IN THE HIGH COURT OF DELHI AT NEW DELHI
W.P. (C) 880/2009
Reserved on: 16th March 2011
Decision on: 28th April 2011
SIR GANGA RAM TRUST SOCIETY ..... Petitioner
Through: Mr. Maninder Singh, Senior
Advocate with Mr. Gaurav Sharma,
Advocate.
versus
UNION OF INDIA & ORS. ..... Respondents
Through: Mr. A.S. Chandhiok, ASG with
Ms. Inderjeet Sidhu, Mr. Sandeep
Bajaj, Ms. Riya Kaul and
Ms. Neha Rastogi, Advocates.
CORAM: JUSTICE S. MURALIDHAR
1. Whether Reporters of local papers may be
allowed to see the judgment? No
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in Digest? Yes
JUDGMENT
28.04.2011
1. This is the second round of litigation involving the Petitioner‟s challenge
to a decision dated 16th March 2001 passed by the Directorate General of
Health Services (`DGHS‟) in the Ministry of Health and Family Welfare
(`MHFW‟), Government of India, Respondent No. 5 withdrawing the
customs duty exemption certificate (`CDEC‟) issued to the Petitioner for
availing the benefit of exemption from payment of customs duty and
W.P. (C) No. 880/2009 Page 1 of 23
additional duty of customs for importing/acquiring medical equipments for
treatment of patients at the Sir Ganga Ram Hospital („SGRH‟) in New
Delhi.
Background facts
2. The Petitioner Sir Ganga Ram Trust Society (GRTS) is registered under
the Societies Registration Act, 1860 and is running the SGRH, a charitable
institution, since 1954. According to the Petitioner, it does not have any
corpus fund and all the income and profit from the SGRH is invested for the
development of the SGRH. Further, the GRTS does not get any grant from
any authority.
3. It is stated that on 30th August 1977 the Directorate of Health Services
(`DHS‟) of the Delhi Administration [now the Government of the National
Capital Territory of Delhi (hereafter `the GNCTD‟)] certified SGRH to be a
charitable institution running a free out-patient department (`OPD‟) and
having 90 free beds. The certificate further stated that the medical facilities
were provided in the SGRH without distinction of caste, creed and religion.
This certificate was reiterated on 23rd March 1983. The DHS certified that
as per its records SGRH had 98 free beds and free OPD services, qualifying
the institution as a charitable one, for the purposes of claiming customs duty
exemption and grant-in-aid under the pattern of Government of India,
MHFW.
W.P. (C) No. 880/2009 Page 2 of 23
4. On 1st March 1988 the Ministry of Finance, Government of India issued
Notification No. 64 of 1988 granting customs duty exemption to hospitals
satisfying the eligibility criteria indicated therein in respect of equipment
imported for the treatment of patients. The categories of hospitals that could
avail exemption in terms of the said notification were:
(a) charitable hospitals; and
(b) hospitals that provide medical surgical or diagnostic treatment
(i) free on an average, to at least 40 per cent of all their outdoor
patients, and (ii) free to all indoor patients whose family income is
less than rupees five hundred per month, and keeping 10 per cent
of all the hospital beds reserved for such patients.
5. The Petitioner states that it applied for customs duty exemption for
several imported equipments stating that it is a charitable hospital. A sample
of the application submitted by the Petitioner has been enclosed with the
writ petition. In the said application, the details of all the patients treated
free for the years 1986, 1987 and 1988 was indicated. The Petitioner
obtained CDEC under the said Notification No. 64 of 1988 for several
equipments up to 1994 after which said notification stood withdrawn.
6. Following the decision of the Supreme Court in Mediwell Hospital &
Health Care Pvt. Ltd. v. Union of India (1997) 1 SCC 759 [hereafter `the
Mediwell Hospital case‟], certain information was sought by the DGHS
W.P. (C) No. 880/2009 Page 3 of 23
from the Petitioner Society on 12th May 2000 regarding (a) the date ofinstallation of the equipments (b) number and percentage of OPD patients
treated free and (c) number and percentage of indoor patients treated free
whose family income was less than Rs. 500 per month. It may be mentioned
here that in the Mediwell Hospital case, the Supreme Court had emphasized
that the objective of giving free treatment to at least 40 per cent of the
outdoor patients as well as free treatment to all the indoor patients
belonging to families with an income of less than Rs. 500/- per month had
to be achieved at all costs and that if the said obligation was not discharged
steps ought to be taken for realization of the customs duty from such of
those entities who had availed of the CDECs. The letter dated 12th May
2000 from the DGHS to the Petitioner sought information in respect of 44
equipments for which CDECs had been issued.
