31, S/O. P.K
PRAKASAN, PALLATH HOUSE, P.O PERINJANAM,THRISSUR 680
686
4 QUALITY SERVICE SYSTEMS,
KOOTANAD, PALAKKAD 679 533
REPRESENTED BY ITS MANAGING PARTNER, SULFIKHAR S, AGED
38, S/O. SUBAIR KUNJU, SUDHEER MANZIL,THANNIMOODU,
IRINCHAYAM P.O, NEDUMANGAD, THIRUVANANTHAPURAM 695 561
5 CENTRUM TECHNOLOGIES
REPRESENTED BY ITS MANAGING PARTNER, JAYESH
GANGADHARAN, AGED 34, S/O. GANGADHARAN, THATTEKKADU
HOUSE,NETTOR, MARADU, ERNAKULAM 682 040
6 COOLUX ELECTRICALS INDIA PVT LTD.,
REPRESENTED BY ITS MANAGING DIRECTOR, SUNNY JACOB
CHERIAN, AGED 62, S/O. CHERIAN, ARTHUNKAL
HOUSE,THRIKKLATHUR P.O, KEEZHILLAM,ALUVA, ERNAKULAM
683 541
BY ADVS.
SRI P.B.KRISHNAN
SRI.P.B.SUBRAMANYAN
SRI SABU GEORGE
SRI.MANU VYASAN PETER
W.P.(C)Nos.3490 & 5045 OF 2021 2
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY ITS SECRETARY, LOCAL SELF GOVERNMENT
DEPARTMENT, SECREETARIAT, THIRUVANANTHAPURAM 695 001
2 THE KERALA STATE ELECTRICITY BOARD LTD,
CORPORATE OFFICE (COMMERCIAL AND PLANNING), VYDYUTHI
BHAVANAM, PATTOM, THIRUVANANTHAPURAM - 695 004
REPRESENTED BY ITS SECRETARY
3 THE CHIEF ENGINEER (DISTRIBUTION),
VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695 004
4 ENERGY EFFICIENCY SERVICES LIMITED (EESL),
NFL BUILDING, 5TH & 6TH FLOOR, CORE-III, SCOPE
COMPLEX, LPDHI ROAD, NEW DELHI-110 003, REPRESENTED
BY ITS DIRECTOR
5 ENERGY EFFICIENCY SERVICES LIMITED (EESL)
TC-12/15(3), FIRST FLOOR ABOVE VIVO SERVICE CENTER,
PLAMOODU, PMG ROAD, PATTOM, TRIVANDRUM 695 004
REPRESENTED BY STATE HEAD (GROWTH & LIGHTING)
6 KERALA INFRASTRUCTURE INVESTMENT FUND BOARD (KIIFB)
2ND FLOOR, FELICITY SQUARE, MG ROAD, STATUE,
THIRUVANANTHAPURAM 695 001
REPRESENTED BY ITS CHAIRMAN.
BY ADVS.
R1 SRI K.GOPALAKRISHNA KURUP, ADVOCATE GENERAL
SRI V.MANU, SR.GOVERNMENT PLEADER
R2 & R3 BY SRI.SUDHEER GANESH KUMAR.R.
SRI.B.PREMOD
R4 & R5 BY SRI.VINOD.V (EDAPPUNATHIL)
R6 BY SRI V.G.ARUN
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
08.10.2021, ALONG WITH WP(C).5045/2021, THE COURT ON
20.10.2021 DELIVERED THE FOLLOWING:
W.P.(C)Nos.3490 & 5045 OF 2021 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
WEDNESDAY, THE 20TH DAY OF OCTOBER 2021 / 28TH ASWINA, 1943
WP(C) NO. 5045 OF 2021
PETITIONER:
PMR LIGHTING INDUSTRIES (INDIA) PVT. LTD.
HAVING REGISTERED OFFICE AT MARATH HOUSE,
NAGALASSERY, PALAKKAD-679 533, REPRESENTED BY ITS
DIRECTOR, PRADEEP P.V.
BY ADVS.
S.SREEKUMAR (SR.)
SRI.P.MARTIN JOSE
SRI.P.PRIJITH
SRI.THOMAS P.KURUVILLA
SRI.R.GITHESH
SRI.AJAY BEN JOSE
SRI.MANJUNATH MENON
SRI.SACHIN JACOB AMBAT
SHRI.HARIKRISHNAN S.
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY ITS SECRETARY, LOCAL SELF GOVERNMENT
DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695 001
2 THE KERALA STATE ELECTRICITY BOARD LTD.,
CORPORATE OFFICE (COMMERCIAL AND PLANNING), VYDYUTHI
BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695 004,
REPRESENTED BY ITS SECRETARY.
3 THE CHIEF ENGINEER (DISTRIBUTION),
VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695
004
4 ENERGY EFFICIENCY SERVICES LIMITED (EESL),
NFL BUILDING, 5TH AND 6TH FLOOR, CORE III, SCOPE
COMPLEX, LODHI ROAD, NEW DELHI-110 003 REPRESENTED
BY ITS DIRECTOR.
5 ENERGY EFFICIENCY SERVICES LIMITED (EESL),
TC-12/15(3), FIRST FLOOR ABOVE VIVO SERVICE CENTER,
W.P.(C)Nos.3490 & 5045 OF 2021 4
PLAMOODU-PMG ROAD, PATTOM, TRIVANDRUM-695 004,
REPRESENTED BY STATE HEAD (GROWTH AND LIGHTING).
6 KERALA INFRASTRUCTURE INVESTMENT FUND BOARD (KIIFB),
2ND FLOOR, FELICITY SQUARE, MG ROAD, STATUE,
THIRUVANANTHAPURAM-695 001, REPRESENTED BY ITS
CHAIRMAN.
7 UNION OF INDIA,
REPRESENTED BY THE SECRETARY, MINISTRY OF MICRO,
MEDIUM AND SMALL ENTERPRISES, UDYOG BHAWAN, RAFI
MARG, NEW DELHI-110 011
BY ADVS.
R1 BY SRI K.GOPALAKRISHNA KURUP, ADVOCATE GENERAL
SRI V.MANU, SR.GOVERNMENT PLEADER
SRI.SUDHEER GANESH KUMAR.R., FOR R2 & R3
SRI.B.PREMOD
SRI.VINOD.V (EDAPPUNATHIL), FOR R4 & R5
R6 BY SRI V.G.ARUN
B.PRAMOD, CGC, FOR R7
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 08.10.2021, ALONG WITH WP(C).3490/2021, THE COURT ON
20.10.2021 DELIVERED THE FOLLOWING:
W.P.(C)Nos.3490 & 5045 OF 2021 5
"CR"
T.R.RAVI, J.
-----------------------------
W.P.(C)Nos.3490 & 5045 OF 2021
-------------------------------
Dated this the 20th day of October, 2021
JUDGMENT
The petitioners in the above two writ petitions are Micro, Small
and Medium Enterprises (hereinafter referred to as MSME). The
petitioners are aggrieved by the implementation of the "Nilaavu"
project by the respondents and the procuring of LED bulbs and other
allied fixtures and fittings for street lighting in Local Self
Government Institutions (LSGI for short) from agencies other than
the petitioners and similarly placed MSMEs in the State. The project
aims at replacing the conventional street lighting in all the LSGIs
with LED lamps and the KSEB Ltd. was to be the special purpose
vehicle for the project and the procurement of LED lights is to be
through the 4th respondent. The issues involved in the writ petitions
and the prayers made are similar and the writ petitions are being
heard and disposed of together. The reference to Exhibits is, unless
specified otherwise, as they appear in W.P.(C) No.5045 of 2021.
2. On 06.03.2014, the 1st respondent issued Exhibit P27
order whereby it was decided to replace the existing streetlights in
the Municipalities in Kerala by LED lights, under a project called
"Nagarajyothi". A committee was formed to study and prepare a
project report after discussion with the LSGI. By Exhibit P2 order
dated 02.03.2015, sanction was accorded to Kerala Rural
Employment and Welfare Society (hereinafter referred to as KREWS)
for establishing a street light manufacturing, assembling and
marketing unit in Kasargode district with public-private partnership
mode. Pursuant to Exhibit P2, an agreement was entered into
between KREWS and the petitioner in W.P.(C) No.5045 of 2021. It
can be seen from the agreement that the proprietor of M/s.Usha
Electronic Systems who was the main promoter of the 1 st petitioner
in W.P.(C) No.5045 of 2021 had submitted an "expression of
interest" on 03.04.2015 for entering into the public-private
partnership agreement and they were pre-qualified and selected by
the Board of Directors of KREWS for the project. It was further
decided that the private participant and KREWS shall form a special
purpose vehicle in the form of a private limited company to be
incorporated under the Companies Act, 2013. Kerala Gramajyothi
Lighting Private Limited was formed pursuant to the agreement. In
W.P.(C)No.3490 of 2021, there are six petitioners who had got
registration as MSME and commenced production during the years
2012, 2015, 2018, 2017, 2019 and 2020, respectively.
A LITTLE HISTORY
3. On 30.01.2009 the Store Purchase Department (SPD for
short) of the 1st respondent issued a circular which is marked as
Ext.P11 in W.P.(C)No.3490 of 2021. The Circular notices the fact that
though the Store Purchase Manual (hereinafter referred to as SPM)
required that electrical fittings are to be procured from the small
industries alone, the purchasing officers of some LSGI and other
Government institutions are refusing to buy such items from the
small industries. It was also noticed that in violation of the
requirements in the SPM, tenders were being floated showing brand
names of products. After noticing the above aspects, the Circular
directs that when purchases are made on behalf of the Government
or its agencies, the items which have been reserved in favour of
small industries under Appendix 28 of the SPM shall be purchased
only from such industries. It is further ordered that the responsibility
to ensure the quality and to standardise the price throughout the
State shall be on SIDCO. On 23.03.2012, Exhibit P6 order was
issued by the Ministry of Micro, Small and Medium Enterprises,
Government of India. The order is issued in exercise of the powers
conferred in Section 11 of the Micro, Small and Medium Enterprises
Development Act, 2006, notifying the "Public Procurement Policy for
Micro and Small Enterprises (MSEs) Order, 2012" in respect of
procurement of goods and services, produced and provided by Micro
and Small Enterprises, by the Central Ministries, Departments and
Public Sector Undertakings. Paragraph 3(1) of Exhibit P6 states that
every Central Ministry or Department or Public Sector Undertaking
shall set an annual goal of procurement from MSME from the
financial year 2012-13, with the objective of achieving an overall
procurement of a minimum of 20% of total annual purchases of
products produced and services rendered by MSME in a period of 3
years. Paragraph 3(3) says that after the period of 3 years, i.e.,
from 01.04.2015, overall procurement goal of minimum of 20%
shall be made mandatory. Paragraph 11 of Ext.P6 says that to
enable wider dispersal of enterprises in the country, particularly in
rural areas, the Central Government Ministries, Departments and
Public Sector Undertakings shall continue to procure from MSME, the
358 items shown in the appendix, which have been reserved for
exclusive purchase from MSME. This was expected to help in the
promotion and growth of MSME including Khadi and Village
Industries, which play a critical role in fostering inclusive growth in
the country. Item 287 in the list of 358 items is "street light fittings".
Since most of the disputes involved in the writ petitions are centered
around the understanding of Paragraph 11, the same is extracted for
easy reference:
"11. Reservation of specific items for procurement: To enable
wider dispersal of enterprises in the country, particularly in rural
areas, the Central Government Ministries or Departments or Public
Sector Undertakings shall continue to procure 358 items (Appendix)
from Micro and Small Enterprises, which have been reserved for
exclusive purchase from them. This will help in promotion and growth
of Micro and Small Enterprises, including Khadi and village industries,
which play a critical role in fostering inclusive growth in the country."
4. On 21.06.2013, the Government of Kerala revised the
SPM, as can be seen from Exhibits P9 and P10. Annexure 19 of the
SPM is the list of items reserved for exclusive purchase from the
MSME. Item 368 in the said list is "street light fittings". Soon
thereafter, by G.O.(P)No.546/2013/Fin. dated 07.11.2013, Ext.P6
Public Procurement Policy was extended to the MSMEs registered in
Kerala (See Ext.P8). It can thus be seen that the MSMEs were
enjoying certain reservations regarding purchases by the
Government and Governmental agencies, both Central as well as
State. As a matter of fact, such reservations were available in the
State of Kerala even prior to Ext.P6. However, Annexure 19 of the
Stores Purchase Manual was later deleted as per Ext.R1(a) order
G.O.(P)No.5/19/SPD dated 08.4.2019 and the items that were
included in Annexure 19 have been included in Annexure 4, which is
a list of stores usually ordered.
5. On 9.11.2018, the Central Government amended Ext.P6
Procurement Policy for MSMEs, whereby it is ordered that wherever
the figure and word 20% appears it shall be substituted by 25%.
Paragraph 4A was inserted, which said that out of the total annual
procurement from micro and small enterprises, 3% from within the
25% target shall be earmarked for procurement from micro and
small enterprises owned by women. It is to be noted that paragraph
11 of the order was not amended and it was retained. On
04.06.2020, the Government of India in the Department of
Promotion of Industry and Internal Trade issued orders, whereby the
revised Public Procurement (Preference to Make in India) Order,
2017, was issued. The Government order is produced as Exhibit P7.
