~ t4dbL ~ttc..t-.--(Santosh Mittal)

Dy. Director Railway Stores (G)IRailway Board

GOVERNMENT OF INDIAMINISTRY OF RAILWAYS

(RAILWAY BOARD)

No.95/RS(G)/363/1 New Dellhi, dated 13.7.2011

The General Manager, All Indian Railways & PUs including NF(C).The General Manager, CORE, Allahabad.The General Manager, Metro Railway, Kolkata.The Director General, RDSO, Lucknow & Railway Staff College, Vadodara.The MD, RITES, RITES Bhavan, Sector-29, Gurgaon.The MD, KRCL, Belapur Bhavan, 4th Floor, Sector-11, CBD, Belapur, Navi Mumbai.The MD, MRVC, 2nd Floor, Church Gate station Building, Mumbai.The MD, CRIS, Chanakyapuri, New Delhi.CAOlWorkshop Projects organisation, 1st Floor, Chamber Bhawan, J.C. Road, Patna -800001.CAOIDMW, Patiala and COFMOW, New Delhi.CAO/MTP, NBCC Place, Bhishma Pitamah Marg, Pragati Vihar, New Delhi.CAO/MTP, Mumbai and Chennai.

Subject: Price Preference to SSI etc.

Ref: Railway Board's letter No. 95/RS(G)/363/1 dated 1.6.2011.

In light of recent court decision on Price Preference to SSls, Railwayshave already been advised the essence of various letters of Railway Board on pricepreference to NSIC/KVICIWDC firms vide letter dated 1.6.2011 referred to above. Inthis regard, a copy of the order of Hon'ble High Court of Delhi is enclosed for yourinformation & necessary action. The same is also available on Railway websitewww.indianrailways.gov.in

DA: As above

No: 95/RS(G)/363/1 New Delhi, dated: 13.7.2011

Copy to:

1. FA&CAOs, All Indian Railways & Production Units.

<~1<-tti'i1·- k;.~j)...,r--

(Santosh Mittal)Dy. Director Railway Stores (G)I

Railway Board

2. PCEs, All Indian Railways & Production Units.3. The ADAI(Railways), New Delhi (with 10 spares copies)4. The Director of Audit, All Indian Railways.

~ 1A.:-Ter\t, k~~;:ltSantosh Mittal)

Dy. Director Railway Stores (G)IRailway Board

No: 95/RS(G)/363/1 New Delhi, dated: 13.7.2011

Copy to:

1. The COSs, All Indian Railways & PUs including NF(C).

2. The COS, Metro Railway, Kolkata.3. The COS, COFMOW, New Delhi.4. The COS, CORE, Allahabad.5. The COS, Konkan Railway Corporation Ltd., Belapur Bhavan, 4th Floor, Sector-11, CBD,

Belapur, Navi Mumbai-400614.6. The COS, Mumbai Rail Vikas Corporation, 2nd Floor, Church Gate station Building,

Mumbai-400020.7. The Directors-

a. Indian Railway Institute of Sig. Engg. & Telecom, Secunderabad.b. Indian Railway Institute of Mech. & Elec. Engg., Jamalpur.c. Indian Railway Institute of Elect. Engg., Nasik.d. Sr.Prof. (Material Management), Railway Staff College, Vadodara.e. Indian Railway Institute of Civil Engg., Pune.f. Indian Railway Institute of Logistics & Materials Management. IDA House, Sector IV,

R.K.Puram, New Delhig. Indian Railway Institute of Traffic Management, Lucknow

8. Chairman, Railway Rates Tribunal, Chennai.9. Director, Iron & Steel, 3, Koila Ghat Street, Kolkata.10. Executive Director (Stores), RDSO, Manak Nagar, Lucknow.11. Chief Commissioner, Railway Safety, Lucknow.12. ED(QA)/RITES, RITES Bhavan, Sector-29, Gurgaon, Haryana.13. CPM, CRIS, Chanakya Puri, New Delhi.14. GM(Proj)-V, CRIS, Chanakya Puri, New Delhi.15. Dy.CMM / Workshop Projects organisation, 1st Floor, Chamber Bhawan, J.C. Road,

Patna -800001.16. Zonal Railway Training Institute, Sukuadia Circle, Udaipuf-313004.

