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PETITIONER: MAHANT SRI JAGANNATH RAMANUJ DAS AND ANOTHER

       Vs.

RESPONDENT: THE STATE OF ORISSA AND ANOTHER.

DATE OF JUDGMENT: 16/03/1954

BENCH: MUKHERJEA, B.K. BENCH: MUKHERJEA, B.K. HASAN, GHULAM MAHAJAN, MEHAR CHAND (CJ) DAS, SUDHI RANJAN BOSE, VIVIAN

CITATION:  1954 AIR  400            1954 SCR 1046  CITATOR INFO :  F          1956 SC 432  (2,5)  R          1959 SC 942  (12,15)  R          1961 SC 459  (11,43)  R          1962 SC 853  (34)  RF         1962 SC1371  (37,78)  R          1965 SC1107  (48)  RF         1971 SC 344  (6)  R          1971 SC1182  (5)  R          1972 SC1586  (12)  RF         1973 SC 724  (43)  R          1975 SC 846  (14)  R          1976 SC1059  (29)  F          1978 SC1181  (5)  R          1980 SC1008  (11)  RF         1981 SC1863  (24)  R          1992 SC2038  (3,7)

ACT: Constitution  of  India, arts. 19(1)(f), 25,  26,  27-Orissa Hindu Religious Endowments Act, 1939, as amended by Amending Act II of 1952, ss. 38 and 89 and proviso to s.  46--Whether ultra vires the Constitution--Section 49 of the Act--Whether ultra vires art. 27.

HEADNOTE:   Held,  that ss. 38 and 39 and the proviso to s. 46 of  the Orissa  Hindu Religious: Endowments Act, 1939 as amended  by the Amending Act II of 1952 are ultra vires arts. 19(1) (f), 25 and 26 of the Constitution.     The annual contribution provided in s. 49 of the Act  is in  the nature of a fee and not a tax and therefore  it  was within the competence of the Provincial Legislature to enact such  a provision.  Further an imposition like this  is  not hit by art. 27 of the Constitution because the object of the contribution   under   s.  49  is  not  the   fostering   or preservation  of the Hindu religion or of  any  denomination within it but the proper administration of religious  trusts and institutions wherever they exist.     Civil Appeal No. 38 of 1953 referred to.

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JUDGMENT: ORIGINAL JURISDICTION:Petition No. 405 of 1953. Under  article  32  of the Constitution  of  India  for  the enforcement of Fundamental Rights                     and APPELLATE JURISDICTION: Case No.1 of 1950 1047      Appeal  under  section 205 of the Government  of  India Act,  1935,  from the Judgment and Decree,  dated  the  13th September, 1949, of the High Court of Judicature, Orion,  in First Appeal No. 39 of 1949 arising out of the Judgment  and Decree, dated the 11th September, 1945, of the Court of  the District Judge, Cutback, in Original Suit No. 3 of 1943.      N.   C. Chattanooga (B.  K. Saran and B. C. Pratt, with him) for the petitioners and appellants Nos.  1 to 13.    S.     P.  Sinclair (B.  K. Saran and R. C.  Pratt,  with him) for appellants 14 to 16.     M.    C. Seth (G.  N. Jose, with him) for respondents in both the matters.  Agent R. H. Debar.    1954.   March  16.   The  Judgment  of  the  Court   was. delivered by    MUKHERJEA  J.-These two connected matters  are  taken  up together for the sake of convenience and may be,disposed  of by one and the same judgment.  Petition ;No. 405 of 1953 has been  presented  to  this  court under  article  32  of  the Constitution   and  the  petitioners  are  the  Mahants   or superiors     of    two    ancient    and     well     known religiousinstitutions   of  Orissa,  both  of   which   have endowmentsof considerable value situated within and  outside the  Orissa  State.   An Act, known  as  the  .Orissa  Hindu Religious   Endowments   Act  was  passed  by   the   Orissa Legislative  Assembly  functioning under  the  Government-of India Act, 1935. in the vear 1939 and it received the assent of  the  Governor- General on the 31st  August,  1939.   The object of the Act, as stated in the preamble, is "to provide for  the  better administration and  governance  of  certain Hindu  religious endowments" and’ the expression  "religious endowment"  has been defined comprehensively in the  Act  as meaning  all  property belongto or given orendowed  for  the support  of Maths or temples  or for the performance of  any service orcharity connected therewith.  The whole scheme  of the  Act  is to vest the control and supervision  of  public temples and Maths in a statutory authority designated as the Commis. sioner of Hindu Religious Endowments and to confer 1048 upon  him  certain  powers  with a view  to  enable  him  to exercise  effective control over the trustees of  the  Maths and  the  temples.   The Commissioner is required  to  be  a member of the Judicial or Executive Service of the  Province and  his actions are subject to the general control  of  the provincial  Government.   For the purpose,  of  meeting  the expenses  of the Commissioner and his staff, every  Math  or temple,  the  annual  income of which exceeds  Rs.  250,  is required  under  section  49 of the Act  to  pay  an  annual contribution  at  certain percentage of  the  annual  income which  increases  I progressively with the increase  in  the income.  With this contribution as well as loans and  grants made by the Government, a special fund is to be  constituted as provided by section 50 and the expenses of  administering the religious endowments are to be met out of this fund.    In  July, 1940, a suit, out of "which the Case No.  1  of 1950  arises,  was instituted in the court of  the  District

