Skip to content


Dr. G.D. Bendale Vs. the State of Maharashtra - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Application No. 1677 of 1965
Judge
Reported in(1970)72BOMLR47; 1970MhLJ313
AppellantDr. G.D. Bendale
RespondentThe State of Maharashtra
DispositionAppeal allowed
Excerpt:
.....such institution exempted under section 3(2)(a)(iii).;a public charitable trust created for educational purposes and running a residential hostel for students which is used for educational purpose and is not maintained for any private gain, is exempted from levy of electrical duty under section 3(2)(a)(iii) of the bombay electricity duty act, 1958.;section 3(2)(a)(iii) of the act creates a general exemption in favour of charitable institutions where its premises are used for hospitals, nursing homes or dispensaries and for educational purposes of any kind whatsoever.;harrow school governors and murray's contract, in re. [1927] 1 ch. d. 556 glasgow corporation v. johnstone [1965] a.c. 609 and monie v. scott (1918) 20 bom. l.r. 889, referred to. - - the submission is that the..........case of the petitioner trust is that the premises of the hostel (the boarding house) are used for educational purpose and the hostel is not maintained for any private gain. for all these reasons, the claim of the petitioner trust is that as consumer it has been under section 3(2)(ii) of the above act exempted from levy of electricity duty. such exemption was wrongly withdrawn for the first time in 1965.4. on behalf of the respondent, reliance is placed on the- provisions in section 3 and the schedule to the act and it is submitted that the claim made by the petitioner trust is unsustainable.5. section 2(a) provides that ' 'consumer' means any person who is supplied with energy on payment of charges...'. section 3 provides:3. (1) subject to the provisions of sub-section (2) there shall.....
Judgment:

K.K. Desai, J.

1. In this petition under Article 226 of the Constitution the petitioner trust-the seva Educational Union-claims that in connection with a hostel for students that it is running at Jalgaon, the trust being a consumer, is entitled to exemption from levy of electricity duty under the provisions of Section 3(2)(iii) of the Bombay Electricity Duty Act, 1958. The contention on behalf of the State Government is that electricity duty is being recovered lawfully from the trust as the exemption claimed is not justified.

2. The facts relevant to be noticed in connection with the above question are as follows:

The petitioner trust is registered under the Bombay Public Trusts Act, 1950. The aims and objects of the trust are '(1) to promote the educational and cultural advancement of the society in all ways; (2) to conduct 'the Fakira Hari seva Boarding House' at Jalgaon; (3) to establish and conduct educational institutions; and (4) to spread education; ... '. The petitioner trust has been running the boarding house mentioned in Clause (2) above for a considerable number of years. The rules 2, 4, 5 and 6 out of the rules made for the conduct of the above boarding house provide as follows:

2. There shall be a paid Superintendent for the management of the boarding.

4. The Superintendent shall have full authority and control over the students and the working of the boarding.

5. The Superintendent shall from the disciplinary point of view supervise the conduct and the educational and cultural progress of the students.

6. At the commencement of each month the Superintendent shall send a report to the guardian of each of the students in respect of the ward's study and character in the preceding month.... .

3. The case, of the petitioner trust is that the above boarding house has been maintained by the petitioner trust for housing exclusively students from rural areas who in each educational term go to Jalgaon for attending schools, colleges, polytechnic and other institutions for studies and for appearing at examinations held and for obtaining degrees and/or diplomas. In accordance with the rules mentioned above, the Superintendent controls the activities of the inmates-students in the boarding and looks after their educational and social progress and character and maintains discipline. In respect of all these matters, in accordance with rule 6, each month the Superintendent sends a report to the guardian of each of the students in connection with the above matters. The case of the petitioner trust is that the premises of the hostel (the boarding house) are used for educational purpose and the hostel is not maintained for any private gain. For all these reasons, the claim of the petitioner trust is that as consumer it has been under Section 3(2)(ii) of the above Act exempted from levy of electricity duty. Such exemption was wrongly withdrawn for the first time in 1965.

4. On behalf of the respondent, reliance is placed on the- provisions in Section 3 and the Schedule to the Act and it is submitted that the claim made by the petitioner trust is unsustainable.

5. Section 2(a) provides that ' 'consumer' means any person who is supplied with energy on payment of charges...'. Section 3 provides:

3. (1) Subject to the provisions of Sub-section (2) there shall be levied and paid to the State Government on the units of energy consumed...a duty...at the rates specified in the Schedule to this Act.

(2)(a) Electricity duty shall not be leviable on the units of energy consumed,

(i) ...

