Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust v. Batra Hospital Employees Union

16. AR for the workmen had placed reliance upon the case of Workman of TIRUMALA TIRUPATI DEWASTHANAMS V/s. THE MANAGEMENT AND ANOTHER, (C.A. NO. 290(L) OF

1974) in which the question was, whether workman of the Dewasthanams were entitled to payment of bonus employed with Transport Department under the Act. It was held that the factors to be considered is the source of fundings, the balance sheet that is drawn up and the disposal of profits and whether the same had nexus with Dewasthanams or not, and in para 4 it was specifically held that the institution may be designed for profit although, it may make or may not make profit and that the institutions profit or earnings may be used for other charitable purposes and the factor to be seen is, was the LPA 99/2018 Page 11 institution not one for purposes of profit and if it was one, hot. for earning profit but merely as an ancillary facility for pilgrims to reach and return, Sec. 32(v) will exclude the institution. In the said ruling it was clearly it was clearly held that earning of profits is immaterial. It is the institution and establishment which is material and it has to be seen whether or not the establishment was for profit or not and rather it was held that even a transport department if it is only facilitating, the reach and return of pilgrims will be entitled to exemption under the Payment of Bonus Act, In the present case it is, the own case of the workmen that the management is putting back the profits in the hospital as a result of which hospital has grown up and no evidence has been led that the members of the society are usurping the profits for themselves.

17. The case of the workmen is not that since the Doctors at that hospital are charging, good amount, their service conditions be also made good. The case is payment of bonus and in view of the above discussion it can be clearly said that the management is exempted from payment of bonus under Section 32(v) of the Payment of Bonus Act being an institution established not for the purposes of profit. Reference is answered against the workmen. Award is passed accordingly”

9. Aggrieved by the said Award, the respondent impugned it in a writ petition bearing no.5349/2004 titled Batra Hospital Employees Union (petitioner) V Batra Hospital & Medical Research.

10. The learned Single Judge vide the impugned judgment quashed and set aside the impugned award passed by the Tribunal and allowed the writ petition. 10.[1] The learned Single Judge with regard to issue no.1 as framed by the LPA 99/2018 Page 12 Tribunal observed that the arguments advanced on behalf of the respondent are insubstantial. The learned Single Judge observed that the substratum of the objection as voiced on behalf of the respondent, before the Tribunal as well as before the court is, that the Union which on 23rd July 1999 initially represented the appellant hospital, was the “Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union (Regd. No.4144)”; the Union which raised the industrial dispute and subsequently petitioned the Tribunal, was the “Ch. Aishi Ram Batra Charitable Trust Employees Union (Regd. No. 4144)”, and that Union which has petitioned this court against the impugned award passed by the Tribunal is the “Batra Hospital Employees Union” and as such there were a multitude of unions espousing the cause of the workmen at different points of time which is impermissible. The learned Single Judge also observed that the Tribunal has merely relied on the two statements of WW[1] Vijay Singh who, in cross-examination, deposed that “about 800 employees of Batra Hospital are members of Charitable Trust Employees Union at Present” and “It is correct that there is no union by the name of Choudhary Aishi Ram Batra Charitable Trust Employees Union” and these two admissions by WW[1] in the estimation of the Tribunal clearly indicated that LPA 99/2018 Page 13

