Judgment :- 1. The petitioner is the Secretary of the Good Shepherd Hospital Society, Vayithiri. Exts. PI to P12-assessment bills were issued to the Chief Medical Officer of the Hospital by the Vayithiri Panchayat where the hospital is situated. They relate to building tax for the years 1970-71 to 1974-75. A portion of the levy made is described in the bills as library cess. Exemption from the levy is claimed by the petitioner on the ground that the Good Shepherd Hospital is a charitable hospital coming within S.72(1)(f) of the Kerala Panchayats Act. 2. The fact that the Good Shepherd Hospital is a charitable hospital is disputed by the Vayithiri Panchayat, the second respondent. Even before issuing the disputed assessment-bills the petitioner bad made Ext. P13-representation to the Panchayat stating that the hospital was not liable to be assessed to building tax as it was a charitable institution. The reply to it. Ext. P14, was sent by the Panchayat only about a month after sending the bills. From that it is seen that the assessment was made on the basis that the petitioner collected charges from the public towards room rent, cost of medicines, fees, etc. and that therefore the hospital could not be treated as a charitable institution. Ext. P 15 is the certificate issued to the petitioner by the District Registrar under the Societies Registration Act, 21 of 1860. Ext. P15(a) is the Memorandum of Association of the Society. That shows that the Society was formed only for charitable purposes. Ext. P15(b) is the Rules and Regulations of the Society. It provides that in the event of winding up or dissolution of the Society if there was surplus after satisfying of the debts and liabilities such surplus bad to be transferred to an Association or Trust having similar objects of charitable nature. Exts. P15(c) and P15(d) are respectively the certificates issued by the District Medical Officer of Health, Kozhikode, and the Assistant Director of Health Services, Trivandrum, wherein it is stated that it is a charitable institution where free treatment is given to the poor and needy irrespective of caste or creed. Para.4 of the Original Petition reads like this: "4. The Good Shepherd Hospital, as aforesaid, belong to the Good Shephered Hospital Society of which, as stated above, the Ursuline Sisters of Mary Immaculate, are the members. Para.4 of the Original Petition reads like this: "4. The Good Shepherd Hospital, as aforesaid, belong to the Good Shephered Hospital Society of which, as stated above, the Ursuline Sisters of Mary Immaculate, are the members. This hospital is a charitable hospital as contemplated in S.72(1) (f) of the Kerala Panchayat Act, 1960, hereinafter referred to as the Panchayat Act. and is therefore exempt from the tax and cess leviable under S.66 of the Panchayat Act. The Ursuline Sisters of Mary Immaculate are running this hospital for the purposes of charitable services, receiving donations for putting up buildings and meeting the expenditure of running the hospital. There are twelve rooms which are rented out to rich patients who can afford to do so, but the rents so received is utilised and ploughed back for meeting the expenses in connection with giving treatment to the poor free of cost and also for running the hospital. No income or profit is derived from the hospital. More than 300 out-patients come to the hospital daily and no charges are collected from them for consultations. No rent is also collected from the patients who are staying in the general ward. Only the actual costs of medicines are realised. Amount, if any, the hospital thus receives is ploughed back for the purposes of charitable treatment. The hospital is run entirely on no profit basis' and is a charitable institution. Free medical aid is given there to poor in-patients and out patients. The amounts obtained by realisation of cost of medicines and rent from the pay ward rooms, are not sufficient for the maintenance of the institution and the deficiency is made up by donations received from benevolent public. It is also submitted that under S.14 of the Societies Registration Act. 1860, under which the Good Shephered Hospital Society has been registered, in the eventuality of a dissolution of the Society registered under the aforesaid Act, any property that remains after satisfaction of all its debts and liabilities, the same cannot be paid to or distributed among the members of the dissolved Society or any of them but has to be given to some other Society registered under the Societies Registration Act. It is also submitted the very fact that the Good Shephered Hospital Society has been registered under the Societies Registration Act, 1860, itself is evidence that the same is run on a charitable basis and for such purposes. The objects of the Society enumerated in Para.1 above would also establish that the Good Shephered Hospital is a charitable hospital, as contemplated by S.72(1) of the Panchayats Act." Some of the facts mentioned there are denied in Para.4 of the counter affidavit filed by the Panchayat and its Executive Officer which reads: "4. With regard to para 4, it is submitted that the hospital was established by Chelot Estate and belong to them. How the hospital belonged to the Society is not made clear in the original petition. The averment that the hospital is a charitable hospital as contemplated in S.72 (I) (f) of the Kerala Panchayat Act is denied. The hospital and other buildings are not exempted from payment of tax. It is not correct to say that the the hospital is not deriving any profit. Out patients so attend the hospital daily used to pay the cost of medicines. The averment that no rent is being collected from the patients who are staying in the hospital also in incorrect. As a matter of fact, the cost of medicine, rent, laboratory test charges, Home medicine charges, maternity charges and other charge„ are being exacted from the patients. This will be evident from the bills issued to the patients. Originals of the bills given to some of the patients are produced herewith and marked as Ext. RI series. It is not possible to deny or affirm the statement that the amounts collected are being ploughed back for the purpose of charitable treatment without seeing the accounts of the Hospital. To this respondent's knowledge the hospital is run in a commercialised method and huge profits are made by running this hospital. Ext, RI series would show that the cost of medicines shown in the Bill is such that it may necessarily include consultation fee of the doctors, although the hospital authorities are bound to show the cost of the medicines separately. Even for poor patients who are admitted in the general ward daily 2 rupees are being charged for each bed. Except for the workers of the Chelot Estate, all the other patients have to pay consultation fee and other charges. Even for poor patients who are admitted in the general ward daily 2 rupees are being charged for each bed. Except for the workers of the Chelot Estate, all the other patients have to pay consultation fee and other charges. The income derived from the hospital is such that it can never be considered as a charitable hospital. The notices issued to the Chief Medical officer relate to the hospital buildings as well as residential quarters of the nurses and doctors. Even assuming the exemption clause applies; that applies only to charitable hospitals and dispensaries and does not apply to residential quarters attached to the hospital or dispensary." But the denial there is evasive to a large extent. 3. There is no specific denial of the allegation in the Original Petition that there are only 12 rooms which are rented out to rich patients who could afford to pay rent and that the rent so received was being ploughed back for meeting the expenses connected with the institution. From the mere fact that money is collected from patients a hospital which is otherwise charitable cannot cease to be charitable. Eleemosynary is not an essential element for a charitable institution. These matters have not been considered by the Panchayat before it made the assessment. 4. It is seen from the counter affidavit that Exts. P1, P8, P10, P11 and P12-bills relate to residential quarters. The explanation to S.72 of the Kerala Panchayats Act shows that the exemption granted under S.72 would not extend to residential quarters. No relief can, therefore, be granted to the petitioner in respect of Exts. P1, P8, P10, P11 and P12 - assessments. 5. In the result the levy evidenced by Exts. P2 to P7 and P9 of building tax is quashed and the Panchayat is directed to consider whether the hospital is not a charitable hospital and the petitioner is not entitled to claim exemption under S.72 (1) (f) of the Panchayats Act in respect of the buildings covered by Exts. P2 to P7 and P9 in the light of what is stated above before deciding on fresh assessment in respect of those buildings. This Original Petition is allowed only to the above extent. In all other respects it shall stand dismissed. There is no order as to costs.