Lt.Col. Ashok M. Chacko Retd. vs Uoi & Ors.
2010 Latest Caselaw 2891 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of Judgment : 02.06.2010

+                          W.P (C) 16699/2006

        LT.COL. ASHOK M. CHACKO RETD.           ..... Petitioner
                         Through: Mr.S.R.Kalkal, Advocate.
                   versus

        UOI & ORS.                                     ..... Respondent
                           Through:     Mr.Amardeep Joshi for Ms.Jyoti
                                        Singh, Advocate for UOI/R-1.
                                        Mr.R.K.Handoo, Mr.Yoginder
                                        Handoo, Mr.Aditya Chaudhary &
                                        Mr.Atul Sharma, Advocates for R-2
                                        and R-3.
CORAM:
HON'BLE MS. JUSTICE GITA MITTAL
HON'BLE MS. JUSTICE INDERMEET KAUR

     1. Whether the Reporters of local papers may be allowed to see the
        judgment?                                         No

     2. To be referred to the Reporter or not?            No

  3. Whether the judgment should be reported in the Digest?
                                                      No
GITA MITTAL, J. (Oral)

1. This writ petition is premised on a claim for entitlement to

the physical allotment of a flat constructed by the Air Force Naval

Housing Board („AFNHB‟ hereinafter for brevity) in „Jalvayu

Tower‟ AFNHB Phase II project at Bangalore.

2. The respondents have vehemently opposed the writ petition

not only on merits but have also raised a preliminary objection to

its maintainability on the ground that the AFNHB is a welfare

society registered under the Societies Registration Act, 1860

which is working on a no-profit no loss basis. The AFNHB is not

an instrumentality of the State and is not covered within the

meaning of „State‟ or „other authority‟ as in Article 12 of the

Constitution of India. Consequently, the present writ petition is not

maintainable against the answering respondent.

3. We have heard the learned counsel for the parties on this

issue.

4. The petitioner has arrayed Union of India as respondent no.1

and the AFNHB as respondent no.2. In its counter affidavit the

respondent no.2 has explained that the Union of India does not

control it financially or otherwise. AFNHB is stated to be a private

welfare society functioning with the object of providing dwelling

units to service personnel of the Indian Navy and the Indian Air

Force. No measure of pervasive control is being exercised by the

respondent no.1 over such society.

The object and purpose of registration of the society has also

been detailed. It is pointed out that for the reason that Air Force

and Navy personnel are required to be posted in different places

all over the country, they are unable to acquire dwelling units for

their personal use on account of exigencies of service. In order to

facilitate acquisition of such dwelling units for these personnel,

the AFNHB undertakes to construct dwelling units on a no-profit

no-loss basis. The object of the society is to construct dwelling

units at cheap rates for these personnel.

So far as allotments are concerned, priority is given to the

widows of the service personnel i.e. to the personnel of Air Force

and Navy alone. On some occasions, the scheme is stated to have

been opened for registration for other services including the

paramilitary forces and other central government employees. The

same is subject to the rider that the allotment would be made only

as per seniority in the respective list on first come first serve basis

after making confirmed allotments and not otherwise.

5. The respondent no.2 has further stated that the Union of

India has no control over the society. In order to manage its

functioning, the two services i.e. the navy and the air force,

alternatively depute some persons on deputation to the AFNHB.

The expenses for the services of such personnel are borne by the

society to the concerned service.

6. The respondent no.1 has also filed a counter affidavit

explaining that the funding for the activities of the AFNHB is

provided by the contributions made by the registrants. The society

has its own staff whose salaries are being paid from its own

resources. The respondent no.1 has also asserted that it has no

involvement or control over the working of the respondent no.2 or

its functions.

7. So far as the governance of society is concerned, the same is

not prescribed by any statutory provisions or rules or regulations.

The functioning of the society is governed by its Memorandum of

Association and the rules and regulations (bye-laws) approved by

the Registrar of Societies.

8. It has been explained that so far as the construction work

undertaken by the society is concerned, when the interest is

expressed by a number of personnel to acquire dwelling units at a

particular place in India, the respondent no.2 negotiates with the

local authority and purchases land. Schemes are then floated by

the respondent no.2 and subscriptions are invited from the

registrants. Tenders are floated for construction work and private

architects are appointed. When the dwelling units at a particular

place become habitable or are in the process of become habitable,

a local society is formed for the regular welfare and smooth

functioning of the work of the society at such location. The entire

project is thereafter handed over to the local society.

9. A categorical stand has been taken by respondent no.1 that

the executives and employees of respondent no.2 are answerable

to the registrants; they are paid from its own resources and not

from the consolidated fund of India.

10. We find that there is no dispute to these assertions on record

except an assertion that the persons who are deputed to

respondent no.2 from the Air Force or the Indian Navy are

enjoying the benefits of government accommodation and

transport. There is otherwise no material challenge to the other

submissions made by the respondents.