(i) the employees of the appellant hospital were members of the “Charitable

Trust Employees Union”, and not of either the “Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union” or the “Choudhary Aishi Ram Batra Charitable Trust Employees Union” and (ii) in fact, there was no union known as “Ch. Aishi Ram Batra Charitable Trust Employees Union”. It was further observed that the Tribunal expressed the view that the Union which had initiated the industrial dispute was a non-existent entity and that the employees of the appellant hospital were actually members of the “Charitable Trust Employees Union” which was nowhere in the picture. The impugned judgment rejected the objection voiced by the appellant hospital and held that finding of the Tribunal thereon is erroneous. It observed that the discrepancy in the name of Union as it figured on the representation made to the management and in the statement of claim before the Tribunal is no discrepancy at all. The impugned judgment after referring the documents on record and crossexamination of WW[1] Vijay Singh expressed agreement that “Batra Hospital Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union”, the “Ch. Aishi Ram Batra Charitable Trust Employees Union” and the “Charitable Trust Employees Union” were one and the same LPA 99/2018 Page 14 union. 10.[2] The learned Single Judge with regard to issue no.2 as framed by the Tribunal observed that espousal either by the Union or by a substantial number of workmen in the establishment concerned would be sufficient to elevate the dispute to the status of an "industrial dispute". It was further observed that in the present case, the registered union of the workmen of the appellant hospital had initiated the industrial dispute and as such the requirement of an "espousal" is clearly satisfied. It was also observed that there is a note in vernacular on record stating that on 28.06.1999, a meeting of the Executive Committee of the petitioner-union met and decided that as the appellant hospital had refused to pay bonus and as such a dispute in that regard, be instituted in the Labour Court. 10.[3] On merits, the impugned judgment has considered the contention of the parties and also considered findings of the Tribunal and observed as under:-

11. The appellant has impugned the judgment on the grounds that it is erroneous, arbitrary, perverse, devoid of material on record and legally not sustainable; that it has resulted into miscarriage of justice; the dispute raised LPA 99/2018 Page 21 by the claimant/Union before the Industrial Tribunal was not espoused as required in law and the claimant was not having any locus standi to raise the dispute; the appellant hospital is not established and run for the purpose of profit but is rather a charitable hospital and is fully covered under the exemption granted by section 32(v)(c) of the Act. The appellant has also raised questions of law. 11.[1] The appellant hospital further contends that the hospital provides free healthcare facilities like OPD and surgery to the poor whereas the fee and other expenses are being charged from other patients to run the hospital, the revenue which is generated is used only for running and improving facilities in the hospital and no money is used and applied for any other purpose and that the appellant was also granted exemption under section 80G of the Income Tax Act, 1961 being a charitable hospital. 11.[2] The respondent filed claims before the Inspecting Officer appointed under the Act on three occasions which were rejected after detailed enquiry, as not being available under section 32(v)(c) of the Act. The findings of the Inspecting Officer were not challenged before the competent court of law. 11.[3] Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust Employees Union raised a demand vide notice dated LPA 99/2018 Page 22 23.07.1999 on Batra Hospital for claiming bonus as given by other hospitals in the region including the Government Hospitals in Delhi. However, the said claim was actually raised and sent by another union, namely, All India General Mazdoor Trade Union and these two unions do not have any concern with the Hospital and never represented the employees of the hospital at any time. The hospital replied to the said demand notice vide letter dated 05.08.1999. 11.[4] Ch. Aishi Ram Batra Charitable Trust Employees Union filed another statement of claim for claiming bonus before the Conciliation Officer, Delhi against Batra Hospital. The appellant had filed a reply to the said claim before the Conciliation Officer wherein it was contended that the dispute was not espoused as per law and did not constitute an industrial dispute within the meaning of section 2(k) of the Industrial Disputes Act, 1947. Vijay Singh, who claimed to be the President of the union, had no authority or locus standi to raise the dispute. The appellant is not liable to pay the bonus to employees. 11.[5] The appellant has also challenged the impugned judgment on other grounds that the term of reference relating to the payment of statutory bonus was beyond the jurisdiction of the appropriate Government. The LPA 99/2018 Page 23 dispute/claim under the Act was rejected by the authority. The claim filed before the Conciliation Officer was not in respect of the statutory bonus but it was in respect of the conditions of the employment and extension of benefit to the employees commensurate with the benefit being given to the employees in other hospitals and Government Hospitals. The dispute was raised against M/s Batra Hospital which is not a legal entity and the name of the appellant is Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust. The claimant/Union was not an existing entity. The learned Single Judge made an error in law while considering the documents submitted along with the petition. The certificate issued to the appellant under section 80G of the Income Tax Act, 1961 was completely disregarded. The object of the expression "charitable" in the Income Tax Act, 1961 has the same purpose as the expression "not for the purpose of profit" in section 32(v)c) of the Act.