Ext.P7, as the title suggests, is intended to give preference to goods
manufactured in India in the matter of public procurement. With the
above purpose in mind, the order categorises local suppliers as Class
I and Class II, depending on the local content involved. "Local
content" has been defined to mean the amount of value added in
India which shall, unless otherwise prescribed by the Nodal Ministry,
be the total value of the item procured (excluding net domestic
indirect taxes) minus the value of imported content in the item
(including all customs duties) as a proportion to the total value, in
percent. Class I local suppliers are suppliers or service providers
whose goods, services or works offered for procurement, has local
content equal to or more than 50%. In cases where the local
content is more than 20%, but less than 50%, the supplier is
categorised as Class II local supplier. As per paragraph 3(a) of the
order, wherever the Nodal Ministry/Department has communicated
that there is sufficient local capacity and local competition, only
Class I local supplier shall be eligible to bid irrespective of the
purchase value. Paragraph 3(b) says that in the procurement of all
goods, services or works, not covered by sub-paragraph 3(a) and
with the estimated value of purchases less than ₹200 crore, in
accordance with Rule 161(iv) of General Financial Rules (GFRs),
2017, global tender enquiry shall not be issued except with the
approval of competent authority as designated by Department of
Expenditure. It says that only Class I local supplier and Class II local
supplier shall be eligible to bid on procurement undertaken by
procuring entities, except when global tender enquiry has been
issued. Paragraph 3A says that purchase preference should be given
for the entire quantity tendered, to Class I local supplier on
procurements undertaken by procuring entities where their bid is the
lowest. Regarding bids which are divisible in nature, if the Class I
local supplier is not the lowest bidder, contract for 50% of the
ordered quantities is to be awarded to the lowest bidder. Regarding
the balance 50%, the lowest bidder among the Class I local
suppliers, should be invited to match the price offered by the lowest
bidder and if the price matches, he can be awarded the contract for
such balance 50%. Regarding bids which are not divisible in nature,
if the Class I local supplier is the lowest bidder, he will be awarded
the contract. If the Class I local supplier is not the lowest bidder, he
has to be invited to match the lowest price offered and if he matches
the price, he will be offered the contract. If the lowest eligible Class
I local supplier fails to match the lowest price, the Class I local
supplier with the next higher bid shall be invited to match the lowest
price and so on, and the contract will be awarded accordingly. If
none of the Class I local suppliers match the price, the contract will
be awarded to the lowest bidder. Class II local supplier will not get
preference in any procurement undertaken by the political procuring
entities. Later, on 23.07.2020, the Department of Expenditure of the
Central Government issued Public Procurement Order No.1, which
deals with certain restrictions under Rule 144((xi) of the General
Financial Rules (GFRs), 2017. The 4 th respondent has produced the
above order, to contend that the restrictions will not apply to
projects, which receives international funding. The order says that
the procurement guidelines applicable to the project shall normally
be followed. On 18.09.2020, the Government of Kerala issued Ext.P8
order, on the basis of Ext.P7 order issued by the Central
Government. The order says that the new procurement policy of the
State will consist of the Price and Purchase Preferences with respect
to the products procured from MSMEs/State PSUs and that the order
supersedes all the previous orders. Ext.P8 order proceeds as if it is
extending a huge benefit to the MSMEs which was not otherwise
available but it however, does not consider the fact that Ext.P6 order
was still in force as amended in 2018 and the fact that Ext.P7 is not
an order repealing Ext.P6 order. The fact that Ext.P6 order was still
in force is affirmed by another amendment of Ext.P6 effected
recently on 11.08.2021, whereby paragraph 3(1) of the Order was
omitted, apparently since it is no longer relevant after 2015. The
amendment also substituted paragraph 7 by a new paragraph which
directs the Central Ministries or Departments or PSUs to take steps
to develop appropriate vendors by organising Vendor Development
Programmes, etc.
STREET LIGHTING - ANALYSIS OF THE STREET LIGHTING
NATIONAL PROGRAMME (SLNP) OF CENTRAL GOVERNMENT
AND "NAGARAJYOTHI" AND "NILAAVU" PROJECTS OF THE
STATE GOVERNMENT
6. The Hon'ble Prime Minister of India launched the National
LED Programme on 05.01.2015 for promoting energy efficiency in
the country. There are two components to the programme viz.,
Domestic Efficient Lighting Programme (DELP for short) and the
Street Lighting National Programme (SLNP for short). The aim of
SLNP is stated to be to cut down the cost of street lighting, reduce
the carbon output and mercury pollution. SLNP was launched with
the aim to replace 3.5 crore conventional street lights with LED
lights and it visualises an energy saving of 900 crore units, which
when converted to monetary value would result in cost savings of
₹5,500 crores for the Municipalities. The declared objective of SLNP
is enhanced public lighting, public safety, energy conservation,
savings in Electricity bill and maintenance cost for public lighting and
environment protection by reducing carbon dioxide emission and
mercury ingression on earth. The 4th respondent is the implementing
agency for the SLNP. On 14.01.2015, the Government of India
addressed the Chief Secretaries of all the States and the Union
Territories informing about the launch of SLNP. The letter says that
the 4th respondent which is the implementing agency, offers
innovative business model to Municipalities and to electrical
distribution companies, in which the 4 th respondent invests all the
capital upfront without any need for investment by electricity
distribution companies or Municipalities and that the amounts need
be paid back only over a period of time from energy and cost
savings that accrue as a result of the installation of energy efficient
LED lights. The petitioners point out that the above feature is a
significant feature of SLNP.
7. A few months prior to the launching of the SLNP, the
Government of Kerala had issued Ext.P27 order on 06.03.2014,
whereby it was decided to replace the existing streetlights in the
Municipalities in Kerala by LED lights, under a project called
"Nagarajyothi". A committee was formed to study and prepare a
project report after discussion with the LSGI. It was after the SLNP
was launched, that by Exhibit P2 order dated 02.03.2015, sanction
was accorded to KREWS to establish a street light manufacturing,
assembling and marketing unit in Kasargode district with public-
private partnership mode. While so, the Alappuzha Municipality
appears to have entered into an agreement with KSEB as can be
seen from Ext.P18 in W.P.(C)No.3490/2021, whereby the
replacement of conventional street lighting with LED lights was
undertaken through the 4th respondent. It can be seen from the
agreement that the cost is met by the 4 th respondent initially and
the payment is made by the Municipality to KSEB in instalments,
from out of the savings in energy consumption.
8. The project "Nagarajyothi" appears to have been
proceeded with even after the launch of SLNP. The petitioner in W.P.
(C)No.5045 of 2021 was incorporated on 08.06.2015 and on
17.06.2015, Ext.P3 public-private partnership agreement was
entered into between the said petitioner and the KREWS. Soon
thereafter the Kerala Gramajyothi Lighting Pvt.Ltd. (KGL for short)
was incorporated on 30.07.2015 as envisaged in Ext.P3 agreement
and the said company was registered as MSME as seen from Ext.P5
Udyog Aadhaar dated 04.12.2015. After the formation of KGL, the
Government issued Ext.P28 order whereby the KSUDP was
entrusted with the duty of identifying the person to implement the
"Nagarajyothi" project, through competitive bidding.
9. Another simultaneous development was the launching of
the Ujwal Discom Assurance Yojana (UDAY for short), by the Central
Government on 20.11.2015 as per Ext.P29. In the counter affidavit
filed on behalf of the KSEB, it is stated that pursuant to the above
Central Government scheme, on 02.03.2017, a tripartite agreement
was entered into between the Ministry of Power, Government of
India, the State of Kerala and the KSEB, whereby the Government of
Kerala was to replace the street lights in all Municipal towns with
LED, through the City Municipal Corporations/Town Municipalities. A
reading of Ext.P29 would show that the object of the UDAY scheme
was to bring about a financial turn around of the Power Distribution
Companies in the States referred to as State DISCOMs.
Replacement of conventional street lights with LED lights is not the
main aspect that comes within the purview of UDAY scheme.
10. On 13.01.2016, the Secretary, Ministry of Power,
Government of India, wrote Ext.R4B letter to the Secretary, Ministry
of Urban Development, referring to the infrastructure review
meeting held by the Hon'ble Prime Minister on 09.11.2015, and
requesting that as per the decision taken at the review meeting,
steps may be taken to implement the LED programme in all the 98
smart cities. It would appear that the SLNP scheme was being
implemented in some of the States through the 4 th respondent, as
per their business module. Ext.P26 dated 28.10.2016 shows that the
State of Telengana had accorded sanction to all the Urban Local
Bodies (ULBs) in the State for implementation of the Energy
conservation and efficiency measures, by entering into agreements
with the 4th respondent. However, as far as the State of Kerala is
concerned, it would appear that the Government had decided to
continue with the "Nagarajyothi" project which was announced
earlier. On 05.04.2017, the Government issued Ext.P19 order,
granting permission to all the LSGIs to directly purchase the
electrical equipments manufactured by KGL, which is stated to be a
sister concern of the KREWS. As there was no compulsion to either
adopt the SLNP scheme or the Nagarajyothi Scheme, the LSGIs
which had the responsibility of ensuring street lighting as per the
Municipalities Act and the Kerala Panchayat Raj Act, were carrying
out their responsibilities as per their individual decisions. This can
be seen from Ext.P19 order dated 12.12.2018 (produced in W.P.
(C)No.3490/2021) issued by the Government permitting the Kollam
Municipal Corporation to implement their proposal to replace the
conventional lighting with LED lighting through "e-Smart Solutions
Pvt.Ltd." whose proposal was found to be best suited.
11. An issue regarding the implementation of SLNP was
raised in the Lok Sabha through starred question No.338. The
questions and its answers given on 03.1.02019, is produced as
Exhibit P21 in W.P. (C) No.3490 of 2011. The specific questions
asked were whether the Government is implementing the SLNP,
whether it is currently implemented only in a few selected States,
the details of the Local Bodies which have entered into contract with
the 4th respondent for replacement of street lights with LED lights
and whether the Government has made any study on the
implementation of the project. In answer, it is stated that SLNP is a
voluntary program, which runs without any budgetary support of the
Government of India and the entire investment in supply, installation
and maintenance of LED lights is made by the 4th respondent. It is
stated that payment to the 4th respondent is made by the ULBs from
the resultant savings achieved in terms of reductions in electricity
bills and maintenance cost in respect of the streetlights covered
under the program over a period of 7 years. It is also stated that the
program has been implemented in all the ULBs of 13 States and one
Union Territory and partially in the 11 other States and three Union
Territories. It is seen from the answer that as far as Kerala is
concerned, only four ULBs had signed agreements with the 4 th
respondent and a total of 38,301 LED streetlights had been installed
till then. Ten months later, the issue was again raised before the Lok
Sabha through Starred Question 1677 for which answers were given
on 28.11.2019. It is stated in the answer, which is available in
Exhibit P22 in W.P.(C)3490 of 2021, that the 4 th respondent had
installed over 1.02 crore LED streetlights across the country. It is
further stated that the program is voluntary and runs without any
budgetary support from the Government of India and that entire
upfront investment is made by the 4th respondent.
12. On 19.04.2020, the 4th respondent issued Exhibit P25
tender notification. The title of the contract is "Design Manufacture
Testing Supply & 7 Years Warranty of 1.9 Million LED Street Lights
and other related works at Telengana Gram Panchayat and other
various location at PAN India under SLNP". Evidently, it is a global
tender. Instruction No.ITB 21.1 issued to the bidders, says about the
amounts to be furnished as bid security for Lot Nos.1 to 5. Lot No.1
is described as Gujarat, Punjab, Uttar Pradesh and Uttarakhand. Lot
No.2 is described as West Bengal, Jharkhand, Bihar and Delhi. Lot
Nos.3, 4 and 5 are all described as different Grama Panchayats in
Telengana, totalling to 32. None of the Lots relate to Kerala. The
contractual experience that is required for being eligible to bid is
that the bidder should have a minimum capacity for manufacturing
2500 LED streetlights per day, irrespective of wattages in BOQ. It is
also stated in paragraph 2.3.2 that the average annual turnover of
the bidder in the preceding 3 financial years with regard to the
different lots should be around ₹83 crores. There are disputes
regarding the scope of Exhibit P25 tender notification, which will be
dealt with later.
