Union Of India vs Moolchand Khairati Ram Trust

4. In the year 1927 one Lala Kharaiti Ram of Lahore made a Will with a codicil registered at Lahore by which Moolchand Khairati Ram Trust   was   constituted   by   Lala   Kharaiti   Ram   with   the   name   of   his father Shri Moolchand. The relevant clauses of the Will are extracted hereunder :

5. It was the case of the Trust that the author neither used the word charity nor charitable while creating the Trust in the Will. In law,   it   became   a   charitable   trust   on   account   of   the   provisions   of section   2   of   the   Charitable   Endowments   Act,   1890.   Mool   Chand hospital acquired the perception of being charitable not from the Will or the purpose set out for the Trust but from the very nature of the activity of providing medical relief, more so in view of section 2(15) of the Income Tax Act, 1961 which defines charitable purpose.

6. The   Trust   was   running   a   hospital   in   Lahore   in   the   name   of Moolchand Kharaiti Ram Hospital. After partition, the trustees had to leave Pakistan and migrate to India as refugees in 1947. The Ministry of   Rehabilitation   allotted   nine   acres   of   land   at   Lajpat   Nagar   to   the 7 Trust on 17.4.1951 on which land at Lajpat Nagar, Delhi, the Trust built a hospital which has been running since then. At the time of allotment Lajpat Nagar was not a prime location of Delhi.

9. Sitaram   Bhartiya   Institute   of   Science   &   Research   was   a registered   society.   On   30.3.1984,   it   applied   for   allotment   of   land admeasuring   3   acres   for   establishing   a   multi­disciplinary   research complex   in   New   Delhi.   On   22.10.1984   the   DDA   allotted   land admeasuring 1.52 acres @ Rs.6 lakhs per acre. Request was made by the said society to charge at the concessional rate that was declined on   20.11.1984.   On   2.9.1985   lease   deed   was   signed   by   which   a consideration of Rs.8,76,000/­ for 1.46 acres was transferred to the petitioner.   The   case   of  Social   Jurists  (supra)   was   filed   in   the   High Court. The writ petition was disposed of by the High Court. Pursuant to the decision in  Social Jurists  (supra), Circular was issued by the 12 Government   on   20.1.2012   to   the   hospitals/societies   to   whom   land had been allotted at concessional rates to provide free treatment to the eligible patients or weaker sections category free of charge. The society took the stand that it was not allotted the land for the purpose of   hospital   at   concessional   rate.   Hospital   was   asked   by   the department on 28.6.2012 to provide free treatment. On 28.6.2012 it directed that it was making arrangement to comply with the order. On   12.7.2012   the   society   informed   the   Director   of   Health   Services about   the   stand   taken   by   it   to   comply   with   the   said   directions. However, on 13.3.2012 contempt application filed against it for not complying   with   the   directions,   was   disposed   of   by   the   High   Court holding   that   no   contempt   was   made   out.   On   18.4.2013   and 29.4.2013,   Director   of   Health   Services   required   the   accounts   of hospitals for the purpose of scrutiny for the last two years from the date on  which  the possession  of  land was given.  Petitioner pointed out on 4.5.2013 that there was no condition to provide free treatment to   economically   weaker  sections   category  as   such   the   hospital   was not similarly situated. Condition was not applicable. However, name of petitioner was not removed from the hospitals that failed to provide free   treatment   hence   the   writ   petition   was   filed   in   the   High   Court. 13 Moreover, similar are the facts of Foundation for Applied Research in Cancer.

45. The relief of the poor is one of the essential requirements of the charity.  All hospitals are not charitable institutions as there may be hospitals   which   run   commercially.     The   hospitals,   which   are operating   under   the   guise   of   charity,   are   in   fact   being   run   on   a commercial basis and it has become impossible for the poor to afford the life­saving drugs at an affordable price.   Their right to life is in jeopardy.     Merely   by   the   expression   hospital,   it   could   not   be successfully   claimed   by   the   respondent­hospitals   that   they   are charitable.   They can be directed to fulfill their obligation and fulfill the purpose by undertaking charitable activities and give it the real meaning by giving free services as envisaged in the policy. The claim of the hospitals that they are undertaking charity at their own level cannot   be   used   as   a   shield   to   the   performance   of   charity   in   an organized   way.   The   very   spirit   of   the   argument   that   as   they   do 43 charity,   it   cannot   be   fastened   upon   them,   is   self­destructive   and tends by its tenor to negate unjust obstruction created in the path of real charity

7. We are therefore of the view that the order made by the State in exercise of the authority conferred by S. 3(1)(b) of the Madhya Pradesh Public Security Act 25 of 1959 was invalid and for the acts done to the prejudice of the respondent after the declaration of emergency under Art. 352 no immunity from the process of the Court could be claimed under Art. 358 of the Constitution, since the order was not supported by any valid legislation.”

Consequently, the impugned order could not be sustained."

xxx xxx xxx

xxx xxx xxx

19. For the above reasons, we are of the opinion that the High Court was right in coming to the conclusion that by the impugned policy, there was no creation of any monopoly nor is there any violation Of Articles 14, 19(1)(g) or 19(6) of the Constitution. In view of the above, we are of the 103 opinion that these appeals should fail and the same are dismissed accordingly. No costs.

CA Nos. 3723 and 3744 of 1988:

20. These appeals are preferred against the judgment and order of the High Court of Punjab and Haryana dated 3-6-1988 made in Civil WP No. 6144 of 1987 wherein the High Court was pleased to allow the writ petition filed by the respondents in these civil appeals, quashing the policy decision of the State of Punjab whereby the State had directed its authorities concerned to purchase certain medicines from the public sector undertakings only. We have today in CA Nos. 4550- 51 of 1989 held that a similar policy decision issued by the State of Rajasthan does not amount to creation of monopoly nor is there any violation of Article 14 or 19(1)(g) of the Constitution. The facts giving rise to the writ petitions before the Punjab and Haryana High Court from which the above civil appeals have arisen being the same, we allow these civil appeals and set aside the judgment and order of the Punjab and Haryana High Court dated 3-6-1988 made in Civil WP No. 6144 of 1987. Consequently, the said writ petition stands dismissed. No costs."

(emphasis supplied)

102. Thereafter,   the   Government   of   India   on   2.2.2012,   issued   the impugned order with respect to the policy of free patient treatment to indigent/poor persons of Delhi to be followed by the private hospitals allotted   land   by  Land   &  Development   Office   on   concessional  rates. The said order is reproduced hereinbelow:

6. Non-observance or violation of any of the above-said guidelines shall mean or be construed as violation of the terms of lease/allotment.

(Mahmood Ahmed) Land & Development Officer”

109. However,  we make  it  clear that  the  hospitals  in question  and other   similarly   situated   hospitals,   shall   scrupulously   observe   the conditions   framed   in   the   order   dated   2.2.2012   and   in   case   any violation is reported, the same shall be viewed sternly and the lease shall be cancelled.   We are constrained to pass this order as there had   been   resistance   to   wholesome   policy   violation   of   the   afore­ conditions contained in order dated 2.2.2012.  Such violation cannot be       permitted to prevail.  We hereby direct the Government of NCT of Delhi to file a periodical report to this Court within a period of one year   from   today   with   respect   to   compliance   of   conditions   by   the respondents­hospitals and other similar hospitals in Delhi, not only governed   by   the   decision   of  Social   Jurists  case   (supra),   but   also governed by this judgment.

110. Resultantly, in our considered opinion, the judgment and order passed by the High Court are not sustainable and the same is liable 124 to be set aside and is hereby quashed.   The appeals are accordingly allowed.  Parties to bear their own costs.