12. The learned counsel for the appellant contends that the impugned judgment has erred in holding without any credible evidence, that the appellant hospital is covered under the Act and is not entitled to the benefit under section 32(v)(c) of the Act; and it is based on illogical reasoning and process on account of misplaced sympathy, generosity and private LPA 99/2018 Page 24 benevolence which has been deprecated by the Supreme Court in various judgments. The correct name of the appellant is „Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust but in reference dated 01.02.2002 the name of the appellant was incorrectly mentioned as M/s. Batra Hospital. The name of the union purportedly representing the workmen in conciliation in the reference order and in the pleadings and evidence before the Tribunal was “Ch. Aishi Ram Batra Charitable Trust Employees Union” but in the certificate issued by the be “Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust Employees Union” with effect from 05.09.1991 and “Batra Hospital Employees Union” with effect from 30.05.2001. 12.[1] The reference order, consequential proceedings and the impugned award passed by the Tribunal are in incorrect name of employer and nonexistent union and as such they became non est and null and void. The present writ petition filed to challenge the impugned award by the correctly named Union was not legally maintainable as no award had been passed against the correctly named Union. The learned Single Judge has not LPA 99/2018 Page 25 considered the said admitted/undisputable circumstances which rendered the impugned judgment per incuriam, without jurisdiction and illegal. 12.[2] The learned counsel for the appellant also argued that the learned Single Judge completely ignored the fact that respondent has not led any corroborative evidence oral or documentary except vague affidavit of WW[1] Vijay Singh. The learned Single Judge should have held that the claim filed before the Tribunal was not proved by the wrongly named union. The learned Single Judge also completely ignored that in the absence of any credible evidence either oral or documentary parameters as mentioned in the impugned judgment for treating hospital established for the purpose of profit have been proved and the hospital being run by a charitable society was granted exemption under the Income Tax Act as not carrying on any commercial, business or trading activities for profit and even surplus income was never used for benefit of any of its members but used for improving the facilities in the hospital which is also admitted by the union. 12.[3] The judgments relied upon by the learned Single Judge are not applicable to the facts of the present case. There was no material before the learned Single Judge to set aside the impugned Award and to hold that the appellant‟s establishment was not covered under section 32(v)(c) of the Act. LPA 99/2018 Page 26 The impugned Award was not liable to be set aside and no relief could have been granted in favour of the respondent Union which is not the Union named in the reference order against which the impugned Award was passed. The learned counsel for the appellant argued that the appeal be allowed and the impugned judgment be set aside and Rs.50,37,552/deposited with the Registrar General of this court as per interim order, along with the interest accrued thereon be directed to be released to the appellant.

