$~106 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 18164/2025 and CM APPL.75152/2025 IVS GLOBAL SERVICES PVT LTD & ANR. .....Petitioners Through: Mr. Siddharth Nath, Mr. Asjad Hussain, Mr. Anunay Chowdhary, Advs. versus UNION OF INDIA .....Respondent Through: Mr. Vikrant N. Goyal, Mr. Ayush Kasand, GP and Ms. Bhawna, Advocates. CORAM:

HON'BLE MR. JUSTICE SACHIN DATTA

O R D E R

% 11.12.2025

1. Issue notice.

2. Learned counsel, as aforesaid, accepts notice on behalf of the respondent.

3. Let reply be filed within a period of four weeks from today. Rejoinder thereto, if any, be filed before the next date of hearing.

4. The present petition has been filed by the petitioners assailing, inter alia, the impugned penalty order dated 14.11.2025, whereby the respondent/ Ministry of External Affairs has sought to impose penalty on the petitioners. The petitioner is an agency which had a contract with the respondent for providing visa, passport and consular services at designated centres.

5. The petitioner also seeks restoration of the Bank Guarantee dated 17.01.2025 which was encashed simultaneously with issuance of the aforesaid impugned penalty order. The impugned penalty order, inter alia, directs as under:-

6. The contract dated 03.06.2013, as was originally executed between the parties, indicate that the same contains a penalty clause which reads as under:- 7. Subsequent extensions of the aforesaid contract between the parties contained further provisions for levy of penalty. During the course of hearing, attention is drawn to the following provision which is appended as Annexure-1 to the extension agreement dated 06.05.2025:-

8. Learned counsel for the petitioner contends that the manner of levying penalty and the quantum thereof have been specifically set out in the contract. However, the impugned penalty order purports to levy penalty in utter derogation and disregard of the contractual provisions. It is further submitted that the penalty sought to be imposed upon the petitioners is clearly outside the ambit of the contract and is wholly arbitrary and unjustified.

9. Learned counsel for the respondent is unable to controvert that the contractual provisions for levy of penalty are in the above terms and do contemplate levy of penalty in terms sought to be imposed by the respondent/s.

10. It is evident that levy of penalty by way of the impugned penalty order is not in terms of the relevant contractual provisions. Further, the impugned penalty order is devoid of any discernible methodology to arrive at the penalty amount.

11. Learned counsel for the respondent emphasises that the petitioner has been over-collecting amounts from customers/ visa applicants and the excess amount so collected is of a very substantial magnitude. Needless to say, the respondent would be at liberty to seek accounts and/or initiate appropriate proceedings, including arbitral proceedings, to recover the said excess amount. However, the levy of penalty in the manner sought to be done vide the impugned order is prima facie unsustainable.

12. In the circumstances, till the next date of hearing, the levy of penalty as sought to be imposed vide Paragraph-7 of the impugned penalty order dated 14.11.2025 shall be kept in abeyance. However, since the bank guarantee has already been encashed, this Court is not inclined to pass any order at this stage with regard thereto.

13. List on 24.02.2026.

14. Order dasti.

SACHIN DATTA, J DECEMBER 11, 2025/uk