S.N.R. Sons Charitable Trust Vs. the Commissioner, Coimbatore City Municipal Corporation - Court Judgment

SooperKanoon Citationsooperkanoon.com/812432
SubjectCivil
CourtChennai High Court
Decided OnAug-25-1992
Reported in(1993)2MLJ154
AppellantS.N.R. Sons Charitable Trust
RespondentThe Commissioner, Coimbatore City Municipal Corporation
Cases ReferredState of Punjab v. British India Corporation Ltd.
Excerpt:
- ratnam, j.1. this writ appeal at the instance of s.n.r. sons charitable trust, coimbatore, has -been preferred against the dismissal of w.p. no. 9701 of 1983, praying for the issue of a writ of certiorari or other appropriate writ calling for the records of the respondent relating to the notice of demand in assessment no. 60511, dated 30.9.1983 in ref. no. 71240/82/a.7 and quash the said notice of demand relating to sri ramakrishna hospital, coimbatore, run by the appellant trust. in the affidavit filed by the appellant in support of the writ petition, it was stated that after the formation of the trust on 9.2.1970 and in accordance with the terms of the deed of trust, the appellant has been running sri ramakrishna hospital, sri ramakrishna children's school, etc., and that the hospital was started in 1974. it was also stated that prior to the coming into force of coimbatore city municipal corporation act (hereinafter referred to as 'the act'), the appellant sought exemption from payment of property tax from the then coimbatore municipality and the appellant, by proceedings dated 20.9 1977, was exempted from payment of property tax under section 83(1)(e) of the tamil nadu district municipalities act, 1920 with effect from 1 .4.1977, excluding the office canteen doctors' residential quarters and nurses' quarters, in respect of which a separate assessment for property tax was made. this according to the appellant, had continued till 30.9,1980, when a special notice dated 31.3.1981 was issued to the appellant proposing to revise the earlier assessment with effect from the half year commencing from 1.10.1980 by revising the annual value and on representations by the appellant, the appellant was granted exemption from payment of property tax under section 123(e) of the act for the period from 1.10.1980 to 31.3.1982, by an order passed on 8.8.1981. the appellant also referred to the grant of exemption under section 80(g) of the income tax act, 1961, as well as exemption from payment of urban land tax and the certificate of the collector of coimbatore to the effect that the hospital run by the appellant was doing charitable and relief work and 40% of the out-patient cases were treated completely free of charges and even in-patients whose income was less than rs. 300 were given free accommodation, bed and linen, medical and nursing care including investigations, medicines, operations and diet, to establish that the hospital run by the appellant was a charitable one which justified an exemption from payment of property tax. on 25.2.1982, according to the appellant, it applied for a renewal of the exemption from payment of properly tax from 1.4.1982, but no reply was received. instead, a notice was served on the appellant demanding property tax for the half year commencing from 1.4.1982 and this led to the appellant making further representations on 13.8.1982 and 30.8.82 praying for the renewal of the exemption granted upto 31.3.1982. thereupon, the respondent, by a communication dated 30.9.1983, not only refused to grant exemption, but demanded payment of arrears of property tax for three half years commencing from 1.4.1982 and called upon the appellant to pay the same within seven days from the date of receipt of that notice. thereafter, the appellant approached this court under article 226 of the constitution of india, praying for the relief set out earlier.2. in the counter filed by the respondent, it was stated that during the first half-year 1975-76, three assessments were made in respect of the hospital building, the first two covering the hospital buildings and the third comprising of the doctors' quarters, nurses' quarters, canteen and office room and that the appellant had paid the tax upto 1977. referring to the claim for exemption made by the appellant by letter dated 26.7.1977, the respondent stated that objections were raised by the audit department on the ground that the hospital was not entitled to the benefit of such exemption, as charges were paid by the patients for the use and occupation of the rooms and that would disentitle them to the benefit of exemption. pursuant to that according to the respondent, on the orders of the commissioner dated 10.10.1980, the hospital, was assessed to property tax on the basis of the annual rental value with effect from 1.10.1980, by the issue of a special notice. when the notice of demand was served on the appellant, it was brought to the notice of the respondent that the appellant had presented a revision petition before the commissioner on 7.4.1981 and after the coimbatore municipality became a municipal corporation from 1.5.1981, the commissioner inspected the property on 6.8.1981 and after perusing the relevant records produced by the appellant, exemption from payment of property tax had been granted for the period from 1.10.1980 to 31.3.1982 and that no exemption was granted for the subsequent period. relying on the proviso to section 123 of the act, the respondent maintained that the appellant was not entitled to the exemption, as it had collected rents