P.C. RAJA RATNAM INSTITUTIONversusMUNICIPAL CORPORATION OF DELHI & ORS.

                                                                                    --
                P.C. RAJA RATNAM INSTITUTION
A
                              v.
            MUNICIPAL CORPORATION OF DELHI & ORS.

                              SEPTEMBER 6, 1989

.B        . [LALIT MOHAN SHARMA, T.K. THOMMEN AND
                        K.N. SAIKIA, JJ.)

           Delhi Municipal Corporation Act, 1957: Section 115(4)-
     ,Charitable purpose'-What is-Relief of the poor, education or rnedical
     relief-Sorne fee charged frorn students-Not decisive_
c          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 ruuning the school for a
     charitable purpose and therefore fell within the _ambit of clause (4) of
D    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
E    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 liability it was necessary for the society to
p    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 Conrt'sjudgment was, therefore, correct.
G
           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, inc-

 H
     ludes relief of the poor, education and medical relief. The test of 'charit-
     able purpose' is satisfied by the proof of any of the three conditions,
                                                                                     ·-
                          P.C. RAJA v. M.C.D. [SHARMA, J.[                    67
••
     namely, relief of the poor, education, or medical relief. [68E-F]
                                                                                    A
           (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] .
                                                                                    B
             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.
                                                                                    c
             (Under Article 32 of the Constitution).

         .   P.K. Pillai for the Appellant .
             R.K. Maheswari for the Respondents.
                                                                                    D
             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          E
     registered society and its object is to organize and run schools in Delhi
     and elsewhere with a view to promote education and welfare. Accord-
     ingly 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 pay-
     ment of general tax under the Act and the exemption claimed by the             F
     petitioner was rejected. In this situation the petitioner moved the
     Delhi High Court under Article 226 of the Constitution for appro-
     priate relief. The writ petition was dismissed in iimine by the following
     order:                                                            -   - ..

                          "The only question that arises for consideration is
                    whether the School run by the Society falls within the ambit    G
                . ·-of clause (4) of Section 115 of the Delhi Municipal Corpo-
                    ration Act. Reading this section it is obvious that exem-
                    tion for levy for general tax could be granted if the Society
                    which is running the school was a Society for charitable
                    pmp~es. Charitable purpose is defined in the explanation
                                                                                    H
                    to clause (4) of Section 115. No doubt the School is impart-
    68         SUPREME COURT REPORTS                 [1989] Supp. 1 S.C.R.


A
                ing education but in order to qualify for exemption, it had
                to give education and medical relief. Admittedly fees are
                                                                                .-
                charged from students. Mere imparting of education can-
                not be called giving relief. We, therefore, find nothing
                wrong with the stand taken by the Municipal Corporation
                of Delhi. Dismissed."
B
    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 neces-
c   sary for a society to offer medical relief:

                      "(a) lands and buildings or portions of lands and
                buildings exclusively occupied and used for public worship
                or by a society or body for a charitable purpose:
D
                     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.

E                    Explanation- "Charitable purpose" includes relief
               of the poor, education and medical relief but does not
               include a purpose which relates exclusively to religious
               teaching;"

  The argument is well founded. The test of 'charitable purpose' is
F satisfied by the proof of any of the three conditions, 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 soc~iety may be
  supported either wholly or in part by voluntary contributions. Besides,
  the explanation is in terms inclusive and not exhaustive. The impugned
G 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
H Court's judgment is, therefore, correct. He urged that in view of the
-·
                             P.C. RAJA v. M.C.D. [SHARMA, J.]                    69.

         relevant facts and circumstances in the case, as is evident by the assess-    A
         ment 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 deci-
         sion. During the pendency of the case in this Court the parties have          B
         filed further affidavits. It will be open to them to file additional
         affidavits and other materials in support of their respective cases. This,
         however, they should do within one month from today, so that the case
         whicn is an old one may be disposed of expeditiously.

               5. Civil Misc. Petition No. 11315 of 1989 has not been pressed          c
         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
                                                                                       D
         urgent nature of the case, the High Court is requested to dispose of the
         writ petition as expeditiously as may be possible.
     >                                                           Appeal allowed.
         «..S.S.




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