# UNION OF INDIA v. MOOLCHAND KHAIRATI RAM TRUST

- **Citation:** [2018] 7 S.C.R. 939
- **Court:** Supreme Court of India
- **Decided:** 2018-07-09
- **Case number:** Civil Appeal No. 3155 of 2017
- **Bench:** Arun Mishra, Uday Umesh Lalit
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-v-moolchand-khairati-ram-trust-33708
- **Pages:** 88

## Headnote

Social Justice:
Direction to Private Charitable Hospitals to follow the policy
of providing free treatment to persons belonging to economically
weaker sections - Validity of - Government of NCT of Delhi by its
circular dated 2.2.2012 intimated respondent-hospitals to implement
judgment of Delhi High Court with regard to free treatment to weaker
sections of society, passed in Social Jurists case - Order of Land &
Development Officer (L&DO) asking the hospitals who had been
allotted land by L&DO to strictly follow policy of providing free
treatment to economically weaker sections - Respondent-hospitals,
since were not party in the Social Jurists case, challenged the
conditions imposed by the Government of NCT of Delhi and L&DO
- High Court quashed the orders passed by Govt. of NCT of Delhi
and L&DO - On appeal, held: Land was obtained by the respondenthospitals for charitable purpose at concessional rates - When the
Government land is allotted, the hospitals owe a duty to act in public
interest - It is obligation of State as a welfare state to ensure basic
necessities food, nutrition, medical assistance etc. - Right to life u/
Art. 21 includes right to health and thus also includes right of
patients to be treated with dignity - u/Art. 47 State has to make
constant endeavour to improve public health - It is also one of the
fundamental duties enshrined u/Art. 51A(h) to develop scientific
temper, humanism and the spirit of inquiry and reform - The State
also has to constantly make an endeavour for realization of human
rights agenda - Right to health is provided in Art. 25 of Universal
Declaration of Human Rights of 10.12.1948 - Policy decision dated
10.6.1949 as well as s. 2 of Charitable Endowments Act, 1890 makes
it clear that running of hospitals is regarded as charitable activity
- When the Government Land is obtained for charitable purpose,
the Government is within its power to impose obligation of free
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treatment to economically weaker sections - On refusal to comply
or on violation of the obligation, it is open to the lessor to terminate
the lease - Imposition of condition of free treatment to economically
weaker section does not tantamount to a restriction imposed within
purview of Art. 19(6) on the right enshrined u/Art. 19(1)(g) -
Judgment in social jurists case is a binding precedent - The hospitals
in question and other similarly situated hospitals are directed to
scrupulously observe the conditions framed in order dated 2.2.2012
and in case of violation, the lease shall be cancelled - Constitution
of India - Arts 19(1)(g), 19(6), 47 and 51A(h) - Charitable
Endowments Act, 1890 - s.2 - Universal Declaration of Human
Rights - Art. 25 - Hospitals.
Hospitals:
Conduct of hospitals - Indulging in inhumane act for the sake
of commercial exploitation such as keeping the dead body as security
for clearance of bills - Held: Such conduct of the hospitals is per
se illegal and criminal and tantamount to Criminal breach of trust
reposed in the medical profession - In future whenever such act is
reported to police, it is supposed to register a case against
management of the hospital and the doctors involved in such act.
Constitution of India:
Art. 162 - Executive orders - In absence of legislation -
Validity of - Held: There can be executive orders in absence of
legislation in the field - It is open to the State to issue executive
orders even if there is no legislation in support thereof, provided
the State could legislate on the subject in respect of which action is
taken.
Doctrines/Principles:
Cy-pres doctrine - Applicability of.
Words and Phrases:
'Charitable', 'Charitable purpose', 'Charitable Corporation'
and 'Charitable trust' - Meaning of.
Allowing the appeals, the Court
HELD: 1.1 Charitable is the public purpose for the benefit
of the needy people, who cannot pay for benefits received. The
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Internal Revenue Code may define i

## Text

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UNION OF INDIA
v.
MOOLCHAND KHAIRATI RAM TRUST
(Civil Appeal No. 3155 of 2017)
JULY 09, 2018
[ARUN MISHRA AND UDAY UMESH LALIT, JJ.]
