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TMI Blog1983 (5) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, pharmacists, etc. For this purpose it has erected a huge complex of buildings. (3) The important point to notice about the Society is that it is a nonprofit making society. It is provided in the Memorandum of Association of the Society that all the income of the Society from properties vesting in it or from wheresoever's derived shall be expended solely on the objects of the Society and for no other purpose, and no portion thereof shall be distributed among its members by way of profits, dividends, bonuses etc. (4) There are two departments of the hospital with which we are immediately concerned in this case. One is called the General O.P.D. The other is called the Private O.P.D. In the General O.P.D. any one can go for medical help and treatment. He has to pay Rs. 3.00 for the first time and Rs. 1.00 for every subsequent visit that he make to the General O.P.D. In the Private O.P.D. things are different. The patient has to pay Rs. 40.00 for every visit. In the Private O.P.D. he has not to jostle with the crowd of hundreds of patients. He can have a prior appointment with the doctor and go at the appointed time and consult him. This is a special facility provided to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buildings in Delhi except - (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. (9) Explanation - (A) Charitable purpose includes relief of the poor, education and medical relief but does not include a purpose which relates exclusively to religious teaching ; (b) lands and buildings vested in the Corporation and not used for intended to be used exclusively for the purposes of the Delhi Electric Supply Undertaking, or the Delhi Water Supply and Sewage Disposal Undertaking, in respect of which the said tax, if levied, would under the provisions of this Act be livable primarily on the Corporation; (c) agricultural lands and buildings (other than dwelling houses). (5) Lands and buildings or portions thereof shall not be deemed to be exclusively occupied and used for public worship or for a charitable purpose within the meaning of clause (a) of Subsection (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each patient is a business and if the Society is engaged in business and uses these eight rooms of its buildings for this purposes then relying on Sub-section (6), he says, these eight rooms are a separate property for purpose of municipal taxation and are not exempt from the general tax merely because other portions of the buildings are being used exclusively for charitable purposes. In my opinion the argument of the counsel for the Corporation is based on a confusion of thought. (13) The Central question in this case is whether the petitioner Society is an organisation established or conducted for profit. The Memorandum of Association of the Society expressly says that it is a non-profit making organisation. No dividend or share of income is payable to its members. Care for the sick and disabled without distinction of caste, religion or race is its main object. It is indeed a laudable object which benefits a wide and diverse cross-section of the community. (14) The Society by its memorandum is required to perform works of charity by caring for the sick and disabled. The main object of the Society is, Therefore, a charitable object. The one thing that distinguishes charitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or buildings or portions thereof or any rent is derived there from then such lands and buildings shall be subject to general tax under Subsection (5). (19) The point of distinction between Sub-section (4) and Sub-section (5) is this. Sub-section (4) is based on the concept of public benefit. There is a desire to do good to others which motivates the action of the Society or the organisation. This is why in the case of deserving organisations the law provides relief from the burden of municipal taxation. It is engaged in an altruistic activity. It is not furthering any private interests of the members because it applies its profits or income in promoting the objects of the Society. It does not pay any dividend or bonus to its members. Sub-section (5) is not based on public benefit. The main objects are not charitable because there is no application of income or profits either for relief of the poor education or medical relief or other charitable purpose. Under Sub-section (5) the lands and buildings are used for purposes of private profit or gain, whether from trade or business or from rental income of the property. (20) Under Sub-section (4) business or trade can be carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such exemption is clear from Sub-section (6). (24) Trade or business can be present in both Sub-sections (4) and (5). But if the profits are income of trade or business is devoted to a charitable purpose and no part thereof is distributed among the members as dividends or bonus then that trade or business is a means to an end. It is charity But if there is a trade or business carried on in a land or building and its profits are not applied to a charitable purpose, Sub-section (6) says that that part of the land or building where a trade or business carried on or from which rent is derived will be subject to tax. (25) The question now is whether the New Delhi Holy Family Hospital Society which has opened a Private O.P.D. in eight rooms qualifies for relief of taxation in respect of this portion of their lands and buildings. This question admits of only one answer. The society fulfills all the criteria laid down in Sub-section (4) of Section 115. It is substantially altruistic and benevolent in its purposes and it is for the public benefit. The purpose of the Society is a charitable purpose. It does not distribute any dividend or bonus to its members. It applies its profits fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutions from the burden of municipal taxes on a rational basis. (29) The Society does not hold any brief for the capitalists or capitalism. It is dedicated to charity. The Society does not exist for the elite or the ''haves . This criticism is unfair. I am reminded of what Derle has said : The capital is there, and so is capitalism. The waning factor is the capitalist . (Berle : The Twentieth Century Capitalist Revolution). (30) SUB-SECTION (4) deals with public charity. Sub. Section (5) is concerned with private gain. Public charity is exempt from municipal taxation but not trade or business which results in private gain. This distinction is brought out in the decision of this court. On Subsection (4) the decision of Sachar J. in New Delhi Holy Family Hospital Society v. Municipal Corporation of Delhi, 1974 Delhi Law Times 39 may usefully be referred to. That was a case where this very Society was charging Rs. 10.00 as lodging expenses from student nurses who were residing in the nurses hostel building. This nurses hostel was built by the Society in 1970. The Corporation subjected it to tax. The learned judge held that the mere fact that Rs. 10.00 per month was be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 169 of the Act this writ petition was not maintainable. This question was raised before Sachar J. In the case of this very Society. At page 45 he rejected this argument by saying that it is a question of discretion and not of jurisdiction. I am in perfect agreement with his view. He decided the case against the Corporation on the footing that Nurses Hostel was promoting a charitable purpose. The Corporation has again assessed these 8 rooms on a view which I find is entirely inconsistent with the decision of Sachar, I think, was right in claiming exemption from tax on their buildings which are exclusively used for charitable purposes, as I have said. (34) The other contention was that the writ petition is signed by the Administrator who is not competent to bring these proceedings in the name of the Society, have not allowed counsel to raise this objection because it has not been taken in the coulter-affidavit. If it had been raised the Society would have shown that the governing body by a resolution had authorised the Administrator to bring these proceedings against the Corporation. As it is not raised so I cannot allow counsel to take a point which will spring a surprise on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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