[See Chapter XII, paragraph 260]
Rules for purchase of Stores (including Printing and Stationery Stores) required for use in Government Departments
The policy of the Government of Uttar Pradesh is to make their purchases of stores (including paper and stationary) for the public service in such way as to encourage the development of the industries of the country in general and of the Uttar Pradesh in particular to the utmost possible extent consistent with economy and efficiency, and the following rules are prescribed in accordance with this policy.
2. In order to give effect to the above policy preference in making purchases will be given in the following order :
(1) Firstly, to articles which are produced in India in the form of raw materials, or are manufactured in India from raw materials produced in India, provided that the quality is sufficiently good for the purpose.
(2) Secondly, to articles wholly or partially manufactured in India from imported materials, provided that the quality is sufficiently good for the purpose.
(3) Thirdly, to articles of foreign manufacture held in stock in India, provided that they are of suitable type and requisite quality.
(4) Fourthly, to articles manufactured abroad which need to be specially imported.
3. Subject to the above, and to such limitations as may be prescribed by the Government, the Director of Industries may, when he is satisfied that such a measure is justified, allow a limited degree of preference in respect of price, quality or finish to articles produced or manufactured in India either wholly or in part.
4. Purchases shall be made through the Stores Purchase Section of the Industries Department, except when otherwise provided in the rules or where the Director of Industries authorizes the direct purchase of any article which in his opinion can most conveniently or cheaply be purchased by indenting officers.
NOTE—For instruction relating to the preamble, see Annexure A.
Rule 1—Save as provided in rule 7, all articles required to be purchased for the public service shall be purchased on the condition that delivery shall be made in India for payment in rupees in India.
NOTE—During the period of war, when there is difficulty in the submission of quotations for supply of articles of foreign manufacture on c.i.f. basis to Indian ports, alternative quotations may be considered from Indian firms who are agents of foreign concerns, i.e. (1) f.o.b. overseas port quotations or (2) c.i.f. Indian port quotations. A sum approximately equivalent to the amount of freight insurance and handling charges should be added to the f.o.b. quotations for purposes of comparison. This procedure of obtaining f.o.b. quotations will not apply in case of articles such as plant and machinery which are purchased for installation and test in India before payment.
Rule 2—Tenders shall be invited—in India, and abroad also when considered desirable—for the supply of all articles which are purchased under rules 1, 3 and 4, unless the value of the order to be placed is small or sufficient reasons to be recorded exist which indicate that it is not in the public interest to call for tenders. No tender which fails to comply with the condition as to delivery and payment prescribed in rule 1 shall be accepted.
NOTE—Tenders from foreign firms giving quotations in rupees for c.i.f. delivery of goods in Indian cities may be considered and accepted subject to such change in price as may be affected by exchange fluctuations during the war and till such time as the normal conditions are not restored. The date of ruling rate of exchange will be decided from the date of shipment or date of receipt and acceptance of orders by firms or from the date of shipping documents.
Rule 3—All articles, whether manufactured in India or abroad, shall be subject to inspection before acceptance, and articles for which specifications and/or tests have been prescribed by competent authority shall be required to conform to such specifications and/or to satisfy the prescribed test or tests which may be carried out during manufacture or before or after despatch from the suppliers’ premises.
Rule 4—(1) Except as provided in rule 7 (1) of these rules, all plant and machinery shall be purchased in India, through the Director of Industries, under an arrangement that no payment shall be made till the plant and machinery have been erected and fully tested under full working conditions. In exceptional cases, however, where any part payments, are necessary before requisite tests are complete, the previous approval of Government in the Finance Department should be obtained.
(2) Other important iron and steel works shall be obtained only from firms approved by the Director of Industries and entered in a list as corrected from time to time by him.
(3) Purchases referred to in sub-rules (1) and (2) above shall be made or arranged for by the Director of Industries in agreement with the indenting officer. In case of disagreement, the former may refer the matter to the Head of the Department concerned, and, if the Director of Industries and the Head of the Department cannot agree, he should refer it to the Government in the Industries Department.
