D.A.V. College Trust and Management 549 a Society & Ors. vs Director of Public Instructions & Ors.

Disposing of the appeals, the Court

HELD: 1.1 It is a well settled statutory rule of interpretation that when in the definition clause a meaning is given to certain words then that meaning alone will have to be given to those words. However, when the definition clause contains the words ‘means and includes’ then both these words must be given the emphasis required and one word cannot override the other. It is thus, clear that the word ‘means’ indicates that the definition is exhaustive and complete. It is a hard and fast definition and no other meaning can be given to it. On the other hand, the word ‘includes’ enlarges the scope of the expression. The word ‘includes’ is used to signify that beyond the meaning given in the definition clause, other matters may be included keeping in view the nature of the language and object of the provision. In the instant case, the word ‘means’ has been used in the first part of sub-section (h) of Section 2 whereas the word ‘includes’ has been used in the second part of the said Section. They have not been used together. [Para 8, 10] [558-G-H; 559-G; 560-A-B]

1.2 The first part of Section 2(h) relates to authorities, bodies or institutions of self-government established or constituted (a) under the Constitution; (b) by any law of Parliament; (c) by any law of State Legislature or (d) by notification made by the appropriate Government. There is no dispute with regard to clauses (a) to (c). As far as clause (d) is concerned, the submission that unless a notification is issued notifying that an authority, body or institution of self-government is brought within the ambit of the Act, the said Act would not apply, cannot be accepted. The notification contemplated in clause (d) is a notification relating to the establishment or constitution of the body and has nothing to do with the Act. Any authority or body or institution of self-government, if established or constituted by a notification of the Central Government or a State Government, would be a public authority within the meaning of clause (d) of Section 2(h) of the Act. [Para 15] [560-H; 561-A-C]

1.3 The words ‘and includes any’, expand the definition as compared to the first part. The second part of the definition is an inclusive clause which indicates the intention of the Legislature to cover bodies other than those mentioned in clauses (a) to (d) of Section 2(h). Thus, the bodies and NGOs mentioned in subclauses (i) and (ii) in the second part of the definition are in addition to the four categories mentioned in clauses (a) to (d). Clauses (a) to (d) cover only those bodies etc., which have been established or constituted in the four manners prescribed therein. By adding an inclusive clause in the definition, Parliament intended to add two more categories, the first being in sub-clause (i), which relates to bodies which are owned, controlled or substantially financed by the appropriate Government. These can be bodies which may not have been constituted by or under the Constitution, by an Act of Parliament or State Legislature or by a notification. Any body which is owned, controlled or substantially financed by the Government, would be a public authority. As far as sub-clause (ii) is concerned it deals with NGOs substantially financed by the appropriate Government. Obviously, such an NGO cannot be owned or controlled by the Government. Therefore, the question of financing is relevant. [Para 16, 17, 18] [561-E-H; 562-A]

1.4 The principle of purposive construction of a statute is a well-recognised principle which has been incorporated in the jurisprudence. While giving a purposive interpretation, a court is required to place itself in the chair of the Legislature or author of the statute. The provision should be construed in such a manner to ensure that the object of the Act is fulfilled. Obviously, if the language of the Act is clear then the language has to be followed, and the court cannot give its own interpretation. However, if the language admits of two meanings then the court can refer to the Objects and Reasons, and find out the true meaning of the provisions as intended by the authors of the enactment. [Para 20] [562-C-D]

1.5 Section 2(h) deals with six different categories and the two additional categories are mentioned in sub clauses (i) and (ii). Any other interpretation would make clauses (i) and (ii) totally redundant because then an NGO could never be covered. By specifically bringing NGOs it is obvious that the intention of the Parliament was to include these two categories mentioned in sub clauses (i) and (ii) in addition to the four categories mentioned in clauses (a) to (d). Therefore, an NGO substantially financed, directly or indirectly, by funds provided by the appropriate government would be a public authority amenable to the provisions of the Act. [Para 22] [563-E-F]