13. The learned counsel for the respondent has refuted the appellant‟s contentions. He says that the finding of the learned Single Judge are correct and sound in law and the judgment calls for no interference. Apropos nomenclature of the respondent, he says that the learned Single Judge examined various documents which are Representation dated 23.07.1999 bearing registration no. of union as 4144 Ex. WW1/A and Memo of parties before the conciliation officer Ex. WW1/4 which bear same registration number and the addresses of the union. The Certificate of Registration of Trade Union bearing no. 4144 dated 05.09.1991certifies that Batra Hospital Medical Research Centre was registered under the Indian Trade Unions Act, 1926 on 05.09.1991 which was changed to “Batra Hospital Employees Union vide Letter No.F10 (4144) RTU/453 dated 30.05.2001. The Deputy LPA 99/2018 Page 27 the constitution of the “Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union” was amended to “Batra Hospital Employees Union” and Vijay Singh on the letter head of Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees‟ Union informed the appellant about the change of name. 13.[1] The learned counsel for the respondent on the aspect of espousal by a majority of Workmen working in the appellant hospital rightly held that espousal either by the Union or by substantive number of Workmen in the establishment would be sufficient to elevate the dispute as an industrial dispute. The requirement of an espousal is satisfied as the registered Union had initiated the industrial dispute. The appellant has refused to pay the bonus and as such in the meeting of the Executive Committee of the respondent, it was decided to institute the said industrial dispute which is evident from the note (in vernacular) dated 28.06.1999. 13.[2] The learned counsel for the respondent on the aspect whether the appellant hospital is exempted under section 32 (v)(c) of the Act argued that the learned Single Judge rightly observed that MW[1] Ajay Jawatkar during LPA 99/2018 Page 28 cross-examination could not recall the name of any person who had been given free treatment by the appellant hospital, MW[1] was unaware that whether the appellant hospital maintained any list of the persons to whom free treatment was given, MW[1] was not aware of the exact location of the board where it was displayed that the appellant hospital was charitable and that the booklet depicting rates was meant only for persons who were charged and there was no reference, therein, to any free OPD or other treatment being provided. It was further observed that MW[1] could not recollect where it was mentioned that free OPD or other treatment was being provided in the Hospital brochure. The learned counsel for the respondent further argued that there was no document to substantiate the averment as deposed in para 9 of affidavit of MW[1] that the appropriate authority had conducted three enquiries into the matter and found that the appellant hospital was established for charitable purposes and appellant hospital ran on the basis of the donations received by it and the income received from patients. 13.[3] The respondent placed reliance on the decision in Workmen of Tirumala Tirupati Dewasthanams V The Management and Another, AIR 1980 SC 604; Christian Medical College and Hospital v Presiding Officer, LPA 99/2018 Page 29 2003 (III) LLJ 650 (Mad) and several other decisions and argued that in the impugned judgment, it was rightly held that the test of “Dominant Purpose” would be the decisive factor and not whether the said entity was actually making profits, and that ploughing back of the profits earned into the institution for its betterment, would not immunize the institution from the rigours of the Act. The exemption under section 80-G of the Income Tax Act cannot automatically exempt the entity from the Act applicability by interpreting the phrase "established not for purposes of profit" in Act similarly with phrase "established for a charitable purpose" in the Income Tax Act and usage of the term "charitable purpose" in section 2(15) of the Income Tax Act. The counsel for the respondent argued that appeal is liable to be dismissed.

14. It is reflecting from the record that union which submitted representation on 23.07.1999 to the appellant Hospital was the Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union (Regd. No. 4144), the union which raised the industrial dispute and subsequently petitioned before the Tribunal was Ch. Aishi Ram Batra Charitable Trust Employees Union (Regd. No. 4144), and union which has filed the writ petition to challenge impugned award is the Batra Hospital LPA 99/2018 Page 30 Employees Union. The appellant in present appeal named respondent union as Batra Hospital Employees Union. The Tribunal on basis of cross examination of WW[1] Vijay Singh held that the employees of the appellant Hospital were members of the Charitable Trust Employees Union and Ch. Aishi Ram Batra Charitable Trust Employees Union which had initiated the industrial dispute before tribunal was a nonexistent entity and that the employees of the appellant Hospital were actually members of the Charitable Trust Employees Union. 14.[1] The learned Single Judge rightly observed that words “Batra Hospital & Research Centre” were missing from the union Ch. Aishi Ram Batra Charitable Trust Employees Union which had represented workmen before the Tribunal in comparison to the union “Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union” which had represented to the appellant Hospital on 23.07.1999 and the said supposed discrepancy is no discrepancy at all as the Registered Number of the Union i.e. 4144 was prominently indicated both at the head of the representation dated 23.07.1999 (Ex. WW-l/A before the Tribunal) as well as in the Memo of Parties before the Conciliation Officer (Ex. WW1/4 before the Tribunal) with same address. These correlations are indicative LPA 99/2018 Page 31 that Batra Hospital Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union and the Ch. Aishi Ram Batra Charitable Trust Employees Union were one and the same. 14.[2] The learned Single Judge rightly did not appreciate findings of the Tribunal on basis of cross examination of WW[1] Vijay Singh that about 800 employees of Batra Hospital are the members of the Charitable Trust Employees Union being suffering from perversity and further correctly concluded that Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Charitable Trust Employees Union, Ch. Aishi Ram Batra Charitable Trust Employees Union and the Charitable Trust Employees Union were one and the same Union and not three different Unions and said finding of the learned Single Judge is supported by documents as detailed in para no 18 & 19 of the impugned judgment. 14.[3] We do not find legal force in arguments advanced by the learned counsel for the appellant that union purportedly representing workmen in the reference and before the Tribunal was Ch. Aishi Ram Batra Charitable Trust Employees Union but in the certificate issued by the Registrar of Trade Unions, Delhi, name of the union is mentioned as Batra Hospital and Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust LPA 99/2018 Page 32 Employees Union with effect from 05.09.1991 and Batra Hospital Employees Union with effect from 30.05.2001 and as such these unions are different entities. These arguments were also rightly rejected by the learned Single Judge in impugned judgment.

