Sidramappa Danigond Memorial Trust Terdal Vs the… — Writ and Judicial Review | Karnataka HC (2025)

Sidramappa Danigond Memorial Trust Terdal Vs the… — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Writ petition allowed: impugned communications (Annexures-F, F1) and demand notices (Annexures-G to G12) quashed; on Annexure-H, the writ petition stands disposed and the respondent-Authority directed to consider the petitioner's pending application in accordance with law; respondent No.4 at liberty to proceed as advised in law regarding the alleged construction without permission/sanction.

Issue for consideration

Whether the petitioner-Trust's buildings and vacant lands — hostels not established or conducted for profit, and premises used for educational purposes by its recognised educational institutions — qualify for property-tax exemption under Section 94(1-A)(i)(i) and (ii) of the Karnataka Municipalities Act, 1964. +3 more

Court's answer

The vacant land and buildings used as student hostels within the campus where the petitioner-Trust's recognised educational institutions are located are exempt from property tax under Section 94(1-A)(i)(i) of the Act, 1964, so long as the hostels are not established or conducted for profit; the respondents did not dispute that these hostels are not run for profit.

Ratio / Principle

The 'attached teaching hospital' — an Ayurveda hospital offering standard healthcare services, attached to an Ayurveda Medical Institution for teaching and training its students — is itself an educational institution, since its purpose is to impart Ayurveda medical education in addition to offering healthcare services.

Key takeaways

Observation in passing: stand-alone hostels without any educational institution attached to them may not come within the exemption under Section 94(1-A)(i)(i) of the Act, 1964.obiter¶23
Under Regulation 5 of the Regulations, 2024 the campus of an Ayurveda medical college mandatorily comprises the attached teaching hospital (with ancillary sections/units/facilities) together with hostel and staff quarters; the attached hospital is therefore part of the medical college itself.ratio¶30

Detailed headnote1 paragraphs

Property tax — exemption — Karnataka Municipalities Act, 1964, S.94(1-A)(i)(i) & (ii) — Trust running recognised educational institutions including an Ayurvedic medical college with its mandated attached teaching hospital, hostels, staff quarters and allied facilities. Held: (i) vacant land and buildings used as hostels within the campus of the recognised institutions are exempt, so long as the hostels are not established or conducted for profit (stand-alone hostels without an attached educational institution may not qualify); (ii) under the Indian Medicine Central Council Act, 1970 and the NCISM Regulations, 2024 (S.2(1)(f); Regs. 5, 38, 40), the attached teaching hospital, hostel and staff quarters are integral parts of the Ayurveda medical college campus; the attached teaching hospital exists for teaching and training Ayurveda students and is therefore itself an educational institution — accordingly, the hospital attached to the medical college and the staff quarters meant for medical-college staff are exempt under S.94(1-A)(ii). The Kerala Full Bench view in Unity Hospital (P) Ltd., followed in Jubilee Mission, distinguished: the 1970 Act and the Regulations, 2024 were not before the Full Bench; the view is consistent with the coordinate-Bench decisions in City Municipal Council and Navodaya Education Trust. Exemption not declared for staff quarters other than those of the medical-college staff (question left open). Certiorari issued: the Town Municipal Council, Terdal's tax communications (Annexures-F, F1) and demand notices (Annexures-G to G12) quashed; Annexure-H — authority directed to consider the pending building-plans/NOC/UHAR-patra application in accordance with law; liberty reserved to the Municipality to proceed on alleged unauthorised construction.

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IN THE HIGH COURT OF KARNATAKA,AT DHARWAD DATED THIS THE 17^TH DAY OF NOVEMBER, 2025

BEFORE

THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE

WRIT PETITION NO. 101312 OF 2024 (LB-RES)

BETWEEN:

SIDRAMAPPA DANIGOND MEMORIAL TRUST TERDAL, REPRESENTED BY ITS CHAIRMAN, DR. MAHAVEER S/O SIDRAMAPPA DANIGOND, AGE. 71 YEARS, R/O. TERDAL, TQ. RABAKAVI-BANAHATTI, DIST. BAGALKOT-587 315.

