New Delhi, Mar 16 (PTI) The Supreme Court has held that the Air Force Group Insurance Society (AFGIS) is a ‘State’ under Article 12 of the Constitution as it performed public duty by protecting and looking after the welfare of armed forces personnel and their family.
Article 12 of the Constitution defines ‘State’ for enforcing fundamental rights.
A bench of Justices Sanjay Karol and Vipul M Pancholi overturned the view taken by the Delhi High Court on February 1, 2023, in a pay parity dispute related to the employees of AFGIS.
“In our view, a perusal of the documents extracted makes out a case for AFGIS to be considered ‘State’ within the meaning of Article 12. For the aspect of deep and pervasive control, we observe that the President of India granted sanction for AFGIS to be established and also specifically approved the deputation Rules…,” the bench said in its March 12 verdict.
It further said the principal director of AFGIS has to apprise the assistant chief of air staff every month about the cash flow of the society, which ensures monitoring by a core member of the IAF on its activities.
The membership and deductions arising therefrom are a compulsory aspect of serving in the IAF, meaning thereby that there is no choice of the individual officer in that matter and instead is a mandate from the employer.
“When the aspect of administrative control is examined, it is seen that all the members of the Board of Trustees, so also the managing committee, are serving members of the IAF and are deputed to AFGIS for a fixed period.
“In essence, therefore, the administration of the body is entirely in the hands of government servants even though the body itself is a purportedly private, self-contained society,” the top court said.
Senior advocate Shoeb Alam, representing the employees of AFGIS, had argued that in a letter dated March 15, 2016, AFGIS had represented itself to be ‘Government’ in official correspondence.
He said the day-to-day affairs of AFGIS are managed by serving senior officers of the Indian Air Force, and the land on which the office is situated has been granted by the Ministry of Defence, and it also enjoys exemptions from various taxes levied.
The top court said it may be that, insofar as financial aspects of AFGIS are concerned, the government may not have a direct role. However, for a body to be held to be a ‘State’, it is the cumulative effect and impact of deep and pervasive control, financial and administrative control, along with other factors, such as carrying out of public duty, it said.
“We are of the considered view that AFGIS does indeed perform a public duty. The protection and welfare of armed forces personnel is a core government function. The role of the armed forces is directly linked to the sovereignty and security of the nation, and in protecting the same, members of the forces are required to adhere to, abide by, and maintain a strict set of rules, unquestionable conduct, and at times, in the most severe and adverse circumstances,” it said.
The top court further elaborated that providing insurance coverage is a public function as it addresses a collective obligation the state has towards a defined public class whose service is indispensable.
“Insurance to service members is a critical instrument for safeguarding their physical, mental well-being, dignity and economic security… The fact that healthcare, rehabilitation, and support to dependants is available readily is undoubtedly an aspect that gives great peace of mind to the member of service, enabling them to carry out their duties without worry, at least in this regard,” it said.
The top court added that the role of the State in protecting them does not end upon their superannuation from service, for the life of a person from the forces is forever shaped by their time in service.
Justice Karol, who penned the verdict, pointed out that at one point AFGIS itself claimed to be Government while claiming an exemption from service taxes, since it is under the control of the Ministry of Defence.
“In effect, by opposing the challenge of the appellants (employees), AFGIS has resiled from its own statement. We fail to understand an organisation can be ‘Government’ for one purpose and not be, for another purpose,” it said.
The top court, while restoring the petition of employees seeking sixth pay commission before the Delhi high court, said it is maintainable as AFGIS is ‘State’ under Article 12 of the Constitution.
“The High Court is requested to decide the same expeditiously, keeping in view the fact that the same has been filed in the year 2017. Appeal is allowed,” the bench ordered. PTI MNL MNL NSD NSD
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