Civil Appeal Nos
10803 to 10805 of 1983
From the Judgment and Order dated 17121980 of the Madras High Court in Tax Cases Nos 261 of 1974 and 9  10 of 1977
K Parasaran G Umapathy Mrs Indu Malini Ananthachari for CS Vaidyanathan for the Appellant
Ranbir Chandra for Ms A Subhashini for the Respondent
The Judgment of the Court was delivered by KULDIP SINGH J
The question for our consideration in these appeals is whether Gangabai Charities a trust operating in the city of Madras is entitled to exemption under Section 111a of the Income Tax Act 1961 the Act
Gangabai executed a document dated September 13 1958 which was described as a deed of trust
The trust was named as Ganga Bai Charities
In the trust deed Ganga Bai gave effect to her desire to construct and provide a building for the benefit of the public to be used for religious charitable cultural and social purposes
She contributed Rs34000 to the trust fund
With that fund a plot of land was purchased and the construction begun
The fund was augmented by her son Seetha Rama Rao from his own contributions as well as from outside donations
The building was completed at the cost of about Rs six lakhs
Ever since the construction of the building it is being let out as a marriage mandapam to be used by 629 the members of the public as such
the income derived from letting out the Kalyana Mandapam came to Rs10639200 in the year ending March 31 1963
For the subsequent years also the income was substantial
The trust was also running a printing press and sizable income was being earned from the press
The Income tax Officer took the view that the income earned by the trust was taxable
The contention of the trust that the income derived from the property was being held wholly for religious and charitable purposes and as such was exempt under Section 11 of the Act was rejected
On appeal the Appellate Assistant Commissioner reversed the Income tax Officer and held that the Ganga Bai Charities was a charitable trust and its income was entitled to exemption under Section 11 of the Act
On further appeal by the department the tribunal upheld the decision of the Commissioner but remitted the assessment to the Income tax Officer to find out as to what extent in each year the trust income or accumulations were expended for charitable purposes
The Income Tax Appellate Tribunal referred the following question to the High Court under Section 2561 of the Act Whether is has been rightly held that the income of the trust would be entitled to exemption under Section 11 of the Income Tax Act 1961 The High Court by its judgment dated December 17 1980 answered the question in the negative and against the assessee
These appeals by way of special leave for against the judgment of the High Court
Section 11ia of the Act to the relevant extent is reproduced hereunder 11
Income from property held for charitable or religious purposes I Subject to the provisions of sections 60 to 63 the following income shall not be included in the total income of the previous year of the person in receipt of the income a income derived from property held under trust wholly for charitable or religious purposes to the extent to which such income is applied to such purposes in India 
The above quoted provisions make it clear that a trust has to satisfy 630 the following conditions in order to claim benefit of Section 111a of the Act 1 The income is derived from property held under the trust
2 The trust is wholly for charitable or religious purposes
3 The exemption is permissible to the extent to which such income is applied to such purposes in India
The appellant trust has been created under a deed of trust dated May 30 1978 and as such we have to look into the contents of the trust deed of find out as to whether the conditions precedent for claiming exemption under section 111a of the Act are satisfied
The tribunal and the High Court have also based their conclusions on the interpretation of the trust deed
It is not disputed that the appellant trust derived the income from the property held under it but the existence of other conditions necessary to claim exemption under Section 111a of the Act have been seriously disputed by the Revenue before us
We have minutely examined the trust deed and have given our thoughtful consideration to its contents
The relevant paragraphs of the trust deed from where the purposes of the trust can be spelled out are reproduced hereunder WHEREAS the Settler has long cherished a desire to construct and provide a building in Purasawalkam Madras for the benefit of the Public to be used by them for religious charitable andor cultural and social purposes to secure religious benefit for herself and satisfy a long felt need of the Public in this part of this city
 NOW THIS INDENTURE WITHNESSTH that in pursuance of the premises the settlor above named doth hereby declare that the plot of land above mentioned and more particularly described in the schedule below was purchased by her for Rs24000 on 991957 for the express purpose of constructing a building thereon and dedicating the same for use by the public inter alia for Religious Charitable and Cultural purposes and doth hereby create an irrevocable Trust of the said property for the purposes aforesaid