… PETITIONER

(BY SMT. LAKSHMY IYENGAR, SENIOR COUNSEL ADVOCATE FOR SRI. SUNIL S. DESAI, ADVOCATE)

AND:

CHANDRASHEKARLAXMANKATTIMANI Digitally signed byCHANDRASHEKARLAXMAN KATTIMANILocation: High Court ofKarnataka, Dharwad BenchDate: 2025.11.22 11:19:59+0530

THE STATE OF KARNATAKA, REPRESENTED BY ITS SECRETARY, DEPARTMENT OF URBAN DEVELOPMENT, M.S. BUILDING, BENGALURU, PIN-560 001.

THE DIRECTOR OF MUNICIPAL ADMINISTRATION, VISWESWAR TOWER, DR. AMBEDKAR ROAD, BENGALURU-560 001.

THE DEPUTY COMMISSIONER, BAGALKOT, DIST. BAGALKOT, PIN-587 301.

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THE TOWN MUNICIPAL COUNCIL TERDAL, REPRESENTED BY ITS CHIEF OFFICER, AT: TERDAL, TQ. RABAKAVI-BANAHATTI, DIST. BAGALKOT, PIN-587 315.

… RESPONDENTS

(BY SRI. ASHOK T. KATTIMANI, AGA FOR R1 TO R3; SRI. MAHANTESH R. PATIL, ADVOCATE R4)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT IN NATURE OF CERTIORARI QUASHING THE COMMUNICATIONS BEARING NO.PUSATE/KAM.VI/CR-202324/529 AND 530 DATED 07-02-2024 VIDE ANNEXURE-F AND F1 ISSUED FOR PAYMENT OF PROPERTY TAX, AS ILLEGAL, WITHOUT JURISDICTION AND WHOLLY UNCONSTITUTIONAL, IN THE INTEREST OF JUSTICE AND EQUITY; ISSUE A WRIT IN NATURE OF CERTIORARI QUASHING THE DEMAND NOTICE DATED 07-02-2024 VIDE ANNEXURE-G TO G12 DEMANDING PAYMENT OF PROPERTY TAX, AS ILLEGAL, WITHOUT JURISDICTION AND WHOLLY UNCONSTITUTIONAL, IN THE INTEREST OF JUSTICE AND EQUITY; ISSUE A WRIT IN NATURE OF CERTIORARI QUASHING THE COMMUNICATIONS DATED 07/08/2025 VIDE ANNEXURE-H ISSUED FOR NON-ISSUANCE OF BUILDING PLANS, NOC AND UHAR PATRA, AS ILLEGAL, WITHOUT AND WHOLLY UNCONSTITUTIONAL, IN THE INTEREST OF JUSTICE AND EQUITY AND ISSUE CONSEQUENTIAL DIRECTIONS TO THE RESPONDENT NOT TO INSIST ON PAYMENT OF PROPERTY TAX AS WELL AS THE SERVICE TAX AS THE CASE MAY BE UNDER ANY OF THE PROVISIONS OF THE KARNATAKA MUNICIPALITIES ACT, 1964 AS THE CASE MAY BE, IN THE INTEREST OF JUSTICE AND EQUITY.

THIS PETITION COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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ORAL ORDER

(PER: THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE)

Heard the learned Senior counsel appearing for the petitioner as well as the learned counsel appearing for respondent No.4.

This petition is filed assailing the communication dated 17.02.2024 marked at Annexures-F and F1 and also the demand notice dated 07.02.2024 marked at Annexures-G to G12. Petitioner has also sought to quash the communication dated 07.08.2025 marked at Annexure–H. All these communications/ notices are issued by respondent No.4, the Town Municipal Council, Terdal.

In terms of the communication at Annexures-F and F1, respondent No.4 demanded ₹ 2,45,10,538/- towards arrears of property tax, and in terms of the communication dated 07.02.2024 respondent No.4 demanded property tax of ₹1,11,00,645. These two notices/communications pertain to buildings built by the petitioner, in two different survey numbers.

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Annexure-G series notices are issued mentioning the break-up of the property tax payable by the petitioner. Notice at Annexure G-12 is said to be the property tax demanded in respect of an vacant space. Rest of the notices at Annexures-G to G-11 are issued demanding property tax in respect of the buildings. Annexure-H - endorsement is issued by the Chief Officer, Terdal Municipality during the pendency of the present petition.