11. The objection to the maintainability of the writ petition

raised by the respondents is required to be examined in this

background.

12. The principles governing adjudication on this issue are well

settled and really need no elaboration. Mr.R.K.Handoo, learned

counsel for the respondent no.2 has placed reliance on the well

settled principles laid down by the Apex court in JT 2007 (10) SC

137 Lt.Governor of Delhi &O Ors. vs. V.K.Sodhi & Ors. We

may usefully refer to the same. In this case the Supreme Court

was concerned with examination of an issue as to whether the

State Council of Education, Research and Training („SCERT‟) is a

„State‟ within the meaning of the expression in Article 12 of the

Constitution of India. The observations of the Apex court in paras

9, 11 & 14 in this regard are relevant and read as follows:

"9. As the decisions of this Court show, there is no simple litmus test, to determine whether an entity is a State or other authority within the meaning of Article 12 of the Constitution of India. What is clear from the decisions is that the various facets of the foundation and the working of the entity would be relevant in determining the question in the context of the duties entrusted to it or taken up by it for performance. It is in that context that in the latest larger Bench decision in Pradeep Kumar Biswas (supra), the majority summed up the position in paragraph 40 thus:-

"The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The

question in each case would be whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State."

xxx xxx xxx

11. The two elements, one, of a function of the State, namely, the coordinating of education and the other, of the Council being dependant on the funding by the State, satisfied two of the tests indicated by the decisions of this Court. But, at the same time, from that alone it could not be assumed that SCERT is a State. It has to be noted that though finance is made available by the State, in the matter of administration of that finance, the Council is supreme. The administration is also completely with the Council. There is no governmental interference or control either financially, functionally or administratively, in the working of the Council. These were the aspects taken note of in Chander Mohan Khanna (Supra) to come to the conclusion that NCERT is not a State or other authority within the meaning of Article 12 of the Constitution of India. No doubt, in Chander Mohan Khanna (supra), the Bench noted that the fact that education was a State function could not make any difference. This part of the reasoning in Chander Mohan Khanna (supra) case has been specifically disappoved by the majority in Pradeep Kumar Biswas (supra). The majority noted that the objects of forming Indian Institute of Chemical Biology was with the view of entrusting it with a function that is fundamental to the governance of the country and quoted with approval the following passage in Rajasthan SEB v. Mohan Lal:-

"The State, as defined in Article 12, is thus comprehended to include bodies created for the purpose of promoting the education and economic interests of the people."

The majority then stated:

"We are in respectful agreement with this statement of the law. The observations to the contrary in Chander Mohan Khanna V. NCERT relied on by the learned Attorney General in this context, do not represent the correct legal position."

xxx xxx xxx

14. As we understand it, even going by paragraph 40 of the judgment in Pradeep Kumar Biswas (supra), which we have quoted above, we have to consider the cumulative effect of all the facts available in the case. So considered, we are inclined to hold that SCERT is not a State or other authority within the meaning of Article 12 of the Constitution of India. As we see it, the High Court has not independently discussed the relevant rules governing the functioning and administration of SCERT. It has proceeded on the basis that in the face of Pradeep Kumar Biswas (supra) decision, the decision in Chander Mohan Khanna (supra) must be taken to be overruled and no further discussion of the question is necessary. But, in our view, even going by Pradeep Kumar Biswas (supra), each case has to be considered with reference to the facts available for determining whether the body concerned is a State or other authority within the meaning of Article 12 of the Constitution of India. So considered, we find that the Government does not have deep and pervasive control over the working of SCERT. It does not have financial control in the sense that once the finances are made available to it, the administration of those finances is left to SCERT and there is no further governmental control. In this situation, we accept the submission on behalf of the appellants and hold that SCERT is not a State or other

authority within the meaning of Article 12 of the Constitution of India. After all, the very formation of an independent society under the Societies Registration Act would also suggest that intention was not to make the body a mere appendage of the State. We reverse the finding of the High Court on this aspect."

13. On a consideration of these principles the Apex Court had

examined the structure and functions of the SCERT and concluded

that it was the master of its own affairs; it was not subservient to

the Government and that the Government did not have any

effective or pervasive control over the working of the society

which was governed by the committee constituted by its bye-laws.

It is noteworthy that the court also observed that the mere fact

that the Government was making available grants to the State

Council and that it was entrusted with the looking after a facet of

education, which was part of the duty of the State and some ex

officio members who were government employees existed in the

Committee were not sufficient to uphold the plea that SCERT was

a State. The Supreme Court has also relied on the principles laid

down in its prior judgment reported in JT 2002 (4) SC 146,

(2002) 5 SCC 111 Pradeep Kumar Biswas vs. Indian

Institute of Chemical Biology & Ors.