Social Justice:
Direction to Private Charitable Hospitals to follow the policy
of providing free treatment to persons belonging to economically
weaker sections - Validity of - Government of NCT of Delhi by its
circular dated 2.2.2012 intimated respondent-hospitals to implement
judgment of Delhi High Court with regard to free treatment to weaker
sections of society, passed in Social Jurists case - Order of Land &
Development Officer (L&DO) asking the hospitals who had been
allotted land by L&DO to strictly follow policy of providing free
treatment to economically weaker sections - Respondent-hospitals,
since were not party in the Social Jurists case, challenged the
conditions imposed by the Government of NCT of Delhi and L&DO
- High Court quashed the orders passed by Govt. of NCT of Delhi
and L&DO - On appeal, held: Land was obtained by the respondenthospitals for charitable purpose at concessional rates - When the
Government land is allotted, the hospitals owe a duty to act in public
interest - It is obligation of State as a welfare state to ensure basic
necessities food, nutrition, medical assistance etc. - Right to life u/
Art. 21 includes right to health and thus also includes right of
patients to be treated with dignity - u/Art. 47 State has to make
constant endeavour to improve public health - It is also one of the
fundamental duties enshrined u/Art. 51A(h) to develop scientific
temper, humanism and the spirit of inquiry and reform - The State
also has to constantly make an endeavour for realization of human
rights agenda - Right to health is provided in Art. 25 of Universal
Declaration of Human Rights of 10.12.1948 - Policy decision dated
10.6.1949 as well as s. 2 of Charitable Endowments Act, 1890 makes
it clear that running of hospitals is regarded as charitable activity
- When the Government Land is obtained for charitable purpose,
the Government is within its power to impose obligation of free
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treatment to economically weaker sections - On refusal to comply
or on violation of the obligation, it is open to the lessor to terminate
the lease - Imposition of condition of free treatment to economically
weaker section does not tantamount to a restriction imposed within
purview of Art. 19(6) on the right enshrined u/Art. 19(1)(g) -
Judgment in social jurists case is a binding precedent - The hospitals
in question and other similarly situated hospitals are directed to
scrupulously observe the conditions framed in order dated 2.2.2012
and in case of violation, the lease shall be cancelled - Constitution
of India - Arts 19(1)(g), 19(6), 47 and 51A(h) - Charitable
Endowments Act, 1890 - s.2 - Universal Declaration of Human
Rights - Art. 25 - Hospitals.
Hospitals:
Conduct of hospitals - Indulging in inhumane act for the sake
of commercial exploitation such as keeping the dead body as security
for clearance of bills - Held: Such conduct of the hospitals is per
se illegal and criminal and tantamount to Criminal breach of trust
reposed in the medical profession - In future whenever such act is
reported to police, it is supposed to register a case against
management of the hospital and the doctors involved in such act.
Constitution of India:
Art. 162 - Executive orders - In absence of legislation -
Validity of - Held: There can be executive orders in absence of
legislation in the field - It is open to the State to issue executive
orders even if there is no legislation in support thereof, provided
the State could legislate on the subject in respect of which action is
taken.
Doctrines/Principles:
Cy-pres doctrine - Applicability of.
Words and Phrases:
'Charitable', 'Charitable purpose', 'Charitable Corporation'
and 'Charitable trust' - Meaning of.
Allowing the appeals, the Court
HELD: 1.1 Charitable is the public purpose for the benefit
of the needy people, who cannot pay for benefits received. The
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Internal Revenue Code may define it separately for its purposes
what is charitable so as to claim the benefit under the Act. The
charitable trust is a trust which is for the benefit of general public.
Charitable is a kind and generous in giving money or other help
to those in need. If there is no statutory definition of charitable
purposes, to be a charitable purpose, it must satisfy certain tests.
It must be for the public benefit and available to a sufficient section
of the community. The reference to charity should be construed
in their technical legal sense. For income tax purpose, the charity
may be defined in the Act and in that light, the interpretation of
the Act has to be made. Public benefit is an essential ingredient
of charitable activities. There are two distinct requirements, the
purpose itself must be beneficial and not harmful to the public. It
is difficult to believe that a trust would be held charitable if the
poor are excluded from its benefits.[Para 43][975-F-H; 976-A-B]
1.2 The cy-pres doctrine can be clearly pressed into service
in the instant matter when the Government land has been allotted
to the hospitals even if the mode of giving charity was not specified.
It can be specified later on and the Court is not powerless to
enforce that purpose of the charitable trust, of which the particular
mode of the application had not been defined by the donor or
otherwise. Where a testator intends to benefit several charitable
objects, one of which fails, the fund must not be distributed among
other objects if the one that fails bears no resemblance to the
other. When trusts have been altered by a scheme, and the trusts
of the scheme become impossible so that a new cy-pres scheme
is required, the trusts of the new scheme must be as close as
possible to the original trusts of the gift. [Para 44][976-C-E]
1.3 The relief of the poor is one of the essential
requirements of the charity. All hospitals are not charitable
institutions as there may be hospitals which run commercially.