 631 The settlor further declares that immediately after such purchase she the settlor relinquished all her rights thereto and dedicated the said plot of land for the use of the public for the purposes above mentioned and put the said plot of land in the possession of her son Shri K Seetharam Rao with a direction to construct a building thereon for the use of the public for religious charitable social cultural and other allied purposes That the Trust property  more particularly described in the schedule below shall be used for religious charitable social cultural and other allied purposes That the Trustee shall have as the construction proceeds power to make any suitable alterations in the plan already submitted by him and sanctioned the Corporation of Madras in such manner as to him may seem necessary and that the Trustee may after the completion of the building let or allow the said building or such portion of portions of the said building for the use of the public for social cultural religious educational etc purposes free or at such rents and such terms and conditions as he thinks proper in the interests of the Trust for holding and conducting religious discourses for running schools for the development of Sanskrit learning free or at such rents and on such terms and conditions as the Trustee things reasonable and proper in the interests of the Trust
On a careful reading of the above quoted paragraphs of the trustdeed it is not possible to cull out in clear terms a specific charitablereligious object to conclude that the trust was set up wholly for charitable or religious purposes
The religious charitable cultural and social purposes referred to in the deed are not avowed as the objectives of the trust itself
What the founder of the trust intended to convey was that the building to be constructed out of the funds provided by her and supplemented from other sources must be held for the benefit of the public for being used by them for religious charitable cultural or social purposes
We cannot read the contents of above quoted paragraphs as the objects of the trust these are only the objects of those who wish to put the trust property to use
On a careful consideration of the language of the trust deed we are of the view that the intention of the founder was to provide a building for the benefit 632 of the public to be used by them for religious charitable andor cultural and social purposes
It is no where stated in the trust deed that the trust itself has been created for the purpose of carrying out any of such objectives
The holding and conducting of religious discourses and the running of schools for the development of Sanskrit have also been mentioned from the point of view of the users of the trust property
These are some of the purposes for which the public can be permitted to use the property
The crux of the statutory exemption under Section 111a of the Act is not the income earned from property held under the trust but the actual application of the said income for religious and charitable purposes
It is therefore necessary to indicate in the trust deed the broad objectives for which the income derived from the property is to be utilised
There is no mention in the trust deed as to how the income derived from the trust property is to be utilised
The public uses the building on payment of rent to the trustees
What is to be done with the money so collected has not been provided in the trust deed
There is no mandate in the trust deed that the income derived from the trust property is to be spent on religious or charitable purposes
We are satisfied that on a proper construction of the trust deed it does not meet the requirements of Section 111a of the Act
We find no infirmity in the judgment of the High Court
We entirely agree with the reasoning and the conclusions reached therein
Mr Prasaran invited our attention to paragraphs 5 and 6 of the special leave petition wherein it is stated that Mr Justice V Balasubrahmanyan who delivered the judgment in this case on behalf of the two Judge Bench of the High Court had given opinion in this case as special counsel for the Income tax Department and in the said opinion the Department was advised to go to the High Court by seeking a reference
It was also opined that the trust was ineligible for the exempltion for the reasons which were given therein
It is further mentioned inthe special leave petition that the petitioner came to know about this aspect only after the judgment was pronounced on December 17 1980
None of the parties brought this aspect to the notice of the learned Judge at the hearing or at any time before or after the conclusion of the hearing
Mr Prasaran contends that it would be in the interests of justice if the matter be remanded back to High Court for rehearing
We are not inclined to agree with the learned counsel
The 633 tribunal pronounced its order on February 28 1974 and the High Court decided the reference seven years thereafter
The opinion must have been given immediately after the tribunal s order and as such due to lapse of time the learned Judge could not have remembered the routine opinion  he gave as a busy lawyer several years ago
The judgment was delivered by the High Court after hearing detailed arguments from both sides
All the points raised by the assessee have been dealt with and decided on the basis of judicious reasoning
In any case we have heard mr K Prasaran learned Senior Advocate for the appellant and have examined the trust deed minutely and carefully
The view taken by the High Court is the only view which can be taken in this case and we affirm the same
The appeal is therefore dismissed with costs
We quantify the costs as Rs 10000
VPR Appeals dismissed


Summary:
The parties to the appeal were married on January 24 1988 at Noida near Delhi
They hardly lived as husband and wife at Pune for about seven months when on August 16 1988 the husband Respondent filed a petition under Section 13 of the Hindu Marriage Act 1956 for dissolution of the marriage on the ground of cruelty