IMPLEMENTATION OF "NILAAVU" PROJECT
13. In June 2020, the 4th respondent submitted a proposal to
the KSEB for implementation of LED streetlights project in the State
of Kerala. Paragraph 6 of the proposal says that after receiving the
order from the KSEB, the 4th respondent shall, procure the lights as
per the public procurement guidelines and the policy approved by its
Board of Directors, shall prepare the tender document, hold pre-bid
meetings, evaluate the tender, issue the LoA to the successful
bidder, etc. It is stated that in order to enhance the
transparency of the procurements, the 4 th respondent
proposes to include a representative of the KSEB as a
member in the tender preparation, evaluation and finalisation
committee of the 4th respondent. The technical specification
of the lights is to be determined jointly by the 4 th respondent
and the KSEB as per the best industry practice (emphasis
supplied). Paragraph 10 of the proposal says that 50% of the cost of
supply of LED streetlights is to be paid by the KSEB after signing an
agreement with the 4th respondent/issuance of LoA to the 4 th
respondent and that the balance 50% is to be paid by the KSEB on
pro rata basis after supply of LED streetlights as per the delivery
schedule. It further says that the Project Management Consultancy
(PMC for short) charges payable to the 4th respondent would be 5%
of the total project cost, out of which 72% payment is to be paid by
KSEB on pro rata basis after supply of LED streetlights and the
balance 28% is to be paid annually in the next 7 years. The
estimated quantity is 6,50,000 lights and the basic price per unit
estimated is ₹450/-. The total price would thus come to
₹29,25,00,000/-. The proposal also deals with the other components
for installation. Finally, the proposal arrives at a total estimated cost
of ₹107,05,50,000/- and PMC charges of ₹5,35,27,500/-. The
proposal specifically says that the financial commitment is calculated
based on the cost of LED streetlights procured through the previous
tenders and shall be revised based on actual price discovered
through EESL bidding process.
14. Thereafter, Ext.P11 order was issued on 10.08.2020,
wherein it is stated that the Government of Kerala intends to include
a project to be named "Nilaavu", which is envisaged for reducing the
power consumption of the LSGIs and for reducing the environmental
impact by replacing the conventional lights with LEDs, in the 12
point priority programmes of the Hon'ble Chief Minister of Kerala,
and implement it. The order details the manner in which the project
is to be given effect to. It says that each LSGI can join by
depositing the project cost, according to their requirement, including
the cost of LED lamps and fixtures with one year AMC upfront with
KSEB.
15. The KSEB is stated to have prepared the DPR on behalf of
the LSG Department and forwarded the same to the Department on
30.11.2020. On 22.12.2020, the KSEB is stated to have designated
the Chief Engineer (DS) as the State Nodal Officer with
responsibilities to procure street lights and fixtures for "Nilaavu"
Scheme. It is claimed that the KSEB through its Chief Engineer, had
placed Ext.R4I letter of intent with the 4 th respondent on
24.12.2020, for supply of 2 lakh LED lights and fixtures for
implementation of phase 1 of the project. The above facts are
seriously disputed by the petitioners, since at that point of
time, the project itself was in a fluid state and no decision
had been taken by the Government to implement the
"Nilaavu" project. (emphasis supplied)
16. The decision for implementation of the "Nilaavu" project
was taken by the Cabinet of the State of Kerala only on 24.12.2020.
This was followed by Ext.P12 Government order dated 25.12.2020,
which is claimed to be in line with the SLNP launched on
05.01.2015. According to the respondents, "Nilaavu" project is being
implemented by the Government of Kerala with KSEB as its Nodal
Agency, as a part of implementing SLNP in the State. The petitioners
are disputing the contention of the respondents that the "Nilaavu"
project is part of the SLNP. The details of the dispute have been
stated in later paragraphs.
17. The 4th respondent is to be the project management
consultant for the "Nilaavu" project and the project cost was
estimated as ₹289.82 crores, which was to be met by KIIFB initially,
and repayable by the LSGI over a period of 7 years. Under the
project the KSEB Ltd. is permitted to purchase LED lighting and
connected equipments from the 4 th respondent. The project thus
envisaged is different from the business model of SLNP and also the
project proposal submitted by the 4th respondent in June,2020.
18. On 13.12.2020, the 4 th respondent issued a tender
notification. The notice inviting the tender is produced as Exhibit
R2(b)/R1(b). The tender description is "Design, Manufacture,
Testing, Supply, including Transportation, loading-unloading of the
IDC material suitable to LED Street Lights "Nilaavu" project in the
State of Kerala under SLNP". The tender document is produced as
Exhibit R4D by the 4th respondent in the counter affidavit. Neither
the tender notification nor the bid document deal with supply of LED
lights. Curiously, in the counter affidavit, the 4 th respondent has
chosen to describe Exhibit R4D as a tender for procurement of LED
streetlights. Other than Exhibit P25, no other tender notification
dealing with supply of LED lights have been produced by the
respondents.
19. On 07.01.2021, Exhibit P13 order was issued in
clarification of Exhibit P12 order. One of the clarifications is that PMC
charge of 2% will be payable to the 4 th respondent. Another
clarification is regarding replacement of lights during the period of
warranty. Along with the clarification, the order also contains
guidelines for implementation of the "Nilaavu" project. It can be
seen from Ext.P13 that the KIIFB will be funding the project, the
cost of which is estimated as ₹28,982.91 lakhs. It says that 80% of
the amount will be given as advance to the 4 th respondent and the
balance 20% will be paid in 7 years. The order further says that the
amounts deducted at source from the development fund of the
LSGIs by the finance department will be the amount which is paid
every year to the KIIFB.
20. On 08.01.2021, the Deputy Director of Panchayats wrote
to the Secretaries of all the Grama panchayats, stating that the
Grama Panchayats should hold an emergency committee meeting on
11.01.2021 and decide to implement the "Nilaavu" project and
select one among the 5 packages which are appropriate for the
Panchayat. On 23.01.2021, the KSEB issued Exhibit P14 circular
regarding the implementation of the project, which contains certain
guidelines that are to be followed by the LSGIs.
21. On 26.02.2021 the KSEB has issued purchase order to
the 4th respondent (Ext.R4E) and executed an agreement with the
4th respondent (Ext.R4E1). Ext.R4E refers to Ext.P12 and Ext.R4I
and a subsequent letter dated 25.02.2021 from the 4 th respondent.
It would appear from paragraph 4 of the affidavit in support of
I.A.No.3 of 2021 filed by the 4 th respondent producing Exts.R4H and
R4I documents that Ext.R4H proposal was submitted in June,2020
and the Letter of Intent was given by the KSEB after six months on
24.12.2020. Ext.R4H contains a proposal for supply of 650000
numbers of 35 W LED street light with 7 years warranty at a base
price of ₹1,271/- with additional cost towards maintaining buffer
stock, etc. of ₹376/- totalling to ₹1,647/- per unit. The proposal also
shows the cost estimation of other components for installation like
GI pipes, cables,etc., and the total cost of the same per unit is not
specifically stated. At the same time, Ext.R4I Letter of Intent does
not even refer to the proposal submitted in June, 2020. lnstead, it
says that a comprehensive proposal was submitted by the 4 th
respondent on 24.12.2020. That is, on the very same day the
proposal was submitted, the KSEB has issued a Letter of Intent. The
Letter of Intent however is regarding 100000 numbers each of LED
Modules of 18W and 35W. There is no proposal regarding the 18W
module available on record. This court is not able to fathom a
contention that a proposal involving a huge financial
commitment, was accepted on the very same day on which it
was submitted and a Letter of Intent was also issued on the
very same day. Now, coming to Ext.R4E, which is stated to be the
purchase order issued on 26.02.2021, another six months later, it
can be seen that the purchase order is for 100000 numbers each of
LED modules of 18W and 35W and the unit price stated for the
module and fixtures has absolutely no comparison with either
Ext.R4H proposal or with R4I Letter of Intent. Ext.R4I specifically
requires the 4th respondent to prepare the bid documents, invitation
of bid, evaluation of bid, award of purchase order to successful
bidder, execution of agreement etc., for procuring the LED
luminaries. In fact, in Ext.R4H proposal the 4 th respondent has
stated that the steps for procurement like preparation of tender
document, holding pre-bid meetings, evaluation of tender, issuance
of LoA to successful Bidder, etc., as per the public procurement
guidelines shall be undertaken after receiving the order from the
KSEB and that the 4th respondent proposes to include a
representative from KSEB as a member in the tender preparation,
evaluation and finalisation committee of the 4 th respondent. But
none of the above procedures have admittedly been followed while
issuing Ext.P25 tender notification, if the same is to be considered
as a notification for procuring LED lights for the "Nilaavu" project. It
is also not evident that such a procedure was followed while issuing
Ext.R2(b) notification for procurement of IDC materials.
STATUTORY PROVISIONS APPLICABLE
22. Section 166 of The Kerala Panchayat Raj Act, 1994 deals
with the powers, duties and functions of the Village Panchayat.
Under Section 166(1), it is the duty of the Village Panchayat to meet
the requirements of the Village Panchayat area in respect of matters
enumerated in the Third Schedule. Under Section 166(2), the Village
Panchayat shall have exclusive power to administer the matters
enumerated in the Third Schedule and to prepare and implement
schemes relating thereto for economic development and social
justice and the role of the Government is only to provide guidelines
and assistance financial, technical, or otherwise. This aspect is
reiterated in Section 166(4) and (5). The Third Schedule contains
the mandatory functions and general functions of the Village
Panchayats. Serial No.15 in the mandatory functions deals with
street lighting and its maintenance. Section 316(1) of the Kerala
Municipality Act, 1994, says that the Municipality shall cause the
public streets in its land area to be lighted and for that purpose to
provide such lamps and works as it deems necessary. As per Section
316(2), for the purpose of sub-section (1), the KSEB shall provide
the required electrical energy and technical assistance to the
Municipality at the rates fixed by the Government and on other
conditions as prescribed. Under Section 316(3), notwithstanding
anything contained in sub-section (1), the Government shall, in
consultation with the Municipality, provide any public street with a
lighting system through an approved agency.
23. The Micro, Small and Medium Enterprises Development
Act, 2006 (MSMED Act for short) came into force with effect from
02.10.2006. The enterprises are classified under Chapter 3 of the
MSMED Act. Section 7 classifies the enterprises as micro, small and
medium on the basis of the capital investments of the enterprise.
Chapter 4 of the Act deals with measures for promotion,
development and enhancement of competitiveness of MSME. Section
11 in Chapter 4, says that for facilitating promotion and
development of MSME, the Central Government or the State
Government may by order notify from time to time, preference
policies in respect of procurement of goods and services produced
and provided by micro and small enterprises, by its Ministries or
Departments, as the case may be, or its aided institutions and public
sector enterprises.
ARGUMENTS ON BEHALF OF THE PETITIONERS
24. Sri P.B.Krishnan, appearing for the petitioner in W.P.
(C)No.3490 of 2021 has raised the following contentions.
(a) Though the executive orders regarding the
"Nilaavu" Project are contended to have been issued
pursuant to the UDAY scheme and the SLNP scheme of
the Central Government, on facts the project introduced
by the State Government is not in any way connected
with the Central Schemes. It is contended that SLNP is a
programme for ULBs and is being implemented is select
Municipalities and the business module for the
programme is such that the entire cost is met by the 4 th
respondent and is recouped from the energy savings
over a period of time. Except for the fact that both the
Central Government scheme and the "Nilaavu" project
aim at replacing the conventional street lights with LED
lights, it is contended that there is no similarity
regarding the business module. It is hence contended
that "Nilaavu" is a unique project that has to stand or
fall on its own merit.
(b) The jurisdiction and authority in the matter of
street lighting is entirely with the LSGIs as per the
provisions of the Kerala Municipality Act, 1994 and the
Kerala Panchayath Raj Act, 1994. Street lighting and
maintenance is a mandatory function of the Grama
Panchayaths. The above functions and authority are
usurped by the State and the KSEB, whose roles are
very limited as per the Statutes. It is also contended
that the project is being thrust upon the Panchayats by
coercing the procurement officers of the LSGIs.
(c) The "Nilaavu" project is against the existing
policy in favour of the MSMEs. The MSMEs enjoy
reservation/preference in the matter of public
procurement of "street lighting". Section 11 of the
MSMED Act, 2006 and the Public Procurement orders
issued thereunder speak about such reservation/
preference. The orders issued by the State Government
earlier also endorse this fact (Ext.P11 in W.P.(C)No.3490
of 2021). Paragraph 3 of Ext.P6 procurement policy
provides for 20% minimum procurement and paragraph
11 provides for exclusive reservation with regard to
items included in the Annexure. The SPM issued by the
State Government also provided for such reservation in
favour of MSMEs till Annexure 19 was deleted from the
SPM in 2019. On 09.11.2018, the Central Government
enhanced the minimum procurement from 20% to 25%
as part of Atmanirbhar Bharat. In the above
circumstances, the State cannot allow KSEB to procure
LED light fittings from the 4th respondent in bulk. It is
also contended that the 4th respondent being a PSU is
bound by the mandatory reservation in favour of
MSMEs, with regard to streetlighting.
(d) It is contended that the principles of
promissory estoppel and legitimate expectation are
applicable in the case. It is submitted that the MSMEs
like the petitioners, which were established on the basis
of the public procurement policies and the provisions of
the MSMED Act, at huge cost, are idling since no LED
fittings required for street lighting are procured from
within the State.
(e) It is also contended that there is non
application of mind to the relevant aspects, particularly
regarding the law and the policy applicable for
procurement of LED light fittings and the existence and
relevance of the MSMEs operating in the field.
25. The counsel relied on the decisions of the Hon'ble
Supreme Court in M/s Motilal Padampat Sugar Mills Co.Ltd., v.