The hospitals, which are operating under the guise of charity, are
in fact being run on a commercial basis and it has become
impossible for the poor to afford the life-saving drugs at an
affordable price. Their right to life is in jeopardy. Merely by the
expression hospital, it could not be successfully claimed by the
respondent-hospitals that they are charitable. They can be
directed to fulfill their obligation and fulfill the purpose by
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undertaking charitable activities and give it the real meaning by
giving free services as envisaged in the policy. The claim of the
hospitals that they are undertaking charity at their own level
cannot be used as a shield to the performance of charity in an
organized way. The very spirit of the argument that as they do
charity, it cannot be fastened upon them, is self-destructive and
tends by its tenor to negate unjust obstruction created in the
path of real charity. [Para 46][976-F-H; 977-A]
1.4 Charitable purpose includes relief of the poor, education
and medical needs. As per the provisions of the Charitable
Endowments Act, 1890, relief of the poor and medical relief is
included as such conditions which had been imposed are clearly
within the parameters of aforesaid definition. [Para 46][977-B-C]
1.5 The charity in the broadest sense includes whatever
proceeds from a sense of moral duty or from humane feelings
towards others uninfluenced by one's own advantage or pleasure.
In its widest sense, denotes all the good affections men ought to
bear towards each other; in its most restricted and common
sense, relief of the poor. In the Mahommedan Law, the charity
has a more general import than under the English Law. A wakf of
property by a Mahommedan to defray the expenses of the poor,
the fakirs, the orphans, the needy and the indigent and to defray
the expenses of good deeds, creates a trust for public purposes
of a charitable nature. In common parlance, the word charity
means giving to someone in any necessitous circumstances and
in law, it means a giving for public good. Thus, the charitable
object would be served if it is not to earn a profit. [Paras 47,
49][977-D-F; 979-D]
1.6 Medical profession deals with the life of human beings.
There has to be a balancing of human rights with the commercial
gains. In the wake of globalisation, it is a regime of Intellectual
Property Rights. Even these rights have to give way to the human
rights. It is an obligation of the Government to provide life-saving
drugs to have-nots at affordable prices so as to save their lives,
which is part of Article 21 of the Constitution of India. It is equally
an obligation of the State to devise such measures that have-nots
are not deprived of the very treatment itself. Administering
medicines is also a part of medical therapy. Thus, members of
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the medical profession owe a constitutional duty to treat the havenots. They cannot refuse to treat a person who is in dire need of
treatment by a particular medicine or by a particular expert merely
on the ground that he is not in a position to afford the fee payable
for such an opinion/treatment. Thus, when the Government land
had been obtained for charitable purpose of running the hospital,
the Government is within its right to impose such an obligation.
[Paras 51, 52][980-H; 981-A-D]
1.7 When the Government land has been allotted to the
hospitals, they would not be doing free service but being a
recipient of Government largesse at concessional rates and
continue to enjoy it, they owe a duty to act in public interest. Not
only have obtained the land at a concessional rate, the other two
hospitals, namely, Sita Ram Bhartia Institute of Science &
Research and Foundation for Applied Research in Cancer have
also obtained land at a lower pre-determined rate, not at market
rate. It was not by way of a public auction that they have received
the land. Besides, in their cases clause 7 was inserted in the
allotment letters to the effect that "The DDA reserves its right
to alter any terms and conditions on its discretion." As hospitals
are enjoying Government land it is open to the Government to
impose such riders and stipulations for free treatment to be given
to economically weaker sections. [Paras 57, 58][983-C-E, H]
1.8 The realization of human rights vests responsibilities
upon the State. The State has to constantly make an endeavor for
realization of human rights agenda, particularly in relation to
economic, social and cultural rights. Right to health is provided
in Article 25 of Universal Declaration of Human Rights of
10.12.1948. [Para 59][984-A-B]
1.9 The State has to ensure the basic necessities like food,
nutrition, medical assistance, hygiene etc. and contribute to the
improvement of health. Right to life includes right to health.
Right to life and personal liberty under Article 21 of the
Constitution also includes right of patients to be treated with
dignity. Right to health i.e., right to live in a clean, hygienic and
safe environment is a right under Article 21 of the Constitution.
Every doctor whether at a Government hospital or otherwise has
the professional obligation to extend his services with due
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expertise for protecting life. The Constitution envisages the
establishment of a welfare State. In a welfare State, the primary
duty of the Government is to secure the welfare of the people.
Providing adequate medical facilities for the people is an essential
part of the obligations undertaken by the Government in a welfare
State. The Government discharges this obligation by running
hospitals and health centers which provide medical care to the
person seeking to avail of those facilities. Preservation of human
life is thus of paramount importance. Government is duty-bound
to provide timely care to persons in serious conditions. Medical
facilities cannot be denied by the Government on the ground of
non-availability of bed. [Paras 60, 61 and 62][984-C-G; 985-B-D]
1.10 The State can also impose such obligation when the
Government land is held by such hospitals and it is the
constitutional obligation imposed upon such hospitals. Under
Article 47, State has to make constant endeavor to raise the level
of nutrition and the standard of living and to improve public health.