15. Regarding issue no 2, the Tribunal held that the respondent had not filed any document to establish that an appreciable number of the employees of the appellant Hospital were the members of the union or any meeting was held by the union espousing the cause of the workmen or majority of workmen in the appellant Hospital had authorized the respondent -Union to espouse their cause. We are in agreement with the findings of the learned Single Judge that the registered union of the workmen of the appellant Hospital had initiated the industrial dispute and as such the requirement of an espousal is clearly satisfied.

16. The Act was enacted with objective to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity. Section 1 of the Act provides that the Act shall apply to every factory and every other establishment in which twenty or more persons are employed on any day during an accounting year. Section 32 of the Act exempts certain classes of employees from their LPA 99/2018 Page 33 entitlement to bonus. The hospitals which are "established not for the purposes of profit" are exempted from the applicability of the Act by virtue of sub-clause (c) of clause (v) of section 32 which reads as under:-

16.[1] The Supreme Court, in Jalan Trading Company V Mill Mazdoor Union, MANU/SC/0185/1966 while considering the vires of the Act including section 32 observed as under:- “It may be broadly stated that bonus, which was originally a voluntary payment, out of profits made, to workmen to keep them contented, acquired the character, under the bonus formula, of a right to share in the surplus profits, and enforceable through the machinery of the Industrial Disputes Act. Under the Payment of Bonus Act, liability to pay bonus has become a statutory obligation imposed upon employers covered by the Act.” 16.[2] The learned Single Judge in para no 33 of the impugned judgment observed that section 32(v)(c) of the Act has come up for judicial LPA 99/2018 Page 34 interpretation on many occasions and referred Workmen of Tirumala Tirupathi Devasthanam V Management, AIR 1980 SC 604. In this case, the issue before the Supreme Court was whether the Transport Department of the Tirumala Tirupati Devasthanam was an institution by itself and, if so, whether it was exempt from the operation of the Act by virtue of section 32(v)(c) thereof. The Supreme Court held as under:- “2.... On the other hand, there must be proof that the Transport Department (a) is an institution; (b) established not for the purpose of profit. The Tribunal has not correctly appreciated the import of this latter requirement. It has been found that profits made some years are ploughed back whatever that may mean. It is also found that the motive for running the industry of transport was to afford special facilities for the pilgrims. These by themselves do not clinch the issue whether the institution has been established not for purposes of profit, nor are we satisfied that merely because in the administrative report of the Devasthanam, there is mention of the transport establishment as a remunerative enterprise, that is decisive of the issue.

