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W.P. No. 34302 of 2025

NEUTRAL CITATION NO. 2026:MPHC-JBP:7231

IN   THE   HIGH   COURT   OF   MADHYA   PRADESH

AT

JABALPUR

BEFORE

HON'BLE

SHRI JUSTICE SANJEEV SACHDEVA,

CHIEF

JUSTICE

&

HON'BLE

SHRI JUSTICE VINAY SARAF

WRIT

PETITION No. 34302 of 2025

GERA GREEN INNOVATION

Vs.

NORTHERN COALFIELDS LIMITED AND OTHERS

Advocates for the Petitioner:

Shri Naman Nagrath, Senior Advocate with Shri Ritwik Parashar

Advocate for Petitioner.

Advocates for the Respondents:

Shri Anoop Nair Senior Advocate with Ms. Surbhi Singh Advocate for

Respondent nos.1 and 2.

Shri Sanjay Agrawal, Senior Advocate with Shri Siddharth Kumar Sharma

Advocate for Respondent no 3.

Reserved On : 09.10.2025

Pronounced On: 27.01.2026

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JUDGMENT

Per: Justice Sanjeev Sachdeva

1. Petitioner inter alia seeks quashing of Letter of Acceptance

dated 06.08.2025, whereby the entire tender has been awarded to

Respondent No. 3. Petitioner seeks reconsideration of the award of

tender by applying the correct Public Procurement Policy for Micro

and Small Enterprises (MSE) Order, 2012 thereby awarding 75% of

the work to the Petitioner (L1) and 25% to the L2 (MSE, other than

Respondent No. 3).

2.Respondent No. 1 — Northern Coalfields Limited (NCL),

issued an e-tender for 62.05 lakh tonnes of coal transportation from

specified seams to Spur-I Siding, including loading into trucks /

wagons, for two years. The result of the tender was declared on the

website of GeM and the Bid submitted by the Petitioner was declared

as L1 (lowest) in the financial evaluation. However, the tender was

awarded to Respondent No. 3 i.e. the L2 bidder by treating it as an

MSE within a price band of L1 + 15% under the Public Procurement

Policy for Micro and Small Enterprises (MSE) Order, 2012

(hereinafter referred to as the MSE Order 2012.

3.Petitioner has impugned the award of tender to Respondent No.

3 on the ground that it could not have been treated as an MSE. It is

contended that the Turnover of the Respondent No. 3 for the Financial

Year 2021-2022 was 47.078 Crores and for the Financial Years 2022-

2023 and 2023-2024 was Rs. 118.978 Crores and 145.373 Crores

respectively. It is submitted that as on the bid submission date the

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limits applicable were Micro ≤ 5 cores, Small ≤ 50 Crores and

Medium ≤ 250 Crores. The limits were revised on 01.04.2025. It is

contended that as the turnover of Respondent No. 3 exceeded Rs. 50

Crores it was a Medium Enterprise and thus not eligible to the benefit

as MSE.

4.It is further submitted that L2 was wrongly extended the MSE

preference. If the tender had been treated as split able, only 25% could

go to L2 (on price match) and 75% to the Petitioner (L1). By labeling

the tender “non split able.’’ Respondents No. 1 and 2 enabled the

entire contract to be diverted to L2.

5.Learned Senior Counsel for the Petitioner submits that

Respondent No. 3 has formed a new company with a new GST and

new PAN. He submits that Respondent No. 3 has obtained the tender

by using a micro status but using the credentials of other company

which has hundreds of cores turnover. It is submitted that as

Respondent No. 3 has relied upon the work experience of the previous

concern, it could not have obtained the benefit of the MSE Order

2012.

