Shah, J.
1. In all these matters a common question of law as to the correct interpretation of sub-section (2) of section 4 of the Bombay City (Inami and Special Tenures) Abolition and Maharashtra Land Revenue Code (Amendment) Act, 1969 (hereinafter referred to as 'the said Act') arises for consideration. Before turning to the controversy raised in these matters the facts which in so far as they are material and are not disputed need to be stated.
2. In Appeal No. 24 of 1980 appellants (original petitioners in Misc. petition No. 1566 0f 1975) are the Trustees of the Behramji nowroji gamadiaParsi Hunnar Shala Trust which is a public trust constituted by a Trust Deed dated 26th September, 1933, made by Bai Navajibai Nowroji Gamadia. The trust is duly registered under the Bombay Public Trust Act, 1960. The objects of the trusts include (a) the foundation, maintained and support of a Technological school or schools and institutes, Hunnar Shala, workshops and industrial and vocational chasses for the training of Parsi Zoroastrian young men and women in the arts and crafts of the factory workshop and as artisans in skilled designs and work and in all manner of hindi crafts wood stone and other materials; (b) the grant of Scholerships, subscriptions, donations and other forms of supports to schools and Parsi Zoroastrian young men and woman conducive to the aforesaid objects; (c) the relief of grant of employment to adult as also Elderly Paris Zoroastrian males and females; (d) to provide construction of buildings and housing facilities to Parsi Zoroastrian males and females and letting out of the buildings or otherwise allowing the use and occupations of the buildings or parts thereof to Parsi Zoroastrian males and females on low and/ or reasonable rents or fees or compensation; (to give options and financial assistance to needle Paris Zoroastrian males and or/ Bombay
3. In Misc. Petition No. 1262 of 1976 the petitioners are the Trustees of Nesserwanji Maneckjee petit Charity Fund created under two Trust Deeds dated March 8,1894, and March 27, 1913. The objects of the said trust are education, medical relief. relief, relief against poverty, maintenance of religious and charitable institutions and so on. Other lands bearing C.S. Nos. 50 and 125 of parel Sewri Division situate at Lalbaug, Bombay . The said lands have been leased to the National Electrical Industries Limited and eithers under a registered lease dated April 14, 1950, and all the income derived from the said lands at all material times has been appropriated for the objects for which the said trust is established.
4. In Misc. Petition No.1343 of 1976 a public trust Known as 'the Destitute Earners Charity Fund' was constituted under a Declaration of Trust dated August 27, 1849. The trust is established for the purposes of relieving the poor and destituted Eranee Parsis in Bombay and maintaining for them a free Dharmashalla for their free residence. The trust is duly registered as a public trust under the Bombay Public Trusts Act, 1960. The said trust owns various lands. A part of the trust land has been leased to different parties such as B.E.S.T. Undertaking for an electric sub-station, Burmah Shell Oil Storage & Distributing Company of India Ltd., Sanghee Motors (Bombay) private Ltd., and Bhakhtavar Construction privatee Ltd. The income derived from the said lands at all material times has been appropriated and is being appropriated for the objects of the trust.
5. In Misc. Petition No. 1161 of 1976 the petitioners are the Trustees of a public trust known as H.D. Saher Agency Trust, constituted under a Declaration of Trust dated November 17, 1858. The said trust is established for the purpose of maintenance of Saher Agency (Parsi Fire Temple) and is registered as a Public Trusteee under the Bombay Public Trust Act. The trust owns lands bearing City Survey Nos. 756, 757, 1/757 and 2/757 of Malabar and cumbelle Hill Division. The Saher Agency is situate on the land bearing C.S.. No,757. The remaining lands were leased out by the Trustees under different Indentures of lease dated June 28, 1901, April 9, 1921 and December 14, 1921, each for a period of 99 years. The income derived from these lands at all material times has been and is being appropriated for the objects for which the trust has been established.
6. In appeal No.83 of 1980 (Misc. Petition Trustees of Tapidas and Tulsidas Vrajdas Charitable Trust which was founded by an Indenture dated January 16, 1884. The objects of the aforesaid trust are the maintenance of the Vithalnathji Temple at Surat and other general Charitable and Educational objects. The income of the trust from various properties, shares, securities, wadi, hall etc. is utilised not only for the maintenance of the said temple, but also for educational purposes such as donations to schools and educational institutions, scholar ships, grant of fees and books to deserving students etc. The Trust is duly registered under the Bombay Public Trust Act. One of the properties settled by the said trust bearing Survey No. 715 of Mazagon Division had been leased out by an Indenture of Lease dated October 16, 1879, for a term of 95 years. By an Indenture of Conveyance dated june 15,1901, the Trustees of the trust had also become the Lessors of a piece of land at Malabar Hill. The Trustees leased out the said land to a third party. However, by an Indenture date January 24,1973, the Trustees sold their reversionary interest as Lessors in the said lease with the result that from and after January 24, 1973, the petitioners ceased to have any interest in the property. The dispute is now confined to the land bearing Survey No. 715 only. The entire rent and income received from the said property has always been and are appropriated for the aforesaid objects of the trust.
