Kerala HC Admits Plea Challenging State Co-Op Bank's Award Of Tender For Supplying Micro-ATM Machines To Sub-Dealers Of Chinese Manufacturer

The plea alleged that the usage of micro ATMs by Chinese Manufacturers in sensitive sectors like banking is a security hazard to the nation. It argues that allowing a Chinese company access to the banking sector undermines the nation's safety, security, integrity, and individual privacy.

The Division Bench comprising Justice A K Jayasankaran Nambiar and Justice Syam Kumar V M issued notice to the respondents including the Union Government, State Government, Department of Expenditure, Department of Co-operation, Kerala State Co-operative Bank and Reserve Bank of India.

The PIL has been moved by the President of a primary cooperative society under the Kerala State Co-operative Bank. It is alleged that the tender was given to a bidder who is an agent of a Chinese Manufacturer in contravention of directives from the Central Government's Department of Promotion of Industry and Internal Trade (DPIIT) and other state government circulars.

The plea stated that unchecked usage of compromised electronic devices can lead to the transmission of sensitive data to foreign countries and it could affect the privacy of citizens and National Security. It is stated that the Central Government has issued DPIIT to interdict the usage of foreign-manufactured components in technical devices, especially from China to protect the leakage of sensitive data and to ensure confidentiality.

“Countries such as China is known for snooping into day to day affairs of countries in which they have strategic interest particularly, India which is their arch nemesis and military and economic rival in Asia. China is known to conduct this espionage without sending a single agent abroad, by weaponizing microchips embedded in smart devices, including payment interfaces, smart bulbs, computers and credit cards. The threat posed by this espionage is mainly in the areas of National Security and economic prosperity in addition to the privacy of the citizens which is a fundamental right in itself”, alleged the plea.

The petitioner also alleges that the Kerala State Co-operative Bank is misusing funds by purchasing devices from unworthy companies in violation of DPIIT and state circulars. It is also alleged that the tender was awarded to certain companies in complete disregard of the law and that the process lacked transparency. The plea stated that the tender process was carried out in violation of e-tendering guidelines and even against tender specifications.

The plea further states that the Reserve Bank of India is bound to issue directions to Kerala State Co-operative Bank since it is evident that they are flouting DPIIT guidelines issued under Article 257 of the Constitution by awarding tenders to sub-dealers of Chinese companies.

The petitioner thus seeks to quash the tender process and to ensure that tenders for all public procurements are carried out by complying with DPIIT directions. As an interim relief, the plea seeks direction to the Kerala State Co-operative Bank to stay purchase orders issued to companies for the supply of micro ATM devices.

The plea has been moved by Senior Advocate George Poonthottam, Advocates Nisha George, J Vishnu

Case Title: T M Thomas v Union of India & Others

Case Number: WPC 28476/2024