NOTES—By "important or steel works" are meant articles of iron or steel which form important components of the project in hand, e.g. bridge girders and roof trusses, built up in the firms workshops and supplied for erection, in such section as may be convenient and rolled steel beams, rails, or other sections cut to length or otherwise prepared at the firms workshops to suit the indenting officer’s requirements. The intention of the rule is to ensure that parts, the accurate preparation of which is essential to the security of the project, shall be obtained only from firms which posses workshops and appliances capable of turning out work of the desired standard. The raw materials used may be either imported or of Indian manufacture, subject to the usual specification.
(2) Applications for inclusion in the list of contractors under this rule should be made to the Director of Industries direct by the firm with a full statement of the reasons which in its opinion justifies such inclusion. The inclusion should be considered by the Director of Industries in consultation with the Chief Engineers, Public Works Department, and Irrigation Department. If the Director of Industries does not agree with the Chief Engineer concerned, he should refer the matter to Government in the Industries Department.
Rule 5—(i) In the case of works let out on contracts, provision should be made in the contract agreements (a) that the contractors must obtain articles required for the construction of such works from the firms with which the Director of Industries has made arrangements and (b) that in the case of articles for which the Director of Industries has made no arrangements, but has, in consultation with consuming departments, prescribed specifications and or tests, they conform to such specifications and or such tests.
(ii) The contracting officer shall be free to allow contractors to make this over arrangements to his satisfaction and without reference to the Director of Industries, for such articles required for the construction of works for which the Director of Industries has made no arrangements or for which no specifications and/or tests have been prescribed at the time of issuing tender notices.
(iii) The contracting officer shall be free to reject any article supplied which may not be up to the specifications/samples under which the articles were supplied. Copies of these specifications/samples shall be supplied to the contracting officer by the Director of Industries. The contracting firm shall have a right to appeal to the Director of Industries.
Rule 6—Nothing in these rules shall be deemed to prohibit the purchase of articles by one department from another.
Rule 7—(1) In special cases where suitable purchases cannot be made in India, plant and machinery may, with the previous sanction of Government, be obtained from abroad, provided the following conditions are satisfied :
(a) The supplying firm is borne on the list of the Central Government and has been exempted from furnishing a security deposit or has responsible agents in India who are borne on the list of the Central Government as being exempt from furnishing a security deposit.
(b) In the case of supplies from England inspection and test are arranged for wherever possible through the expert employed by the High Commissioner for India.
(c) The orders for well-know types of machinery and plant costing more than Rs. 5,000 approximate as nearly as possible to the standard types of recognized engineering firms.
(d) The orders shall ordinarily be placed through the Indian Stores Department of the High Commissioner for India, but in special cases with the sanction of Government an order may be placed direct.
(2) The articles enumerated in Annexure B, or any other articles of a special or usual character, may, when suitable and economical purchases cannot be made in accordance with the preceding rules, be obtained by the officers specially authorized as mentioned in Annexure C without reference to those rules, subject to the condition that the purchasing officer may at his discretion either obtain the article that he requires by indent on the Indian Store Department, London, or purchase it direct from manufactures or dealers aboard. Where resort is had to direct purchase from manufacturers or dealers aboard tenders shall, whenever practicable, be first obtained.
(3) When orders are placed on the basis of delivery free on board vessel at port of despatch, arrangements for the shipment of the store shall be entrusted to the Director General, Indian Stores Department, London.
(4) When articles are purchased abroad under this rule through the agency of the Indian Stores Department, London, payment shall be made by the department. In other cases payment shall be made—
(i) in countries other than Great Britain and Northern Ireland, direct to the suppliers by the purchasing officer;
(ii) Great Britain and Northern Ireland, through the High Commissioner for India.
NOTE—The procedure mentioned in Annexure D shall be followed in making payments in regard to purchase of Stores by the Public Works Divisional Officers, however, the procedure laid down in Appendix XIV of the Financial Handbook, Volume VI will also be followed.
