9911796707
TMI Blog2021 (4) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... enue also. Thus, the holistic approach towards the institution alone would result in neutralizing the provisions of the Act more specifically, regarding property tax. The exemptions are exceptions and to be granted discreetly, if the applicant is capable of establishing that they are providing medical services dominantly to the poor, needy and deserving people of the society. This Court is of the strong opinion that it is for the charitable institution to establish the facts and circumstances. In the present case, the petitioners have provided some data, showing that they are providing medical services to the poor, needy and deserving people. On perusal of the official website of the petitioner/Sundaram Medical Foundation, the same would reveal that Sundaram Medical Foundation was established in 1990 by Dr.S.Rangarajan with the help of M/s.Sundaram Finance Group of Companies as a Community Centred Hospital, following the best tradition of medical service. Dr.Rangarajan's vision was to provide Quality Health Care which is cost-effective and community centred - Based on the inspection, the Corporation Officials formed an opinion that the petitioner/Sundaram Medical Foundat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1990. On 07.01.1991, the petitioner submitted application to the Government of Tamil Nadu, seeking allotment of lands, for the purpose of setting up of hospital offering free / concessional medical services. Another application was also sent on 29.03.1992. On 10.04.1992, the Government of Tamil Nadu issued G.O.Ms.No.460, Revenue and allotted an extent of 2542 Sq.Mtrs of land at Anna Nagar to the petitioner Medical Foundation for the purpose of setting up a hospital. 3. The petitioner had written a letter to the respondents on 14.12.1994, pointing out that it is a Charitable hospital and is to be exempted under Section 101(e) of the 'CCMC' Act. However, on 28.03.2002 and on 02.07.2005, the petitioner received demand notices from the 2nd respondent. On 27.08.2007, the petitioner preferred an appeal in M.T.A.No.21/2006 before the Learned Principal Judge, City Civil Court, challenging the order dated 19.06.2006 in TAT.No.112 of 2006. The Principal District Court quashed the demand and remanded the matter back to the Regional Deputy Commissioner. In proceedings dated 12.08.2008, the respondents passed a non-speaking order dated 12.08.2008, declining to grant exemption from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (e) shall be deemed to exempt from property tax any building or land for which rent is payable by the person or persons using the same for the purposes referred to in the said clauses. Section 101 (e) of the 'CCMC Act' contemplates Charitable hospitals and dispensaries but not including residential quarters attached thereto. 5. Referring the said provisions, the learned counsel for the petitioner reiterated that the petitioner / Sundaram Medical Foundation was constituted by way of a Deed of Declaration of Trust, which is a Public Trust. The contentions in the Trust Deed reveals that it is a charitable hospital and therefore, there is no reason whatsoever to decline exemption from payment of property tax. The Government itself considered the Deed of Declaration of Trust and allotted land for construction of hospital and the petitioner invested huge amount by constructing buildings and running hospital and providing free treatment to poors and charges are collected from the affluent patients for the purpose of maintenance of the hospital and the petitioner Foundation is not running the hospital for profits. The income derived from and out of the hospital is spent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner is entitled for exemption. However, the matter was remanded back on the ground that the respondents should consider the documents and other evidences produced by the writ petitioner. But, the respondent has not considered the observations made by this Court in its letter and spirit and rejected the application once again by assigning flimsy reasons. The learned counsel for the petitioner contented that this Court made strong observations regarding the eligibility for exemption to the writ petitioner and the relevant paragraph relied on by the writ petitioner are extracted hereunder: 19. In the case of Society of Jesus, (supra), the question which arose for consideration was, what is a charitable hospital and dispensary for the purpose of Section 110(e) of the Karnataka Municipal Corporation Act, 1976. After noting that nowhere in the Karnataka Act, Charitable hospital and dispensary has been defined, the Court referred to the dictionary meaning as well as Section 2(15) of the Income Tax Act, which defines charitable purposes to include relief of the poor, education, medical relief and the advance of any object of general public utility. After discussing further on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to point out that in a society like ours, where the country is still a developing country and where large sections of people are poor and not free from hunger and disease, the State alone, out of its revenue, cannot provide free medical aid to all those poor persons who are in need of it. Therefore, presumably, keeping