Army Welfare Housing ... vs Adjutant Generals Branch & Ors
2014 Latest Caselaw 5956 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Date of decision: 19th November, 2014

+                               LPA No.867/2013

       ARMY WELFARE HOUSING ORGANISATION ..... Appellant
                  Through: Ms. Jyoti Singh, Sr. Adv. with Ms.
                           Tinu Bajwa, Mr. Amandeep Joshi and
                           Mr. Sameer Sharma, Advs.

                                   Versus

    ADJUTANT GENERAL'S BRANCH & ORS. ..... Respondents

Through: Ms. Richa Kapoor, Mr. Nishant Gautam & Mr. Ankur Chhibber, Advs. for UOI.

Mr. Prashant Bhushan & Mr. Ramesh K. Mishra, Advs. for R-3.

CORAM:-

HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. This intra-court appeal impugns the judgment dated 4th September,

2013 of the learned Single Judge of this Court of dismissal of W.P.(C)

No.5567/2013 preferred by the appellant. The said writ petition was

preferred impugning the order dated 23rd July, 2013 of the Central

Information Commission (CIC) holding the appellant to be a public

authority within the meaning of Section 2(h) of the Right to Information Act,

2005 (RTI Act) and directing the appellant to designate a Central Public

Information Officer and a First Appellate Authority within the meaning of

the RTI Act.

2. The RTI Act, vide Section 3 thereof vests in all citizens the right to

information. However the said right of citizens to information, under the

Act, is enforceable against the public authorities only and for exercise of

which right, the Act creates obligations on the public authorities to maintain,

display and dispense information and lays down the mechanism for exercise

of such right. Public Authority is defined in Section 2(h) of the Act as

under:

"(h) "public authority" means any authority or body or institution of self-government established or constituted,-

                (a)      by or under the Constitution;
                (b)      by any other law made by Parliament;
                (c)      by any other law made by State Legislature;
                (d)      by notification issued or order made by the appropriate
                         Government, and includes any -
                (i)      body owned, controlled or substantially financed;
                (ii)     non-Government     Organization   substantially     financed,

directly or indirectly by funds provided by the appropriate Government;"

3. The appellant is a Society registered on 20th May, 1987 at Delhi under

the Societies Registration Act, 1860 with the aims and objects inter alia:

"(a) To promote Housing Scheme as a Welfare measure in the Army / Ex-servicemen to provide cheap houses to them at places of their choice in India and to start pilot project in Delhi and its satellite town immediately.

(b) To facilitate relief to the existing deficiencies of Government accommodation at various stations in the country and to provide suitable rehabilitation opportunities in the said category.

(c) To offer accommodation at no profit / no loss basis.

(d) To form sub committee, to initiate such schemes as are deemed necessary and as are expedient in the interest of the organization, its employees and / or members and as is found desirable for the fulfilment of the aims and objectives of the organization. Also to perform or cause to be performed such and similar acts and needs which facilitate smooth and uninterrupted working of the organization and connotes with the principle aims of the organization.

(e) All the activities of this Society as mentioned above from 3(a) to 3(c) will be carried out without any profit nature. The income and property of the Society whenever derived shall be applied Society towards to promotion of the objects of the association set forth in this memorandum of association and no proportion by way divided or bonus or otherwise shall be paid to any person

who at any time are or have been members of the Society or to any of them or to any person claiming through them, provided that nothing herein contained shall prevent the payment in good faith of remuneration to any employee (officer or servant) of the society thereof or to any other person outside the society in return for any services actually rendered to, for and on behalf of the society or interest on money borrower by or for the purposes of the society from any person whether a member of the society or otherwise."

with its registered office at South Block, Adjutant General Branch, Army

Headquarters, New Delhi and on the application of, (i) the Adjutant General,

(ii) Deputy Adjutant General, (iii) Director of Personnel Service, (iv)

Director General of Work, (v) Director of Quartering, all three of the

Adjutant General‟s Branch, (vi) Director Army Welfare Housing

Organization, (vii) Deputy Director of Army Welfare Housing Operation

and (viii) Director Army Group Insurance.