Rule 8—In cases of emergency, when inconvenience to the public service is likely to be caused by waiting to obtain an article through the Stores Purchase Section, a Head of Office can make purchase in India, articles both of foreign and indigenous make, up to a limit of Rs. 4,000 at a time. For purchases between Rs. 4,000 and Rs. 20,000 at a time, he must obtain the sanction of the head of his department. The authority sanctioning such purchase must, within fifteen days, inform the Director of Industries of the reasons which led him to exercise these emergency powers. For purchases over Rs. 20,000 the sanction of Government in the Administrative Department must be obtained.
Rule 9—The following articles may be purchased direct;
(1) Articles of a perishable and fragile nature, and inflammable and volatile articles.
(2) Spare parts of machinery or articles urgently required to effect repairs.
(3) Articles in common use and for which rate contract does not exist when the total value of the entire quantity of articles purchased for an individual work does not exceed Rs. 1000, at a time by the Head of Office and Rs. 5,000 at a time by the Head of Department.
NOTES—(1) The foregoing exception does not apply to local purchases o stationery which are governed by the Stationery Manual.
(2) The Superintendent, Printing and Stationery, may purchase any one article or any number of similar articles purchased at one time, up to Rs. 1,000 in each case, subject to maximum of Rs. 5,000 per annum.
(4) Live-stock and fodder for live-stock.
(5) Material such as bricks, sand, common timber, kankar, stone ballast, lime, country tiles, etc.
Rule 10—The Government in the Industries Department will sanction departures from these rules if the public interests so require. All applications for sanction to such departures should be made with full reasons through the Director of Industries.
Rule 1l—Recoveries made from contractors on account of--
(a) delay, in the supply of stores.
(b) excess cost of the repurchase when it is found necessary to cancel a contract, and
(c) withdrawal by the contractor of the tender before the expiration of the time specified in the form of tender, should, in the first instance, be credited to a suspense head. When the amount is eventually determined it should be credited to the appropriate head of revenue as a receipt of the department concerned.
Recoveries may, where stores are indented for on capital account, be adjusted in reduction of expenditure under the capital major head concerned.
Rule 12—(1)(a) As a general rule, payment for supplies is not permissible until the articles have been received and surveyed. But in cases in which supplies are under competent authority, ordered free on rail at the station of despatch, payment may, when desirable, be made on production of railway receipt. The Accountant General will in such cases place the amount paid under objection pending the receipt of a bill based on actual measurements or in the case of shortage until the difference has been made good either by recovery from the railway or the firm concerned or by sanction of competent authority to write off the loss or shortage.
Rule 12—(1) (b). Subject to the terms and conditions laid down in annexure to this Appendix, payment up to 90 per cent of the cost of articles may be made on Railway Receipt through Bank before their actual receipt and verification. In such cases the amount required for payment shall be drawn on an abstract contingent bill (Contingent Bill form no. 16) giving full description of the charges and the number and date of the sanction permitting advance payment. As soon as the supplies are received and the payment made, a detailed contingent bill (fully voucher contingent Bill from no. 14) prepared on the basis of the actual verification measurement of the supplies along with the required sub-voucher (s) must be submitted to the Accountant General in adjustment of the advance drawn earlier quoting voucher number and date to the relevant abstract bill.
C. S. no. 58 Dated May 8, 1986.
[Vitta (Lekha) Anubhag File No. 23 (6)/80]
(2) No payment of advances to suppliers is permissible, except as provided in rule 4 (1) or paragraph 5 of Annexure D.
Rule 13—If contracts are entered into for supply of stores under these rules the instructions for entering into contracts in Appendix XIX should be complied with.
Instructions relating to the Preamble
1. The revised rules express a definite preference for articles which are produced in India in the form of raw materials or are manufactured in India from raw materials produced in India, and also for articles wholly or partially manufactured in India from imported materials. They also extend a preference (but not in price) to articles of foreign manufacture stocked in India over those which have to be specially imported.
2. The difference in the character of the preferences which may be given should be carefully noted. In the case of the first two categories mentioned in the preamble the condition is that the quality is sufficiently good for the purpose, and for the third category that the articles are of suitable type and requisite quality. This means that articles coming under the first two categories should be accepted, unless it is considered that the quality is definitely not up to the standard required, even though imported atricles may be considered to be of better quality.
