Raja Ratnam Institution Vs. Municipal Corporation of Delhi & Ors  INSC
266 (6 September 1989)
L.M. (J) Sharma, L.M. (J) Thommen, T.K. (J) Saikia, K.N. (J)
1990 AIR 816 1989 SCR Supl. (1) 66 1990 SCC Supl. 97 JT 1989 (3) 574 1989 SCALE
INFO : RF 1992 SC1456 (40)
Municipal Corporation Act, 1957: Section 115(4)-'Charitable purpose '--What
is--Relief of the poor, education or medical relief--Some fee charged from
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 running the school for a
charitable purpose and therefore fell within the ambit of clause (4) of section
115 of the Delhi Municipal Corporation Act, 1957. The claim was rejected by 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 for exemption the Society had to
give education and medical relief; and that fees were charged from students.
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 offer medical relief.
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 Court's judgment
was, therefore, correct.
the appeal and remitting the case to the High Court for fresh decision on the
facts relied upon by the parties, this Court,
(1) A "charitable purpose" as defined in the Act, includes relief of
the poor, education and medical relief.
test of 'charitable purpose' is satisfied by the proof of any of the three
conditions, 67 namely, relief of the poor, education, or medical relief.
(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
APPELLATE JURISDICTION: Civil Appeal No. 43 of 1982.
the Judgment and Order dated 7.12.1979 of the Delhi High Court in Writ Petition
No. 1754 of 1979.
Writ Petition (Civil) No. 265 of 1980.
Article 32 of the Constitution).
for the Appellant.
for the Respondents.
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.
case of the petitioner is that it is a non-profit making 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 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 limine by the following order:
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 Corporation Act. Reading this section it is obvious that exemption
for levy for general tax could be granted if the Society which is running the
school was a Society for charitable purposes.
purpose is defined in the explanation to clause (4) of Section 115. No doubt
the School is impart68 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.
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
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:
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.
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 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 society may be supported either wholly or
in part by voluntary contributions. Besides, the explanation is in terms
inclusive and not exhaustive. The impugned judgment must, therefore, be held to
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 Court's judgment is, therefore, correct. He
urged that in view of the 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 which is an old one may
be disposed of expeditiously.
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.