No: 95/RS(G)/363/1 New Delhi, dated 13.7.2011

Copy to:

1. The General Secretary, AIRF, 4 State Entry Road, New Delhi.

2. The General Secretary, NFIR, 3 Chelmsford Road, New Delhi.

3. The Secretary General, IRPOF, Room No. 268, Rail Bhavan, New Delhi

4. The Secretary General, FROA, Room No. 256-0, Rail Bhavan, New Delhi.

5. The Secretary General, AIRPFA, Room No. 256-0, Rail Bhavan, New Delhi

Copy to:- Sr. PPSs / PPS / PS to

(i) CRB, FC, ME, ML, MM, MS, MT, SECY., DG (RHS), DG (RPF)

(ii) All AMs and Advisors of Railway Board.

(iii) All Executive Directors of Railway Board.

(iv) All Directors of Electrical, Engineering, Finance, Mechanical, Stores, Signal &Telecom Dte. &

All Branches of Electrical, Engineering, Finance, Mechanical, Stores, Signal &Telecom Dte.

OItHER12.()8.2010

$-* IN THE HIGH COUHT OF DF:LHI AT NEW !H~LHl

41.

+ W.IUC) No. 7704 of 2009

DELKON TEXTILES PRIV ATE LTD..H. PetitionerThrough: Ms. Puja Anand, Advocate.

versus

CORAM: JUSTICE S. MURALIDHAR

"fheVetiti~n~f~e~ksadJrCbtl()n to the Respondent, Ministry 6fRailwa~$,

GOVG1111nelltbfIO'arft't6lrripIemChfand grant the benefits to small ~dlldnJllts.' .', .. . . "

l'SStJs')like.·thc·pefitfonot in terms of Circular dated 28111

August :W()O

>IS$Ll.cd ·J1yt}jc'Mill.i~1!'Y .of .Small Scale !ndustrics & Agro and Rural,._' ', .. ' '0 .i ,""-',' .-',' '. "

lhdtistrics,<h'>vctrittlchfoflnciia Respondent No.2 herein.

2.·lhePc{itidti~rls~SinaHScalc Industrial Unit (' SSU') registered with the

'National Sma:lIStale'Industfles Corporation Ltd. cNSSrCL '), whLch is a

Govenil11ent6flhmaetiterprise, for participation in the Central Government

Petitioner manufactures textile products including fire retardant curtain

fabric, which conforms to the specification or the Research Designs &

Standards Organisation ('RDSO'), functioning under the Ministry orW.P,(C) No. 7704 DJ2009 ",.,. .'. : <:!(+U') :)A TA I'age 1 of 6

.~ !~;opy

Railways, Respondent No.I:

3. There arc four specific benefits granted by the Circular dated nth August

2000 to SSUs which have been registered with the NSS[Cl under its SPRS

in order-to help them in marketing their products:

"1. ISStlcofTender set free of cost.

2. Exempti<')11frpnl payment of Earnest Money

3, Waiver.of Security Deposit to the Monetary Limit ror, "

whiththeuhitis.registered.

4. Prise Prefere'nce upto 15% over the quotation or large-

t:frcl.1il~lliJtS~l:r'st?t.esthat the abovcl11cntioned facilities are given "as

thefin~tJclal resourcesa» the disposal of small scale units arc limitedarrdi!

be.comesdiff1Gultforlhem tiJpartic1pate in'11101't~ than one tender.floated by

~l!lleGirdufar reminds the Government and their departments or earlier

Chcularsdated 30th Julv 1993 and i5!hMav J 998 extending facilirit'st.(). the. ._.,. '_'" ", J - . - " . . ~ '. .

SS(Js whioh WereI'lofbeingirnpJementedo

6, The everltsthatlcd to the Petitioner approaching this Court with the above

prayer is thatRcspqrtcl~nt No.! invited tenders on 11'11 February 2008 for

Fire Retardant Curtain Cloth Fabric for 2 AC and 3 AC coaches as per the

RDSO specifications. On 4th March 2008, a letter inviting quotations for the

above tender was issued by Respondent No.I to the Petitioner The

l/,/,P.(C}No. 770401 Z009 OIGITALI.. Y SiGNED DATA.

