H. H. Sudhundra Thirtha Swamiar. Vs.
Commissioner for Hindu Religious & Charitable Endowments [1962] INSC 326
(20 November 1962)
SHAH, J.C.
SINHA, BHUVNESHWAR P.(CJ) GAJENDRAGADKAR,
P.B.
WANCHOO, K.N.
GUPTA, K.C. DAS
CITATION: 1963 AIR 966 1963 SCR Supl. (2) 302
CITATOR INFO :
R 1965 SC1107 (15,48) RF 1966 SC 416 (19) R
1970 SC 181 (5,6) RF 1970 SC1114 (6) RF 1971 SC 344 (5,6) R 1971 SC1182 (8) R
1975 SC 846 (14) R 1976 SC1207 (165) RF 1980 SC 1 (3,13) E 1980 SC1008 (10) R
1980 SC1124 (18) R 1983 SC 617 (5) F 1983 SC1246 (30) RF 1985 SC 218 (9) R 1989
SC 100 (26) RF 1989 SC 317 (34) RF 1992 SC1383 (14)
ACT:
Hindu Religious
Endowments-Maths-Commissioner's power to bring a suit for removal of
truatees-Whether infringes fundamental right-Pathakanika given to the Mahant as
head of Muth given personally to the Math-Only the former need be used for
Math-Annual contribution-Levy of-Whether tax or fee-Retrospective
Legislation-Power of State LegislatureConstitution of India, Art. 19(f)25, 26,
27-Seventh Schedule, List II, Items 28, 47-Madras Religious Endowments Act,
1951 (Madras XIX of 1951), as amended by Act XXVII of 1953, ss.52(1) (f ), 55,
76(1) and (2), 80, 81, 82.
HEADNOTE:
At Udipi in the South Kanara District there
are eight Maths Each Math is presided over by a Mathadhepathi or Swamee.
There is a nineth Math the administration of.
which had been traditionally carried on by each of the Swamis of the other
eight Maths in turn. There is a tenth Math which 'is presided over by Shri
Shankaracharya Swamigal.
The Swami of Shirur Math, one of the eight
Maths had challenged the vires of the Hindu Religious Endowments Act 1951 (Act
XIX) in the High Court of Madras and in the appeal therefrom this Court had
declared certain sections of the Act ultra vires inasmuch as they infringed
Article 19 (1) (f), 25, 26 and 27 of the Constitution. Subsequently by Act
XXVII of 1954 the Madras Legislature omitted or amended the sections declared
by this Court ultra vires. Petitions were filed in the High Court challenging
various sections of the amended Act. The High Court declared ultra vires
sections 21, 30(2), 31 and 76(5) and Rule 10 framed under section 100(2). and
upheld the validity of sections 51 (1) (f), 55, 76 (1) and (2), 80, 81 and 82. The
Mahant appealed to this Court with Certificate granted by the High Court.
Held, that a Mahant is not a mere manager or
custodian. By= though he is not a trustee in the strict sense, he is by 303
virtue of his office under an obligation to discharge the duties of his office
as a trustee and is answerable as such for the property. The property is
attached to the office and the Mahant cannot incur expenditure for personal
luxury or objects incongruous with his position as Mahant. The right of a
Mahant over the property of the Math is undoubtedly property and unreasonable
restrictions placed upon his rights which are not in the interest of the
general public would by virtue of Art. 19(1)(f) read with cl. (5) be void.
Arunachallam Chetti v. Venkata Chalapathi
Guruswamigal, (1919) L.R. 46 I.A. 204, Vidyavaruthi Thirtha v. Baluswami Ayyar,
(1921) L.R. 48 I.A. 302, Commissioner Hindu Religious Endowments, Madras v.
Lakshmi Tirtha Swamiar of Sirur Math, [1954] S.C.R. 1005, followed.
Held, that s. 52 (1) (f) does not in effect
seek to cut down the authority of the Mahant which is traditionally recognized.
It only implies that by virtue of his position and the limited character of his
powers, he cannot waste the property of the Math or utilise it for his personal
enjoyment or luxury or for objects incongruous with his position or for
purposes wholly unconnected with the Math.
Such a restriction on his power is in the
interest of general public and cannot be said to be unreasonable.
Section 55 as amended will not apply to
Pathakanikas which are proved to be gifts personal to the Mahant and it applies
only to Paaokarikas gifted to him as the bead of the Math.
The annual contributions levied under the
amended s. 16(1) go into a separate fund and not the consolidated fund of the
state and are earmarked for defraying the expenses for rendering services :
they are not even payable to the Government but are payable to the Commissioner
and they are levied not as a tax but only as fee. A fee does not cease to be of
that character merely because there is an element of compulsion in it, nor is
it a postulate of a fee that it must have direct relation to the actual service
rendered.
Absence of uniformity is not a criterion on
which alone it can be said that the levy is of the. nature of a tax. The
Legislature has power to enact appropriate retrospective legislation declaring
these levies as fees by denuding them of the characteristics of tax.
M/s. J. K. Jute Mills Co. Ltd. v. State of
Uttar Pradesh, [1962] 2 S.G.R. 1, followed.