from persons who used to occupy the hospital rooms and charges had also been collected from out-patients and, therefore, the appellant cannot be permitted to take advantage of section 123(e) of the act. an objection that the appellant had an effective alternative remedy was also put forward.3. the learned judge, who heard the writ petition, took the view that the use of the word 'rent' in the proviso should be regarded as having been used in a comprehensive or in a very wide and general sense to include collection of any charges from the person or persons using the property, by those who run the hospital, and, therefore, the benefit of exemption claimed by the appellant under section 123(e) of the act cannot be availed of by the appellant. in the result, the learned judge dismissed the writ petition, the correctness of which is questioned in this appeal.4. learned counsel for the appellant, referring to the contents of the bills issued to the patients, who had visited the hospital for treatment, contended that the charges paid by the patients were in the nature of hospital stoppages for services rendered and for bed, linen, nursing and para-medical services and charges for electricity, while the patients remained in the hospital and such payments can, by no means, be regarded as 'rent' as contemplated in the proviso to section 123(3) of the act as to disentitle the appellant from claiming the benefit of exemption. it was also submitted that the use of the word 'rent' contemplated letting out and the relationship of landlord and tenant being brought into existence and the occupation of a bed by a patient was only permissive and did not confer any exclusive possession or enjoyment and the word 'rent' cannot be given a comprehensive or wide meaning as to include any payment, irrespective of the character of the payment and also ignoring the circumstances leading to such payment. reference in this connection was also made to the decision of the supreme court in state of punjab v. british india corporation ltd. : [1964]2scr114 and new delhi holy family hospital society v. delhi municipality a.i.r. 1984 del. 84.. on the other hand, learned counsel for the respondent submitted that though it may be that the appellant had received amounts from the patients, who had come to the hospital, either as bed and linen charges, nursing and para-medical services, charges for tests, etc., the payments were really for the use of the premises and regarded as consideration for such use, the payments were only 'rent' as contemplated in the proviso and therefore, the exemption was rightly refused.5. before proceeding to consider the aforesaid contentions, it has to be stated that there is no dispute now before us that the hospital run by the appellant is a charitable hospital and that the only ground on which the benefit of exemption is now denied to the appellant is that rent is paid by the person or persons using the hospital, though the hospital had the benefit of such exemption till 31.3.1982. in order to ascertain the character of the payments made by the persons using the hospital, it becomes necessary to scrutinise the bills issued, which have been placed by the appellant before us. it is seen from the bills produced that they are all itemised bills. in the bill dated 21.9.1984 relating to master k.p. manoj, the total charges have been arrived at rs. 670.75 and that is made up of clinical lab testing charges rs. 20 medicines rs. 101.20, injections and dressings rs. 89.70, operation charges rs. 375 and other charges rs. 64.85. similarly, it is seen from the bills dated 5.5.1983,19.2.1985 and 24.2.1985 relating to mr. veluswamy, mr. natarajan and ms. lakshmi that the total amount of the bill is comprised of several different items of charges, like bed charges, medicines, x-ray charges, clinical lab testing charges, operation charges and other charges. the other charges referred to are for the junior and senior doctors visiting the patients twice a day as could be gathered from the details for other charges provided by the appellant. from the other bills relating to mr. shanmugasundaram and miss. vasanthi also it is seen that the charges have been shown itemised as above. from the manner in which the charges have been collected under the aforesaid different heads and paid, it is difficult to hold that such charges had been paid by way of rent by the patients visiting the hospital for purposes of treatment. apart from x-ray charges, charges for clinical lab testing, medicine, injection and dressings, operation charges and other charges, which are really in the nature of charges paid for rendering of service, the collection of bed charges are clearly referable to the provision of bed with blanket, linen, maintenance of beds and changing the linen, maintenance of room, attendance by nurse, charges for electricity and water and other para-medical services. the amounts paid by the patients cannot, in our view, be equated or treated as 'rent' but represent charges paid for all the services rendered under the different heads mentioned above. we may in this connection usefully make a reference to volume 27 of halsbury's laws of england, fourth edition, paragraph 212, where it has been stated that as rent can only be reserved on a demise of corporeal hereditary tenements the following payments, even though recoverable by virtue of the contract, are not rent; payments on account of service charges, which is not reserved as a rent. we also find