TaxTMI 
TaxTMI 
2018 (7) TMI 2318
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....ilar lines was issued by Government of NCT of Delhi to Sitaram Bhartia and the Foundation of Cancer Research imposing condition of providing free treatment to 10% indoor patients and 25% to outdoor patients of poor strata of the society. The decision was taken in the light of the decision of Delhi High Court in Social Jurists case (supra) which was referred by this Court in Special Leave Petition [Civil] No.18599 of 2007 vide order dated 1.9.2011 in which this Court observed that 25% OPD and 10% IPD have to be given treatment free of cost. Said patients should not be charged with anything. However, the concerned hospital could make the arrangements of the cost either by meeting the treatment/medicines cost from its funds or resources or by way of sponsorships or endowments or donations. As the respondents-hospitals were not a party, they have questioned imposition of said conditions in the impugned order by filing writ applications. The High Court has quashed the imposition of conditions hence, the appeals have been preferred. 2. The factual matrix reflects that the Government of India in the year 1949 took a decision to provide all possible help to the hospitals by allotting la....
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....tan. According to that formula, any charitable institution will have to pay a premium at the rate of 25,000 to 35,000 per acre, plus ground rent @ 15% on the premium per annum, that would be obviously too high. Hence, it was agreed that the premium chargeable on land allocated to charitable institutions in Delhi should vary from Rs.2000/to Rs.5000/per acre. Facts relating to Mool Chand Khairati Ram Trust : 4. In the year 1927 one Lala Kharaiti Ram of Lahore made a Will with a codicil registered at Lahore by which Moolchand Khairati Ram Trust was constituted by Lala Kharaiti Ram with the name of his father Shri Moolchand. The relevant clauses of the Will are extracted hereunder : "(8) After meeting the above-mentioned allotments the following instructions shall be observed with regard to the property of every description that may remain after my death:- (a) All the remaining property of every description shall constitute a Trust known as Moolchand Kharaiti Ram Trust, Lahore, the objects of which shall be as follows:- (1) Imparting education in and preaching Sanskrit according to Sanatan Dharm Methods, and (2) Devising means for imparting edu....
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....criteria. Since the policy has not been converted into law by enactment of an Act by the legislature, only insistence could be that the institution should be run without any profit motive and not that the institution be required to provide free treatment to any specified number of patients. The DDA (Disposal of Developed Nazul Land) Rules, 1981 are not applicable in the case of Trust. Clause 14 of the lease deed did not authorize the Government to impose such conditions. That the decision of Social Jurists case (supra) is not applicable as in that case there was either conditions of allotment, or the stipulations in the lease deed under which the hospitals were obliged to provide access to significant percentage of the IPD and OPD facilities. Right to carry on any occupation, trade or business is fundamental under Article 19(1)(g) as such, such restriction could have been imposed by enacting a law under Article 19(6) of the Constitution of India by Parliament or the State legislature. Such condition could not have been imposed by executive feat in exercise of power under Article 162. In the decision in Social Jurists (supra) which has been affirmed by this Court, the Trust was not ....
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....nditions of the lease deed. Same has been allowed by the High Court. Though land had been obtained for purpose of the charitable institution it was not open to imposing such riders by executive order. There was no condition of free care in the 1949 policy. Unilateral amendment of the lease deed could not have been made. The decision of Social Jurists (supra) is not applicable as 20 hospitals were dealt with in the said decision. There was no stipulation regarding free care in the allotment letters/lease deeds. The order is without jurisdiction. Hence, the writ petition was filed in the High Court. Facts regarding Sitaram Bhartiya Institute of Science & Research: 9. Sitaram Bhartiya Institute of Science & Research was a registered society. On 30.3.1984, it applied for allotment of land admeasuring 3 acres for establishing a multidisciplinary research complex in New Delhi. On 22.10.1984 the DDA allotted land admeasuring 1.52 acres @ Rs.6 lakhs per acre. Request was made by the said society to charge at the concessional rate that was declined on 20.11.1984. On 2.9.1985 lease deed was signed by which a consideration of Rs.8,76,000/for 1.46 acres was transferred to the petitioner.....
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....d vide allotment letter dated 12.6.1970 which was followed by lease deed dated 3.7.1970, whereafter, further land admeasuring 2331 sq. yds. was allotted vide allotment letter dated 25.2.1972 at the rate of Rs.5000/per acre and ground rent at the rate of 5% per annum. 13. Sitaram Bhartiya Institute of Science & Research was allotted 1.52 acres of land at the rate of Rs.6/lakhs per acre on 22.10.1984 followed by lease deed dated 2.9.1985 in respect of another plot of 1.46 acres for a consideration of Rs.8,76,000/. The Government of Delhi with the approval of Lt. Governor of Delhi constituted a Committee headed by Mr. Justice A.S. Qureshi to review the existing free facility extended by the charitable hospitals and various other hospitals which had been allotted land at concessional terms/rates by the Government. Amongst other measures the Committee opined as under: "1. Most of the representatives of the hospital submitted that 25% of beds earmarked for poor patients were excessive since the cost of medicines was too high. It was agreed that it should not be more than 15% in any case, but 10% would be ideal. Therefore, the Committee recommended 10% indoor beds free for poor pati....
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....efund, however, the request was declined. 19. The High Court of Delhi had allowed the writ applications, hence, the appeals have been preferred. Social Jurists, a civil rights group has filed Civil Appeal Nos.31573158 of 2017 against the judgment and order passed in the case of Moolchand Kharaiti Ram Trust and others. Other appeals have been filed by Union of India/NCT of Delhi. Rival Submissions 20. It was urged by Mr. Sandip Sethi, learned Additional Solicitor General on behalf of the appellants that the High Court erred in allowing the writ applications. The condition of providing 10% IPD and 25% OPD free medical treatment to poor strata of the society cannot be considered to be a restriction in terms of Article 19(6) of the Constitution of India putting fetters on the right of the respondent hospitals to carry on their trade and profession under Article 19(1)(g) of the Constitution of India. The direction has been issued in terms of the policy of allotment in public interest which must override the business interest of an individual. The High Court erred in holding it to be a restraint under Article 19(6) which can be imposed only by a legislation. It was within the co....
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....s would reflect that a separate process is given for the sale of plots by auction or tender. Thus, allotment of land at predetermined rates is also concessional. 24. It was also urged that the definition of 'charitable' as given in Income-tax Act would not govern the field in the present case. Word 'charitable' is to be seen in the legal sense. Word 'charitable' is used and has been relied upon in the Law Lexicon by P. Ramanatha Aiyar, 2nd Edition, 1997, which defines the 'charitable' as under: "includes every gift for a general public use, to be applied consistent with existing laws, for benefit of an indefinite number of persons, and designed to benefit them from an educational, religious, moral, physical or social standpoint." 25. On the other hand, learned senior counsel appearing on behalf of the respondents-hospitals contended that legal obligation of a person can be created by an agreement or statutory law and in no other manner. The court cannot pass an order on account of sympathy in contravention of the settled law as the function of this court is to protect and preserve the rule of law which has been held to be basic feature of the Constitution in ....
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....cting statutory law. The conditions were impermissible, arbitrary and violative of Article 14. The lease deeds are not governed by the provisions of the Government Grants Act. The Executive power referred to in Articles 73 and 298 of the Constitution did not empower the State to unilaterally amend the terms of a perpetual lease deed granted by it. The fundamental rights cannot be abridged by an executive order. Decision in Social Jurists (supra) is distinguishable. There was no similar stipulation in the lease deeds of respondents. Judgment of the High Court in Social Jurists (supra) was faulty to the extent that it imposed a condition of free care on hospitals in whose lease deeds there was no such condition. It was not open to the court to first create a law or an obligation and then seek to enforce it. Charity would not mean free services to be provided. Medical relief itself is a charitable purpose. It would not mean that it cannot charge for services provided by it. Though while seeking allotment by the missionaries as charitable society, do not get actuated by a profit motive. Surplus income is also utilized for charitable purpose for providing medical care. The fact that the....
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....ome of the medicines are very expensive. Its cost cannot be borne by the hospital and it cannot form part of free medical treatment except possibly in Government hospitals. No profit no loss condition would not mean that it was allotted on a concessional basis. Respondent No.1 is a self-supporting society, is doing medical research also. In case free medical treatment is provided it would diminish the respondent's ability to invest in research. Populist and misplaced policies could not have been framed or imposed. Similar arguments have been raised by the Foundation for Applied Research in Cancer. 28. Following questions arise for consideration: 1. Whether by virtue of fact that Moolchand Kharaiti Ram Trust and St. Stephens Hospital have obtained the land for charitable purposes at a concessional rate, it was open to the Government to impose a condition of 10% in IPD and 25% in OPD services to be provided free of cost to patients of economically weaker sections? 2. Whether in view of the condition No.7 of the allotment letter issued in the case of Sitaram Bhartiya Institute and Foundation for Applied Research in Cancer, the imposition of the aforesaid condi....
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....t obligation and stipulations of free treatment at its own level. In order to appreciate the submission made, we deem it appropriate to consider the meaning of charitable, charitable purpose, charitable corporation and charitable trust in common parlance. 32. The Black's Law Dictionary, Ninth Edition defines 'charitable', 'charitable purpose', 'charitable corporation' and 'charitable trust' thus: "Charitable - Dedicated to a general public purpose, usu. for the benefit of needy people who cannot pay for benefits received. Charitable purpose - The purpose for which an organization must be formed so that it qualifies as a charitable organization under the Internal Revenue Code - Also termed charitable use. Charitable corporation - A nonprofit corporation that is dedicated to benevolent purposes and thus entitled to special tax status under the Internal Revenue Code. - Also termed eleemosynary corporation. Charitable trust - A trust created to benefit a specific charity, specified charities, or the general public rather than a private individual or entity. Charitable trusts are often eligible for favorable tax treatment. If the trust's terms do n....
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.... have been a charity at any time when it is or was on the register of charities. The Act does not provide that an institution which, if it were a charity, would be required to be registered, but which is not registered, is for that reason, not a charity." 35. Again, the Halsbury's Laws of England while dealing with the meaning of charity, has discussed the matter thus: "502. Meaning of "charity". Since the Charities Act, 1960 provides no statutory definition of what purposes are and what are not charitable, all the cases previously decided on the subject are still relevant. The legal meaning of "charitable purposes" is said to be precise and technical, and the phrase is a term of art, but it is probably incapable of definition. The popular use of the expressions "charity", "charitable", "charitable objects" and "charitable purposes" does not coincide with their technical legal meaning according to the law of England. The word "charitable", when used in its legal sense, covers many objects which a layman might not consider to be included under that word, but it excludes some benevolent or philanthropic activities which a layman might consider charitable. Charita....
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....o enforced and is therefore void for uncertainty." 37. Public welfare is one of the essential requirements of legal charity, which has been discussed in Halsbury's Laws of England in paragraph 505, which is extracted hereunder: "505. Public benefit essential. It is a clearly established principle of the law of charities that a purpose is not charitable unless it is directed to the public benefit so that the element of public benefit is the necessary condition of legal charity. There are two distinct elements in this requirement: the purpose itself must be beneficial and not harmful to the public, and the benefit of the purpose must be available to a sufficient section of the public. The line of distinction between purposes of a public and a private nature is fine and practically incapable of definition." 38. The benefit to the poor is one of the essential requirements of charity. The concept has been discussed in paragraph 509 of Halsbury's Laws of England, which reads thus: "509. Benefit to rich as well as poor. An object may be charitable in the legal sense notwithstanding that it will benefit the rich as well as the poor, but it is difficult to believe th....
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....usts which are not charitable in law." 41. It has also been observed in the Halsbury's Laws that not all hospitals are charitable institutions, for there may be hospitals run commercially, with a view to the profit of private individuals or hospitals, the services of which are not available to a sufficient section of the public. The mere fact that a hospital is supported by the payment of fees does not prevent its being a charitable corporation. In paragraph 707, the following discussion has been made: "707. Hospital supported partly by fees. Not all hospitals are charitable institutions, for there may be hospitals run commercially, with a view to the profit of private individuals, or hospitals the services of which are not available to a sufficient section of the public. The mere fact that a hospital is supported by the payment of fees does not prevent it's being a charitable corporation, and the same is true of schools. Furthermore, the Charity Commissioners have the power to authorize the committee of management of a voluntary hospital to provide facilities for paying patients in certain circumstances." 42. In the Law Lexicon, the Encyclopedic Law Dictionary b....
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....re regarded as charitable, but trusts for the benefit of a particular political party or for the advancement of particular political purposes or opinions are not regarded as charitable. A gift for such purposes as a particular individual or individuals may consider to be charitable is not a good charitable purpose although a gift for such charitable purposes as the managing committee of a trust may think fit would be good, because the committee would be bound to keep within the ambit of charity, and if they go beyond the legal boundary, they can be controlled by the Court. 43 Bom LR 1027 = 1942 Bom 61. The definition includes relief of the poor. Relief of the poor by itself would not be a charitable object unless it involved an object of general public utility. Relief for the poor relations of the settlor or donor will not be a charitable purpose within the definition. Trustees of Gordhandas Govindram Family Charity Trust v. Commissioner of Income Tax, AIR 1952 Bom 346. [S. 4(3)(i) Income Tax Act 1992] 'Charitable purpose' - the dominant purpose of a State Bar Council is to ensure quality service of competent lawyers to the litigating public, a spread legal li....
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....ived. The Internal Revenue Code may define it separately for its purposes what is charitable so as to claim the benefit under the Act. The charitable trust is a trust which is for the benefit of general public. Charitable is a kind and generous in giving money or other help to those in need as defined in Webster's New World Dictionary and Black's Law Dictionary. The Halsbury's Laws of England discussed the meaning of charity, which provides that if there is no statutory definition of charitable purposes, to be a charitable purpose, it must satisfy certain tests. It must be for the public benefit and available to a sufficient section of the community. The reference to charity should be construed in their technical legal sense. For income tax purpose, the charity may be defined in the Act and in that light, the interpretation of the Act has to be made. Public benefit is an essential ingredient of charitable activities. There are two distinct requirements, the purpose itself must be beneficial and not harmful to the public. In paragraph 509 of Halsbury's Laws of England, it has been discussed that it is difficult to believe that a trust would be held charitable if the poor are exc....
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....ion, medical relief and the advancement of any other object of general public utility, but does not include a purpose which relates exclusively to religious teaching or worship." It is apparent from the definition that charitable purpose includes relief of the poor, education and medical needs. As per the provisions of the Charitable Endowments Act, 1890, relief of the poor and medical relief is included as such conditions which had been imposed are clearly within the parameters of aforesaid definition. 47. The charity in the broadest sense includes whatever proceeds from a sense of moral duty or from humane feelings towards others uninfluenced by one's own advantage or pleasure. In its widest sense, denotes all the good affections men ought to bear towards each other; in its most restricted and common sense, relief of the poor. In the Mahommedan Law, the charity has a more general import than under the English Law. A wakf of property by a Mahommedan to defray the expenses of the poor, the fakirs, the orphans, the needy and the indigent and to defray the expenses of good deeds, creates a trust for public purposes of a charitable nature. In common parlance, the word ....
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....usive and not exhaustive. The impugned judgment must, therefore, be held to be erroneous." The question in the aforesaid case was altogether different with respect to the meaning of charitable purpose as defined under Section 115 (4) (a). 49. In Municipal Corporation of Delhi vs. Children Book Trust, (1992) 3 SCC 390, this Court considered the provisions of Section 115(4)(a) of Delhi Municipal Corporation Act, 1957 and dealt with the question of charitable purpose, context of property tax in respect of lands and buildings and exemption to lands and buildings occupied and used by a society for charitable purpose. It was held that conditions for applicability of the tax exemption were firstly on the society must be charitable and not earn a profit. This Court considered the meaning of charitable purpose for imparting education sans an element of public welfare not per se charitable. Secondly, society must be supported wholly or in part by voluntary contribution and lastly, society must utilize its income in promoting its object and must not pay any dividend or bonus to its members. This Court observed that the tax liability of a registered society running recognized priva....
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....und under the Delhi Municipal Corporation Act. In other words, the definition is narrower in scope. This is our answer to question No. 1. xxx xxx xxx 85. The last aspect of the matter is utilisation of the income in promoting its objects and not paying any dividend or bonus to its members. The learned counsel for the appellant and the intervenor would urge that on the basis of Cane (Valuation Officer) vs. Royal College of Music , (1961) 2 QBD 89, the position in the instant case is the same. At page 121 the following observation is found: "One, I think, that enriches the corporation itself or relieves it of a burden or furthers its objects or powers." Thus, it is apparent from the aforesaid discussion that the charitable object would be served if it is not to earn a profit. 50. The medical and legal professions stand on a different pedestal in the matter of fulfilling the obligations towards the society. They are not meant to be for commercial activity which by and large has become a bitter reality of the day. 'Free treatment' to economically weaker sections is a normal obligation by very nature of charity, and it was also contended on beh....
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....contains the code of medical ethics. Part B of Regulation 1.1 deals with the character of a physician. Regulation 1.1.1 provides that the institution shall uphold the dignity and honour of the profession. Regulation 1.1.2 is self-explanatory and the same is extracted hereunder: "1.1.2 The prime object of the medical profession is to render service to humanity; reward or financial gain is a subordinate consideration. Whosoever chooses his profession, assumes the obligation to conduct himself in accordance with its ideals. A physician should be an upright man, instructed in the art of healings. He shall keep himself pure in character and be diligent in caring for the sick; he should be modest, sober, patient, prompt in discharging his duty without anxiety; conducting himself with propriety in his profession and in all the actions of his life." It lays down in an unequivocal term that the medical profession has to render service to humanity; reward or financial gain is a subordinate consideration. The doctor is supposed to be noble in all actions of his life. 54. Under Regulation 1.2.1 it is the duty of the member of the medical profession to make available to the patie....
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....cil of India. Considering the object of the statutory rules also, medical profession owes a duty to serve the poor and havenots, irrespective of financial status, they have to treat everybody equally with respect to social standing and economic disparity, that cannot be achieved without free treatment to the needy. 57. When the Government land has been allotted to the hospitals, they would not be doing free service but being a recipient of Government largesse at concessional rates and continue to enjoy it, they owe a duty to act in public interest. In our opinion, not only Moolchand Kharaiti Ram Trust and St. Stephens Hospital have obtained the land at a concessional rate, the other two hospitals, namely, Sita Ram Bhartia Institute of Science & Research and Foundation for Applied Research in Cancer have also obtained land at a lower predetermined rate, not at market rate. It was not by way of a public auction that they have received the land. Besides in the cases of Sita Ram Bhartiya Institute of Science & Research and Foundation for Applied Research in Cancer, clause 7 was inserted in the allotment letters to the effect that "The DDA reserves its right to alter any terms and co....
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....ution as observed in Occupational Health and Safety Association v. Union of India & Ors., AIR 2014 SC 1469. The concept of emergency medical aid has been discussed by this Court in Pt. Parmanand Katara v. Union of India & Ors. (1989) 4 SCC 286. In Paschim Banga Khet Mazdoor Samity & Ors. v. State of West Bengal & Anr. (1996) 4 SCC 37, right to medical treatment has been extended to prisoners also. 61. In Parmanand Katara (supra) this Court has observed that every doctor whether at a Government hospital or otherwise has the professional obligation to extend his services with due expertise for protecting life. The obligation being total, absolute and paramount, laws of procedure whether in statutes or otherwise, which would interfere with the discharge of this obligation cannot be sustained and must, therefore, give way, and there is an obligation upon the doctor to treat the injured victim on his appearance before him either by himself or being carried by others. It has also been observed by this Court that the effort to save the person should be the top priority not only of the medical professional but even of the Police or any other person who happens to be connected with the m....
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....ld be violative of basic human rights. In our opinion, when the State largesse is being enjoyed by these hospitals in the form of land beside it is their obligation by the very nature of the medical services to extend the reciprocal obligation to the public by providing free treatment as envisaged in the impugned order. In case they want to wriggle out of it and not to comply with it, they have to surrender the land and orge out the benefit which they have received by virtue of holding the Government land in an aforesaid manner. 64. It is regrettable that the land had been obtained by Moolchand Kharaiti Ram Trust which claims to be charitable and St. Stephens Hospital run by the Missionaries admittedly for charity, are questioning the very conditions for which they have come into being and it appears with the passage of time they have lost the very purpose of their establishment. In our opinion they should have welcomed the conditions imposed by the Government, considering their objectives and for the purpose, they have obtained the land. Two other hospitals, namely, Sita Ram Bhartia Institute of Science & Research and Foundation for Applied Research in Cancer also cannot wriggl....
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....e due to poverty. That is what is envisaged in the Constitution also. On the making of a doctor, the State spends and invests a huge amount of public money and it is the corresponding obligation to serve the needy and the treatment cannot be refused on the ground of financial inability of the patient to bear it. To such an extent, the right and moral obligation can be enforced and that precisely has been done by issuance of the impugned directions to provide free treatment in IPD and OPD to economically weaker sections of society. They have suffered so long and benefit has not percolated down to them of distributive justice and they are deprived of equal justice and proper treatment due to lack of financial means. It is apparent from the policy decision dated 10.6.1949 and also the provisions contained in section 2 of the Charitable Endowments Act, 1890 that running of hospitals is regarded as a charitable activity. The further rider in policy was that such institution claiming allotment should be secular and of noncommunal character. 68. The Arts and Crafts Society and other nonprofit making bodies were also included under the term 'charitable institution' with the rider th....
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....It is apparent that decision in Social Jurists (supra) has been rendered on the basis of the terms and conditions contained in the allotment letters as well as stipulations made in the lease deeds. Some representations were made relating to free treatment. The High Court, hence in Social Jurists (supra), opined that it was not necessary to incorporate each and every condition in the lease deed and other corresponding documents would also be seen and it was not only contractual but statutory, and public law obligation enjoined upon the hospitals to fulfil condition of free treatment. The order was affirmed by this Court by a reasoned order, hence it becomes binding as precedent. 70. It is apparent that in the case of Moolchand Kharaiti Ram Trust and St. Stephens Hospital, the lands were allotted for charitable purposes under the Scheme of the year 1949, as further modified, thus, the policy under which they had obtained lease deed would also be a relevant document and of paramount importance for entitlement to hold the land for purpose as specified in the policy, as that is the basic document governing the rights of the parties, and the terms and conditions of lease deed, would b....
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....ed by a company, firm or trust as referred to in Sub-rule (2) of Rule (4).] 20. Allotment to certain public institutions. - [***] No allotment of Nazul land to public institution referred to in Rule 5 shall be made unless - (a) according to the aims and objects of that public institution - (i) it directly subserves the interests of the population of the Union Territory of Delhi; (ii) it is generally conducive to the planned development of the Union Territory of Delhi; (iii) it is apparent from the nature of work to be carried out by that public institution, that the same cannot, with equal efficiency be carried out elsewhere than in that Union Territory. (b) it is a society registered under the Societies Registration Act, 1860 (21 of 1860) or such institution is owned and run by the Government or any Local Authority, or is constituted or established under any law [for the time being in 69 force or it is a company, firm or trust for the purpose of establishment of hospital or dispensary]; (c) it is of non-profit making character; (d) it is in possession of sufficient funds to meet the cost of land and the constr....
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....aracter and it is regrettable that it has to be reminded of its responsibility by the Court for the purpose for which it exists and having obtained the land on a particular basis, is observed only in breach thereof. The adverse remarks in the report of Justice Qureshi Committee with respect to the institution cannot be brushed aside on the sole ground that comments recorded in Justice Qureshi's report were based on the statement made by disgruntled employees of the hospitals, who were in dispute with the management of the hospital. 76. Learned senior counsel appearing on behalf of St. Stephens Hospital has also relied on the decision rendered in Divisional Manager, Aravali Golf Club & anr. v. Chander Hass & anr., (2008) 1 SCC 683, to contend that it is not open to the Court to create a law or an obligation and then seek to enforce it. The statement in the factual matrix has no legs to stand and we are conscious that we are not trying to create any new obligation. It was a self-created obligation on missionaries to do charity for which they exist while obtaining the land and Court is duty bound to enforce it. By the stipulation in the question of free treatment, the policy ru....
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.... Nagar, it was not a prime locality at the relevant time and the land was given at the market rate. The submissions are wholly baseless and against the record and cannot be countenanced. The record belies the same. In Reference to question No.3 relating to Article 19(1)(g) and 19(6): 80. It was contended on behalf of the respondents/hospitals that imposition of such a stipulation for free treatment tantamounts to imposing restriction on the right enshrined in Article 19(1)(g) of the Constitution which confers a Fundamental Right on all citizens of India to practice any profession or to carry on any occupation, trade or business in India. Since the Trustees are Indian citizens, they are exercising their fundamental right in running the hospitals. If any restriction was to be placed on their right to run the institution by providing the manner in which they must run their hospitals by providing free treatment to a particular percentage of patients, this could only be done by enacting a 'law' under Article 19(6) of the Constitution. It was further contended that 'law' is clearly defined in Article 13 of the Constitution as 'statutory law' which has a foundation in a legislation ....
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....t any law which may be made, under Clauses (2) to (6) of Article 19 to regulate the exercise of the right to the freedoms guaranteed by Article 19(1)(a) to (e) and (g) must be 'a law' having statutory force and not a mere executive or departmental instruction. In Kharak Singh v. State of U.P. AIR 1963 SC 1295, 1299, the question arose whether a police regulation which was a mere departmental instruction, having no statutory basis could be said to be a law for the purpose of Article 19(2) to (6). The Constitution Bench answered the question in the negative and said: Though learned counsel for the respondent started by attempting such a justification by invoking Section 12 of the Indian Police Act he gave this up and conceded that the regulations contained in Chapter XX had no such statutory basis but were merely executive or departmental instructions framed for the guidance of the police officers. They would not, therefore, be "a law" which the State is entitled to make under the relevant Clauses (2) to (6) of Article 19 in order to regulate or curtail fundamental rights guaranteed by the several sub-clauses of Article 19(1), nor would the same be "a procedure estab....
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.... Reliance has also been placed on State of M.P. & Anr. v. Thakur Bharat Singh, AIR 1967 SC 1170 wherein it was pointed out that the executive power of the State under Article 162 being only an executive power and not a legislative power anything done in exercise of executive power under Article 162 does not become law under the Constitution. This Court in the factual matrix of the case that executive order was issued during an emergency was pending under Article 19. It was contended that Article 358 protects action of both legislative and executive. The decision in the aforesaid case was not supported by Article 358 of the Constitution. It was observed: "(4). Counsel for the State did not challenge the view that the restrictions which may be imposed under cl. (b) of S. 3(1) requiring a person to leave his hearth, home, and place of business and live and remain in another place wholly unfamiliar to him may operate seriously to his prejudice, and may on that account be unreasonable. xx xxx. (5) xx xx Counsel for the State while conceding that if S. 3(1)(b) was, because it infringed the fundamental freedom of citizens, void before the proclamation of emergency, and t....
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....inental community the executive exercises far wider discretionary authority in the matter of arrest, of temporary imprisonment, of expulsion from its territory, and the like, than is either legally claimed or in fact exerted by the government in England : and a study of European politics now and again reminds English readers that wherever there is discretion there is room for arbitrariness and that in a republic no less than under monarchy discretionary authority on the part of the government must mean insecurity for legal freedom on the part of its subjects." We have adopted under our Constitution not the continental system but the British system under which the rule of law prevails. Every Act done by the Government or by its officers must if it is to operate to the prejudice of any person, be supported by some legislative authority. xxx xxx xxx 7. We are therefore of the view that the order made by the State in exercise of the authority conferred by S. 3(1)(b) of the Madhya Pradesh Public Security Act 25 of 1959 was invalid and for the acts done to the prejudice of the respondent after the declaration of emergency under Art. 352 no immunity from the pro....
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.... that they are doing charity at their own level, we find impugned order dated 2.2.2012 is simply an expression to the aforesaid activity which has been given a channelized form. 85. We are of the considered opinion that there was no necessity of enacting a law, as the policy/rules under which the land has been obtained, the hospitals were obligated to render free treatment as the land was allotted to them for earning no profit and held in trust for public good. Similar is the provision in the rules of 1981 and apart from that the regulations framed by the Medical Council of India also enjoins upon the medical profession to extend such help and in view of the object of the hospitals, trust, and missionaries it is apparent that there was no necessity of any legislation and the Government was competent to enforce in the circumstances, the contractual and statutory liability and on common law basis. 86. The right to carry on the medical profession has not been restricted, however, what was enjoined upon the respondent-hospitals to perform otherwise had been given a concrete shape. Thus, it was permissible to issue circular in the exercise of power under Article 162 of the Constit....
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.... the Parliament has power to made laws and to the exercise of such rights, authority and jurisdiction as are exercisable by the Government of India by virtue of any treaty or any agreement. The proviso engrafted on clause (1) further lays down that although with regard to the matters in the Concurrent List the executive authority shall be ordinarily left to be State it would be open to the Parliament to provide that in exceptional cases the executive power of the Union shall extend to these matters also. Neither of these articles contain any definition as to what the executive function is and what activities would legitimately come within its scope. They are concerned primarily with the distribution of the executive power between the Union on the one hand and the States on the other. They do not mean, as Mr. Pathak seems to suggest, that it is only when the Parliament or the State Legislature has legislated on certain items appertaining to their respective lists, that the Union or the State executive, as the case may be, can proceed to function in respect to them. On the other hand, the language of article 162 clearly indicates that the powers of the State executi....
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....s evidently includes the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, the direction of foreign policy, in fact, the carrying on or supervision of the general administration of the State. xxx xxx xxx 17. Specific legislation may indeed be necessary if the Government require certain powers in addition to what they possess under ordinary law in order to carry on the particular trade or business. Thus when it is necessary to encroach upon private rights in order to enable the Government to carry on their business, a specific legislation sanctioning such course would have to be passed. 18. In the present case it is not disputed that the entire expenses necessary for carrying on the business of printing and publishing the textbooks for recognised schools in Punjab were estimated and shown in the annual financial statement and that the demands for grants, which were made under different heads, were sanctioned by the State Legislature and due Appropriation Acts were passed. For the purpose of carrying on the business the Government do not require any additional powers and whatever is necessary for the....
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....ditions of labour vary under different circumstances and from State to State and the expediency of including a particular trade or industry within the schedule depends upon a variety of facts which are by no means uniform and which can best be ascertained by a person who is placed in charge of the administration of a particular State. That is why the Court concluded that in enacting S. 27 it could not be said that the Legislature had in any way stripped itself of its essential powers or assigned to the administrative authority anything but an accessory or subordinate power which was deemed necessary to carry out the purpose and the policy of the Act. 11. In the same year another attempt was made to challenge the validity of the Act in Bijay Cotton Mills Ltd. v. State of Ajmer (1955)-1 SCR 752; ((S) AIR 1955 SC 33). This time the crucial sections of the Act, namely, Ss. 3, 4 and 5 were attacked, and the challenge was based on the ground that the restrictions imposed by them upon the freedom of contract violated the fundamental right guaranteed under Art. 19(1)(g) of the Constitution. This challenge was repelled by Mukherjea, J., as he then was, who again spoke for the Court....
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....aka Cinemas (Regulation) Rules, 1971 came to be questioned as violative of Article 19(1)(g) of the Constitution of India. The argument that the income would be reduced as such the rule was prohibitive not restrictive, this Court rejected the submission of violation of Article 19(1)(g) and observed thus : "12. The appellants'/petitioners' contention that restriction under Rule 41-A is unreasonable is founded on the premise that Rule 41-A is not regulatory in nature instead it totally prohibits exhibition of cinematograph films for one show and its impact is excessive as it reduces appellants'/petitioners' income to the extent of one-fifth. The appellants/petitioners have no unrestricted fundamental right to carry on business of exhibiting cinematograph films. Their right to carry on business is regulated by the provisions of the Act and the Rules framed thereunder. These provisions are necessary to ensure public safety, public health and other allied matters. As already discussed Rule 41-A has placed limit on the number of shows which a licensee can hold in a day. The rule does not prohibit exhibition of cinematograph films instead it regulates it by providing that ....
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.... protection and management of forest wealth in the State of Tamil Nadu. Hence, the impugned rules are not violative of Article 19(1)(g)." 5. Having found that the rules were regulatory and not prohibitive, the High Court also rejected the argument based on Articles 301-304 of the Constitution of India. So far as the enhancement of fee is concerned, the High Court examined the scheme and operation of the rules and came to the conclusion that the State Government was providing sufficient services to the timber merchants at every check-point and as such the principle of quid pro quo was satisfied." 91. In State of Orrisa and Anr vs. Radheyshyam Meher & Ors. AIR 1995 SC 855 = 1995 (1) SCC 652 the question which arose for consideration was about the power of the State Government in the absence of rule or regulations to permit the opening of medical store in campus of hospital remaining open day and night. Objection was raised by storekeepers across road close to hospital that opening of store in campus will jeopardise their interest and they will not be able to sustain themselves. This Court observed that the intention in starting day and night store within the campus has di....
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.... the hardship that may be caused to the medical store keepers who may be having their shops outside the hospital campus. Thus the intention of the appellants to open a medical store within the hospital campus is to salvage the difficulties of the patients admitted in the hospital and this object of the appellants has direct nexus with the Public Interest particularly that of the patients and, therefore, the High Court should not have interfered with the decision of the State Government to settle the holding of a medical store in the Hospital premises. However, if the respondents so choose, they may keep their medical stores also open day and night. Consequently, the impugned order could not be sustained." 92. In Dalmia Cement (Bharat) Ltd. v. Union of India 1996 (10) SCC 104, compulsory packing of specified commodities with jute packaging material (gunny bags) was held not to be violative of Articles 14, 19(1)(g) and 301 of the Constitution. This Court held that 97 the Act primarily intended to provide socioeconomic justice to agriculturist. This Court observed that the role of Article 14 in ushering in healthy social order by providing equal opportunities to all citizens to mak....
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....damental rights meaningful and the life of every citizen worth living and at its best, with the dignity of person and fraternity, lest they remain empty vessels and teasing illusions to majority population. xxx xxx xxx 21. Article 38 of the Constitution enjoins the State to strive to promote the welfare of the people by securing and protecting, as effectively as it may, the social order in which justice - social, economic and political - shall, inform all the institutions of the national life striving to minimise inequalities in income and endeavour to eliminate inequalities in status, facilities, opportunities amongst individuals and groups of people residing in different areas or engaged in different avocations. As stated earlier, agriculture is the mainstay of rural economic and empowerment of the agriculturists. Agriculture, therefore, is an industry. To the tiller of the soil, livelihood depends on the production and return of the agricultural produce and sustained agro-economic growth. The climatic conditions throughout Bharat are not uniform. They vary from tropical to moderate conditions. Tillers of the soil being in unorganised sector, their voice is scarcely h....
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....f production in the hands of a few and are detrimental to the vast. Law, therefore, must seek to serve as a flexible instrument of socio-economic adjustment to bring about peaceful socio-economic revolution under rule of law. The Constitution, the fundamental supreme lex distributes the sovereign power between the Executive, the Legislature, and the Judiciary. The three instrumentalities, within their play endeavour to elongate the constitutional basic structure built in the Preamble, Fundamental Rights and Directives, namely, establishment of an egalitarian social order in which every citizen receives equality of opportunity and of status, social and economic justice. The Court, therefore, must strive to give harmonious interpretation to propel forward march and progress towards establishing an egalitarian social order." 93. This Court has observed that above economic justice means abolition of such economic conditions which remove inequality between man and man. In our opinion, there has to be positive action for that equality. 94. In Indian Drugs & Pharmaceuticals Ltd. & Ors. v. Punjab Drugs Manufacturers Association & Ors. (1999) 6 SCC 247 constitutional validity of the p....
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....n that by the impugned policy, there was no creation of any monopoly nor is there any violation Of Articles 14, 19(1)(g) or 19(6) of the Constitution. In view of the above, we are of the 103 opinion that these appeals should fail and the same are dismissed accordingly. No costs. CA Nos. 3723 and 3744 of 1988: 20. These appeals are preferred against the judgment and order of the High Court of Punjab and Haryana dated 3-6-1988 made in Civil WP No. 6144 of 1987 wherein the High Court was pleased to allow the writ petition filed by the respondents in these civil appeals, quashing the policy decision of the State of Punjab whereby the State had directed its authorities concerned to purchase certain medicines from the public sector undertakings only. We have today in CA Nos. 4550- 51 of 1989 held that a similar policy decision issued by the State of Rajasthan does not amount to creation of monopoly nor is there any violation of Article 14 or 19(1)(g) of the Constitution. The facts giving rise to the writ petitions before the Punjab and Haryana High Court from which the above civil appeals have arisen being the same, we allow these civil appeals and set aside the judgmen....
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.... 48. In other words, a party's right had to be controlled in accordance with the terms of letter of allotment and, therefore, a complete contract existed between the parties. The terms and conditions of the letter of allotment empowered the authorities to add or impose such other conditions which the allottee was obliged to agree having taken benefit thereof. The terms and conditions of the Lease Deed certainly does not contain the condition of free treatment to poorer sections of the Society but the same was part of the letter of allotment itself and they would be applicable to the allotments mutatis mutandis particularly when there is no conflict between them and they duly are supplement to each other." 97. The High Court of Delhi also referred to Rules 5 and 21 of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981. Rule 5 deals with rules of premium for allotment of Nazul land to certain public institutions, whereas Rule 20 deals with allotment to certain public institutions. Rule 5 provides that the Authority may allot Nazul land to schools, colleges, universities, hospitals, other social charitable institutions, religious, political, semipo....
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....e a request to the authorities for a sympathetic consideration and cannot breach the terms of the allotment. The Court specifically observed as under: ".....The allotment of land belonging to the people at practically no price is meant for serving the public interest i.e., spread of education or other charitable purposes; it is not meant to enable the allottees to make money or profiteer with the aid of public property." 98. The High Court held that it was not open to hospitals to wriggle out of their contractual, statutory and public law obligation. There was no scope for reading and confining the rights and obligations of the parties in isolation. 99. The recommendation made in the report of Justice Qureshi Committee was also considered by the High Court of Delhi, the relevant part is extracted hereunder: "66. The Lieutenant Governor of Delhi had constituted a special committee being Justice Qureshi Committee for this purpose. This committee after taking into consideration various aspects including workability of this condition had recommended that 10% IPD and 25% OPD patients should be treated free in all respects in every such hospital. Such patients bel....
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.... "95. No right exists without any obligation and no obligation can be dissected from the duty tagged with it. Right should correlate to a duty. The wider interpretations given to Article 21 read with Article 47 of the Constitution of India are not only meant for the State but they are equally true for all who are placed at an advantageous situation because of the help or allotment of vital assets. Such assets would be impossible to be gathered in a city like Delhi where the land is not available in feet, much less in acres, which the State at the cost of its own projects had provided land at concessional rates to these hospitals. The principle of equality, fairness, and equity would command these hospitals to discharge their obligations of free patient treatment to poor strata of Delhi." 101. The aforesaid decision in Social Jurists (supra) was questioned before this Court by way of several special leave petitions filed by Dharamshila Hospital & Research Centre etc. and Sundar Lal Jain Charitable Hospital also challenged the abovesaid decision by preferring SLP (C) No.5630 of 2008. The said special leave petitions were dismissed by reasoned order dated 01.09.2011. The order in ....
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....and (5) R.B. Seth Jassa Ram Hospital (initial allotment of land was made by DDA and after that an additional strip of land 773 sq. yds. was allotted by L&DO), during the period 1951 to 1976 in accordance with the said policy and at the rate of Rs.10,000/- per acre to one hospital namely VIMHANS as per the prevailing concessional rate in 1981 keeping in mind that these hospitals were genuinely charitable in nature and would provide free treatment for the poor patients and function for the welfare of the public. Out of these 6 hospitals, the lease deed of two hospitals namely, Veeranwali International Hospital (Delhi Hospital Society)/PRIMUS ORTHO and VIMHANS had the free treatment condition to the extent of 70% of total beds whereas, in respect of remaining four hospitals, conditions for free treatment have not been provided. 3. The Govt. of NCT of Delhi has issued guidelines for the provision of Free Treatment facilities to patients of EWS category in private hospitals in pursuance of directions issued on 22.3.2007 by the Hon'ble High Court of Delhi in WP (C) No.2866/2002 in the matter of Social Jurist vs. GNCT Delhi, which inter-alia includes as follows: - i.....
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....hall be provided shortly. vii. The establishment of the referral desk should be ensured within two weeks from the issue of this letter and the Director/In charge of the hospital shall be personally liable in the event of default. viii. The hospital shall send daily information of availability of free beds to the DHS, GNCTD twice a day between 9 AM - 9.30 AM and at 5 PM-5.30 PM on all working days and also to the concerned nearby Govt. hospital to which the private hospital is proposed to be linked for general and for specialized purposes. The details of geographical linkage, the telephone numbers/fax numbers and the name of the nodal officer of Govt. hospitals shall be intimated shortly. In case no information is received within the stipulated time from the private hospitals then it shall be presumed that the beds are available in private hospitals and the patient referred shall be accommodated. ix. The patient referred by Govt. hospitals or directly reporting to the private hospital shall be admitted if required, and be treated totally free. As per court's directions, these patients shall not incur any expenditure for their entire treatment in the hospit....
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....ith Article 215 of the Constitution of India. 4. The Hon'ble Supreme Court of India while dismissing the bunch of Special Leave Petitions in the SLP Civil No.18599/2007 vide its order dated 1.9.2011 has ordered that: "25% OPD and 10% IPD patients have to be given treatment free of cost. The said patients should not be charged anything. But that will not come in the way of the concerned hospital making its own arrangements for meeting the treatment/medicines cost, either by meeting the cost from its funds or resources or by way of sponsorships or endowments or donations." 5. The Hon'ble Supreme Court has affirmed the aforesaid directions passed by the Hon'ble High Court of Delhi. The Government of India has taken a policy decision on the basis of the judgment passed by the Hon'ble Supreme Court that all the six hospitals which have been provided land by Land & Development Office must strictly follow the policy of providing treatment free of cost to 25% OPD and 10% IPD patients. The Government of India further incorporates the aforesaid conditions mentioned in the para 3 (i) to (xviii) above as a part of the terms and conditions of lease/allotme....
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....Kharaiti Ram Hospital to send a reply to the questionnaire and to submit the documents which they were required to submit at the end of the enquiry. The first visit made to Moolchand Kharaiti Ram Hospital was on 16.1.2001 and the second on 21.3.2001. Various other hospitals were also visited. The Committee observed that there was no legal, social or moral justification for allowing such moneymaking commercial concerns. The land was allotted for a charitable purpose and to do charitable service which has now been totally replaced by exploitative commercial hospitals. 106. With respect to Moolchand Kharaiti Ram Hospital, Justice Qureshi Committee has discussed the matter in extensive details. It has been observed that initially the Trust was truly charitable. It was granted 9 acres of prime land situated on the Ring Road in Lajpat Nagar in South Delhi. Initially the hospital continued to serve as a free Ayurvedic hospital for patients in OPD and IPD sections. It also carried on the research for Ayurvedic medicines. Later on the trustees decided to introduce Allopathic treatment also. The Allopathic Section has been upgraded with airconditioned deluxe and superdeluxe rooms which ar....
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....as dismissed on the ground that the hospitals in question were not impleaded as a party to the writ petition, that does not help the hospitals in question. We have examined the matter on merits in the present case afresh unfettered by previous decision and have found Government's order dated 2.2.2012, to be absolutely proper. 108. Reliance has also been placed on Delhi Development Authority & Anr. v. Joint Action Committee Allottee of SFS Flats & Ors., (2008) 2 SCC 672, wherein it was held that novation of contract cannot be done unilaterally, and the new terms must be brought to the knowledge of the offeree and his acceptance thereto must be obtained. It was further observed that when a contract has been worked out, a fresh liability cannot be thrust upon a contracting party and it was beyond the scope of the original terms contained in the offer letter and the allotment letter, in which the imposition of extra charges was not contemplated. In factual matrix being different decision has no application to the instant case as it was stipulated right from the beginning in the policy/rules that land to such institution has been given for charitable purposes of hospitality, rese....