that in view and with a view to encourage charitable attitude among the philanthropists, a provision like Section 110(e) of the Act has been made providing for exemption from payment of property tax in respect of a building and land used as charitable hospital/dispensary. There cannot be any doubt that it is only with a view to facilitate medical aid to the poor and needy and with a view to reduce financial burden of such charitable hospitals and dispensaries, such a provision has been made. The burden of running a charitable hospital and dispensary which is established and continued for the purpose of giving free/subsidised medical aid, can be reduced by various methods, (1) by granting exemption from payment of property tax in respect of the buildings solely used as charitable hospital/dispensary; (2) by raising donations from the rich and affluent; (3) by free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that the entire income derived by charging the patients, as stated above, should be solely utilised by the hospital/dispensary for the benefit of the hospital and for the benefit of the poor and the deserving, needy patients. The hospital is permitted to charge and collect money from the rich and affluent only with a view to make the hospital viable and with a view to get the best and qualitative treatment to the poor and the needy whenever it is required by them. Insofar as outpatients are concerned, it would not be permissible for the hospital to limit the extension of the medical facility to a limited number of poor patients. It has to be for all those who approach the hospital seeking free treatment. However, insofar as in-patients are concerned, it could be subject to the availability of the beds and other facilities in the hospital. The funds generated by the hospital by charging the patients has to be utilised, as noticed by me earlier, for the benefit of other poor and deserving patients. This does not mean that an additional income earned, in a particular year, cannot be carried over for future development and to be spent in a near future i.e., within a year or two of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is cost-effective and community centred. Today SMF is a multi-specialty hospital with state-of-the-art health care facilities providing services to New Born to Nineties under one roof. Vision: *SMF will provide Quality Health Care which is costeffective and Community-centered in an environment which is clean, caring and responsive to the needs of the patient. *SMF will serve as a Role Model of Health Care delivery system in India. Accreditation *Accredited under NABH (National Accreditation Board for Hospitals Health Care providers). * ISMS: First Hospital in India to be certified under the standard ISO/IEC 27001:2013-Information Security Management Systems. *First NABL (National Accreditation Board for Testing and Calibration Laboratories) certified hospital based laboratory services in Biochemistry, Microbiology, Clinical Pathology and Histopathology in Chennai under the...... *ISO 9001:2008 Certified Organisation. 14. Though in the official website of the Sundaram Medical Foundation, it is stated that the Quality Health Care which is cost-effective and community centred has been stated as vision, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reatment to economically weaker sections and not for all the public. Further, the petitioner have not produced any material evidence to prove that the activities of the hospital are completely charitable. Hence, the grant of exemption from payment of property tax, under Section 101 (e) of the 'CCMC Act 1919', not be considered and also rejected. 17. Further, the reasons given by the respondents is that you have not followed the terms and conditions laid down by the Government in the 1st G.O cited, for which you have not produced any valid and strong document for providing free treatment to 30% outpatients and reserving 15% of total beds in the Hospitals for poor families, and giving free treatment to them, ever since its inception. Instead you have produced a list of beneficiaries being treated in the year of 2014-2015, which is not an adequate and sufficient document to prove your claim. 18. The respondents formed an opinion that even the conditions mentioned in G.O.Ms.No.460 dated 10.04.1992 has not been complied with by the petitioner. They are collecting higher charges for providing beds, treatment and other charges from the patients. Thus, the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. 23. The learned counsel for the petitioner argued that Charitable hospital does not mean that the treatment must be provided to all patients at free of cost. It is sufficient if portion of poor patients are treated at free of cost and for the maintenance of hospital, the petitioner is entitled to collect treatment charges from patients, who are capable of paying the treatment charges. In this regard, he relied on the judgment of the Apex Court of India in the cases of Society of Jesus and contended that, if the affluent and rich patients are charged for the services rendered with a view to organise funds required to such a hospital, such a hospital will not lose the characteristic of a charitable hospital/dispensary. 