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Vinay Shah   16 September 2023

A proprietor's tendor quote rejected for not being a company

Hello Legal Experts.,

I am running a Proprietorship Firm since 2007. I have Shop and Establishment Certificate from Ahmedabad Municipal Corporation.

I recently participated in and tender. I met all criteria. I was L1 (least bidder). I had submitted my Shop and Establishment Certificate.

The buyer rejected me on the grounds of: "As per ATC the party has not attached Certificate of Incorporation Under Companies Act 1956"

Can a government body reject a Sole Proprietorship Firm. Which also is a MSME. And as per government policy preference has to given to MSME.
PFA tender document. Highlighted Tender Document and Rejection document.



 4 Replies

P. Venu (Advocate)     16 September 2023

The facts posted suggest the action of of the purchaser, being a Government funded body, appears to be necessary. The remedy is in approaching the High Court in a Writ Petition.

Dr. J C Vashista (Advocate and Legal Consultant)     17 September 2023

If it is a condition precident to file tender by a company you are ineligible even if your tender is least among participants.

P. Venu (Advocate)     17 September 2023

In my above posting the "necessary" may kindly be read as "discriminatory"

T. Kalaiselvan, Advocate (Advocate)     17 September 2023

You have not registered your company with the ROC even though you have obtained license under Shops and establishment act.

The shop and establishment registration certificate serve as evidence of the legal body of a store or other commercial organisation that grants the right to do business in that particular area.

Your company may be MSME.

The government of India provides a MSME registration to the Micro, Small and Medium (MSME) industries. The MSME registration helps MSMEs to obtain various benefits provided by the government for their establishment and growth. 

Therefore the government rejecting your tender applicaiton citing that you have not fulfilled the requirements, i.e., not a registered copmpany as per companies act  is construed to be valid.

You cannot get any releif even if you would like to pursue the matter through a writ petition before high court 

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