Patna High Court
Krishna Devi Devi Pd.Kejriwal vs The Bihar State Elec.Board &Or on 16 November, 2010
Author: S. K. Katriar
Bench: Sudhir Kumar Katriar, Birendra Prasad Verma
CIVIL WRIT JURISDICTION CASE No.556 OF 1999
With
CIVIL WRIT JURISDICTION CASE NO. 1947 OF 1998
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In the matter of an application under Article 226 of the Constitution
of India.
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In C.W. J.C. No. 556 of 1999
Tripolia Social Service Hospital, Tripolia, P.S. Alamganj, District-
Patna, through its Administrator, Sr. Anne Thomas, daughter of Shri
Thomas Alanchery, resident of Holy Cross Convent, Tripolia, P.S.
Alamganj, District- Patna
----- Petitioner.
Versus
1. Bihar State Electricity Board, through its Chairman, Vidyut
Bhavan, Patna.
2. Finance Controller, Bihar State Electricity Board, Vidyut
Bhavan, Patna.
3. Accounts Officer, Department of Revenue, Bihar State Electricity
Board, Vidyut Bhavan, Patna.
4. Electrical Executive Engineer, Electric Supply Division, Bihar
State Electricity Board, Gulzarbagh, Patna.
5. Assistant Electrical Engineer (Rev.), Gulzarbagh Supply
Division, Bihar State Electricity Board, Gulzarbagh, Patna.
6. The State of Bihar ------ Respondents.
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In C.W. J.C. No. 1947 of 1998
Krishna Devi Devi Prasad Kejriwal Maternity Hospital, Juran
Chapra, Road No.2, Muzaffarpur, through its Secretary Shri Raj
Kumar Goenka ----- Petitioner.
Versus
1. The Bihar State Electricity Board, Vidyut Bhawan, Bailey Road,
Patna, through its Chairman.
2. The Senior Legal Advisor-cum-Additional Secretary, Bihar State
Electricity Board, Vidyut Bhawan, Bailey Road, Patna.
3. The Electrical Superintending Engineer, Electrical Supply Circle,
Ganipur, Muzaffarpur.
4. The Electrical Executive Engineer, Urban Electric Supply
Division, Maripur, Muzaffarpur.
5. The Assistant Electrical Engineer (Revenue) Maripur,
Muzaffarpur ---- Respondents.
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In C.W.J.C. No. 556 of 1999
For the Petitioner : Mr. K.M. Joseph, Advocate.
Mr. Peter Ladis, Advocate.
Ms. Annamma Mathew, Advocate.
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For the respondent: Mr. Vinay Kirti Singh, Advocate,
Nos.1 to 5 Mr. Vijay Kumar Verma, Advocate.
For the State : Mr. Ajay Kumar Singh,
A.C. to S.C.6.
In C.W.J.C. No. 1947 of 1998
For the Petitioner: Mr. Suraj Samdarshi, Advocate.
For the Respondents : Mr. Vinay Kirti Singh, Advocate.
Mr. Akhileshwar Singh, Advocate.
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PRESENT
THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR
THE HON'BLE MR. JUSTICE BIRENDRA PRASAD VERMA
**********
S.K.Katriar,J. Both these writ petitions raise common issues of
law and facts and are, therefore, being disposed of by a
common judgment. In view of the issues involved in the
matter, C.W.J.C. No. 556 of 1999 was admitted for final
hearing by order dated 28.3.2000, to be heard by a Division
Bench. By order dated 1.3.2001, passed in the analogous
C.W.J.C. No. 1947 of 1998, the same has been directed to be
heard along with C.W.J.C. No. 556 of 1999, because of the
common issues involved in these writ petitions. That is how
both these writ petitions have come up for final disposal.
2. A brief statement of facts giving rise to C.W.J.C.
No.556 of 1999, may be indicated. Tripolia Social Service is
a society established by Sisters of Mercy of the Holy Cross,
a group of religious Sisters in the Catholic Church. The
Society has established and operate Tripolia Social Service
Hospital, the petitioner herein. The memorandum of Tripolia
Social Service sets out charitable purposes as the aims and
objects of the society. It is, inter alia, engaged in a number of
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activities including medical relief to the poor and the needy.
