The Tamil Nadu Dr.M.G.R.Medical University v. Corporation of Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 20.03.2009CORAMTHE HONOURABLE MR.JUSTICE K.CHANDRUW.P.NO.6528 OF 2008andM.P.NO.1 OF 2008The Tamil Nadu Dr.M.G.R.Medical University,rep. by its Registrar,No.69, Anna Salai,Guindy,Chennai-32.. PetitionerVs.1.The Commissioner, Corporation of Chennai, Rippon Buildings, Chennai.2.The Revenue Officer, Corporation of Chennai, Chennai.3.The Assistant Revenue Officer, Zonal Office-IX, 583, Anna Salai, Saidapet, Chennai-15.. Respondents This writ petition has been preferred under Article 226 ofthe Constitution of India praying for the issue of a writ ofcertiorarified mandamus to call for the records relating to theletter, dated 14.01.2008 in letter No.Z.O.IX/R.D./R2/7093/2006 ofthe second respondent and the consequential Final Warrant inZ.O.IX/R.D./C.No.SPl/2007-08 dated 6.3.2008 issued by the thirdrespondent and to quash the same and consequently, forbear therespondents from demanding any property tax from the petitioner inrespect of the premises at New No.69, Old No.40, Anna Salai,Guindy, Chennai. For Petitioner : Ms.AL.Ganthimathi For Respondents: Mr.Bharathidasan - - - - https://hcservices.ecourts.gov.in/hcservices/ ORDERThe petitioner is the Tamil Nadu Dr.M.G.R. MedicalUniversity created under the Tamil Nadu Dr.M.G.R. MedicalUniversity Act, 1987. The object of the Act was to provide forinstruction and training in the field of medical science, toorganise continuing medical education programme and to developresearch facilities in the State of Tamil Nadu. Under Section 3(3), the headquarters of the University shall be located withinthe limits of Madras Metropolitan Planning area, as defined underthe Tamil Nadu Town and Country Planning Act. The object of theAct is set out in Section 4 of the Act. The statutes have beenframed under the said Act in terms of Section 42. At present, theUniversity is situated at No.69, Anna Salai, Guindy, Chennai-32.2.The third respondent herein sent a letter, dated11.7.2006 to the petitioner University, stating that they shouldfurnish certain information regarding area, in which theUniversity building is located. The petitioner, by acommunication, dated 6.9.2006, gave those particulars withreference to the area of the building in main administrativebuilding, department of Transfusion Medicine and Virtual library,etc. 3.On receipt of the said information, the respondent issueda provisional notice, stating that they are bound to pay propertytax and it was worked out to Rs.2,19,850/-. They assessed propertytax on the basis that the premises is used by the owner for nonresidential purpose. Accordingly, a demand notice was issued tothe petitioner University, asking them to pay a sum ofRs.3,62,754/-. 4.When they issued several notices of demand, thepetitioner University sent a representation, dated 26.12.2006,stating that to provide for medical education and variousactivities, the medical University was set up. An attention of therespondent was also drawn to Section 101(c) of the Chennai CityMunicipal Corporation Act, 1919, which reads as follows:"101(c):[buildings used for educational purposeincluding hostels attached thereto and places used forthe charitable purpose] of sheltering the destitute oranimals and orphanages, homes and schools for the deafand dumb, asylum for the aged and fallen women andsuch similar institutions run purely on philanthropiclines as are approved by the Council;" (emphasisadded).5.Instead of replying to the legal objection raised by theUniversity, the respondent, by a reply dated 12.01.2007 reiteratedtheir contention regarding payment of dues. Once again, thepetitioner University sent letters, dated 14.2.2007 and 23.6.2007.There was no reply. When there was a further demand notice, theUniversity again sent a reply, dated 12.9.2007 and brought to the https://hcservices.ecourts.gov.in/hcservices/ notice of the respondent Corporation the various activitiescarried out by them and also the statutory exemption granted underSection 101(c), as referred to above. 6.The Assistant Revenue Officer sent a reply, dated29.11.2007, stating that exemption under Section 101(c) will notapply to the building of the University as it is used foradministrative purpose. A reference was also made to the opinionsent by the Government Secretary, Municipal Administration andWater Supply Department, dated 14.09.2007. Thereafter, thepetitioner University sent a further letter, dated 24.12.2007,reiterating their entitlement to avail statutory exemptionprovided to them.7.The respondent Corporation, by a letter, dated18.02.2008, informed them that since administrative work is goingon in the building, and hence exemption from paying property taxcannot be given and therefore, they should pay the dues inaccordance with law and a final warrant notice was issued. It isat this stage, the University was forced to approach this courtwith this writ petition, challenging the action of the respondentCorporation.8.The writ petition was admitted on 14.3.2008 and aninterim stay was granted on the very day. Despite notice issued tothe Corporation, there has been no counter affidavit filed tilldate. Today, the matter is posted before this court. The standtaken by the respondent that the premises in New No.69, Old No.40,Anna Salai, Guindy, in which the University and various academicdepartments are situated, is not eligible for exemption underSection 101(c), is totally a misreading of the provision forexemption. As seen from the exemption provision, it is availablewhen the buildings are used for educational purpose, includinghostels attached to the main building, they must be used inconnection with the educational purpose. It does not mean only thearea in which class rooms and laboratories are situated alone areeligible for exemption. The purpose of exemption was that theeducational institutions must enjoy the exemption from theproperty tax. 9.In the present case, by 1987 Act of the StateLegislature, the petitioner University was established and it hasto have premises for running its administration, including meetinghall for Executive Council, Vice Chancellor's Office and variousoffices under the Registrar, without which the educational purposefor which the Act had established the University cannot be served.10.The respondent's action is highly irresponsible and nottaking note of the main object of exemption granted by the Statelegislature in respect of the educational institutions. Theattempt of the respondent by indulging in interpreting the sectionand by giving artificial meaning that only such of those buildingswhere instructions are given to students alone are exempted andthe other administrative buildings are not exempted, clearly showsthe sorry state of affairs in the office of the respondent https://hcservices.ecourts.gov.in/hcservices/ Corporation. Because of their action, the petitioner Universityhad to rush to this court and spent considerable amount of publicmoney.11.When a similar exercise came for consideration inrespect of the educational institutions operating in panchayatarea, the Division Bench of this court in a judgment in SriramEducational Trust rep. by its Chairman Vs. The President,Thiruvallur Taluk & District reported in 2008 (3) MLJ 351 heldthat the educational institutions (including its whole premises),whether aided or run by the State or run under self financingbasis, are eligible for exemption. 12.In the light of the same, this writ petition standsallowed and the impugned notice stands set aside. It is herebydeclared that the petitioner University is not liable to pay anyproperty tax in respect of the premises in Old No.40, New No.69,Anna Salai, Guindy, Chennai. However, in the circumstances of thecase, there shall be no order as to costs. Consequently, theconnected MP is closed.VvkSd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1.The Commissioner, Corporation of Chennai, Rippon Buildings Chennai.2.The Revenue Officer, Corporation of Chennai, Chennai.3.The Assistant Revenue Officer, Zonal Office-IX, 583, Anna Salai, Saidapet, Chennai-15.+ 1 cc to Mr. V. Bharathidasan, Advocate, SR No.8956+ 1 cc to M/s. A. L. Ganthimathi, Advocate, SR No.8991KA(CO)SR/26.3.2009W.P.NO.6528 OF 2008