P.C. Raja Ratnam Institution vs Municipal Corporation Of Delhi & Ors on 6 September, 1989 Equivalent citations: 1990 AIR 816, 1989 SCR SUPL. (1) 66, AIR 1990 SUPREME COURT 816, (1990) 181 ITR 354, (1989) 3 JT 574 (SC), 1989 2 RRR 236, (1990) 2 LANDLR 182.2, (1990) 1 APLJ 80, 1990 SCC (SUPP) 97, (1989) 39 DLT 210 Author: L.M. Sharma Bench: L.M. Sharma, T.K. Thommen, K.N. Saikia 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 P.C. Raja Ratnam Institution vs Municipal Corporation Of Delhi & Ors on 6 September, 1989  1 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, 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. P.C. Raja Ratnam Institution vs Municipal Corporation Of Delhi & Ors on 6 September, 1989  2 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- 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- 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;" P.C. Raja Ratnam Institution vs Municipal Corporation Of Delhi & Ors on 6 September, 1989  3 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 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. P.C. Raja Ratnam Institution vs Municipal Corporation Of Delhi & Ors on 6 September, 1989  4