The State Legislature has power to levy a fee
under the Seventh Schedule, List II, Item 28 read with item 47, 304
CIVIL APPELLATE JURISDICTION Civil Appeals
Nos. 551 to 560 of 1961.
Appeals from the judgment and order dated
December 9, 1955 of the Madras High Court in Writ Petitions Nos. 323, 324, 351
to 357 and 359 of 1955.
Purshottam Trikumdas, R. Ganapathy Iyer and
G. Gopalakrishnan, for the appellants (in C. As. Nos. 551559/61).
A. V. Viswanatha Sastri and M. S. K. Sastri,
for the appellant (in C. A. No. 560/61).
G. S. Pathak, B. R. L. Iyengar and P. D.
Menon, for the respondent No. 1 (in C. A. No. 551/61) and for the respondents
in (C. As. Nos. 552 to 559 of 1961).
A. Ranganadham Chetty and A. V. Rangam, for
the respondents (in C. A. No. 560/61).
1962. November 20. The judgment of the Court
was delivered by.
SHAH., J.-In this group of appeals certified
by the High Court of Madras under Art. 132 (1) of the constitution the validity
of ss.52(1)(f), 55, 76(1) & (2), 80, 81 and 82 of the Madras Hindu
Religious Endowments Act XIX of 1951 asamended by Act XXVII of 1954 is
impugned.
At Udipi in the South Kanara District there
are eight Maths which are reputed to be founded by Shree Madhvacharya, an
exponent of the dualistic philosophy. Each of these Maths is presided over by a
Mathadhipati or Swami who is invariably a Brahmin Sanyasin. There exists
another Math known as Shri Krishna Devaru Math of which the administration is
carried on according to long-standing usage by the Swamis of the eight Maths in
turn, 305 each Swami administering for two years. There is also the Sri Kanchi
Kamakoti Peetam Math of which Shree Sankaracharya Swamigal is the presiding
head.
These ten appeals are directed against orders
passed by the High Court of Madras refusing to declare the provisions aforesaid
ultra vires the State Legislature.
In order to ensure proper management of Hindu
religious endowments, the Provincial Legislature of Madras enacted the Hindu
Religious Endowments Act. II of 1927. The Act made divers provisions for
enforcing supervision over the management of Hindu endowments, and a Board was
constituted for that purpose. In exercise of the authority under the Act
several restrictions were placed upon the powers of the trustees of religious
endowments, schemes were framed for administration thereof and executive
officers were appointed to administer Maths and other religious endowments. An
enquiry was commenced before the Hindu Religious Endowments Board for
ascertaining whether in the interests of the Shirur Math (one of the eight
maths at Udipi) a scheme for the administration of the Math be framed, it being
alleged that the affairs of the Math were mismanaged by the Swami.
The Board being satisfied that a case for
settling a scheme was made out served upon the Swami of the Math a draft scheme
and called upon him to file his objections thereto.
The Swami filed a petition in the High Court
of Madras challenging the vires of Act II of 1927, and especially the
provisions under which the scheme was sought to be framed.
During the pendency of that petition, Act 11
of 1927 was repealed by the Madras Legialature and was substituted by Act XIX
of 1951, enacting diverse provisions relating to the governance, management and
administration of Hindu Religious Endowments. The Swami of Shirur.Math obtained
leave to amend 306 the petition and challenged the validity of Act XIX of 1951
on the ground that the provisions thereof infringed his fundamental rights and
that in any event certain provisions were beyond the legislative competence of
the State Legislature.
The High Court of Madras declared several
provisions of the Act ultra vires, as infringing Arts. 19 (1) (f), 25, 26 and
27 of the Constitution. The Court also declared s. 76 (1) ultra vires because
the State Legislature had thereby assumed powers to legislate for levy of a tax
on the income of religious endowments which the State Legislature was
incompetent to exercise. The State of Madras appealed against the order of the
High Court. This Court declared invalid s. 21 (provision authorising the
Commissioner and his subordinates to enter premises of religious endowments or
places of worship in the exercise of powers conferred or duties imposed by or
under the Act), s. 30 (2) (requiring the swamis to be guided by the
instructions of the Commissioner or the Area Committee in the matter of
incurring expenditure), s. 31 (relating to expenditure of surplus income with
the sanction of the Commissioner), s. 55 (dealing with Mahant's powers over
pathakanikas personal gifts), S. 55 (dealing with Commissioner's authority to
require the trustees of the Endowments to appoint a Manager) and ss. 63 to 69
(relating to notification of religious institutions and invoking thereby
certain penal consequences.) This Court also held that s. 76 (1)
whichauthorised levy of contributions at the rate not exceeding five per cent
of the income of the endowments was beyond the power of the State Legislature
to enact. The judgment of this Court in that case is reported as : The
Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha
Swamiar of Sri Shirur mutt (1).
The Madras Legislature amended Act XXVII of
1954 which received the President's sanction on (1) [1954] S. C. R. 1005.
307 September 22, 1954, and thereby provisions
which were declared by this Court ultra vires, were altered or omitted and some
new provisions were enacted with a view to make the enactment consistent with
the law declared by this Court.
