Rajiv Sahai Endlaw, J.

1. This petition under Article 226 of the Constitution of India, filed as a Public Interest Litigation (PIL), pleads:

(i) that the respondent No.4 Quality Council of India (QCI) was set up in the year 1997 as an autonomous body, by the Govt. of India and the Indian Industry represented by the three premier Industry Associations i.e. the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the Confederation of India Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI), to establish and operate national accreditation structure and promote quality through National Quality Campaign and receives 50% grant in aid from the Govt. of India and rest 50% from ASSOCHAM, CII and FICCI;

(ii) that the respondent No.3 Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce and Industry is the Nodal Ministry for the respondent No.4 QCI;

(iii) that the respondent No.4 QCI has a governing body and two wings, of A) Accreditation and B) Quality promotion functioning thereunder; the Accreditation Wing further has, (a) National Accreditation Board for Certification Bodies (b) National Accreditation Board for Hospitals and Healthcare Providers (NABH) (c) National Accreditation Board for Education and Training (d) National Accreditation Board for Testing and Calibration Laboratories thereunder and the Quality Promotion Wing has (1) National Board for Quality Promotion and (2) Quality Information and Enquiry Service thereunder;

(iv) that as per Office Memorandum (OM) dated 15th October, 1984 issued by the Govt. of India, it is mandatory for every body, as the respondent No.4 QCI, to get its rules and regulations and bye-laws approved from its Controlling Ministry as well as from the Ministry of Finance inter alia with respect to the creation of posts, revision of pay and allowances etc. and such rules, regulations and bye-laws have to be in conformity with that of the Central Government;

(v) however the respondent No.4 QCI till date has neither framed the said rules, regulations and bye-laws nor gotten them approved from the Ministry of Commerce and Industry and / or from the Ministry of Finance;

(vi) though the respondent No.4 QCI, while registering itself as a society under the Societies Registration Act, 1860, had in April, 2009 framed bye-laws in respect of the matters relating to management, administration, personnel, finance, purchases etc. but the same were not sent to the Ministry of Finance or to its Controlling Ministry i.e. Ministry of Commerce and Industry for approval;

(vii) that the Comptroller and Auditor General of India (CAG) also during the audit of the respondent No.4 QCI had noted the said non-compliance and further observed about the irregularities committed in appointments, promotion and annual increment / made / given and also commented on the appointments, promotion being granted and increments being given in the respondent No.4 QCI, being made without following any procedure whatsoever and the requisite records being not maintained;

(viii) that the bye-laws of April, 2009 of the respondent No.4 QCI are even otherwise not in conformity with that of the Central Government regarding separation of Financial Rules;

(ix) that the respondent No.4 QCI is also not following the General Financial Rules (GFR) in their accounting practice, as prescribed to be followed by such autonomous bodies funded by the Govt. of India;

(x) that thus the expenditure incurred by the respondent No.4 QCI since its inception till date is irregular and illegal amounting to misappropriation of public funds as well as organised loot of tax payers’ money;

(xi) that though the petitioner complained to the respondent No.4 QCI in respect of accreditation granted to certain hospitals but no tangible corrective action was initiated;

(xii) that the Service Tax Authorities have also served a notice upon the respondent No.4 QCI for evasion of service tax;

(xiii) that the top officials of the respondent No.4 QCI remained out of India for their personal tours but on the official expenses;

(xiv) that thus the entire running of respondent No.4 QCI is illegal and its officials are misusing public money;

(xv) that the petitioner had earlier filed W.P.(C) No.7109/2013 highlighting all the aforesaid facts and which was disposed of on 13th November, 2013 with a direction to the DIPP to deal with the complaints of the petitioner within a period of four weeks;

(xvi) that in response thereto, the petitioner received a letter dated 13th December, 2013 informing that the matter was under consideration and that the respondent No.4 QCI had been directed to take corrective action;

(xvii) that thereafter also no steps had been taken.

Accordingly, this petition is filed, seeking:

(a) a direction to the respondent No.4 QCI to formulate its rules, regulations and bye-laws in conformity with that of Central Government and to get them approved from the Controlling Ministry as well as from the Ministry of Finance in terms of OM dated 15th October, 1984;

(b) a direction to the respondents No.2&3 Ministry of Commerce and Industry and the DIPP and to the respondent No.1 Ministry of Finance to stop grant in aid and other benefits to the respondent No.4 QCI till the aforesaid approval;

(c) a direction to the respondent No.4 QCI to follow the GFR in terms of OM dated 2nd November, 2010 of the Ministry of Finance; and,

(d) a direction to the respondent No.5 Central Vigilance Commission as well as to the Central Bureau of Investigation (CBI) to investigate the financial mismanagement, irregularities and illegalities practised in the respondent No.4 QCI.