Petitioner is a Trust registered under the Indian Trusts Act, 1882. Petitioner claims that it is running the following educational institutions:

1. B.A.M.S. Ayurved medical college

1. Para medical course

1. College of commerce

1. Primary school

1. B.Ed College

1. ITI College etc.

1. Danigond College of Commerce B.com, Terdal

1. Dr.Sidhant Danigond Central School-CBSE Terdal

1. Danigond P.U science College, Terdal

1. Danigond Post Graduation Centre M.D/M.S, Terdal

1. Danigond College of Pharmacy, Terdal

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1. Danigond college of Nursing, Terdal

1. Danigond College of Physiotherapy, Terdal

1. Padma Hospital, Terdal

1. SDM Trust Padma Ayurvedic Hospital and research Centre, Terdal, further, the petitioner trust property also comprises of Hostel, Mess, Auditorium, Canteen, Sport building both indoor and outdoor, staff quarters, pharmacy building, central store, departmental store, recreation hall, Temples and other buildings exclusively for the use of the petitioner trust.

The petitioner states that the vacant space as well as the buildings are used to effectively run the educational institutions referred to above. Certain buildings and vacant space are used for hostel, mess, auditorium, canteen, sport both indoor and outdoor, staff quarters, pharmacy, central store, departmental store, recreation hall, Temple.

Learned Senior counsel appearing for the petitioner would submit that since the premises is used essentially for running educational institutions, the petitioner/institution is exempt from paying property tax under Section 94(1-A)(i)(ii) of Karnataka Municipalities Act, 1964 (‘Act, 1964’).

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Learned Senior Counsel would urge that, to run an Ayurvedic Medical College, there has to be a hospital attached to the college. This is the mandate under the Indian Medicine Central Council Act, 1970 and the Rules framed thereunder and also under the National Commission for Indian System of Medicine (Minimum Essential standards, assessment and rating for undergraduate Ayurveda colleges and attached teaching hospitals) Regulations, 2024 (‘Regulations, 2024’) which are framed under Section 55 of National Commission for Indian System of Medicine Act, 2020 (for short ‘Act, 2020’).

Attention of the Court is invited to the definition of ‘attached teaching hospital’ in Section 2(1)(f) and also to Regulation 5(b) of Regulations, 2024.

Learned Senior Counsel also referred to Rule 38 found in Chapter IV of Regulations, 2024 and also Regulation No. 40 which defines the ‘Out Patient Department Zone.’

Referring to the aforementioned provisions, it is urged that the Ayurvedic Medical College must have an Ayurvedic Hospital and without an Ayurvedic Hospital, the

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Ayurvedic Medical College cannot function. Teaching is imparted to the students both in the college and as well as in the hospital, and hospital cannot be considered as the commercial enterprise which is liable for payment of property tax.

Learned Senior Counsel in support of the contention would also refer to the judgment of the Co-ordinate Bench of this Court in Navodaya Education Trust vs. The Commissioner, Raichur¹ and The City Municipal Council vs Akbarpatel² . In addition to that the learned Senior Counsel also referred to the judgment of Madras High Court in Coimbatore Masonic Charity Trust vs. The Corporation of Coimbatore³ .

Learned Counsel appearing for respondent No.4 would urge that the petitioner is not running a charitable hospital. Petitioner is collecting fees for the services rendered and petitioner is liable for payment of property tax as property tax is exempted only for charitable medical hospitals. In addition it is also submitted that petitioner is also running hostels and other facilities in the premises and all those structures which

1 W.P. No.103010/2013

2 W.P.No.87922/2012

3 MANU/TN/1304/2010

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accommodate those facilities are liable for payment of property tax as fees are collected from the occupants. It is further submitted that the staff quarters and vacant site are not exempted from payment of property tax.

In support of his contention, learned counsel for respondent No.4 would place reliance on the judgment of the Kerala High Court in Quilon Medical Trust vs State of Kerala and another⁴ , Prestige Educational Trust (Regd.) vs Tashildar, Kannur & and Others⁵ and Jubilee Mission Medical College and Research Institute vs Government of Kerala⁶ .

Placing reliance on the aforementioned judgments, learned counsel for respondent No.4 would submit that since the petitioner is collecting fees from the patients admitted to the hospital, the petitioner does not come under the category of charitable institutions, as such, it is liable to pay the tax.

