The Supreme Court has held that the Air Force Group Insurance Society (AFGIS) qualifies as “State” within the meaning of Article 12 of the Constitution of India and is therefore amenable to writ jurisdiction under Article 226.
A bench comprising Justice Sanjay Karol and Justice Vipul M. Pancholi allowed the civil appeal arising out of SLP (C) No. 27366 of 2023 and set aside the judgment dated 1st February 2023 passed by the Delhi High Court which had dismissed the writ petitions filed by AFGIS employees on the ground that the Society was not “State”.
The controversy arose when the Board of Trustees of AFGIS initially resolved on 27th December 2016 to revise pay scales in accordance with the Sixth Central Pay Commission. However, by a subsequent resolution dated 13th February 2017, the Board decided to delink the Society’s pay structure from Central Government pay scales. Employees were directed vide notice dated 22nd May 2017 to accept the revised terms.
Aggrieved employees approached the Delhi High Court contending that AFGIS is an instrumentality of the State. The High Court dismissed the petitions holding that AFGIS is a self-contained, self-funded welfare scheme registered under the Societies Registration Act, 1860 and does not satisfy the tests laid down in *Ajay Hasia* and *Pradeep Kumar Biswas*.
Setting aside the High Court judgment, Justice Sanjay Karol observed that the protection and welfare of armed forces personnel is a core government function directly linked to the sovereignty and security of the nation. Providing insurance coverage through AFGIS addresses a collective obligation the State has towards a defined public class whose service is indispensable.
The Court noted several factors establishing deep and pervasive governmental control: establishment of AFGIS and its deputation rules were sanctioned by the President of India; membership and compulsory premium deductions from salaries of all officers and airmen are mandated by Air Force Instructions; the Board of Trustees and Managing Committee comprise entirely of serving senior IAF officers; the Principal Director (AFGIS) is required to apprise Assistant Chief of Air Staff (Accounts) every month on cash flow and investments; and AFGIS enjoys tax exemptions and land granted by the Ministry of Defence.
Referring to the tests evolved in *Ramana Dayaram Shetty*, *Ajay Hasia*, *Pradeep Kumar Biswas* and the recent decision in *Rajkaran Singh v. Union of India*, the Court held that the cumulative effect of financial, functional and administrative domination by the Government brings AFGIS within Article 12.
Allowing the appeal, the Supreme Court held AFGIS to be “State” under Article 12 and requested the Delhi High Court to decide the writ petitions expeditiously, keeping in view that they were filed in 2017.
Case Title: Ravi Khokhar & Ors. v. Union of India & Ors.
Citation: 2026 INSC 233 | C.A. @ SLP (C) No. 27366 of 2023
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