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.)
###### c
_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__
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, includes relief of the poor, education and medical relief. The test of 'charitH 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]
(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] .
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.
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.
A
B
c
D
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. 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 F
petitioner was rejected. In this situation the petitioner moved the
Delhi High Court under Article 226 of the Constitution for appropriate 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
. ·-of clause ( 4) of Section 115 of the Delhi Municipal Corpo
ration Act. Reading this section it is obvious that exemtion 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
to clause ( 4) of Section 115. No doubt the School is impart
G
H
### .
.-.:,
A
B
c
D
E
68 SUPREME COURT REPORTS [1989] Supp. 1 S.C.R.
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 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 portions 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
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 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 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
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 allowed.
A
B
###### c
D