It is also one of the fundamental duties enshrined in Article 51A(h)
to develop the scientific temper, humanism and the spirit of
inquiry and reform. [Para 63][985-E-F]
1.11 Even when the purpose of the charitable activity is
not defined, it is open to the court to define it. The decision of
the Government cannot be said to be foreign to the purpose for
which land is held. Thus, the action of the State cannot be said to
be unauthorized, illegal or arbitrary in any manner whatsoever
and is in furtherance of the very objectives for which the medical
profession exists. [Para 65][986-D-E]
1.12 By and large the hospitals have now become centers
of commercial exploitation and instances have come to notice
when a dead body is kept as security for clearance of bills of
hospitals which is per se illegal and criminal act. In future,
whenever such an act is reported to the police, it is supposed to
register a case against management of Hospital and all concerned
doctors involved in such inhumane act, which destroys the basic
principles of human dignity and tantamount to a criminal breach
of the trust reposed in the medical profession. [Para 65][986-E-F]
1.13 It is the obligation on the medical professionals,
hospitals, the State and all concerned to ensure that poor person
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is given treatment and not deprived of the same due to poverty.
That is what is envisaged in the Constitution also. On the making
of a doctor, the State spends and invests a huge amount of public
money and it is the corresponding obligation to serve the needy
and the treatment cannot be refused on the ground of financial
inability of the patient to bear it. To such an extent, the right and
moral obligation can be enforced and that precisely has been done
by issuance of the impugned directions to provide free treatment
in IPD and OPD to economically weaker sections of society. [Para
67][987-B-D]
1.14 It is apparent from the policy decision dated 10.6.1949
and also the provisions contained in section 2 of the Charitable
Endowments Act, 1890 that running of hospitals is regarded as a
charitable activity. The further rider in policy was that such
institution claiming allotment should be secular and of noncommunal character. [Para 67][987-E]
1.15 It cannot be said that the condition is not applicable
to hospitals and would apply to Arts and Crafts Association, and
there was no specific stipulation with respect to providing free
treatment in the letter of allotments and lease deed. The rider
that the Arts and Crafts institution should be run for good of the
public, without any profit motive is primarily applicable to the
charitable institutions like hospitals etc. then it has been only
specified as an obligation to Arts and Crafts institution etc. too.
As such there would be an obligation upon hospitals being
charitable by their very nature to provide free treatment to
economically weaker sections of society. The expression 'no profit
motive' would also exclude the hospitals being run for commercial
gains. That would be violative of the very foundational basis and
fulcrum on which the allotment order had been issued and lease
deeds have been executed. Once having claimed themselves to
be charitable institutions, it does not lie in the armory of defense
to raise such plea and having obtained the benefit of the public
largesse. [Para 68][987-F-H; 988-A-B]
1.16 As a matter of fact, as these hospitals are being run
for commercial gains, it would be open to the lessor to terminate
the lease. That can be done in case there is a refusal to comply
with or violation in any manner of the obligation of providing free
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medical treatment to 10% IPD and 25% OPD patients belonging
to economically weaker sections of the society. The imposition
of the said condition is inherent in the policy and in the very
grant on the basis of which the land is held and even otherwise in
the case of two other institutes i.e. Sita Ram Bhartia Institute of
Science & Research and Foundation for Applied Research in
Cancer, as they are holding the Government land for the hospital
purpose and research functions in the hospital, the allotment was
also made at a pre-determined rate and not by way of auction and
considering the specific stipulation in clause 7 of the lease deed
and considering the aforesaid other aspects, and it being charitable
activity, it was open to the Government to obligate them by
providing free medical treatment. [Para 68][988-B-E]
1.17 The decision in *Social Jurists case has been rendered
on the basis of the terms and conditions contained in the allotment
letters as well as stipulations made in the lease deeds. Some
representations were made relating to free treatment. The High
Court, hence in Social Jurists case opined that it was not necessary
to incorporate each and every condition in the lease deed and
other corresponding documents would also be seen and it was
not only contractual but statutory, and public law obligation
enjoined upon the hospitals to fulfil condition of free treatment.
The order was affirmed by this Court by a reasoned order, hence
it becomes binding as precedent. [Para 69][988-E-G]
