Ravi Khokhar & Ors. v. Union of India & Ors.

9. Learned counsel appearing on behalf of petitioners submitted that the AFGIS was registered under the Societies Act, XXI of 1860 in the year 1976 and was sanctioned by the President on 06.10.1976 and also by the Ministry of Finance and Expenditure, Government of India. The employees of AFGIS were given benefits at par with the Central Government employees and the alteration of unilateral service terms and conditions is contrary to law and pay scale.

10. Similarly, petitioners employed in Air HQs Non-Public Fund Organization have also claimed that their organization was formed in Lahore in 1940 but was re-registered in the year 1981. It is averred that Indian Air Force Benevolent Association (IAFBA) is a part of Air HQ Non-Public fund Organisation which has been treated as a Government notified Institution vide notification No. 1591 dated 17.12.1976 under Section 10 of I.T. Act, 1961. The Air HQs NPF is under the direct control and supervision of top officials of Indian Air Force and the affairs of the organization are being manned and managed by the Indian Air Force and so, Air HQs Non Public Fund organization falls within the purview of 12:51 State under Article 12 of the constitution of India.

11. Learned counsel submitted that the preliminary objection raised by the respondents that AFGIS is not a „State‟ deserves to be rejected in the light of decision of Supreme Court dated 14.02.2019 in CA9166/2013, titled as “Marwari Balika Vidyalya Vs. Asha Srivastava” wherein it is held that under Article 12, “authority” does not mandamus a public duty but such a duty if imposed by common law or contract, the writ petition is maintainable. Reliance was also placed upon a decision dated 29.08.2011 passed by this Court in W.P.(C) 3850/2010, titled as Sagrika Singh Vs. UOI & Ors., wherein a Society, namely, Army Group Insurance Fund (AGIF), formed by the Armed Forces on 01.01.1976 was held to be a State. Learned counsel for petitioners also placed reliance upon decision dated 09.09.2008 passed by the Delhi State Commission in Appeal No.A07/244, wherein it was held that AFGIS was under the overall control of Air Force and the funds of AFGIS were also under the supervision of Air Force and hence, funds of AFGIS cannot be treated as non-public funds.

12. To the contrary, learned counsel appearing on behalf of respondents submitted that these petitions are not maintainable as the AFGIS, CR.P.F. I.T.C, and Air HQs Non-public Fund Organization, fall under the category of “Other Society” and not State under Article 12 of the Constitution. It was submitted that these Societies are not funded by the Government nor performs any public, statutory or sovereign function. Learned respondents‟ counsel drew attention of this Court to a decision of Constitution Bench of the Supreme Court in Ajay Hasia & Ors. Vs. 12:51 Khalid Mujib Sehravardi & Ors. (1981) 1 SCC 722, wherein six tests were culled out to qualify the ambit of Article 12 and submitted that the Societies in question function as per the stipulated rules and regulations of the societies and not as per administrative control of the Government and as such Indian Air Force.

13. Learned counsel for respondents also placed reliance upon Supreme Court‟s decision in Pradeep Kumar Biswas & Ors. Vs. Indian Institute of Chemical Biology & Ors. (2002) 5 SCC 111 to submit that if there is some element of control of the government but not a deep and pervasive control; if Government's presence or participation is felt in the society, such presence cannot be called a brooding presence or the over lordship of government and a mere governmental patronage, encouragement, push or recognition would not make an entity “the State”. Reliance was next placed upon Constitution Bench‟s decision in M/S Zee Telefilms Ltd. & Anr. Vs. Union of India &Ors. (2005) 4 SCC 649 and decisions of this Court dated 02.06.2010 in W.P.(C) No. 16699/2006, titled as Lt. Col. Ashok M. Chacko Retd. Vs. Union of India & Ors. and Air Vice Marshal J.S. Kumar Vs. Governing Council Of Air Force Sports Complex 126 (2006) DLT 330 in support of above submissions.

14. Learned counsel for respondents submitted that these Societies have been incorporated in order to provide insurance, investment and education related services to a section of people belonging to the Air Force and, therefore, no public function is being carried out by these Societies in order to fall even close to ambit of Article 12 of the Constitution of India.

15. About changes in service terms and conditions, it was submitted 12:51 that Board of Trustees of the Society reserve the right to do so from time to time, which fact was also mentioned in the appointment letters of the petitioners and such like personnel. Reliance was further placed upon decision in Chander Mohan Khanna Vs.

NCERT (1991) 4 SCC 578 and Lt. Governor Delhi Vs. V.K Sodhi 2007(15) SCC 136 wherein it is held by the Supreme Court that NCERT and SCERT though have some relations with the Government but still do not fall within the four walls of Article 12. Reliance was also placed upon decision in St. Mary's Education Society and Anr. Vs. Rajendra Prasad Bhargava and Ors. 2022 SCC Online SC 1091 whereby in Para 69 (c) it has been held that in the absence of service conditions being controlled by the Government by statutory provisions, the matter would remain in the realm of ordinary contract of service; therefore, will not amenable to Writ Jurisdiction.

