JUDGMENT
B.N. Agrawal, J.
1. This writ application has been filed for quashing order dated October 5, 1985 issued by the Chief Inspecting Officer, Bihar, Respondent No. 1, whereby he has decided that Tata Main Hospital at Jamshedpur (hereinafter to be referred to as ‘Hospital’) is an establishment within the meaning of Section 2(6) of the Bihar Shops and Establishments Act, 1953 (hereinafter to be referred to as ‘Act’) and directed that the same be registered as an establishment under the Act.
2. The short facts are that the Hospital was established around 1908 for providing medical facility to the employees as well as their family and dependents of Tata Iron and Steel Co. Limited (hereinafter to be referred to as ‘TOCO’.) and its associated Companies namely, TELCO, Tata-Robins-Fraser, Tata-Ydoga, Indian Oxy-gen, Indian Cables, etc. Even according to the petitioner, Government employees are treated in the Hospital on payment of charges at the rate of Rs. 15 per day and apart from Government employees outside patients are also treated on their payment of charges at the rate of Rs. 120 per day. According to the petitioner’s case, seventy-five per cent of the patients, who are treated therein, are employees’ dependants or family members of TISCO or its associated-Companies, referred to above, fifteen per cent of the patients are Government employees and ten per cent of the patients are outsiders. When Labour Superintendent, Jamshedpur, Respondent No. 1, sent a letter to the petitioner company on November 7, 1985 for registration of” the Hospital as an establishment under the provisions of the Act, objection was taken on behalf of the petitioner company that as free medical services are provided to employees etc., of TISCO and its associated companies, the same cannot be treated to be a commercial activity, as such, the Hospital cannot be said to be an establishment within the meaning of the Act. The said objection has been overruled by Respondent No. 1 by its order, contained in Annexure 1, as stated above. Hence this writ application.
3. Shri K.D. Chatterjee, learned senior Counsel appearing on behalf of the petitioner in support of his application has raised two points; firstly, that the Hospital is not an establishment within the meaning of Section 2(6) of the Act, therefore, the authority was not justified in giving direction for its registration as an establishment under the provisions of the Act, and, secondly, that even if the Hospital is an establishment within the meaning of the Act, the same is fit to be exempted under Section 4(2) read with Item No.2 of Schedule I appended to the Act, as this Hospital is run for charitable object. First I proceed to consider point No. 1 and for appreciating the same, it would be useful to refer to the provisions of Section 2(6) of the Act, which defines establishment and runs thus:
“2(6). “Establishment” means an establishment which carries on any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession and includes-
(i) administrative or clerical service appertaining to such establishment;
(ii) a shop, restaurant, residential hotel, eating-house, theatre or any place of public amusement or entertainment; and
(iii) such other establishment as the State Government may, by notification, declare to be an establishment to which the Act applies; but does not include a ‘motor transport undertaking’ as defined in clause (g) of Section 2 of the Motor Transport Workers Act, 1961 (27 of 1961).”
From a bare perusal of Section 2(6), referred to above, it would appear that only (hose establishments would come within the ambit of Section 2(6) of the Act, which carries on any business, trade or profession. It has been submitted that this Hospital is not run for carrying on any business or trade, but the same is run mainly for providing free medical facility to the employees, etc. of TISCO or its associated companies besides providing facility to some Government officials and some outsiders. Learned Counsel has placed reliance upon a Full Bench decision of this Court in the case of Tata Iron and Steel Company Limited v. The State of Bihar and Others, 1985 Patna Law Journal Reports 167, which was a case filed by TISCO, in which question raised was as to whether running of canteen by TISCO for its employees and sale of articles therein to them in an integral part of business of mining and quar rying carried on by the said company so as to 1 bring the company within the definition of dealer under Section 2(f) of Bihar Sales Tax Act, 1947. It was laid down in that case that as canteens are run under statutory mandate and obligation and not as an integral part of the business, therefore, running of the canteen by the company for its employees cannot bring it within the definition of dealer under Section 2(f) of the said Act. In that case, undisputedly, fa cility in the canteen used to be provided only to 3 employees and not to any outsider, but, in the present case, medical facility is provided to out siders as well and that also on payment of charges, therefore, the said case has no applica tion to the facts of the present case.
4. Both the parties heavily relied upon a Division Bench decision of this Court in the case of Beldih Club, Jamshedpur v. The Presiding Officer, Labour Court, Jamshedpur and Ors. 1990 (1) BLJ 334. In that case, the question, which had arisen, was as to whether Beldih Club was an establishment within the meaning of the Act. In that case, after taking into consideration various decisions of the Supreme Court t as this Court the Court laid down the law as follows:
“54. Thus, loosely speaking, activity which is extra-commercial cannot be held to be a ‘business’ in the context of a statute like Bihar Shops and Establishments Act.
There cannot be any doubt whatsoever that where business activities or trade activities; are being carried out, profit motive is not a relevant factor for the purpose of consideration as to whether the same comes within the purview of the word ‘industry’ or ‘establishment’ or not.