4. The Regulations of the appellant, as lodged with the Registrar of

Societies, show the organizational set-up of the appellant as under:

"5. The AWHO would be managed by Board of Management (unless dissolved as hereinafter provided) with a common seal, and would sue and be sued in the name of its Director General. There

will be no share-holders. All provisions of the Societies Registration Act (Act XXI of 1860) (Punjab Amendment Act, 1957) as extended to the Union Territory of Delhi will apply to this Organization. The AWHO consist of two wings viz:-

       (a)    Board of Management; and

       (b)    Executive."

and the Board of Management of the appellant to be comprising of:-

" (a) Adjutant General in the Army Member Chairman Headquarters (Ex-Officio)

(b) Quartermaster General in the " Vice Chairman Army Headquarters

(c) Engineer-in-chief in the Army "

Headquarters

(d) Deputy Adjutant General in the "

Army Headquarters

(e) Managing Director, AWHO Member

(f) Chief of Staff in HQ Central Member Command, Lucknow (Ex-Officio)

(g) MG IC Adm in HQ Northern "

Command, c/o 56 APO

(h) General officer Commanding HQ "

Bengal Area, Calcutta

(j) Commander HQ Karnataka Sub "

Area, Bangalore

(k) Deputy GOC in HQ Delhi Area, "

Delhi Cantt.

(l)     DFA (W) in the Ministry of                    "
        Defence (Finance), New Delhi
(m)     Secretary, AWHO                           Secretary"

and further provide that all the aforesaid will hold their office as long as they

hold the appointment by virtue of which they have become members of the

Board of Management. The said Regulations further provide,

(i) Only the existing and future ranks of Army would be eligible to apply

to the appellant for allotment of houses.

(ii) Not more than one house to be allotted to any applicant.

(iii) Local rules of eligibility for allotment to have precedence over rules

of eligibility framed by the appellant.

(iv) Scheme for provision of houses to be a self-financing one with no part

thereof being subsidized.

(v) The houses to be provided to the applicants on no profit no loss basis.

(vi) Financing of housing schemes by raising loans from Central

Government, Life Insurance Corporation, Nationalized Banks and

various financial institutions which generally lend money for building

of houses.

(vii) In the event of 3/5th majority of the Board of Management deciding to

dissolve the appellant, utilization of its assets for payment of

outstanding liabilities and the remainder to be handed over to such

other societies as the Board may decide.

5. The CIC, in its order dated 23rd July, 2013, while holding the

appellant to be a public authority held as under:

(a) It is clear that the appellant does not fall in Sub-clauses (a), (b)

and (c) of Section 2(h) of the RTI Act; the question thus is

whether the appellant is controlled by Army Headquarters or

whether the appellant is substantially financed by Ministry of

Defence.

(b) The appellant has been shown as one of the branches / offices

of the Adjutant General‟s Office in the Army website; even

though the said website is not attributable to the appellant, the

fact remains that the appellant had never objected to being

treated as a wing of Adjutant General‟s office.

(c) That the Board of Management of the appellant comprises

exclusively of serving army officers and is reflective of the

appellant being nothing but an extension of Army

Headquarters.

(d) All major decisions regarding the functioning of the appellant

are taken by the Board of Management which is under the

pervasive control of the serving army officers with the Adjutant

General as its head.

(e) That thus the Army Headquarters, for all intents and purposes

controls the affairs of the appellant through the Adjutant

General.

(f) Army Officers are regularly deputed to the appellant on the

terms and conditions determined by the Ministry of Defence.

(g) Grant of loans to the appellant by the Ministry of Defence is

reflective of the Ministry of Defence‟s financially supportive

role towards promoting and building the appellant.