Petitions were then filed by the
appellants-heads of ten maths--challenging the validity of diverse provisions
of the amended Act. The High Court by its order dated April 25, 1955 declared
ss. 21, 30 (2), 31 and 76 (5), and Rule 10 framed under s. 100(2) invalid. The
High Court, however, upheld the validity of ss. 52 (1) (f), 55, 76 (1) &
(2), 80, 81 and 82. In these appeals the Swamis of the maths contend that the
provisions declared valid by the High Court infringe the fundamental rights of
the Swamis or are beyond the authority of the State Legislature.
It may be observed initially that we are
dealing with the validity of the impugned provisions in their application to
maths and not to religious institutions such as temples or other endowments. It
may also be observed that Act XIX of 1951 has been repealed by the Madras State
Legislature and has been substituted by Act XXII of 1959, but we are not called
upon to adjudicate upon the validity of the provisions of the new Act because
the territory in which these maths are situated has, by the provisions of the States
Reorganisation Act, 1956 been integrated with the State of Mysore as from
November 1, 1956 and by virtue of s. 119 of the States Reorganisation Act these
maths continue to be governed by Act XIX of 1951 till that Act is modified or
repealed by the Mysore State Legisture.
Section 52 (1) of the Act as amended provides
:
"The Commissioner or any two or more
persons having interest and having obtained the 308 consent in writing of the
Commissioner, may institute a suit in the Court to obtain a decree for removing
the trustee of a Math or a specific endowment attached to a Math for any one or
more of the following reasons, namely (a) the trustee being of unsound mind-,
(b) his suffering from any physical or mental defect or infirmity which renders
him unfit to be a trustee ;
(c) his having ceased to profess the Hindu
religion or the tenets of the math ;
(d) his conviction for any offence involving
moral turpitude ;
(e) breach by him of any trust created in
respect of any of the properties of the Religious institutions ;
(f) waste of the funds or properties of the
institution or the application of such funds or properties for purposes
unconnected with the institution ;
(g) the adoption of devices to convert the
income of the institution or the funds or properties thereof into
'pathakanikas' (h) leading an immoral life or otherwise leading a life which is
likely to bring the office of the head of the math into contempt ;
(i) persistent and willful default by him in
discharging his duties or functions under this Act or any other law." 309
This section authorises the Commissioner or two or more persons interested in
the endowment with the consent of the Commissioner to institute a suit for a
decree for removal of the trustee of a Math or a specific endowment attached to
a Math on any of the grounds. mentioned therein. the section is similar to S.
92 of the Code of Civil. Procedure though somewhat restricted in its operation
as to the reliefs which may be claimed : it merely enumerates the grounds on
which the Court may, in a suit instituted there under, remove the trustee of a
Math or of a specific endowment, if the Court is satisfied that the grounds set
up exist and also that it is in the interest of the institution to remove the
trustee.
Grounds (a), (b), (c), (d) and (h) are
grounds of personal infirmity of the trustee; grounds (e), (f), (i) and (i)
deal with conduct inconsistent with the exercise of the duties of a trustee.
Clauses (f), (g) and (h) were inserted by Madras Act XXVII of 1954. Apart from
cl. (c) which regards breach of trust as entailing liability for removal, cls.
(f), (g), and (i) have been enacted by the Legislature with a view to entail
such liability when the trustee of a math is guilty of improper conduct qua
property of the math notwithstanding his special rights in that property.
It is urged by counsel for the appellants
that s. 52(1)(f) which enables a suit to be filed on the score of waste of
funds or properties of the institution or application of such funds or
properties for purposes unconnected with the institution, infringes the
fundamental right of the Mathadhipati under Art. 19(1)(f) of the Constitution.
In order to ascertain the true scope of s. 52(1) (f)it is necessary to state
the position of a Mathadhipati, qua the property of the math. In Arunachallam
Chetty v. Venkatachalapathi Guruswamigal (1) dealing with the title which a
Mahant of a math has in the property of the math, the judicial Committee of the
Privy Council observed "two propositions may be cited as now expressing
the general state of the law. with regard to (1) (1919) L. R. 46 I. A. 204,
224, 310 these institutions. In the first place, the nature of the ownership is
an ownership in trust for the institution itself. Secondly, while it may no
doubt be true that the ownership in the general case is with the spiritual head
of the 'institution, still to use the language of Sir Charles Turnver in
Sammanatha Pandara v. Sellapa Chetti (I.L.R. 2 Madras 179) 'We do not, of
course, mean to lay it down that............ the property may not in some cases
be held on different conditions and subject' to different incidents.' As
pointed out in Ram Parkaah Das v. Anand Das there are varieties of
circumstances and tenure, and in respect to these the usage and custom of the
math fall to be determined.
Once that usage and custom are clear they
form the law of the math.