it difficult to construe the charges paid by a patient for use and occupation of a room in the hospital, while under treatment or even the charges paid for rendering services, as 'rent' and merely on the basis of occupation of a room by a patient and payment of charges therefor and also for other services, the relationship of landlord and tenant cannot be stated to have been brought into existence. thus, on a scrutiny of the bill's placed before us as well as the different heads under which the charges had been collected, we are of the view that the payment of hospital charges or stoppages cannot, on the facts and circumstances of this case, be regarded as payment of 'rent' by the patients.6. a reference to some of the provisions of the act would be necessary to find out whether a payment of the kind aforesaid was at all contemplated as 'rent' found in the proviso to section 123(3) of the act/the word 'rent' has not been defined in the act and that is clearly indicative that the intention of the legislature was that the question should be decided on consideration of facts of each case, when a controversy over it arose. necessarily, therefore, from the provisions of the act, the meaning of the word 'rent' has to be gathered. section 117 of the act, occurring in chapter v of the act, relating to taxation, refers to the levy of property tax by the council. section 118 of the act provides for a resolution of the council determining to levy the tax as well as the rate and the date from which such tax shall be levied. with particular reference to property tax, under section 121(1) of the act, the council by resolution is enabled to determine the levy of property tax on all buildings, except those exempted by or under the act or any other law. section 121 (2) of the act, after referring to the levy of property tax at a percentage of the annual value of buildings, as may be fixed by the council, further provides that the aggregate of the percentage shall not be less than fifteen and a half percent or greater than thirty-five percent of its annual value. the commissioner is empowered to determine the annual value of any building for purposes of assessing the property tax under section 121(3) of the act. section 122(2) of the act, dealing with the method of assessing the property tax, provides that the annual value of lands and buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to let from month to month or from year to year less certain deductions, which are not relevant for the present case. section 123 catalogues the exemptions from payment of property tax available in respect of buildings and lands. section 123(3) of the act and the proviso are important section 123(e) of the act exempts from property tax charitable hospitals and dispensaries, but not including residential quarters attached thereto. though as a charitable hospital, the building may be entitled to the benefit of exemption, the availability of such exemption, is further qualified by the proviso to the following effect:provided that nothing contained in clauses (a), (c) and (e) shall be deemed to exempt from property tax any building or land for which rent is payable by the person or persons using the same for the purposes referred to in the said clauses.on a consideration of the aforesaid provisions, it is clearly seen that property tax is leviable on annual value and the annual value in turn is based on gross annual rent, on the basis of letting from month to month or year to year. the exemption is thus made available with reference to the levy of property tax on the basis of annual value determined on gross annual rent either from month to month or from year to year. in other words, the entire scheme for the levy of property tax is based on rent, which is gross annual rent, based either on a monthly tenancy or a yearly tenancy. the 'rent' contemplated for purposes of ascertaining the annual value and also for levying the property tax cannot, in our view, be different for purposes of denial of exemption as per section 123(e) read with the proviso. a consideration of the scope of exemption from payment of property tax, with reference to buildings in the other clauses, would also indicate that in certain cases, the building or the property cannot at all be let out for rent and that perhaps is the reason why they have hot been included in the proviso excepting cases falling under clauses (a), (b) and (c), for instance, an ancient monument falling under clause (b) cannot normally be let out and, therefore the benefit of exemption has been given with the qualification that it is not used as residential quarters or public office. this would mean that though no ancient monument can normally be let out either as residential quarters or for public office, such letting cannot be totally ruled out and if they are so let out for use as residential quarters or public office, then the benefit of exemption may not be available. aburial ground as found in clause (g) cannot be normally let out for rent either monthly or even yearly. likewise, clause (i) relating to bed of a river or canal, cannot be ordinarily thought of as property, which can be let out for rent. the buildings belonging to the central government are normally used for its own purposes and are not let out. in cases where the property is such that it cannot be let out at all as for instance, ancient monument, when not used as residential quarters or public office, burial and burning grounds; bed of a