Rajindar Sachar, J.
(1) This petition by the New Delhi Holy Family Hospital Society, New Delhi, has been filed for quashing the order of respondent No. 2, the Deputy ASsessor and Collector, Municipal Corporation of Delhi dated 20th September, 1971. passed under Section 126 of the Delhi Municipal Corporation Act, (hereinafter called the Act) by which be has eboanced the taxable value of the property from 81.600.00 to 2,81,910 00 for the year 1970-71.
(2) The petitioner society Is registered under the Societies Registration Act, 1890. The objects of the society amongst others are :-
(A)to perform works of charity by caring for the sick and disabled without distinction of caste, religion or race : (b) to establish, conduct and maintain all types of Medical Institutions for the care of the sick ; (c) to educate and train medical students. Nurses and midwives and to conduct courses for the same 7 (d) to train pharmacists and all types of medical personnel ; (e) to conduct medical research.
(3) The petitioner society erected and maintains a hospitall kno vn as Holy Family Hosipital within the Municipal Limits of the Delhi Mun cipal Corporation, respondent No 1.
(4) Section 114(l)(d) of the Act provides for the levy of property tax on lands and buildings a general tax of not less than ten and not more than 20% of the ra'eable value of lards and buildings within the urban areas ; Sub Section (4) of Section 115 of the Act lays down that the general tax shall be levied in respect of all lands and 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. Explanationn to sub-section (4) of Section 115 defines 'charitable purpose' to include relief of the poor, education and medical relie . Sub-section (5) of Section 115 provides that lands and buildings or portions thereof shall not be deemed to be exclusively occupied and used for public worship or fora charitable purpose within the meaning of clause (a) of sub lection (4) if any trade or business is carried on in such lands and buildings or portions thereof if in respect of such lands and buildings or portions thereof any rent is derived. Subsection (6) provides that where any portion of any land or building is exempt from the general tax by reason of its being exclusively occupied and used for public worship or for a charitable purppose such portion shall be deemed to be a separate property for the purpose of municipal taxation, The petitioner society derives its income from voluntary con' tribution and does not pay any dividend or bonus to its members nor does it declare any profit. In July, 1957 the erstwhile South Delhi Committee assessed the hospital property at' an annual retea' ble value of Rs81,000.00andfull amount of house tax was realised. The petitioner however later on represented for exemption from the general tax in respect of the hospital building The Municipal Corporation taking into account the portion of the hospital for which service charges were recovered calculated the non-exempted portion at a rateable value of Rs. 21,600.00 and the remaining building at Rs. 59,400.00 per annum was treated as exempted from general tax. Thus from the year 1st April. 1959 onwards the petitioner's property was split into two portion (a) non-exempted Rs. 21.600.00 and (b) exempted Rs. 59,400. In 1970.pititioner society put up a Nurses Hostel building adjoining to the main hospital building. This builds ing is staled to have,been built under a grant from charitable organisation of West Germany. The said hostel building ts used for running a training school for nurses under the Government of lndia scheme for the integration of Public Health with the basic course of Nursing to provide trained Nurses. A charge of only Rs. 10.00 pm. is made from the student nurses towards lodging expenses. The student nurses also reside in part of the accoimmodation in this new hostel. A number of regular nurses are also residing in this very hostel. The common room, library room and offices, class rooms for teaching etc. also form part af the residential block.
(5) A notice und r Secuoii 121 of the Act was given to the petitioner society informing it that it was proposed to enhance the rateaote value from 197u-7l because of the addition of Nurses Hastel building.
(6) The petitioner society made r,eoresontation against enhancement 'to respondent No. 2, but inspile of it the rateable value has been increased to Rs. 1,81,910 00. la the impugned order (Annexure E) no reason is given for the increase. In the counter-affidavit of respondent No 2, it has been explained that the petitioner society indicated that a sum of Rs. 13 lakhs was spent on the residential blocks on the ground floor, 1st floor and 11nd floor which are used for the residence of nurses, student nurses and as such has been finalised ai a rateable value of R, l00910/ P.M. as non-exempted and after adding it to the value already non-exempted (ie-21,600) a total of Rs. l22,510PA. aS nonex.. empted from general tax with effect from 1st April, 1970, has been arrivedt at,the previous rateable value of Rs. 59.000.00 p. & as exempted has been maintained in respect of hospital building only.
(7) The petitioner feeling aggrived against Vie increase in the rateable. value. in the none-exempred has filed this writ petition. The cop ention is that the addition of the nurses hostel is also a charitable purpose and thereforee the 'society is not liable to pay General tax by virtue of Sectian ll5(4)(a) of the Act. It is admitted by the respondents dents that petitioner is a charitable society.
(8) Indeed, it has been held by the Supreme Court in the Manage ment of Sofdarjung Hospital and Kuldip Singh Sehi etc, .that the objects of the Kurji Holy Family Hospital are entirely charitable. It carries on. work of training research and treatment. 118 income is mostly from donations and distribution of surplus as profits ii prohibited. It is however claimed that the portions which arc exclusively occupied and used for charitable purpose are only entitled to be exempted and It is because: this that a partial exemption of the amount of Rs. 59,4( 0.00 has already beea given for the hospital portion. the controversy really ii whether the building i.e. nurses hostel in which training to the student nurses is being given and they are also residing is occupied and used for a charitable purpose so as to earn total exemption from the payment of general tax.