14. In the instant case, there is not even a whisper of a

suggestion to the effect that the respondent no.2 is discharging

any part of the duty of the State. No control of any kind of the

Union of India over the working of the respondent no.2 has been

pointed out. As noticed above, the respondent no.2 is governed

and functions in terms of its bye-laws. No material has been

placed before us which could even suggest any contribution from

the coffers of the State to the funding of respondent no.2.

15. We also find that in order to carry out its objectives the

respondent no.2 is conducting private purchases for the purpose of

acquisition of land on which this construction is undertaken of the

flats which are raised and thereafter allotted to its members.

Respondent no.2 appears to be functioning in a completely

independent manner and is dependent on the funds which are

deposited with it by its members for its functioning.

16. Looked at from any angle, there is no association of

Respondent no.1 with the functioning of the society other than

making available certain officers for discharging its functions and

looking after the interest of the personnel who are members of the

society. It is also an admitted position so far as the expenses of

these deputationists are concerned, the same are also borne by the

society. The mere fact that these loaned personnel enjoy certain

facilities by virtue of their employment makes no difference so far

as the status of the respondent no.2 is concerned.

17. Learned counsel for the respondent has also relied upon a

Division Bench pronouncement of this court dated 2.1.2006

rendered in LPA no.2618/2005 titled as Air Vice Marshal

J.S.Kumar vs. Governing Council of Air Force Sports Complex &

Another wherein the court rejected the contention that the

governing council of the Air Force Sports Complex (AFSC) was a

„State‟ under Article 12 of the Constitution of India as the

Government has no effective and pervasive control over it. It was

held by this court that a writ will lie against a private body only if

it is performing a public function and that it could not be held that

the AFSC which was a society registered under the Societies

Registration Act, funded from private contributions, was

performing public functions or discharging public duties. It was

accordingly held that no writ petition would lie against such a

society under Article 226 of the Constitution of India.

18. Our attention is drawn by Mr. Handoo, learned counsel for

the respondent no.2 to a Single Bench decision of this court dated

7.11.2001 in Civil Writ nos.1722 and 1798/99 and CCP 24/2001 in

Asha Vij and Ors. vs. The Chief of the Army Staff and Ors. wherein

it was held that the Army Welfare Educational Society which was

running a school did not fall within the meaning of „State‟ for the

reason that it was not being run and managed out of the

regimental funds and there was no measure of control of the

Central or State Government over its functioning. The Army

Welfare Education Society was also a society related under the

provisions of the Societies Registration Act, 1860.

19. In view of the above discussion, it is held that the respondent

no.1 has no involvement or measure of control over the

functioning of respondent no.2. It is also not the contention of the

petitioner, and rightly so, that the functions which are being

discharged by respondent no.2 are functions of the State.

Accordingly, we find substance in the objection raised by the

respondent that the respondent is not „State‟ or „other authority‟.

20. Even on application of the functional test to the objectives

and activities of the respondent no.2, the petition must fail. Thus,

in view of the clear principles laid down by the Supreme Court it

has to be held that the respondent no.2 does not fall within the

meaning of the expressions „State‟ or „other authority‟ under

Article 12 of the Constitution of India and would normally be not

amenable to the jurisdiction of this court in exercise of its power

under Article 226 of the Constitution of India.

21. In view of the above finding on the preliminary objection

raised by the learned counsel for the respondent further

adjudication on the merits in the present proceedings would be

appropriate or legally permissible. Accordingly, this writ petition

is dismissed on the ground that the writ petition against the

respondent no.2 is not maintainable.

22. In view of the above, the interim order made on 10.11.2006

also stands vacated.

23. At this stage, learned counsel for the petitioner has made a

prayer that since the petitioner has deposited certain amounts

with the respondent no.2, the same be refunded to him. A prayer

for interest thereon is made. It is submitted by Mr.R.K.Handoo,

learned counsel for the respondent no.2 that the petitioner has

deposited an amount of Rs.1 lakh which shall be refunded to him

as per the prescribed procedure. He further submits that the

respondents had offered this refund by a letter dated 7.12.2004

and 31.8.2005 but the same was not accepted by the petitioner.

In view of the above, the respondents are directed to refund

the amount deposited by the petitioner within a period of eight

weeks from today. The petitioner shall not be entitled to interest

thereon.

24. Learned counsel for the petitioner has further explained

circumstances in which he was not present on 23rd April, 2010 and

a request for waiver of costs imposed on that date is made.

Mr.Handoo, learned counsel for the respondent no.2 has no

objection to same. In view of the same, costs imposed on the last

date of hearing stand waived.

Dasti.

GITA MITTAL, J.

INDERMEET KAUR, J.

JUNE 02, 2010 rb