Brij Bhushan Gupta vs Union Of India And Ors.
1990 Latest Caselaw 417 Del

JUDGMENT

N.N. Goswami, J.

(1) The question referred to the Division Bench by a learned Single Judge of this Court is as to whether Army Welfare Housing Organisation (for short 'A WHO') is a State within the meaning of Article 12 of the Constitution of India and is such is amenable to writ jurisdiction of High Court.

(2) In order to appreciate this question we have looked into memorandum of article of association of the society as A WHO is a society registered under the Societies Act, 1860. The name of the society is Army Welfare Housing Organisation. The registered office of A WHO is to remain within the territory of Delhi and was located in room Nos. 208, 209 and 211, 2nd floor. South Block, Adjutant General Branch, Army Headquarters, New Delhi. The aims and objects of the A WHO are :

(A)To promote housing scheme as welfare measure in the army/ ex servicemen to provide cheap houses to them at place of their choice in India and to stare pilot project in Delhi and its selected towns immediately;

(B)To facilitate relief to the existing Deficiencies of Government accommodation at various stations in the country and to provide suitable re-habilitation opportunities in the said category ;

(C)To offer accommodation at no profit/no loss basis; and

(D)All the activities of the A WHO as mentioned above, (a) to (c) are to be carried out without any profit nature.

 (3) The A WHO has a Board of Management consisting of:    (1) Adjutant General (Lt. General). (2) Quarter Master General (Lt. General). (3) Engineer-in-Chief (Lt. General). (4) Deputy Adjutant General (Major General). (5) Director Personnel Service (Major General). (6) Director Quartering (Brigadier). (7) Deputy Director Works (Brigadier). (8) Managing Director (Major General). (9) Secretary (Lt. Colonel).  

 All the aforesaid office bearers are senior serving officers of the Army and arose-office members of the Board and with every change of the holder of that particular office, his successor take his place on the Board suo-moto.   

 (4) In order to decide the question it would be useful to refer to the guidelines laid down by their Lordships of the Supreme Court. We would first refer to the decision in "Ajay Haisa etc. v Kfhalid Mujib Sehravardi and others". . After laying down six tests in paragraph 9 of the report their Lordships further held in paragraph as under:    "WE may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not us to how it is created. The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government company or a company formed under the Companies Act, 1956 or it may be a society registered under the Societies Registration Act, 1860 or any other similar statute. Whatever Be its genetical origin, it would been "authority" within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12".  

The same view was reiterated in "MC Mehta and another v. Union of India and Others",'. The relevant paras from the aforesaid Ajay Hansia's case from pages 492, 493 and 494 were cited with approval. "And Mukta Sadguru Shri Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and others v. V.R.Rudani and ethers", Air is the latest case on the subject. In paragraph 20 of the report it was held : "THE term "authority" used in Article 226, in the context must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words "any person or authority" used in Article 226 are, therefore, not to be confirm only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. Their duty must be judged in the light of positive obligation owed by the person or authority to the affective party. No matter by what means the duty is imported, if a positive obligation exists mandamus cannot be denied".

(5) The ratio or the aforesaid decisions is that the inquiry has to be not as to how juristic pen on is born but why it has been brought into existence. If the answer is that it was brought into existence to perform certain functions as an agency of the Government then obviously it is an "authority" under Article 12 of the Constitution of India. In order to answer this question we do not have to go to anything else than the counter-affidavit filed by the Union of India. While setting out the history of the establishment of A Who it is stated in the affidavit : "THE background of the inception of Army Welfare Housing Organisation relates to the aftermath of the three wars that the Indian Army bad to fight within less than a decade A great need was felt for providing a further motivating force to the soldier in terms of social security to their families. The shelter being the basic necessary of "life, it was considered that there should be an organisation which could be entrusted with the work of constructing houses for Army personnel both serving and retired including war widows-all over the country at selected places, at "No profit No loss" basis. With avowed aim, the then Chief of The Army Staff, in his Army Day address to the troops on January 15, 1978, announced the creation of an ad-hoc cell under the aegis of the Adjutant General to study and examine various proposals for introducing a housing scheme. Thus came in being the Army Welfare Housing Organisation which was finally registered as a society on March 20, 1978 and assumed its independent entity. Army orders (AOs) are issued on the authority of the Chief of Army Staff (COAS) in the form of directions emanating from the Coas for communication to the concerned persons (Servicemen/ ex-servicemen) on variety of subject matters for smooth administration of the Army. Similarly Ao 81/79 was issued with the aim, as brought out in the history of the inception of Army Welfare Housing Organisation to apprise the Army personnel of the ensuing welfare programme for the construction of houses taken up through Army Welfare Housing Organisation which is a registered society and which would be acting independently as a separate entity".

The aforesaid averment in the counter affidavit sworn by Director in Adjutant General's Branch, Army Headquarters, New Delhi, clearly brings about as to why A WHO was brought into existence. The averments clearly show that great need was felt by the Government to provide social security by providing houses to )be Army personnel and in order to fulfilll this need by Administrative Orders issued by the Chief of Army Staff, the Organisation was created and it was decided that the welfare programme for construction of houses would be taken up through this Army Welfare Housing Organisation. This clearly indicates that the function was to be performed by the Government and in order to achieve .the said object it was decided to bring into existence an agency to carry out the object and as such the said Who was created. It is being managed by nine serving officers of the Army and is further subject to supervision by the Chief of Army Staff Sub-rule 10 of supplementary rule I of the Organisation also confers discretion upon the Chief of Army Staff to allot 1% of the total houses available for allotment at his discretion without the Chief of Army Staff being on the Board of Management. The Headquarters of the Organisation are located in the Army Headquarters and for years no lent was being charged by the Government though at a later stage a. demand was raised which we were told has not yet been paid. The demand was probably raised in order to defeat the writ petitions filed against the Organisation Thus, we have no doubt in our mind that the function of the Government of providing security to the families of the Army personnel by providing houses is being performed by A WHO a(r) an agency of the Government. Thus, A WHO is clearly an agency or instrumentality of State and is Slate within Article 12 of the Constitution of India.

(6) The question was referred to a Larger Bench in view of a judgment by a learned Single Judge of this Court in "Lt Col. N.C. Rastogi v. Union of India and others", , wherein the learned Single Judge held that the A WHO is not a State within the meaning of Article 12 of the Constitution of India. We have carefully looked into the entire judgment. It appears that the counter affidavit tiled on behalf of the Union of India was not available to the learned Single Judge and the learned Single Judge took the view on perusal of the memorandum and article of association of the society. The memorandum and article of association of the society do not indicate as to why was it brought into existence. Thus, there was nothing before the learned Single Judge to come to the conclusion that A WHO was created in order to perform the functions of the Government which the Government bad decided to perform through the agency of A WHO.

(7) For the reasons recorded above we hold that A WHO is a State. Within the meaning of Article 12 of t6e Constitution of India and consequently direct that the case be listed before the learned Single Judge for decision on merits.