CATERPILLAR INDIA PVT. LTD. versus WESTERN COAL FIELDS LTD. AND ORS.

CATERPILLAR INDIA PVT. LTD. versus WESTERN COAL FIELDS LTD. AND ORS.

A uniform purchase preference policy in favour of Public Sector Enterprises cannot be justified without industry-wise and enterprise-specific assessment of need, cost-effectiveness, and impact. The impugned Office Memorandum's substitution of 'may' by 'will' is improper in the absence of such assessment and is accordingly set aside prospectively with directions for rational reconsideration.

Parties
Appellant: Caterpillar India Pvt. Ltd.; Respondent: Western Coal Fields Ltd. and Ors.
Jurisdiction
India
Judgment Date
18 May 2007
Procedural Posture
Transferred Case (civil) and Civil Appeal / Final Judgment and Disposition
Outcome
Appeal and petitions disposed of with directions.
Legal Topics
Purchase Preference Policy, Public Sector Enterprises, Discrimination Under Article 14, Government Policy and Memorandums, Legitimate Expectation, Arbitrariness
Constitutional Law Administrative Law Public Procurement Purchase Preference Policy Public Sector Enterprises Discrimination Under Article 14 Government Policy and Memorandums Legitimate Expectation +1 more

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Parties

Caterpillar India Pvt. Ltd.

Appellant

Western Coal Fields Ltd. and Ors.

Respondent

Procedural Posture

Transferred Case (civil) and Civil Appeal / Final Judgment and Disposition

Legal Issues

  1. 1 Whether the Office Memorandum substituting 'may' with 'will' and granting purchase preference to Public Sector Enterprises is arbitrary, discriminatory, or otherwise unconstitutional under Article 14 of the Constitution of India.

Ratio Decidendi

A uniform purchase preference policy in favour of Public Sector Enterprises cannot be justified without industry-wise and enterprise-specific assessment of need, cost-effectiveness, and impact. The impugned Office Memorandum's substitution of 'may' by 'will' is improper in the absence of such assessment and is accordingly set aside prospectively with directions for rational reconsideration.

Court Disposition

Appeal and petitions disposed of with directions.

Orders

  • Industry-wise assessment to be undertaken by the concerned Ministry of the Central Government within four months.
  • Interim purchase preference arrangements to continue pending reconsideration.