The State of Uttar Pradesh & Ors. reported in [AIR 1979 SC
621], State of Punjab v. Nestle India Ltd. & Anr. reported in
[(2004)6 SCC 465], Manuelsons Hotel Private Ltd. v. State of
Kerala reported in [2016(2)KLT 694(SC)], State of Jharkhand
& Ors. v. Brahmputra Metallics Ltd. & Ors. reported in [2020
SCC OnLine SC 968] to contend that the respondents are estopped
by the principles of promissory estoppel from not purchasing the
required LED lights from persons like the petitioners and that the
petitioners are entitled to have a legitimate expectation that
purchases of the LED lights required for the purpose of street
lighting in the LSGI will be from persons like the petitioners who are
entitled to preference.
26. Sri S.Sreekumar, Senior Advocate, instructed by Sri
P.Martin Jose, appearing for the petitioner in W.P.(C)No.5045 of
2021 adopted the arguments advanced by Sri P.B.Krishnan. The
Senior Counsel submitted that the petitioner in W.P.(C)No.5045 of
2021 is a company registered as an MSME and that the Managing
Director is the proprietor of M/s. Usha Electronic System, which is
also a MSME. He referred to the Nagarajyothi project that was
introduced in 2014 and submitted that the KREWS, which is a
Society in which all the Grama Panchayaths are members had
pursuant to invitation of interest for private participation and Ext.P3
public private partnership agreement, formed the Kerala
Gramajyothi Lighting Pvt.Ltd. It is submitted that it is while the
above project was in place that the "Nilaavu" project is introduced,
whereby the entire purchase of LED for street lighting is sought to
be made from the 4 th respondent, to the total exclusion of the
MSMEs, who were hitherto having a reservation. The Senior Counsel
referred to Ext.P7 order and submitted that the purchase preference
available under paragraph 3(a) has to be considered alongside the
proposal of Global Tender by the 4 th respondent. Referring to the
features of the SLNP project and the "Nilaavu" projects, it is
submitted that the "Nilaavu" project is not in line with SLNP scheme,
which provides for the entire cost being met by the 4 th respondent.
It is submitted that in the "Nilaavu" project the KIIFB has the role of
a financier and the KSEB has the role of an implementing agency,
which is not the case with SLNP. Reference is made to Ext.P23 which
is brochure of the 4th respondent which says that the 4 th respondent
follows a Pay-As-You-Save (PAYS) model which obviates the need of
any upfront capital investment by the consumer. The document also
claims that the conventional street lights are replaced by LEDs at
the cost of the 4th respondent without any investment by the
Municipalities and that the business model has been used to replace
around 10 million street lights in over 1050 ULBs across India. The
Senior Counsel submits that a reading of Ext.P23 and the features of
the SLNP will clearly establish that "Nilaavu" project is not in line
with SLNP. The Senior Counsel referred to Ext.P16 which contains
the Stores Purchase Rules followed in the State and submitted that
the rules to be followed for public procurement are contained in the
Kerala Financial Code and the Stores Purchase Manual.
27. As per the norms, whenever the estimated value of the
stores to be purchased is ₹20,000/- and above, tenders should be
invited. The Kerala Financial Code (KFC for short) lays down the
general financial principles and rules of procedure in respect of
financial matters of all Departments under the Government. As per
paragraph 120(2) contained in Chapter VI of the KFC, the rules and
instructions will apply also to purchase of stores on behalf of LSGIs.
A tender system has been explained in Clause 126 of the KFC. As
per Clause 126(b), tenders should be obtained either by
advertisement or by direct invitation of limited number of firms or by
invitation to one firm only. The counsel also referred to Ext.P18
circular which specifically says that tendering process or public
auction is a basic requirement for award of contract by any
Government agency and any other method would amount to breach
of Article 14 of the Constitution of India. Ext.P18 also makes
reference to the decision in Nagar Nigam, Meerut v. Al Faheem
Meat Exports Pvt.Ltd & Ors. reported in [(2006) 13 SCC 382].
28. The learned Senior Counsel submitted that it is the duty
of the Government to promote MSMEs or at least they should have
invited tenders for the supply of LED bulbs, after having decided to
implement the "Nilaavu" project. Instead, what has been done is to
create a Nodal Agency who is to supply the necessary stores which
is totally against the tendering process and hence impermissible.
The contention is that when the State is obliged to purchase stores
through a tendering process, it cannot be bye-passed under the
guise of a policy where a public sector undertaking is identified as a
Nodal Agency; and the entire purchase is made through them. It is
submitted that admittedly there has been no tender specifically
invited for supply of LED lighting in terms of the proposal submitted
by the 4th respondent and accepted for the purpose of
implementation of the "Nilaavu" project. The counsel points out that
even the respondents do not have a case that apart from Ext.P25,
there has been any other tender with respect to LED lighting. It is
contended that Ext.P25 which was a tender issued for the purpose of
implementation of the SLNP in Telengana cannot be taken as a
defence to contend that a tendering process was initiated. The
learned Senior Counsel referred to the counter affidavit filed by the
4th respondent to contend that the "Nilaavu" project has absolutely
no connection with the SLNP initiated by the Central Government.
Exts.R4B and R4C are also referred to, to establish the above
aspect. After referring to the manner in which the "Nilaavu" project
is sought to be implemented, the learned Senior Counsel has raised
a question as to why the Municipalities and Panchayats, who have a
statutory duty to take care of the street lighting are not allowed to
directly deal with the 4th respondent under the SLNP and instead,
the 2nd respondent and the KIIFB have been allowed to participate in
the project. It is the contention that if the intention of the
Government was a benefit to the Municipalities, the same could have
been achieved by participating in the SLNP programme directly
rather than by launching a unique project with two more participants
who are actually not required either from the implementation point
of view or from the financial point of view. It is submitted that public
purpose will also be served better if the LSGIs had adopted the
SLNP. The counsel further submits that the reference to SLNP in
Ext.R4D tender notification is actually misleading, as the "Nilaavu"
project is not a project under the SLNP, and is in total variance with
the business module which has been adopted by the 4 th respondent
for implementation of SLNP. It is further submitted that in Ext.R4D,
a purchase preference has been stated to be available to MSMEs. A
reading of the qualification criteria contained in the bid document
would show that there is no manner in which the MSMEs can
participate in the tender process. Specific reference is made to the
financial criteria which says that bidders should have an average
annual turnover of at least ₹3,54,00,000/- in the previous three
years. It is submitted that with such harsh conditions, there is no
manner in which an MSME can participate in a competitive tender in
the nature of Ext.R4D.
29. The learned Advocate General appearing for the State
contended that it is not correct to say that there is any usurpation of
power of the Municipalities or Panchayats and there is no violation of
the statutory provisions. Reference is made to Section 316 of the
Municipalities Act to submit that the Government has acted only
within its powers. It is submitted that as per the Statute it is open
to the Government, in consultancy with the Municipality, to provide
any public street with a lighting system through an approved
agency. Section 316A of the Municipalities Act is relied on to submit
that the Statue permits a Municipality, with prior sanction of the
Government, to enter into a contract with KSEB for the bulk
purchase for the supply of electricity in its area. The learned
Advocate General referred to Section 166 of the Kerala Panchayat
Raj Act, 1994 dealing with powers, duties and functions of the
Village Panchayat and submitted that the Village Panchayat has
certain mandatory functions specified in the Third Schedule.
Referring to the Third Schedule, it is submitted that Serial No.15 in
the mandatory functions is street lights and its maintenance. It is
further submitted that in sector wise functions mentioned in Third
Schedule "electricity and energy" is included in Sl.No.IX and it takes
in installation and maintenance of street lights. The learned
Advocate General submits that Ext.P12 has to be read in the light of
Section 316 of the Municipalities Act and Section 166 read with Third
Schedule of the Kerala Panchayat Raj Act. The contention is that on
a combined reading of the statutory provisions, there is nothing
illegal in appointing the KSEB as the special purpose vehicle for the
"Nilaavu" project. It is further submitted that as far as the payment
is concerned, 80% of the payment is to be made from plan funds
and 20% is to be made from energy savings, which is to be paid in
seven instalments. As per the project, even the abovesaid payment
will be made by the KIIFB and the amounts will be made available to
the KIIFB from out of the energy savings. It is specifically
contended that there is no compulsion of the LSGI to adopt the
"Nilaavu" project. It is submitted that the "model resolution" that
the Panchayat has to pass for adopting the "Nilaavu" project,
contained in Ext.P13, is not to be understood as a compulsion, but is
only a guideline to such of those Panchayats which are proposing to
replace the conventional street lights with LED light by opting for the
"Nilaavu" project. Regarding the contention of the petitioners on
promissory estoppel based on Section 11 of the MSME Act and the
procurement policy, it is submitted that paragraph 3 of Ext.P6 only
provides for 20% procurement from MSMEs. It is hence contended
that even if MSMEs participate in the tender, only 20% need to be
procured from them. Another contention is that paragraph 13 of
Ext.P6 provides for an alternate remedy through a Grievance Cell.
It is submitted that the petitioners have not approached the
Grievance Cell with any complaint that there is violation of the
procurement policy. It is further submitted that all that is available
to the MSMEs is price preference and purchase preference and there
is no absolute reservation. Regarding the contentions based on the
SPM, the learned Advocate General replied that the SPM is not
giving any reservations regarding the purchase of stores. The
learned Advocate General pointed out that Annexure 19 of the SPM
which listed out the items on which the reservation was available to
the MSMEs has been deleted and hence no reservation can be
claimed. On the contention that the principles of promissory
estoppel and legitimate expectation will apply, the learned Advocate
General submitted that Ext.P12 has to be tested on the basis of the
judgment in Bannari Amman Sugars Ltd. v. Commercial Tax
Officer & Ors. reported in [(2005) 1 SCC 625] which specifically
says that the issue has to be decided on the basis of pleadings and
as long as the pleadings do not justify a claim of promissory
estoppel or legitimate expectation, the doctrine has no application.
The specific contention is that the State has not either induced the
petitioners or assured them about any purchase of stores from
them. It is submitted that they had started units and have been
functioning all these years and purchases by the Government or
Governmental institutions can only be one of their selling point and
that no details are available from the pleadings to show that the
petitioners are entirely dependent on purchases by the Government
or the LSGIs. Regarding the question whether the reservation in
favour of the MSMEs under paragraph 11 of Ext.P6 continues even
after Ext.P6 was amended in 2018 and 2021, the learned Advocate
General submitted that the State is not bound by the reservation
since it applies only to Central Government Ministries, Departments
and PSUs and not the the State of Kerala and KSEB. The contention
is that once the SPM was amended to include only purchase
preference and price preference, and Annexure 19 was deleted, no
reservation can be claimed by the MSMEs.
30. The counsel for the 4th respondent submits that the 4th
respondent is a joint venture of four public sector undertakings and
the Ministry of Power has designated the 4th respondent as the nodal
implementing agency for LED based SLNP and DELP programmes.
They have been appointed as Project Management Consultant (PMC
for short) by the 2nd respondent, who is the Nodal Agency for
implementation of "Nilaavu" Project, appointed as per Ext.P11 order.
He contends that there is no compulsion on any LSGIs to take part
in the "Nilaavu" project. It is contended that the 2 nd respondent had
approached the Kerala State Electricity Regulatory Commission,
which had on 03.12.2020 ordered that KSEB shall take the role of
lead SPV for implementation of the "Nilaavu" project. It is stated
that thereafter Ext.R4C Detailed Project Report of the project was
prepared with the name "Nilaavu"-Illuminating Kerala. Since the
administrative sanction for the project was accorded only as per
Ext.P12 order dated 25.12.2020, the project report could only have
been prepared thereafter. Paragraph 7 of Ext.R4C details the
financial estimates and cost projections which includes details
regarding the cost of LED lights of different Watts, the PMC charges
payable to the 4th respondent and the manner of funding by the
KIIFB. Paragraph 9 says about the payment schedule. It is stated
that 80% of the cost of LED street lights and 100% cost of fixtures
specified in the invoice of the 4th respondent shall be released by the
KIIFB on completion of delivery and acceptance of the same by the
2nd respondent. The project report details the roles of the different
stake holders. Regarding the purchases by the 4 th respondent, it is
stated that it will be through competitive bidding process. It is
further stated that the KSEB will arrange to dismantle the
conventional street lights and install the new LED luminaries
supplied by the 4th respondent using its own or contracted
manpower. The total cost of the project is estimated at around
₹298.38 crores for replacing the existing lights with 10,50,000
LEDs.
31. The counsel for the 4th respondent submitted that on
24.12.2020, the 2nd respondent had given a letter of intent to the 4th
respondent based on which the 4 th respondent had floated a tender
on 01.01.2021. Later on 26.02.2021, the 2 nd respondent had issued
a purchase order for supply of 2 lakh LED lights and 2 lakh IDC
material and has also entered into an agreement with the 4 th
respondent for the supply of the above products [Exts.R4E and
R4E(1)]. It is submitted that the 4th respondent has already supplied
goods worth ₹33,27,00,000/- to the 2nd respondent. It is further
submitted that the LED lights are procured by spending public
money and that too money obtained by the Government of India as
loan from the Asian Development Bank Act, which has been made
over to the 4th respondent. Regarding the contention that the
procurement was for Telangana as per Exhibit P25 tender, the
counsel submits that there is provision for utilising the purchase
made for one contract in another contract. It is also submitted that
the tender does not prohibit MSMEs from participating. On the
question whether the 4th respondent has followed the purchase
preference policy, the counsel referred to the annual report of the 4 th
respondent for the period 2019-2020, which is produced as Exhibit
R4L and submitted that 25% percentage of the purchases for the
year are from MSMEs. It is also submitted that the petitioners did
not participate in the tender floated by the 4th respondent.