4. Likewise, merely because it is an institution, the Transport Department does not cease to be one established 'not for purposes of profit', that has got to be made out on its merits. The institution may be designed for profit although it may make or may not make profit. The institution's profits or earnings may be used for other charitable purposes. That also does not determine finally the character of the institution. Was the institution 'not one for purposes of profit', motives apart? If it was one, definitely not for earning profit, but merely as an ancillary facility for pilgrims to reach and to return. Section 32(v) will exclude the institution. If we may tersely put it, the LPA 99/2018 Page 35 dominant purpose of the Transport Department will be the decisive factor.” 16.[3] The learned Single Judge also referred T.N. Water Supply & Drainage Board V T.N. Water Supply & Drainage Board Engineers Association, (1998) 5 SCC 370 and State of Tamil Nadu V K. Sabanayagam, (1998) 1 SCC 318. In T.N. Water Supply & Drainage Board, the Supreme Court observed as under:- “Learned Single Judge has referred to the functions of the Board and its powers and rightly held that the purpose behind the functions of the Board is to provide protected drinking water supply and drainage facilities, but this also cannot be disputed that the Board has got its own assets and liabilities, that it has got its method of recovery of the cost of the scheme, making investment and constituting its funds by 'all moneys received by or on behalf of the Board..., all proceeds of land or any other kind of property sold by the Board, all charges, all interest, profits and other moneys accruing to the Board and all moneys and receipts', deposited into the public accounts of the Government under such detailed heads of accounts as may be prescribed or in the Reserve Bank of India, State Bank of India or any corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. It has thus a scheme of profit and loss. It shall earn profit in some year and lose in another year. Thus, in its commercial activities of sort, it has got a capital structure of profit, liabilities and labour force to care for. We see reason to hold in accordance with the Rule indicated by the Supreme Court in the case of Workmen v. Tirumala Tirupathi Devasthanam that the Board is an institution designed for profit in the limited sense that when the Government's department found it difficult to run such projects LPA 99/2018 Page 36 departmentally, they decided to create a Board and transferred the projects to ensure that there was proper service to the community at large on the one hand and on the other, there was no pressure on the meagre revenue and other resources of the State. Applying the test as above, we have no hesitation in holding that the learned Single Judge has fallen in error in holding that the respondent-Board is an institution established not for purposes of profit. Employees of the Board qualifying for bonus under the Act, in our opinion, are entitled to minimum amount of bonus.” 16.[4] The High Court of Madras in the case of Christian Medical College and Hospital V Presiding Officer, 2003 (III) LLJ 650 (Mad) analysed the applicability of section 32(v)(c) of the Act. As observed by the learned Single Judge examined issue whether the Christian Medical College & Hospital was exempted from the application of the Act by virtue of section 32(v) (c) of the Act:- “(i) The CMC was being run on commercial lines.

(ii) The cost of education for a single Medical student was Rs.

64,000/- per year, whereas the fee charged from a student for a year, was only Rs. 3,000/-. This indicated that it was only from the earnings of the hospital, that subsidy could be provided for the student for their education.

(iii) The minutes of the Extra Ordinary Meeting of the

Association of the CMC indicated that income from patients during 1978-88 was 88%, whereas contribution from the Members was only 1.42%, collections from students amounted to 1.5%, collection from other sources was 2.5% and earnings from the division of community health was 3.4%. LPA 99/2018 Page 37

(iv) Of 1484 beds in the hospital, only 161 beds were assigned for free treatment, i.e. a mere 11%. 90% of the inpatients and 60% of out-patients were charged on commercial basis.

(v) The CMC manufactured 144 items of medicines, sold them to patients at a profit and ploughed back the surplus from the sales to the institution itself. (vi) 90% of the income of the institution came from the hospital. Even if the purpose of establishment, and the object of the institution at that time, had been to serve the poor, it was not necessary that the said object continued.

(vii) Free service, on charitable lines, was no longer available to all patients, as was admitted by the CMC itself.”

17. The perusal of impugned award reflects that the Tribunal in para no 15 of the impugned award after considering Ex. MW1/3 observed that one of the object of the trust is setting up of hospitals or other medical institutions for administering medical relief to needy, carrying out medical and clinical research, grant of medical help to poor which clearly goes to show that the objective for which the society is formed and for which the hospital is established is not for earning profits. The perusal of impugned award further reflects that the Tribunal did not agree with the arguments advanced on behalf of the respondent that the management i.e. the appellant had not specifically denied that management had charged various amounts from the persons who died during treatment and only after receiving the amounts their bodies were handed over to their relatives which goes to show that the management is a profitable organization by observing that these averments LPA 99/2018 Page 38 are even without particulars and the workmen had not been able to prove these averments by producing, any material on record. The Tribunal also did not agree with the arguments advanced on behalf of the respondent in light of cross examination of MW[1] that management i.e. the appellant is earning profit and is not a charitable institution. It is notable that in his cross examination, the management‟s witness - MW[1] failed to give the name of even a single person who had been given free treatment, or provided/furnished a list/register/record of persons to whom free treatment was given by the hospital; the exact location of the board wherein it was stated to be displayed that the hospital was a charitable hospital was not answered or identified, nor was a photograph or any evidence regarding it produced. The fact that executive body of the Society are family members was not denied. Except MW1/4, no document or record was produced to establish that the management was entitled to exemption u/Sec. 32(v)(c) of the Act. In the booklet it is not mentioned that free OPD and free treatment to poor is available. The Tribunal observed that these arguments are misplaced in as earning of profits is not a criteria for seeking exemption under section 32(v)(c) of the Act rather it is the purpose which is material and the only thing which has to be shown is whether the institution is not LPA 99/2018 Page 39 established for purposes of profit. The Tribunal also observed that as per workmen and as the management profits are put back into the funning of the hospital itself as a result of which the hospital has grown and it is the workmen's own case that the management had extended from a small hospital in 1986 to a 312-bedded hospital as on date. The Tribunal also observed that no evidence had been led by the workmen to show that profits earned are diverted to the personal income of the persons who were members of the society and further Municipal Corporation charges subsidized rates for water and electricity from the management and that the equipment imported by the management are duty free which reflects that the Govt. and the MCD have treated the management as a charitable institution.