He alleged that the wife had a habit of smoking and drinking and even once came drunk to the house and abused everybody
The wife vehemently denied the allegations and claimed that she was a homely vegetarian non smoking teetotaler and faithful house wife
During the pendency of the aforesaid divorce proceeding before the Family CourtPune the wife filed a petition on May 1 1989 before this Court seeking transfer of the case from the Family Court Pune to Delhi
This Court granted ad interim stay of the proceedings which remained operative till September 11 1989 when the Transfer Petition was dismissed 82 and the stay become vacated
Thereafter the husband appeared before the Family Court on September 15 1989 whereas the wife remained absent
Notice were sent by registered post to the wife on her address at Noida and also at her Delhi address given in the proceedings before this Court
The notices having come back with the remarks not found the Family Court ordered sub stituted service and a notice was published in a Delhi daily newspaper asking the wife to appear before the Family Court on November 16 1989
The wife not having appeared on the said date the Family Court ordered ex parte proceedings
The issues were framed on November 21 1989 evidence of the husband was recorded on November 251989 and the judgment was pronounced on November 30 1989 granting the husband a divorce decree
The wife filed an application dated December 18 1989 for setting aside the ex parte divorce decree
She contended that she was forced to leave the matrimonial home at Pune and was residing with her parents at Noida and that in OctoberNovember 1989 she had gone to reside with her brother at Delhi that she applied to the Army Authorities claiming maintenance out of her husband s salary and that the Army Authorities sent a letter dated December 14 1989 to her father informing that the application for maintenance could not be entertained as the husband had already obtained a divorce decree from the Court
She further contended that for the first time on or about December 14 1989 she came to know from her father that her husband had been granted an ex parte divorce decree by the Family Court
The Family Court dismissed the application for setting aside ex parte divorce decree and the High Court upheld the reasoning and conclusions reached by the Family Court and dismissed the appeals filed by the wife
In the appeal to this Court by the wife it was contended that 1 The Family Court and the High Court grossly erred in dismissing the application filed by the appellant for setting aside the ex parte proceedings 2 the divorce petition should have been dismissed as not competent in terms of Section 14 of the Hindu Marriage Act as the Statutory period of one year had not lapsed since the date of marriage 3 even on merits the divorce decree is based on no evidence the allegations in the divorce petition 83 being wholly vague and 4 the High Court acted illegally in substituting the decree of divorce to that of a decree for judicial separation
Allowing the Appeal this court HELD 1
The appellant filed written statement before the Family CourtPune denying the allegations made against her by the respondent
She also raised preliminary objections regarding the maintainability of the divorce petition
Though her transfer petitions before this Court were dismissed in September 1989 and on April 12 1990 and that she did not approach the High Court for transfer of her case the fact remains that she has been seriously contesting the divorce proceedings and it would not be fair to assume that she deliberately chose to abstain from the Family Court and was intentionally avoiding the summons
In the facts and circumstances of this case the appellant was justified in her assumption that the proceedings before the Family Court would be resumed after fresh notice to the parties
The applicability of the Rules of natural justice depends upon the facts and circumstances of each case
Fair play and the interest of justice in this case required the issuance of a fresh notice to the parties after the stay order was vacated by this Court
The Family Court sent two Registered notice to the appellant at her Noida address and also at the address given by her in the proceedings before this Court
Unfortunately both the notices came back with the endorsements that the appellant could not be found on the given addresses
On the record there is no material to reach a conclusion that the appellant refused to receive the notices or to show whether the postal authorities made any efforts to deliver the registered letters to any of the appellants  relations at the given addresses
The Courts below are therefore wholly unjustified in holding that the appellant refused to receive the notices and further that the said notices could have been received by any of her relations on the given addresses
After the notices sent by registered post were received back the Family Court did not make any attempt to serve the appellant through the process of the Court
The appellant was not stranger to the respondent
She was his wife
It could not have been difficult for him to find out the address where she was staying 
Under the circumstances resort to the 84 substitute service by way of publication in the newspaper was not justified
There was thereforesufficient cause for the non appearance of the appellant in the matrimonial petition before the Family Court
With a view to do complete justice between the parties it is directed that this case be transferred from the file of the Principal Judge Family Court Pune to the Principal Judge Family Court Bombay and the parties are directed to appear before the Principal Judge Family Court Bombay