32. On the legal aspects, it is contended on behalf of the 4 th
respondent that the issue involved in the writ petitions is purely
contractual and this Court should not interfere in such cases by
exercising the jurisdiction under Article 226 of the Constitution of
India. It is further contended that judicial review is regarding the
decision making process and that the Court should exercise restraint
and caution while considering issues of this nature. It is further
contended that the Court is not sitting in appeal over the decision of
the respondents to implement the "Nilaavu" project, which is a
result of expert opinion and unless there is overwhelming public
interest involved or there is total arbitrariness or unreasonableness,
there can be no case for exercise of the discretionary power under
Article 226 of the Constitution of India. Reliance is placed on the
decisions of the Hon'ble Supreme Court in Kasturilal Lakshmi
Reddy v. State of J&K reported in [AIR 1980 SC 1992],
Sachidanand Pandey & Ors. v. The State of West Bengal &
Ors. reported in [AIR 1987 SC 1109], M.Jhangir Batusha &
Ors. v. UOI & Ors. reported in [AIR 1989 SC 1713], Tata
Cellular v. UOI reported in [AIR 1996 SC 11], M.P.Oil
Extraction & Ors v. State of M.P. & Ors. reported in [AIR 1998
SC 145], Ranaq International Limited v. I.V.R.Construction
Ltd. & Ors. reported in [AIR 1999 SC 393], Air India Ltd., v.
Cochin International Airport Ltd. reported in [(2000) 2 SCC
617], Nagar Nigam, Meerut v. Al Faheem Meat Exports
Pvt.Ltd. & Ors. reported in [(2006) 13 SCC 382], Jagdish
Mandal v. State of Orissa & Ors. reported in [(2007) 14 SCC
517], Meerut Development Authority & Ors. v. Association of
Management Studies & Ors. reported in [AIR 2009 SC 2894],
Michigan Rubber(India)Ltd. v. The State of Karnatake & Ors.
reported in [AIR 2012 SC 2915], UOI & Ors. v. HBL Nife Power
Systems Ltd. reported in [AIR 2016 SC 558], Afcons
Infrastructure v. Nagpur Metro Rail Corporation Ltd., & Ors.
reported in [AIR 2016 SC 4305], in support of the above
contention.
33. Another contention of the counsel for the 4 th respondent
is that what is challenged in the writ petitions is a policy decision of
the State Government and the legal principles regarding judicial
review of policy decisions is well settled. Reliance is placed on the
judgment of the Hon'ble Supre Court in Union of India v.
International Trading Co. & Ors. reported in [AIR 2003 SC
3983]. It is also contended that the 4th respondent has received
multilateral funding for the SLNP and certain exemptions have been
permitted by the Government of India in Exts.R4F and R4G. The
counsel referred to the judgment of the Hon'ble Supreme Court in
Asia Foundation & Constructions Ltd. v. Trafalgar House
Constructions(I) Ltd. & Ors. reported in [(1997) 1 SCC 738].
The Apex Court had observed in the judgment that the Asian
Development Bank came into existence under an Act called Asian
Development Act, 1966, pursuant to an International agreement to
which India was a signatory. The Court further observed that when
financial institutions grant huge loans they always insist that any
project for which loan has been sanctioned must be carried out in
accordance with the specification and within the time schedule.
Reliance is also placed on the decision of the High Court of Gujarat
in Paresh Kumar Dalsukhbhai Gurjar v. State of Gujarat &
Ors. (Writ petition(PIL) No. 243 of 2016. Regarding the
contention that MSMEs are entitled to the reservation under
paragraph 11 of Ext.P6, the counsel for the 4 th respondent contends
that all that the MSMEs are entitled to are the benefits stipulated in
paragraph 3 of Ext.P6 and that the said benefits are being extended
by the 4th respondent as is evident from the annual accounts which
has been produced in the case.
34. The Standing Counsel for the 2nd respondent adopted the
contentions of the learned Advocate General and the counsel for the
4th respondent and submitted that the first phase of the "Nilaavu"
project is already implemented and the second phase is under
implementation.
35. In reply to the contentions of the respondents,
Sri P.B.Krishnan submits that the "Nilaavu" project does not have
anything to do with either ADB or SLNP. The counsel points out that
the Government orders do not refer to ADB funding or to the Central
Scheme. The counsel points out that the SLNP related to
replacement of streetlights in 98 selected ULBs. Regarding the
contention that the petitioners did not participate in the tender
process, the counsel pointed out that as far as Exhibit R4D tender
was concerned, it was for procurement of IDC material and there is
no reason for the LED manufacturers to participate in the tender.
Regarding the tender for LED lamps, the counsel pointed out that
the said tender was dated 19.04.2020, much before the "Nilaavu"
project was visualised and the tender related to a totally different
area. He reiterated the contention that in paragraph 11 of Ext.P6
procurement policy, there is a complete reservation in favour of the
MSMEs as far as street lighting is concerned. Regarding the
contention that the 4th respondent is procuring 25% from MSMEs,
the counsel points out that it can be seen from Exhibit R4L that out
of the total procurement worth ₹1913 crores, procurement through
international bidding amounts to ₹1629.30 crores and the 25%
procurement that is mentioned is relating to only domestic
procurement. The contention is that if the project is neither under
the ADB nor under SLNP, the respondents are bound to follow the
procurement policy. The counsel pointed out that for the first time,
the price is shown only in Exts.R4E and R4F. It is pointed out that
the writ petition was filed on 09.02.2021, and it is immediately
thereafter that the respondents had fixed the price and entered into
an agreement. The counsel contended that the failure to issue a
tender notification and invite bids is itself an illegality, when it comes
to public procurement and spending of public money.
36. The learned Senior Counsel Sri S.Sreekumar appearing
for petitioner in W.P.(C)No.5045 of 2020, in reply, submitted that the
petitioner in the writ petition was incorporated in order to carry out
the Nagarajyothi policy which had been announced by the State
Government in 2015. It is submitted that all the LSGIs are members
of the KREWS. It is also contended that the model which is
contemplated for the "Nilaavu" project is not the unique model
which was contemplated for the SLNP by the Government of India
and if the contention of the respondents that the project is under
the SLNP scheme is to be accepted, necessarily, there cannot be a
different model as far as one State is concerned.
ISSUES TO BE ANSWERED:
37. On the basis of the pleadings and arguments advanced by
the petitioners and respondents, the following questions are
formulated for the purpose of deciding the dispute.
(a) Are the MSMEs entitled to any exclusive
reservation regarding public procurement of street
lighting?
(b) If no exclusive reservation is available, are MSMEs
entitled to any preference in purchase by the
Governments, LSGIs and PSUs?
(c) Is "Nilaavu" project a part of the Street Lighting
National Programme which is implemented through the
4th respondent?
(d) Can the State or LSGI or KSEB avoid public
procurement by tender process, including the preference
available to the MSMEs, while they are implementing a
Policy through a management consultant (4th
respondent)?
(e) Have the respondents followed the tender process
for procuring LED lighting, required for implementation
of the "Nilaavu" project or is it a case of outright
purchase from a single PSU (the 4th respondent)?
(f) Do the principles of promissory estoppel and
legitimate expectation apply in the facts of this case?
(g) Can the petitioners invoke the extraordinary
jurisdiction of this Court under Article 226 of the
Constitution of India?
CONSIDERATION
QUESTIONS (a) and (b):
38. Section 11 of the MSMED Act, 2006, says that for
facilitating promotion and development of micro and small
enterprises, the Central Government or the State Government may,
by order notify from time to time, preference policies in respect of
procurement of goods and services, produced and provided by micro
and small enterprises, by its Ministries and Departments, as the
case may be, its aided institutions and public sector enterprises.
Even though Section 7 of the Act categorises the enterprises into
micro, small and medium, Section 11 refers only to micro and small
enterprises. Going by the norms of categorisation under Section 7, a
micro enterprise is one where the investment in plant and
machinery does not exceed ₹24 lakhs and a small enterprise is one
in which the investment in plant and machinery is more than ₹24
lakhs, but does not exceed ₹5 crores. Exhibit P6 is the preference
policy notified under Section 11 of the MSMED Act. Paragraph 3 of
the public procurement policy as it originally stood, mandates
procurement from MSMEs, 20% of the total purchase made by the
Central Government Ministries, Departments and Public Sector
Undertakings. The paragraph further says that in case where an
MSME is not the L1 tenderer, but has submitted a bid which is within
the range of L1+15%, the MSME will be allowed to bring down the
price to match the bid of L1 and in such event, the MSME will be
awarded work upto 20% of the tendered value. Paragraph was later
amended by increasing the preference to 25%. Paragraph 11 of the
policy is very relevant. It specifically reserves 358 items which are
included in the schedule, for exclusive purchase from MSMEs. Item
287 in the list is "street lighting". Paragraph 11 thus creates an
exclusive preference for MSME, with regard to select items that are
manufactured by them. Even though Exhibit P6 order was amended
on 09.11.2018 and 11.08.2021, paragraph 11 dealing with exclusive
preference for MSMEs with regard to certain products was not
amended. That is to say, the exclusive reservation still continues. It
is to be noted that Exhibit P6 is issued in exercise of the power
available under Section 11 of the MSMED Act and has a legislative
colour. I am hence of the view that the petitioners and other MSMEs
are entitled to the reservation contemplated in paragraph 11 with
respect to the 358 items included in the schedule to Exhibit P6. I am
also of the opinion that Exhibit P7 order which is also a public
procurement policy, has been issued for a totally different purpose
and does not deal with the preference policy for MSMEs under
Section 11 of the MSMED Act. That apart, Exhibit P7 specifically says
that the procurement policy, which are already in place in different
departments and approved by the Cabinet after 01.01.2015 will
prevail over the provisions of Exhibit P7. The amendments of Exhibit
P6 in 2018 and 2021 are a clear indication of an approval after 2015
and hence Exhibit P6 will prevail over Exhibit P7, even in terms of
Exhibit P7. The purchase preference of 25% is not hence very
relevant as far as the 358 items are concerned and they would apply
in case of other products which are manufactured by MSMEs.
39. The contention of the learned Advocate General is of
great significance on this issue. It is only under Section 11 of the
MSMED Act, the Central Government and the State Government
issues preference policies with respect to MSMEs. As far as the
Central Government is concerned, Ext.P6 preference policy is
binding on the Central Government Ministries, Departments and
PSUs. However, even though the State of Kerala had adopted the
policy by making amendments in the SPM initially, after the issuance
of Ext.P7 order, the State of Kerala has amended the SPM by
deleting Annexure 19 which contained the list of the products
manufactured by MSMEs which enjoyed reservation. In the place of
reservation, the price and purchase preference contained in the
Procurement Policy under Make in India Programme alone was
incorporated. It is not clear whether the State Government had
considered the Procurement Policy under the Make in India
Programme as amending Ext.P6. However, the fact remains that
there is a change in procurement policy as far as the State
Government is concerned. The State Government cannot be
compelled to follow the policy of the Central Government in this
regard, having regard to the wording of the Statute. I am hence of
the opinion that Ext.P6 cannot be held to be binding on the State
Government. However, as far as the 4 th respondent is concerned,
since it is Central PSU, they are bound by Ext.P6 procurement policy.
40. The 4th respondent has put forward a contention that in
case of projects funded by the ADB, it is only the norms prescribed
for the project that has to be looked into and not Ext.P6
procurement policy. Reliance is placed on Ext.R4F and R4G Office
Memorandums in support of the above contention. The portion of
the order relied on reads as "In projects which receives international
funding with the approval of the Department of Economic Affairs
(DEA), Ministry of Finance, the procurement guidelines applicable to
the project shall normally be followed, notwithstanding anything
contained in this Order and without reference to the Competent
Authority. Exceptions to this shall be decided in consultation with
DEA." In my opinion, the above contention is without any basis.
Firstly, Exts.R4F and R4G do not have anything to do with Ext.P6
Procurement Policy as amended in 2018 and 2021. Secondly, even
on a reading of the portion from Ext.R4G extracted above, it would
only mean that the procurement guidelines of the project will apply
not withstanding the contents of Exts.R4F and R4G. Thirdly, the
"Nilaavu" project with which we are concerned, is not a project
funded by ADB or one which is receiving international funding.
Admittedly, the funding is initially done by KIIFB, and the amount is
to be paid back by the Government from the amounts deducted at
source from the development fund of the LSGIs by the Finance
Department every year. Fourthly, Ext.P6 is binding on the 4 th
respondent. The counsel for the 4 th respondent relied on the decision
in Asia Foundation (supra), regarding judicial review in a project
funded by the ADB. The Court in the above said case was
considering a project which was admittedly funded by the ADB, who
insist on certain conditions while extending the financial help, and
held that the Court has to take into account the fact of escalation of
cost in such project and the time involved and the fact that in a co-
ordinated project, if one component is worked out, the entire project
gets delayed. There is no such situation available in the case on
hand. There is already a policy notified by the Central Government
which has the force of law, which needs to be adhered to by the 4 th
respondent. The State Government has also issued a policy
document granting price and purchase preference to MSMEs.