18. After analytical and critical analysis of material on record including impugned judgment we are of view that the learned Single Judge rightly did not agree with above findings of the Tribunal while observing that these findings are presumptuous in nature and the Tribunal did not disclose how or why it presumes that a Trust which sets up hospitals which provide free treatment to needy patients is not working "for the purpose of profit". It is difficult to accept the contention that the appellant could be regarded as established "not for the purpose of profit". The learned Single Judge has LPA 99/2018 Page 40 observed that profits were in fact earned by the appellant but were funnelled back into the appellant Hospital to enhance its services and as a result thereof, the appellant Hospital had expanded, from a small institution in 1986 to a 312-bedded hospital as on the date of the Award and must have been further expanded manifold. The earning of the profit would necessarily entail the responsibility of sharing some part of such profit with the employees or workmen whose effort have significantly contributed towards the earning of the profit which is mandate of the Act and it would not fair for the appellant to evade this responsibility.

19. In his cross-examination, MW[1] has admitted that the appellant hospital was not in possession of any material to establish that poor persons were given free treatment by the appellant Hospital, in fact he admitted that the Hospital was running on the basis of the income received from patients, apart from donations received by it. The said witness failed to identify the location of the display or any notice or intimation to the general public that the appellant Hospital was being run on charitable purposes. Most strikingly, the management‟s witness was unable to name even a single patient who had been given free treatment by the appellant Hospital. MW[1] also admitted that the appellant Hospital has issued a booklet mentioning the rates of LPA 99/2018 Page 41 various services rendered by it but could not recall information regarding providing of free treatment in any of the brochures issued by the appellant Hospital. Further the respondent in the statement of claim and WW[1] Vijay Singh in affidavit tendered in evidence stated that balance sheet of the appellant Hospital showed huge profits which was not specifically denied in the written statement filed by the appellant Hospital and only a bald statement was made that the appellant Hospital was not earning huge profits but admitted that the advancement of the hospital was attributable to the income and profits earned by the appellant Hospital. The learned counsel for the appellant argued with force that without any credible evidence oral or documentary except vague affidavit of WW[1] it was held in impugned judgment that the appellant hospital is covered under the Act and not entitled to the benefit under section 32(v)(c) of the Act rather the learned Single Judge should have held that the claim filed before the Tribunal was not proved in accordance with law and should not treat appellant hospital established for the purpose of profit.

20. The contentions on behalf of the appellant are misplaced and misconceived particularly in light of cross examination of MW[1], which was completely ignored by the Tribunal in impugned Award. The learned LPA 99/2018 Page 42 counsel for the respondent rightly has argued that MW[1], Ajay Jawatkar during cross-examination could not recall the name of any person who had been given free treatment by the appellant hospital and was unaware that whether the appellant hospital maintained any list of the persons to whom free treatment was given. MW[1] could not give location of the board where it was displayed that the appellant hospital was charitable and further in the booklet there was no reference to any free OPD or other treatment being provided to poor persons. We are in agreement with the arguments advanced by the learned counsel for the respondent.