(h) The appellant had also been granted exemption from income

tax.

6. The learned Single Judge, in the impugned judgment dated 4th

September, 2013, while upholding the decision of the CIC of the appellant

being a public authority, held as under:

(i) "Admittedly, the petitioner" is not covered under clauses (a),

(b), (c) and (d) (ii) of Section 2(h) of the RTI Act.

(ii) The appellant, being a Society registered under the Societies

Registration Act, technically is not a body owned by the

Government.

(iv) The question which arises is whether the appellant can be said

to be a body controlled or substantially financed by the

Government.

(v) There is no material on record to show that the activities of the

appellant Society are substantially financed by the government;

merely taking some loan from the Government does not lead to

the conclusion that the activities of the appellant are

substantially financed by the Government; the appellant had

been taking loans from the banks and financial institutions as

well as from the Government.

(vi) There is no material to show that major finances of the

appellant come from the coffers of the Government.

(vii) Thus it cannot be said that the appellant is a body substantially

financed by the Government.

(viii) Unlike private societies, the Regulations of the appellant neither

provide for enrolment of members nor for election of Board of

Management which manages administration and controls the

affairs of the appellant.

(ix) All members of the Board are specific public servants holding

responsible positions in the Army; though the Board of

Management is competent to nominate other members but only

from amongst the holders of public office specified in the

Regulations.

(x) The fact that all the members of Board of Management are

holders of specified public office and become members of the

Board only by virtue of public office they hold clearly shows

that the appellant Society is controlled by the Government

through the Board of Management.

(xi) The Government also exercise control over the affairs of the

appellant Society by having the power to change the

constitution of the Board by transferring the members of the

Board from the public office held by them to other posts.

(xii) That though the Regulations of the appellant do not mandate

the appellant to comply with the directions of the Government

but the Government indirectly controls the affairs of the

appellant; for application of Section 2(h) of the RTI Act, it is

not necessary that the Government should directly control the

affairs of a public body.

(xiii) Even the Government by showing the appellant on its website

as a branch office of Adjutant General‟s office has been treating

the appellant as one of the offices controlled by it.

(xiv) The appellant had also been held to be a State within the

meaning of Article 12 of the Constitution of India by the

Division Bench of this Court in Brij Bhushan Gupta Vs. Union

of India 42(1990) DLT 537; it would be difficult to say that the

appellant is not a public authority within the meaning of

Section 2(h) of the RTI Act.

7. The senior counsel for the appellant challenges the judgment aforesaid

by:

(a) Drawing our attention to the stand of the Adjutant General‟s

Branch before the CIC to the effect that the funds of the

appellant are created by its welfare activities and short term

borrowings from various finance agencies; that the Army

Headquarters or the Ministry of Defence does not give any

assistance to the appellant; that the Ministry of Defence or the

Adjutant General‟s Branch does not exercise any control over

the appellant and that the Chairman and other members of the

Board of Management who are senior serving Army officers

perform their functions purely in an ex officio capacity.

(b) Contending that serving Army Officers constitute the Board of

Management and other Executive Officers in the appellant

simply for the reason that the appellant does not have to bear

the burden of their salaries / emoluments and which if borne

would push up the cost of houses to be provided by the

appellant on no profit no loss basis.

(c) Contending that the appellant is pursuing this litigation as a

matter of principle and else has nothing to hide and has already

given an undertaking before the CIC to provide all information

to the respondent No.3 Lt. Col. R. Bansal (Retd.) at whose

instance the proceedings before the CIC had started.

(d) Contending that the reasoning of the learned Single Judge that

because the appellant is a State for the purposes of Article 12 of

the Constitution of India, 1950, it is also a public authority

under the RTI Act is erroneous.

(e) contending that the CIC in the earlier order dated 29th January,

2007 had held the appellant to be not a public authority

reasoning that there was no provision enabling the Army

Headquarter or its Central Public Information Officers (CPIO)

to call for or access any information held by the appellant.