2.1. The petitioner has taken three electricity connections,
namely, numbers 26401600, 26401601, and 26401602, in
1962. The present dispute commenced in 1994, and the
present writ petition is with respect to the period August
1991 to January 1998, for which period the Bihar State
Electricity Board (hereinafter referred to as 'the Board') had
called upon the petitioner to make payment of power supply
after applying the commercial tariff with respect to two of
the connections, namely, nos. 26401601 and 26401602,
renumbered as A/C 75994/26401803 and A/C
149721/26401805. The Board has, from time to time, been
issuing tariff notifications in exercise of its statutory powers
under sections 46 and 49 of the Electricity (Supply) Act,
1948. These tariffs provide the yardstick i.e. the rates at
which power will be supplied to different consumers. It has
statutory flavour. The Board had been raising its bills to the
petitioner as per its tariff enforced from time to time. The
petitioner, being a hospital, was required to pay electricity
bills treating it to be a domestic service (D.S.III for short), as
per the Tariff Notification published in the Bihar Gazette
(Extra), August 12, 1983. A dispute arose about the category
in which it is covered after issuance of tariff notification
dated 20.9.1991 (Annexure-7), replacing the said tariff
notification dated 12.8.1983, whereby categorization of
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power consumers was changed. The petitioner asserted that
it continues to be in D.S. III, the rates of which are lower
than commercial service (hereinafter referred to as 'C.S.').
On the other hand, the Board took the stand that, in view of
recategorisation of power consumers in Tariff Notification
dated 20.9.1991, hospitals have been transferred from
D.S.III to C.S. In order to realize bills at the appropriate rate,
namely, the commercial tariff, the Board issued two
supplementary bills, both dated 4.3.1998 (Annexures 11/A
and 11/B). The petitioner challenged the two supplementary
bills, by preferring C.W.J.C. No. 3119 of 1998, which was
disposed of by a learned Single Judge of this Court by order
dated 22.4.1998 (Annexure-12), whereby the petitioner was
directed to submit appropriate representation before the
Director of Accounts (Revenue), who shall dispose of the
same with a speaking order. Certain directions were also
recorded for payment of part of the bill amount. The
Director of Accounts rejected the representation by a
reasoned order dated 24.12.1998 (Annexure-17), followed
by the consequential order dated 9.1.1999 (Annexure-17),
upon the petitioner to make payment of the bills, and
impugned herein.
3. A brief statement of facts giving rise to C.W.J.C. No.
1947 of 1998, may also be indicated. This dispute
commenced in 1991. This writ petition covers the period
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May 1992 to January 1998, and the Board had called upon
the petitioner to make payment of the electricity dues as per
the Commercial, i.e. non-domestic, rates. The Kejriwals of
Muzaffarpur set up the petitioner hospital allegedly for
charitable purposes. In view of issuance of supplementary
bills on the basis of commercial tariff, the petitioner
preferred C.W.J.C. No. 4383 of 1996, which was disposed of
by the learned Single Judge of this Court by order dated
19.11.1996 (Annexue-8), whereby the petitioner was
directed to submit an appropriate representation before the
Senior Legal Advisor of the Board to be disposed of by a
reasoned order. The Senior Legal Advisor rejected the
representation by a speaking order dated 4.4.1997
(Annexure-9). The petitioner challenged the same by
preferring C.W.J. C. No. 3811 of 1997, which was allowed
by order dated 20.10.1997 (Annexure-10), the order of the
Senior Legal advisor was set aside, and the matter was
remitted to the same authority for a fresh decision in
accordance with law and the observations made therein. The
Senior Legal Advisor reconsidered the entire matter, and
passed an exhaustive order whereby the representation has
once again been rejected by order dated 31.1.1998
(Annexure-13). Hence this writ petition.
4. While assailing the validity of the impugned action,
learned counsel for the petitioner of C.W.J.C. No. 556 of
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1999, submits before us that the petitioner has been
recognized as a charitable institution within the meaning of
section 4(K) of the Patna Municipal Corporation Act, 1951.
He next submits that the petitioner is a recognized charitable
institution within the meaning of Section 12(A), read with
Section 2(15), of the Income Tax Act, and is being assessed
there on the footing that it is a charitable institution. The
petitioner's nature and character as a charitable institution is
not in dispute in view of the orders of various courts,
notwithstanding which the Board is not treating the
petitioner as a charitable institution. He also submits that the
order of the Board suffers from an error apparent on the face
of it. They have not correctly appreciated the order of the
Supreme Court in determining the nature and character of a
hospital being run without profit motive. He relies on the
following reported judgments:
(i)Additional Commissioner of Income-tax, Gujrat,
Ahmedabad Vrs. Surat Art Silk Cloth
Manufacturers'Association, Surat, A.I.R. 1980 SC
387 (Paragraph nos. 18 and 19).
