'Motivated': HP High Court Rejects PIL Challenging Procurement Of Infosys Software For Cooperative Bank, Forfeits ₹2 Lakh Deposit
The Himachal Pradesh High Court has dismissed a Public Interest Litigation challenging the State Cooperative Bank's procurement of the Infosys Finacle 10.02.25 Core Banking Software without an independent tendering process, holding that the petition was not a genuine public interest litigation but one driven by business rivalry and a deep-rooted private motive.A Division Bench of Chief...
The Himachal Pradesh High Court has dismissed a Public Interest Litigation challenging the State Cooperative Bank's procurement of the Infosys Finacle 10.02.25 Core Banking Software without an independent tendering process, holding that the petition was not a genuine public interest litigation but one driven by business rivalry and a deep-rooted private motive.
A Division Bench of Chief Justice G.S. Sandhawalia and Justice Bipin C. Negi further directed forfeiture of the ₹2,00,000 the petitioner had been asked to deposit in the Registry, observing that this was necessary "to ensure that such frivolous litigations do not subvert the system of this Court."
Speaking for the bench Justice Sandhawalia said, "apparently, there is deep-rooted motive in filing of the petition, guided by self-gain or for the gain of any other person/institution. Therefore, we are not inclined to entertain the petition as such keeping in view the above facts and circumstances, which have been brought to our notice."
The petitioner, Ajay Bhaik, stated to be a private contractor of over 20 years' standing and a member of a cooperative society which is in turn a member of the respondent-Bank and a shareholder entitled to dividends. He challenged the Bank's Board Resolution passed on 06.08.2022 in its 410th Board Meeting (Item No. 33) resolving to procure the Finacle make of Core Banking Software from Infosys, and sought an independent inquiry into the decision-making process by which the Bank adopted NABARD's Request for Proposal.
Directions were also sought to ensure that future procurements are undertaken through open, transparent and product-neutral competitive bidding in conformity with the Central Vigilance Commission Guidelines, the General Financial Rules, the H.P. Financial Rules, 2009, and State notifications.
Given the commercial nature of the dispute, the Court had by order dated 22.09.2025 directed the petitioner to deposit ₹2,00,000 in the Registry to demonstrate his bona fide, and to file an affidavit as to whether the software sought to be installed was available on the GeM Portal.
It was alleged that the Bank awarded the contract to Dynacons Systems & Solutions Ltd. for over ₹45 crores merely on the ground that the earlier tender had been allotted to Infosys by NABARD. Of the three companies invited for demonstration — Infosys, Oracle and TCS BaNCS — only Oracle and Infosys responded and gave live demonstrations at the Bank's Head Office in July 2022, following which the decision to switch to Infosys Finacle 10.2.25 was taken.
Senior Advocate Ajay Sharma for the petitioner argued that the procurement violated the CVC Office Memorandum dated 27.12.2002 prescribing pre-qualification criteria, Rule 144 of the General Financial Rules, 2017 requiring a fair, transparent and reasonable procedure for public buying, and Chapter 6 read with Rule 131 of the H.P. Financial Rules, 2009. Reliance was also placed on the Controller of Stores' communication dated 04.09.2018 on procurement through the GeM portal.
It was contended that NABARD's RFP dated 28.10.2023, adopted by 58 State Cooperative Banks and 9 Central Cooperative Banks across nine States was neither applicable to nor binding on the respondent-Bank, which was never a participant or beneficiary of that RFP. Reliance was placed on Tata Cellular v. Union of India (1994) 6 SCC 651 and A.K. Kraipak v. Union of India, AIR 1970 SC 150, to argue that administrative decisions carrying civil consequences must be made with fairness and transparency.
Senior Advocate Suneel Mohan Goel for the Bank raised a threshold objection to the bona fide of the litigation. He pointed out that the RTI information relied upon had been supplied to a Delhi-based advocate, and that the very same documents had been appended to Writ Petition (C) No. 9287 of 2025 filed by Natural Support Consultancy Services Private Limited before the Delhi High Court seeking to quash the RFP dated 28.10.2023. That petition was dismissed as withdrawn on 08.07.2025, while the present petition was filed on 11.07.2025.
It was further submitted that the grievance fell within the ambit of the Cooperative Societies Act and the Bank's bylaws, that Dynacons had been selected through open competitive bidding under NABARD's Pan-India RFP and was not a subsidiary of Infosys, and that the RBI had recorded adverse findings on the Bank's existing BancMate CBS by letter dated 14.01.2022 — a fact allegedly suppressed by the petitioner.
Analysing the law on maintainability of PILs, the Bench referred to Janata Dal v. H.S. Chowdhary (1992) 4 SCC 305, Ashok Kumar Pandey v. State of West Bengal (2004) 3 SCC 349, State of Uttaranchal v. Balwant Singh Chaufal (2010) 3 SCC 402 and Tehseen Poonawalla v. Union of India (2018) 6 SCC 72, noting in particular the caution that the judiciary must ensure that "behind the beautiful veil of public interest an ugly private malice, vested interest and/or publicity seeking is not lurking," and that in cases of business rivalry the Court would not step in.
In the present case, the Court found that the annexure relied upon in the present petition was the same RTI reply dated 21.12.2024 that had been placed before the Delhi High Court, with reference to the same New Delhi-based advocate.
Noting the "strange co-incidence" in the timing of the withdrawal of the Delhi petition and the filing of the present one, the Bench held that the source of the petitioner's knowledge had not been explained in the replication, and that "apparently, there is deep-rooted motive in filing of the petition, guided by self-gain or for the gain of any other person/institution."
The Court also referred to the Himachal Pradesh High Court (Public Interest Litigation) Rules, 2021, notified pursuant to Balwant Singh Chaufal, particularly Rule 7(iv) barring PILs relating to contractual or statutory liabilities, and Rules 9(i)(b) and 9(i)(c) requiring specific averments on absence of personal interest and on the source of knowledge of the facts pleaded.
Recording that the CBS software is a highly technical product supplied by only three companies in the country, the Bench observed that "the business rivalry as such is apparent," as also borne out by the earlier attempt before the Delhi High Court to prevent Pan-India installation of the software in cooperative banks under NABARD's aegis.The tentative project cost, as placed on record, worked out to ₹12,38,34,560 including one-time implementation, training, recurring monthly and licence costs across 272 branches.
Holding that the petitioner could not be treated as "a genuine propagator for a down-trodden person furthering the cause of public interest," the Court declined to examine the merits of the tendering challenge and dismissed the petition with forfeiture of the deposited amount.
Case Title: Ajay Bhaik v. State of H.P. & Others
Coram: Chief Justice G.S. Sandhawalia and Justice Bipin C. Negi
Appearances: Mr. Ajay Sharma, Senior Advocate with Mr. Atharv Sharma, Advocate, for the petitioner;
Mr. Pranay Pratap Singh, Additional Advocate General, for respondents No. 1 & 2;
Mr. Suneel Mohan Goel, Senior Advocate with Mr. Raman Jamalta, Advocate, for the respondent-Bank.