2. The petition has been entertained and a counter affidavit has been field by the respondent No.4 QCI, pleading:

(I) that the petition has been filed not in public interest but out of vengeance; the petitioner had in March, 2009 applied for admission to Assessor Training course conducted by the NABH but could not qualify and thereafter started tirade against the respondent No.4 QCI;

(II) that the respondent No.4 QCI is following its own finance manual as standard practice and so is the standard practice being followed in various public sector undertakings, autonomous bodies and other institutions;

(III) that the GFR are implemented in purely government institutions, public sector undertakings, public sector enterprises etc.;

(IV) that the autonomous bodies as the respondent No.4 QCI have freedom to adopt their own financial rules which are not contrary to the interest of the organisation and which are in compliance with the standard practice;

(V) that the respondent No.4 QCI is not obliged to follow employment structure and pay scale of government and rather it follows its own pay structure and recruitment rules which have the approval of its governing body;

(VI) that the financial manual and HR manual of the respondent No.4 QCI have the approval of its governing body comprising inter alia of representative of DIPP, Ministry of Commerce and Industry;

(VII) that the OM dated 15th October, 1984 of the Ministry of Finance applies to autonomous bodies, which are fully or partly funded by the Govt. of India and is not applicable to respondent No.4 QCI which was set up as a public private model and 50% of whose Seed Capital was given by the DIPP, Ministry of Commerce and Industry and the balance 50% was contributed by ASSOCHAM, CII and FICCI; no grant has been given by the DIPP for the administrative expenditure and the respondent No.4 QCI is not asking for grant to meet its administrative cost;

(VIII) that the respondent No.4 QCI makes its own budget of its income and expenditure and takes care of its administrative expenses of its own;

(IX) that the respondent No.4 QCI has its own rules for recruitment of manpower, salary structure which are not linked with the salary structure of government and has its own financial rules and manual and which are approved by its governing body;

(X) that as per the rules and regulations of the respondent No.4 QCI registered as a society, its governing body has the management of all its affairs and funds, subject however to such limitations as the government may from time to time impose;

(XI) that the objections raised by the CAG have been replied by the respondent No.4 QCI and the corrective measures are in process;

(XII) that the bye-laws of the respondent No.4 QCI are under consideration of its Nodal Ministry;

(XIII) that no appointments, promotions or increments have been made / given in contravention of the bye-laws of the respondent No.4 QCI;

(XIV) that the matter relating to service tax is being pursued with the Service Tax Department;

(XV) denying that there is any misuse of funds;

(XVI) that the financial manual of the respondent No.4 QCI serves the purpose of GFR and the respondent No.4 QCI is thus not required to comply with the GFR of the Govt. of India.

3. The respondent No.3 DIPP, Ministry of Commerce and Industry has also filed a counter affidavit, pleading:

(A) that the respondent No.4 QCI is an autonomous body under the said Ministry, mandated to create a national accreditation structure and set up the National Quality Campaign in view of the need of quality culture and to support economic growth;

(B) that the Ministry provides project based support to the respondent No.4 QCI including the grant of plan funds for its campaigns;

(C) that the respondent No.4 QCI being an autonomous body follows its own set of rules and regulations which are duly approved by the said Ministry and whereafter only the respondent No.4 QCI was registered as a society;

(D) that even when the Memorandum of Association and Rules and Regulations of the respondent No.4 QCI was revised, it was sent to the Department of Legal Affairs for ex post facto vetting but since the same had already been approved and ratified by the Board of Governors of the respondent No.4 QCI, no further approval was required to be taken;

(E) that on coming to know of the anomalies in the affairs of the respondent No.4 QCI, the Ministry had vide letter dated 24th February, 2014 asked the respondent No.4 QCI to rectify the irregularities;

(F) that in the meeting held on 20th November, 2012, it had been decided to revise the finance manual of the respondent No.4 QCI to incorporate a separate section / chapter dealing with the accounting and other procedures to be followed in respect of grant in aid received from the government and ensure that such procedures are in consonance with the government instructions and guidelines;

(G) that on the representations of the petitioner, an inquiry was conducted and based on the findings of the inquiry, the respondent No.4 QCI was directed to take immediate corrective action and the petitioner informed of the same;

(H) that vide OM dated 25th June, 2014, a Committee has been constituted and entrusted with the task of examining the compliance of the audit observations of the CAG and allegations of irregularities and illegalities levelled against the officers of the respondent No.4 QCI by the CAG;

(I) that for the appointment to the post of Secretary General of the respondent No.4 QCI, a Search-cum-Selection Committee was constituted, also comprising of the Joint Secretary of the Ministry and it was on the recommendation of the said Committee that the appointment to the said post was made and the said appointment was also approved by the Ministry;

(J) that the respondent No.4 QCI has already been directed to follow the GFR and to comply with the audit objections raised by the CAG.