(ii) Assistant Commissioner of Income Tax,
Madras and others Vs. Thanthi Trust and others,
2001(2) SCC 707 (Paragraph no.25).
(iii) Victoria Technical Institute Vs. Addl.
Commissioner of Income-tax, Madras and another,
A.I.R. 1991 SC 997 (Paragraph 3).
(iv) Yogiraj Charity Trust Vs. Commissioner of
Income-tax, New Delhi, A.I.R. 1976 SC
1836.(Paragraph 17)
(v) C.I.T., Madras Vs. Andhra Chambers of
Commerce Etc., A.I.R. 1981 SC 1766.
4.1. Taking us through the provisions of the series of tariff
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notifications issued by the Board from time to time, he
submits that there is a golden thread consistently running
though grant of exemptions to a hospital like the present
petitioner being run without profit motive. He submits in the
same vein that the Board has failed to realize that income
after all has to be generated by different methods to retain
the charitable nature of the hospital. The primary question
whether or not the hospital is being run without any profit
motive has to be ascertained from the functioning of the
hospital.
5. The petitioner of C.W.J.C. No. 1947 of 1998 has
assailed the validity of the impugned order on diverse
grounds. He has advanced submissions akin to those of the
learned counsel for the petitioner of C.W.J. C. No. 556 of
1999. He has in addition relied on the following reported
judgments:
(i) P.C. Raja Ratnam Institution Vs. Municipal
Corporation of Delhi, A.I.R. 1990 SC 816
(ii)Commissioner of Income Tax Vs. Gujrat
Maritime Board, (2007) 14 SCC 704.
6. Learned counsel for the Board has taken us through
the provisions of different tariff, and has submitted that ever
since issuance of tariff notification dated 20.9.1991
(Annexure-7), and that of 23.6.1993 (Annexure-8), hospitals
and dispensaries are being treated to be under the
commercial category. In his submission, it has been carved
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out from the domestic category of charitable institutions, and
is now included in the commercial cateogory. He relies on
the judgment of a learned Single Judge of this Court in the
case of Dr. Ram Sharan Sinha and Anr. Vrs. The State of
Bihar & Ors., reported in 1996 (1) P.L.J.R. 695.
7. We have perused the materials on record and
considered the submissions of learned counsel for the
parties. The previous tariff notification, and the two relevant
ones in the present context, may be noticed. The Board had
published its tariff notification in the Bihar Gazette (Extra),
August 12, 1983. Paragraph no.1 of the same is reproduced:
"THE TARIFF SCHEDULE
LOW TENSION SUPPLY
DOMESTIC SERVICE (SYMBOL D.S.)
1. Applicability.- For use for domestic purpose
including domestic pumping set and household
electric appliances in a private residence. Space
provided in dwelling houses for office and
professional work and occasionally used for
business is also considered as a private house for
the purpose. This rate is also applicable where the
supply is used in schools, colleges, hospitals,
clubs, temples, mosques, churches, charitable
institutions, industrial institutions."
(emphasis added)
7.1. The same was replaced by tariff notification published
in Bihar Gazette (Extra) September, 20, 1991. The relevant
portions of which are reproduced hereinbelow:
"THE TARIFF SCHEDULE
LOW TENSION SUPPLY
Domestic Service (Symbol:Ds)
1. Applicability: For use for domestic
purpose including domestic pumping set and
household electric appliances in private residence
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such as Radios, Fans, Televisions, Desert Coolers,
Air Conditioners, Motors upto 1 BHP for lifting
water for domestic purposes and other household
electrical appliances not covered under any other
schedule.
14.BIHAR GAZETTEE (EXTRA), SEPTEMBER 20, 1991
This rate is also applicable where the
supply is used in religious institutions such as
Temples, Gurudwaras, Mosques, Church and
Burial/Crematorium grounds and other charitable
institutions.