7. The Petitioner claimed that it was facing difficulty in locating the old
records as the information sought related to the number of OPD and indoor
patients treated free of cost in the SGRH up to 1999. On 31st August 2000
the Petitioner replied to the aforementioned letter dated 12th May 2000 in
which it stated that the Petitioner had been able to locate some of the
records. The Petitioner enclosed the details of equipments in respect of
which the CDEC benefit had been availed of as Annexure-I. The details of
the OPD as well as in-patients treated and those treated free at the SGRH
during the years 1985 to 1999 was enclosed as Annexure-II and the details
W.P. (C) No. 880/2009 Page 4 of 23
of beds speciality-wise and beds reserved for indoor patients pertaining tofamilies with income less than Rs. 500/- per month was enclosed as
Annexure-III. The Petitioner reiterated that the SGRH was a 500 bedded
charitable hospital and that it had reserved 100 beds out of the total 500
beds for treatment of poor patients.
8. It is stated that the DGHS carried out a surprise inspection on 17th/18th
January 2001. The Petitioner states that it was not at that stage given a copy
of the inspection report and that without affording it an opportunity of being
heard the DGHS passed an order dated 16th March 2001 withdrawing the
CDECs granted to the Petitioner. It was observed in the said order that the
information furnished by the Petitioner was not sufficient. The inspection
had revealed that the SGRH was running a paid OPD facility for which no
records had been kept. The investigations done in the paid OPD were much
more than the patients attending the General OPD. All patients attending the
General OPD had to pay Rs. 10/- as registration charges. Although the
consultation provided was free, the claim of SGRH that it had given free
treatment to 40% of its OPD patients was not correct. The admission
register as well as the case sheets did not mention income of the patients
and, therefore, it was not possible to verify whether the SGRH gave free
treatment to indoor patients whose income was less than Rs. 500/- per
month. No bed was earmarked for such patients. On the date of the visit, a
substantial number of patients admitted to such beds informed the
W.P. (C) No. 880/2009 Page 5 of 23
inspecting team that they had paid for the services earlier and weretransferred to the General Ward category due to their inability to pay.
Consequent upon the said inspection report the impugned order dated 16 th
March 2001 was passed whereby the CDECs issued to the Petitioner in
respect of 44 equipments stood withdrawn.
9. By a letter dated 25th May 2001 the Petitioner furnished to the DGHS the
statistical data from the records showing “(a) that all OPD patients and
more than 10% of its indoor patients were treated freely; (b) that in so far as
paid OPD was concerned, the hospital had only allotted rooms to the
consultants for their practice and the hospital charged nothing; and (c) that
the hospital had only one OPD and that was General OPD which was 100%
free”.
10. On 7th October 2002 the Petitioner again wrote to the DGHS requesting
that the decision dated 16th March 2001 withdrawing the CDECs be
reconsidered. However, by a letter dated 20th June 2003 the DGHS
maintained that it had treated the SGRH as a hospital falling under
paragraph 2 of Notification No. 64 of 1988, and that the Petitioner did not
fulfill the conditions stipulated therein. Consequently, the earlier decision
dated 16th March 2001 was reiterated by the subsequent letter dated 1 st
October 2003 of the DGHS.
