Supreme Court strikes down Rs 6,300-cr food contracts

Sandeep A Ashar
Women and Child Development Minister Pankaja Munde

IN FRESH trouble for the Devendra Fadnavis government, the Supreme Court (SC) has struck down tenders worth Rs 6,300 crore issued in 2016 by the Maharashtra women and child development department for supplying Take Home Ration (THR) as supplementary nutrition at daycare centres or anganwadis in the state.

A bench comprising Justice Arun Mishra and Justice Deepak Gupta pronounced the order on February 26.

Even more worrying for the government in an election year would be the SC's observations that some of the technical and financial conditions introduced by the state in the tender notice were "arbitrary" and favoured "big players and industrialists in the field" at the cost of women self-help groups (SHGs).

While setting aside the tender, the SC ordered issuance of fresh tenders within four weeks, while asking the state government to take all measures to ensure participation of SHGs involving local women. But the SC has permitted the state to make alternative arrangements to supply nutrition for the children and lactating mothers enrolled with the daycare centres in the interim period. It has, however, restrained it from relying on the current arrangement, where contracts have been awarded to three mahila mandals on the basis of the same tender.

In particular, the SC rap is a setback for Women and Child Development Minister Pankaja Munde. While Munde has been facing fire from the Opposition over the food contract, Chief Minister Devendra Fadnavis had earlier denied allegations of graft raised against her.

Munde's ministry had floated the consolidated tender on March 8, 2016, after securing a nod from the Cabinet on February 23, the same year.

The tender was for allotting contracts for supply of THR to anganwadis for five years, which could be extended for two more years. Its total worth is estimated to be Rs 6,300 crore.

The petitioner in the case, Vaishnorani Mahila Bachat Gat, had objected to the insistence of extrusion-based technology for the manufacture of the THR mixtures and the condition regarding annual financial turnover in the tender notice, arguing that it effectively ruled out local SHGs from participating in the tender, and created a monopoly of sorts for a handful of big companies.

Upholding a previous judgment of the Aurangabad bench of the HC in this regard, the SC has noted that by introducing the extrusion technology condition, the government had selected three mahila mandals - Maharashtra Mahila Sahakari Grahuudyog Sanstha (Dhule), Venkateshwara Mahila Audyogic Utpadan Sahakari Sanstha (Latur) and Mahalaxmi Mahila Grihaudyog and Balvikas Bahuuddeshiya Audyogic Sahakari Sanstha - which were earlier found to be acting as fronts for existing companies and industrialists.

"The principal issue is whether the contracts for the supply should be given to local mahila mandals run along democratic lines with local women participating or whether such contracts ought to be given by the state to large corporates/contractors under the guise of the conditions of the tender. It has also been pointed out that under THR, normally dry mixtures such as Dallya, khicdi, etc are supplied, which do not require sophisticated techniques for manufacturing. The SHGs are fully equipped and competent to supply the said food," stated the order made public on Friday.

Quoting the Centre's guidelines in this regard, it added: "The state governments are expected to undertake effective measures to ensure that SHGs are allowed to meaningfully participate in providing hot cooked meal and THR. The terms and conditions should not be framed in a way that they get excluded from participating itself in the tender."

The court also came down heavily on the state government for "wrongly representing" to it that the Centre had issued specific recommendations for the issue of extrusion technology, when no such recommendations existed. Criticising the state for "misleading" it, the SC also set aside previous observations it had made in a related case.

Further, it objected to the state's decision to enhance the area of supply for food contracts by forming 70 blocks at the district level, which it said "effectively ousted the local SHGs from the field".

In 2013, acting on court directives and guidelines from the Centre, the previous Congress-NCP regime had issued orders for involving village communities and local SHGs in the process by proposing to form one SHG for each of the 553 Integrated Child Development Scheme projects (about 25 to 30 anganwadis are attached to each such project) for allotting such work.

But it could allot work in this manner for 314 projects.

The three firms mentioned earlier were allowed to continue with the contracts for most of the remaining project sites on grounds that they had been in this supply business since 2009.

An essential condition of the tender states that a supplier must hold an annual turnover over 25 per cent of the supply quantity.

"Increasing the area of supply increased the turnover requirement significantly, and this would have automatically disqualified most of local SHGs and village communities," the petitioner had argued.

The SC concurred with this viewpoint.