3. The other kind of preference referred to in the revised rules is a price preference , and it is enjoined that limited price preference may be given to articles produced or manufactured in India either wholly or in part. It should be noted that no price preference should be given to articles falling in the third category over those which come within the last category.
4. A strict comparison with price prevailing abroad is not required, but the underlying principle is that the preference to be accorded to Indian products is to be tempered by the consideration of economy and should discriminate between articles made from Indian and from imported raw materials.
5. Ordinarily a limited degree of price preference in favour of articles produced or manufactured in India will be justified for one or other of the following reasons :
(a) When the industry in question is expected to fill a vital gap in the economic life of the Country and is likely to take a firm root in the soil in the near future.
(b) To prevent any a sudden dislocation of the labour market on a large scale.
(c) To regulate and control foreign competition specially during period of temporary trade depression abroad.
(d) To counteract the advantage to foreign industries arising from the depreciation of the currency of the country in question.
6. Price preference may be given by the Director of Industries subject to such instructions as may be issued to him by Government in the Industries Department : provided that in the case of contracts for a specific article required by one department only such price preference may not be given by the Director of Industries without the consent of the officer who controls the budget.
[See rule 7 (2) ]
List of articles that may be purchased by officers mentioned in Annexure C without reference to rules 1 to 6
(ii) Cinchona bark.
(iii) Articles for experimental or research purposes including instruments and apparatus required by the Excise Department.
(iv) Articles required for Government Houses.
(v) Such articles as Superintendents of Vaccine Depots may require for the preparation of vaccine lymph (e.g. lanoline and glycerine).
[see rule 7 (2)]
List of officers who are authorized to obtain direct from manufactures or dealers in England or in any other foreign country articles mentioned in Annexure B or other articles referred to in rule 7 (2).
1. Chief Conservator of Forests.
2. Chief Engineer, Public Works Department.
3. Chief Engineer, Irrigation Department.
4. Director of Agriculture.
5. Director, Animal Husbandry.
6. Director of Industries.
7. Director of Medical Health Services and Family Planning.
8. Director of Education.
9. Excise Commissioner.
10. Inspector General of Prisons.
11. Director, U. P. State Observatory, Naini Tal.
(C. S. No. 37, dated, November 14, 1983)
[Vitta (Lekha) Anubhag, File no. 15 (3)-83]
(Vide note below rule 7)
Procedure for making payments for purchases made from overseas
Subject to the provisions of rule 7, the following procedure shall be observed in making payments for purchases made from overseas :
1. Purchases through the High Commissioner, whether in the United Kingdom or elsewhere—
(1) The officer making the purchase should send the usual indent to the High Commissioner, and should at the same time intimate to that officer the details of the budget appropriation in the Indian grant concerned to which the cost will be taken.
(2) The officer should also provide the Accountant General with full details of each indent placed with the High Commissioner.
(3) On receipt of the monthly statements of expenditure in England, the Accountant General will enter the expenditure on stores against the Indian budget appropriation concerned.
(4) Indenting officers are responsible for watching expenditure on account of indents against budget appropriations.
In respect of the budget each estimating officer should divide the provision for stores into—
(1) Stores from England;
(2) Stores in India ; and
(3) Customs duty.
Special care should be exercised by the purchasing officer in differentiating the articles purchased through the agency of the High Commissioner from those merely delivered to or shipped through his agency. In the former case payment cannot be made from India, whereas in the latter case, the procedure prescribed for purchase of articles direct from suppliers should be observed.
2. Direct purchases for delivery of stores in India for purchases made in the United Kingdom—
(a) The officer making the purchase should report direct, with the necessary vouchers, to the Accountant General, who will then pre-audit the payment.
(b) At the close of each month the Accountant General will prepare a consolidated statement of the payments to be made, and purchase a sterling draft in favour of the High Commissioner for India and forward the draft, with the necessary details of payment to be made to suppliers, to the Secretary to the High Commissioner for India.
(c) The Accountant General will then bring the cost of the sterling draft finally to account against the Indian budget appropriation concerned.