W.P. (C) No. 880/2009 Page 6 of 23
11. Aggrieved by the above decisions, the Petitioner filed W.P. (C) 5303-04
of 2004 in this Court. Pursuant to the orders passed in the said writ petition,
two affidavits were filed by the Trustees of GRTS and by its Assistant
Secretary stating as follows:
a. The SGRH collected from its consultants the total number of
private patients treated by them. It also collected the number of
private patients who visited the hospital on a sample basis in order
to make a reasonable estimate of the total number of private
patients treated by the consultants.b. The percentage of OPD patients treated free during 1988 to
2003 was as follows:(i) 100% of the OPD patients were treated free, if the
General OPD patients of the hospital alone were
considered;(ii) 73% to 85% of the OPD patients were treated free, if
the total number of OPD patients was taken as the
aggregate of (a) number of private patients as reported by
the consultants and (b) general OPD patients of the hospital.(iii) 55% of the OPD patients were treated free, if the total
number of OPD patients was taken as the aggregate of (a)
number of private patients as collected by the hospital on
sample basis; and (b) general OPD patients of the hospital.(iv) Similarly, more than 40% of the investigations were free
even after taking into account the number of investigations
W.P. (C) No. 880/2009 Page 7 of 23
done for private patients during the last six years i.e. 1998
to 2003, since the notification laid down as a requirement
on an average such free treatment.(v) During 1988 to 2003, percentage of indoor patients
treated free was ranging between 17.5% to 20.38% as
against the requirement of only 10%.(vi) During 1998 to 2003, percentage of indoor patients
transferred from paying wards to general ward was
negligible and was ranging between 0.42% to 0.67%.
12. In the affidavit filed by the trustees, it was sought to be explained that
GRTS had evolved a separate “Model” for achieving the twin purposes of
making available the best consultants/surgeons for all poor patients
attending free OPD and free indoor beds on daily basis. It is stated that this
Model has been implemented since 1976. The Petitioner states that there are
certain consultation cubicles where the private doctors work on a honorary
basis with the SGRH and grant consultation to private patients for certain
specified hours in the week. The patients visit the doctors in the rooms and
they are not patients of the SGRH. In return, the consultants give free
consultation in the General OPD. It is stated that through this method the
Petitioner ensured continuous availability of high standard medical
treatment/facilities to a large number of patients who were being treated
free at the SGRH. It is stated that when the MHFW desired to know the
W.P. (C) No. 880/2009 Page 8 of 23
proportion of the number of patients attending the free General OPD, on thebasis of calculation made for three days it was demonstrated that the
number of patients treated at the free General OPD was more than 55% of
the total number of patients. Ninety beds were also shown to be free beds.
13. On 10th August 2004 the Division Bench of this Court dismissed the
Petitioner‟s writ petition. It was inter alia held that the petition raised
disputed questions of fact which could not be examined in a writ petition.
Aggrieved by the above order, the Petitioner preferred an appeal being Civil
Appeal No. 7282-83 of 2005 which was disposed of by the Supreme Court
on 24th October 2007 by the following order:
“Prima facie, we were of the view that the Director General Health
Services (for short ‘DGHS’) had withdrawn/canceled the exemption
certificate given to the appellants from payment of customs duty
on import of medical instruments in terms of Notification No.
64/88-Cus. dated 1st March, 1988 in violation of the principles of
natural justice.
Mr. Amarendra Sharan, learned Additional Solicitor General, after
taking instructions, states that the impugned order of the High
Court as well as DGHS be set aside and the case be remitted back
to the DGHS to pass a fresh order in accordance with law after
affording due opportunity to the appellants to put forth their point
of view. That the appellants shall be supplied a copy of the
inspection report carried out on 17th & 18th January, 2001.
W.P. (C) No. 880/2009 Page 9 of 23
In view of the statement made by the learned Additional Solicitor
General, these appeals are allowed; impugned orders of the High
Court and DGHS are set aside and the case is remitted back to the
DGHS to pass a fresh order in accordance with law after affording
due opportunity to the appellants to put forth their case. All
contentions are left open.”
14. Thereafter on 6th December 2007 a fresh notice was issued to the
Petitioner by the DGHS asking it to explain why the CDECs issued should
not be withdrawn. On 20th December 2007 a letter was written to the DGHS
by the Petitioner asking for a copy of the inspection report dated 17 th/18th
January 2001. After the receipt of the copy of the report the Petitioner
submitted a detailed reply on 26th March 2008. It was submitted that the
SGRH should be considered to be a charitable hospital under para (1) of the
Table appended to the Notification 64/88. Alternatively, it was submitted
that the SGRH in any event complied with the requirements of para (2) for
availing of the customs duty exemption.