Moreover, I have already found that the "Nilaavu" project is not
funded by the ADB. It is worthwhile to note that Exts.R4F and R4G
office memorandums which dealt with exemptions in case of funding
by multilateral and bilateral agencies were issued only after the
issuance of Ext.P25 tender notification regarding procurement of
LED lights and hence the said exemptions were not available on the
day on which the tender was notified. As such, the decision in Asian
Foundation (supra) has no application in this case. Hence I find
that the MSMEs are entitled to the reservation under the
procurement policies notified under Section 11 of the MSMED Act
and the said reservation is not affected in any way by Exts.R4F and
R4G Office Memorandums, which have been issued in a different
context. The 4th respondent is bound by Ext.P6 policy. However, such
reservation cannot be claimed against the State Government, if the
State Government or its Departments or its PSUs are procuring the
products which are included in the Annexure to Ext.P6. The State
Government will only have to follow the policy framed by them,
which provides only for price and purchase preference for the
MSMEs. At the same time, if the State Government is proposing to
procure such products, through the intervention of a Central PSU
like the 4th respondent, necessarily, the 4th respondent has to make
such procurement on behalf of the State Government, following the
policies framed by the Central Government in this regard.
Question (c):
41. As already discussed in detail in the previous paragraphs,
I am of the considered opinion that the "Nilaavu" project which has
been announced by the State Government is not a project coming
under the SLNP scheme envisaged by the Central Government.
Admittedly, the implementation of the "Nilaavu" project is with funds
made available by KIIFB and the 4th respondent is only a Project
Management Consultant, who is entitled to a payment of PMC
Charges at the rate of 2% of the invoice amount and who is
responsible for sourcing the LED lights and fixtures. The Nodal
Agency is the KSEB. In the case of SLNP, there is no funding agency
involved and the entire cost is met by the 4 th respondent. There is
no necessity to pay any PMC charges to the 4 th respondent under
SLNP. The repayment is to be made in 7 years by the LSGI
concerned out of the energy savings. Except for the fact that both
projects aim at replacing the conventional street lights with LED
lamps, there is no other similarity.
QUESTIONS (d) & (e):
42. What cannot be done directly in law, cannot be permitted
to be done indirectly. As per the guidelines contained in the Kerala
Financial Code, purchases for amounts more than ₹20,000/- can
only be done by invitation of tenders. If the 4 th respondent was not
in the picture, the State Government or the KSEB would have had to
float a tender for procuring the LED lights and the fittings. So merely
for the reason that the 4th respondent is given the responsibility of
procuring the lighting materials, it does not mean that the
requirement of open tender can be avoided. It is a requirement in
public interest and in the interest of transparency in financial
dealings of the State that they follow such a procedure. In the case
on hand, admittedly, there has been no tender floated by the State
Government or the KSEB for procurement of LED lights. The only
tender that was floated is Ext.P25 floated by the 4 th respondent,
much before they entered into an agreement in connection with the
"Nilaavu" project, that too with relation to the State of Telengana
and certain other States. I am of the opinion, that Ext.P25 will not
satisfy the requirement of law, as far as procurement of LED lights
for the "Nilaavu" project is concerned. With regard to the
procurement of the IDC materials for the purpose of implementing
the project, the petitioners are not really concerned with the same,
since they are manufacturers of the LED lights.
43. On the admitted facts, it can be seen that as far as the
LED lights are concerned, it is a case of outright purchase of the
same from the 4th respondent. Neither the State Government nor
the KSEB could have made such a purchase without following the
tender process. Even the price is fixed with reference to the tenders
floated by the 4th respondent. Even though the proposal submitted
by the 4th respondent stated that the tender will be floated for
procurement, by the inclusion of officers of the KSEB both for
preparation of the bid document and for finalisation of the bid, none
of the above have admittedly taken place. It could not also have
been done since the KSEB and the State of Kerala were not in
picture while Ext.P25 was issued by the 4 th respondent. I hence find
that the action of the respondents in procuring 2 lakh LED lights
without following the tender process is bad in law.
QUESTION (f): PROMISSORY ESTOPPEL AND LEGITIMATE
EXPECTATION
44. The principles of promissory estoppel and legitimate
expectation have undergone substantial changes after their origin.
The Hon'ble Supreme Court has in several decisions explained and
applied the principles. Recently, in Brahmputra Metallics (supra),
the Apex Court has considered the two principles elaborately,
referring inter alia to the earlier decisions in Motilal Padampat
(supra), Nestle (supra) and Manuelsons (supra). The Hon'ble
Supreme Court has started the analysis from the origin of the
doctrine of promissory estoppel referring to the judgment of Lord
Denning in the Court of Appeal case Crabb v. Arun DC, wherein his
Lordship had traced the genesis of promissory estoppel in equity and
the requirements of the doctrine of promissory estoppel formulated
in "Chitty on Contracts". The Court noticed that in the early English
decisions, the application of the doctrine of promissory estoppel was
limited as a "shield" and was not used as a "sword" and that such a
restriction was not found in the decisions of the Courts of United
States and Australia. The application of the doctrine in India has
been elaborately considered thereafter, starting from the decision in
Motilal Padampat (supra), where the Hon'ble Supreme Court
viewed the doctrine as a principle in equity, which was not hampered
by the doctrine of consideration as was the case under English law.
In the above said decision Bhagwathi J, speaking for the Bench
observed that "We do not see any valid reason why promissory
estoppel should not be allowed to found a cause of action where, in
order to satisfy the equity, it is necessary to do so." The Hon'ble
Supreme Court then goes on to the basis for the doctrine of
legitimate expectation under the head "From estoppel to
expectations". In paragraphs 36 and 37 of the judgment, the Apex
Court states the distinction between the doctrines of promissory
estoppel and legitimate expectation under the English Law. Under
English Law, the doctrine of legitimate expectations is founded on
the principles of fairness in Government dealings and it comes into
play if a public body leads an individual to believe that they will be a
recipient of a substantive benefit. Paragraph 56 of the judgment in R
v. North and East Devon Health Authority, ex p Coughlan,
(2001) QB 213 which has been extracted in the judgment is
extracted below:
"56....Where the court considers that a lawful promise or practice
has induced a legitimate expectation of a benefit which is
substantive, not simply procedural, authority now establishes that
here too the court will in a proper case decide whether to
frustrate the expectation is so unfair that to take a new and
different course will amount to an abuse of power. Here, once the
legitimacy of the expectation is established, the court will have
the task of weighing the requirements of fairness against any
overriding interest relied upon for the change of policy."
45. After considering the application of the doctrines in the
public law field and the private law field the Court observed that
while the basis of the doctrine of promissory estoppel in private law
is a promise made between two parties, the basis of the doctrine of
legitimate expectation in public law is premised on the principles of
fairness and non-arbitrariness surrounding the conduct of public
authorities. Thereafter, the Apex Court considered the doctrine of
legitimate expectation in the Indian Context. In paragraphs 40 and
41 of the judgment, the Apex Court noticed that while applying the
two doctrines, the Courts have often used the expressions
'legitimate expectation' and 'promissory estoppel' interchangeably.
The Court observed that 'legitimate expectation' is a concept much
broader in scope than 'promissory estoppel'. The Hon'ble Supreme
Court has thereafter proceeded to provide a cogent basis for the
doctrine of legitimate expectation. The Court held that the
understanding of the doctrine by the Apex Court in the decision in
National Buildings Construction Corporation v. S.
Raghunathan (1998) 7 SCC 66, that "legitimate expectation" has
its genesis in the field of administrative law and that in order to
apply the doctrine reliance must have been placed on
"representations" and "detriment" should have resulted for the
claimant, was based on the scope and ambit of the doctrine under
English Law as it stood then. The Court found that since the
judgment of this Court in National Buildings (supra), the English
Law in relation to the doctrine of legitimate expectation has evolved.
The Court in paragraph 45 referred to the concurring opinion of
Justice H.L.Gokhale in Monnet Ispat and Energy Ltd. v. Union of
India [(2012) 11 SCC 1]. It is useful to extract paragraph 45 of
the judgment.
"45. In a concurring opinion in Monnet Ispat and Energy Ltd.
v. Union of India (2012) 11 SCC 1, Justice H.L. Gokhale
highlighted the different considerations that underlie the
doctrines of promissory estoppel and legitimate expectation. The
learned judge held that for the application of the doctrine of
promissory estoppel, there has to be a promise, based on which
the promisee has acted to its prejudice. In contrast, while
applying the doctrine of legitimate expectation, the primary
considerations are reasonableness and fairness of the State
action. He observed thus:
"Promissory Estoppel and Legitimate Expectations
289. As we have seen earlier, for invoking the
principle of promissory estoppel there has to be a
promise, and on that basis the party concerned must
have acted to its prejudice. In the instant case it was
only a proposal, and it was very much made clear
that it was to be approved by the Central
Government, prior whereto it could not be construed
as containing a promise. Besides, equity cannot be
used against a statutory provision or notification.
290. ..... ..... In any case, in the absence of any
promise, the Appellants including Aadhunik cannot
claim promissory estoppel in the teeth of the
notifications issued under the relevant statutory
powers. Alternatively, the Appellants are trying to
make a case under the doctrine of legitimate
expectations. The basis of this doctrine is in
reasonableness and fairness. However, it can also not
be invoked where the decision of the public authority
is founded in a provision of law, and is in consonance
with public interest."
46. Referring to the decision in Union of India v. Lt. Col.
P.K. Choudhary [(2016) 4 SCC 236] with approval, it was held
that if denial of legitimate expectation in a given case amounts to
denial of a right that is guaranteed or is arbitrary, discriminatory,
unfair or biased, gross abuse of power or in violation of principles of
natural justice, the same can be questioned on the well-known
grounds attracting Article 14 of the Constitution but a claim based
on mere legitimate expectation without anything more cannot ipso
facto give a right to invoke these principles. That is to say, that while
the doctrine of legitimate expectation cannot be claimed as a right in
itself, it can be used when the denial of a legitimate expectation
leads to the violation of Article 14 of the Constitution.
47. The Court then proceeds to examine the relationship
between Article 14 and the doctrine of legitimate expectation. As
regards the relationship between Article 14 and the doctrine of
legitimate, the Court quoted with approval paragraphs 7 and 8 of
the judgment of a Three Judge Bench in Food Corporation of
India v. Kamdhenu Cattle Feed Industries reported in [(1993)
1 SCC 71], wherein the Apex Court held that duty to act fairly is a
necessary component of the decision-making process in all State
actions and that to satisfy this requirement of non-arbitrariness in a
State action, it is necessary to consider and give due weight to the
reasonable or legitimate expectations of the persons likely to be
affected by the decision, failing which the unfairness in the exercise
of the power would amount to an abuse of power and the decision
so made would be exposed to challenge on the ground of
arbitrariness. The Court held that the requirement of due
consideration of a legitimate expectation forms part of the principle
of non-arbitrariness, a necessary concomitant of the rule of law. The
Apex Court also referred to the decision in NOIDA Entrepreneurs
Assn. v. NOIDA [(2011) 6 SCC 508], wherein the Hon'ble
Supreme Court held that power vested by the State in a public
authority should be viewed as a trust coupled with duty to be
exercised in larger public and social interest and that it is to be
exercised strictly adhering to the statutory provisions. The Court
held that action taken "in good faith" means "for legitimate
reasons". The Court finally concluded that the doctrine of
substantive legitimate expectation is one of the ways in which the
guarantee of non-arbitrariness enshrined under Article 14 finds
concrete expression. The Court further held that the States' policies
give rise to legitimate expectations that the State will act according
to what it puts forth in the public realm. Since the law has been
explained in clear terms in Brahmputra (supra), I do not think it is
necessary to elaborately consider the other decisions cited by
Sri.P.B.Krishnan on the issue of legitimate expectation. Since the
contention of legitimate expectation and promissory estoppel are
based on the public procurement policy notified by the Government,
I am of the opinion that the principles laid down in Bannari Amman
(supra) will not in any way affect the rights of the petitioners.
48. Applying the above said principles to the facts of this
case, as already found earlier, the MSMEs enjoy a reservation
regarding such products produced by them, which are included in
the Annexure to Ext.P6 procurement policy. The policy is a legal
document, issued under the powers available under Section 11 of
the MSMED Act. The MSMEs thus have a legitimate expectation that
the Central Government, its Departments and its PSUs will follow the
policy scrupulously, while proceeding for public procurement. As
such, non-consideration of the above right available to them while
procuring LED lights required for street lighting under the "Nilaavu"
project, by the 4th respondent, is necessarily arbitrary and violative
of Article 14 of the Constitution of India.