4 WP(c) No.6965/2014

5 W.P.No.2159/2010

6 2011 (4) KLT 106

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The Court has considered the contentions raised at the Bar and perused the records.

It is not in dispute that the petitioner is a Trust registered under the Indian Trusts Act, 1882. The petitioner claims that it is running educational institutions as well as the hospital. Admittedly, the hospital, hostels and staff quarters are located in the premises where the Medical College is located. In addition, certain portion of the property is vacant.

Learned Senior Counsel on a specific question put by the Court as to whether the petitioner –Trust is a charitable Trust running charitable hospital, would submit that the petitionerTrust is not a charitable Trust and the hospital run by the petitioner-Trust is also not a charitable hospital. However, it is the submission that the Trust is running educational institutions as such the Trust is exempt from paying property tax under Section 94(1-A)(i) (i) and (ii).

Since it is submitted that the petitioner is not a charitable Trust, the Court need not consider whether the

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petitioner is exempted from paying property tax under Section 94(1-A)e.

Since the petitioner is claiming exemption from property tax under Section 94(1-A)(i) (i) and (ii), the Court has to consider whether the petitioner-Trust meets the requirement under the said provision and the relevant portion is extracted as

under:

94. Taxes which may be imposed .-(1) Subject to the general or special orders of the Government, a municipal council.-

(a) xxxxxx

(b) xxxxxx

94(1-A) The following buildings and vacant lands shall be exempted from the property tax, namely.-

(a) xxxxx

(b) xxxxx

(c) xxxxx

(d) xxxxx

(e) charitable hospitals and dispensaries but not including residential quarters attached thereto;

(f) xxxxx

(g) xxxxx

(h) xxxxx

(i) buildings or vacant lands exclusively used for.-

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(i) student hostels, which are not established or conducted for profit;

(ii) educational purposes by recognised educational institutions;

xxxxx

(Emphasis supplied)

Aforementioned provision provides exemption for both the building as well as vacant land provided two conditions are met.

(a) The building or the vacant land must be used for student hostels which are not established or conducted for profit.

(b) If the building or the vacant lands used for educational purposes by recognised educational institutions.

It is not in dispute that the colleges run by the petitioner-Trust are recognized by the competent Authority and those institutions are recognised educational institutions.

There is nothing on record to hold that the hostels in the premises are established or run for profit. The petitioner claims that hostel facilities are provided in the campus for the benefit of the students studying in the petitioner’s educational

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institutions and they are not run for profit. This statement is not disputed by the respondent- Authority. This being the position, there is no difficulty in holding that the vacant land and the buildings used as hostels in the campus where educational institutions are located are exempt from payment of property tax as long as the hostels are not run for profit. It is also relevant to notice that the stand-alone-hostels without any educational institutions attached to it, may not come under the ambit of exemption under Section 94(1-A) (i) (i) of Act, 1964.

Now the question is whether the hospital attached the medical college and the staff quarters provided to the medical college staff are exempt from payment of property tax.

Sections 2(1)(ea)and (f) of the Indian Medicine Central Council Act, 1970 read as under:

2. Definitions.- (1) In this Act, unless the context otherwise requires,-

(ea) “medical college” means a college of Indian medicine, whether known as such or by any other name, in which a person may undergo a course of study or training including any post-graduate course of study or training

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which will qualify him for the award of a recognised medical qualification.

(f) “medical institution” means any institution within or without India which grants degrees diplomas or licences in Indian medicine;

It is also necessary to refer to the definition of “attached teaching hospital” under Section 2(1)(f) of

Regulations, 2024 which reads as under:

2. Definitions.- (1) In these regulations, unless the context otherwise requires.-

xxxxx

xxxxx

(f) ‘attached teaching hospital’ means an Ayurveda hospital that offers standard healthcare services, attached to an Ayurveda Medical Institution for the purpose of teaching and training to the students of Ayurveda;

xxxxx

(Emphasis supplied)

As can be seen from the definition of “attached

teaching hospital” as found in Section 2(1)(f) of Regulations,

2024, the hospital that offers standard healthcare services, attached to an Ayurveda Medical Institution, for teaching and

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training the students of Ayurveda, would also be the educational institution as the purpose of the hospital is to impart Ayurveda medical education in addition to offering health care services.