15. By the impugned order dated 28th August 2008 the DGHS reiterated its
earlier order dated 16th March 2001. It was inter alia observed that the
CDEC Committee had considered the request of the Petitioner to re-
categorise the SGRH as a charitable hospital but did not agree with this
request since this was made after a gap of 16 years after availing of the
CDEC and further since the Petitioner Society had not been certified as a
W.P. (C) No. 880/2009 Page 10 of 23
charitable organization by the MHFW. A reference was also made to the
decision dated 31st October 2007 of the Supreme Court in Civil Appeal
Nos. 7284 of 2005 and 5054 of 2007 [Jaslok Hospital & Research Centre
v. Union of India and Keki Byram Grant v. Union of India respectively,
2007 (12) SCALE 714] declining a similar request. The impugned order
further stated that the SGRH had not provided any fresh information to
substantiate its claim of having fulfilled the terms and conditions of the
Notification No. 64 of 1988 dated 1st March 1988.
Submissions of counsel
16. Mr. Maninder Singh, learned Senior counsel appearing for the Petitioner
submitted that the impugned order failed to consider the materials placed
before the DGHS by the Petitioner and, therefore, the decision was vitiated
in law. At the outset, it was submitted that the matter should not again be
remanded to the DGHS for a fresh decision since the DGHS appears to
have made up its mind to reject the Petitioner‟s representations. Reliance
was placed on the judgments in K.I. Shephard v. Union of India (1987) 4
SCC 431 and H.L. Trehan v. Hindustan Petroleum Corporation Ltd.
(1989) 1 SCC 764 to the effect that the post-decisional opportunity of
hearing does not in such circumstances subserve the purpose of ensuring
observance of the principles of natural justice.
17. It is next submitted that the DGHS failed to appreciate that the SGRH
W.P. (C) No. 880/2009 Page 11 of 23
has only one OPD and every patient who comes to the OPD is treated free.
The SGRH provides cubicles/consultation rooms to enable doctors to attend
to their private patients for which they charge consultation fee directly from
such patients. The SGRH itself does not receive any payment from such
patients. The model adopted by the SGRH satisfies the objective of
providing free treatment both to the OPD as well as indoor patients as
mandated by the Notification No. 64 of 1988 dated 1st March 1988.
18. It is submitted that SGRH‟s claim to be a charitable hospital was not
made for the first time as erroneously observed in the impugned order.
Reliance is placed on the certificates issued in 1977 and in 1983 by the
DGHS certifying that SGRH was in fact a charitable hospital. In addition, a
reference was made to a document of the DGHS which itself confirmed that
for the years up to 1992 free treatment had been given to more than 40%
OPD patients and a substantial number of indoor patients. The information
provided by the Petitioner along with its letter dated 31 st August 2000 was
also referred to. It is submitted that the Committee chaired by Justice A. S.
Qureshi that was constituted to review the existing free treatment facilities
extended by charitable and other hospitals who had been allotted land on
concessional terms/rates by the Government observed that the SGRH was a
charitable hospital. Reference was also made to an order of the Income-tax
Appellate Tribunal (ITAT) upholding the claim of the SGRH to be a
charitable hospital. Mr. Maninder Singh submitted that although the land on
W.P. (C) No. 880/2009 Page 12 of 23
which the SGRH stood, did not fall in the category of land allotted on
concessional rates, the observations of the aforesaid Committee were
relevant for the purposes of the present case. It was submitted that in any
event Notification No. 64 of 1988 stood withdrawn with effect from 1 st
March 1994, and there was no need to report compliance with the
conditionalities attached to the import of the equipments for any period
thereafter. Reliance is placed on the decision of this Court in R.G. Stone
Urological Research Institute v. Union of India 173 (2010) DLT 385.
19. Appearing for the Respondents, it is submitted by Ms. Inderjeet Sidhu,
learned Advocate, that the impugned order dated 28th August 2008
confirming the earlier decision dated 16th March 2001 was passed after
giving a personal hearing to the Petitioner and after considering its reply
dated 26th March 2008. SGRH did not give any fresh information to
substantiate its claim of having fulfilled the post-import obligations.