This procedure does not permit a purchasing officer to make a payment himself by bank draft or otherwise.
In the case of really urgent payments the Accountant General will authorize the High Commissioner by telegram to disburse the amount in question, and will include it in his next monthly sterling draft, making a suitable note in the statement accompanying the sterling draft. The High Commissioner will take this portion of the remittance against the payment already made by him on the authority of the telegram.
NOTES—(1) Particular care should be taken to ensure that no double payment is authorized in respect of the same item.
(2) The Accountant General, when forwarding the sterling draft to the High Commissioner, should also endorse a copy of his communication to the officer concerned in India.
(3) The procedure laid down in this rule and the directions contained in notes (1) and (2) above may be followed mutatis mutandis in the case of payments to be made for articles obtained by direct order from private firms and individuals in America. The bank drafts to be sent by the Accounts Officers in India in such cases, will be purchased in favour of the Director India Supply Mission, Washington.
3. For purchases made elsewhere than in the United Kingdom and America—Payments for direct purchases made elsewhere than in the United Kingdom and America may be made by the purchasing officers direct to the suppliers whether by bank draft, postal order, or otherwise.
4. Direct purchases on the f.o.b. system, whether in the United Kingdom or elsewhere.—Under clause (a) of rule 7 (1) if orders are placed on the basis of delivery free on board vessel at port of despatch, arrangement for the shipment of the stores shall be entrusted to the Director General, India Store Department, London. With a view to avoid delay in payment to suppliers in such cases the purchasing officer may, if he considers such a course desirable, authorize the suppliers to submit their bills direct to the Director General who will certify that the stores referred to in the bills have been inspected by him and despatched under his arrangements. After verification the Director General will pass the bills to the High Commissioner for payment. The amount paid will be debited to the Accountant General through the Remittance Account in the usual manner, supported by the suppliers’ bills duly certified by the Director General, India Store Department, London. In cases in which it is desired to adopted this method of payment, the purchasing officers in India will give complete instructions to suppliers and the Director General, India Store Department, London. If more than one copy of a bill is required, the fact will be stated in the order, and if bills are required to be submitted on any special forms, the necessary forms will be supplied.
5. Special provisions for payment of advances for purchases of plant and machinery—When in the case of supplies from abroad payment of advances to the contracting firm is unavoidable, they shall be regulated as follows :
(a) In the case of contracts including erection, 80 per cent of the price of the plant may be advanced in rupees in India against the railway receipt covering the despatch of the material from an Indian port, 10 per cent of the price may be advanced when the plant is taken over after satisfactory completion of tests and the remaining 10 per cent may be paid at the end of the maintenance period. The payment on account of erection of the plant shall be made separately in proportion to the progress of the work.
(b) In the case of contracts independent of erection, 80 per cent of the price may be advanced in rupees in India against the railway receipt covering the despatch of the material from an Indian port and 20 per cent may be paid upon delivery and check at the site, or within one month of delivery, whichever is earliest : provided that if in any case the check of material cannot be carried out within one month of its delivery the matter shall be referred to the Government in the Finance Department for sanction of the advance payment.
NOTE—This direction also shall apply to similar cases in which purchases are made through the India Store Department of the High Commissioner of India; but in such cases sterling payment should be avoided, as far as possible, and arrangements should ordinarily be made for payment in India. In any case provision for sterling payment requires the previous approval of the Finance Department.
[ See Rule 12 (I) (b) ]
Terms and conditions for payment up to 90 per cent through bank before their actual receipt and verification.
Ninety per cent payment may be made to the suppliers on Railway Receipts through Bank and remaining ten per cent on receipt and verification of the articles with in thirty days on the following conditions :
(1) The facility of 90 per cent payment through bank shall be admissible to only those suppliers who are registered either with Director General Supplies and Disposals, National Small Industries Corporation U. P. Small Industries Corporation. Stores Purchase Section of Directorate of Industries. In exceptional cases the Director of Industries and the Purchase Committee shall have the right to give the facility of payment through bank to unregistered suppliers also in cases of rate contracts and quantity contracts respectively specifying the justification for doing so in writing.
