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PETITIONER: P.C. RAJA RATNAM INSTITUTION

       Vs.

RESPONDENT: MUNICIPAL CORPORATION OF DELHI & ORS.

DATE OF JUDGMENT06/09/1989

BENCH: SHARMA, L.M. (J) BENCH: SHARMA, L.M. (J) THOMMEN, T.K. (J) SAIKIA, K.N. (J)

CITATION:  1990 AIR  816            1989 SCR  Supl. (1)  66  1990 SCC  Supl.   97     JT 1989 (3)   574  1989 SCALE  (2)537  CITATOR INFO :  RF         1992 SC1456  (40)

ACT:     Delhi   Municipal   Corporation   Act,   1957:   Section 115(4)-’Charitable  purpose ’--What is--Relief of the  poor, education   or   medical  relief--Some  fee   charged   from students--Not decisive.

HEADNOTE:     The  appellant, a non-profit making registered  society, is  running  a school in Delhi.  The  Municipal  Corporation raised  a demand of general tax on the school building.  The appellant claimed exemption from the tax on the ground  that the society was running the school for a charitable  purpose and therefore fell within the ambit of clause (4) of section 115 of the Delhi Municipal Corporation Act, 1957. The  claim was rejected by the Corporation.     The  appellant’s writ petition under Article 226 of  the Constitution was dismissed by the High Court. The High Court held  that mere imparting of education could not  be  called giving  relief and to qualify for exemption the Society  had to  give  education and medical relief; and that  fees  were charged from students.     Before this Court it was contended by the appellant that in  view of the language of s. 115(4)(a) it was not  correct to  suggest that to qualify for exemption from the  tax  li- ability  it was necessary for the society to  offer  medical relief.     The respondent on the other hand contended that although it  was not in a position to support the reasoning given  by the  High  Court, the appellant was for  other  reasons  not entitled  to  the exemption ’claimed and  the  High  Court’s judgment was, therefore, correct.     Allowing  the appeal and remitting the case to the  High Court  for  fresh decision on the facts relied upon  by  the parties, this Court,     HELD: (1) A "charitable purpose" as defined in the  Act, includes  relief of the poor, education and medical  relief. The  test of ’charitable purpose’ is satisfied by the  proof of any of the three conditions,

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67 namely,  relief of the poor, education, or  medical  relief. [68E-F]     (2) The fact that some fee is charged from the  students is  also  not decisive inasmuch as the  proviso  to  section 115(4)(a) indicates that the expenditure incurred in running the society may be supported wholly or in part by  voluntary contributions. [68F]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 43 of 1982.     From the Judgment and Order dated 7.12.1979 of the Delhi High Court in Writ Petition No. 1754 of 1979. AND Writ Petition (Civil) No. 265 of 1980. (Under Article 32 of the Constitution). P.K. Pillai for the Appellant. R.K. Maheswari for the Respondents. The Judgment of the Court was delivered by     SHARMA,  J.  The petitioner claims  exemption  under  s. 115(4)(a) of the Delhi Municipal Corporation Act, 1957  from the liability of paying general tax leviable under the  said section.     2. The case of the petitioner is that it is a non-profit making registered society and its object is to organize  and run  schools in Delhi and elsewhere with a view  to  promote education  and welfare. Accordingly it is running  a  school with the name of General Raj’s School in Delhi in a building constructed  for  that  purpose. A demand was  made  by  the appropriate  authority  of  the  Municipal  Corporation  for payment  of  general  tax under the Act  and  the  exemption claimed  by the petitioner was rejected. In  this  situation the petitioner moved the Delhi High Court under Article  226 of  the Constitution for appropriate relief. The writ  peti- tion was dismissed in limine by the following order:                         "The  only question that arises  for               consideration is whether the School run by the               Society  falls within the ambit of clause  (4)               of Section 115 of the Delhi Municipal Corpora-               tion  Act. Reading this section it is  obvious               that exemption for levy for general tax  could               be granted if the Society which is running the               school was a Society for charitable  purposes.               Charitable purpose is defined in the  explana-               tion  to clause (4) of Section 115.  No  doubt               the School is impart-               68               ing  education  but in order  to  qualify  for               exemption, it had to give education and  medi-               cal  relief. Admittedly fees are charged  from               students.  Mere imparting of education  cannot               be  called giving relief. We, therefore,  find               nothing  wrong  with the stand  taken  by  the               Municipal Corporation of Delhi. Dismissed." The  present  Civil  Appeal by  special  leave  is  directed against this judgment.     3. The learned counsel for the petitioner has  contended that in view of the language of s. 115(4)(a), quoted  below, it  is not correct to suggest that to qualify for  exemption from  the  tax liability it is necessary for  a  society  to offer medical relief:                           "(a)  lands and buildings or  por-

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             tions  of  lands  and  buildings   exclusively               occupied  and used for public worship or by  a               society or body for a charitable purpose:                         Provided  that such society or  body               is  supported wholly or in part  by  voluntary               contributions, applies its profits, if any, or               other income in promoting its objects and does               not pay any dividend or bonus to its members.                         Explanation--"Charitable    purpose"               includes  relief  of the poor,  education  and               medical relief but does not include a  purpose               which relates exclusively to religious  teach-               ing;" The  argument is well founded. The test of ’charitable  pur- pose’  is satisfied by the proof of any of the three  condi- tions,  namely,  relief of the poor, education,  or  medical relief. The fact that some fee is charged from the  students is also not decisive inasmuch as the proviso indicates  that the  expenditure  incurred  in running the  society  may  be supported  either wholly or in part by  voluntary  contribu- tions.  Besides, the explanation is in terms  inclusive  and not  exhaustive. The impugned judgment must,  therefore,  be held to be erroneous.     4.  Mr.  B. Sen, the learned  counsel  representing  the respondent Municipal Corporation, contended that although he is  not in a position to support the reasoning given by  the High Court, the petitioner is for other reasons not entitled to  the exemption claimed and the High Court’s judgment  is, therefore, correct. He urged that in view of the 69 relevant facts and circumstances in the case, as is  evident by  the assessment order, the claim of the  petitioner  that its  purpose  is charitable cannot be accepted.  Since,  the High Court has not adverted to the facts of the case  relied upon  by  the learned counsel for the parties  and  has  not expressed  its opinion on the other aspects of the case,  we are of the view that the case should go back on remand to it for fresh decision. During the pendency of the case in  this Court the parties have filed further affidavits. It will  be open to them to file additional affidavits and other materi- als  in  support of their respective cases.  This,  however, they should do within one month from today, so that the case which is an old one may be disposed of expeditiously.     5.  Civil Misc. Petition No. 11315 of 1989 has not  been pressed and is, therefore, dismissed; and the Writ  Petition No.  265 of 1980 is permitted to be withdrawn as prayed  for on behalf of the petitioner. Civil Appeal No. 43 of 1982  is allowed and the case is remitted to the High Court for fresh decision in the light of the observations made above.  There will  be no order as to costs of this Court. In view of  the urgent  nature of the case, the High Court is  requested  to dispose  of  the writ petition as expeditiously  as  may  be possible. S.S.                                            Appeal   al- lowed. 70