(ia) ...

(ib) ...

(ii) by a tramway company, save in respect of premises used for residential and office purposes;

(iii) in respect of a hospital, or nursing home or dispensary, or premises used for educational purpose, each of which when not maintained for private gain;

(iv) ...

(v) ....

(vi) in respect of such industrial or agricultural purposes (other than residential or office purposes)...

6. The relevant part of the Schedule to the Act provides:

Part A.

In respect of-

(i) premises used for residential purpose;

(ii) a Hospital, or nursing home, or dispensary, or premises used for educational purpose, each of which when maintained for private gain; and

(iii) any other premises or for consumption of energy for any purpose not falling under any other part of this Schedule-

(a) For the first ... 6 P, per unit.30 units ... ...(b) ... ... ...(c) ... ... ...PART B.

In respect of premises used for business, trade, commercial or professional purposes

... ... ...10 P. per unit.PART C.

PART H.

In respect of consumption for agricultural purposes ...4 P. ... .

7. The submission on behalf of the Government is that on a true_ construction the phrase 'premises used for educational purpose' contained in item (iii) in Sub-section 2(o) of Section 3 means the premises where education is actually imparted. This item, (in) does not provide for exemption of the premises which the petitioner trust is using- for residential purposes of the inmates of the boarding house from the levy of electricity duty. The contention is that what is relevant is to ascertain the purpose for which the premises are immediately and directly used. This could only be done by finding out what in fact is being done on the premises. The argument is that the sole purpose and/or exclusive purpose for which the boarding house was maintained was residence of the students-inmates. That is so on the facts stated by the petitioner trust itself. The hostel is not used for any educational purpose whatsoever. In developing the above contention reliance is placed on the observations in the minority judgment of Lord Guest in the case of Glasgow Corporation v. Johnstone [1965] A. C. 609, in a passage at page 629. In that connection, the argument is that under item (Hi) general exemption in respect of premises owned by an educational trust has not been enacted.

8. In reply, the petitioner trust relies upon the fact that levy is made against consumers and under item (in) the main question which arises is the use to which the consumer i.e. the petitioner trust puts the hostel premises. In that connection, reliance is placed on the exemption granted to 'a hospital and nursing home' and it is pointed out that in so far as in-patients go, these institutions are residential institutions. It is further pointed out that so far as these institutions may maintain residential quarters for doctors, nursing staff and other staff, these institutions provide residential accommodation. The fact that premises may be used for residence does not disentitle under item (iii) of Sub-section (2) of Section 3 the hospitals or nursing homes or educational charities from the benefit of the exemption enacted.. In that connection, reliance is placed on Part A of the Schedule and it is contended that though under Part A of the Schedule rate is fixed separately for premises used for residential purpose, in item (ii) the rate is separately provided for a hospital, a nursing home and premises used for educational purpose when they are maintained for private gain. Reliance is also placed on Part B of the Schedule where premises used for business, trade, commercial or professional purposes are mentioned. It is pointed out that in numerous cases these (such) premises may be used for residential purposes also or may be used for residential purposes in parts. The submission is that the attempt of the Government to treat the hostel as premises exclusively used for residential purposes must fail, because residential purpose is involved in the other institutions mentioned in item (iii) in Sub-section (2) of g. 3 as well as in the Schedule such as a hospital, a nursing home, a dispensary and premises used for business, trade and commerce. The submission is that the exemption enacted by item (iii) in Sub-section (2) of Section 3 is for charities conducting hospitals, nursing homes and educational institutions including a residential hostel for students. In that connection, reliance is placed on the observations in the case of Harrow School Governors And Murray's Contract In re. [1927] 1 Ch. D. 556 and also on the observations of Kajiji, J., in the case of Monie v. Scott : AIR1918Bom88 . Reference is also made to the discussion at pages 31, 32 and 395 of 'Tudor on Charities', 6th Edition.