1.6 NGO is not defined under the Act or any other statute. In fact, the term NGO appears to have been used for the first time describing an international body which is legally constituted but non-governmental in nature. It is created by natural or legal entities with no participation or representation by the Government. Even NGOs which are funded totally or partially by the Governments essentially maintain the NGO status by excluding Government representations in all their organisations. In some jurisprudence, they are also referred to as civil society organisations. A society which may not be owned or controlled by the Government, may be an NGO but if it is substantially financed directly or indirectly by the government it would fall within the ambit of sub-clause (ii). [Para 23, 24] [563-G; 564-A-B]

1.7 ‘Substantial’ means a large portion. It does not necessarily have to mean a major portion or more than 50%. No hard and fast rule can be laid down in this regard. Substantial financing can be both direct or indirect. To give an example, if a land in a city is given free of cost or on heavy discount to hospitals, educational institutions or such other body, this in itself could also be substantial financing. The very establishment of such an institution, if it is dependent on the largesse of the State in getting the land at a cheap price, would mean that it is substantially financed. Merely because financial contribution of the State comes down during the actual funding, will not by itself mean that the indirect finance given is not to be taken into consideration. The value of the land will have to be evaluated not only on the date of allotment but even on the date when the question arises as to whether the said body or NGO is substantially financed. Whether an NGO or body is substantially financed by the government is a question of fact which has to be determined on the facts of each case. There may be cases where the finance is more than 50% but still may not be called substantially financed. Another aspect for determining substantial finance is whether the body, authority or NGO can carry on its activities effectively without getting finance from the Government. If its functioning is dependent on the finances of the Government then there can be no manner of doubt that it has to be termed as substantially financed. While interpreting the provisions of the Act and while deciding what is substantial finance one has to keep in mind the provisions of the Act. This Act was enacted with the purpose of bringing transparency in public dealings and probity in public life. If NGOs or other bodies get substantial finance from the Government, there is no reason why any citizen cannot ask for information to find out whether his/her money which has been given to an NGO or any other body is being used for the requisite purpose or not. [Para 26, 27 and 29] [565-C-G; 566-A-B]

1.8 Appellant no.1 is the Society which runs various colleges/schools but each has an identity of its own and, each of the college/school is a public authority within the meaning of the Act. The documents show that M.C.M. D.A.V. College, Chandigarh, in the years 2004-05, 2005-06 and 2006-07, has received grants which constituted about 40-44% of the expenditure of the College. 95% of the salary of the teaching and non-teaching staff of the College is borne by the State Government. The State has placed on record material to show that now these grants have increased substantially. It can be safely said that they are substantially financed by the Government. The Fund is being granted to these institutions from the year 2013-14 to 2015-16. These are the substantial payments and amount to almost half the expenditure of the Colleges/School and more than 95% of the expenditure as far as the teaching and other staff is concerned. Therefore, these Colleges/School are substantially financed and are public authority within the meaning of Section 2(h) of the Act. [Para 32-35] [566-E-H; 567-A, G-H]

1.9 As far as CA NOS. 9844-9845/2013, CA NOS. 98469857/2013, CA NO. 9860/2013 are concerned, though it is held that these bodies are NGOs, the issue whether these are substantially financed or not needs to be decided by the High Court. The matters are remitted to the High Court for determination whether the institutions are substantially financed or not. [Para 36, 37] [568-B-D]

Thalappalam Service Cooperative Bank Ltd. and Ors. v. State of Kerala and Ors. (2013) 16 SCC 82 : [2013]

14 SCR 475 ; Kasilingam v. P.S.G. College of

Technology (1995) Supp 2 SCC 348 : [1995] 2 SCR 1061 ; Bharat Coop. Bank (Mumbai) Ltd. v. Coop. Bank Employees Union (2007) 4 SCC 685 : [2007]

4 SCR 347 Delhi Development Authority v. Bhola Nath Sharma (D) by L.Rs. (2011) 2 SCC 54 ; New India Assurance Company Ltd. v. Nusli Neville Wadia and Anr. (2008) 3 SCC 279 : [2007] 13 SCR 598 ; Abhiram Singh v. C.D. Commachen (D) by L.Rs. and Ors. (2017) 2 SCC

629 : [2017] 1 SCR 158 - referred to.

Purposive Interpretation in law (2007) by Aharon Barak - referred to.