Chapter II of Regulations, 2024 would deal with the general considerations before granting sanction to any institution to run the Ayurvedic Medical College.

Regulation 5(1)(b) and (c) of Regulations, 2024 read

as under:

5. College, campus and general considerations.(1) The campus designated for an Ayurveda medical college shall consist of followings, namely: - (a) xxxxxxx

(b) attached teaching hospital along with ancillary sections or units or facilities;

(c) hostel and staff quarters;

xxxxxx

(Emphasis supplied)

From the aforementioned Clauses in Regulations, 2024, it is explicit that the campus designated for Ayurveda Medical college shall consist of;

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(i) attached teaching hospital along with ancillary sections or units or facilities.

(ii) Hostel and staff quarters.

Thus, the Ayurveda Medical College would also include the attached teaching hospital and the hostel and staff quarters.

Regulation 5 makes it abundantly clear that to run an Ayurvedic College there must be a hospital attached to the college and that hospital would also be the part of the Medical College.

Regulations 38 and 40 of Regulations, 2024 set out the requirements for the attached teaching hospital and outpatient department. These Regulations would also provide for having an attached teaching hospital and outpatient department in medical college.

It is common knowledge that in medical colleges, the education is imparted not just in classrooms but also in hospitals. In fact, the education that is imparted in medical college is more intense in the hospitals than in the classrooms.

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This being the position, the Court is of the view that there is no difficulty at all in holding that the medical hospital attached to a medical college and the staff quarters meant for the medical college staff are exempt from payment of property tax under Section 94(1-A)(ii) of Act, 1964.

Though, learned counsel for respondent No.4 would place heavy reliance on the judgment of the Kerala High Court in Jubilee Mission Medical College and Research Institute supra which has followed the full Bench judgment of the Kerala High Court in Unity Hospital (P) Ltd. V. State of Kerala⁷ , this Court is of the view that the provisions which has been referred to by this Court in Regulations, 2024 and the provisions of the Act, 1970 are not referred to by the Full Bench of the Kerala High Court. Since, it is mandatory for the medical colleges to have a hospital attached to the college; this Court is of the view that the hospital attached to the medical college is also an educational institution which is exempt from payment of property tax.

7 (2011(1) KLT 236)

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The view taken by this Court is also supported by the view taken by the Co-ordinate Bench of this Court in City Municipal Council supra and Navodaya Education Trust supra. In Navodaya Education Trust supra , the Co-ordinate Bench of this Court has held that the structure used for the bank, canteen and staff quarters in the campus is also exempt from payment of property tax.

This case was decided on 31.10.2025 and the petition was allowed. Before signing the judgment, while going through the draft the Court entertained the doubt as to whether all the staff quarters in the premises are used by the medical college staff and for this purpose the matter was listed on 17.11.2025 to seek clarification.

Learned Senior counsel submitted that the staff quarters in the premises are meant only for the medical college staff. Said submission is placed on record and the counsel for the petitioner was directed to place a memo in this behalf and memo is also filed to this effect.

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The Court also noticed that the impugned notices do not include the staff quarters and the notices are issued in respect of hospital, colleges, hostel, workshop, TV recreation and store room, Mess building, school and vacant land.

It is also made clear that this judgment cannot be construed as having declared exemption of tax in respect of the staff quarters other than the staff quarters meant for medical college staff. The question whether other staff quarters are exempt from payment of tax or not is not decided in this petition.

The Court for the aforementioned reasons, has taken

the view that the petition has to be allowed and impugned communications/notices have to be quashed.

41. Hence the following:

ORDER

(i) Writ Petition is allowed.

(ii) As far as Annexure - H is concerned, it is noticed that the petitioner's request is declined on the

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premise that the Writ Petition is pending. Now the Writ Petition is disposed of.

(iii) The respondent-Authority shall consider the application filed by the petitioner in accordance with law.

(iv) It is submitted by the learned Counsel for respondent No.4 that, the petitioner has constructed the building without obtaining any permission/sanction as required under the law.

(v) If any such illegal act is committed by the petitioner-Trust, respondent No.4 is at liberty to proceed as advised in law.

Sd/(ANANT RAMANATH HEGDE) JUDGE

BRN/GVP CT:BCK

LIST NO.: 1 SL NO.: 1