MSME Turnover Relaxation Circular Creates No Enforceable Right in Tender Proceedings: Jammu & Kashmir and Ladakh High Court
Case Overview
Court: Jammu and Kashmir and Ladakh High Court
Case: Pro Health Scientific Pvt. Ltd. Vs Union Territory of Jammu & Kashmir
**WP(C) No.😗* 2697/2025
Date of Order: 14/08/2026
The Jammu and Kashmir and Ladakh High Court, in a significant ruling on the scope of judicial review in tender matters, dismissed the writ petition filed by Pro Health Scientific Pvt. Ltd. challenging its disqualification from a procurement tender. The Court firmly held that the Government of India circular dated 10.03.2016 issued by the Ministry of Micro, Small and Medium Enterprises — which enables procuring entities to relax prior turnover and experience conditions for Micro and Small Enterprises — is purely discretionary and advisory in character and does not vest any legally enforceable right in an MSME bidder to demand such relaxation.
Background and Tender Requirements
The dispute arose from NIT No. NIT/JKMSCL/M&E/2025/655 dated 28.02.2025, issued for the procurement of "Machinery & Equipment" comprising one Anatomy Virtual Dissection Table. Among the technical qualification criteria prescribed in the Notice Inviting Tender, a bidder was required to demonstrate:
- An average annual turnover of Rs. 5 crores for the financial years 2021-22, 2022-23, and 2023-24, specifically of the Indian Subsidiary of the Principal Manufacturer or Sole Importer
- The turnover certificate was required to be issued by a Chartered Accountant or competent authority with UDIN
- Submission of audited balance sheets and profit and loss accounts for all three specified financial years, duly certified by a Chartered Accountant with UDIN
These requirements were embedded in Clauses 12 and 13 of the Technical Bid Submission Sheet, which are reproduced verbatim from the judgment as follows:
Clause 12: Average Annual Turnover Statement for last 3 financial years of the Indian Subsidiary of Principal Manufacturer/Sole Importer issued by Chartered Accountant/competent authority with UDIN (2021-22, 2022-23 and 2023-24). In case of foreign manufacturer the turnover of Indian Subsidiary/Sole Importer only shall be considered and not of the original manufacturer.
Clause 13: Copies of audited balance sheet and profit loss account for last three financial years certified by Chartered Accountant of the Importer/India Subsidiary for 2021-22, 2022-23 and 2023-124 with UDIN. In case of foreign manufacturer the balance sheets of Indian Subsidiary/Sole Importer only shall be considered.
The Petitioner's Position
Pro Health Scientific Pvt. Ltd. participated in the tender as an agent/representative of M/s Immersive Vision Technologies Pvt. Ltd., Pune, Maharashtra. The petitioner put forward several arguments in support of its claim for inclusion in the tender process:
1. Inability to Furnish FY 2021-22 Data
The petitioner stated that it had commenced business operations only in 2022 and was therefore incapable of producing a turnover certificate or audited accounts for the financial year 2021-22. It contended that it was structurally impossible for a newly established enterprise to satisfy a backward-looking financial criterion predating its own incorporation.
2. Claim for Updated Financial Year Consideration
Since the bid submission deadline was initially set at 04.04.2025 and was subsequently extended to 26.04.2025, the petitioner argued that the deadline fell within financial year 2025-26. On this basis, it claimed that the most recent completed financial year — namely 2024-25 — ought to have been included in the evaluation window. Accordingly, the petitioner submitted turnover details for financial years 2022-23, 2023-24, and 2024-25 and asserted that these collectively satisfied the Rs. 5 crore average turnover condition.