7. In Appeal No. 138 of 1980 (Misc. Petition No. 1272 of 1975) the petitioner is a trust known as Bombay Zoroastrian Jashan Committee. The trust is registered under the Bombay Public Trust Act. Amongst various objects of the trust interestingly one of the objects is to educate Parsi public opinion in favour of 'harmless vegetarian diet'. The other objects are to promote devotion amongst the members of the Parsi Community whether males, females or children towards their exalted Zoroastrian religion and its moral code and to promote and cherish national feelings and for ancient culture. The trust is the owner of a piece and parcel of land bearing Survey No. 1/145 of the Lower Parel Survey Division admeasuring 5016.75 sq.meters situated at Fergusson Road, Bombay. The said land had been leased out by a Deed of Lease dated April 4, 1918, for a period of 999 years from 1st May 1918 at an yearly rent of Rs. 210/-. The present lessees are M/s. Goodlass Nerolac Paints Limited who were assigned the said lease by a Deed of Assignment dated April 13, 1934. All the income arising from the said land by way of lease is appropriated and applied entirely for the achievement of the aims and objects of the trust.
8. In Writ Petition No. 693 of 1981 the petitioners are the Trustees of Bhai Manekbai Charity Trust which is registered as a public trust under the provisions of the Bombay Public Trust Act, 1950. The said trust was formed by a declaration of Trust dated August 31, 1940, by one Morarji Virji Gocaldas and three others who were the Trustees of a Trust created by a Will of one Ranchhoddas Premji and who were in possession of certain sums of monies and securities belonging to Manekbai, the widow of the said Ranchhoddas, settled for the charitable purposes the aggregate sum of Rs.2 lakhs and odd as also certain shares and securities. Under clause 2(b) of the declaration it is provided that the Trustees shall spend a sum of Rs. 1,50,000/- or such portion thereof as the Trustees think fit for the purchase of one or more immovable property or properties or in the purchase of land of the freehold or the leasehold tenure and erection of buildings thereon in the City and Island of Bombay or in the Bombay Suburban Districts. It is further provided that the Trustees shall allow the building or buildings so purchased or erected (except in the discretion of the Trustees the ground floor thereof) to be used as a sanitorium for poor and needy Bhatia Hindu Inhabitants residing in Bombay or in the Bombay Suburban Districts either free of rent or on payment of such nominal or other fees. The Trustees could let out the ground floor of the said building to such person or persons on rent. After providing for the use of other parts of the Trust Fund, the said declaration provided that the said balance of the trust funds was to be credited to an account to be opened in the name of 'Bai Manekbai Charity Account' and to use the income thereon for various objects such as (a) for giving monetary help to poor and needy Bhatia residents in the Province of Bombay or (b) for giving in times of famine, flood, earth-quake, cyclone, typhoon, hurricane, lightening and the like food, clothing and monetary or other help to deserving persons anywhere in India without reference to case or creed or for the supply of grass, fodder, hay and water for the use of animals and birds (c) for giving monetary and other help to poor and needy Bhatia students (d) in and towards any other charitable object for the benefit of the Bhatia community. In accordance with the terms contained in Clause (2) of the Declaration, the then Trustees purchased immovable property consisting of land and a building with a ground floor and four upper floors with additional rooms on the 5th floor bearing Survey No. 901 of Bhuleshwar Division situated at Old Post Office Lane, Kalbadevi, Bombay. As the building was not in a sound condition and required heavy repairs the Trustees applied to the City Civil Court for sanctioning necessary expenditure to carry out extensive repairs to the building. The City Civil Court by order dated 30th January 1958 rejected the Trustees' Application. Ultimately, in the proceedings under the Bombay Municipal Corporation Act the building was demolished by about February 1964. After the demolition of the said building the Trustees made an application in Suit No.1085 of 1965 before the City Civil Court setting out the facts relating to the premises and seeking permission to (a) purchase and /or construct a building on a suitable site in the suburbs of Bombay for use a Sanatorium for housing poor and needy Bhatias on the terms contained in Clause (2) of the Declaration and (b) to put an office construction on the said C.S.No.901 and to let out the same. The Charity Commissioner was a party to this proceeding. By order dated July 28, 1965, the Court granted the said prayers. In accordance with the said order the Trustees erected a commercial building on the said plot bearing C.S.No. 901 in or about 1968. The building consisted of two godowns and seven other premises. All the premises have been let out by the Trustees to various parties. It will be observed that though under clause (2) of the Declaration only the ground floor of the building could have been let out, there was a modification by the order of the Court which allowed the Trustees to put up a commercial building on C.S.No.901 and the same has been let out. It is not disputed that the entire rental income excluding the expenses is used towards the objects of the trust. As pointed out above, as far as this property is concerned, the objects of the trust got modified by reason of the order passed by the court and the income is being used for the other objects as mentioned in the trust deed.
