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Judgment
Honourable Mr. Justice K. Chandru
The petitioner is an Educational Agency running several Educational Institutions in Madurai. In this Writ Petition, the petitioner agency sought for a Writ in the nature of Mandamus, directing the third and fourth respondents, viz., the Indian Oil Corporation Limited, represented by its Area Manager (Indane) and the Standard Gas Agencies, Arupukkottai Road, Madurai to forbear from stopping the supply of liquefied petroleum gas (LPG Indane gas) to the petitioner''s hostels under the Non Domestic Commercial Exempted Category [NDCE] with customer Nos.18145 and 18146 without reference to the third respondent''s letter dated 15.03.2006.
When the Writ Petition came up for admission on 12.07.2006, this Court directed the learned Additional Solicitor General to take notice for the first respondent and for respondents 2 and 3, the learned counsel was directed to take notice. When the matter came up on 24.01.2007, counter was filed by the fourth respondent, who is the LPG Gas Dealer and on 16.02.2007, while directing the main Writ Petition to be posted for final disposal during the second week of April 2007, this Court granted an order of interim injunction till April, 2007. Subsequently, the matter was adjourned from time to time and the interim order was not extended.
The fourth respondent, who is a Gas Agency, in his counter-affidavit dated 08.08.2006, informed that they are supplying LPG cylinders to various consumers and they are bound by the instructions issued by the Indian Oil Corporation. The contentions that the petitioner was a charitable company and running various educational institutions. They are not charging fees to the students other than the fee fixed by the Government and they are running four hostels were denied as false.
In the counter-affidavit filed on behalf of the second and third respondents, it was stated that in their letter dated 15.03.2006, the petitioner was asked to furnish a copy of the registration as a Charitable Institute under the Societies Act and also a copy of the registered trust deed. These documents are necessary for supplying the Indane gas cylinders with a capacity of 14.2 kgs. The petitioner institution, instead of complying with the request, merely informed the respondents that they are registered company not holding any stock and registered in terms of Section 25 of the Companies Act. Since a company is governed by memorandum and articles of association, there was no necessity to have any separate trustee, since they are not registered under the Societies Act. It is also not necessary to provide any registration under the Societies Act.
In response to the stand of the petitioner institution, the second and third respondents had stated that LPG supplies of 14.2 kgs domestic cylinders were supplied to the institutions getting grant-in-aid from the Government, Government approval Charitable Institutions and Social Welfare Institutions run for physically handicapped, orphanage and old-agers. Since the petitioner had not produced any documentary proof of getting any grant-in-aid from the State, the request of the petitioner cannot be considered. It is also stated that the Indian Oil Corporation is willing to supply LPG gas cylinders with 19 Kg capacity for their hostels under the Non Domestic Non Exempted category at commercial rate applicable to such customers. Unless and until the petitioner institution produced documentary proof to show that they are in receipt of grant-in-aid or sanction of any funds towards the expenditure for the establishment or there was no fee/charge being collected from the students for food supply from the hostels on a charitable basis, the question of supply of subsidized domestic cylinders in the capacity of 14.2 kgs will not arise.
However, Mr. S. Xavier Rajini, learned counsel for the petitioner contended that this stand of the respondents was arbitrary and inasmuch as they are running educational institutions, which institutions are open to all without discrimination, it should be considered as a ''charitable institution'' and there should not be any discrimination between grant-in-aid institutions and the self-financing colleges. He also further added that if they are allowed to buy the cylinders under the Non Domestic Non Exempted category at commercial rates, it only increases the cost of students'' food charges.
In this context, it is useful to refer to the Halsbury''s Laws of India (Lexis Nexis Butterworth Edition) New Delhi 2006 Volume 5(2) for defining the scope of ''charitable corporations''. The passage found therein in paragraph No.214 is usefully extracted hereunder:
The two principal kinds of charitable corporations used to be hospitals and colleges, the former being created for the maintenance and relief of the poor and impotent, and the latter for the promotion of learning and the support of persons engaged in literary pursuits.
Colleges and hospitals, in the strict legal sense of the latter term, are both institutions where the persons benefited by the charity are themselves incorporated. The colleges of Oxford and Cambridge are eleemosynary corporations, but the halls are not.
Reference was also made to Black''s Law Dictionary (published by Thomson, West), Eighth Edition for understanding the definition of the term "charitable" and it reads as follows:
charitable, adj. 1. Dedicated to a general public purpose, usu. for the benefit of needy people who cannot pay for benefits received charitable contribution.