6.Reference may be had to the MSE Order 2012 in respect of the

preferential treatment being given to MSE. The relevant clause reads

as under:

“III. The following clauses are applicable for both One

Part and Two Part Systems:

A. Procurement from Micro and Small Enterprises

(MSEs) shall be applicable for Service Tenders in

accordance to the notification of Govt. of India and

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including its amendment(s) as notified by GoI from time to

time

i) Subject to meeting terms and conditions stated in the

tender document including but not limiting to prequalification

criteria, 25% of the work will be awarded to MSE as defined

in MSE Procurement Policy issued by Department of Micro,

Small and Medium Enterprises (MSME) for the tendered

work/item. Where the tendered work can be split, MSE

quoting a price within a price band of L1 + 15% shall be

awarded at least 25% of total tendered work provided they

match L1 price. In case the tendered work cannot be split,

MSE shall be awarded full work provided their quoted price

is within a price band of L-1 + 15% and they match the L-1

price.

ii) In case of more than one such MSEs are in the price

band of L-1 + 15% and matches the L-1 price, the work may

be shared proportionately if the job can be split. If the job

cannot be split, then the opportunity to match the L-1 rate of

the tender shall be given first to MSE who has quoted lowest

rate among the MSEs and the total job shall be awarded to

them after matching the L-1 price of the tender, in case the

L-1 is other than MSE. If MSE is a L1 Bidder, full work will

be awarded to such Bidder. If the MSE who have quoted

lowest rate among the MSEs in the price band of L-1 + 15%

do not agree to match the rate of L-1 of the tender, then the

MSE with next higher quoted rate in the price band of L-1 +

15% shall be given chance to match the rate of L-1 for award

of the complete job. This process to be repeated in till work is

awarded to MSE or MSE Bidders are exhausted.

NOTE- Bidders should take note that above work

cannot be split.

iii) Out of the 25% target of annual procurement from

micro and small enterprises 3 (three) percent shall be

earmarked for procurement from micro and small enterprises

owned by women. In the event of failure of such MSEs to

participate in the tender process or meet the tender

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NEUTRAL CITATION NO. 2026:MPHC-JBP:7231

requirements and L-1 price, 3(three) percent sub-target so

earmarked shall be met from other MSEs.

iv)Out of the 25% target of annual procurement from

micro and small enterprises 4 (four) percent shall be

earmarked for procurement from micro and small enterprises

owned by Scheduled Caste & Scheduled Tribe entrepreneurs.

In the event of failure of such MSEs to participate in the

tender process or meet the tender requirements and L-1 price,

four percent sub-target so earmarked shall be met from other

MSEs.

v) To qualify for entitlement as SC/ST owned MSE, the

SC/ST certificate issued by District Authority must be

submitted by the Bidder in addition to certificate of

registration with anyone of the agencies mentioned in

paragraph (I) above. The Bidder shall be responsible to

furnish necessary documentary evidence for enabling CIL to

ascertain that the MSE is owned by SC/ST. MSE owned by

SC/ST is defined as:

* In case of proprietary MSE, proprietor(s) shall be

SC /ST.

* In case of partnership MSE, the SC/ST partners shall

be holding at least 51% shares in the enterprise.

* In case of Private Limited Companies, at least 51%

share shall be held by SC/ST promoters.

vi) Classification of Micro and Small Enterprise are as

under:

a) Micro Enterprise -Enterprise where the investment in

Plant and Machinery or Equipment does not exceed

One Crore Rupees and Turnover does not exceed Five

Crore Rupees.

b) Small Enterprise- Enterprise where the investment in

Plant and Machinery or Equipment does not exceed

Ten Crore Rupees and Turnover does not exceed Fifty

Crore Rupees.

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vii) Micro and Small Enterprises (MSEs) registered under

Udyam Registration are eligible to avail the benefits under

the policy. Verification of MSE status of bidder is mandatory.

viii) The MSEs are required to submit copy of documentary

evidence, issued by their registering authority whether they

are small enterprise or micro enterprise as per provisions of

Public Procurement Policy for Micro and Small Enterprise

(MSEs) Order, 2012 with latest guidelines/clarifications

provided by MoMSME.”

(underlining supplied)

7.In terms of the procurement policy 25% of the work is to be

awarded to MSE as defined in MSE order. Where the tendered work

can be split, MSE quoting a price within a price band of L1 + 15%

shall be awarded at least 25% of the total tendered work provided they

match L1 price and if the tendered work cannot be split, MSE shall be

awarded full work provided their quoted price is within a price band

of L-1 + 15% and they match the L-1 price. The note stipulates that

the work cannot be split.

8.As per the Respondents No. 1 & 2, the above clause was

applied and Respondent No. 3 was asked to match the L1 price

offered by the Petitioner. They matched the price and as tender

stipulated that the work cannot be split, the entire work was awarded

to Respondent No. 3. It is contended that Respondent No. 3 is

classified as Micro Enterprise for the year 2024-25 as per the

UDYAM certificate, benefit was accorded to them.

9.As per the Petitioner, Respondent no. 3 Harsh Roadlines Private

Limited is a Company incorporated by the Sole Proprietor of Harsh

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Enterprises. Since it is a company recently incorporated, it has

obtained MSE registration. It is submitted that for the purposes of

claiming eligibility for the subject tender, it has availed of the work

experience of the proprietorship concern. It is contended that the Sole

Proprietorship concern does not qualify as an MSE and as such the

benefit of MSE cannot be claimed by the Respondent No. 3, if it was

using the work experience of a non MSE.

10.Per contra, the contention on behalf of Respondent No. 3 is that

the Company came into existence on 21.03.2024 and was classified as

a Micro Enterprise on 12.06.2024. It is submitted that the MSME

registration is entirely online and can be obtained from the Udyam

registration portal. An enterprise applying online for MSME

registration has to upload Aadhar number and PAN number.

Thereafter, PAN and GST-linked details of the enterprise is taken

automatically by the Udyam Registration Portal from the Government

database. The Udyam Registration portal classifies an enterprise as a

Micro, Small or Medium enterprise based on a composite criterion of

both investment in plant, machinery/equipment and annual turnover.

The portal automatically determines the classification by fetching data

from the Income Tax and GST portals based on the PAN and GSTIN

provided. After verifying the investment in plant and machinery as

well as annual turnover, an enterprise is classified as micro, small or

medium.

11.The e-tender stipulated the eligibility qualification based on

Work Experience. The relevant clause reads as under:

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“c) Work Experience: The Bidder must have experience of

works (includes completed/ ongoing) of similar nature

valuing 50 % of the Annualized estimated value of the work

put to tender (for period of completion over 1 year) / 50 % of

the Estimated value of the work (for completion period up to

one year) put to Tender, in any year (consecutive 365 days)

during last 7(seven) years ending last day of month previous

to the one in which bid applications are invited.”

12.As per the tender document the Bidder, to qualify in the tender,

must have experience of completed or ongoing works of similar

nature valuing 50% of the annualized estimated value of the work.

The estimated cost of work as per the tender document is Rs.

96,30,64,399/-. The period of completion stipulated is 730 days i.e. 2

years.

13.Respondent No. 3 is a private limited Company incorporated on

21.03.2024 and the documents submitted by it show that it

commenced its operations on 01.04.2024. The Turnover Certificate

submitted by Respondent No. 3 is for the year Financial Years 2021-

22, 2022-23 and 2023-24 and Turnover shown is Rs. 47,07,87,603/-,

Rs. 118,97,88,223/- and Rs. 145,37,34,230/- respectively. The

Turnover Certificate certifies that the Total Turnover of M/s Harsh

Roadlines Private Limited (previously known as Harsh Enterprises)

having PAN # AAHCH2669E during the period 01.04.2021 to

31.03.2024 is as shown above.

14.The PAN card uploaded by Respondent No. 3 shows the date of

incorporation as 21.03.2024. Clearly the Turnover Certificate covering

the period 01.04.2021 to 31.03.2024 does not relate to Respondent

No. 3. Said company was not in existence during the said period and

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admittedly commenced its operations on 01.04.2024. The PAN No. of

Harsh Enterprises is APAPA3482R. Respondent No. 3 has been

incorporated by conversion of proprietorship to Company with two

promoters Mr. Shakil Ahmad son of Adbul Rajjak (shown as the

Existing owner) and Mr. Abdul Rajjak Siddiqui son of G.R. Siddiqui

(shown as father of Existing Owner).

15.The MSE Order 2012 has been formulated with inter alia the

object of promotion and development of micro and small enterprises.