9. In Writ Petition No. 1244 of 1980 the petitioners are Trustees of a public charitable trust known as 'The Sir Vithaldas Damodar Thackersey Charitable Trust'. The trust owns properties bearing S.Nos. 874 and 1/874 in Bhuleshwar Division and S.Nos. 194 and 1/194 in Fort Division, Bombay, which were acquired and fully tenanted in 1950-51 and 1962. The Indenture of the trust property should be accumulated and then utilised for the objects of the trust. It is not in dispute that the rental income of the said properties is all along been used for the objects of the trust.
10. In all the above matters it is common ground that the land is Inami and Special Tenure land to which the provision of the said Act applied. The lands belong to Public Trusts which are duly registered under the provisions of the Bombay Public Trust Act. Either the land itself or the structure thereon is let out by the Trust and the rental income received by the Trust is utilised towards the objects of the trust. Each of the trusts made an application for a certificate of eligibility for a concession in the matter of payment of land revenue under sub-section (2) of section 4 in the prescribed form. The ground for rejection of these applications is that the land is not physically used by the Trust for its objects and further that by the reason of creation of lease the land ceased to be part of such trust which requirement must be fulfilled for the applicability of sub-section (2) of section 4.
11. In Misc. Petition No. 843 of 1975 and its companion petition being Misc. Petition No. 1566 of 1975, Pendse J. took the view that the expression 'used for the object of the Trust' in Section 4(2) was clear and unambiguous and required that the Trust must physically use the properties for the objects of the Trust in order to qualify for the exemption under the said Section. In his view, since the provision was in the nature of an exception and the Act was a taxing statute, the said wording used by the legislature had to be strictly construed and cannot cover a case where merely income of the property was utilised by the Trust for its objects. He also held that the phrase 'used for the objects of the Trust' was so clear and unambiguous to the meaning and it was not necessary nor permissible to take the aid of the Rules made under the Act for its interpretation. The Writ Petition No. 1244 of 1980 had come up for hearing before Bharucha J. He, however, disagreed with the view taken by Pendse J. and felt that in view of the difference of opinion, it was desirable that the matter may be heard by a Division Bench. Accordingly, the learned Chief Justice directed the said petition and the other petitions referred to above be heard by a Division Bench. It is in these circumstances that the various Writ Petitions mentioned above have been placed before us along with the appeals for hearing and disposal.
12. The Bombay City (Inami and Special Tenures) Abolition and Maharashtra Land Revenue Code (Amendment ) Act, 1969, came into force on 1st August 1971. By this Act, the legislature abolished Inami tenures and certain special tenures of the City of Bombay subjecting them to the payment of revenue under the Maharashtra Land Revenue Code (Amendment Act, 1965). The Act was enacted after the question of abolition of Special Tenures was referred to an Expert Committee and the Expert Committee made a report suggesting abolition. As far as the Inami and Tenure lands belonging to the public trusts are concerned, the Committee inter alia recommended continuance of the existing concession in regard to the said lands, so long as the same continued to be the properties of the public trusts. The Committee also recommended continuance of this concession even in respect of lands used for a remunerative purpose because the profit realised from it ultimately benefits the trust and its denial would have an adverse effect on the financial position of the trust and consequently on the achievement of its object (under the heading 'Public Trusts and the Proposed Legislation' of the report).
13. Section 4(1) of the Act inter alia provides that notwithstanding anything contained in any usage or custom or in any settlement, grant, sanad, certificate, deed or other instrument, or in any decree or order of a count, or any law for the time being in force, and with effect from the appointed day, the Inami tenure and the special tenure shall be abolished. The 'appointed day' has been defined to mean the day on which the Act came into force. Section 4(1)(e) of the Act provides that all Inami lands and special tenure lands shall be liable to the payment of land revenue to the State Government. Sub-section (2) of Section 4 of the Act which deals with the property belonging to the Public Trusts runs as under:-
'Where immediately before the appointed day, and Inami Land or Special Tenure Land formed part of the property of a public trust within the meaning of the Bombay Public Trust Act,1960 (Bombay Act XXXIV of 1950), then such Inami Land, or as the case may be, Special Tenure Land, so long as it continue to be part of such trust and used for the objects of such trust; shall be liable to the State Government for the payment of land revenue equal to the amount of cess, rent or assessment which is payable in respect thereof immediately before the appointed day to the superior holder or as the case may be, to the State Government under the terms of the tenure, or shall be held free from payment of land revenue, if no such cess, rent or assessment is payable in respect thereof immediately before the appointed day.'
14. In exercise of the Rule making power conferred under Section 19 of the said Act, the Government of Maharashtra has framed rules called 'The Bombay City (Inami and Special Tenures) Abolition Rules, 1972'. Rule 14 prescribes the procedure whereby a Public Trust can obtain a certificate for the purposes of Section 4(2). It is inter alia provided that where any Inami or Special Tenure Land (being the property of a Public Trust), is eligible for the concession in the matter of payment of land revenue under sub-section (2) of Section 4, the Trustees of such land shall make an application to the Collector on making an enquiry as he deems fit, shall issue a certificate in Form No. VIII, if he comes to the conclusion that the Trust satisfies the requirement of sub-section (2) of section 4. The prescribed Form No.VIII, if he comes to the conclusion that the Trust satisfies the requirement of sub-section (2) of section 4. The prescribed Form No. VIII shows that it is required to be stated by the Trustees in their application that all the income derived from the land is appropriated and will be appropriated for the objects for which the trust is established. The certificate of exemption has to be issued by the Collector in Form No. VIII. The said prescribed form of certificate also shows that the certificate is issued on the Collector being satisfied that the land continued to be part of the Trust and all the income from the lands in respect of which exemption is granted is appropriated for the objects of the Trust for which it is established.
15. Now, the provisions of Section 4(2) show that in order to be eligible for the concession in the matter of payment of land revenue, it must be established that (a) immediately before the appointed day the land must have formed part of the property of a public trust within the meaning of the Bombay Public Trusts Act, 1950, and (b) that the land so long as it continues to be the part of such Trust is used for the objects of such Trusts.
16. It is not disputed that the first condition as to the land being part of the property of the Public Trust within the meaning of the Bombay Public Trusts Act, 1950 , is satisfied. It is obvious that merely by reasons of creation of lease, the land cannot be said to have ceased to be the part of Public Trust. The main dispute is about the second requirement viz. whether the land can be said to be used for the objects of the Trusts if it is not physically used by the Trustees for the objects of the Trust, but is put to economic use by utilising all the income received for the objects of the Trusts.
17. Section 4(2) excludes Public Trusts of the kind mentioned therein from the general applicability of the other provisions of the Act. As a result thereof, the provisions confer a benefit on Trusts which fulfill the requirements of Section 4(2). By enacting this provision the legislature has granted a relief to such Trusts from the liability of taxation which they would otherwise have attracted, but for the provisions of Section 4(2). The intention in making the provisions clearly appears to be to afford relief to such Trusts from the rigour to payment of revenue. In Bank of India v. Commr. of IT Bombay City II : [1969]72ITR157(Bom) a Division Bench of this Court has held that when the question is of granting relief to the subject in the matter of taxation, there is no room for the application of the rule of strict construction, but a liberal construction should be placed in favour of the subject on the relevant statutory provision. In this connection a reference may be made to a passage in Maxwell on The Interpretation of Statutes, 12th Edition at page 93, which runs thus:
'The fact that a section is clearly designed to afford relief may incline the court to construe it more benevolently than it might a less obviously remedial enactment.'
18. Though, the Abolition Act in the instant case is a taxing statute a benevolent and liberal construction is required to be placed on the provisions of Section 4(2), having regard to the intention of the legislature to grant relief to the Trusts from the applicability of the other provisions of the Act. In our view,a liberal and benevolent construction is called for while considering the provisions of Section 4(2). With respect, we are unable to agree with the view taken by the learned Single Judge that being an exception carved out of the general rule, Section 4(2) must be given a strict and narrower meaning.
19. While considering Section 4(2) regard must be had to the well settled principles construing the statutory provisions. The relevant principles are (1) where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise, (2) where, by the use of clear and unequivocal language capable of only one meaning, anything is enacted by the legislature, it must be enforeced, however, harsh or absurd or contrary to commonsense the result may be. The interpretation of a statute is not to be collected from any notions which may be entertained by the court as to what is just and expedient : words are not to be construed, contrary to their meaning, as embracing or excluding cases merely because no good reason appears why they should not be embraced or excluded.
20. However, it is equally well settled that the statutory language is not read in isolation, but in its context and the words of a statute, when there is a doubt about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject, or in the occasion on which they are used, and the subject to be attained. The question is whether the word 'used' occuring in the expression 'used for the objects of the Trust' in Section 4(2) is capable of only one meaning viz. the physical user and not the economic use of the land by letting it out.
21. The word 'used' is capable of different meanings depending on the context (which?) is well illustrated in 'Words and Phrases' in Vol.43A, Permanent Edition, West Publishing Co. Various meanings of the word 'used' have been illustrated. Some of these meanings given are as under:
The word 'use' means benefit ; profit; a trust of real estate. The word 'use' means behalf, advantage, benefit or profit. Word 'use' is frequently interpreted to mean benefit or advantage when justified by language of statute. Generally, the word 'use' of a thing does not mean the thing itself but that the user is to enjoy, hold, occupy, or have in some manner the benefit thereof. As a general rule, the 'use' of a thing does not mean the thing itself, but means that the user is to enjoy, hold, occupy, or have in some manner the benefit thereof. If the thing to be used is in the form or shape of real estate, the use thereof is its occupancy or cultivation etc., or the rent which can be obtained for its use. Physical 'use' of land is a thing apart from income as respects exemption from taxation of property used for educational, literary scientific, religious or charitable purposes. Under statute providing that real estate of charitable organization, to qualify for exemption, must be owned, occupied and 'used' for the purposes for which it was established.
22. Similarly, in Corpus Juris Secundum, the various meanings of the word 'use' depending on the context in which it is used have been mentioned. Some of these meanings are described as under:
As a general rule, the 'use' of a thing does not mean the thing itself, but means that the user is to enjoy, hold, occupy, or have in some manner the benefit thereof, and in this sense 'use' is the right to enjoy, hold, or occupy, and have the fruits. Thus, if the thing to be used is in the form or shape of real estate, the use thereof is its occupancy or cultivation etc., or the rent which can be obtained for its use.
As a verb the word 'use' has several meanings and while it has been characterised as a very indefinite term, it has been said to have a definite, fixed and well understood meaning and a legal significance. It is, an active, transitive verb, and it may be employed in a passive form, and it must be construed with reference to the context in which it appears. However, in more comprehensive sense, the word 'use' may imply employment to the extent of a complete appropriation, expenditure, or consumption of the thing employed, meaning a permanent use. The verb 'to use' is variously defined as meaning to employ, to employ for any purpose, to employ for the attainment of some purposes or end; to avail one's self of; to convert to one's service, to put to one's use or benefit; to employ for the accomplishment ofa purpose; to derive service from; to use so as to derive service therefrom; to put into service or make use of; to put ot a purpose; to turn to account.
23. Reliance was placed on behalf of the appellants on the decisions of the Judicial Committee of the Privy Council in Newcastle City Council v. Royal Newcastle Hospital, 1959 AC 248, and of the Chancery Court in Black down Properties Ltd., v. Ministry of Housing and Local Government and another, 1967(1) Chancery Division, 115. In Newcastle City Council case the question that arose was as to the construction of Section 132 of the Local Government Act, 1919, of New South Wales which provided: (1) All land in a Municipality.....shall be rateable except.......(d) land which belongs to any public hospital..........and is used or occupied by the hospital ........for the purposes thereof;
'The respondent , a public hospital for the treatment of tuberculosis, owned 291 acres of unfenced land in its virgin state adjoining other land in the City of Newcastle owned by and on which the hospital stood. The 291 acres, of which the hospital made no physical use - it was vacant land - intersected by steep gullies and heavily timbered had been acquired for the purposes of the hospital, namely, to keep the atmosphere clear and unpolluted; to prevent building on the land; to provide quiet and serene surroundings for the patients; and to give room to expand the activities of the hospital. On a claim by the appellant local authority to recover rates on the 291 acres, it was held that an owner can use land by keeping it in its virgin state for his own special purposes, and the 291 acres, from which the hospital intentionally derived the above specified advantages, were 'used' for the purposes of the hospital and accordingly, exempt from the payment of rates under the aforesaid provisions.'
In Black down Properties Ltd. the question that arose for consideration was as to the meaning of the expression 'used for the drainage' in the Interpretation Section 343 of the Public Health Act, 1936.
'It may be said that the part of the sewer with which I am concerned is not now used for anything, and so not used for the drainage of buildings and yards appurtenant to the buildings and not to be included in the description of a sewer. But it seems to me, that the phrase 'used for the drainage of buildings and yards appurtenant of buildings' is susceptible of more than one meaning. The word 'used' may mean 'being used' or 'in use', which I think is perhaps the more obvious meaning; or it may connote the actual user but the purpose or function which the thing spoken of serves, and it will I think take its colour by reference to the phrase in which it is used.'
24. The above decisions would indicate that the word 'used' has been given a wider meaning and not the restricted meaning of 'physical user' while considering the phrase 'used by the hospital' or 'used for the drainage' in the relevant Acts, having regard to the context in which the word is used signifying the intention of the legislature.
25. In Commr. of IT v.Smt. Sen Sodra Devi : [1957]32ITR615(SC) , the Supreme Court was required to consider the meaning of the words 'any individual' and 'such individual' occuring in Sections 16(3) and 16(3)(a) of the Income-tax Act, 1922. The court observed in para-14 of the judgment thus:
'It is clear that unless there is any such ambiguity it would not be open to the Court to depart from the normal rule of construction which is that the intention of the Legislature should be primarily gathered from the words which are used. It is only when the words are ambiguous that they would stand to be examined and construed in the light of surrounding circumstances and constitutional principle and practice....... The Supreme Court pointed out that in the latter event the following observations of Lord Lindley M.R., in Thomson v. Lord Clanmorris, 1900 I Ch. 718 would be apposite:
'In construing any statutory enactment, regard must be had not only to the words used, but to the history of the Act and the reasons which led to its being passed. You must look at the mischief which had to be cured as well as at the cure provided.'
26. Turning to the phraseology 'used' in section 4(2), the question is whether the language employed by the legislature viz. 'used for the objects of the Trust' is clear or ambiguous. Does it convey the only meaning of physical user of the land or the meaning is not so clear or unambiguous? In our view, the expression 'used for the objects of the Trust' is not so clear as to convey the only meaning that the land must be physically used for the objects of the Trusts as the word 'used' is capable of different meanings depending on the context of the subject matter in which it is used. The object of the provisions appears to be to confer a benefit on the public trusts by excluding them from the operation of the Act. The section does not afford any clear indication that the legislature intended to use it in a narrower sense of physical user and excludes the economic user. There are no clear words in the section indicating that the land must be physically used for the objects of the Trust nor do we find the use of the expression such as 'used and also occupied for the objects of the trust'. In the absence of the intention being clearly expressed by use of plain language of the section, it would be permissible indeed it is the duty of the court to construe the words in the light of the surrounding circumstances such as the object behind making the provision, the historical back-ground which led the legislature to exempt the public trusts, the mischief sought to be remedied and so on. Similarly, it would be permissible to take the aid of the rules framed under the Act in an endeavour to find the true intention of the legislature and construe the section accordingly. As indicated above, the word 'used' has no fixed meaning and has to be construed in the light of the surrounding circumstances from which one has to deduce the real intention of the legislature as to whether the expression 'used for the objects of the trust' in section 4(2) should be given a restricted or narrower meaning or a wider meaning so as to include economic user by letting out the trust property and utilising the income so received for the objects of the trust.
27. Now, turning to the provisions of the Act, the preamble discloses that the enactment preceded the preparation of bills and publications thereof, Representatitons, comments and criticisms were received from various persons, bodies and associations and thereafter it was decided that the proposals in the said bills, representations, comments and criticisms received should be considered by an expert committee consisting of officials and non-officials. The preamble inter alia recites -
'And whereas, the Expert Committee appointed, decided by a majority that there was no justification for the continuance of the Inami and Special Tenures in the city, but has strongly recommended that to cushion the effect of the impact of such abolition and to redress hardship that would arise in consequence of the imposition immediately on these lands of land revenue at the present market value of lands, it is necessary to impose a rate of assessment at a lower rate to levy assessment on a graduated scale and to specify the principles of such assessment in the Act itself, and not leave it to the discretion of the Collector subject only to the orders of the State Government;
And whereas, for reasons, industrial, economic and otherwise, it is reasonable and proper to accept the main recommendations of the Committee, and to declare the aforesaid tenures to be abolished;
And whereas, if as recommended by the Expert Committee the principles of assessment in regard to the said lands are to be specified in the proposed legislation, it is considered necessary that the principles of assessment in regard to other lands in the City should in like manner be specified in Chapter XIV of the Maharashtra Land Revenue Code, 1966 (Mah. XLI of 1966), itself.'
28. The preamble thus shows that the legislature gave considerable importance to the recommendations made by the expert committee. The proposal of the Expert Committee called 'Report of the Committee Appointed by Government for assessing the probable effects of Legislation relating to Inams and Special Tenures In Bombay City' shows that the committee has devoted a separate Chapter dealing with Public Trusts and the proposed legislation. The relevant recommendation with which we are concerned is found in the report which runs thus:
'The Committee is, therefore, of the view that it is absolutely essential to enlarge the scope of para(a) of sub-clause (2) of clause (3) of the Bill and to permit continuance of the existing concession in regard to all Inami and Tenure lands, so long as they continue to be the property of Public Trusts. The Committee recommends continuance of this concession even in respect of land used for a remunerative purpose because the profit realised from it ultimately benefits the trust and its denial would have an adverse effect on the financial position of the trust and consequently on the achievement of its object.'
This recommendation has to be read in the light of the fact that the Inami and Special Tenures were to be abolished and taxed in accordance with the provisions of the Act. It is obvious that the recommendations relating to the Public Trusts have been made with a view to prevent the adverse financial impact on the Public Trusts as a result of the abolition of the tenure. The Chapter relating to Public Trusts shows that the Committee considered the impact of the legislation on Public Trusts in all its aspects and suggested remedial measures as indicated in the above quoted para of the report. The Committee specifically recommended the continuation of concession even in respect of land used for a remunerative purpose because the profit realised from it ultimately benefits the trust and further that its denial would have an adverse effect on the financial position of the trust and consequently on the achievement of the object of the trust. It would be permissible to look into the report of the Expert Committee in view of the ambiguity arising out of the use of the expression 'used for the objects of the trust' which is capable of different meanings having regard to the context in which it is used. In Commr. of IT v. Vadilal Lallubhai : [1972]86ITR2(SC) , the reasons which pursuaded the select committee to recommend inclusion of section 44(F) were looked into as the section was considered as ambiguous. Similarly, the report of the Joint Select Committee was referred to and relied upon for ascertaining the historical background of framing of a provision in the statute in S.P. Watel v. State of U.P. : [1973]3SCR783 .
29. On behalf of the appellants reliance was also placed on the forms prescribed in the Rules framed under the Act. Rule 14 which provides for the procedure for obtaining the certificate for purposes of sub-section (2) of section 4, requires the Trustees of the land to make an application to the Collector in Form No. VII. The Rule also provides that on receipt of the application, the Collector shall make such enquiries as he deems fit and if he comes to the conclusion that the trust satisfies the requirement of sub-section (2) of section 4, he shall issue a certificate in Form VIII, Form VII, inter alia, requires Trustees to make the following statement in the application for a certificate for exemption.
'The trust is established for the purpose of ....... and holds land(s) specified in the Scheduled hereto, and all the income derived from the said land(s) is appropriated and will be appropriated hereafter for objects for which the trust is established.'
Certificate of exemption which has to be issued in Form No.VIII is required, inter alia , to state:
'And whereas, the Collector of Bombay is satisfied that the lands continue to be part of such trust, and all the income from the said lands is appropriated for the objects of the Trust for which it is established.'
30. Now, it is further to be noticed that by sub-section (1) of section 19, it is provided that the State Government may, subject to the condition of previous publication, make rules for the purposes of carrying out the provisions of this Act and such rules shall, when finally made, be published in the Official Gazette. Sub-section (2) of Section 19 provides that every rule made under this section shall be laid, as soon as may be, after it is made, before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions and if, before the expiry of the sessions in which it is so laid or the session immediately following both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall, from the date of publication of a notification in the Official Gazette, of such decision, have effect only in such modified form or be of no effect, as the case may be. It is not disputed that this procedure has been followed and the rules have been approved by the legislature.
31. The provisions of Section 19 indicate that the legislature has not merely left it out to the Executive to frame the Rules, but has preserved unto itself powers to modify the Rules which are required to be laid before the Houses within the prescribed period. It is significant that the legislature did not think it fit to modify the Forms VII and VIII which indicate that even economic user of the land entitles the trust for the exemption provided the income received is utilised for the fulfilment of the objects of the Trust for which it is established. It would be legitimate to infer that if the intention of the legislature was to exempt only lands which are physically used for the objects of the trust and to exclude those which are not so used, the legislature would have modified the said forms, not only by deleting the above quoted portions, but on the contrary indicating explicitly physical user as a condition for the exemption.
32. Since the wording of the statutory provision viz. Section 4(2) is ambiguous, it would be permissible to take into consideration the Rules framed under the Act as the legitimate aid to construction of the statutory provisions as contemporanea exposito, especially having regard to the fact that under Section 19 not only that the Rules made by the Government have to be published in the Official Gazette, but have to be laid before each House of the State Legislature within the prescribed period and further that the Rules can be modified by the Legislature and only such modified Rules have a binding force. The Supreme Court in the case of Tata Engineering & Locomotive Co. Ltd., v. Gram Panchayat, Pimpri Waghere : [1977]1SCR306 , while construing the provisions of Section 89 of the Bombay Village Panchayats Act considered the Rules framed under the Act as the legitimate aid to construction of the statutory provisions. The question that arose before the Supreme Court about the meaning of the expression 'House' as used in Section 89 of the Bombay Village Panchayat Act. While construing the said provisions, the Supreme Court observed:
'The 1952 resolution of the Gram Panchayat in the present case is to be understood in the background of the provisions contained in Section 89 of the Act and the rules framed under Section 108 of the Act. The Rules were placed before the legislature for approval. The rules framed in 1934 used the words 'lands and buildings' instead of the words 'lands and houses'. The rules are a legitimate aid to construction of the statute as contemporanea Exposito .
33. It would, therefore, be permissible to look into the relevant contents of the two Forms VII and VIII in the Rules as an aid for construing the expression 'used for the objects of the trust' in Section 4(2) of the Act. Undoubtedly if the language of section is clear and unambiguous the Rule framed under the enactment cannot control the meaning of such a provision. Such a Rule being contrary to the statutory provisions will be ultra vires and cannot be given effect. Such, however, is not the case here. The wording of section is ambiguous. The word 'used' is capable of different meanings and would also include the remunerative user of land by letting out the same and utilising the rent by the Trustees gained therefrom for the purpose of the trust. It is well settled that the Rules and Section have to be read in harmony with each other, and though in the normal course the Rule must take the colour from the section, in view of the ambiguity in the wording of section in contrast with the clear wording in the two forms which form part of the Rules framed under the Act, the wording of the forms VII and VIII which are unambiguous will have an important bearing on the construction of Section 4(2).
34. Considerable reliance was placed by Mr. Chogle on behalf of the respondents on the decision of a learned Single Judge of the Madras High Court in Suryanarayanamurti v. Municipal Council, Coconada, AIR 1941 Mad 877, and also on the decision of a learned Single Judge of Andhra Pradesh High Court in Tenali Municipal Council v. Shri Kanyaka P.V.V.V. (1977) 2 Andh WR 415: 1978 TaxLR 46. As rightly observed by Pendse J., the above decisions relate to construction of certain sections of Municipal lands and the observations made therein can be of no assistance while interpreting the scope and ambit of section 4(2) of the Act. In the Madras case the section that fell for consideration is Section 83 of the Madras District Municipalities Act (5 of 1920). The Section says:
'The following buildings and lands shall be exempt from the property tax : (a) places set apart for public worship and either actually so used or used for no other purposes,choultries, buildings used for educational purposes and libraries and play grounds which are open to the public and from which no income is derived.'
On a construction of this section the court observed -
'Now, to allow the plaintiff to lease out the house, collect the full rent and still give him exemption from liability to property tax is to permit him to enjoy a privilege which strikes me as entirely unwarranted and even senseless. To my mine, it is quite clear that this could not have been the intention of the Legislature.......... The word 'used' necessarily connotes the further idea that the user was by some human agency. Who else could be the human agency unless it be the owner of the property or the person primarily liable for the tax. I am prepared to read the word 'used' in the sense 'used by the person who is primarily liable for the tax' or in other words, the owner. The meaning suggested by the petitioner's advocate would lead to a palpable absurdity and there is nothing in the section which compels me to adopt.
35. In the Andhra Pradesh case 1978 TaxLR 46, the Section 88(1)(c) of the Andhra Pradesh Municipalities Act (VI of 1965) came up for consideration of the court. Section 88(1) quoted in the judgment runs thus:
'The following buildings and lands shall be exempt from the property tax:
(a) and (b) .................
(c) Building used for educational purposes including hostels, public buildings , and places used for the charitable purpose of sheltering the destitute or animals, and libraries and playgrounds which are open to the public:
Provided that nothing in clauses (a),(b) and (c) 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 clause.'
36. It may be noted that as far as Section 83 of the Madras Act is concerned, it specifically provides that exemption from property tax can be claimed only in cases of properties from which no income is derived. Same is the case with Section 88(1) of Andhra Pradesh Act. The proviso to Section clearly shows that no exemption from property tax in respect of a building or land for which rent is payable can be claimed. The interpretation of the sections in both the cases turns on the construction of the provisions in the two Acts and these decisions cannot be of assistance in construing the provisions with which we are concerned.
37. What emerges from the above discussion may be summed up thus:
(I) The word 'used' has different shades of meaning and having regard to the context in which it is used may include not only physical user of the property, but also its economic user by letting out the same.
(ii) The expression 'used for the objects of the trusts' is not clear and ambiguous and, therefore, will have to be read and understood in the context of the object of the legislature in making the provisions and in the light of the surrounding circumstances.
(iii) The report and the recommendations of the Expert Committee together with the Forms VII and VIII prescribed under the Rules indicate that the intention is to extend benefit to the public trusts even in the cases where the property is let out and not necessarily used physically.
(iv) Section 4(2) carves out an exception in respect of public trusts so as to confer benefits on them. As the section is designed to afford relief to the trusts in the matter of taxation, the provisions ordinarily should be construed more benevolently and a liberal construction should be placed in favour of the trusts. The principle that a fiscal statute should be construed strictly does not rule out the application of reasonable construction so as to give effect to the intention. In the instant case, there is no reason why a narrow construction should be put on the provisions of Section 4(2) so as to confine its applicability only to properties physically used by the trusts.
38. If regard be had to the above, it must be held that the expression 'used for the objects of the trust' in Section 4(2) is intended to embrace in its operation even cases of economic user of the property by letting out the same and utilising the income so received therefrom towards the objects of the trust. It is well-known that there are many trusts where the property is not intended to be physically used, for instance, a trust the object of which is to give Scholarships to the students out of the income of the trust property. If the legislature intended to extend the benefit only to the properties of trusts which are physically used by the trust, the language would have been more specific. In the view that we are taking on the interpretation of Section 4(2) it is not disputed that all the conditions laid down in Section 4(2) have been satisfied by the trust and, therefore, the Trustees are entitled to claim exemption certificates under Section 4(2) in respect of the lands in question.
39. In the result, Appeals Nos. 24 of 1980, 83 of 1980 and 138 of 1980 are allowed and the orders passed by the learned single Judge are set aside. Similarly, Misc.Petition No. 1262 of 1976, Misc. Petition No. 1343 of 1976, Misc. Petition No. 1161 of 1976, Writ Petition No. 693 of 1981 and Writ Petition No. 1244 of 1980 are also allowed. In all the above-mentioned matters, the Collector is directed to issue exemption certificates under Section 4(2) of the Act in respect of the lands in question. Rule made absolute accordingly in all the Misc. Petitions and the Writ Petitions. In the circumstances of the case, there shall be no order as to costs. Ordered accordingly.