1.18 In the case of Moolchand Kharaiti Ram Trust and St.
Stephens Hospital, the lands were allotted for charitable purposes
under the Scheme of the year 1949, as further modified, thus, the
policy under which they had obtained lease deed would also be a
relevant document and of paramount importance for entitlement
to hold the land for purpose as specified in the policy, as that is
the basic document governing the rights of the parties, and the
terms and conditions of lease deed, would be supplemental to
the main objective of the policy. The lease deed can supplement
not supplant the main policy or rules as the case may be under
which the allotment has been obtained and lease deed has been
executed. [Para 70][988-G-H; 989-A-B]
1.19 Not only by the policy that prevailed in 1949, the land
at concessional rates for charitable purposes, had been obtained
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and free treatment being as stipulated in the order dated
02.02.2012 issued by the Government of India, is within the realm
of the policy under which allotment had been made at highly
concessional rates in the heart of Delhi and the Delhi
Development Authority Rules framed in 1981. They cannot
wriggle out of their obligation by contending that there was no
such stipulation in the allotment letter or lease deed. Allotment
letter and lease deed are subject to the riders in the main policy
and rules under which grant has been made. It is the foundation
of the allotment letter and the lease deed. [Para 71][989-B-D]
1.20 It is not correct to say that this Court cannot proceed
to make an order on account of sympathy in contravention of
settled law and it will seriously damage the credibility of this
institution. The Trust cannot be permitted to wriggle out of its
obligation unjustly and unfairly. Originally the Trust was set up
for pure charity. Trust has lost its main objective and assumed a
commercial character and it is regrettable that it has to be
reminded of its responsibility by the Court for the purpose for
which it exists and having obtained the land on a particular basis,
is observed only in breach thereof. The adverse remarks in the
report of Justice Qureshi Committee with respect to the
institution cannot be brushed aside on the sole ground that
comments recorded in Justice Qureshi's report were based on
the statement made by disgruntled employees of the hospitals,
who were in dispute with the management of the hospital. [Para
75][991-D-G]
1.21 On behalf of Moolchand Kharaiti Ram Trust, Will has
been relied upon to indicate the purpose of creation of Trust.
The objects of the creation of Trust was inter-alia devising means
for imparting education in and improving the "Ayurvedic system
of medicine" and preaching the same. In order to achieve the
latter object, it was not prohibited to take help from the English
or Yunani or any other system of medicine and according to need,
one or more than one Ayurvedic Hospital may be opened. When
its object was of improving the Ayurvedic system of medicine
only as is apparent from the material on record that at present
the said activities had been confined to one room and the changed
main activity is an Allopathic system of medicine which was not
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at all the intendment of the creator of the Trust. However, having
obtained the land for charitable purposes for the hospital, for no
profit and for the public good, whatever system of medicine is
being administered, it can be obligated with such charitable rider
of free treatment as envisaged in the impugned order issued by
the Government. [Para 77][992-B-F]
1.22 Similarly, St. Stephens Hospital is Missionaries'
hospital and its very objective admittedly is to provide the
charitable services free of charge but it has also become more or
less a commercial venture as in the case of other hospitals inter
alia involved in the instant matter, how such provision for charity
is opposed is beyond comprehension, is it charity versus charity.
They have to abide by the just and reasonable legal conditions
for free treatment which are constitutionally envisaged also. [Para
78][992-G-H]
State of Punjab & Ors. v. Mohinder Singh Chawla &
Ors. (1997) 2 SCC 83 : [1996]10 Suppl. SCR 279;
Balram Prasad v. Kunal Saha & Ors. (2014) 1 SCC
384 : [2013] 12 SCR 30; Occupational Health and
Safety Association v. Union of India & Ors. AIR 2014
SC 1469 : [2014] 4 SCR 10; Pt. Parmanand Katara v.
Union of India & Ors. (1989) 4 SCC 286 : [1989] 3
SCR 997; Paschim Banga Khet Mazdoor Samity & Ors.
v. State of West Bengal & Anr. (1996) 4 SCC 37 : [1996]
2 Suppl. SCR 331 - relied on.
P.C. Raja Ratnam Institution v. Municipal Corporation
of Delhi & Ors. 1990 (Supp) SCC 97 : [1989] Suppl.
SCR 66; Municipal Corporation of Delhi v. Children
Book Trust (1992) 3 SCC 390 : [1992] 2 SCR 535;
Divisional Manager, Aravali Golf Club & anr. v.
Chander Hass & Anr. (2008) 1 SCC 683 : [2007] 12
SCR 1084 - referred to.
Incorporated Council of Law Reporting for England
and Wales v. A-G (1971) 3 All ER I029 CA;
Ironmongers' Co. vs. A-G (1844) 10 CI & Fin 908 at
027 HL; Lambeth Charities (1853) 22 LJ Ch 959 -
referred to.
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Black's Law Dictionary, Ninth Edition; Webster's New
World Dictionary; Halsbury's Laws of England, Vol.5,
Fourth Edition; Law Lexicon, the Encyclopedic Law
Dictionary by P. Ramanatha Aiyer - referred to.
2.1 It is not correct that imposition of condition tantamounts
to a restriction imposed within the purview of Article 19(6) of the
Constitution. High Court has erred in law in holding that such
stipulation could have been imposed only by a statutory law. It is
not a restriction on the right to carry on medical profession, the
medical profession has obligated itself by such conditions by very
nature of its professional activity and when the State land is being
held which is for the public good with no profit motive, such land
is held for the charitable purpose of public good. The charitable
purpose would include, the aforesaid obligation of free treatment
to the persons of economically weaker strata of the society. It is
not a restriction but the very purpose of existence of medical
profession and very purpose of policy/Rules to grant land to
institutions without public actions that would have fetched market
rate and does not amount to putting any fetter to practice the
medical profession or to carry on occupation. The benefits of
various welfare schemes hardly reach to them in spite of efforts
made, economic disparity is writ large and persists. They cannot
afford such treatment and thus in lieu of holding land of
Government at concessional rate and enjoying huge occupancy
benefits inter alia for aforesaid reasons, the hospitals can be asked
to impart free treatment as envisaged in the Government order.