21. The Tribunal in impugned Award also observed that the appellant Hospital vide certificate Ex. MW1/2 was granted exemption under subsection (5) of section 80G of the Income Tax whereby it was certified that vide letter dated 10.02.1989 issued by the Commissioner of income Tax, the appellant Hospital qualifies to tax relief under section 80 G of the Income Tax Act. The Tribunal also observed that subsequent certificates issued in 1993 and 1998 had also been proved. It was argued on behalf of the appellant Hospital before the learned Single Judge as reflected from the impugned judgment that the certificate issued to the appellant Hospital under section 80G of the Income Tax Act does amount to an LPA 99/2018 Page 43 acknowledgement by the Income Tax authorities, that the appellant Hospital his client is a "no-profit" organization.

22. The learned counsel for the appellant Hospital also argued that the appellant hospital being run by a charitable society was granted exemption under the Income Tax Act as the appellant Hospital is not carrying on any commercial, business or trading activities for profit and surplus income was never used for benefit of any of its members but surplus income is used for enhancing the facilities in the hospital. The learned counsel for the respondent argued that the test of “Dominant Purpose” is the decisive factor and ploughing back of the earned profits for betterment would not immunize the institution from the rigours of the Act and the exemption under section 80G of the Income Tax Act would not automatically exempt the institution from the application of the Act by interpreting the phrase "established not for purposes of profit" in Act similarly with phrase "established for a charitable purpose" in the Income Tax Act. The learned Single Judge in impugned judgment has dealt these arguments in detail and did not agree with this argument advanced by the learned counsel for the appellant Hospital. The learned Single Judge in para no.49 of the impugned judgment observed that perusal of the certificates issued to the appellant Hospital LPA 99/2018 Page 44 under section 80G of the Income Tax Act reveals that they have been issued under sub-section (5) thereof and exemption under sub-section (5) of section 80G of the Income Tax Act is available "to donations to any institute or fund referred to in sub-clause (iv) of clause (a) of sub section (2) only if it is established in India for a charitable purpose..." and further observed that as per arguments advanced on behalf of the appellant Hospital there is no real difference between the expressions "established not for the purpose of profit" and "established for a charitable purpose" and the certificates issued to appellant Hospital under section 80G of the Income Tax Act effectively conclude the factual position that the appellant-Hospital was established not for the purpose of profit. The learned Single Judge has rightly rejected the said argument by observing that the definition of "charitable purpose" as contained in clause (15) of section 2 of the Income Tax Act defeats the said contention, because it would be hazardous to presume that every organization which is certified under section 80G of the Income Tax Act would be entitled ipso facto to immunity from the applicability of the Act and the word "charitable purpose" as used in section 80G(5) of the Income Tax Act may not readily be equated with the words "not for the purpose of profit", as used in section 32(v)(c) of the Act. In our view observation of the LPA 99/2018 Page 45 learned Single Judge made in impugned judgment that the objects and purposes of the Income Tax Act and the Act are distinct and different from each other. Consequently, the purpose of grant of exemption in respect of donations made to an organization certified under section 80G of the Income Tax Act would be distinct from the purpose of granting immunity to an organization or institution from the applicability of section 32(v)(c) of the Payment of Bonus Act. The appellant has neither placed on record any notification to prove that the equipment imported by the appellant Hospital was exempted from levy of any statutory duty.

23. In the background of above facts, we are of the considered opinion that the appellant Hospital cannot be regarded as established "not for the purpose of profit" as required by section 32(v)(c) of the Payment of Bonus Act and the dominant purposed of the appellant is manifestly to earn the profit. We are in agreement with the findings of the learned Single Judge that the impugned Award was passed on assumptions and presumptions and without considering the material evidence on record including statements of the witnesses and the contents of the affidavits filed by them. The impugned Award cannot be sustained on facts or in law. There is no merit in the appeal. The appellant Hospital is not entitled for exemption under section 32 LPA 99/2018 Page 46 (v)(c) of the Act. It is liable to pay bonus to its employees as per mandate of the Act. The appellant Hospital is directed to comply with directions in terms of para 59 of the impugned judgment.

24. The present appeal along with pending applications, if any, stands dismissed. (SUDHIR KUMAR JAIN) JUDGE (NAJMI WAZIRI)

JUDGE MAY 26, 2023 N/SD