M/s Aqua Fitness Associates v. State of Haryana & Ors.

Mr. Ajit Atri, Advocate, for the petitioner. Mr. B.S.Rana, Addl. A.G., Haryana. Mr. J.P.Bhatt, Advocate, for respondent Nos.2 to 5 in CWP No.2219 of 2012. Mr. Rahul Garg, Advocate, for Mr. Munish Bansal, Advocate, for respondent Nos.1 to 5 in CWP No.7336 of 2012. Mr. Animesh Sharma, Advocate, for respondent No.6. ***** RAKESH KUMAR JAIN, J. We are disposing of two writ petitions bearing CWP Nos.2219 and 7336 of 2012 by a common order as the questions of law and facts involved therein are identical. In short, in both the writ petitions, the same petitioner has challenged the allotment of tender for operating swimming pool of HUDA Zymkhana Club in Sectors 4 and 29 at Gurgaon, inter alia, on the ground that the contract has been awarded at a throwaway price without inviting CWP No.2219 of 2012 [ 2 ] any tender. ****** Separate replies have been filed by respondent Nos.1 to 6. Respondent Nos.1 to 5 have alleged that the work regarding maintenance of the swimming pool of HUDA Zymkhana Club in both Sectors 4 and 29 at Gurgaon was given to respondent No.6 on trial basis for 6 months and after its satisfactory performance, the contract was allotted to it for 7 years on B.O.T. basis w.e.f.

01.04.2011 to 31.03.2018 on payment of `4,50,000/- for the first year with revision of `50,000/- every year, which is further extendable on better performance. In the reply filed by respondent No.6, a preliminary objection was raised about the maintainability of the writ petition on the ground that HUDA Zymkhana Club (hereinafter referred to as the “club”) is not a State for the purpose of Article 12 of the Constitution of India. It is alleged that club is a registered society having objective to provide various recreational, physical and sports facilities to its members. The club generates its own income through membership subscription and it is not funded by the State nor it is formed under any Statute. It is also alleged that the State has no deep or pervasive control over the club and merely holding some posts of the Executive Committee of the club by the State officials as per the Society's Constitution does not make it an instrumentality of the State for the purposes of Article 12 of the Constitution of India.

In order to substantiate his submission, respondents No.6 has referred to a Division Bench decision of this Court in the case of M/s R.K. Electronics, Nangal v. National Fertilizers Limited, 1999(4) R.C.R. CWP No.2219 of 2012 [ 3 ] ****** (Civil) 499, a Division Bench decision of the Allahabad High Court in the case of Udit Chandra, Advocate s/o Sri Subodh Kumar v. State of U.P. and others, 2012 (91) ALR 758 and two decisions of the Supreme Court in the cases of Zee Telefilms Ltd. and anr. v. Union of India (UOI) and ors., 2005(4) SCC 649 and Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and ors., (2002) 3 SCR 100. We have heard learned counsel for the parties and perused the record. It is not in dispute that the club is a society registered under the Societies Registration Act, 1860 having aims and objects of providing recreational facilities for the club minded allottees/residents of the HUDA sectors at Gurgaon.

It is also not in dispute that some of the members of the Executive Committee are the State functionaries, but learned counsel for the petitioner has failed to prove on record that the club is meant for the employees of the State and is not amenable to the allottees of the HUDA sectors in Gurgaon. Nothing has been proved on record that the club is being funded by the State or is formed under a Statute or is under the pervasive control of the State, rather the club is being run by its own income generated through membership subscription. In this regard, it would be relevant to refer to the decision of this Court in M/s R.K. Electronics, Nangal's case (supra) in which the facts were that M/s R.K. Electronics submitted tender for supply, installation, commissioning, operation and maintenance of cable TV network in national Fertilizers Limited, Naya Nangal in pursuance of the CWP No.2219 of 2012 [ 4 ] ****** notice dated 08.03.1999 issued by the President, Anand Bhawan Club.

The Committee consisting of the office bearers of Anand Bhawan Club and the additional members nominated by the General Manager, National Fertilizers Limited examined the tenders and awarded the contract to respondent No.3 in that case, against which the grievance of M/s R.K. Electronics, Nangal was that contract has been given without opening its tender and without considering the lowest rates offered by it. It mainly challenged the award of contract on the ground of violation of Articles 14 and 19(1)(g) of the Constitution of India. In the said writ petition, question was raised with regard to its maintainability on the ground that the Anand Bhawan Club does not fall within the ambit of Article 12 of the Constitution of India. It was averred that the Club was formed with an object to provide facilities to its members for recreation, entertainment, sports, games and cultural activities and neither the State Government/Central Government nor the management of the National Fertilizers Limited has got any direct control over its functioning.

In this background, the Division Bench made the following observations while dismissing the writ petition: “6. We have thoughtfully considered the respective submissions and are of the opinion that respondent No.2 cannot be treated as an agency or instrumentality of the State so as to fall within the ambit of expression “other authorities” appearing in Article 12 of the Constitution of India. The management and the functioning respondent No.2 does not satisfy majority of the tests laid down by the Supreme Court in Ajay Hasia etc. v. Khalid Mujib Sehravardi and others, AIR 1981 Supreme Court 487 and Chander Mohan Khanna v. CWP No.2219 of 2012 [ 5 ] ****** The National Council of Educational Research and Training and others,1992(1) SCT 100 (SC): AIR1992 Supreme Court 76 because it has not been shown that the finances of the club are provided by the government or that the club functions under the control of the State Government/Central Government or the National Fertilizers Limited or that its activities have anything to do with the governmental functions.

It has also not been shown that the club is engaged in any of the activities in furtherance of the Directive Principles of State Policy embodies in Part IV of the Constitution of India. The provision for nomination of 6 out of 12 members of the managing committee of respondent No.2 may have been incorporated in its Constitution because it is situated within the precincts of the colony of the National Fertilizers Limited. It may also be due to the fact that majority of its members are officers and employees of the National Fertilizers Limited. However, these factors cannot be treated as sufficient for holding that respondent No.2 is an instrumentality of the State for the purpose of Part III of the Constitution of India.” In Udit Chandra's case (supra), writ petition was filed in the Allahabad High Court challenging constitutional validity of Rule 10 and part of Rule 55 of the High Court Bar Association Allahabad Rules wherein it was provided that “only Ordinary Members who have put in 3 years of continuous Membership will be entitled to vote and participate in the election”.

It was found that the Bar Association of the Allahabad High Court is a Society registered under the Societies Registration Act, 1860. The petitioner in that case wanted to cast his vote in the election of the Bar Association immediately after becoming member but was not allowed. The CWP No.2219 of 2012 [ 6 ] ****** question posed was that as to whether the writ petition is maintainable against the Bar Association as it cannot be equated with the Bar Council which is a statutory body under the Advocates Act, 1961. The Court found that action of the Bar Association is not the action of an authorized representative of the State and as such it does not come within the net of instrumentality of the State or the “other authorities” of the State to attract Article 12 of the Constitution of India. Similar views have been expressed by the Supreme Court in Zee Telefilms Ltd.'s case (supra) and Pradeep Kumar Biswas's case (supra).