(l L,-ArrESTEf)

." "- //.~, t{ •

Page:} of 6

w.p.{eJ Nil. 770~ of 200!i . ATTESYED foge 3 0/6

•• r_" _ •• eF. _...=;:,:======::::::::~~~==

Petitioner submitted its offer (;}] 14tl'Marcll 20(lg

keeping in mind the: market rates prevalent and the hest price possible which

would make the tender viable for them. Among the (our units that

submitted their offers pursuant to the tender. the Pctirioncr wa ..., the 0111y

the Respondent No.2 asking them to direct the lL:'spcndi:l1t1'-h I to gran!

2000. The NSSICL, in tllrn,\vrot~ to tht Respondent No.! on 18;{1i\prH

2008. an :WthMay 260g,T<:~sp,jnden! No, I wrote a Idler of counter-offer In

thy ]>etitiOI}crwithollt extending the benefit under rhc Circular (lined zs"Aug\.lst2(}Ooo'.<thePctitibfic(thcn again wrote to the NSSI Cl. on 2fhM ay

Further letters wetc\vfitten by the Petitioner and the NSSIClo to the

RespondenfN'b.{ 6t1h',hJuI1e 2008 and7ih July 20(H; respectively

70 The petitioner does riot, in his petition. challenge the denial !.C, it or the

iiv-tard ol../i'1.l\>)f p')J'tiql1 ofth~ ter~d~rfloated.by lhcRcs;Xlndcnt No, I Railwuys. . .'-', . ,'.- '.' "', .',' . -. - ..

. tenders, the Railways may not follow the above Circular dated ~sth August.?~' ,

i~~~OO' Accordingly, the only prayer in the writ petit/oil is as under:

:\JItr~ ;::~.;:.\.~ * "to issue a writ of mandamus to the Respondent No.1

~~oa\tI • commanding and directing them to implement and grant all

ihc 'benefits of Purchase Price Preference policy oCthc

main Circular dated 28'h August 2000 in favour or the

Petitioner, which is NS[C approved small scale unit

WoP.(C)No. 7704 of 2009 Al'iEstt:O! I.' :/c..

Page 4 of 6

henceforth. "

8. A counter affidavit and a supplementary affidavit have been filed by the

Railways on 12th November 2009 and 29th July 20 10 respectively, Since the

first counter affidavit did not specifically deal with the CircuiHr dated nth

August 2000, this Court required the Respondent 10 file a supplCl11'cntary

affidaviL As fat as the tendertloated on lih February 2008, i1 is stated that

the offers were receivecHrbm 5 units, 'iI1?hldlng the Petitioner, The Petitioner

"vas the orily SSU. 'rhe Petitioner and one M/s. Anudc Faze Autd Fab Ltd.

('AFAFL/) were categorized a.s'RDSOPart Il sources' /\ bulk oi'der was

submitted fhatthc'lOwcsl Offctrcc:eivcd was from i\FAFL,whi,ch is not a. .,'," ',' -' "','- -',',' ",' '"

SStJ,at Rs.26$pC,rrrtcter plustheexclse duty @ Rs. 2 L84 Le, all inClusive

rate .()fRs.286.84pcrli1et~r. 15% of the quantity was awarded ro I\FI\FL. . . '. .

rll'eofferbrthc.iPQ~iti()ir~twa~ Rs.3tl per iWetcr. llowcvcr, it is stated in

"(x) 'Vhatas per pllrehasc/pricc preference clause, the

purch;:\s(fl' r~~erves the option to give the price preference to

the small scale ind\lstricsovcr those from other firms,

However it .cann6l be taken for granted, and every need he

luadeby them to bring down the cost and, achieve

competitiveness. However the Petitioner has been given the

benefits of waiver of cost of tender document and exempted

from paymcntofEMD,

XXXX

otGTT~\..L'lS\GltEO OA.i,. xxxx

'li-9,\f.irr~ri<coo~ (xiv) 11"t by the above facts, it is very cloar that thet~ I discounted rate offered by the firm which is affordable will

be the best price and profltahle to them, hut claiming higher'

W.P.(C) No. 7704 of 2009

page.) of 6

---_.-._--.,-----,--_.. _-,: ..-.--.,.-.~~ ..-.,,~---.-~--

price under the provision of benefit or price prcCerence up to

15% over the large scale units is not proper and rn islcading

the .Governmcnt."