4. The respondent No.3 Ministry of Commerce and Industry at the time of hearing on 3rd December, 2014 handed over a copy of the OM dated 25th June, 2014 of the said Ministry constituting a Committee to inquire into the various allegations of irregularities in the functioning of the respondent No.4 QCI and to submit a report within four weeks. However, he on 3rd December, 2014 could not tell, as to whether a report has been submitted or not and to what effect. Even thereafter, since the time the judgment has been reserved, nothing has been informed.

5. As far as the plea of the respondent No.4 QCI of the present petition being not maintainable as a PIL for the reason of the same being guided by the personal vengeance of the petitioner for having not been admitted to a course conducted by one of the bodies functioning under the respondent No.4 QCI is concerned, though the petitioner has not filed a rejoinder to either of the counter affidavits but we find the said plea, even if to be correct, to be too remote to qualify the petitioner as being guided by private interest in the guise of public interest. Moreover, the allegations in the petition which have not been disputed by the respondents No.3&4, who alone have filed a counter affidavit to the petition, rather show that the representations of the petitioner preceding the writ petition have had the effect of the Ministry of Commerce and Industry initiating action which it earlier had neglected to take. Ordinarily, we would have expected the Ministry of Commerce and Industry to have immediately acted on the report of the CAG. However, it had to be spurred into action by the petitioner.

6. Though the respondent No.4 QCI has in its affidavit denied that it is bound by the OM dated 15th October, 1984 of the Ministry of Finance or by the GFR of the Govt. of India but the Ministry of Commerce and Industry in its counter affidavit has stated that the respondent No.4 QCI has been directed to comply with the GFR; the Ministry has however not given any reply to the plea of the respondent No.4 QCI being required to comply with the OM dated 15th October, 1984. The respondent No.1 Ministry of Finance has also failed to file any counter affidavit.

7. We are also constrained to observe that the Govt. of India has also not complied with the spirit of the order dated 13th November, 2013 of this Court in W.P.(C) No.7109/2013 earlier filed by the petitioner. Though the Govt. of India was asked to deal with all the allegations made by the petitioner as listed out above but all that it informed to the petitioner in response thereto vide letter dated 13th December, 2013 was that, based on the findings of the inquiry, the respondent No.4 QCI had been directed to take corrective action. A perusal of the enclosure dated 5th November, 2013 to the said letter shows that the inquiry had indeed revealed merit in the allegations and either clarification had been sought from the respondent No.4 QCI or QCI had been directed to take corrective action. In fact, the inquiry conducted had also found the respondent No.4 QCI to be in violation of the GFR. Though it was stated that the grant in aid to the respondent No.4 QCI had been stopped since 2011-2012 under the plan scheme of National Quality Campaign but it was not stated, as to what action had been taken against the officials under whose nose the irregularities had been committed or who were privy thereto or for recovery of the funds, which had been spent in violation of the GFR.

8. All the aforesaid leaves us with an impression that inspite of the attention of the Ministry of Finance and the Ministry of Commerce and Industry being drawn to the mismanagement, irregularities, malfunctioning and financial irregularities in the affairs of the respondent No.4 QCI, the needful has not been done.

9. We therefore dispose of this petition with a direction to the Ministry of Commerce and Industry to, in consultation with the Ministry of Finance, on or before 18th August, 2015, file an affidavit in this Court with advance c

opy to the petitioner, (I) disclosing the report of the Committee constituted vide OM dated 25th June, 2014 and if the said report had found merit in the allegations / complaints of the petitioner, disclosing the action taken in pursuance thereto; (II) specifically replying, whether the respondent No.4 QCI is required to comply with the OM dated 15th October, 1984 of the Ministry of Finance and if so, what action has been taken in that respect; (III) specifically replying whether the respondent No.4 QCI is required to comply with the GFR and if so, what action has been taken for admitted non-compliance therewith and for ensuring compliance in future; (IV) disclosing specifically the grant in aid made to the respondent No.4 QCI at the time of its inception and thereafter from time to time, and what steps have been taken to ensure intended utilisation thereof; (V) disclosing, that besides the grant in aid, what other financial or other assistance in whatsoever form and under whatsoever scheme / policy / campaign has been given to the respondent No.4 QCI and the steps taken to secure / ensure appropriate utilisation thereof; (VI) specifically replying disclosing, that whether the salaries, perks, promotions, increments, amenities of the officials and personnel of the respondent No.4 QCI are required to be in accordance with the norms of the Govt. of India and if so, whether they are in consonance with the said norms and if not, what steps have been taken in respect thereof; 10. Upon perusal of the said affidavit, direction if any required for consequential action shall be issued. 11. The petition is disposed of. 12. List for reporting compliance on 18th August, 2015.