49. Coming to the action of the State Government and the
KSEB, they are also in law obliged to follow the tender process while
procuring materials above the value of ₹20,000/-. The mere fact
that the procurement is done through a Central PSU will not absolve
them from the above obligation and they are bound to ensure that
the 4th respondent does not violate such a requirement of law. As far
as the "Nilaavu" project is concerned there has been no such public
procurement of the LED lights, initiated with the participation of the
4th respondent and the KSEB or officers of the Government and the
Government has just purchased what has already been procured by
the 4th respondent on the basis of tenders that had been floated by
them for implementing the SLNP scheme in Telengana and certain
other areas. Here again, the petitioners have a legitimate
expectation that the respondents will follow the procedure
prescribed while making public procurement, with necessary
consideration of the right of the MSMEs either on reservation or for
the price and purchase preference. There is no material to show that
there was such a consideration.
50. In the light of the above findings, I am of the opinion that
the procurement of LED lights for the purpose of "Nilaavu" project,
by the respondents, without following the procedure prescribed and
without considering the rights of the MSMEs available as per Ext.P6
as far as the 4th respondent is concerned and to the extent adopted
by the State Government, are arbitrary and violative of Article 14 of
the Constitution of India.
QUESTION (g):
51. The contention of the 4th respondent is that since the
issue involved is in the realm of contract, depending on opinion of
experts, unless the decision is totally arbitrary or unreasonable, the
Court will not sit in appeal over the decision of the appropriate
authority, in exercise of the discretionary power under Article 226 of
the Constitution of India.
52. In Kasturilal (supra), the Apex Court held that Court
can interfere and strike down State action as arbitrary, unreasonable
or contrary to public interest. On facts the Court held that so long
as the State action is bona fide and reasonable, the Court will not
interfere merely on the ground that no advertisement was given or
publicity made or tenders invited. The judgment does not in any way
hold that the Court should not act if it finds that an action is
arbitrary for having not considered the legitimate expectations of
the MSMEs, which are based on policies notified by the State.
Sachidanand Pandey (supra) was a case where the Government
of West Bengal resorted to private negotiation instead of following
the process of inviting tenders or holding public auction and on
facts, the Apex Court found that the said action cannot be said to
lacking in probity. Unlike the above case, in the case on hand, rights
are recognised in favour of the MSMEs in terms of reservation and
purchase and price preference and the said rights recognised by the
notified policies are not taken into account, thus leading to
arbitrariness in State action. The decision in M.Jhangir (supra)
also does not better the case of the 4 th respondent in any manner.
Tata Cellular (supra) is a case where the Apex Court held that the
right to refuse the lowest or any other tender is always available
with the Government. The said judgment also stands on a totally
different footing. In the case on hand, I have already found that
there has been no tender for procurement of LED lights for the
"Nilaavu" project and it is a case of total exclusion of the MSMEs,
who claim reservation as against the 4 th respondent and price and
purchase preference as against the State and KSEB. In fact, the
Apex Court had specifically held in the above case that the Court is
concerned with the manner in which a decision is taken. The Court
reiterated the grounds of illegality, irrationality (Wednesbury
unreasonableness) and procedural impropriety as the ones available
for challenging an administrative action. This Court is concerned
with the decision making process adopted by the respondents, which
in my opinion does not satisfy the tests laid down in Brahmputra
(supra). M.P.Oil (supra) is a case where the Hon'ble Supreme
Court held that the Court should not embark on the unchartered
ocean of public policy and should not question the efficacy or
otherwise of such policy. The said decision will also not apply to the
facts of this case, where the petitioners are complaining about non-
consideration of their rights guaranteed in the policy notified by the
State. In the case on hand, the State Government as well as the
Central Government have notified schemes/projects whereby the
conventional streetlights are to be replaced with LED lights. This
Court has no doubt about the laudable objective that is sought to be
achieved. However, when faced with a situation where, in
implementation of the project, the State Government or its agents
have acted arbitrarily, this Court is bound to interfere and set right
the action in such a way that the arbitrariness is removed.
53. The principles laid down in Raunaq International
(supra), also do not help the 4th respondent in any manner. The
said judgment also does not rule out judicial review in cases where
the petitioners put forth a right of legitimate expectation based on
notified public policy, issued in terms of the power available under
Section 11 of the MSMED Act. Reliance is placed on Air India
(supra), wherein the Hon'ble Supreme Court held that "Even when
some defects is found in the decision making process, the Court
must exercise its discretionary power under Article 226 with great
caution and should exercise it only in furtherance of public interest
and not merely on the making out of a legal point". However, the
above observation was made by the Court after stating the law on
the point thus: "... the State, its Corporations, instrumentalities and
agencies are bound to adhere to the norms, standards and
procedures laid down by them and cannot depart from them
arbitrarily. Though that decision is not amenable to judicial review,
the Court can examine the decision making process and interfere if
it is found vitiated by malafides, unreasonableness and arbitrariness.
The State, its corporations, instrumentalities and agencies have the
public duty to be fair to all concerned". This Court is examining the
action of the respondents only to the above said limited extent.
Nagar Nigam (supra) was a case in which the High Court had
granted a licence by negotiation and the law laid down by the Court
does not go against the principles laid down in
Brahmputra(supra). In Jagdish Mandal (supra) also, the
Hon'ble Supreme Court reiterated the law that Court can interfere
when the process adopted or the decision made is so arbitrary and
irrational that no responsible authority acting reasonably and in
accordance with relevant law could have reached. The decisions in
Meerut Development (supra), Michigan Rubber(supra), HBL
Nife Power (supra) and Afcons (supra), also do not depart from
the above referred legal principles.
54. Reliance is placed on the decision in International
Trading Co.(supra) to contend that the doctrine of legitimate
expectation cannot be applied if it came in the way of public
interest, while exercising the power of judicial review of policy
decisions of the State. However, the said contention does not appear
to be justified in the light of the law stated by the Hon'ble Supreme
Court in the judgment relied on. What is stated in paragraph 22 of
the judgment is that "If denial of legitimate expectation in a given
case amounts to denial of right guaranteed or is arbitrary,
discriminatory, unfair or biased gross abuse of power or violation of
principles of natural justice, the same can be questioned on the well
known grounds attracting Article 14 but a claim based on mere
legitimate expectation without anything more cannot ipso facto give
a right to invoke these principles." The above judgment also
proceeds on the basis that the Court can examine the question
whether the denial of legitimate expectation amounts to denial of a
right guaranteed or is arbitrary etc.
55. Lastly, the Counsel for the 4th respondent referred to the
decision of the Gujarat High Court in Paresh Kumar Dalsukhbhai
Gujrar v. State of Gujarat & others (Writ Petition(PIL) No.243
of 2016), and contended that in a similar situation, the Gujarat
High Court had dismissed a writ petition challenging the
appointment of the 4th respondent as the Nodal Agency for the
project of LED street lights in various ULBs in the State of Gujarat.
The above decision does not relate to the rights of the MSMEs
regarding procurement of products manufactured by them. As
already stated, this Court is very much aware of the laudable object
of the project "Nilaavu" envisaged by the State Government. The
SLNP could have been implemented by the State Government or the
LSGIs in the State, even without a separate project named
"Nilaavu", by entrusting the entire implementation with the 4 th
respondent, in which case the defence regarding the international
funding would have been available to the 4 th respondent. However,
the facts as already discussed are very different in the case of the
"Nilaavu" project. I am of the opinion that the decision of the
Gujarat High Court does not apply to the facts of this case.
56. Before proceeding to conclude, it is beneficial to
recapitulate some necessary facts. Neither the KSEB nor the 4th
respondent has a case that any of the process that was set forth in
the proposal submitted by the 4th respondent regarding the
implementation of the project in June, 2020 (Ext.R4H) was
undertaken after issuance of Ext.R4I Letter of Intent or even before.
It is in this context that the Tender documents Ext.R4D and Ext.P25
should be compared. Ext.P25 is a global tender for purchase of 1.9
million LED lamps notified on 19.4.2020, when the "Nilaavu" project
was not in contemplation. Ext.R4D is regarding purchase of IDC
materials suitable for LED Streetlights. Ext.R4D is six days after the
issuance of Ext.R4I Letter of Intent. However, Ext.P25 is eight
months before the Letter of Intent. Even though an attempt is made
to link Ext.P25 to the contract between the 4 th respondent and
KSEB, I am of the opinion that there is no way in which they can be
linked. Ext.P25 cannot legally be the basis for issuance of the
purchase order for several reasons. Firstly, Ext.P25 is relating to
implementation of SLNP in Telengana and some other States, which
does not include Kerala. Secondly, even the proposal for supply was
submitted by the 4th respondent to the KSEB only in June, 2020.
Thirdly, Ext.P25 is a global tender with standards of pre-qualification
for bidders fixed in such a way that no MSME will be able to
participate in the tender process. Fourthly, Ext.P25 does not refer to
"Nilaavu" project at all while Ext.R4D relating to IDC materials
specifically refers to the project. It would appear that the entire
process is to facilitate the 4 th respondent to supply LED
lightings that are already available with them, having
procured for some different project, by making it appear it as
a fresh procurement in terms of Ext.R4I Letter of Intent. I
would not have made the above observation, but for the reason that
in their counter affidavit, the 4th respondent has sought to contend
that they had invited open competitive bidding for procurement of
LED street lights and IDC fixtures as per the policy guidelines and
norms prescribed for giving purchase and price preference to MSMEs
and also sought to make it appear that Ext.R4D is a tender relating
to procurement of LED Street lights. It is also contended that the
LED lights and the fittings and fixtures have been procured by the
4th respondent in accordance with the Procurement Policy envisaged
under the agreement dated 26.02.2021. The above contentions
cannot be true since Ext.P25 was issued on 19.04.2020, much
before Ext. R4E and R4E1.
CONCLUSION
57. In the light of the detailed discussion in the earlier
paragraphs, the contentions raised by the writ petitioners are found
to be legally sustainable. The petitioners are entitled to succeed in
the writ petitions. It is declared that the procurement of LED lights
by the State Government and the KSEB, through the 4 th respondent
is not in accordance with law. However, since the procurement of
2 lakh LED lights is already completed and it is contended that the
replacement with the said 2 lakh LED lights is nearing completion,
this Court does not think it fit to exercise the discretion available
under Article 226 of the Constitution of India to direct the
respondents to undo what has already been done. However, the
project envisages purchase of 10.5 lakhs LED lights. In the light of
my finding on questions (a) to (f), it is directed that the respondents
shall not proceed to procure the balance 8.5 lakhs LED lights without
making necessary changes in the purchase process under the
"Nilaavu" project, by providing for the purchase of the LED lights
from the MSMEs like the petitioners, giving due consideration to the
reservation available under paragraph 11 of Ext.P6 and the price and
purchase preference notified by the State Government. This Court
does not deem it necessary to stop the Government from going
ahead with the project of replacement of the conventional street
light with LED lights. The respondents are free to continue with the
"Nilaavu" project, after making necessary changes regarding giving
reservation/preference to the MSMEs in the procurement of LED
lights, and thus bringing the action within the limits of non-
arbitrariness.
The parties will bear their respective costs.
Sd/-
T.R.RAVI,
JUDGE
dsn
APPENDIX OF WP(C) 3490/2021
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE REGISTRATION CERTIFICATE OF
PETITIONER NO.1 IN 'UDYAM' UNDER THE MINISTRY
OF MICRO, SMALL AND MEDIUM ENTERPRISES OF THE
UNION OF INDIA WITH DATE OF REGISTRATION 14-09-
EXHIBIT P2 TRUE COPY OF THE UDYOG AADHAR OF PETITIONER NO.
EXHIBIT P3 TRUE COPY OF THE UDYOG AADHAR OF PETITIONER NO.
EXHIBIT P4 TRUE COPY OF THE UDYOG AADHAR OF PETITIONER NO.
EXHIBIT P5 TRUE COPY OF THE UDYOG AADHAR OF PETITIONER NO.
EXHIBIT P6 TRUE COPY OF THE CERTIFICATE OF INCORPORATION
OF PETITIONER NO. 6 DATED 15-10-2020
EXHIBIT P7 TRUE COPY OF ORDER NO.S O 581(E) DATED 23-03-
2012 ISSUED BY THE MINISTRY OF MICRO, SMALL AND
MEDIUM ENTERPRISES, GOVERNMENT OF INDIA.
EXHIBIT P8 TRUE COPY OF ORDER NO. P-45021/2/2017 PP (BE
II) DATED 04-06-2020 ISSUED BY THE MINISTRY OF
COMMERCE AND INDUSTRY, GOVERNMENT OF INDIA
EXHIBIT P9 TRUE COPY OF G.O(RT) NO 5382/2020/FIN DATED 18-
09-2020 ISSUED BY THE FINANCE DEPARTMENT,
GOVERNMENT OF KERALA
EXHIBIT P10 TRUE COPY OF THE RELEVANT PAGES OF ANNEXURE 19
OF THE STORE PURCHASE MANUAL, REVISED EDITION
EXHIBIT P11 TRUE COPY OF CIRCULAR NO. 3038/A2/98/S.P.D
DATED 30-01-2009 ISSUED BY THE STORE PURCHASE
(A) DEPARTMENT OF THE GOVERNMENT OF KERALA.