In Vidya Varuthi Thirtha v. Balusami Ayyangar
(1) the judicial Committee dealing with the application of Arts. 134 and 144 to
suits for recovery of property alienated by a former Mathadhipati observed:
"It is also to be remembered that a
"trust' in the sense in which the expression is used in English law, is
unknown in the Hindu System, pure and simple. Hindu piety found expression in
gifts to idols and images consecrated and installed in temples, to religious
institutions of every kind, and for all purposes considered meritorious in the
Hindu social and religious system; to brahmans, goswamis, sanyasis, etc. When
the gift was to a holy person, it carried with it in terms or by usage and
custom certain obligations. x x x x x In many cases in Southern India,
especially where the diffusion of Aryan Brahmanism was essential for bringing
the Dravidian peoples, under the religious rule of the Hindu system, colleges
and monasteries under the names of math were (1) (1921) L R. 48 I. A. 302.
311 founded under spiritual teachers of
recognised sanctity. These men had and have ample discretion in the application
of the funds of the institution, but always subject to certain obligations and
duties, equally governed by custom and usage." In The Commissioner, Hindu
Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur
Mutt (1) (to which we have already referred in setting out the history of this
case) Mukherjea, J., speaking for the Court, observed :
"He is certainly not a trusteee in the
strict sense. He may be as the Privy Council says, a manager or custodian of
the 'institution who has to discharge the duties of a trustee and is answerable
as such; but he is not a mere manager and it would not be right to describe
Mahantship as a mere office. A superior of a Math has not only duties to
discharge in connection with the endowment but he has a personal interest of a
beneficial character which is sanctioned by custom and is much larger than that
of a Shebait in the debutter property. x x x x x x x x x Thus in the conception
of Mahantship, as in Shebaitship, both the elements of the office and property,
or duties and personal interest are blended together and neither can be
detached from the other. The personal or beneficial interest of the Mahant in
the endowments attached to an institution is manifested in his large powers of
disposal and administration and his right to create derivative tenures in
respect to endowed properties; and these and other rights of a similar
character of proprietary right which, though anomalous to some extent, is still
a genuine legal right." A Mahant is not a mere manager or custodian, nor
is he trustee in the strict sense: holding the office of (1)[1954] S. C. R.
1005.
312 a Mahant by custom and usage of the
institution he has beside large powers of management and disposal certain
proprietary rights over the property of the Math. But he is by virtue of his
office under an obligation to discharge the duties as a trustee and is
answerable as such. The Mahant of a Math is generally a Sanyasin who has renounced
worldly affairs: he has no family ties either by blood or by marriage, and in a
theoretical sense he has taken a vow of not owning any property. He has
undoubtedly, for the benefit of the institution of which he is the head, large
powers : he has to incur expenditure for the maths i. e. for carrying on the
religious worship, for the desciples and for maintaining the dignity of his
office. But the property is attached to the office, and is devoted to the
endowment. He cannot therefore iucur expenditure for personal luxury or objects
ircongruous with his position as a Mahant. Power to waste the property or the
income of the institution is therefore not claimed by the appellants and
rightly so.
But counsel for the appellants says that over
the income, the Mahant has absolute powers of disposal, and s. 52 (1) (f) which
authories his removal on the ground that he has applied the funds or properties
of the institution for purposes unconnected with the institution places an
unreasonable restriction upon the right of property vested in the Mahant. In
the Commissioner, Hindu Endownents, Madras v. Sri Lakshmindra Thirtha Swamiar
of Sri Shirur Mutt (1) Mukherjea, J., observed at p. 1019 :
"There is no reason why the word
'property' as used in article 19 (1) (f) of the constitution, should not be
given a liberal and wide connotation and should not be extended to those welt
recognized types of interest which have the insignia or characteristics of
proprietary right." The right of a Mahant over property of the math is,
therefore, undoubtedly 'property' and (1)[1954] S. C. R. 1005.
313 unreasonable restrictions placed upon
right of the Mahant which is not in the interest of the general public would,
by virtue of Art. 19 ( 1) (f ) read with cl. (5) be void.
Reasonableness of the restrictions which may
be placed upon that right must be adjudged in the light of the character and
the extent of that right, and the general interest of the public which may be
served by the restrictions. In Arunachallam Chetty v. Venkatachalapathi
Guruswamigal (1) the Judicial Committee of the Privy Council observed that the
Mahant is under an obligation not to utilise the surplus income after defraying
the expenses of the math for personal enjoyment but is bound to add the same to
the capital of the estate administered. At p. 226 the judicial Committee
dealing with the accumulated income in the hands of the receiver who had been
appointed during the pendency of a suit observed :
"Under the decree quoted the gurukkal
would be entitled to instant possession and entire beneficial enjoyment of that
sum. If the present purposes of the math did not consume it, he could employ it
for his personal use quite apart from the dignity of his office.
It is plain to their Lordships that this
would be not only a subversion of the usage and custom of the math, but would
be a violation of the Law applicable to such institutions. A fair test to be
applied in such cases is to demand what is the true principle or nature of the
administration of surplus income. It is, of course,, the duty of a trustee to
refrain from the personal enjoyment of such surplus and to add the same to the
capital of the estate to be administered ; and this Law also applied to the
property of a math or as thal, and that whether the title to the same is in the
gurukkal (1) (1919) L. R. 46 I.A. 204,224.
