Delhi High Court Draws Line: No Free Ride on Parent's Experience in Tenders

In a measured ruling emphasizing restraint in judicial review of tender processes, the Delhi High Court dismissed a writ petition by International Visa Services Pvt Ltd (formerly IVS Lanka Pvt Ltd) challenging its disqualification from a tender for outsourcing consular, passport, and visa (CPV) services in Sri Lanka. A Division Bench of Justices V. Kameswar Rao and Manmeet Pritam Singh Arora upheld the Union of India's decision, ruling that operational experience gained as a subsidiary "arm" doesn't count toward mandatory eligibility without formal contract assignment.

This decision, delivered on March 30, 2026, in W.P.(C) 5/2026 , reinforces that tender authorities hold sway over interpreting eligibility criteria, particularly when bids hinge on shared histories between related entities.

A Decade of Operations, But Whose Experience Counts?

The saga traces back to 2013, when IVS Global Services Pvt Ltd secured a contract with the Indian government to run CPV centers in Sri Lanka. To meet local laws, IVS Global incorporated IVS Lanka (now the petitioner), which handled day-to-day operations via a Memorandum of Understanding (MOU) dated July 4, 2013. The MOU explicitly positioned IVS Lanka as an "extended operational arm" under IVS Global's supervision, control, and with retained client ownership.

Over 13 years, extensions to the 2013 Agreement (last till October 31, 2025) were signed, bank guarantees furnished by IVS Lanka, and the government issued press releases, count confirmations, and appreciation letters naming IVS Lanka. Yet, privity of contract stayed with IVS Global—no assignment or novation occurred.

Fast-forward to November 27, 2025: A fresh Request for Proposal (RFP) demanded bidders show three years' independent experience (Jan 2020-Dec 2024) operating CPV centers for diplomatic missions, averaging 100 applications daily. IVS Lanka bid solo after IVS Global opted out (email Dec 10, 2025), claiming the 2013 tenure as its own. Rejected via email December 29, 2025, for failing Chapter V Clause 1(i)'s Mandatory Eligibility Criteria (MEC).

Prior drama included a stalled first RFP (Feb 2025, where IVS Lanka qualified technically) and a penalty order against both entities for excess fees—stayed in separate litigation.

Petitioner's Plea: 'We Did the Work, Give Us the Credit'

IVS Lanka argued it was the on-ground executor, backed by government documents like press releases and approvals. Extensions were signed by its officers; a CA-certified turnover proved finances. They cried foul over inconsistency—the same criteria cleared them earlier, and UAE mirrored this (IVS Global LLC renamed SGIVS, awarded extensions). Alleging malice post-penalty row, they invoked equality and prior admissions in affidavits.

Union's Stand: 'Contract Says It All—You're Not the Principal'

The government countered: The 2013 Agreement named IVS Global exclusively; MOU clauses (3.2, 5, 6) locked IVS Lanka in subordination—no independent experience. Risk, liability, and client ties stayed with the parent. Precedents like Tata Cellular v. Union of India (1994) and Jagdish Mandal v. State of Orissa (2007) limit courts to checking arbitrariness, not merits. UAE differed—no dual claims there; here, IVS Global touts Sri Lanka experience elsewhere (e.g., Singapore tender). Strict MEC can't be diluted.

Bench's Sharp Scalpel: Privity Over Performance, Restraint Over Reinterpretation

Quoting Supreme Court lore, the Bench invoked Tata Cellular 's "Wednesbury reasonableness" and Jagdish Mandal 's public interest test: Courts review process, not substitute expertise. Tata Motors v. BEST (2023) and N.G. Projects urged damages over injunctions to avoid public cost hikes.

Key dissection: - No privity : IVS Lanka signed extensions "for" IVS Global; MOU barred independent claims (Clause 3.4 client ownership). - Agent, not principal : Section 230 Contract Act binds disclosed principal (IVS Global). - UAE distinction : Formal novation there; none here. - Tender boss knows best : Per Galaxy Transport Agencies (2021), authors interpret terms. - First RFP? Changed facts : IVS Global's withdrawal severed oversight.

New Horizons Ltd. (1995) allowed pragmatic views of "persons behind" entities, but here, direct dealings convinced authorities IVS Lanka lacked solo chops.

As other reports noted, this aligns with the Court's stress: "The requisite experience claimed by the bidder must vest in it as the contracting party and cannot be derived as an agent of a separate legal entity."

Key Observations

“The Bidder must meet the following mandatory conditions: (i) The Bidding Company must have... at least 3 (three) years' experience... Verifiable details of the experience of operating such centers must be provided.”

“IVS Lanka shall act as the extended operational arm of IVS Global and shall carry out day-to-day operations under the supervision, control, and guidance of IVS Global.”

“Judicial review of administrative action is intended to prevent arbitrariness... When the power of judicial review is invoked in matters relating to tenders... courts will not... interfere even if a procedural aberration... is made out.”

“The author of the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court.”

Petition Dismissed: Green Light for Strict Bidding, Red Flag for Subsidiaries

"The writ petition is accordingly dismissed." No costs; interim orders vacated. Clarified no impact on penalty challenge ( W.P.(C) 18164/2025 ).

Implications ripple: Tendering entities gain leeway to demand standalone credentials, curbing "experience laundering" via affiliates. Subsidiaries must secure novations for legacy claims. For public procurement, it prioritizes fairness over flexibility, potentially hiking barriers but safeguarding competition—lest one contract fuels multiple bids.