(f) Relying on a judgment dated 2nd June, 2010 of the Division

Bench of this Court in W.P.(C) No.16699/2006 titled Lt.Col.

Ashok M. Chacko Retd. Vs. Union of India holding the Air

Force Naval Housing Board to be not a State within the

meaning of Article 12 of the Constitution of India.

(g) Relying on Thalappalam Service Co-operative Bank Ltd. Vs.

State of Kerala (2013) 12 SCALE 527 holding that a

Cooperative Society registered under the Kerala Cooperative

Societies Act, 1969 will not fall within the definition of "public

authority" for the reasons:

(I) Merely because the Registrar of Cooperative Societies

exercises supervisory and regulatory powers over a

cooperative society will not amount to controlling such

society.

(II) A distinction has to be made between a body which is

created by a statute and a body which after having come

into existence is governed in accordance with the

provisions of a statute; cooperative societies fall under

the latter category and are not statutory bodies.

(III) The final authority of a society vests in the general body

of its members and every society is managed by the

Managing Committee constituted in terms of its bye-

laws.

(IV) Cooperative Societies were also held not to be a State

within the meaning of Article 12 of the Constitution of

India in S.S. Rana Vs. Registrar, Cooperative Societies

(2006) 11 SCC 634; however there may be a situation

where a body or organization though not a State or

instrumentality of State may still satisfy the definition of

public authority.

(V) Right of citizens to form cooperative societies voluntarily

has been raised to the level of a Fundamental Right by

Articles 19(1)(c) read with 243ZH to 243ZT read with

Article 43B of the Constitution of India.

(VI) Cooperative Society is essentially an association of

persons who have come together for a common purpose

of economic development or for mutual help.

(VII) Cooperative Societies do not fall in the category of

authority or body or institution of self-government

established or constituted by or under the Constitution or

by any other law made by Parliament or by any other law

made by State Legislature or by notification issued by

and under the appropriate Government because

cooperative societies are not bodies of self-government.

(VIII) Cooperative Societies are also not owned by the

government.

(IX) Though the expression "control" has not been defined in

the RTI Act but has to take its colour from the expression

"body owned".

(X) Thus the control must be of a substantial nature and mere

supervision or regulation would not amount to control.

(XI) Merely providing subsidiaries, grants, exemptions,

privileges etc. cannot be said to be providing funding to a

substantial extent.

(h) Drawing attention to the earlier order dated 6th June, 2006 of the

CIC holding the appellant not to be a public authority for the

reason that (i) though the appellant was incorporated on an

application of officers of the Army but such persons had applied

in their personal and not official capacity; (ii) the Regulations of

the appellant do not depict any „say‟ or „control‟ of the

Government/Army Headquarters; (iii) the Central Public

Information Officer (CPIO) of the Army Headquarters has no

right to access any information from the appellant; and (iv) the

funding of the appellant is on a self financing basis.

8. The counsel for the respondent No.3 (information seeker and at whose

instance the proceeding began) has supported the judgment of the learned

Single Judge by contending that though wearing two hats i.e. of the Adjutant

General and of the Chairman of the Board of Management of the appellant,

the person is one and the same and that the control of the Ministry of

Defence and Army Headquarters on the Board of Management is evident

from the power in their hands to change the members of the Board of

Management by posting their favoured persons to the post which entitles

them to be members of the Board of Management of the appellant.

