Fathima Memorial Educational Trust v State of Kerala and others

1 ``` IN THE HIGH COURT OF KERALA AT ERNAKULAM ``` ``` PRESENT ``` ``` THE HONOURABLE MR.JUSTICE S.V.BHATTI ``` ``` & ``` ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI ``` ``` WEDNESDAY, THE 2[ND] DAY OF MARCH 2022 / 11TH PHALGUNA, 1943 ``` ``` WA NO.335OF 2020 ``` ``` AGAINST THE JUDGMENT IN WP(C) 24238/2011 OF HIGH COURT OF KERALA DATED 15.11.2019 ``` ## **`APPELLANT/PETITIONER:`** ``` FATHIMA MEMORIAL EDUCATIONAL TRUST REPRESENTED BY ITS CHAIRMAN A.YOUNUS KUNJU, PALLIMUKKU, VADAKKEVILA P.O., KOLLAM-10. BY ADV M.R.ANISON ``` ## **`RESPONDENTS:`** ``` 1STATE OF KERALA REPRESENTED BY CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-691 001. 2THE CORPORATION OF KOLLAM, REPRESENTED BY ITS SECRETARY, KOLLAM-695 001. 3THE SECRETARY TO GOVERNMENT, LOCAL SELF GOVERNMENT DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001. ``` `BY ADV SRI.M.K.CHANDRA MOHAN DAS,SC,KOLLAM MPT` BY ADV.HARIKRISHNAN M.S. ## BY GOVT.PLEADER SRI JOSHY THANICKAMATTOM ``` THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 02.03.2022, ALONG WITH WA.363/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 2 # **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE S.V.BHATTI ``` ``` & ``` ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI ``` ``` WEDNESDAY, THE 2[ND] DAY OF MARCH 2022 / 11TH PHALGUNA, 1943 ``` # **`WA NO. 363 OF 2020`** ``` AGAINST THE JUDGMENT IN WP(C) 28475/2016 DATED 15.11.2019 OF HIGH COURT OF KERALA ``` ## **`APPELLANT/PETITIONER:`** ``` FATHIMA MEMORIAL EDUCATIONAL TRUST REPRESENTED BY ITS CHAIRMAN A .YOUNUS KUNJU, PALLIMUKKU, VADAKKEVILA.P.O, KOLLAM-10. BY ADVS. M.R.ANISON SMT.V.BHARGAVI (PANANGAD) SMT.P.A.RINUSA ``` ## **`RESPONDENTS/RESPONDENTS:`** ``` 1STATE OF KERALA REP. BY ITS SECRETARY, LOCAL SELF GOVERNMENT DEPARTMENT, GOVT SECRETARIAT, THIRUVANANTHAPURAM- 695001 2CORPORATION OF KOLLAM REPRESENTED BY ITS SECRETARY, CORPORATION OFFICE, KOLLAM-691010 BY ADV SPECIAL GOVERNMENT PLEADER (B/O) ``` R1 BY ADV.HARIKRISHNAN M.S. for ADV.M.C.CHANDRAMOHAN DAS ``` THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 02.03.2022, ALONG WITH WA.335/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 3 ## W.A.No.335& 363 of 2020 JUDGMENT Dated this the 2[nd] day of March 2022 ## _**S.V.Bhatti, J.**_ Fathima Memorial Educational Trust, Pallimukku, Vadakkevila/writ petitioner is the appellant. The State and the Kollam Municipal Corporation are the respondents. The appellant, in the instant Writ Appeal, challenges the judgment dated 15/11/2019. The circumstances necessary for disposing of the appeal are briefly stated thus: 2. The appellant is an Educational Trust running educational institutions in Kollam District. Younus College of Engineering and Technology, Pallimukku, Kollam is one of the institutions run by the Trust. The appellant challenges demand notices as illegal and quash the said demand notices. The appellant challenges Section 235(b) of the Kerala Municipalities Act, 1994 (for short ‘the Act’) as unconstitutional to the extent the said provision of law does not grant exemption to the buildings 4 in occupation of appellant Trust used for imparting education and providing accommodation facility to the students studying in the said colleges. Section 235 (b) of the Act : **Exemption from Property Tax, Service Cess etc.-** The following buildings and lands shall be exempted from property tax as may be levied under S.233 and service cess as may be levied under sub-section (4) of Section 230, namely sub-section (4) of S.230, namely:- (a)……………….xxx…………..xxx (b) buildings exclusively used for educational purposes or allied purposes under the ownership of educational institutions owned by the Government, aided or functioning with the financial assistance of the Government and the hostel buildings wherein the students of the said institutions reside; 3. The appellant's case is that the appellant is entitled to exemption from payment of property tax. The argument both in law and fact is that the appellant is a minority educational trust and established educational institutions for imparting education to the minority students. Since the appellant runs educational institutions for the benefit of minorities, the appellant has the right to establish and run educational institutions that encompass the right to pay property tax. The appellant relies on a few judgments 5 of this Court and the Supreme Court dealing with different constitutional rights enjoyed by an educational institution. To briefly conclude this aspect of the narrative, we observe that the judgments relied on by the appellant are prior to Act 30 of 2009 through which Section 235 is amended by way of substitution. 4. The statutory scheme of Section 235 prior to amendment and post amendment as stated in the following tabular form: **Prior to Amendment Post Amendment Exemption from property tax, Exemption from property tax, service cess etc** .- The following **service cess etc** .