LIFECARE INNOVATIONS PVT. LTD. & ANR. versus UNION OF INDIA & ORS.

LIFECARE INNOVATIONS PVT. LTD. & ANR. versus UNION OF INDIA & ORS.

The Public Procurement Policy for Micro and Small Enterprises Order 2012, issued under section 11 of the MSMED Act, has the force of law and creates enforceable obligations on statutory authorities to implement procurement preference mandates; while individual MSEs do not have a proprietary right to procurement, the Review Committee and Grievance Cell must ensure effective implementation, including examining whether the mandatory 25% procurement is independent of the 358 reserved items and whether minimum turnover clauses in NITs are reasonable and consistent with the Policy; the Review Committee and the Grievance Cell are directed to examine and issue decisions/guidelines within 60 days.

Parties
Petitioner: Lifecare Innovations Pvt. Ltd.; Petitioner: Dr. Jitendra Nath Verma; Respondent: Union of India & Ors.
Jurisdiction
India
Judgment Date
24 February 2025
Procedural Posture
Writ Petition (civil) Under Article 32 (writ Petition (c) No. 1301 of 2021) / Writ Petition Disposed of by Final Judgment of the Supreme Court (25 February 2025)
Outcome
Writ petition disposed of
Legal Topics
Public Procurement Policy for Micro and Small Enterprises Order 2012, MSMED Act Section 11, Mandatory Procurement Percentage (25%), Reservation of Items for Mses (clause 11), Minimum Turnover Clauses in Nits, Judicial Review of Administrative Bodies, Review Committee and Grievance Cell
Constitutional Law Administrative Law Public Procurement Law Statutory Interpretation Commercial/contract Law Public Procurement Policy for Micro and Small Enterprises Order 2012 MSMED Act Section 11 Mandatory Procurement Percentage (25%) +4 more

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Parties

Lifecare Innovations Pvt. Ltd.

Petitioner

Dr. Jitendra Nath Verma

Petitioner

Union of India & Ors.

Respondent

Procedural Posture

Writ Petition (civil) Under Article 32 (writ Petition (c) No. 1301 of 2021) / Writ Petition Disposed of by Final Judgment of the Supreme Court (25 February 2025)

Legal Issues

  1. 1 Whether the MSMED Act, coupled with the Public Procurement Policy for Micro and Small Enterprises Order 2012, mandates procurement of 25 percent of goods and services by the Government and its instrumentalities from Micro and Small Enterprises (MSEs)
  2. 2 Whether prescription of mandatory minimum turnover clauses in Notice Inviting Tenders (NITs) is violative of Articles 14 and 19 of the Constitution, the MSMED Act, and the Procurement Order 2012

Ratio Decidendi

The Public Procurement Policy for Micro and Small Enterprises Order 2012, issued under section 11 of the MSMED Act, has the force of law and creates enforceable obligations on statutory authorities to implement procurement preference mandates; while individual MSEs do not have a proprietary right to procurement, the Review Committee and Grievance Cell must ensure effective implementation, including examining whether the mandatory 25% procurement is independent of the 358 reserved items and whether minimum turnover clauses in NITs are reasonable and consistent with the Policy; the Review Committee and the Grievance Cell are directed to examine and issue decisions/guidelines within 60 days.

Court Disposition

Writ petition disposed of

Orders

  • The Public Procurement Policy for Micro and Small Enterprises (MSEs) Order 2012 has the force of law as formulated in exercise of power under Section 11 of the MSMED Act and encapsulates the purpose and object of the Act.
  • There is no mandatory minimum procurement right for an individual MSE, but statutory obligations rest on authorities and bodies under the Act and the Procurement Order 2012 to implement the mandate, which obligations are subject to judicial review.