river or a canal, the central government buildings, falling under clauses (d), (f), (g), (i) and 0), exemption appears to be total. however, with reference to the buildings felling under clauses (a), (c) and (e) there is a possibility of the place being made available for use by others on payment of rent for such an event, the benefit of exemption may not be available with reference to a place of public worship falling under clause (a) there may be a possibility of the place being made available for use by others on payment of some amounts for such use. likewise a choultry and a hospital can also be let out to others on rent and if that is clone, then, the exemption is not available. it is thus seen that the properly tax leviable based on annual value is relatable to the gross annual rent, either from month to month or from year to year and the periodicity of payment either from month to month or from year to year, indicates clearly that the word 'rent' could not have been used in a wider sense, but only in a strict and narrower sense of payment by a tenant to a landlord for the demise of the property. in this case, the amounts paid by the patients, who use the' hospital as well as the range of services provided by it, cannot be regarded as 'rent' paid by them in the narrower sense in which it is intended under the provisions referred to earlier. though learned counsel for the appellant relied upon the decision reported in new delhi holy family hospital society v. delhi municipality : air1984delhi84 , we find that it does not assist the appellant in any manner. reference, however, in this connection may be made to the decision of the supreme court reported in slate of punjab v. british india corporation ltd. : [1964]2scr114 , strongly relied upon by learned counsel for the appellant. amongst others, the supreme court had occasion to consider the meaning of the word 'rent' in clause (ii) of rule 18(4) of punjab urban immovable property tax rules, 1941 for purposes of availing the benefit of exemption. at pages 123 and 124, the supreme court observed as follows:.in its wider sense rent means any payment made for the use of land or buildings and thus includes the payment by a licensee in respect of the use and occupation of any land or building. in its narrower sense it means payment made by tenant to landlord for property demised to him... in seeking an answer to this question it is legitimate to examine the use of the word 'rent' in the act for which these rules were made. at the time the rules were first made in 1941 the act used the word 'rent' only in two sections. first in section 5 where in providing how the annual value of land or building shall be ascertained the legislature said that it shall be ascertained by estimating the gross annual rent at which such land or building might reasonably be expected to let from year to year. it is absolutely clear that here the word 'rent' is used in its strict and narrower sense of payment by tenant to landlord for demised property...in the absence of anything to indicate the contrary, it would be reasonable to think that the rule-making authority would not depart from the meaning in which it had reason to believe that the legislature had used the word, and that it used the word in clause (ii) of rule 18(4) in the same narrower sense of payment by tenant to landlord for demised property.our conclusion therefore is that the word 'rent' in clause (ii) of rule 18(4) means payment to a landlord by a tenant for the demised property and does not include payments made by licensees'.7. though the attention of the learned judge, had been drawn to this decision of the supreme court in state of punjab v. british india corporation ltd. : [1964]2scr114 , we find that apart from referring to it, as a decision which can be seen with advantage, the learned judge has not otherwise dealt with it. in view of the aforesaid decision of the supreme court, on a consideration of the relevant provisions of the act referred to earlier, we are clearly of the view that the payments made by the patients to the hospital by way of hospital charges, or stoppages or even service charges, cannot be equated to 'rent' as contemplated under the provisions of the act and the denial of the benefit of exemption to the appellant; on that score cannot be sustained. we may also observe in this connection that when it was not disputed that the hospital run by the appellant was entitled to the benefit, of exemption under section 123(e) of the act, unaffected by the proviso, till 31.3.1982, it is not known how the appellant could be denied the benefit of such exemption from 1.4.1982. we have carefully perused the order passed by the respondent and we do not see any reason whatever for denying the benefit of exemption prayed for by the appellant. in the impugned order, it has also not been stated as to why the appellant is not entitled to the benefit of exemption from 1.4.1982, when it had enjoyed such a benefit till 31.3.1982. there is also no indication therein whether the character of the payments made by the patients taking treatment in the hospital underwent a change between 31.3.1982 and 1.4.1982 and in this view also, the refusal of exemption prayed for by the appellant cannot be upheld. we, therefore, allow the writ appeal with costs, setting aside the dismissal of w.p. no. 9701 of 1983 and that writ petition will stand allowed, as prayed for by the appellant. counsel's fee rs. 2,000.
Judgment:

Ratnam, J.

1. This writ appeal at the instance of S.N.R. Sons Charitable Trust, Coimbatore, has -been preferred against the dismissal of W.P. No. 9701 of 1983, praying for the issue of a writ of certiorari or other appropriate writ calling for the records of the respondent relating to the notice of demand in Assessment No. 60511, dated 30.9.1983 in Ref. No. 71240/82/A.7 and quash the said notice of demand relating to Sri Ramakrishna Hospital, Coimbatore, run by the Appellant trust. In the affidavit filed by the appellant in support of the writ petition, it was stated that after the formation of the trust on 9.2.1970 and in accordance with the terms of the Deed of Trust, the appellant has been running Sri Ramakrishna Hospital, Sri Ramakrishna Children's School, etc., and that the hospital was started in 1974. It was also stated that prior to the coming into force of Coimbatore City Municipal Corporation Act (hereinafter referred to as 'the Act'), the appellant sought exemption from payment of property tax from the then Coimbatore Municipality and the appellant, by proceedings dated 20.9 1977, was exempted from payment of property tax under Section 83(1)(e) of the Tamil Nadu District Municipalities Act, 1920 with effect from 1 .4.1977, excluding the office canteen doctors' residential quarters and nurses' quarters, in respect of which a separate assessment for property tax was made. This according to the appellant, had continued till 30.9,1980, when a special notice dated 31.3.1981 was issued to the appellant proposing to revise the earlier assessment with effect from the half year commencing from 1.10.1980 by revising the annual value and on representations by the appellant, the appellant was granted exemption from payment of property tax under Section 123(e) of the Act for the period from 1.10.1980 to 31.3.1982, by an order passed on 8.8.1981. The appellant also referred to the grant of exemption under Section 80(g) of the Income Tax Act, 1961, as well as exemption from payment of urban land tax and the certificate of the Collector of Coimbatore to the effect that the hospital run by the appellant was doing charitable and relief work and 40% of the out-patient cases were treated completely free of charges and even in-patients whose income was less than Rs. 300 were given free accommodation, bed and linen, medical and nursing care including investigations, medicines, operations and diet, to establish that the hospital run by the appellant was a charitable one which justified an exemption from payment of property tax. On 25.2.1982, according to the appellant, it applied for a renewal of the exemption from payment of properly tax from 1.4.1982, but no reply was received. Instead, a notice was served on the appellant demanding property tax for the half year commencing from 1.4.1982 and this led to the appellant making further representations on 13.8.1982 and 30.8.82 praying for the renewal of the exemption granted upto 31.3.1982. Thereupon, the respondent, by a communication dated 30.9.1983, not only refused to grant exemption, but demanded payment of arrears of property tax for three half years commencing from 1.4.1982 and called upon the appellant to pay the same within seven days from the date of receipt of that notice. Thereafter, the appellant approached this Court under Article 226 of the Constitution of India, praying for the relief set out earlier.

2. In the counter filed by the respondent, it was stated that during the first half-year 1975-76, three assessments were made in respect of the hospital building, the first two covering the hospital buildings and the third comprising of the doctors' quarters, nurses' quarters, canteen and office room and that the appellant had paid the tax upto 1977. Referring to the claim for exemption made by the appellant by letter dated 26.7.1977, the respondent stated that objections were raised by the Audit Department on the ground that the hospital was not entitled to the benefit of such exemption, as charges were paid by the patients for the use and occupation of the rooms and that would disentitle them to the benefit of exemption. Pursuant to that according to the respondent, on the orders of the commissioner dated 10.10.1980, the hospital, was assessed to property tax on the basis of the annual rental value with effect from 1.10.1980, by the issue of a special notice. When the notice of demand was served on the appellant, it was brought to the notice of the respondent that the appellant had presented a revision petition before the commissioner on 7.4.1981 and after the Coimbatore Municipality became a Municipal Corporation from 1.5.1981, the Commissioner inspected the property on 6.8.1981 and after perusing the relevant records produced by the appellant, exemption from payment of property tax had been granted for the period from 1.10.1980 to 31.3.1982 and that no exemption was granted for the subsequent period. Relying on the proviso to Section 123 of the Act, the respondent maintained that the appellant was not entitled to the exemption, as it had collected rents from persons who used to occupy the hospital rooms and charges had also been collected from out-patients and, therefore, the appellant cannot be permitted to take advantage of Section 123(e) of the Act. An objection that the appellant had an effective alternative remedy was also put forward.

3. The learned Judge, who heard the writ petition, took the view that the use of the word 'rent' in the proviso should be regarded as having been used in a comprehensive or in a very wide and general sense to include collection of any charges from the person or persons using the property, by those who run the hospital, and, therefore, the benefit of exemption claimed by the appellant under Section 123(e) of the Act cannot be availed of by the appellant. In the result, the learned Judge dismissed the writ petition, the correctness of which is questioned in this appeal.

4. Learned Counsel for the appellant, referring to the contents of the bills issued to the patients, who had visited the hospital for treatment, contended that the charges paid by the patients were in the nature of hospital stoppages for services rendered and for bed, linen, nursing and para-medical services and charges for electricity, while the patients remained in the hospital and such payments can, by no means, be regarded as 'rent' as contemplated in the proviso to Section 123(3) of the Act as to disentitle the appellant from claiming the benefit of exemption. It was also submitted that the use of the word 'rent' contemplated letting out and the relationship of landlord and tenant being brought into existence and the occupation of a bed by a patient was only permissive and did not confer any exclusive possession or enjoyment and the word 'rent' cannot be given a comprehensive or wide meaning as to include any payment, irrespective of the character of the payment and also ignoring the circumstances leading to such payment. Reference in this connection was also made to the decision of the Supreme Court in State of Punjab v. British India Corporation Ltd. : [1964]2SCR114 and New Delhi Holy Family Hospital Society v. Delhi Municipality A.I.R. 1984 Del. 84.. On the other hand, learned Counsel for the respondent submitted that though it may be that the appellant had received amounts from the patients, who had come to the hospital, either as bed and linen charges, nursing and para-medical services, charges for tests, etc., the payments were really for the use of the premises and regarded as consideration for such use, the payments were only 'rent' as contemplated in the proviso and therefore, the exemption was rightly refused.

5. Before proceeding to consider the aforesaid contentions, it has to be stated that there is no dispute now before us that the hospital run by the appellant is a charitable hospital and that the only ground on which the benefit of exemption is now denied to the appellant is that rent is paid by the person or persons using the hospital, though the hospital had the benefit of such exemption till 31.3.1982. In order to ascertain the character of the payments made by the persons using the hospital, it becomes necessary to scrutinise the bills issued, which have been placed by the appellant before us. It is seen from the bills produced that they are all itemised bills. In the bill dated 21.9.1984 relating to Master K.P. Manoj, the total charges have been arrived at Rs. 670.75 and that is made up of clinical lab testing charges Rs. 20 medicines Rs. 101.20, injections and dressings Rs. 89.70, operation charges Rs. 375 and other charges Rs. 64.85. Similarly, it is seen from the bills dated 5.5.1983,19.2.1985 and 24.2.1985 relating to Mr. Veluswamy, Mr. Natarajan and Ms. Lakshmi that the total amount of the bill is comprised of several different items of charges, like bed charges, medicines, x-ray charges, clinical lab testing charges, operation charges and other charges. The other charges referred to are for the junior and senior doctors visiting the patients twice a day as could be gathered from the details for other charges provided by the appellant. From the other bills relating to Mr. Shanmugasundaram and Miss. Vasanthi also it is seen that the charges have been shown itemised as above. From the manner in which the charges have been collected under the aforesaid different heads and paid, it is difficult to hold that such charges had been paid by way of rent by the patients visiting the hospital for purposes of treatment. Apart from x-ray charges, charges for clinical lab testing, medicine, injection and dressings, operation charges and other charges, which are really in the nature of charges paid for rendering of service, the collection of bed charges are clearly referable to the provision of bed with blanket, linen, maintenance of beds and changing the linen, maintenance of room, attendance by nurse, charges for electricity and water and other para-medical services. The amounts paid by the patients cannot, in our view, be equated or treated as 'rent' but represent charges paid for all the services rendered under the different heads mentioned above. We may in this connection usefully make a reference to volume 27 of Halsbury's laws of England, fourth Edition, paragraph 212, where it has been stated that as rent can only be reserved on a demise of corporeal hereditary tenements the following payments, even though recoverable by virtue of the contract, are not rent; payments on account of service charges, which is not reserved as a rent. We also find it difficult to construe the charges paid by a patient for use and occupation of a room in the hospital, while under treatment or even the charges paid for rendering services, as 'rent' and merely on the basis of occupation of a room by a patient and payment of charges therefor and also for other services, the relationship of landlord and tenant cannot be stated to have been brought into existence. Thus, on a scrutiny of the bill's placed before us as well as the different heads under which the charges had been collected, we are of the view that the payment of hospital charges or stoppages cannot, on the facts and circumstances of this case, be regarded as payment of 'rent' by the patients.