- The following buildings and lands shall be buildings and lands shall be exempted from the property tax as exempted from the property tax as may be levied under section 233 may be levied under section 233 and service cess as may be levied and service cess as may be levied under sub-section (4) of section under sub-section (4) of section 230, namely: 230, namely: (a) buildings set apart for public (a) buildings set apart for public worship and actually so used or worship and actually so used or used for incidental purposes, used for incidental purposes, religious study centres; religious study centres; (b) buildings exclusively used for (b) buildings exclusively used for educational purposes or allied educational purposes or allied purposes under the ownership of purposes under the ownership of educational institutions owned by educational institutions owned by the Government, aided or the Government, aided or functioning with the financial functioning with the financial assistance of the Government and assistance of the Government and the hostel buildings wherein the the hostel buildings wherein the 6 |students of the said institutions<br>reside;<br>(c) hospitals providing treatment to<br>patients at free of cost;<br>(d) buildings which are providing<br>shelter to destitutes, or orphans or<br>physically or mentally challenged<br>persons or persons suffering from<br>fatal diseases or animal, using for<br>charitable purposes and admitting<br>all classes of people;<br>(e) libraries, reading rooms and<br>playgrounds open to public;<br>(f) ancient monuments protected<br>under the law relating to the<br>preservation<br>of<br>ancient<br>monuments for the time being in<br>force, or part thereof as are not<br>used as residential houses or as<br>public offices;<br>(g) burial and burning grounds;<br>(h) buildings owned by any Local<br>Self Government Institution and<br>the<br>building<br>attached<br>to<br>the<br>institutions handed over to Local<br>Self Government Institutions by<br>the Government;<br>(i) buildings, if the owner thereof<br>belongs to below poverty line and<br>used as his own dwelling house<br>and having a plinth area of less<br>than thirty square meter,<br>(j) residential buildings constructed<br>and<br>given<br>free<br>of<br>cost<br>by<br>Government or Quasi Government<br>institutions<br>or<br>Local<br>Self<br>Government institutions as part of<br>welfare activities.|students of the said institutions<br>reside;<br>**(ba) buildings exclusively used**<br>**for educational purposes and**<br>**upto**<br>**the**<br>**level**<br>**of**<br>**Higher**<br>**Secondary**<br>**under**<br>**the**<br>**ownership**<br>**of**<br>**educational**<br>**institutions having recognition**<br>**of the Government and hostel**<br>**buildings in which the students**<br>**of such institutions reside.**<br>(c) hospitals providing treatment to<br>patients at free of cost;<br>(d) buildings which are providing<br>shelter to destitutes, or orphans or<br>physically or mentally challenged<br>persons or persons suffering from<br>fatal diseases or animal, using for<br>charitable purposes and admitting<br>all classes of people;<br>(e) libraries, reading rooms and<br>playgrounds open to public;<br>(f) ancient monuments protected<br>under the law relating to the<br>preservation<br>of<br>ancient<br>monuments for the time being in<br>force, or part thereof as are not<br>used as residential houses or as<br>public offices;<br>(g) burial and burning grounds;<br>(h) buildings owned by any Local<br>Self Government Institution and<br>the<br>building<br>attached<br>to<br>the<br>institutions handed over to Local<br>Self Government Institutions by<br>the Government;<br>(i) buildings, if the owner thereof<br>belongs to belowpovertyline and| |---|---| 7 |**Explanation._**<br>The<br>exemption<br>granted under this section shall not<br>extend to buildings for which rent is<br>realised by the owners and to<br>residential<br>houses<br>not<br>being<br>hostels attached to educational<br>institutions<br>and<br>to<br>residential<br>houses attached to libraries.|used as his own dwelling house<br>and having a plinth area of less<br>than thirty square meter,<br>(j) residential buildings constructed<br>and<br>given<br>free<br>of<br>cost<br>by<br>Government or Quasi Government<br>institutions<br>or<br>Local<br>Self<br>Government institutions as part of<br>welfare activities.<br>**Explanation._**<br>The<br>exemption<br>granted under this section shall not<br>extend to buildings for which rent is<br>realised by the owners and to<br>residential<br>houses<br>not<br>being<br>hostels attached to educational<br>institutions<br>and<br>to<br>residential<br>houses attached to libraries.| |---|---| 5. The learned counsel appearing for the appellant argued that restricting the exemption to the institutions viz excluding hostels attached to Self-Financing institution and not granting the same exemption to buildings in which the appellant is running educational institutions per se is discriminatory and the legislation does not comply with the requirement of Article 14 of the Constitution of India. Therefore, according to the appellant, the exemption should have been granted to the appellant as well without any differentiation or classification based on aid received for government educational institutions so on and so forth. The 8 judgment of the single learned judge has not explicitly adverted to the appellant's argument and the judgment reported in _**Sreenarayana Gurukulam College of Engineering, Kolenchery** v_ _**State of Kerala and another**_ (2016 (4) KHC 482) is not applicable and distinguishable both in law and fact. Hence prays for allowing the appeal. 