EXHIBIT P12 TRUE COPY OF G.O(MS) NO. 202/2020/LSGD DATED
25-12-2020 ISSUED BY LOCAL SELF GOVERNMENT
DEPARTMENT OF GOVERNMENT OF KERALA.
EXHIBIT P13 TRUE COPY OF THE ORDER NO. EWB1/101/2020 DATED
07-01-2021 ISSUED BY LOCAL SELF GOVERNMENT
(EWB) DEPARTMENT OF GOVERNMENT OF KERALA ALONG
WITH THE REVISED GUIDELINES OF "NILAVU" SCHEME
EXHIBIT P14 TRUE COPY OF CIRCULAR NO. C.P/PLG II/NILAVU
STREET LIGHT SCHEME/2020-21/174 DATED 23-01-
2021 ISSUED BY RESPONDENT NO.2
EXHIBIT P15 TRUE COPY OF THE STREET LIGHT NATIONAL
PROGRAMME (SNLP).
EXHIBIT P16 TRUE COPY OF THE AGREEMENT DATED 04.12.2015
EXECUTED BETWEEN NAGAR NIGAM KOTA, GOVERNMENT
OF RAJASTHAN AND EESL.
EXHIBIT P17 TRUE COPY OF THE ORDER ISSUED BY THE MUNICIPAL
ADMINISTRATION AND URBAN DEVELOPMENT (P2)
DEPARTMENT, GOVERNMENT OF TELANGANA, DATED
28.10.2016.
EXHIBIT P18 TRUE COPY OF THE AGREEMENT DATED 27.07.2015
EXECUTED BETWEEN THE KSEBL AND THE ALAPPUZHA
MUNICIPALITY.
EXHIBIT P19 TRUE COPY OF THE GOVERNMENT ORDER
NO.3128/2018/LSGD DATED 12.12.2018 ISSUED BY
THE LOCAL SELF GOVERNMENT DEPARTMENT,
GOVERNMENT OF KERALA.
EXHIBIT P20 TRUE COPY OF THE ORDER ISSUED BY THE PANCHAYAT
DIRECTOR TO THE SECRETARIES OF ALL THE
PANCHAYATS IN THE STATE ON 08.01.2021.
EXHIBIT P21 TRUE COPY OF STARRED QUESTION No.338 AND THE
ANSWERS GIVEN BY THE UNION MINISTER OF POWER ON
3.1.2019 REGARDING SLNP IN THE LOK SABHA
EXHIBIT P22 TRUE COPY OF UNSTARRED QUESTION No.1677 AND THE
ANSWERS GIVEN BY THE UNION MINISTER OF POWR ON
28.11.2019 REGARDING SNLP IN THE LOK SABHA
EXHIBIT P23 TRUE COPY OF PHOTOGRAPH OF A STREET LIGHT AS
PER THE NILAVU PROJECT
RESPONDENTS' EXTS:
EXT.R2A TRUE COPY OF NOTICE INVITING TENDER
DT.19.4.2020 ISSUED BY EESL
EXT.R2B TRUE COPY OF NOTICE INVITING TENDER
DT.30.12.2020 ISSUED BY EESL
EXT.R4A TRUE COPY OF LETTER OF AUTHORITY DT.11.3.2021
ISSUED BY RESPONDENT No.4
EXT.R4B TRUE COPY OF LETTER D.O.No.9/23/2014-EC
(VOL.II) DT.13.1.2016 ISSUED BY THE MINISTRY OF
POWER
EXT.R4C TRUE COPY OF THE DETAILED PROJECT REPORT GOT
PREPARED BY RESPONDENT No.1 NAMED AS NILAVU
-ILLUMINATING KERALA
EXT.R4D TRUE COPY OF THE TENDERS FOR PROCUREMENT OF LED
STREET LIGHTS INVITED BY EESL
EXT.R4E TRUE COPY OF PURCHASE ORDER DT.26.2.2021
EXT.R4E(1) TRUE COPY OF AGREEMENT DT.26.2.2021
EXT.R4F TRUE COPY OF OM DT.4.6.2020
EXT.R4G TRUE COPY OF OM DT.23.7.2020
EXT.R4H TRUE COPY OF RELEVANT PAGES OF THE PROPOSAL
GIVEN BY EESL IN JUNE 2020 TO KSEB TITLED
PROPOSAL FOR IMPLEMENTATION OF LED STREET LIGHT
PROJECT IN KERALA STATE
EXT.R4I TRUE COPY OF THE 2ND RESPONDENT'S LETTER OF
INTENT DT.24.12.2020
EXT.R4J TRUE COPY OF ADB PROCUREMENT POLICY, 2017
EXT.R4K TRUE COPY OF PROCUREMENT REGULATIONS FOR ADB
BORROWERS, 2017
EXT.R4L TRUE COPY OF RELEVANT PAGES OF 4TH RESPONDENT'S
ANNUAL REPORT FOR THE FINANCIAL YEAR 2019-2020
EXT.R1(A) TRUE PHOTOCOPY OF GO(P)No.5/2019/SPD
DT.8.4.2019
EXT.R1(B) TRUE COPY OF NOTICE INVITING TENDER IT
DT.30.12.2020 ISSUED BY EESL, INVITING TENDER
FOR SUPPLYING MATERIALS FOR NILAVU PROJECT.
APPENDIX OF WP(C) 5045/2021
PETITIONERS' EXHIBITS
EXHIBIT P1 TRUE COPY OF CERTIFICATE OF INCORPORATION OF THE
PETITIONER DATED 08.06.2015.
EXHIBIT P2 TRUE COPY OF G.O (RT) NO. 629/2015/LSGD DATED
02.03.2015.
EXHIBIT P3 TRUE COPY OF PUBLIC PRIVATE PARTNERSHIP AGREEMENT
DATED 17.06.2015 EXECUTED BETWEEN THE PETITIONER
AND KREWS.
EXHIBIT P4 TRUE COPY OF CERTIFICATE OF INCORPORATION OF THE
SPV DATED 30.07.2015.
EXHIBIT P5 TRUE COPY OF UDYOG AADHAR OF THE SPV FILED ON
04.12.2015.
EXHIBIT P6 TRUE COPY OF ORDER NO. S.O. 581(E) DATED
23.03.2012 OF 7TH RESPONDENT.
EXHIBIT P7 TRUE COPY OF ORDER NO. P45021/2/2017-PP(BE-II)
DATED 04.06.2020.
EXHIBIT P8 TRUE COPY OF G.O(RT) NO. 5382/2020/FIN. DATED
18.09.2020.
EXHIBIT P9 TRUE COPY OF G.O(P) NO. 3/2013/SPD DATED
21.06.2013.
EXHIBIT P10 TRUE COPY OF RELEVANT PAGES OF THE STORES PURCHASE
MANUAL, REVISED EDITION, 2013.
EXHIBIT P11 TRUE COPY OF G.O (K) NO. 117/2020/LSGD DATED
10.08.2020 ISSUED BY LOCAL SELF GOVERNMENT
DEPARTMENT OF GOVERNMENT OF KERALA.
EXHIBIT P12 TRUE COPY OF G.O(K) NO. 202/2020/LSG DATED
25.12.2020.
EXHIBIT P13 TRUE COPY OF ORDER NO. EWB1/101/2020 DATED
07.01.2021 ISSUED BY LOCAL SELF GOVERNMENT (EWB)
DEPARTMENT OF THE 1ST RESPONDENT ALONG WITH THE
REVISED GUIDELINES OF "NILAVU" SCHEME.
EXHIBIT P14 TRUE COPY OF CIRCULAR NO. C.P./PLG II/NILAVU
STREET LIGHT SCHEME/2020-21/174 DATED 23.01.2021
ISSUED BY RESPONDENT NO.2.
EXHIBIT P15 TRUE COPY OF REPRESENTATION SUBMITTED BY THE SPV
BEFORE THE MINISTER FOR INDUSTRIES, STATE OF
KERALA.
EXHIBIT P16 TRUE COPY OF WEBSITE OF THE STORES PURCHASE
DEPARTMENT, GOVERNMENT OF KERALA.
EXHIBIT P17 TRUE COPY OF RELEVANT PAGES OF THE KERALA
FINANCIAL CODE VOLUME 1, 8TH EDITION, 2016.
EXHIBIT P18 TRUE COPY OF CIRCULAR NO. 23/7/07 DATED 05.07.2007
ISSUED BY THE CENTRAL VIGILANCE COMMISSION.
EXHIBIT P19 TRUE COPY OF VIDE G.O(GEN.) NO. 1093/2017/LSGD
DATED 05.04.2017.
EXHIBIT P20 TRUE COPY OF UDYOG AADHAAR MEMORANDUM OF M/S USHA
ELECTRONIC SYSTEMS SHOWING DATE OF COMMENCEMENT AS
21.08.2009 ISSUED BY THE 7TH RESPONDENT
EXHIBIT P21 TRUE COPY OF UDYOG AADHAAR REGISTRATION
CERTIFICATE OF THE PETITIONER COMPANY ISSUED BY
THE 7TH RESPONDENT DATED 05.03.2021
EXHIBIT P22 TRUE COPY OF RELEVANT PAGES OF ANSWERS PLACED ON
THE TABLE OF LOK SABHA BY THE MINISTRY OF POWER,
WITH REGARD TO THE QUESTIONS RELATING TO LED
STREET LIGHTS.
EXHIBIT P23 TRUE COPY OF RELEVANT PAGES OF CORPORATE BROCHURE
OF THE 4TH RESPONDENT.
EXHIBIT P24 TRUE COPY OF LETTER NO B3-829/2020 DATED
08.01.2021 ISSUED BY PANCHAYAT DEPUTY DIRECTOR
ADDRESSED TO THE SECRETARY, PANCHAYATS.
EXHIBIT P24 TYPED COPY OF EXHIBIT P24
EXHIBIT P25 TRUE COPY OF RELEVANT PAGES OF TENDER NO-
EESL/2020-21/ICB/PHASE-111/SLNP-181902249 ON
19.4.2020 ISSUED BY THE 4TH RESPONDENT
EXHIBIT P26 TRUE COPY OF G.O.(RT) NO.761 DATED 28.10.2016
ISSUED BY THE GOVERNMENT OF TELENGANA
EXHIBIT P27 TRUE COPY OF G.O.(GEN) NO-685/2014/LSGD DATED
06.03.2014 ISSUED BY THE 1ST RESPONDENT
EXHIBIT P28 TRUE COPY OF G.O.(GEN) NO.2495/2015/LSGD DATED
12.08.2015 ISSUED BY THE 1ST RESPONDENT
EXHIBIT P29 TRUE COPY OF ORDER NO.06/02/2015-NEF/FRP DATED
20.11.2015 OF GOVERNMENT OF INDIA.
RESPONDENTS' EXHIBITS
EXHIBIT R2A THE TRUE COPY OF NOTICE INVITING TENDER AND TENDER
DOCUMENTS DATED 19.04.2020 ISSUED BY EESL.
EXHIBIT R2B THE TRUE COPY OF NOTICE INVITING TENDER DATED
30.12.2020 ISSUED BY EESL.
EXT.R4A TRUE COPY OF LETTER OF AUTHORITY DT.11.3.2021 ISSUED
BY RESPONDENT No.4
EXT.R4B TRUE COPY OF LETTER D.O.No.9/23/2014-EC (VOL.II)
DT.13.01.2016 ISSUED BY THE MINISTRY OF POWER
EXT.R4C TRUE COPY OF THE DETAILED PROJECT REPORT GOT
PREPARED BY RESPONDENT No.1 NAMED AS NILAVU
-ILLUMINATING KERALA
EXT.R4D TRUE COPY OF THE TENDERS FOR PROCUREMENT OF LED
STREET LIGHTS INVITED BY EESL
EXT.R4E TRUE COPY OF PURCHASE ORDER DT.26.2.2021
EXT.R4E(1) TRUE COPY OF AGREEMENT DT.26.2.2021
EXT.R4F TRUE COPY OF OM DT.4.6.2020
EXT.R4G TRUE COPY OF OM DT.23.7.2020
EXT.R4H TRUE COPY OF RELEVANT PAGES OF THE PROPOSAL GIVEN BY
EESL IN JUNE 2020 TO KSEB TITLED PROPOSAL FOR
IMPLEMENTATION OF LED STREET LIGHT PROJECT IN KERALA
STATE
EXT.R4I TRUE COPY OF THE 2ND RESPONDENT'S LETTER OF INTENT
DT.24.12.2020
EXT.R4J TRUE COPY OF ADB PROCUREMENT POLICY, 2017
EXT.R4K TRUE COPY OF PROCUREMENT REGULATIONS FOR ADB
BORROWERS, 2017
EXT.R4L TRUE COPY OF RELEVANT PAGES OF 4TH RESPONDENT'S
ANNUAL REPORT FOR THE FINANCIAL YEAR 2019-2020
EXT.R1(A) TRUE PHOTOCOPY OF THE GO(P)No.5/2019/SPD DT.8.4.2019
EXT.R1(B) TRUE PHOTOCOPY OF THE NOTICE INVITING TENDER IT
DT.30.12.2020 ISSUED BY EESL, INVITING TENDER FOR
SUPPLYING MATERIALS FOR NILAVU PROJECT