314 as spiritual head of the
institution-which is an ordinary case-or is in trustees like the Chettys
according to the usage and custom of the institution as in the present
case." The power of the Mahant over the income does not therefore differ
in quality from the power he has over the property of the Math. The property
and the income belong to the math, and must therefore be applied for the
purposes of the math, and con. sistently with the usage and custom of the
endowment. By s. 52 (1) (f) application of funds or properties for purposes
unconnected with the institution, i. e. purposes for which the custom of the
institution does not warrant application, is a ground for removal. It cannot be
said that by enacting a provision which enables a Court, in an appropriate
case, to remove a Mahant if it be found that he has applied the funds or the
properties of the institution for purposes unconnected with the institution,
any unreasonable restriction is sought to be placed. This provision does not in
effect seek to cut down the authority of the Mahant which is traditionally
recognised. It merely implies that by virtue of his position and the limited
character of his powers he may not waste the property of the Math or utilise
the property for personal enjoyment or luxury or for objects incongruous with
his position or for purposes wholly unconnected with the Math : if he does so,
he may by order of the Court be liable to be removed. Such a restriction on the
power is in the interest of the general public, and cannot be said to be
unreasonable.
We may, however, say that the observations
made by the learned judges of the High Court that it was decided by this Court
in the Commissioner, Hindu Endowments, Madras v. Sri Lakshmindra Thirtha
Swamiar of Sri Shirur Mutt (1) that "the real limitations on the
Mathadhipathi are that he should not spend any of the monies of the Math for
(1) [1954] S.C.R. 1005.
315 wicked or immoral purposes" does not
seem to be war-ranted by anything contained in the judgment of this Court. The
observation is founded on a dictum of the High Court in the judgment under
appeal in that case, but there is no indication that this Court approved that
view. This Court has instead pointed out that the Mahant has to discharge the
duties of a trustee qua the institution and is answerable as such. We deem it
necessary also to state that having regard to the larg e powers which the
Mahant has over the application of the funds not only for the maintenance of
the dignity of his office, and expenses for the maintenance of the math but
also for such purposes religious or charitable as are not inconsistent with the
usage and custom of the endowment, application of the funds for personal
enjoyment or luxury by the Mathadhipati or for purposes wholly unconnected with
the institution, would alone be covered by the second part of s. 52 (1) (f). In
our view the provision which authorises the institution of a suit for removal
of a Mahant where he is found to have wasted the funds or properties of the
institution or has applied such funds or properties for purposes wholly
unconnected with the institution does not amount to an unreason. able
restriction upon the fundamental right of the Mahant in the property under his
management.
Section 55, before it was amended, was
challenged in the earlier proceeding as being invalid on the ground that it
sought to place an unreasonable restriction upon the powers of the Mahant over
gifts personal to him. It was provided by s. 55 (1) as originally enacted by
Act XIX of 1951 that :
"The trustee of a Math shall be entitled
to spend at his discretion, for purposes connected with the Math any
'Pathakanika' that is to say any gift or property or money made as a personal
gift to him as the head of the Math." 316 By sub-section (2) the trustee
had to maintain regular accounts of receipts and disbursements of the nature
referred to in subsection (1). The Mahant was therefore enjoined by the Act to
spend 'Pathakanika' for the purposes of the math, and that amounted in the view
of the Court as an unwarranted restriction of the property right of the Mahant.
Pathakanikas are as expressly stated in sub-section (1) personal gifts to the
Mahant, and normally such gifts would be at the disposal of the Mahant. It was
observed by this Court in the earlier case "It may be that according to
customs prevailing in a particular institution, such personal gifts are
regarded as gifts to the institution itself and the Mahant receives them only
as the representative of the institution: but the general rule is otherwise. As
section 55 (1) does not say that this rule will apply only when there is a
custom of that nature in a particular institution, we must say that the
provision in this unrestricted form is an unreasonable encroachment upon the
fundamental right of the Mahant. The same objection can be raised against
clause (2) of the section; for if the Pathakanikas constitute the property of a
Mahant. There is no justification for compelling him to keep accounts of the
receipts and expenditure of such personal gifts. As said already if the Mahant
dies without disposing of these personal gifts, they may form part of the
assets of the Math, but that is no reason for restricting the powers of the
Mahant over these gifts so long as he is alive." The Legislature of the
Madras State thereafter repealed both the sub-sections of s. 55, and has
reenacted a new clause "The trustee of a math shall keep regular accounts
of receipts of 'pathakanika' that is to 317 say, any gift of property made to
him as the head of the math and shall be entitled to spend the said
'pathakanika in 'accordance with the customs and usages of the
institution'." By express enactment the expression 'pathakanikas' for the
purpose of s. 55 as amended, means gifts of property made to a Mahant as the
head of the Math. By that section, the Mahant is required to keep regular
accounts of receipts of such gifts and is entitled to spend the same in
accordance with lie customs and usages of the institution, for such
pathakanikas received by the Mahant are gifts to the Mahant as the head of the
math and therefore in trust gifts to the Math. Obligations imposed upon the
Mahant to maintain regular accounts of the receipts of pethakanikas of the
character defined in s. 55 and to utilise the same in Accordance with the
customs and usages of the institution cannot be regarded as an unreasonable
restriction upon the fundamental right of the Mahant. A Mahant being bound to
discharge the duties of a trustee and being answerable as such, a provision
requiring him to maintain accounts of such pathakanikas would conduce to the
effective exercise of the control over him and imposing an obligation to spend
the same in accordance with the customs and usages of the institution is not
inconsistent with his position as a Mnhant even though lie has a beneficial
interest therein.