(9) In Royal College of Nursing v. St. Marylebone Borough Council it was held that the Royal College of Nursing which hass as one of its objects to promote the science and art of nursing and the better education and training of nurses and their efficiency in the profession of.nursing.and to promote the advance of nursing as a profession, was charitable and that the college was entitled to relief under Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, as the objects were charitahle
(10) In Royal College of Surgeons of Eagland v. National Provincial BankLtd, the Royal College of Surgeons the object of which was the advancement of science or the advancement of education was.held to be charitable object. ;
(11) Now if the buildiNg was exclusively uied and occupied for giving training to the nurses, on the basis of the authorities cited above, it will have to be held that the building was occupied for charitable purpose as contemolated by Section 115(4)(a) read with he Explanationn. Bat even if a portion of building is exclusively used for a charitable purpose that porion is to be treated as a separate property, and would earn exemption vide 115(6) of the lot, thus that ponition of' the Nurses hastel is being occupied for giving training io nurses would have to be. excluded from payment of general tax.
(12) The position tegarding the use and occupation of this addition namely student hostel seems io be as follows :-
(A)a portion is occupied for giving training to the student nurses (b) another portion is occupied for the residence of student nurses. (c) another portion is occupied by the regular nurses employed in the hospital (d) another portion is occupied by common room including hostel etc office etc.
During the course of the argument it was stated at the bar by the counsel for the petitioner that the grant given to the hospital for the public health scheme was only a part of the expenses which was here, sary far maintaining this instiiu ion and that the society was spending manifold time more amount to run Nurses hostel, and actually was paying stipend from its own resources. Apparently the portion mentioned a' (a) would be entitled to relief frona payment of general tax. Regarding portion at (b) i.e. one occupied as residence by student nurses it is claimed that fee is taken from the student nurses; another that one paid seipend by the hospital. It was however admitted that a small f-e of Rs. 10.00 p.m. is being charged as lodging expenses from them Mr. Khera counsel for the petitioner submitted that this amount was merely.a service charge which was really meant to defray the expenses of maintaining services. Now it cannot be denied that hostel for the residence of students would be essential and integral part of running a training school for nurses. The mere fact that Rs.l0p.m is being carged as service charges from each resident student nurse without more does not make this payment as rent without which the portion so occupied cannot be taken out of the perview of charitable purpose. The exact scope of this payment has to be insvestigated to determine whether this portion would not be eligible for exemption.
(13) Reference may be made to Monie. Municipal Corporation lor the city of Bombay and the Municipal Corporation for the city of Bombay v. The Revd. Robert scoit I.L.R. 1943 Born 281 the hostles erected and maintined by the college were held to be exempt from taxation as they were exclusively occupied for charitable purpose within the meaning of City of Bombay Municipal Act as they were held to lave been erected as part of the general education scheme of the country. The court held that payment of Rs. 23.00 per month extra, from the resident student in the hostels, could not be treate to be received by the university on account of rent as there was no relation ship of the landlord and the tenant between student and the univarsity.
(14) The next question is about the portion occupied by the regular nurses, employed in the hospital. The position, as stated at the bar by M. Khera appears.to that the conditionsofservice of the nurses is that is any of the nurse is not provided with accomodation by the society then she is entitled to be paid the house rent allowance. The nurses who are occupying the portion of the hostel are thereforee of paid any house rent allowance Mr. Bhatia, c unsel for the corporation urged that as the society could have paid house rent allowance lo the nurses it they had not been provided accomodation in the hostel. the portion occupied by these nurses should be treated to be 8 pontion for which rent is being derived. He urged that if this a.cmimodation was not made available to regular nurses, the society would have to pay house rent fo them. By giving them the accommodation, the socity was saving rent and this is equivalent to deriving rent, and thus this portion,cannot be exempted. Mr. Khera however urged that no provisions of the hostel accomodation to nurses is in lieu of the obligation on the society to provide accommodation and it cannot be said that any rent is being derived as there is no tenancy in the occupation of nurses Now Sub section 5 of Section 115 says that portion shall not be deemed to.be exclusively occupied and used for a charitable purpose if in respect of such land and building or portions thereof any rent is derived. It necessarily means that before it can be held that rent is being derived from a portion, the occupant must have an interest of tepancy in the portion, occupied by him. Section 105 of the Transfer of Properly Act says a lease of iminoveible property is a transfer of a right to enjoy such property, made for a certain time, express or implied or in perpetuity, in conaideration of a price paid or promised, or any ether thing of value, to be rendered periodically or on specified occasions to the .transferor by the transferee, who accepts the transfer on such terms. The money, share, service or other thing to be so rendered is called the rent. (Emphasis mine). Whether the relationship between the nurses and the society for portions occupied by them is that of a tenant and a landlord will naturally depend on the terms and conditions on which the hostel is being occupied by (be regular nugular. It may be also relevant to determine as to whether the nurses who are living in hostel arc employed for the portion 'of hospital which is exempted or for the other portion ; or whether proportionate utilisation can be determined. All these matters obviously need investigition before liability can be imposed. That leaves the question regarding the portion occupied for common purpose laboratory hall etc. In this connection it is relevant to note that library was need to be a part of university as it served a useful purpose and would be exempt from payment of general tax vide The University, of Bombay v. The Municipal Commission ner for City of Bombay This is because of portions which serve and form a part of the main chailtable purpose of training classes for nurses would inevitably be occupied for charitable purpose
(15) The position thus appears to be that the additional accormmodation of Nurses Hostel Building .has been built out of the funds received from a charitable organisation. A portion of this building is occupied for giving training to nurses which is obviously for a charitable purpose and should earn exemption from payment of general tax. Even the other portions prima facie seem eligible for earning exemption. Of course no final satisfactory decision can be given regarding those portiors unless matter is investigated further and in depth. It is not clear from the order whether the rateable value has been calculated for the whole building or for any portion. From the notice the rateable value was sought to be increased because of addition of Nurses hostel That might possibly suggest as if no portion has been exempted at all, which would prima focie be difficult to uphold as the portion occupied for 4 2nd 16 Bom 217 - givingt training to nurses has in any case to be exempted.