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Judge of Cuttack by a number. of Mahants including .the  two petitioners  in  the petition under article  32  before  us. -praying  for  a  declaration that  the  Orissa  Relig  ious Endowments   Act  of  1939  was  ultra  vires   the   Orissa Legislature  and  for  other  consequential  reliefs.    The validity  of the Act was challenged substantially  on  three grounds, namely, (1) that the subject matter of  legislation was  not covered by Entry 34 of List 11 in Schedule  VII  of the  Government  of  India  Act,  1935  ;  (ii)  that   the, contribution  levied under, section 49 was, in substance,  a tax  and  could  not have been  imposed  by  the  Provincial Legislature;  and  (iii) that as the provisions of  the  Act affected  the  income  of properties  situated  outside  the territorial  limits  of  the Province, the  Act  was  extra- territorial  in  its operation and hence  inoperative.   All these  contentions were overruled by, the District Judge  of Cuttack,  who  by his judgment dated the  11  th  September, 1945,   dismissed  the  plaintiffs’  suit.    Against   that decision, an appeal was taken by the  plaiitiffs to the High Court  -of  Orissa and the appeal was heard  by  a  Division Bench,  consisting of Jagannedbadas and Narasimham JJ.   The learned  Judges  by two separate but  concurring  judgments, dated the 13th September. 1949, affirmed the decision 1049 of  the  District  Judge and dismissed  the  appeal.  it  is against  this judgment that Case No. 1 of 1950 has  come  to this court.     During  the  pendency of the appeal in  this  court  the Constitution  came  into force on the 26th January  ,  1950, with its chapter on fundamental rights, and the Orissa Hindu Religious  Endowments Act also has been amended recently  by the State Legislature of Orissa by Amending Act II of  1952. In  view  of these changes, the  present  application  under article 32 of the Constitution has been filed by two of  the Mahants who figured as plaintiffs in the Declaratory Suit of 1940 and the application has been framed comprehensively  so as  to  include all points that could be urged  against  the validity of the Orissa Hindu Religious Endowments Act on the basis of the provisions of the Constitution.  It is conceded by  both the parties that in these circumstances it  is  not necessary  for us to deal separately with the  appeal.   The decision,  which  we would arrive at in the  petition  under article  32,  will be our pronouncement on the  validity  or otherwise of the different provisions of the impugned Act.    It  may be stated at the beginning that the Orissa  Hindu Religious Endowments Act of 1939 follows closely the pattern of  the Madras Hindu Religious Endowments Act of 1927  which has  been  now replaced by a later Act passed by  the  State Legislature  of Madras in 1951 and described as  the  Madras Hindu Religious and Charitable Endowments Act.  The  grounds upon which the validity of the Orissa Act has been  attacked be  fore  us  are substantially the same as  were  urged  in assailing the constitutional validity of the Madras Act,  in Civil  Appeal  No.  38  of  1953  (The  Commissioner,  Hindu Religious  Endowments,  Madras v.  Sri  Lakshmindra  Thirtha Swamiar),  the  judgment in which has just  been  delivered. The  grounds urged can be classified conveniently under  two heads.   In the first place, some of the provisions  of  the impugned  Act have been challenged as invalid on the  ground that  they invade the fundamental rights of the  petitioners guaranteed  under articles 19(1) (f), 25 26, and, 27 of  the Constitution.  The other branch of the contention (1)  [1954] S.C.R. 1005. 1050 relates  to..  the  provision for  levying  contribution  on