Section 55 as amended will not apply to
pathakanikas which are proved to be gifts personal to the Mahant.
Our attention was invited by counsel for the
appellants to cl. (g) of s. 52 (1) in which I adoption of devices to convert
the income of the institution or of the funds or properties thereof into
pathakanikas is one of the grounds on which a suit for removal of a Mahant may
lie. But the expression 'pathakanika' as used in s. 52 (1) (g) appears to have
the larger meaning in which that expression is traditionally 318 understood. In
the context of s. 52 (1) (g), 'pathakanika' would mean personal gifts to the
Mahant. If the Mahant resorts to devices to convert the income of the
institution or of the funds or properties thereof into personal gifts made to
him that would be improper conduct for which he would be liable to be removed
in a suit under s. 52. But under s. 55 the Legislature has expressly restricted
the meaning of the expression "pathakanika' by using the words, 'that is
to say, any gift of property made to him as the head of he math. We are
therefore unable to hold that the expression 'Pathakanika' in s. 55 means
personal gifts and the Legislature by enacting that section was attempting to
re-enact s. 55 as it originally stood in a different garb.
The next section challenged is s. 76 (1). The
section, as it originally stood before it was amended, provided :
"76 (1) In respect of the services
rendered by the Government and their officers, every religious institution
shall, from the income derived by it, pay to the Government annually such
contribution not exceeding five per centum of its income as may be prescribed.
(2) Every religious institution, the annual
income of which for the fasli year immediately preceding as calculated for the
purposes of the levy of contribution under sub-section (1), is not less than
one thousand rupees, shall pay to the Government annually, for meeting the cost
of auditing its accounts, such further sum not exceeding one and a half per
centum of its income as the Commissioner may determine.
(3) The annual payments referred in subsections
(1) and (2) shall be made, notwithstanding anything to the contrary contained
in 319 any scheme settled or deemed to be settled under this Act for the
religious institution concerned.
(4) The Government shall pay the salaries,
allowances, pensions and other beneficial remu neration of the Commissioner,
Deputy Commissioners, Assistant Commissioners and other officers and servants
(other than executive officers of religious institutions) employed for the
purposes of this Act and the other expenses incurred for such purposes,
including the expenses of Area Committees and the cost of auditing the accounts
of religious institutions." The Court in the earlier case pointed out that
the levy of an annual contribution permitted by s. 76(1) on a religious
institution was in the nature of a tax. The Court observed that in so far ass.
76 spoke of the contribution being levied in respect of the services, it had
the appearance of a fee, but the contribution levied was made dependent upon
the capacity of the payer and not upon the quantum of benefit that was supposed
to be conferred on any particular religious institution, that the institutions
which came under the lower income group and had income less than Rs. 1,000/annually
were excluded from liability to pay the additional charges under cl. (2) of the
section lending thereby to it one of the characteristics of a tax which bore a
close analogy to income-tax, and that the amount "raised by the levy of
the contribution was not ear-marked or specified for defraying expenses that
the Government had to incur in performing the services". All the
collections went into the Consolidated Fund of the State and all the. expenses
had to be met not out of those collections but out of the general revenues by a
proper method of appropriation as was done in case of other Government
expenses. There was again a total absence of any co-relation between the
expenses incurred by the 320 Government and the amount raised by the levy of
contribution and therefore the theory of a return or quid pro quo could not
have any possible application. The Court accordingly held that the contribution
levied under s. 76 was a tax and not a fee and such a tax it was beyond the
power of the State Legislature to levy.
altered the scheme of s. 76. The Madras High
Court has declared the newly enacted cl. (5) ultra vires and that part of the
decision of the Court is not challenged before us.
By the impugned cl. (1) the defects in the
original section have been remedied by the Legislature. Contributions are now
payable to the Commissioner and not to the Government, and they are to be
levied expressly in respect of services rendered by the Government and their
officers, and for defraying the expenses incurred on account of such services.
By sub-section (2) every religious
institution, the annual income of which is not less than one thousand rupees,
has to pay to the Commissioner annually, for meeting the cost of auditing its
accounts, such further sum not exceeding one and a half per centum of its
income as the Commissioner may determine. By sub-section (4) the Government is
required to pay the salaries, allowances, pensions and other 'beneficial
remuneration' of the Commissioner, Deputy Commissioner, Assistant Commissioners
and other Officers and servants employed for the purposes of the Act and also
to defray the other expenses incurred for such purposes, including the expenses
of Area Committees and the cost of auditing the accounts of religious
institutions. The section manifestly provides for levy of contribution at a
rate not exceeding five per cent of its income from all religious institutions,
and audit fee from religious institutions of which the income is Rs. 1,000/or
more, but all the amounts collected under cls. (1) and (2) have to be spent for
meeting 321 the expenses in connection with the performance of the duties rendered
to the religious institutions and for no other purposes. By section 81 (1) a
separate Fund called "'The Madras Hindu Religious and Charitable
Endowments Administration Fund" is constituted and that Fund vests in the
Commissioner, and by cl. (2) of that section the contributions payable under s.
