Air Force Group Insurance Society performs public function, it is ‘State’ under Constitution: SC

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 a 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.

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 the Government while claiming an exemption from service taxes, since it is under the control of the Ministry of Defence.