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religious institutions under section 49 of the Act and  this provision has been impeached firstly on the ground that  the contribution  being  in substance a tax, it was  beyond  the competency  of the Provincial Legislature to enact any  such provision.  The other ground raised is, that the payment  of such  tax or imposition is prohibited by article 27  of  the Constitution.     The general questions relating to the scope and ambit of the fundamental rights embodied in articles 19 (1) (f ), 25, 26  and 27 of the Constitution in connection with Maths  and temples  have  been discussed fully in our judgment  in  the Madras  appeal  referred  to above and  ,it  would  not,  be necessary to reiterate these discussions for purposes of the present  case.  We can straightaway proceed to  examine  the different  provisions  of the Act to which  objections  have been  taken  by  the  learned  counsel  appearing  for,  the petitioners in the light of the principles which this  court has  laid  down in the Madras appeal.  It may be  said  that many of the impugned provisions of the Orissa Act correspond more or less. to similar provisions in the Madras Act.    Section 11 of the Act has been objected to on the  ground that  it vests almost , an uncontrolled and arbitrary  power upon the Commissioner.  This section corresponds to  section 20  of  the Madras Act and as has been pointed  out  in  our Judgment, in the Madras appeal, the powers, though seemingly wide, can be exercised only to ensure that Maths and temples are  properly  maintained and the  endowments  are  properly administered.   As  the object and purpose for  which  these powers could be exercised have been indicated preoisely   we do  not  think  that it, could be said  that  the  authority vested  in  the  Commissioner is  in  any  way  arbitrary.or unrestricted.  The explanation attached to the section  only makes  it  clear that the general power conferred  upon  the Commissioner  extends  to passing of interim orders  as  the Commissioner might think fit.     Section  14 lays down the duties of the trustee and  the care which he should exercise in the management 1051 of  the  affairs of the religious institutions.   The  care, which  he has to exercise, is What is demanded  normally  of every -trustee in charge of trust estate and the standard is that  of  a man of ordinary prudence dealing  with  his  own funds  or  properties.   This is a matter  relating  to  the administration of the estate and and does not interfere with any fundamental rights of the trustee.  For the same reason, we  think, no objection could be taken to the  provision  of section  28  which lays down that the trustee  of  a  temple shall  be  bound  to  obey  all  orders  issued  under   the provisions  of the Act by the Commissioner.. if  the  orders are  lawful  and made in pursuance  of  authority-  properly vested  in-the officer, no legitimate ground could be  urged for not complying with the orders.  The sections of the Act, to which serious objections have been taken are sections 38, 39, 46, 47 and 49.  Sections 38 and 39 relate to the framing of  a scheme.  A scheme can certainly be settled  to  ensure due administration of the endowed property but the objection seems  to be that the Act -provides, for the framing.  of  a scheme not by a civil Court or under its supervision but  by the  Commissioner who is a mete administrative or  executive officer.  There is also no provision for appeal against  his order  to  the court.  Under section 58 of the  Madras  Act, although   the  scheme  is  to  be  framed  by  the   Deputy Commissioner,  an  appeal  lies against  his  order  to  the Commissioner  in the first place.  A party aggrieved by  the order  of the Commissioner again has a right of suit in  the

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ordinary civil court, with a further right of appeal to  the High Court.  It seems that sub-section (4) of section 39  of the  impugned  Act,  as it originally  stood,  allowed  the, trustee or any person having an interest in the  institution to  file a suit in a civil court to modify or set  aside  an order framing a scheme; and under section 40, the order made under  section 39 could be final only subject to the  result of  such suit.  Subsection (4) of section 39,  however,  was deleted by the Amending Act of 1952, and under the new  sub- section  (4), the order passed by the Commissioner has  been made  final and conclusive.  Strangely, however, section  41 of the Act has still been retained in its 1052 original shape and that speaks of an order settling a scheme being  set aside or modified by the court.  Obviously,  this is  careless  drafting and the Legislature did not  seem  to have  adverted  to the apparently  contradictory  provisions that  it made.  The learned Attorney-General, appearing  for the State of, Orissa, has also conceded that these  sections require redrafting.  We think that the settling of a  scheme in regard to a religious institution by an executive officer without  the intervention of any judicial -tribunal  amounts to an unreasonable restriction upon the right of property of the  superior of the religious institution which is  blended with  his  office.   Sections 38 and 39 of  -the  Act  must, therefore, be held to be invalid.     There  is nothing wrong in the provision of  section  46 itself  but legitimate exception, we think, can be taken  to the  proviso appended to the section.  Under the law, as  it stands,  the Mahant or the superior of a Math has very  wide powers  of  disposal over the surplus income  and  the  only restriction  that is recognised is that he cannot spend  the income for his own personal use unconnected with the dignity of his office.  The purposes specified in section 46 are all conducive to the benefit of the institution and there is  no reason  why the discretion of the trustee in regard  to  the spending  of surplus for such purposes also should be  still further restricted by directions which the Commissioner  may choose  to issue.  Section 47 (1) lays down how the rule  of cy pres is to be applied not merely when the orginal purpose of the trust fails or becomes incapable of being carried out either  in whole or in part by reason of subsequent  events, but  also  where there is a surplus left after  meeting  the legitimate   expenses   of   the   institution.    Objection apparently could be raised against the last provision of the sub-section,  but  as subsection(4)  of  section47gives  the party  aggrieved  by any order of the Commissioner  in  this respect  to  file a suit in a civil court and the  court  is empowered  to  modify  or  set  aside  such  order  of   the Commissioner, we do not ,think that there is any  reasonable ground for complaint.   The only other section that requires consideration is sect ion 49 under which every Math or temple having 1053 an annual income exceeding Rs. 250 has got to make an annual contribution  for meeting the expenses of  the  Commissioner and the officers and servants working under him.  The  first question  that  arises  with regard  to  this  provision  is whether  the  imposition is a tax or a fee; and  it  is  not disputed  that  if it is a tax, the  Provincial  Legislature would  have  no authority to enact such a  provision.   This question  has been elaborately discussed in our judgment  in the Madras appeal referred to above and it is not  necessary to  repeat the discussions over again.  As has been  pointed out  in  the Madras appeal, there is no  generic  difference