24. This Court is of the considered opinion that the observations made by the Hon'ble Supreme Court of India are relatable to the facts of that case and every case should be considered with reference to the particular facts and circumstances. The observations made cannot be applied directly, so as to defeat the very concept of Charitable hospitals as contemplated under the Statute. Thus, the observations are to be read and applied along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the considered opinion that the Deed of Declaration of Trust itself provides that either free of cost or at concessional rates. It is an admitted fact that few people are treated at free of cost and others are treated by collecting medical charges. Medical charges as well as the tariff for beds are the relevant factors to be considered for the purpose of forming an opinion, whether the petitioner can be termed as Charitable Hospital or not. 30. The General meaning for the word Charity is generosity and helpfulness, especially towards the needy or suffering. An institution engaged in relief of the poor, charitable organization is dedicated to the General Public purpose, more specifically, for the benefit of needy people, who cannot pay for benefits received. The charitable institution does not distribute earnings for the benefit of private individuals. Thus, the character of a Charitable institution must be considered with reference to the facts and circumstances as well as the manner, in which, such institutions are being run by such trust or person. 31. In this regard, it is contended on behalf of the petitioner that a Charitable medical institution need not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36. This Court is of the strong opinion that it is for the charitable institution to establish the facts and circumstances. In the present case, the petitioners have provided some data, showing that they are providing medical services to the poor, needy and deserving people. The data provided is extracted hereunder: 37. The manner, in which, the statistics is provided by the petitioner, shows that they are providing services to the poor, needy and deserving as per the Government order in G.O.Ms.No.460, Revenue dated 10.04.1992 issued under Tamil Nadu Urban Land (Ceiling and Regulation) Act 1978. Under the said Government Order, a prime property in Chennai City, measuring 2452 Sq.Mtrs at Anna Nagar was allotted for setting up of a hospital. The said Government Order stipulates that the percentage of reservation of beds for free treatment blocking to the poor family is reduced from 25% to 15%. 38. The petitioners have stated that they have complied with all the terms and conditions stipulated in the Government Order and therefore, they are entitled for exemption. The learned counsel for the petitioner made further submissions that even the Government has not init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by dominantly providing free medical services to the poor, needy and deserving citizen of this great Nation. It is to be remembered that any institution predominantly providing medical services at free of cost to the poor, needy and deserving people, alone, may be granted with the benefit of exemption. The character of predominant services to be interpreted as if the services provided to poor, needy and deserving are not only provided to such poor, needy and deserving people, and they must have free access to such charitable medical institutions for the purpose of taking treatment. Thus, it is to be construed as poor, needy and deserving patients / citizen of this great Nation, must have free access to such Charitable institution and such institution should not refuse admission in the hospital at any circumstances to the poor. 41. In the absence of any such free access to poor, needy and deserving patients in charitable medical institution, one cannot come to the conclusion that such institutions are doing charity to poor, needy and deserving for the purpose of seeking exemption of property tax under the Statute. Tax being Revenue of the State, strict interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher side. 44. In fact, petitioners are predominantly providing services to rich and affluent. Thus, this Court is inclined to draw factual inference that the petitioner / Medical Foundation is providing free medical services to the poor, needy and deserving people restrictedly and to the limited extent for the purpose of retaining the free land allotted by the Government in G.O.Ms.No.460, Revenue dated 10.04.1992. The value of the land in Anna Nagar Location is running in several crores. Such a valuable land is allotted at free of cost in favour of the petitioner to run the medical institution and under the guise of maintenance of building and other infrastructures, the petitioners are collecting huge charges from the patients and providing least services to the poor and needy. Thus, such factors are to be inspected by the Government for the purpose of ascertaining, whether the Charitable institutions are functioning for the welfare of the poor, needy and deserving people and in the event of any contra facts, all suitable actions are to be initiated. 45. As far as the provisions of the Chennai City Municipal Corporation Act is concerned, it is unambiguous that Chari ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