75. A club, thus, which does not carry out any commercial activity but confines its activity for rendering service or entertainment to its members only, in my opinion, cannot be said to be an ‘establishment’ within the meaning of the provisions of the said Act.
However, the matter may be different where it undertakes a commercial activity that means an activity not with its own members but with outsiders.
76. It is not possible for this Court to state exhaustively as to what could constitute a commercial activity but it may be stated by way of an example that if the club’s property including its premises are let out on hire regularly to the members of the public or if, its restaurant is also made open to the general public or if activity of the club are such so as to enable it to make regular income by dealing with the outsiders, in such case the club may be said to be engaged in commercial activities.
80. As noticed herein before, commercial activity of a club must mean dealing with the third parties or outsiders but not with their own members or the guests of the members unless such activity with the members is held to be a camouflage.”
5. From the aforesaid passages, it would be clear that the Division Bench laid down the law that the profit motive is not a relevant factor for bringing the activity within the ambit of commercial one. It was laid down that if activity in the club for rendering services or entertainment to its members is confined to them only, the club cannot be said to be an establishment within the meaning of the Act. But, if such services are rendered even to outsiders, mat is to general public, the club can be said to be engaged in commercial activity and would be treated to be an establishment within the meaning of Section 2(6) of the Act. In the present case, it has been stated that expenditure of the company over the Hospital is more than the income therefrom, therefore, the company is not making any profit by running the Hospital. This question has been specifically answered by the Division Bench, as stated above and it has been laid down that profit motive is not a relevant factor for considering an activity to be a commercial one. From the aforesaid facts, it becomes clear that services are not rendered by the company to its employees, but to Government servants and other outsiders as well on payment of charges. Therefore, as laid down in the aforesaid decision, activity of the company in providing medical facility in the Hospital would constitute a commercial activity. In my view, the present case is squarely covered by the aforesaid Division Bench decision, which does not support contention of learned Counsel appearing on behalf of the petitioner but runs counter to the same and supports the stand of the State. This being the position, I have no difficulty in holding that the Hospital is an establishment within the meaning of Section 2(6) of the Act.
6. Now 1 proceed to consider the second point raised by learned Counsel appearing on behalf of the petitioner, that is, whether the Hospital is exempted from the provisions of the, Act. For deciding this question, I may usefully quote the provisions of Section 4 of the Act and Item 2 of Schedule I appended thereto, which run thus:
“Section 4. (1) The provisions of this Act shall not; apply to any precinct or premises of a mine as defined in Clause (j) of Section 2 of the Mines Act, 1952 (XXV of 1952).
(2) Notwithstanding anything contained in’ this Act, the provisions thereof specified in the third column of the Schedule shall not apply to the establishment, employees and other persons referred to in the corresponding entry in the second column.’
SCHEDULE 1
Serial No.
Establishments, employees orother persons
Provision of the Act
2.
Establishment for the treatment or the care
of the infrim, sick, destitute or the mentally unfit, which are not run for
the profits but for charitÂable, philanthropic, religious or educational object.
All provision Act
On the basis of the aforesaid provisions, it has been submitted that the Hospital is exempted from the provisions of the Act as medical services are rendered therein for charitable object to its employees. In support of his contention, learned Counsel placed reliance upon a decision of the Supreme Court in the case of P. C. Raja Ratnam Institution v. Municipal Corporation of Delhi and Others, AIR f990 Supreme Court 816, where question had arisen whether a registered Society, which was running a school, was exempted from payment of tax under Delhi Municipal Corporation Act. The Court while deciding the question as to whether running of school is charitable purpose or not laid down the law as follows:
“The argument is well founded. The test of ‘charitable purpose’ is satisfied by the proof of any of the three conditions, namely, relief of the poor, education, or medical relief. The fact that some fee is charged from the students is also not decisive inasmuch as the proviso indicates that the expenditure incurred in running Society may be supported either wholly or in part by voluntary contributions. Besides, the explanation is in terms inclusive and not exhaustive. The impugned judgment must, therefore, be held to be erroneous.”
On the basis of the law laid down in the aforesaid judgment, it has been contended that merely because charges are paid by Government servants and outsiders for rendering medical facilities to them, it cannot be said that the Hospital is not run for charitable purpose. It has been laid down by the Apex Court that if payment is made in the shape of fee by way of voluntary contribution the purpose would still remain to be charitable one. In the present case, there is nothing to show that charges are paid by the Government servants at the rate of Rs. 15 per day and by outsiders at the rate of Rs. 120 per day by way of voluntary contribution, rather the same are paid under compulsion. Therefore, in my view, the said decision of the Supreme Court is quite distinguishable and it cannot be said that the hospital is run for charitable object and since the object is not charitable, it cannot be said that the Hospital is exempted from the provisions of the Act by virtue of Section 4(2) read with Item No. 2 of Schedule I of the Act.
7. This being the position, I do not find that Respondent No. 1 has committed any error in passing the impugned order, contained in Annexure 1, as such, it is not possible to interfere with the same in this writ application, which is, accordingly, dismissed. But, in the circumstances of the case, 1 direct that the parties shall bear their own costs.
A.K. Ganguly, J.
8. I agree.