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1996 Supreme(Mad) 880
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.M. ALI MOHAMED
S.RM.M CT.M. Thiruppani Trust rep. by its Trustee, M.CT. Pethachi, Madras
Versus
State of Tamil Nadu rep. by Secretary to Government Revenue Department, Madras & Others
W.P No. 11438 of 1989
Decided On :Decided on : 28-08-1996
For the Petitioner:C. Ramakrishnan for Vishnu Mohan, Advocates.
For the Respondents: P. Rajamanickam, Additional. Government Pleader.
The making of profit by a public charitable trust is not relevant to the determination of whether the trust is entitled to exemption from the ceiling limit under Section 20(1)(iv) of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978, as long as the predominant object and activity of the trust is to carry out charitable purposes.
Headnote:
S.RM.M.C.T.M. Thiruppani Trust - Urban Land (Ceiling and Regulation) Act, 1978 - Section 20(1)(iv) - Exemption from ceiling limit - Educational institution of a public nature - Charitable purpose - Interpretation.
Fact of the Case:
The petitioner, S.RM.M.C.T.M. Thiruppani Trust, is a public charitable trust that runs an educational institution of a public nature. The trust owns 61 grounds and 1395 sq. ft. of vacant land in Chennai, which is in excess of the ceiling limit prescribed under the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 (the Act). The trust applied for exemption from the ceiling limit under Section 20(1)(iv) of the Act, which exempts vacant land held by public charitable trusts and required and used for any public charitable or religious purpose. The competent authority rejected the trust's application, and the appellate authority upheld the rejection. The trust filed a writ petition in the Madras High Court, challenging the orders of the competent authority and the appellate authority.
Finding of the Court:
The Madras High Court allowed the writ petition and held that the trust was entitled to exemption from the ceiling limit under Section 20(1)(iv) of the Act. The court held that the trust was a public charitable trust and that the school run by the trust was an educational institution of a public nature. The court further held that the making of profit by the trust was not relevant to the determination of whether the trust was entitled to exemption, as long as the predominant object and activity of the trust was to carry out charitable purposes. The court also held that the doctrine of maladministration could be applied in cases of maladministration by administrative authorities, and that in appropriate cases, necessary direction may be given to enquire and investigate whether there was maladministration or not and whether any person has suffered injustice thereby.
Issues: 1. Whether the petitioner trust is a public charitable trust? 2. Whether the school run by the petitioner trust is an educational institution of a public nature? 3. Whether the making of profit by the trust is relevant to the determination of whether the trust is entitled to exemption under Section 20(1)(iv) of the Act? 4. Whether the doctrine of maladministration can be applied in cases of maladministration by administrative authorities?
Ratio Decidendi: 1. The court held that the petitioner trust was a public charitable trust based on the following factors: - The trust deed of the petitioner trust showed that its predominant object and activity was to carry out charitable purposes, such as repairing and renovating old Hindu temples, establishing and maintaining schools and hospitals, and providing relief to the poor and afflicted. - The trust was registered under the Income Tax Act, 1961 as a charitable trust. - The trust was running an educational institution of a public nature, which was recognized by the Education Department. 2. The court held that the school run by the petitioner trust was an educational institution of a public nature based on the following factors: - The school was open to all students, irrespective of their caste, creed, or religion. - The school charged nominal fees from the students, and the fees were used to meet the expenses of running the school. - The school had a good academic record and was popular among the students. 3. The court held that the making of profit by the trust was not relevant to the determination of whether the trust was entitled to exemption under Section 20(1)(iv) of the Act, as long as the predominant object and activity of the trust was to carry out charitable purposes. The court relied on the following Supreme Court judgments: - Dharmadeepti v. C.I.T. (1978) 114 I.T.R. 454 - Rangaraya Medical College v. I.T.O (A.P.) [(1979) 117 I.T.R. 284] - C.I.T. v. A.P. State Road Transport Corporation (159 I.T.R.I). 4. The court held that the doctrine of maladministration could be applied in cases of maladministration by administrative authorities, and that in appropriate cases, necessary direction may be given to enquire and investigate whether there was maladministration or not and whether any person has suffered injustice thereby. The court relied on the following English cases: - Smith and others v. Inner London Education Authority [(1978(1) All England Reporter 411 at page 417] - Regin v. Local Commissioner for Administration for the North and East Area of England reported in Law Reports 1979, Queen-Bench-287
Final Decision: The Madras High Court allowed the writ petition and held that the trust was entitled to exemption from the ceiling limit under Section 20(1)(iv) of the Act.