9. We have considered the matter from all perspectives.

10. The reason which has prevailed with the CIC and the learned Single

Judge, to hold the appellant to be a public authority within the meaning of

Section 2(h) of the RTI Act, is that the Board of Management of the

appellant comprises of serving officers of Army and the Army Headquarters

thus having power to decide the members thereof and exercising control

over it through the said Army Officers. (Though the CIC as well as the

learned Single Judge also gave the reason of the appellant, on the website of

the Army being shown as a branch of the Army and being treated as such but

in our opinion the same would be irrelevant for determining whether the

appellant is a public authority or not as an authority / body by conduct

cannot become a public authority. Similarly though the learned Single

Judge has also given the reason, of the appellant being a State within the

meaning of Article 12 of the Constitution of India but now the Supreme

Court has in Thalappalam Service Co-operative Bank Ltd. held that the

same is not determinative). There can be no dispute with the factual position

of, the Board of Management of the appellant comprising of serving Army

officers and that the Army Headquarters thus, by deciding whom to post to

the office, occupier whereof becomes ex-officio member of Board of

Management of the appellant, can indeed choose who will and who will not

be a member of Board of Management of the appellant. Thus, we, in this

appeal are to only adjudge the correctness of the said sole reason given by

the learned Single Judge.

11. The Supreme Court, in Thalappalam Service Co-operative Bank Ltd.

was not concerned with a co-operative society, management whereof was in

the hands of serving government officers who by virtue of their post / office

were ex-officio member of the management committee. Thus the said

judgment is of no help in this regard. We have also not been able to find any

other precedent for such factual position.

12. We have thus explored the law generally, whether a person who by

the office he / she occupies, becomes an ex-officio occupant of another office

also, in the discharge of functions of such ex-officio office, is required to act

as per the dictates of his office.

13. The Supreme Court in Bhuri Nath Vs. State of Jammu & Kashmir

(1997) 2 SCC 745 was concerned with the question whether the Governor of

State of Jammu & Kashmir, who under the provisions of the Shri Mata

Vaishno Devi Shrine Act, 1988 was the ex-officio Chairman of the Board

constituted under the said Act, was in the exercise of his powers as the

Chairman of the said Board required to act on the aid and advice of the

Council of Ministers as the Governor, being the Executive Head of the State

of Jammu & Kashmir in accordance with the Constitution of Jammu &

Kashmir, was required to act. It was held that the exercise of powers and

functions under the Act is distinct and different from those exercised

formally in the name of the Governor for which responsibility rests only

with the Council of Ministers headed by the Chief Minister. The judgment of

Full Bench of Punjab & Haryana High Court in Hardwari Lal Vs. G.D.

Tapase AIR 1982 P&H 439 to the effect that the Governor of a State, in his

ex-officio capacity as the Chancellor of a State University, in the discharge

of his functions does not perform any duty or exercise any power of the

office of the Governor individually but acts in his discretion as Chancellor

and does not act on the aid and advice of his Council of Ministers and

further that the office as Chancellor held by the Governor is a statutory

office and quite different from the office of the Governor, was cited with

approval.

14. We see no reason as to why the aforesaid principles be not applied to

the facts of this case. Though the persons occupying the position in the

Board of Management of the appellant are serving Army officials who in

performance of their duties as such officers are required to act as per the

dictates of the Army Headquarters or the Ministry of Defence but the same

cannot lead to the presumption that they, in their capacity / position as

members of the Board of Management of the appellant will also act as per

the dictates of the Army Headquarters or the Ministry of Defence. Thus it

cannot be said that for this reason the Board of Management of the appellant

is under the control of Army Headquarters or the Ministry of Defence. Such

persons, as members of the Board of Management of the appellant are

expected to exercise their functions in accordance with the Charter of the

appellant, honestly and reasonably.

15. Notice may however be taken of Pradeep Kumar Biswas Vs. Indian

Institute of Chemical Biology (2002) 5 SCC 111 where, in the context of

the Prime Minister being the ex-officio President of the Council for

Scientific and Industrial Research, a Society, it was held that the Prime

Minister as ex-officio President may exercise powers not specifically

conferred upon him by the Charter of the Society but necessarily implied in

his office as the Prime Minister and the contention that the Prime Minster as

ex-officio President of the Society was to exercise powers not as the Prime

Minister but as the President of the Society was rejected. However it was so

held in the context of the dominant role played by the Government of India

in the Governing Body of CSIR, by having the power to appoint the

Secretary of the Society and the power to nominate and terminate the other

members of the Governing Body of the Society. That is not the position here.