9. In connection with these rival contentions, it first requires to be noticed that there are numerous instances where premises are in fact used for residential purposes and at the same time for educational and/or hospital and/or nursing home purposes. The fact that a part of the premises are used for residential purposes exclusively or the fact that the premises are used for parts of the time for residential purposes and for parts of the other time for educational purposes or hospital or nursing home purposes will not in numerous cases make exemption from the levy of electricity duty under Section 3(2)(iii) inapplicable. In Bombay we have cases of Sydenham College and Elphinstone College where the Principals of the Colleges reside in the flats maintained by the Colleges in the College premises themselves. We have similarly several hospitals in Bombay including St. George's Hospital and G. T. Hospital where residential quarters are maintained for the nursing staff, certain members of the staff belonging to Class IV and possibly for residence of doctors who have to attend on the in-patients continuously. As regards the premises used for educational purposes also, we have instances of public schools where parts of the premises of the institutions are exclusively used for residential purpose's of the inmate-students as well as for supervisory staff and the other parts are exclusively used for imparting education. It is not difficult to imagine that some of such institutions have no separate accommodation for imparting education and for residence of the inmate-students. The students reside in the premises where they are taught. It is clear from the language in item (fti) of Sub-section (2)(a) of Section 3 that the exemption enacted therein is in favour of charitable institutions only. That is made clear by the phrase 'when not maintained for private gain.'' The reference to hospital and nursing home and the phrase 'educational purpose' indicate that the premises where charitable institutions conduct hospitals, nursing homes, dispensaries and educational institutions, are exempted from the levy of electricity duty. In that connection the fact that the premises of a hospital, a nursing home and an educational institution are used partly or wholly for residential purposes is not relevant at all. Apparently it is not intended that because residential accommodation is provided in a hospital for nursing staff or doctors or other menial staff, the premises of hospital should not be exempt from the electricity duty. Same must be the intent of the Legislature in connection with the charities maintaining nursing homes and educational institutions when they provide residential accommodation to the sick and/or the students and/or the staff. In our view, the submission made for the Government that since the petitioner trust maintains the hostel mentioned above directly for providing residence to the students the premises are not used for educational purposes is incorrect. On the contrary, the scheme of management of the hostel and the rules made in that connection go to show that the hostel maintained by the petitioner trust must be considered to be an institution maintained for educational purposes only. It is difficult to hold that the hostel premises are not directly and immediately used for educational purposes. It is difficult to accept the submission that the phrase 'used for educational purpose' must only mean 'used for imparting education.' There can be no justification for such a narrow construction of the exemption enacted by item (w) of Sub-section (2)(a) of Section 3. In that connection, in passing, one may refer to item (vi) where in exempting premises used for agricultural purposes the exemption is withdrawn from the premises used for residential and office purposes.

10. In the case of Harrow School Governors And Murray's Contract, the Harrow Public School had purchased a property and was maintaining it as a sanatorium for the students of the school. In connection with the purchase and/or assurance made in its favour, exemption was claimed on the basis of Section 4, Sub-sections (6) and (9) of the Mortmain and Charitable Uses Act on the ground that the purchase was made for educational purpose. The majority of the Law Lords accepted the contention and held that in the case of a public school provision of a sanatorium was an educational purpose. Similarly, in the case of Glasgow Corporation v. Johnstme, in considering the question as to whether a house forming part of the church edifice that was given for residential purposes to a member of the staff of the church was exempt from rates as being premises used wholly or mainly for charitable purposes,' the majority of the Law Lords held that the house was occupied by the charity since the church officer's residence was directed to the more efficient performance of his duties. Now, in his dissenting judgment Lord Justice Guest made certain observations on which, reliance is placed by Mr. Joshi. These are instructive observations, but it is unnecessary to quote them here. In the case of Monie v. Scott, exemption from general tax was claimed under Section 143(7)(a) of the City of Bombay Municipal Act in respect, inter alia, of the hostel maintained by the Wilson College for residence of its students. The exemption under Section 143(1)(a) was available 'only for building and lands or portions thereof exclusively occupied for... charitable purpose''. The exemption was withdrawn even for the buildings maintained for charitable purposes when in respect of these buildings rent was derived and it was not applied exclusively to charitable purposes. In connection with the question of exemption claimed in respect of the hostel maintained by the Wilson College, Kajiji, J., observed (p. 849) :.I must, therefore, hold that hostels are erected and maintained by the College as part of the general educational scheme of the country and the object of the hostel is the advancement of learning and it, therefore, falls within the general objects which are charitable......and therefore the portions occupied by the resident students are exempt from taxation as they are exclusively occupied for charitable purposes...

It is not necessary for us to rely upon the observations in any of these authorities in connection with the findings which we have made above. In our view, general exemption has been created in item (in) of Sub-section (2) of Section S of the Act in favour of charitable institutions where the premises are used for hospitals, nursing homes or dispensaries and for educational purposes of any kind whatsoever.

11. In the result, the petitioner trust is entitled to succeed in this petition. The rule is made absolute with costs. The amount that the petitioner trust might have paid under protest is liable to be refunded and is directed to be refunded.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //