Hospital is not a charitable institution.

N.Kannadasan, J.

The appellant herein is the appellant in A.S.No.342 of 1985 and respondent in A.S.588 of 1986 and defendant in the suit. The respondent herein is the respondent in A.S.No.342 of 1985 and appellant in A.S.No.588 of 1986 and the plaintiff in the suit.

2. The suit is filed by the plaintiff viz., Kovindasamy Naidu Hospital, which is administered by K.Govidasamy Naidu Medical Trust (hereinafter called as the Trust), which is a public Charitable Trust constituted under the deed of Trust dated 27.3.1974. The Trust was found to serve the public by providing medical relief to the general public, by establishing Hospital, Surgical Homes, Nursing Homes etc. The plaintiff comes within the scope of definition of Section 86(e) of the Tamil Nadu District Municipalities Act,1920 (hereinafter after called as the Act), by construing it as Charitable Hospital and hence eligible for exemption from payment of the property tax. However, the said benefit was not extended to it by the defendant in spite of repeated pleas. In fact, the plaintiff has availed the exemption from payment of property tax in pursuance of the Coimbatore Municipal Council Resolution 693 dated 18.6.1980 with effect from 1.4.1980 and by later resolution No.1121 dated 23.7.1980, the defendant has cancelled the earlier resolution for mala fide and extraneous reasons. The said cancellation is also illegal as no opportunity of hearing was given before the said cancellation, which is violative of the fundamental principles of natural justice. In spite of several representations submitted by the plaintiff, no order was passed by the defendant even though the plaintiff satisfies the scope and ambit of Section 86(e) of the Act and Section 123 (e) of the Coimbatore City Municipal Corporation Act, 1981. In fact, the Trust has been recognised as Charitable Institution for the purpose of the provisions of the Income-tax Act, 1961 and availed Customs Duty exemption for the purchase of medical equipment. Due to inaction on the part of the defendant, the suit is filed to declare the plaintiff as Charitable Trust to seek exemption from the property tax and to direct the defendant to repay the amount already collected by way of property tax for the period subsequent to 1.4.1978 and to grant permanent injunction restraining the defendant from recovery of any arrears.

3. The suit was resisted by the defendant contending that the property tax was imposed after carrying out inspection of the premises and during such inspection, it came to light that rents are collected for the rooms and fees also collected from the patients. It is also contended that the plaintiff hospital cannot be construed as Charitable Hospital within the meaning of the relevant provisions of the Act referred to above and the cancellation of the earlier resolution in withdrawing the tax exemption was done in accordance with law and the suit is barred by limitation.

4. The suit was decreed in respect of declaration, injunction and for recovery of a sum of Rs.36,002.80, but however, relief was not granted in respect of the tax which was collected for the period prior to 18.6.1977 as barred by limitation.

5. Aggrieved against the Judgment and decree of the trial court, the appellant/defendant filed A.S.No.342 of 1985 and the plaintiff/respondent filed A.S.No.588 of 1986 in respect of the portion of the decree which was not granted. Before the learned single Judge, the appeal filed by the plaintiff in A.S.No.588 of 1986 was not pressed and accordingly the same was dismissed as not pressed. However, the appeal filed by the appellant/defendant in A.S.No.342 of 1985 was dismissed on merits by a Judgment and decree dated 21.7.1998. Against which the defendant has filed the present L.P.A.

6. The learned senior counsel Mr.G.Masilamani, appearing for the appellant/defendant has contended that the plaintiff-hospital is receiving income and collecting rent for the rooms and the patients are being charged by way of