9. Learned counsel for the Petitioner points out that the Petitioner being the

only SSU was entitl(i)d to be considered since its offer of Rs. 32 \ per meter

was less than the lowest offer of Rs. 286.84 plus I 5 (Y() in terms of the

Cjrcular <jatcd 2Sth August 2000. Learned counsel for the Petitioner,

howeVer, reiterateS that the Petitioner is not secking. any dircct\(')I1S \vith

rerer

€mge to the aw~rd of contract pursuant to the tender floated by the

j Rail\\-''<olYs on l2thpebrllary 2008 but would be satisfied if a clariflbationis

iSSt1e<lfQ~~I:i,e.~turi,':i~lJOtlttheappnQahility of the Circular dated 28111

August

2QOO"

10. Learned couns.~l f9r the Respondents, while not denying that the rate

qQ6tcdbyt~~P"Gtiti<?!1~r ,could be well within the acceptable qU()tapol1 or. . . ....•..... . : .. , " ..

15%Clverth~qilqt~fipt1 offered by AFAFL, submitted that it waslri

the. ...' ..:.' "'- '; -~':;:. -'. . ::."-,:'!..

discretioo.ofthe.Rallways whether or not to extend the bcnditin terms 0t

theCirculardatea 2Sth August 2000.: - .:,' .

February 2008, As regards the only prayer in the writ petition; it appears to

this Court that the Railways do not have any di fficulty as rcg.ard~cxtending

three of the lOUr benetlts extended·to SSlJs by the Circular dated zs" August

20000 However, in granting the price preference "lIPlO 15°lcl over the

.~ ef Jarge-1lcale ;i.UUts" ahere l'P.Pcars 10 .be ;j misconstruing {)J the

Gm!lar ~:zgth .August 2000 by !the'l\1inistryofRaitw:ays_ Whika SSU

cannot .insist that the entire quantity tendered must be offered loan SSU, :a

duly Bualified SSU should be givenpreference in the matter ofprice In-terms

of'zbeCircnlar a~ed 2:8lilAugust 20.0.0. In other words.vwherethebid ofa

non-'SSU large scale ·UIrit Iravebeenaccepted for a portion of the tendered

qlJantity.ih.en me ,qualified ·ShaUbe ,quaJified up to 15%aoove ro price

quoted 'by',the Iarge-scale ,unit. Betweentwo :SSUs,.ofco~e, ii1would 'be

for the RaTIways ;to opt for...~e 'bener piice -quoted, which-again cannot

exceed 15% .over Md abovi·~.~Ox •..est price .quoted by the l~sca1cJJnit.

Itis1iufher.e1acifiedthatitiisnotnecessarythatiheentirequar.tt'ity:Shoclrlbe. . -:" . ..~I

'xiff~d to 'R SSUI If 1h.eCire.clar ..dated 281h Augusr 2000 is read as beUlg. ~ - . . . . .

purely discretionary, ;then the {i~e.c.t:so~ 10 be achieved by 'SUCh C:rr~u1ar

fer ;natex:tending to ,duly .q~ SSIiJ::the~e:fit'!iDder the C'm:m:1arilaterl

.2:811I~ 2000, ,Wbich reasons _ ;b::' ;r,~td~dJn~ritIng, 5tlch :a

;qualified 'SW :Sho.u1dbe,extended ;allthehere.fi:ts, mdu~ pri.ce reference

(J;f 1.5"4>,o:verthe price BUQted~thequalified Iarge-scale unit w ,tenns of,the

. C.rrcu'lardated 2StB August: 200£tJIheRaihwl,Yi> :sha1l implement ti:le:Said

~,&re.d ~Auwst2-oo.e ~e ewuafil'lgthelbiids,su1m:iitted!by 1thi-

- ,,,,,£,~--,,.~.•.•. _ . ;l" 41"';;""'.<A~. ~ )""~,cIl{iH.-c;;lJ~lIl=;tenuer;s-"",,,~'J:ry iIt. '\

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