6. A reference to some of the provisions of the Act would be necessary to find out whether a payment of the kind aforesaid was at all contemplated as 'rent' found in the proviso to Section 123(3) of the Act/The word 'rent' has not been defined in the Act and that is clearly indicative that the intention of the Legislature was that the question should be decided on consideration of facts of each case, when a controversy over it arose. Necessarily, therefore, from the provisions of the Act, the meaning of the word 'rent' has to be gathered. Section 117 of the Act, occurring in Chapter V of the Act, relating to Taxation, refers to the levy of property tax by the council. Section 118 of the Act provides for a resolution of the Council determining to levy the tax as well as the rate and the date from which such tax shall be levied. With particular reference to property tax, under Section 121(1) of the Act, the council by resolution is enabled to determine the levy of property tax on all buildings, except those exempted by or under the Act or any other law. Section 121 (2) of the Act, after referring to the levy of Property Tax at a percentage of the annual value of buildings, as may be fixed by the council, further provides that the aggregate of the percentage shall not be less than fifteen and a half percent or greater than thirty-five percent of its annual value. The Commissioner is empowered to determine the annual value of any building for purposes of assessing the property tax under Section 121(3) of the Act. Section 122(2) of the Act, dealing with the method of assessing the property tax, provides that the annual value of lands and buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to let from month to month or from year to year less certain deductions, which are not relevant for the present case. Section 123 catalogues the exemptions from payment of property tax available in respect of buildings and lands. Section 123(3) of the Act and the proviso are important Section 123(e) of the Act exempts from property tax charitable hospitals and dispensaries, but not including residential quarters attached thereto. Though as a charitable hospital, the building may be entitled to the benefit of exemption, the availability of such exemption, is further qualified by the proviso to the following effect:

Provided that nothing contained in Clauses (a), (c) and (e) shall be deemed to exempt from property tax any building or land for which rent is payable by the person or persons using the same for the purposes referred to in the said clauses.

On a consideration of the aforesaid provisions, it is clearly seen that property tax is leviable on annual value and the annual value in turn is based on gross annual rent, on the basis of letting from month to month or year to year. The exemption is thus made available with reference to the levy of property tax on the basis of annual value determined on gross annual rent either from month to month or from year to year. In other words, the entire scheme for the levy of property tax is based on rent, which is gross annual rent, based either on a monthly tenancy or a yearly tenancy. The 'rent' contemplated for purposes of ascertaining the annual value and also for levying the property tax cannot, in our view, be different for purposes of denial of exemption as per Section 123(e) read with the proviso. A consideration of the scope of exemption from payment of property tax, with reference to buildings in the other clauses, would also indicate that in certain cases, the building or the property cannot at all be let out for rent and that perhaps is the reason why they have Hot been included in the proviso excepting cases falling under clauses (a), (b) and (c), For instance, an ancient monument falling under Clause (b) cannot normally be let out and, therefore the benefit of exemption has been given with the qualification that it is not used as residential quarters or public office. This would mean that though no ancient monument can normally be let out either as residential quarters or for public office, such letting cannot be totally ruled out and if they are so let out for use as residential quarters or public office, then the benefit of exemption may not be available. Aburial ground as found in Clause (g) cannot be normally let out for rent either monthly or even yearly. Likewise, Clause (i) relating to bed of a river or canal, cannot be ordinarily thought of as property, which can be let out for rent. The buildings belonging to the Central Government are normally used for its own purposes and are not let out. In cases where the property is such that it cannot be let out at all as for instance, ancient monument, when not used as residential quarters or public office, burial and burning grounds; bed of a river or a canal, the Central Government Buildings, falling under clauses (d), (f), (g), (i) and 0), exemption appears to be total. However, with reference to the buildings felling under clauses (a), (c) and (e) there is a possibility of the place being made available for use by others on payment of rent for such an event, the benefit