76 (1) and the audit fee payable under s. 76 (2) when realized are credited in
the said Fund. The two principal objections against the levy of the
contribution under s. 76 before it was amended were (1) that the money raised
by levy of the contribution was not earmarked or specified for defraying the
expenses that the Government had to incur in performing services. All the
collections went to the Consolidated Fund of the State and all the expenses
were not met out of the collections but out of the general revenues by a proper
method of appropriation as is done in case of other Government expenses, and
(2) that there was a total absence of any co-relation between the expenses
incurred by the Government and the amount raised by contribution under the
provision of s. 76. The Legislature has by the amendment of s. 76 (1) and (4)
and the constitution of a separate Fund under s. 81 rectified both these
defects. The amounts raised are specifically ear-marked for defraying expenses
for rendering services :
they do not go into the Consolidated fund of
the State, but are included in a separate Fund. The Contributions are not even
payable to the Government they are payable to the Commissioner.
It was urged that there was no co-relation
between the expenses incurred and the amounts collected as contributions, but
there is no reliable evidence on the record in support of this plea. Our
attention was invited to Ex. 'A' referred to in paragraph-2 of the supplemental
counter-affidavit of the State of Madras in Writ Petition No. 323 of 1955, in
which 322 an abstract of the receipts and charges was set out. It was stated in
that document:
"During the period from 30th September
1951 to 30th June 1952 the total receipts under the head XXXVI
Miscellaneous-(c.) Miscellaneous Administration of Madras Hindu Religious and
Charitable Endowments Act, 1951" amounts to Rs. 3,16,013-1-3 and the total
receipts under "XLVI-Miscellaneous (d) fees for Government Audit" by
way of contribution recovered from the religious institutions amounted to Rs. 2,27,531-4-10.
The total expenditure during the said period towards salary and allowances of
the officers and staff contingencies and fees paid to private auditors for
auditing the accounts of religious institutions amounted to Rs.
6,93,539-10-3." Then followed a chart for fasli years 1361, 1362, 1363 and
1364 setting out different heads such as Arrear Demand, Current Demand, Total
Demand and, Write off, Net Demand, Collection and Balance. J appears from the
Chart that there were large arrears in the collection of contributions and by
the end of the fasli year 1364 the arrears exceeded 15.50 lakhs. An abstract at
the foot of the chart shows that the total actual collections amounted to Rs.
19.74 lakhs and the balance recoverable for the four fasli years was Rs. 15.75
lakhs. The total expenditure for 31 out of the four years was Rs. 26.4 lakhs.
It is difficult to draw an inference from this document that the demand of
contribution was wholly unrelated to the expenditure incurred out of the
accumulations. No attempt was made before the High Court to establish that the
levy of contribution at the rate of five per cent was so exorbitant that it
could be said to have no true relation to the value of the services rendered to
the endowments by the administration. Our attention was also invited to a
statement of account 323 showing that the Commissioner received when the Act of
1951 was brought into force a total investment in fixed deposits, Government
stock certificates, debentures of co-operative land mortgage bank, national
savings certificates and in banks a total account exceeding Rs. 18 lakhs. But
this is the accumulation during a period of nearly 25 years when the Act of
1927 was in operation. There is no evidence on the record as to the sources
from which the fund was accumulated. From this statement of account it would
not be possible to infer that the contributions under s. 76(1) of the Act of
1951 were wholly disproportionate to the value of the services to be rendered.
A levy in the nature of a fee does not cease to be of that character merely
because there is an element of compulsion or coerciveness present in it, nor is
it a postulate of a fee that it must have direct relation to the actual
services rendered by the authority to individual who obtains the benefit of the
service. If with a view to provide a specific service, levy is imposed by law
and expenses for maintaining the service are met out of the amounts collected
there being a reasonable relation between the levy and the expenses incurred
for rendering the service, the levy would be in the nature of a fee and not in
the nature of a tax. It is true that ordinarily a fee is uniform and no account
is taken of the varying abilities of different recipients. But absence of
uniformity is not a criterion on which alone it can be said that it is of the
nature of a tax. A fee being a levy in consideration of rendering service of a
particular type, correlation between the expenditure by the Government and the levy
must undoubtedly exist, bat a levy will not be regarded as a tax merely because
of the absence of uniformity in its incidence, or because of compulsion in the
collection thereof, nor because some of the contributories do not obtain the
same degree of service as others may.