COMMERCIAL SERVICE
1. Applicability.- For use for Lights, Fans and
Power loads non-domestic purpose like shops,
Hospitals (Private or Government), Clinic, Nursing
Home, Restaurants, clubs, Workshops, Show-rooms,
Office (Private or Central/State Governments and
their Undertakings), Commercial Establishments,
Cinemas, X-rays Plants, Schools (Private or
Government, College, (Private or Government
Hostel (Private or Government), Boarding/Lodging
houses, Libraries (Private or Government), Defence
installations, Recognized Research institutions,
Hotels, Railway Stations, Fuel-Oil Stations
(including Vehicle Service Station), All India
Radio/T.V. Installation, Printing Presses, Housing
Co-operative Societies for availing power, common
services in Multi-stored building and such other
installations not covered under any Tariff
Schedule." (Emphasis added)
7.2. This tariff notification was replaced by the
notification published in the Bihar Gazette (Extra) 23, June,
1993. The relevant portion of the same are reproduced
hereinbelow:
THE TARIFF SCHEDULE
LOW TENSION SUPPLY
DOMESTIC SERVICE (SYMBOL :DS)
1. Applicability:
For use for domestic purpose including
domestic pumping set and household electric
appliances in private residence such as Radios,
Fans, Televisions, Desert Coolers, Air
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Conditioners, Motors upto 1 BHP for lifting
water for domestic purposes and other household
electrical appliances not covered under any other
schedule.
This rate is also applicable where the
supply is used in religious institutions such as
Temples, Gurudwaras, Mosques, Church and
Burial/Crematorium grounds and other
recognized charitable institutions.
Non-Domestic, Light, Fan and Power Service
1. Applciability:
For use for Lights, Fans and Power loads non-
domestic purpose like shops, hospital (Private or
Government) Clinic, Nursing home, Restaurants,
Clubs, Workshops, Central Air Conditioning
Unit, Office (Private or Central/State Govts. and
their undertakings) Dispensaries, Show-rooms,
Commercial Establishments, Cinema, X-Ray
Plants, Schools and Colleges (Private or
Government), Boarding lodging Houses,
Libraries (Private or Government ), Defence
installations, Recognised Research Institutions,
Hotels, Railway Stations, Fuel-oil Stations
(including Vehicle. Service station), all India
Radio/ T.V. installation, Printing Presses,
Housing Co-operative Societies for availing
power, Common Services in Multi storeyed
building, Universities, Trust, Museum, Poultary
Farms, Banks and such other installations not
covered under any Tariff Schedule."
(Emphasis added)
8. It is evident on a perusal of the brief history of the
successive tariff notifications that 1983 notification included
hospitals, and charitable institutions, as separate entries
under D.S. The same was replaced by that of 1991, whereby
hospitals have been deleted from D.S., and incorporated in
C.S. In fact, the description of hospitals has been given a
longer and wider description in the C.S. in the tariff
notification of 1991, under the head C.S. It is further
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relevant to state that charitable institutions continue in D.S.
The same position continues under 1993 notification, i.e.
hospitals continued to be in the C.S. The periods in question
in the present proceeding are covered by tariff notifications
of 1991 and 1993. It is thus evident that the tariff-makers
consciously deleted hospitals from D.S., and included them
in C.S., in the notifications of 1991 and 1993. We thus
conclude that both the writ petitions are covered by the tariff
notifications 1991 and 1993, and shall have to pay for
electric supply as per the rates applicable as C.S. for the
periods in question.
9. It is evident that hospital was specifically included
in D.S. in 1983 tariff notification, was omitted therefrom and
transferred to the category of C.S. in 1991 notification, and
continued as such in 1993 notification, makes the intention
of the Board that it shall be treated as C.S. with
promulgation of the 1991 notification. The intention is
obvious and highlights the intention of the tariff-maker in
taking hospital etc. out of D.S., and inserting it specifically
in C.S. Learned counsel for the petitioner has rightly relied
on the judgment of a learned Single Judge of this Court, in
Dr. Ram Sharan Sinha (supra), wherein the same view has
been taken. We approve of the view taken therein.
10. In view of foregoing discussion, we do not consider it
necessary to consider the remaining submissions advanced
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on behalf of the petitioners. We have not applied our minds
to the nature and character of the functioning of the two
petitioners, and whether or not these are engaged in
charitable activities providing service free of charges, or
without any profit motive. Therefore, the decision of the
authorities under the notifications remains untouched.
11. In the result, we dismiss the two writ petitions, though
we rest our conclusion on grounds different from the ones
indicated in the impugned orders. The petitioners have made
part payment as per interim orders of this Court. The Board
shall, therefore, issue fresh bills to the petitioners after
making adjustment of the interim payments made by the
petitioners. If the petitioners make payment of the balance
amount within a period of four weeks from the date of
service of fresh bills, they shall not be required to pay any
amount towards delayed payment surcharge, and/or any
other penalty or interest by whatever name called. In the
circumstances of the case, there shall be no order as to costs.
( S. K. Katriar,J. )
B.P. Verma, J.I agree.
(Birendra Prasad Verma, J.) Patna High Court, Patna. Dated 16th November, 2010 Vinay/A.F.R.