Secondly, it is submitted that the SGRH cannot be permitted to seek change
of categorization from para (1) to para (2) of the Table to the Notification
No. 64 of 1988. It is pointed out that even the application submitted by the
SGRH for obtaining the CDECs categorized SGRH under para (2) of the
Table. The undertaking/declaration that the SGRH would fulfil the post-
import condition also showed it to be falling in para (2). Likewise the
proforma invoices categorized the SGRH as falling in para (2) of the Table
to the notification. Thirdly, it is submitted that the certificates dated 30th
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August 1977 and 23rd March 1983 issued by the Delhi Administration that
the SGRH was a charitable hospital were not acceptable since a certificate
in that regard had to be issued by the MHFW. The figures relied upon by
the Petitioner in the representation dated 31st August 2000 were not
supported by any evidence to suggest that more than 40% of the OPD
patients in SGRH were being given free treatment. Admittedly the SGRH
also did not maintain any admission register or case sheets of patients
treated free of cost. It is alleged that the Petitioner deliberately concealed
the records of the paid OPD. The Petitioner‟s claim that the private doctors
were charging consultation fee directly from the patients and that SGRH
was not involved in the receipt of payment by the private doctors was
contrary to the stand taken in an earlier representation dated 25th May 2001
wherein the Petitioner claimed that the Consultant doctors contributed 33%
of their income for the development of the hospital. It is pointed out that the
inspection carried out on 17th/18th January 2001 showed that despite running
a paid OPD no records have been kept and even the patients attending the
General OPD have to pay Rs. 10/- as registration charges. Although the
consultation was provided free, the Petitioner‟s claim that the SGRH had
treated more than 40% of its OPD patients free, was not correct. The
admission register as well as the case sheets did not mention the income of
the patients and, therefore, it was not possible to verify whether the SGRH
treated free all its OPD patients. The claim that 100 General Ward beds
were free beds, was not found to be true since no bed was found to be
W.P. (C) No. 880/2009 Page 14 of 23
earmarked for the patients whose income was less than Rs. 500/- per month.
It was submitted that the withdrawal of Notification No. 64 of 1988 with
effect from 1st March 1994 would not affect the liability of the Petitioner
from fulfilling the post-import conditions. As regards the decision of this
Court in R.G. Stone Urological Research Institute v. Union of India
(supra), it is stated that it is pending in appeal before the Division Bench.
Reliance is placed on Jaslok Hospital & Research Centre v. Union of
India (supra); Medical Relief Society of South Kanara, Manipal,
Dakshina Kannada v. Union of India 1999 (111) ELT 327 (Kar); Shah
Diagnostic Institute Pvt. Ltd. v. Union of India 2008 (222) ELT 12 (Bom);
Commissioner of Customs (Import) v. Jagdish Cancer & Research Center
AIR 2001 SC 3161 and Social Jurists, A Lawyers Group v. Govt. of NCT
of Delhi 140 (2007) DLT 698 (DB).
Is SGRH a charitable hospital?
20. Notification No. 64 of 1988 talks broadly of two categories of hospitals
which are eligible for customs duty exemption in relation to imported
equipments to be used in such hospitals. The first is a charitable hospital
which is covered by para 1 of the Table appended to the said Notification.
In relation to such hospitals, the conditions specified in para 2 would not
apply.
21. There are several documents placed on record which substantiate the
W.P. (C) No. 880/2009 Page 15 of 23
claim of the Petitioner that SGRH is a charitable hospital. The certificates
dated 30th August 1977 and 23rd March 1983 issued by the Delhi
Administration certifying that SGRH is a charitable hospital cannot be
overlooked merely on the ground that there is no certification to that effect
by the MHFW. A certification by the Delhi Administration would
obviously be on the same parameters as evolved by the MHFW. Although
Para 1 of the Table appended to Notification No. 64 of 1988 adverts to the
certification by the MHFW of a charitable hospital, such certification by the
Delhi Administration is not prohibited and should be accepted as long as the
criteria for such certification is not shown to be different from that adopted
by the MHFW.
22. The application filed by the Petitioner for obtaining the CDECs, a copy
of which has been placed as Annexure P-6, states in column 2: “hospital is
run by a charitable trust and is recognized as a charitable hospital by Delhi
Administration.” The mere fact that the Petitioner gave particulars which
would be relevant for exemption under para 2 of the Table appended to the
Notification No. 64 of 1988 will not, in the opinion of this Court, act as an
estoppel to prevent it from claiming the benefit of para 1 of the said Table.