6. Adv.Harikrishnan holding for Mr.V.K.Chandramohan Das invites our attention to Section 233 and the obligation to pay property tax by every individual, institution, department coming within the fold of the Act. Section 235 is providing an exemption from payment of property tax but a few institutions are categorically spelt out in the exemption in the section dealing with the exemption. By a mere reading of the section, it is discernible that there is an object in the classification of educational institutions by the State Legislature. There is no requirement in law that all the educational institutions, including minority educational institutions for the purpose of levying and demanding property tax are to be treated as alike; in other words, the legislature in its wisdom has discerned the distinction 9 between a government college or a college being run with financial aid and a self--financing educational institution as the present. Therefore, there is no discrimination, and the ground of challenge to the amended provision as violative of Article 14 is completely misplaced and there is no infringement of any right much less the rights guaranteed to a minority educational institution. He invites our attention to a few of the conclusions recorded in the judgment under appeal and places reliance on a similar provision in Kerala Panchayat Raj Act, 1994 and the view taken by this Court in _**Sree Narayana Gurukulam College**_ (supra) and submits that there is no ground warranting interference of this Court in the appeal. 7. Equal protection also means the right to equal treatment in similar circumstances. It could be both in the privileges confirmed and the liabilities imposed by the statute. This similarity of circumstances is not an expression for easy acceptance of all heterogeneous circumstances in one basket. In more than one aspect the financial institute run by the appellant cannot be equated with a college run by the 10 government college or any educational institution being run with granting aid assistance received from the government from time to time. These are distinct classes and the exemption in legislative wisdom is limited to homogeneous institutions. Excluding the educational institution of the appellant does not vitiate the classification now adopted by the amended provision. 8. The judgment under appeal and the judgment reported in _**Sree Narayana Gurukulam College**_ (supra) have dealt with the objection in the broad classification made by amendment to the applicable sections in the Municipalities Act and the Panchayat Raj Act. The argument proceeds on the factual ground that the buildings for which the property tax is demanded are accommodating the educational institutions run by the appellant Trust. The appellant enjoys the protection under Article 30 of the Constitution and by levying a property tax, a layer of the right recognised by Article 30 is infringed and the classification from any point of view is arbitrary, illegal and contrary to Article 14 of the Constitution of India. The argument is merely noted and omits to recognize a few basic circumstances. Section 235 of 11 the Act as it stood prior to the amendment provided a broad exemption to the educational institutions. Property tax is one of the major sources of revenue for a local body. The legislature in its wisdom has narrowed the area of the exemption between the government and aided institutions on one hand and on another hand self-financing institutions. The object of classification is again the method of establishment and mode of administration of the self-financial institutions on one hand and government colleges etc. on the other hand. The exemption by its nature in law means usually not chargeable in relation to tax and the person exempted is put beyond the application of law and precluded from being chargeable under the charging provision gives immunity from liability, obligation, penalty, law or authority. The exemption understood in the above context has been limited to two classes or categories of cases. It is available for the argument if even from among the self-financing educational institutions, discrimination is shown, or favouritism is conferred on a few then an argument under Article 14 may be available and a court of law is required to examine the said issue. The 12 argument of the Corporation, particularly, on fact is well founded that the buildings in which the educational institutions are being run are enjoying all the facilities provided for by the local body and a corresponding contributory responsibility is there on the educational institution which is a self-financing institution. We appreciate this argument to the limited extent of availing the facilities and contributing to the development and maintenance of the local body. The sound reasoning both in the judgment under appeal and the view taken in _**Sree Narayana college**_ (supra) are correct and we confirm the same. The appeal fails and is dismissed. Sd/- S.V.BHATTI Judge Sd/- BASANT BALAJI Judge css/