(2) In rate contracts the facility of payment through bank shall be admissible to only those units/suppliers who have successfully participated in the last three rate contracts and against whom there has been no complaint.
(3) In rate contracts the suppliers shall have to furnish bank guarantee of Rs.5000 to Rs.25,000. The amount of bank guarantee shall, to the extent possible, be determined on the basis of the anticipated amount of purchases to be made against the rate contract.
In respect of quantity contracts the amount of bank guarantee shall be 10 per cent of the anticipated amount of the purchase involved, but in special circumstances the Purchase Committee shall be the right to reduce or waive the amount of bank guarantee on the merits of the case specifying justification thereof.
(4) The facility of payment through bank shall be given only in those rate contracts in which there exists arrangement for prior inspection and this facility shall not be given where such arrangement does not exist. In quantity contracts arrangement for prior inspection shall be made by the Director of Industries or with his consent by the indenting officer. In rate contracts this facility shall be given by the Director of Industries for only those items for the prior inspection of which arrangement exists with the Directorate of Industries. In the case of supply of I. S. I. marked goods. The Director of Industries/Purchase Committee may dispense with the condition of prior inspection.
(5) It will not be necessary to take a separate security in those cases in which 90 per cent payment through banks is made according to these rules after the required bank guarantee prescribing the conditions of ensuring supplies therein has been obtained from the supplier.
(6) It shall be necessary for the supplier who is given the above facility, to get the goods insured at his own cost while sending the goods by rail. This insurance will cover and compensate for all sorts of losses incurred due to theft, pilferage non delivery and other damage.
(7) The suppliers shall have to enclose the following documents to the railway builty for receiving 90 per cent payment :—
(a) The details of insurance policy and the specific date by which it is necessary for the officer receiving the goods to intimate to the supplier the details of shortage (s) or damages etc. (This date should be at least after 15 days from the date of receipt of goods from the railway)
(b) A declaration to the effect that entire material, shown in the bill has been dispatched and that the same was found intact and up to the mark in all respects at the time of prior inspection.
(c) ‘A’ copy of the prior inspection certificate bearing the seal and signature of the inspecting officer.
(d) Ninety per cent payment through bank shall be admissible only on the basis of railway receipt and not on the basis of road transport.
(8) whatever arrangements are made by the Director of Industries for the purchase of article, he shall specify in the purchase orders the name of the firms and also the maximum amount of any one bill or full supply for which payment can thus be made through bank. It shall be the responsibility of the Director of Industries to obtain the bank guarantee maintain its account and to make recovery etc. Under the bank guarantee in case of any complaint the indenting officer who thus makes any payment shall be definitely responsible for keeping a watch on the timely receipt of the material and its inspection on priority and in case of any complaint in respect thereof as a result of which any recovery has been made against the bank guarantee be shall report the matter to the Director of Industries and ensure that requisite action is taken by keeping regular contact with Director of Industries.
(9) The responsibility attached to the Director of Industries in para (8) above, shall be that of the head of the department concerned in cases in which purchase arrangements are made by the other department itself.
(10) The responsibility to implement this scheme and to keep a watch ensuring that there occurs no less to Government shall be of the Director of Industries in respect of those purchase arrangements which are finalised by him and in respect of purchase arrangements made by any other department itself the above responsibility shall be that the head of the department concerned. For this purpose they will prescribe suitable procedure and can give suitable general and if need be special directives to the indenting officer, who shall be fully responsible for complying with them.
2. The facility of 90 per cent payment through bank on the above terms and conditions can be extended to those suppliers also who are prepared for prior inspection to the material at their cost by the Director General Supplies and Disposals. Inspection by D. G. S. & D. may be got done only in those cases in which the Director of Industries, U.P., Stores Purchase Section Kanpur is not in a position to do so owing to the non availability of requisite instruments and machinery. If the supplies are found defective even after inspection by D. G. S. & D., then the suppliers can be black-listed.
(C. S. No. 58 Dated 8-5-1986)
[Vitta (Lekha) Anubhag, File No.23(6)/80 ]