HP High Court Dismisses PIL on Co-operative Bank's Core Banking Software Procurement, Forfeits Rs 2 Lakh Deposit

The Himachal Pradesh High Court dismissed a PIL challenging the HP State Cooperative Bank's procurement of Infosys Finacle CBS software, finding deep-rooted private motive and forfeiting the petitioner's Rs 2 lakh deposit.

The High Court of Himachal Pradesh, in a Division Bench led by Chief Justice G.S. Sandhawalia and Justice Bipin C. Negi, dismissed a public interest litigation filed by Ajay Bhaik challenging the procurement of Finacle 10.02.25 Core Banking Software (CBS) by the Himachal Pradesh State Cooperative Bank Ltd. from Infosys and its associated entity Dynacons Systems & Solution Ltd. for a contract valued at over Rs 12 crore. The bench found that the petition was not a genuine public interest proceeding, but was driven by business rivalry and oblique private motives. The petitioner's earlier Rs 2 lakh deposit, required by the court to establish bona fide, was forfeited and divided between the High Court Employees’ Welfare Association Fund and the IGMC’s poor patients fund.

The Dispute Before the Court

Ajay Bhaik filed CWPIL No. 94 of 2025 before the High Court at Shimla, seeking to challenge the respondent-Bank’s decision to procure and install the Finacle 10.02.25 CBS from Infosys Ltd. without initiating what the petitioner described as an independent and transparent tendering process. A Board Resolution passed on 6 August 2022 at the Bank’s 410th Board Meeting, Item No. 33, authorised the adoption of Infosys Finacle software.

The petitioner additionally sought an independent inquiry into the Bank’s decision-making process and directions to ensure that all future procurements follow open, product-neutral competitive bidding in conformity with Central Vigilance Commission guidelines, the General Financial Rules, and the Himachal Pradesh Financial Rules, 2009.

To establish standing, the petitioner stated he was a private contractor for over 20 years and a member of the Himalayan Natural Beauty Adventure and Tourism Co-operative Limited, which is itself a member of the respondent-Bank. The Society held shares in the Bank and was entitled to dividends declared by it.

The contract at issue involved the Bank awarding the work to respondent No. 6, Dynacons Systems & Solution Ltd., described by the petitioner as a subsidiary of Infosys, for a sum exceeding Rs 45 crore. The total project cost as detailed in the Bank’s own documents included a one-time implementation cost of Rs 4,50,00,000, training costs of Rs 20,00,000, recurring monthly infrastructure and support costs totalling Rs 6,52,80,000, and licence costs of Rs 1,15,54,560, aggregating to Rs 12,38,34,560.

The petitioner argued that the Bank selected the software merely because NABARD had earlier awarded a tender to Infosys, and that the Bank was never a participant or beneficiary of NABARD’s RFP dated 27 October 2023, which had been adopted by 58 State Co-operative Banks and 9 Central Co-operative Banks across nine states.

Petitioner’s Legal Arguments

Senior Advocate Mr. Ajay Sharma, appearing for the petitioner, argued that the procurement violated the Central Vigilance Commission Office Memorandum dated 27 December 2002, which prescribed pre-qualification criteria circulated to all societies. He also relied on Rule 144 of the General Financial Rules, 2017, which mandates fair, transparent and reasonable procedures for all public procurements, and Chapter 6 of the Himachal Pradesh Financial Rules, 2009, on transparency in procurement of goods and services.

Reference was also made to instructions issued by the Controller of Stores, Himachal Pradesh, Shimla, dated 4 September 2018, requiring procurement through the GeM Portal. The petitioner’s supplementary affidavit stated that Finacle CBS was not readily available on the GeM Portal, while NABARD’s own RFP dated 27 October 2023 showed it had obtained Finacle 10.2.25 through the GeM Portal on competitive bidding.

The petitioner also relied on RTI information supplied by the Bank on 21 December 2024, which disclosed that the 410th Board Meeting had decided to proceed under the NABARD umbrella instead of floating a fresh RFP. Live demonstrations were held on 7–8 July 2022 by Oracle and 14–15 July 2022 by Infosys at the Bank’s head office; TCS Bancs had not responded. On the strength of these facts, the petitioner placed reliance on Tata Cellular v. Union of India (1994) 6 SCC 651 and A.K. Kraipak v. Union of India AIR 1970 SC 150, arguing that administrative decisions with civil consequences must be made with fairness and transparency.