16. In rebuttal, learned counsel for petitioners submitted that reduction in basic pay and change of conditions of service is bad in law. Learned counsel submitted that there has been a historical parity of the petitioners with Central Government employees, which has been abruptly done away with by introducing Rules of 2017. Lastly, it was submitted that the funds of AFGIS is compulsory deposit by officers including Airmen, NCE and Flight Cadets and is para materia with the Army Fund and is covered under Article 12, as has been held in the case of Sagarika Singh Vs. UOI & Ors. 2011 SCC OnLine Del 3612.

17. Whether or not the petitioners are entitled to get the relief claimed in their respective petitions would be governed only after it is determined that AFGIS, Air HQs Non-public Fund Organization and CRPF EES fall 12:51 in the category of „other authorities‟ or the „State‟, as contemplated under Article 12 of the Constitution of India so that it could further be determined whether the relief sought in these petitions can be granted by this Court. Thus, the arguments were advanced by learned counsel for the parties on this limited aspect.

18. For the aforesaid purpose, we have gone through the provisions of Article 12 of the Constitution of India as well as decisions relied upon by learned counsel for the parties. Article 12 of the Indian Constitution reads “Definition in this part, unless the context otherwise requires, the State includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.”

19. The Hon‟ble Supreme Court as well as High Courts in various decisions have laid down factors which determine whether a body falls within the purview of „local authorities‟ or „other authorities‟ and would be considered as „State‟ or not.

20. Learned counsel for petitioners have relied upon decision of this Court in Sagarika Singh (Supra), pertinent observations relied upon are

21. This Court in Ex. Sub. Rajender Singh Vs. Union of India and Ors. 2013 SCC OnLine Del 1598, observed and held as under:-

22. In the light of aforenoted view, this Court in Ex. Sub. Rajender Singh (Supra) referred the case to the larger Bench for consideration on afore-noted questions. The Larger Bench of this Court disagreed with the interpretation of Para-59 of Army Group Insurance Scheme penned in Sagarika (Supra) and overruled the opinion rendered therein.

23. Thereafter, another Bench of this Court in Shivali Dhillon Vs. Managing Director, Army Welfare Education Society (Awes) and Ors. 2015 SCC OnLine Del 10655, wherein the petitioner, who was working as Lecturer in Army Centre for Education (ACE), Panchmarhi, Madhya Pradesh, had sought benefits of Sixth Pay Commission along with arrears of DA etc.; and the issue of maintainability of petition being ACE not a „State‟ and „other category‟ under the meaning of Article 12, was raised; this Court dismissed the said petition holding that the objective for which the Society was formed was to provide, augment Educational and Technical/Professional/Vocational training facilities to meet the needs of children of Army Personnel including widows and ex-service men, for 12:51 which land has been given by the army to create infrastructure and it would not construe the function/duty of respondent No. 1 as having a public law element.

24. The Supreme Court in Rajasthan State Electricity Board Vs. Mohan Lal AIR 1967 SC 1857 has held as under:-

25. The Supreme Court in Ajay Hasia Vs. Khalid Mujib Sehravardi

26. Further, the Supreme Court in Chander Mohan Khanna Vs. National Council of Educational Research and Training, (1991) 4 SCC 578 has observed as under:-

12:51

28. The afore-referred decisions of the Supreme Court clearly show that irrespective of the fact that an organization is founded by the Government or not, if an organization is financially, functionally and administratively controlled by the Government and it is rendering an important public service, it shall be considered as a „State‟.

29. Now, it is required to be seen as to whether the petitioners before this Court fulfil the criteria laid down by the Supreme Court and fall within the definition of „State‟ to get the relief sought herein.

30. With regard to i.e. W.P.(C) No. 5024/2017 and W.P.(C) 16428/2022, we find that the petitioners have themselves averred that AFGIS was formed in the year 1976 under the Societies Registration Act and it operates Air Force Group Insurance Scheme for Air Force personnel. It is not disputed that it is a self-run scheme and is governed by the Board of Trustees of Air HQ being Air Officer in Charge Administration as the Chairman; AOP, DCAS, DG (I&S) and AOM as the members and PD AFGIS and its day to day functioning is carried out by four officers deputed from Air Force. These officers are governed by the terms and conditions of Ministry of Defence for being on deputation and they act under the terms and conditions issued by the Board of Trustees of the Society. Moreover, admitted case of the petitioners is that the expenditure on the staff and officers for running this Scheme is charged from the Group Insurance Funds with the concurrence of Ministry of Finance.

31. A perusal of copy of appointment letter issued to one of the petitioners, namely, Ravi Khokhar dated 06.03.1989, is placed on record, 12:51 which clearly mentions that the “terms and conditions of service will be governed by the service rules for employees of Air Force Group Insurance Society as may be amended from time to time”. With regard to HRA, DA and City Compensatory allowance etc. it states that the same shall be paid if approved by the Board of Trustees. Besides, it also clearly mentions the other terms and conditions of service. However, nowhere in the appointment letter it has been mentioned that the terms and conditions of service shall be applicable as per Central Government Rules. Rather, the respondent has in very clear words made it clear that the terms and conditions as postulated by the Society shall be applicable. Accordingly, in our considered opinion, though the AFGIS is a self developed Society by a few members of the Air Force, for benefit of a group of people who are its members and though its being run by a few officers of the Air Force, it cannot be said that its functioning relates to the Air Force. In addition, the rules and regulations governing AFGIS are not controlled by the Central Government but are in the hands of its Board of Trustees since its inception.