of exemption may not be available With reference to a place of public worship falling Under Clause (a) there may be a possibility of the place being made available for use by others on payment of some amounts for such use. Likewise a choultry and a hospital can also be let out to others on rent and if that is clone, then, the exemption is not available. It is thus seen that the properly tax leviable based on annual value is relatable to the gross annual rent, either from month to month or from year to year and the periodicity of payment either from month to month or from year to year, indicates clearly that the word 'rent' could not have been used in a wider sense, but only in a strict and narrower sense of payment by a tenant to a landlord for the demise of the property. In this case, the amounts paid by the patients, who use the' hospital as well as the range of services provided by it, cannot be regarded as 'rent' paid by them in the narrower sense in Which it is intended under the provisions referred to earlier. Though learned Counsel for the appellant relied upon the decision reported in New Delhi Holy Family Hospital Society v. Delhi Municipality : AIR1984Delhi84 , we find that it does not assist the appellant in any manner. Reference, however, in this connection may be made to the decision of the Supreme Court reported in Slate of Punjab v. British India Corporation Ltd. : [1964]2SCR114 , strongly relied upon by learned Counsel for the appellant. Amongst others, the Supreme Court had occasion to consider the meaning of the word 'rent' in Clause (ii) of Rule 18(4) of Punjab Urban Immovable Property Tax Rules, 1941 for purposes of availing the benefit of exemption. At pages 123 and 124, the Supreme Court observed as follows:.In its wider sense rent means any payment made for the use of land or buildings and thus includes the payment by a licensee in respect of the use and occupation of any land or building. In its narrower sense it means payment made by tenant to landlord for property demised to him... In seeking an answer to this question it is legitimate to examine the use of the word 'rent' in the Act for which these rules were made. At the time the rules were first made in 1941 the Act used the word 'rent' only in two sections. First in Section 5 where in providing how the annual value of land or building shall be ascertained the legislature said that it shall be ascertained by estimating the gross annual rent at which such land or building might reasonably be expected to let from year to year. It is absolutely clear that here the word 'rent' is used in its strict and narrower sense of payment by tenant to landlord for demised property...In the absence of anything to indicate the contrary, it would be reasonable to think that the rule-making authority would not depart from the meaning in which it had reason to believe that the legislature had used the word, and that it used the word in Clause (ii) of Rule 18(4) in the same narrower sense of payment by tenant to landlord for demised property.

Our conclusion therefore is that the word 'rent' in Clause (ii) of Rule 18(4) means payment to a landlord by a tenant for the demised property and does not include payments made by licensees'.

7. Though the attention of the learned Judge, had been drawn to this decision of the Supreme Court in State of Punjab v. British India Corporation Ltd. : [1964]2SCR114 , we find that apart from referring to it, as a decision which can be seen with advantage, the learned Judge has not otherwise dealt with it. In view of the aforesaid decision of the Supreme Court, on a consideration of the relevant provisions of the Act referred to earlier, we are clearly of the view that the payments made by the patients to the hospital by way of hospital charges, or stoppages or even service charges, cannot be equated to 'rent' as contemplated under the provisions of the Act and the denial of the benefit of exemption to the appellant; on that score cannot be sustained. We may also observe in this connection that when it was not disputed that the hospital run by the appellant was entitled to the benefit, of exemption under Section 123(e) of the Act, unaffected by the proviso, till 31.3.1982, it is not known how the appellant could be denied the benefit of such exemption from 1.4.1982. We have carefully perused the order passed by the respondent and we do not see any reason whatever for denying the benefit of exemption prayed for by the appellant. In the impugned order, it has also not been stated as to why the appellant is not entitled to the benefit of exemption from 1.4.1982, when it had enjoyed such a benefit till 31.3.1982. There is also no indication therein whether the character of the payments made by the patients taking treatment in the hospital underwent a change between 31.3.1982 and 1.4.1982 and in this view also, the refusal of exemption prayed for by the appellant cannot be upheld. We, therefore, allow the writ appeal with costs, setting aside the dismissal of W.P. No. 9701 of 1983 and that writ petition will stand allowed, as prayed for by the appellant. Counsel's fee Rs. 2,000.