16. As far as the contention / reasoning, of the Army Headquarters or the

Ministry of Defence thereby having a choice as to who will and who will not

constitute the Board of Management of the appellant is concerned, the posts,

the occupiers of which become ex-officio members of the Board of

Management of the appellant, are senior posts in the Army, the appointment

whereto is governed by the service conditions and it is not as if the Army

Headquarters or the Ministry of Defence has an unguided discretion in the

matter of appointments thereto to be able to whimsically appoint any officer

thereto. Any breach of such rules, regulations or service conditions invites

challenge thereto by the person considering himself entitled thereto.

Moreover the objective for which the appellant has been set up is not such

for it to be said that the Army Headquarters or the Ministry of Defence

would be interested in packing the Board of Management of the appellant

with its nominees by making appointments to the posts which are far more

crucial, of persons not otherwise fit / eligible therefor, merely for the reason

of having such person on the Board of Management of the appellant. The

appellant was incorporated to provide a further motivating force to the

soldiers in terms of social security to their families, shelter being a basic

necessity of life, i.e. for constructing houses for Army personnel serving or

retired on „No profit No loss basis‟. Neither any interest of Army

Headquarters or the Ministry of Defence in having its preferred nominees on

the Board of Management of the appellant was disclosed, nor can we fathom

any.

17. As far as the reliance placed by learned Single Judge on the Division

Bench judgment of this Court in Brij Bhushan Gupta supra holding the

appellant to be State within the meaning of Article 12 of the Constitution of

India is concerned, we may notice that subsequent thereto another Division

Bench of this Court in Asha Vij Vs. Chief of Army Staff

MANU/DE/4012/2012 has, relying on Union of India Vs. Chotelal (1999)

1 SCC 554 holding that regimental funds are not „public fund‟ and that a

person paid out of such regimental funds cannot be said to be holder of civil

post within the Ministry of Defence, held the Army Welfare Educational

Society to be not a State within the meaning of Article 12. Similarly another

Division Bench of this Court in Air Vice Marshal J.S. Kumar Vs.

Governing Council of Air Force (126) 2006 DLT 330 held the Air Force

Sports Complex to be not a State, merely for the reason that the Government

had provided some benefits and facilities thereto for providing recreation to

Armed Forces officers. We have already noticed above Lt. Col. Ashok M.

Chacko holding the Air Force Naval Housing Board to be not a State.

Though a Division Bench of this Court in Sagarika Singh Vs. Union of

India MANU/DE/3337/2011 held Army Group Insurance Fund also a

Society, to be State amenable to writ jurisdiction, but for the reason of every

Army personnel compulsorily becoming a member thereof and subscription

thereof being deducted from the pay and allowances of Army personnel and

being subject to governmental control in the matter of revision of rates of

subscription to the Fund and the Government having complete control to

regulate and manage the Fund. That is not the position here. It is not

compulsory for the Army personnel to avail of the allotment of house from

the appellant or to contribute therefor. It is thus obvious that trend of

judicial decisions has changed since Brij Bhushan Gupta. In fact Brij

Bhushan Gupta was premised on the definition of State as laid down in

Ajay Hasia Vs. Khalid Mujib (1981) 1 SCC 722 which itself has been

reconsidered in Pradeep Kumar Biswas (supra) which has held that the tests

formulated in Ajay Hasia are not rigid.

18. We therefore set aside the judgment of the learned Single Judge and

allow the appeal and hold that the appellant is not a public authority within

the meaning of Section 2(h) of the RTI Act.

No costs.

RAJIV SAHAI ENDLAW, J

CHIEF JUSTICE NOVEMBER 19, 2014 „gsr‟..