32. With regard to W.P.(C) 6759/2017 and W.P.(C) 863/2019, we find that the petitioners are employed with Air Headquarter Non-Public Fund Organization, which was originally formed in 1940 but was registered as a Society in 1981. It is not disputed that the Society solely runs on the fund contributions of the employees of the Air Force and on the interest amount incurred on loans advanced to its members and is not at all funded by the Central Government. Though some of the officers of the Air Force are posted in the Society on deputation basis for its running, but at the same time those officers are being paid by the Organisation/ Society for their 12:51 work, and not by Air Force. Merely because the monthly contribution towards the organisation is being deducted from the salary of the employees, and for this purpose sanction of the President was granted, would not bring the organisation within the ambit of the Central Government. A copy of appointment letter issued to one Ms. Rajni Kanta on 17.01.1975 clearly notes that she will be entitled to receive allowances as laid down by the Executive Committee from time to time. When the Society is neither funded nor run by the Central Government, it cannot be said to fall under the category of „State‟ within the meaning of Article 12 of the Constitution of India.

33. The petitioner in W.P.(C) 15835/2022 is employed with CRPF ITI which is under the CRPF Employees Education Society. We have perused the copy of appointment letter issued to the petitioner which clearly mentions that he shall be entitled to the allowances and benefits as allowed by this Society from time to time. Meaning thereby, petitioner is not an employee of Central Government and his service shall run on the terms and conditions stipulated by the Society.

34. The petitioners in support of their case have relied upon Supreme Court‟s decision in Marwari Balika Vidyalya (Supra), wherein the Single Bench had dismissed the writ petition on the ground that the private school was not run by the State Government but was privately managed and hence, the writ petition was not maintainable; and the Division Bench had reversed the said order passed by the Single Bench; against which an appeal was preferred before the Supreme Court and it was held that since the appellant- therein, was performing a public function by imparting 12:51 education to the children throughout India, the writ petition was maintainable. In the present petitions, the respondents are performing duties only towards its members and not public at large.

35. In Sagarika Singh (Supra), this Court had held that Army Group Insurance Fund performs a public duty by providing insurance cover to the Army Personnel and their families by way of premium being compulsorily deducted from the salary of Army Personnel and thus a writ of mandamus can certainly be issued to AGIF to compel it to perform its duty. For holding so, the Court had noted the fact that AGIF performs a public duty by providing insurance cover to the Army Personnel and their families by way of premium being compulsorily deducted from the salary of army personnel. However, the Larger Bench of this Court while answering the reference petition in Ex. Sub. Rajender Singh (Supra), has negated the observations made in Sagarika Singh (Supra). In the present case, the petitioners have not been able to establish that respondents are performing public duty or run by Air Force to fall within Article 12 of the Constitution of India. A copy of letter dated 15.03.2016 written by the AFGIC to the Assistant Commissioner of Service Tax, seeking exemption from paying service tax, shows that the respondent-AFGIS has stated that the AFGIS was established for the welfare of past and present members of Armed Forces (Air Force) and the sanction by the Ministry of Defence vide letter dated 06.10.1976 was accorded noting that it is a „self contained society‟. The AFGIS is administered by the Board of Trustees and it is established for the financial security and welfare of the air warriors of Indian Air Force. 12:51

36. In the aforesaid view of the matter, we draw the conclusion that the Societies under which petitioners are employed are self-funded societies, which are formed and running for the benefit of those employees of Air Force who are its members. The petitioners have not placed any document on record to establish that these Societies are financially run by the Central Government. Even though petitioners have claimed that deduction of amount of their contribution to the Society is permitted by the Ministry of Finance and also that the land to run the Society is allocated by the Government, we find that purpose to provide aid in the form of sanction and land to the Society is to enable it to function smoothly to the benefit of its members. However, this does not establish that these functionaries are being run by Air Force or the Central Government. These societies are running only to the benefit of its members and their functioning does not in any way affect the Air Force. These Societies are not financially, functionally and administratively dominated by or under the control of Central Government. Such control must be particular to the body in question and must be pervasive in order to establish it to fall within the ambit of „State‟ as mentioned in Article 12 of the Constitution of India.

37. We accordingly conclude and hold that the petitioners have not been able to establish before this Court that the competent authority, against which relief is sought, fall within the ambit of „State‟ as stipulated in Article 12 of the Constitution of India.

38. This Court vide order dated 30.11.2022 in W.P.(C) 16428/2022, had granted interim relief to the petitioner to the extent that any promotion shall be subject to outcome of the petition. The said interim order is 12:51 accordingly vacated.

39. These petitions and pending applications are accordingly dismissed with liberty to the petitioners to avail the remedies before the appropriate Forum.

(SURESH KUMAR KAIT) JUDGE (NEENA BANSAL KRISHNA)

JUDGE FEBRUARY 01, 2023 r 12:51