Mandatory procurement from weaver cooperatives cannot be bypassed via open tenders without prior non-availability certificates.

The petitioners are co-operative societies representing handloom weavers who depend on the industry for their sustenance and livelihood

Under G.O.Ms.No.1 dated 11.03.2024, the Government of Telangana mandated all departments and government institutions to procure handloom requirements exclusively through the Telangana State Handloom Weavers Co-operative Society Limited (TSCO)

Procurement from the open market is permitted only if TSCO issues a "Non-Availability Certificate" (NAC)

Despite this mandate, the State Project Director cancelled an existing indent for bedding material with TSCO via a letter dated 31.03.2026

Subsequently, on 02.04.2026, the Project Monitoring Unit (PMU)—constituted under G.O.Ms.No.17 to streamline procurement—issued tender notifications for carpets, bedsheets, blankets, and uniforms for the 2026-27 academic year without obtaining an NAC

The petitioners challenged these actions as illegal and violative of their constitutional rights

The court primarily applied Article 19(1)(c) of the Constitution of India, which elevates the right to form co-operative societies to a fundamental right

It further relied on Article 43B, a Directive Principle of State Policy introduced by the 97th Amendment, which compels the State to promote the voluntary formation and professional management of co-operative societies

The court treated G.O.Ms.No.1 dated 11.03.2024 as a mandatory social welfare policy designed to safeguard the livelihoods of the weaver community

Additionally, the court applied the principle of harmonious construction to ensure that G.O.Ms.No.17 dated 08.07.2025 (regulating the PMU) does not defeat the socio-economic objectives of G.O.Ms.No.1

The court reasoned that G.O.Ms.No.1 is not merely an administrative instruction but a protective "umbrella" for the weaver community, reinforcing their fundamental right to form and sustain co-operatives

The court observed that paragraph 4 of G.O.Ms.No.1 creates a mandatory condition precedent: departments must place orders with TSCO and can only approach the open market upon the issuance of an NAC

While the respondents argued that the PMU was established for efficiency and that TSCO meets only a fraction of total demand, the court held that such administrative convenience cannot override a social mandate

The court found that the cancellation letter dated 31.03.2026 and the subsequent tenders were issued without any reference to an NAC, thereby violating the mandate of G.O.Ms.No.1

Furthermore, the court clarified that a departmental "Memo" (dated 14.03.2026) cannot override a formal Government Order (G.O.) intended for socio-economic upliftment

The tender notice dated 02.04.2026 was set aside specifically regarding items that TSCO is capable of supplying

The court directed all State departments and the PMU to adhere strictly to G.O.Ms.No.1 by approaching TSCO for requirements first

TSCO was ordered to consult with weaver societies and either provide the materials or issue an NAC within one week

The respondents remain at liberty to procure items from the open market only for products TSCO cannot supply or once an NAC is formally issued