The Bank’s Defence

Senior Advocate Mr. Suneel Mohan Goel appeared for the respondent-Bank and raised a preliminary objection on the bona fide of the petition itself. He pointed out that the RTI information relied upon by the petitioner had been originally obtained by a Delhi-based advocate and had also been appended to Writ Petition (C) No. 9287 of 2025 filed before the Delhi High Court by Natural Support Consultancy Services Private Limited. That petition had sought to quash NABARD’s RFP/Tender dated 28 October 2023 and to direct fresh procurement proceedings. The Delhi High Court dismissed that writ petition as withdrawn on 8 July 2025. The present petition before the Himachal Pradesh High Court was filed just three days later, on 11 July 2025.

The Bank further submitted that Dynacons was not a subsidiary of Infosys but a system integrator selected through NABARD’s competitive bidding process. The RBI had given adverse findings on the Bank’s existing BancMate CBS vide letter dated 14 January 2022, a fact the petitioner had deliberately suppressed. NABARD’s letter dated 9 August 2022 had specifically requested the Bank to align its policy with the national CBS platform before undertaking any CBS updation. The Bank submitted that the centralized regulatory-driven technology modernisation project, supervised by NABARD, was intended to bring all co-operative banks under a common technology umbrella recognised by the RBI and was not amenable to challenge through a PIL bypassing statutory remedies under the Co-operative Societies Act and the Bank’s bye-laws.

How the Bench Reasoned

The bench applied the framework for PIL scrutiny laid down by the Supreme Court in Janta Dal v. H.S. Chaudhari (1992) 4 SCC 305, Ashok Kumar Pandey v. State of Bengal (2004) 3 SCC 349, State of Uttaranchal v. Balwant Singh Chaufal & Others (2010) 3 SCC 402, and Tehseen Poonawal v. Union of India (2018) 6 SCC 72. These decisions collectively require a court to verify the credentials of the petitioner, satisfy itself as to the correctness of the information, and ensure that no personal gain, private motive, or oblique consideration drives the filing.

The bench drew three specific inferences against the petitioner. First, the RTI documents appended by the petitioner were identical to those annexed in the Delhi High Court petition, and both referenced the same Delhi-based advocate. The petitioner had not explained in the replication how those documents came into his possession, a requirement under Rule 9(i)(c) of the Himachal Pradesh High Court (Public Interest Litigation) Rules, 2021. Second, the timing was telling: the Delhi petition was withdrawn on 8 July 2025 and the present petition was filed on 11 July 2025, three days later, seeking substantially similar relief with the Bank as a party. Third, only three companies supply CBS software of this kind in India—Oracle, Infosys, and TCS Bancs—making business rivalry the obvious explanation for litigation aimed at preventing a pan-India CBS rollout in co-operative banks under NABARD.

The bench held that the petition was not a genuine effort to advance public interest but an attempt to derail the CBS system being installed at national level to ensure financial security, certainty and efficiency. It held that the petitioner could not be treated as a genuine propagator furthering the cause of a disadvantaged section of the public.

The bench also referred to Rule 7(iv) of the HP High Court PIL Rules, 2021, which provides that a letter petition shall not be entertained as a PIL pertaining to disputes relating to contractual or statutory liabilities. The court found that the petition fell squarely within that exclusion.

On the substance, the bench noted that NABARD had written to the Bank on 9 August 2022 requesting alignment with the national CBS platform before undertaking any CBS updation, and that the RBI had already found fault with the Bank’s existing BancMate software. These regulatory directions lent legitimacy to the Bank’s decision, which the petitioner had suppressed from the court.

The court quoted directly from Ashok Kumar Pandey: “Public interest litigation is a weapon which has to be used with great care and circumspection.”

Outcome

The Division Bench dismissed CWPIL No. 94 of 2025 on 20 July 2026. The Rs 2,00,000 deposited by the petitioner before the Registry of the High Court was ordered to be forfeited. Of that sum, Rs 1,00,000 was directed to be credited to the High Court Employees’ Welfare Association Fund and Rs 1,00,000 to the IGMC poor patients fund. All pending applications in the matter were disposed of simultaneously.