It is not possible to accept the plea that since the Petitioner did not claim
this earlier, it would be precluded from doing so at a later point in time.
What requires to be seen is whether in fact the Petitioner‟s claim to be a
charitable hospital is sustainable or not.
W.P. (C) No. 880/2009 Page 16 of 23
23. It must be recalled that the enquiry into whether the hospitals that had
imported equipments in terms of Notification No. 64 of 1988 had fulfilled
the post-import obligations commenced long after the Notification itself
was withdrawn. The inquiry was conducted only on account of certain
directions issued by this Court in a public interest litigation that such
enquiry commenced. Consequently, many hospitals that had imported such
equipments were required to produce records from 1985 onwards. Some of
them might have preserved those records. But many may not have. This
inevitably led to litigation with the Respondents insisting on the hospitals
producing proof of having satisfied the post-import obligations. In the
circumstances, if at the stage of producing such proof any hospital claims
that it should have been treated even to begin with as a charitable hospital
such plea ought to be examined by the Respondents and not brushed aside
only on the ground that such a plea was not raised earlier.
24. The order dated 8th February 1984 of the ITAT in respect of the
Petitioner for the assessment year 1979-80 is, in the context of the present
case, relevant. It sets out the figures of free services rendered to the patients
of the SGRH during the years 1976-77 and 1981-82. The order of the ITAT
relied on a certificate issued by the DHS that SGRH was “a charitable
hospital running a free out patients department and maintaining free beds”.
The ITAT proceeded to observe:
“It is no doubt true that the hospital also had a number of paying
W.P. (C) No. 880/2009 Page 17 of 23
beds and it charged the patients who could afford but that fact by
itself would not render the income of the hospital as not exempt
u/s 10(22-A). Having regard to the predominant object of the
society and the restrictions placed in clause 10 of its memorandum
and articles of association which has been reproduced above, we
do not find anything inconsistent with the claim made by the
assessee that the hospital was being run as a public charity on a
philanthropic basis. According to us a charity would not be any
the less charity just because it runs certain beds in its hospital or
nursing home on payment. After all a charity cannot and does not
survive on voluntary contribution or subscription alone. In order
that it could better provide medical facilities and in order that it
could achieve in a better and larger manner the advancement of
medical relief, if it charged fees from patients who could afford, it
would not lose (sic `loose’) its character of working in a
philanthropic manner. In other words, if the assessee hospital was,
in order that it became financially viable, supported to an extent
by the fees charged from patients it did not, according to us ceased
to be a philanthropic institution engaged in advancement of
medical relief. While determining whether an institution is
philanthropic or not, three questions that may be asked are:
i) Is it run for unselfish motives?
ii) Is it for public in general?
iii) Is it for general good?
Since, we find that the answers to these three questions are in the
affirmative and since we also find that the profit motive stood
completely eliminated in the case of the assessee as per clause 10 of
its memorandum and articles of association, we would hold that the
assessee society was running a hospital solely for philanthropic
purposes and not for purposes of profit.”
W.P. (C) No. 880/2009 Page 18 of 23
25. Then there is an enquiry report of the Committee headed by Justice A.S.
Qureshi. The terms of reference of the said Committee were as follows:
“a) To review the existing free treatment facilities extended by the
Charitable and other Hospitals who have been allotted land on
concessional terms/rates by the Government.
b) to suggest suitable policy guidelines for free treatment
facilities for needy and deserving patients uniformly in the
beneficiary institutions in particular to specify the diagnostic,
treatment, lodging, surgery, medicines and other facilities that
will be given free or partially free.
c) To suggest a proper referral system for the optimum
utilisation of free treatment by deserving and needy patients.
d) To suggest a suitable enforcement and monitoring mechanism
for the above including a legal framework.”