[Para 83][998-B-F]
2.2 The right to carry on the medical profession has not
been restricted, however, what was enjoined upon the respondenthospitals to perform otherwise had been given a concrete shape.
Thus, it was permissible to issue circular in the exercise of power
under Article 162 of the Constitution. It was urged on behalf of
hospitals that they were doing a charitable work on their own,
thus, it could not be said to be a restriction within the meaning
contemplated under Article 19(6) for which a law was required.
No new restriction has been imposed for the first time under
Article 19(6) of the Constitution of India, as such there was no
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necessity for enacting a law, such guidelines could be issued under
the executive powers. [Para 86][999-C-E]
2.3 It is open to the State to issue executive orders even if
there is no legislation in support thereof provided the State could
legislate on the subject in respect of which action is taken. There
can be executive orders in the absence of legislation in the field.
[Para 87][999-F]
2.4 Therefore, such stipulation for free treatment does not
amount to restriction under Article 19(6) on the right enshrined
under Article 19(1)(g) and even otherwise it was not necessary
to enact a statutory provision by the Government in view of
existing liability as per policy/rules/statutory provisions as to
ethical standards and other statutory provisions in force. [Para
95][1013-B-C]
Rai Sahib Ram Jawaya Kapur & Ors. v. The State of
Punjab [1955] 2 SCR 225 : AIR 1955 SC 549; U.
Unichoyi & Ors. v. State of Kerala AIR 1962 SC 12 :
[1962] SCR 946; Minerva Talkies, Bangalore & Ors.
v. State of Karnataka & Ors. (1988) Suppl. SCC 176 :
[1988] SCR 511; T.V. Balakrishnan v. State of T.N. &
Ors. 1995 Suppl. 4 SCC 236; State of Orrisa and Anr
vs. Radheyshyam Meher & Ors. AIR 1995 SC 855 :
(1995) 1 SCC 652 : [1994] 6 Suppl. SCR 591; Dalmia
Cement (Bharat) Ltd. v. Union of India (1996) 10 SCC
104 : [1996] 1 Suppl. SCR 825; Indian Drugs &
Pharmaceuticals Ltd. & Ors. v. Punjab Drugs
Manufacturers Association & Ors. (1999) 6 SCC 247
- relied on.
Kharak Singh v. State of U.P. [1964] 1 SCR 322; Bijoe
Emmanuel & Ors. v. State of Kerala & Ors. (1986) 3
SCC 615 : [1986] 3 SCR 518; State of M.P. & Anr. v.
Thakur Bharat Singh AIR 1967 SC 1170 : [1967] SCR
454; Bijay Cotton Mills Ltd. v. State of Ajmer AIR 1955
SC 33 : [1955] SCR 752 - referred to.
3.1 It cannot be said that decision in Social Jurists case is
not applicable to the Trust. Condition of free treatment had been
the primary objective, which would be applicable to hospitals in
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question and to all other similarly situated hospitals, whether they
were party to the aforesaid decision or not. The decision rendered
in Social Jurists case would be applicable to similarly situated
institutions having been rendered in the public interest institution
and affirmed by this Court by a reasoned order. [Para 103][1023A-C]
3.2 It is not the case of unilateral imposition of the condition
of free treatment on the hospitals. The inquiry was conducted,
hospitals were heard and evidence was recorded by Justice
Qureshi Committee and thereafter recommendation made in the
report had been accepted. The hospitals were required to show
cause. Pursuant thereto, the reply had been filed. Thus, the
decision cannot be said to be unilateral. [Para 104][1023-C-D]
3.3 Before imposing the conditions in lease deeds, a High
Level 10-Member Committee for hospitals in Delhi was
constituted, headed by Mr. Justice A.S. Qureshi regarding the
working of the hospitals and nursing homes in Delhi, to review
the existing free treatment facilities extended by the charitable
and other hospitals who had been allotted land on concessional
terms/rates pre-determined by the Government, and 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 would be given free or partially
free; to suggest a proper referral system for the optimum
utilization of free treatment by deserving and needy patients; and
to suggest a suitable enforcement and monitoring mechanism
for the above, including a legal framework. The Committee held
various meetings, conducted enquiries, various hospitals were
heard including Moolchand Kharaiti Ram Hospital. The
Government observed that there were resistance and persistent
refusal of the management of Moolchand Kharaiti Ram Hospital
to send a reply to the questionnaire and to submit the documents
which they were required to submit at the end of the enquiry.