The learned counsel, thereafter, referred to a judgment of the Supreme Court in Unni Krishnan, J.P. and others Vs. State of Andhra Pradesh and others etc. etc., . In that case, the above definitions were extracted for the purpose of holding that the concept of charity was elastic and in this context, it is useful to refer to paragraph Nos.94 and 97, which read as follows:
It cannot be contended that education must be available free and it must be run on a charitable basis. In this connection, we may usefully quote P.R. Ganapathy Iyer''s The Law Relating to Hindu and Mahomedan Endowments, as to the concept of charity which is elastic. At page 46 of Chap. III it is stated:
A charitable establishment is a choultry, college, dispensary etc., while a religious establishment is a mosque, temple etc. For these endowments may be made.
95...
96...
The time is not yet ripe to hold that education must be made available on a charitable basis. It is true whenever trusts are made for advancement of education it was held to be a charitable purpose.
First of all, the passage quoted by the learned counsel for the petitioner did not form part of the majority opinion in Unni Krishnan''s case cited above. Secondly, Unni Krishnan''s case itself came to be overruled by a Reference Larger Bench of the Supreme Court in T.M.A. Pai Foundation and Others Vs. State of Karnataka and Others, . In fact, the decision in Unni Krishnan''s case relied on by the petitioner was an earlier reference and the Supreme Court''s final case is reported in Unnikrishnan P.J. and Others Vs. State of A.P. and Others, .
However, the learned counsel for the petitioner added that it is only cited for the purpose of definition of ''concept of charity'' and not for the contents of the said judgment.
The learned counsel also relied upon a decision of the Supreme Court in P.C. Raja Ratnam Institution Vs. Municipal Corporation of Delhi and Others, , wherein a non profit making registered society running a school in Delhi was directed to pay general tax and when it claimed benefit under an exemption provision, the Delhi High Court, after noticing the exemption provision u/s 115(4) of the Delhi Municipal Corporation Act, 1957, which exempted ''an educational institution run by a Society for charitable purpose'', held that the term ''charitable purpose'' will include even partially supported schools. In that very same case, since the school did not satisfy the other criteria, the matter was only remitted back for fresh consideration by the Municipal Corporation.
It must be noted that the supply of domestic LPG cylinder is subsidized by the Government. It is intended to benefit a section of the public, if the Indian Oil Corporation decides to extend the same concession/subsidy even to students, who are staying in the hostel and studying in the institutions, which are state funded and do not extend the same to other institutions, which are self financed. It can be a valid classification. The petitioner cannot term it as a discriminatory and seek for consideration as a matter of right. The State or any other Corporation is expected to supply a subsidized commodity to institutions which do not come within the beneficiary norm stipulated therein.
In this context, it is useful to refer to certain decisions of the Supreme Court. In Krishnasamy Reddiar Educational Trust Vs. Member Secretary, National Council for Teachers Education and Another, , the Supreme Court held as follows:
20.... once it is held that the action of the respondent in imposing condition is legal and valid, even if an order is passed in favour of any other institution, the appellant cannot invoke Article 14. In our considered opinion, that is not the sweep of Article 14 of the Constitution.
In A.P. Cooperative Oil Seeds Growers Federation Ltd. Hyderabad, Andhra Pradesh Vs. D. Achyuta Rao and Others, , the Supreme Court observed as follows:
41... the mere fact that some hardship, inconvenience or injustice results to some members of the service, is not a ground to strike down the rule. It is not safe to test the constitutionality of a service rule on the touchstone of fortunes of an individual. If the rule otherwise appears to be fair, just and reasonable and does not suffer from the vice of Articles 14 and 16 of the Constitution or any constitutional guarantee, the mere fact that some little hardship or injustice is cause to some one, is no ground to strike down the rule altogether.
In Jagdish Mandal v. State of Orissa reported in 2007 (14) SCC 517, the Supreme Court held as follows:
Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions.
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone:
OR
Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached",
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.
Further, this Court in more than one decisions has justified the distinction between the aided institution and unaided institution in Maharaja College of Arts and Science Vs. State of Tamil Nadu, . This Court in relation to the discrimination rejected the grounds based on discrimination.
This case arose out of the exemption from not being granted in respect of the property tax. Similarly, in respect of the exemption granted under the ESI Act to the State funded institutions, this Court in W.P.Nos.2471, 3234, 30509 and 16273 of 2007, etc batch cases in Muthu Rathina Arangam Matriculation School vs. The Government of Pondicherry, represented by Additional Secretary to Government (Labour), Labour Department, General Secretariat, Puducherry, dated 04.01.2011, held that it was based on rational classification.
In the light of the above stated position, this Court finds that there is no case made out to entertain the present Writ Petition. Hence, the Writ Petition will stand dismissed. Consequently, the connected miscellaneous petition is closed. No costs.