1. The prayer of the Petitioner is to issue a Writ, direction, or order in the nature of certiorari or other appropriate writ calling for the records of the 2nd respondent in Rc.J2. 67077/88 on his file and quash the order dated 9.5.1989 made therein (confirming the order of the 3-rd respondent in A2/SRA/4/81 dated 19.9.1988.
2. The petitioner herein is S.RM.M.CT.M. Thiruppani Trust. In the affidavit filed by one of the trustees of the petitioner trust, it is stated that his grandfather, the late Sir. M.CT. Muthiah Chettiar, executed a deed of declaration of trust on 20th October, 1930 and registered the same in Rangoon. Since the original trust deed was lost during World War II, the trust was reiterated by a deed of declaration of trust executed by him and his elder brother Sir. M.CT. Muthiah on 12.2.1969. The main objects of the Trust are renovation of Hindu temples and endowing and maintaining educational institutions in Madras and endowing hospitals and granting relief to the needy.
3. It is further stated that in furtherance of the objects of the trust, the property known as Rama Vilas, bearing Door No. 78, Luz Church Road, Mylapore, Madras-4 (comprised in RS. No. 1649/2, Mylapore of an extent of 61 grounds and 1395 sq. ft. and the building thereon) was acquired in July, 1970 for running a school therein. The M.CT.M. Chidambaram Chettiar Matriculation Higher Secondary School with L.K.G., U.K.G. classes I to VII was started in the said premises in the year 1980-1981. Subsequently, the school was upgraded as a Matriculation School in 1984-1985 and the School has, since, been upgraded as a Higher Secondary School in 1989 after obtaining the requisite sanction from the Director of School Education, Madras. As per the orders of the Director, dated 29.11.1985, and 2.3.1989, the school is required to provide adequate accommodation and sanitary facilities, adequate laboratory and library facilities and adequate play are a and offer vocational courses as a pre-condition for recognition and upgradation.
4. The petitioner further states that there are about 500 pupils in the school now. The School has an efficient staff and well equipped library and laboratories. By reason of the courses of studies offered and the efficient management and the devoted work of qualified teachers, the School has become very popular in the City. In fact, the large building with a plinth area of about 12000 Sq. ft. and play fields in the compound of an extent of over 60 grounds in the heart of the city are an added attraction for the School and add to its utility and service in the curricular and Co-curricular pursuits; the open site within the compound is necessary for the additional constructions contemplated for the inevitable expansion of the growing school.
5. It is further stated that in pursuance of the notice dated 28.10.1980 received from the 2nd respondent, the petitioner submitted a return under section 7(1) of Tamil Nadu Urban Land (Ceiling and Regulation) Act 24 of 1978 along with a topo sketch of the property in question and an attested copy of the Trust Deed. It was repeatedly pointed out that their Trust is a public charitable trust and this has been accepted by the Income Tax authorities and that the urban land was purchased by the Trust for esta blishing and maintaining a school and that the Trust is entitled to exemption Under Section 20(1)(iv) of the Tamil Nadu Urban Land (Ceiling and Regulation) Act (hereinafter called the ‘Act’). Copy of the accounts of the Trust for the year ended 13.4.1978 was also made available to show the charitable acts and the public nature of the Trust.
6. Since the Act has no application to lands held by public charitable or religious trusts like the petitioner trust, it was advised to file a petition to the Secretary to the Government for exemption. Accordingly, a petition dated 16.2.1981 was filed stating that the Rama Vilas land was purchased only for educational purposes and hence may be exemp