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between  a  tax and a fee and both are  different  forms  in which  the  taxing power of a State manifests  itself.   Our Constitution, however, has made a distinction between a  tax and  a  fee  for legislative purposes and  while  there  are various  entries in the three lists with regard  to  various forms of taxation, there is an entry at the end of each  one of  these  lists as regards fees which could  be  levied  in respect  of  every  one of the  matters  that  are  included therein.  A tax is undoubtedly in the nature of a complusory exaction of money by a public authority for public purposes, the payment of which is enforced by law.  But the  essential thing  in  a tax is that the imposition is made  for  public purposes  to meet the general expenses of the State  without reference  to any special benefit to be conferred  upon  the payers  of the tax.  The taxes collected are all  merged  in the  general revenue of the State to be applied for  general public purposes.  Thus, tax is a common burden and the  only return  which the taxpayer gets is the participation in  the common benefits of the State.  Fees, on the other hand,  are payments  primarily  in  the public interest  but  for  some special  service rendered or some special work done for  the benefit  of those from whom payments are demanded.  Thus  in fees  there  is always an element of quid pro quo  which  is absent  in a tax.  Two elements are thus essential in  order that  a  payment  may be regarded as a fee.   It  the  first place,,  it  must  be levied  in  consideration  of  certain services which the individuals accepted either willingly  or unwillingly.  But this by itself is not enough to make 136 1054 the imposition a fee, if the payments demanded for rendering of   such  services  are  not  set  apart  or   specifically appropriated for that purpose but are merged in the  general revenue  of  the  State.to  be  spent  for  general   public purposes.   Judged  by this test, the contribution  that  is levied  by  section  49 of the Orissa Act will  have  to  be regarded  as a fee and not a tax.  The payment  is  demanded only  for  the  purpose  of  meeting  the  expenses  of  the Commissioner  and his office which is the machinery  set  up for  due  administration  of the affairs  of  the  religious institution.   The  collections made are not merged  in  the general  public  revenue  and are not  appropriated  in  the manner  laid  down for appropriation of expenses  for  other public  purposes.  They go to constitute the fund  which  is contemplated  by  section 50 of the Act and  this  fund,  to which also the Provincial Government contributes both by way of loan and grant, is specifically set apart for the render- ing  of services involved in carrying out the provisions  of the  Act.   We  think,  therefore,  that  according  to  the Principles  which  this court has enunciated in  the  Madras appeal mentioned above, the contribution could  legitimately be  regarded as fees and hence it was within the  competence of the Provincial Legislature to enact this provision.   The fact  that  the amount of levy is graded  according  to  the capacity of the payers though it gives it the appearance  of an income-tax, is not by any means a decisive test.    We  are further of opinion that an imposition  like  this cannot be said to be hit by article 27 of the  Constitution. What   is   forbidden  by  article  27   is   the   specific appropriation  of  the  proceeds of any tax  in  payment  of expenses for the promotion or maintenance of any  particular religion  or  religious  denomination.  The  object  of  the contribution  under  section  49 is  not  the  fostering  or preservation  of the Hindu religion or of  any  denomination within  it; the purpose is to see that religious trusts  and

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institutions wherever they exist are properly  administered. It   is   the  secular  administration  of   the   religious institutions  that the Legislature seeks to control and  the object,  as  enunciated in the Act, is to  ensure  that  the endowments attached to the religious institutions  are properly administered and their income  is duly  appropriated for purposes for which they were  founded or  exist.   As  there  is  no  question  of  favouring  any particular  religion or religious denomination,  article  27 could not possibly apply.     The result is that, in our opinion, the only sections of the  Act,  which are invalid, are sections 38,  39  and  the proviso to section 46.  The application under article 32 is, therefore, allowed to this extent that a writ in the  nature of  mandamus would issue restraining the Commisoner and  the State  Government  enforcing  against  the  petitioners  the provisions  of  -the sections mentioned  above.   The  other prayers  of  the petitioners are  disallowed.   No  separate order  is necessary in Case No. I of 1950, which will  stand dismissed.   We  make  no order as to costs  either  in  the petition or in the appeal.