Operational performance as an agent cannot be claimed as independent contractual experience for tender eligibility.

The Petitioner (IVS Lanka), a Sri Lankan company, challenged its disqualification from a tender process for outsourcing consular services (CPV services) in Sri Lanka

In 2013, the Respondent (Union of India) entered into an agreement with a distinct entity, IVS Global Services Pvt. Ltd. (IVS Global), for these services

IVS Global incorporated the Petitioner as an "extended operational arm" via an MOU dated 04.07.2013 to handle day-to-day operations under its supervision

While the Petitioner performed the work, the formal contract and its subsequent extensions remained exclusively with IVS Global

In 2025, the Respondent issued a fresh Request for Proposal (RFP) with Mandatory Eligibility Criteria (MEC) requiring bidders to have three years of experience operating CPV centers

The Petitioner bid independently, relying on the experience gained under the 2013 Agreement

However, the Respondent disqualified the Petitioner on 29.12.2025, ruling that the experience and revenue under the 2013 Agreement belonged to IVS Global, the actual contracting party, and not the Petitioner

1. Whether the Petitioner can validly claim the experience of rendering services under the 2013 Agreement (executed by its principal, IVS Global) to satisfy the MEC of the 2025 RFP

2. Whether the Respondent's decision to disqualify the Petitioner was arbitrary, irrational, mala fide, or illegal

The court primarily applied the principles of judicial restraint in tender matters as established in Tata Cellular v. Union of India, which limits review to the decision-making process rather than the merits

It followed Jagdish Mandal v. State of Orissa, holding that interference is only warranted if the decision is mala fide or so arbitrary that no responsible authority could have reached it

The court relied on Galaxy Transport Agencies v. New J.K. Roadways, which posits that the author of a tender document is the best judge of its interpretation

Furthermore, it applied Section 230 of the Indian Contract Act, 1872, regarding the relationship between agents and disclosed principals

it distinguished the commercial/pragmatic experience rule in New Horizons Limited v. Union of India

The Court observed that privity of contract under the 2013 Agreement existed solely between the Respondent and IVS Global; the Petitioner was never a formal party, and no assignment or novation occurred

Under the MOU, the Petitioner functioned only as an "operational arm" under the "supervision, control, and guidance" of IVS Global, which retained "client relationship ownership"

The Court noted that IVS Global had claimed the same experience in other international tenders, and allowing the Petitioner to claim it simultaneously would undermine competitive bidding

While the Petitioner was qualified in a previous RFP, the Court accepted the Respondent’s explanation that the Petitioner’s current bid lacked the essential "supervisory layer" of IVS Global, which had withdrawn from the process

Applying Section 230 of the Contract Act, the Court held that operational involvement by an agent does not necessarily translate into independent contractual experience

The Court concluded that the Respondent's interpretation—that experience must vest in the contracting party—was a "plausible and reasonable" view that did not warrant judicial interference

The Court found no evidence of mala fides or arbitrariness in the Respondent's decision. The Court further vacated all interim orders and clarified that this judgment would not affect other pending litigations regarding penalty orders between the parties