Respondent No. 3 seeks to claim benefit of the MSE order 2012 by

claiming the status of MSE. For claiming the status of MSE, it

contends to be newly incorporated company. The contention of

Respondent No. 3 is that the online portal automatically determines

the classification by fetching data from the Income Tax and GST

portals based on the PAN and GSTIN provided. The date of Udyam

registration is 12.06.2024 and the PAN No. of Respondent No. 3 was

that of a newly incorporated company with no turnover prior to

31.03.2024. Respondent No. 3 did not provide the PAN No. of the

proprietorship concern which had a turnover of over Rs. 145 Crores in

2023-2024. Had Respondent No. 3 provided the PAN No. of the

proprietorship concern, it would not have been classified either as a

Micro or a Small enterprise.

16.Respondent No. 3 submitted its bid document under the

category of Micro Enterprise. As per the notification dated

26.06.2020 an enterprise could be classified as Micro if its turnover

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did not exceed five cores. By notification dated 21.03.2025, it has

been enhanced to Rs. Ten cores.

17.Respondent No. 3, for claiming benefit of the MSE Order 2012

i.e. preference being given to MSE who quoted price within a price

band of L-1 + 15%, L1, claims status of Micro Enterprise i.e. having a

turnover of less than Rs. 5 Crores. However, to show eligibility,

Respondent No. 3 relies upon the turnover of Harsh Enterprises, its

proprietorship concern and files documents showing turnover of over

Rs. 47 Crores for the Financial Year 2021-22, over around Rs. 119

Crores for the Financial Year 2022-23 and over Rs. 145 Crores for the

Financial Year 2023-24. Admittedly Harsh Enterprises does not

qualify or have the status of Micro or Small Enterprise and is not

entitled to take benefit of the MSE Order 2012. The conversion from

proprietorship to Private Limited Company as a new entity is to claim

benefit of the preference clause in the MSE Order 2012 and tax

exemptions and other benefits available to Start Ups under the Start

Up India Scheme. Respondent No. 3 clearly cannot qualify as a Start

Up if it seeks to take benefit of the work experience and turnover of

the proprietorship concern.

18.The Judgment in the case of New Horizons Ltd. v. Union of

India,

(1995) 1 SCC 478

 at

page 492

relied upon by learned senior

counsel for Respondent No. 3 to contend that the newly formed

Company was entitled to take benefit of the work experience of the

proprietorship concern of its promoter who holds 50% of its equity is

not applicable to the facts of the case of Respondent No. 3.

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Respondent No. 3 may be entitled to take into consideration the work

experience/turnover of the proprietorship but then it cannot ignore the

turnover while claiming the status as a Micro or Small Enterprise.

19.Respondent No. 3 is not entitled to take benefit of the MSE

Order 2012 as the benefit of the said Order is available only to MSEs.

If Respondent No. 3 wishes to take benefit of the turnover of its

predecessor proprietorship concern, then it cannot avail of the benefits

under the MSE Order 2012. If it wishes to avail of the benefit of the

MSE Order 2012 then it has to forego the work experience and

turnover of its predecessor. The object and purpose of the MSE Order

2012 is to promote and give development opportunities to micro and

small enterprises and not to give benefit to a large enterprise which is

well settled and has turnover way beyond the prescribed threshold. It

cannot be held that an Enterprise can claim the turnover/work

experience of a large enterprise to show eligibility but claim Micro

Enterprise status by claiming to be a Start Up or new enterprise with

no Turnover. It cannot be permitted to ‘blow hot and cold in the same

breath’.

20.Respondent No. 3 was clearly not entitled to avail of the benefit

of the preference clause which entitled an MSE quoting a price within

a price band of L1 + 15% to be awarded the full work. Thus, the

option given to Respondent No. 3 to match the L1 price was incorrect

and the award of contract to Respondent No. 3 is liable to be quashed.

21.In view of the above, the Writ Petition is allowed. The contract

awarded to Respondent No. 3 by way of Letter of Acceptance dated

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06.08.2025 is quashed. Respondents No. 1 and 2 are directed to

reprocess the Tender in accordance with the Tender conditions. While

reprocessing the Tender, Respondent No. 1 and 2 shall ignore the

status of Respondent No. 3 as an MSE. There shall be no orders as to

costs.

(SANJEEV

SACHDEVA)

(VINAY

SARAF)

CHIEF JUSTICE

JUDGE