The first visit made to Moolchand Kharaiti Ram Hospital was on
16.1.2001 and the second on 21.3.2001. Various other hospitals
were also visited. The Committee observed that there was no
legal, social or moral justification for allowing such money-making
UNION OF INDIA v. MOOLCHAND KHAIRATI RAM TRUST
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commercial concerns. The land was allotted for a charitable
purpose and to do charitable service which has now been totally
replaced by exploitative commercial hospitals. [Para 105][1023D-H; 1024-A-B]
3.4 With respect to Moolchand Kharaiti Ram Hospital,
Justice Qureshi Committee has discussed the matter in extensive
details. It has been observed that initially the Trust was truly
charitable and continued to serve as a free Ayurvedic hospital for
patients in OPD and IPD sections. It also carried on the research
for Ayurvedic medicines. Later on the trustees decided to
introduce Allopathic treatment also. The Allopathic Section has
been upgraded with air-conditioned deluxe and super-deluxe
rooms which are called Wards. Presently the Allopathic section
covers about 90% of the hospital activities and the Ayurvedic
section is reduced to about 10%. There is only nominal Ayurvedic
treatment of patients in OPD and IPD, which had originally 4
wards. Now it is reduced to only one ward in which there are very
few patients. The manufacturing of Ayurvedic medicines is also
considerably reduced. After noting in detail the statements of
various witnesses working in the hospital, and after analysing
them, the Committee has found that the Moolchand Kharaiti Ram
Hospital has acted not only contrary to the wishes of its founder
but also violated the terms and conditions regarding free
treatment to the poor, openly both in letter and spirit. The
management of hospital does not consider it to be a charitable
hospital at all. The land would not have been allotted to Trust if it
was not charitable. Nonetheless the land has been allotted for
charitable purpose to the hospital. In addition, the High Court of
Delhi during the course of hearing of Social Jurists case has also
constituted a Committee headed by Shri N.N. Khanna and also
considered the same and thereafter the decision had been
rendered in Social Jurists case. [Para 106][1024-A-H; 1025-A]
Delhi Development Authority & Anr. v. Joint Action
Committee Allottee of SFS Flats & Ors. (2008) 2 SCC
672 : [2007] 13 SCR 811 - distinguished
Asit Kumar Kar v. State of West Bengal & Ors. (2009)
2 SCC 703 : [2009] 1 SCR 469 - referred to
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4. The hospitals in question and other similarly situated
hospitals, shall scrupulously observe the conditions framed in
the order dated 2.2.2012 and in case any violation is reported,
the same shall be viewed sternly and the lease shall be cancelled.
The Government of NCT of Delhi is directed to file a periodical
report to this Court within a period of one year from the date of
the present judgment with respect to compliance of conditions
by the respondents-hospitals and other similar hospitals in Delhi,
not only governed by the decision of Social Jurists case but also
governed by the present judgment. [Para 109][1025-G-H; 1026A-B]
Case Law Reference
[1989] Suppl. SCR 66
referred to
Para 48
[1992] 2 SCR 535
referred to
Para 49
[1996] 10 Suppl. SCR 279
relied on
Para 60
[2013] 12 SCR 30
relied on
Para 60
[2014] 4 SCR 10
relied on
Para 60
[1989] 3 SCR 997
relied on
Para 60
[1996] 2 Suppl. SCR 331
relied on
Para 60
[2007] 12 SCR 1084
referred to
Para 76
[1964] 1 SCR 322
referred to
Para 80
[1986] 3 SCR 518
referred to
Para 81
[1967] SCR 454
referred to
Para 82
AIR 1955 SC 549
relied on
Para 87
[1962] SCR 946
relied on
Para 88
[1955] SCR 752
referred to
Para 88
[1988] SCR 511
relied on
Para 89
(1995) Suppl. 4 SCC 236
relied on
Para 90
[1994] 6 Suppl. SCR 591
relied on
Para 91
[1996] 1 Suppl. SCR 825
relied on
Para 92
(1999) 6 SCC 247
relied on
Para 94
[2009] 1 SCR 469
referred to
Para 107
[2007] 13 SCR 811
distinguished Para 108
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3155
of 2007.
From the Judgment and Order dated 28.04.2014 of the High Court
of Delhi at New Delhi in W.P. (C) No. 1478 of 2012.
WITH
C.A. Nos. 3153-3154, 3156 and 3157-3158 of 2017.
Sandeep Sethi, Ajit Kumar Sinha, Shanti Bhushan, Ms. V. Mohana,
Sr. Advs., Ms. Sadhana Sandhu, Ms. Asha Gopalan Nair, Shadman Ali,
Mohan Prasad Gupta, Ms. Aakanksha Kaul, A. Thanvi, Raj Bahadur
Yadav, B.V. Balaramdas, Neeraj Yadav, Mukesh Kumar Maroria, B.