(16) It is thus manifest that if the order increising rateable value by Rs. 100,910 to the Lon exempted value has been arrived at by taking tither the Value of this portion or by not clearly investigating and deter-mining the exact position regarding the other portions, the impugned order increasing the rateable value would suffer from serious infirmity and would be difficult to sustain it. Unfortuoately no indication is given in the impugned order about it. Even in the counter affidavit also, it is not stated that any portion has been given exemption. It appears that respondent No. 2 has proceeded on the basis that the whole of the building has to be assessed for rateable value lt is manifest that order of respondent No. 2 increasing the rateable value haa been passed without applying its mind to take essential aspecis mentioned above and is thus not in compliance with the relevant statutory prov siors and thereforee suffers from a patent error of law, and is liable to be corrected in these proceedings
(17) Mr Bhatia counsel for the respondent however objects that the petitioner is not entitled to relief in these proceedings because he has alternative remedy by way of appeal available under section 169 which gives a right of an appeal against the levy or assessment of any tax under 'the Act to the Disirict Judge. It is also pointed outthat sub-section 2 of Section 169 further provides that if before the bearing of appeal any question of law arises, the District Judge may draw up a statement of the facts of the case and the question so arising and refer the statement with its opinion on the question for decision to the High Court. It is, thus strongly contended that that writ petition should fail on the ground of an. alternative remedy being available. I cannot agree. No doutt it is truettiat this court will not normally interfere under Article 226 where another adequate alternative is available. But that is a question of discretion and not of jurisdiction. This court, in its discretion, has to sec in each case whether it should decline to exercise its jurisdiction in a particular case on the ground that the alternative remedy is available. It is true that right of appeal is provided u/s 169. But it cannot be overlooked that appeal shall be heard or determined under Section 169. unless the amount if any, in dispute in the appeal has been deposited by the appellant in the office of the Corporation. Thus acondition precedent for right of appeal to be heard is the deposit of the amount in dispute by the petitioner. That such condition is an or.onerous condition , was recognised in 1954 S. C. (?) lam not saying that in everv case the party is entitled to by-pass the alternative remedy of filling an appeal simply on the ground that the amount of tax is to be deposted before an appeal can be beard. It will depend on the facts andcircumstarces of each case. In the prelent case it has been seen that the order of respondent No. 2 does not indicate on what basis the rateable value has been ethanced. As mentioned by me above it was essential to I ftivestigate various matters before the assessing autbortiy could enhance the rateable value. All these facts 'having not been worked out the appellTE court- could not have finally decided the matter aNd would have had to remand the matter back to the assessing authority for examining these details.' Not only that as the question whether Nurses hostel is occupied for a'Charitable purpose, it might have been for.the pettioner to ask the District Judge to refer such a question of law to this Court for decision (?)Editor
(18) Considering further that the amount of tax involved is a substantial one and the assessmeat for a part of the building (i.e. for training of nurses) would be apparently illegal while the assessment regarding the other portions without first holding enquiry and investigating fact arbitrary and unsustainable and the further fact that the petitioners- society is a charitable society it will be a proper exercise of discretion not to'refuse relief to the petitioner more especially when the time for filing appeal has pasted and when the same cannot be heard unless the amount of tax is first deposited by it. Such a course might result in working injustice I would, thereforee, allow the writ petition quash the assessment dared 20th September, 1971 made by respondent No. 2 and remit the matter back to him for making fresh assessment in accordance with the law and on merits, and keeping in view the rbservation in this judgment. As the petitioners society was not , diligent in giving full facts to the assessing authority in the first instance and have thus also contributed to the case being remitted back to the assessing authority, there will be no order as to costs. Order accordingly.