26. The Committee observed that very few of the hospitals in Delhi were
providing free medical services. It observed “but now very few of them are
genuinely charitable or social service institutions, such as Sir Ganga Ram
Hospital, Batra Hospital, etc.” It further observed that “some charitable
hospitals provide good free treatment facilities for needy and deserving
patients, such as Sir Ganga Ram Hospital, Batra Hospital etc.” At this point
in time several years after the import of the equipments and several years
after the Notification No. 64 of 1988 has ceased to exist, to brush aside the
W.P. (C) No. 880/2009 Page 19 of 23
claim of the Petitioner that it should be treated as a charitable hospital,
would not be justified. Consequently, this Court is of the view that the
claim of the Petitioner to be treated as a charitable hospital for the purposes
of Notification No. 64 of 1988 ought to be accepted by the Respondents.
Does the Petitioner satisfy the requirement of Para (2)?
27. The alternative plea of the Petitioner that it satisfies the requirement of
para 2 of the Table appended to Notification No. 64 of 1988 is examined
next.
28. The scope of enquiry is whether during the time Notification No. 64 of
1988 was in force, i.e., 1st March 1988 till 1st April 1994, the post-import
obligations were fulfilled by the Petitioner. The inspection undertaken of
the SGRH on 17th/18th January 2001 refers to data after 1995. It does not
advert to data submitted by the Petitioner for the period during which the
Notification No. 64 of 1988 was in force. Given the fact that the data
pertained to patients receiving OPD treatment in the past and those who had
received in-patient treatment up to 1st March 1994, there were no means to
verify these details in 2001. Much less would it have been possible to verify
those details in 2008. The question really revolves around the veracity of
the figures furnished by the Petitioner along with its reply dated 31st August
2000. Those figures cover the period from 1985-89. This is reiterated in a
letter dated 25th May 2001 after the Respondent DGHS withdrew the
W.P. (C) No. 880/2009 Page 20 of 23
CDECs by its letter dated 16th March 2001.
29. As regards the contemporaneous record of the number of OPD patients
treated free, the letter dated 21st July 1992 from the Delhi Administration to
the DHS forwarding the application from the SGRH for customs duty
exemption in regard to six different equipments is instructive. The said
forwarding letter certifies as under:
“2. The institution provided free OPD to all patients reporting in
OPD. Year-wise figures are as follows:
1987 : 2,02,361
1988 : 2,13,875
1989 : 2,26,797
3. Indoor treatment facilities are provided free of cost to all
families with income of less than Rs. 500/- per month. For this
purpose 49 beds reserved, out of total 498 beds which is not less
than 10% of total bed strength of the hospital/institution.”
30. The above letter was placed on record before this Court by the DGHS
itself. It is not clear whether there was any correspondence between the
Delhi Administration and the DGHS in that behalf. The DGHS obviously
accepted the certification by the DHS. Considering that this is a letter of 21 st
July 1992 and relates to the figures of 1987 to 1989, there is no reason why
the DGHS should disbelieve it.
W.P. (C) No. 880/2009 Page 21 of 23
31. The impugned order passed by the Respondents reiterating the earlier
order dated 16th March 2001 does not advert to the detailed representation
made on 26th March 2008 by SGRH. The affidavit of the trustees filed in
the earlier writ petition being W.P. (C) 5303-04 of 2004 pursuant to an
order dated 12th April 2004, the relevant portions of which have been
extracted hereinbefore, have also not been discussed in the impugned order.
It was necessary for the Respondents to have considered whether the Model
of free treatment provided in the OPD and to indoor patients by the SGRH
served the object and spirit of the Notification No. 64 of 1988. The
Respondents were also required to account for the fact that an examination
of the compliance of the conditionalities in para 2 of the Table was being
undertaken long after the Notification No. 64 of 1988 had ceased to be
operative.
32. This Court is satisfied upon an examination of the said affidavit of the
trustees that there was substantial compliance with the spirit and objective
of Notification No. 64 of 1988 by SGRH during the period that the said
Notification was in force. Therefore, the Petitioner should be held to have
satisfied the requirements of para 2 of the Table appended to Notification
No. 64 of 1988.
Conclusion
33. Consequently, the impugned order dated 28th August 2008 passed by the
W.P. (C) No. 880/2009 Page 22 of 23
DGHS, reiterating the earlier decision dated 16th March 2001 withdrawing
the CDECs issued to the Petitioner is hereby set aside.
34. The writ petition is allowed in the above terms, but in the
circumstances, with no order as to costs.
S. MURALIDHAR, J
APRIL 28, 2011
akg
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