Krishna Prasad, Ashok Agarwal, Ms. K. R. Chitra, Ms. Ritu Bhalla,
Ms. Medha Sachdeva, Ms. Sanjana Sharma, S. S. Shroff, Sumant
Bhushan, Rajeev Sharma, Ms. Radhalakshmi R., T. Rajat Krishna, Ms.
Garima Prashad, Dr. Lalit Bhasin, Ms. Nina Gupta, Ms. Ratna D.
Dhingra, Ms. P. Chadna, Mudit Sharma, Advs. for the appearing parties.
 The Judgment of the Court was delivered by
ARUN MISHRA, J. 1. The question involved in the appeals is
with respect to the validity of Circular issued by the Government of
NCT of Delhi (GNCTD) on 2.2.2012 whereby it intimated the hospitals
to implement the judgment of Delhi High Court with regard to free
treatment to the weaker sections of the society in terms of the judgment
dated 22.3.2007 in the case of Social Jurists v. Government of NCT of
Delhi & Ors. Thereafter, the Land & Development Officer (in short,
'L&DO') passed an order dated 2.2.2012 wherein it was stated that the
Government of India had taken a policy decision that all the hospitals
which have been provided land by L&DO have to strictly follow the
policy of providing free treatment as provided in it. That the said conditions
were applicable to Moolchand Hospital and St. Stephens Hospital as
they were allotted land by L&DO. Communication on similar lines was
issued by Government of NCT of Delhi to Sitaram Bhartia and the
Foundation of Cancer Research imposing condition of providing free
treatment to 10% indoor patients and 25% to outdoor patients of poor
strata of the society. The decision was taken in the light of the decision
of Delhi High Court in Social Jurists case (supra) which was referred
by this Court in Special Leave Petition [Civil] No.18599 of 2007 vide
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order dated 1.9.2011 in which this Court observed that 25% OPD and
10% IPD have to be given treatment free of cost. Said patients should
not be charged with anything. However, the concerned hospital could
make the arrangements of the cost either by meeting the treatment/
medicines cost from its funds or resources or by way of sponsorships or
endowments or donations. As the respondents-hospitals were not a party,
they have questioned imposition of said conditions in the impugned order
by filing writ applications. The High Court has quashed the imposition
of conditions hence, the appeals have been preferred.
2. The factual matrix reflects that the Government of India in the
year 1949 took a decision to provide all possible help to the hospitals by
allotting land to the hospitals and schools at highly concessional rates so
as to involve them in achieving the larger social objective of providing
health and education to the people. Pursuant to the decision taken in the
meeting dated 10.6.1949 under the Chairmanship of the Secretary
(Finance) it was decided that the land would be allotted to the hospitals
and schools at the rate of Rs.2000/- to Rs.5000/- per acre. The hospitals
and schools were treated as charitable institutions. While the first
safeguard relating to institutions being secular and non-communal in
character, free help by allotment of land to schools and hospitals was
unanimously accepted. It was also agreed that non-profit making bodies
be included under the term "charitable institution" with the aforesaid
institutions. The test should be that the institute should be run for the
good of the public without any profit motive. The relevant portion of
policy decision dated 10.6.1949 is extracted hereunder:
"1) It should be clearly laid down that the land will be made available
only for institutions of secular and non-communal character, schools
and hospitals should be freely helped by allotment of land but
applications from other types of charitable institutions should be
considered individually on merits. It would be risky to lay down a
general rule as regards the latter.
2) Recognition by an appropriate authority to the Government
should be a condition precedent the allotment of land to schools,
hospitals etc.
3) The first safeguard was unanimously accepted. It was
understood that an institution of secular and non-communal
character was one which did not discriminate against any class of
UNION OF INDIA v. MOOLCHAND KHAIRATI RAM TRUST
[ARUN MISHRA, J.]
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people on any ground while making an admission. It was also
agreed that institutions like Arts and Crafts Society and other nonprofit making bodies should be included under the term "Charitable
Institution". The test should be that the institution should be run
for the good of the public without any profit motive."
3. It was also deliberated upon on 10.6.1949 that what should be
premium and ground rent chargeable to a charitable institution. As per
the policy laid down by the Government of India in the letter of the
Department of Education, Land, dated 25.7.1943, the premium charged
was too high, to be easily payable by any charitable institution much less
by any displaced institution from Pakistan. According to that formula,
any charitable institution will have to pay a premium at the rate of 25,000
to 35,000 per acre, plus ground rent @ 15% on the premium per annum,
that would be obviously too high. Hence, it was agreed that the premium
chargeable on land allocated to charitable institutions in Delhi should
vary from Rs.2000/- to Rs.5000/- per acre.
Facts relating to Mool Chand Khairati Ram Trust :
4. In the year 1927 one Lala Kharaiti Ram of Lahore made a Will
with a codicil registered at Lahore by which Moolchand Khairati Ram
Trust was constituted by Lala Kharaiti Ram with the name of his father
Shri Moolchand.