324 Section 80 makes the Commissioner a
corporation sole with perpetual succession and s. 81 provides for the
constitution of the Madras Hindu Religious and Charitable Endowments
Administration Fund. These sections have been enacted with the object of
establishing a distinct Fund out of the income of the endowments totally
unrelated to the general revenues of the State. By s. 82 contributions which
had been levied under the Act XIX of 1951 before it was amended by the Act
XXVII of 1954 under s. 76(1) and (2) have been validated.
Section 82 provides :"82. (1)
Contributions under section 76(1) and the further sums payable under section
76(2) shall be payable with effect from the commencement of this Act. For the
period from the commencement of this Act until the commencement of the Madras
Hindu Religious and Charitable Endowments (Amendment) Act, 1954, the rate
prescribed by the Government under section 76(1), or determined by the Commissioner
under section 76(2), shall be deemed to be the rate prescribed or determined
under section 76(1) or section 76(2), as the case may be,_ as amended by the
Madras Hindu Religious and Charitable Endowments (Amendment) Act, 1954, and
contributions and further sums paid to the Government shall be deemed to be
contributions and further sums, as the case may be, paid to the Commissioner
under section 76(1) and section 76(2) as amended by the Madras Hindu Religious
and Charitable Endowments (Amendment) Act, 1954.
(2)The Government shall pay to the Commissioner
the balance, if any, remaining out of the aggregate of the contributions and
further sums paid or realized before the commencement of the Madras Hindu
Religious 325 and Charitable Endowments (Amendment) Act, 1954, in pursuance of
section 76(1) and section 76(2), after deducting there from sums paid by the
Government under section 76(4)." It is true that the contributions levied
under s. 76(1) of the Act before it was amended had the characteristic of a
tax, and the levy thereof was accordingly struck down. But the Legislature had
power to enact appropriate retrospective legislation declaring these levies as
fees by denuding them of the characteristics which went to make the levies of
the nature of a tax. By the express provision contained in subsection (1) of s.
82 the rates prescribed under s. 76(1) or determined by the Commissioner under
s.76(2), under the Act as originally enacted were to be deemed rates prescribed
under ss. 76(1) or determined under s. 76(2) as amended by the Act XXVII of 1954,
and contributions and other sums paid to the Government were to be deemed as
contributions and other sums paid to the Commissioner under ss. 76(1) and (2)
as amended. Retrospectively the payments received by the Government were
dissociated from the general governmental revenues and by sub-section (2)
account was to be made on the footing that these payments constituted a
distinct and separate fund and all payments were deemed to be received by the
Commissioner and not by the Government. That retrospective legislation may be
enacted is not now open to question. In M/s. J. K. Jute Mills Co. Ltd. v. State
of Uttar Pradesh it was held by this Court :
"The power of a legislature to enact a
law with reference to a topic entrusted to it, is x x x unqualified subject
only to any limitation imposed by the Constitution. In the exercise of such a
power it will. be competent for the legislature to enact a law, which is
(1)[1962] 2 S.C.R. 1 326 either prospective or retrospective. In Union of India
v. Madan Gopal, 1954, SCR 541: it was held by this Court that the power to impose,
tax on income under entry 82 of List 1 in Schedule VII to the Constitution,
comprehended the power to impose income-tax with retrospective operation even
for a period prior to the Constitution. The position will be the same as
regards laws imposing tax on sale of goods. In M. P. V. Sundraramier & Co. v.
State of Andhra Pradesh, 1958 S.C.R. 1422, this Court had occasion to consider
the validity of a law enacted by Parliament giving retrospectively operation to
laws passed by the State legislatures imposing a tax on certain sales in the
course of inter-State trade. One of the contentions raised against the validity
of this legislation was that, having regard to the terms of Art. 286 (2), the retrospective
legislation was not within the competence of Parliament. In rejecting this
contention, the court observed:
'Article 286 (2) merely provides that no law
of a State shall impose tax on inter-state sales "except in so far as
Parliament may by law otherwise provide'. It places no restriction on the
nature of the law to be passed by Parliament. On the other hand, the words
"in so far as' clearly leave it to Parliament to decide on the form and
nature of the law to be enacted by it. What is material to observe is that the
power conferred on Parliament under Art. 286(2) is a legislative power, and
such a power conferred on a Sovereign Legislature carries with it authority to
enact a law either prospectively or retrospectively, unless there can be found
in the Constitution itself a limitation on that power.' And it was held that
the law was within the competence of that Legislature. We must therefore hold
that the 327 Validation Act is not ultra vires the powers of the legislature
under entry 54, for the reason that it operates retrospectively." The
State Lagislature has power to levy a fee under the Seventh Schedule, List III,
Item 28 read with item 47. The Legislature was, therefore, competent to levy a
fee for rendering services in connection with the maintenance, supervision and
control over the religious institutions and it was competent to levy the fee
retrospectively. If the amounts received by the State have been expressly
regarded as fee collected by the Commissioner tinder the provisions as amended
and account has to be made on that footing between the Government and the
Commissioner, challenge to the vires of s. 82 (2) must fail.
In our view the High Court was right in
declaring ss. 52(1)(f), 55, 76(1) & (2), 80, 81.,and 82 intra vires. The appeals
therefore, fail and are dismissed with costs. One hearing fee.
Appeals dismissed.
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