06 October 1964
Supreme Court


Case number: Appeal (civil) 182 of 1964






DATE OF JUDGMENT: 06/10/1964


CITATION:  1965 AIR 1222            1965 SCR  (1) 678  CITATOR INFO :  R          1967 SC1606  (12)  F          1971 SC1599  (4)  D          1977 SC 567  (23)  F          1977 SC 740  (10)  RF         1982 SC1201  (2,3)

ACT: The  C.P.  and Berar Revocation of Land  Revenue  Exemptions Act,  1948,  s.  5(3)-Descendants of  former  Chiefs  losing exemption  entitled  to apply for money  grant  or  pension- Granting  of  pension,  if  conditions  satisfied,   whether discretionary.

HEADNOTE: The appellants who were descendants of a former ruling chief and  had lost their exemption from land revenue as a  result of  the operation of s. 3 of the C.P. & Berar Revocation  of Land Revenue Exemptions Act, 1948, applied for a pension  or money  grant under the provisions of s. 5 of the Act.  their petition  was  rejected  by  the  State  Government  without reasons  being recorded.  They filed a writ  petition  under Art.  226  but the High Court held that the  granting  of  a pension   was  completely  within  the  discretion  of   the Government and the petition was therefore incompetent. In appeal before the Supreme Court the appellants  contended that  rejection of their petition without any reasons  being given  amounted  to no decision at all, and  that  once  the conditions for the grant of a pension were satisfied it  was obligatory on the State Government to make a grant of  money or pension.  On behalf of the State Government reliance  was placed on the words of s. 5(2) that after enquiry in respect of the applications the Government ’may pass such orders  as it  deems fit’ and the directory word ’may’ used in s.  5(3) itself. HELD: (i) Sub-section (2) and (3) of s. 5 must be considered separately. Under sub-s. (2) all the applications for  grant of money or pensionhad to be considered and Government could deal  with  them  in  several  ways.   Notwithstanding   its apparent discretion s. 5(2) only enabled Government to  pass



orders as fit the occasion. [683 E-H]. In   sub-s.  (3)  special  classes  namely   religious   and charitable  institutions  etc.  and  descendants  of  ruling chiefs  had  to be dealt with and therefore  the  discretion stood  modified.   The  rules  highlighted  the  distinction between  the  two  sub-sections because  they  provided  for special enquiries in cases falling under sub-s. (3) [683  A- D]. Enabling provisions sometimes acquire a compulsory force and in  the present instance on the existence of  the  condition precedent,  the grant of money or pension became  obligatory on  the  Government notwithstanding that in sub-s.  (2)  the Government  had power to pass such orders as it thought  fit and in sub-s. (3) the word ’may’ was used.  Except in  those cases  where  there were good grounds for not  granting  the pension,  Government was bound to make a grant to those  who fulfilled  the desired conditions and the word ’may’ in  the third sub-section though apparently discretionary had to  be read as ’must’. [684 B-H]. Maxwell on Interpretation of Statutes, referred to. (ii)In   passing  orders  on  the  appellants’   application Government  had  to  act in a  quasi-judicial  manner.   The appellants had to be given an                             679 opportunity  to state their case and were also  entitled  to know why their claim had been rejected. [685 B-D]. M/s.    Hari  Nagar  Sugar  Mills  Ltd.  v.   Shyam   Sundar Jhunjhunwala and Others [1962] 2 S.C.R. 339, referred to. Order of the State Government set aside.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 182 of 1964. Appeal  by special leave from the judgment and  order  dated April  20, 1959, of the Madhya Pradesh High Court  in  Misc. Petition No. 325 of 1955. S.   V.  Gupte,  Solicitor-General, W. S. Barlingay,  S.  T. Khirwarkar and A. G. Ratnaparkhi, for the appellants. M.   S. K. Sastri and M. S. Narasimhan for I. N. Shroff, for the, respondent. The Judgment of the Court was delivered by Hidayatullah  J. The appellants claiming to be  the  descen- dants  of former ruling chiefs in the Hoshangabad and  Nimar Districts  of  Madhya  Pradesh  applied  under  the  Central Provinces  and Berar Revocation of Land  Revenue  Exemptions Act,  1948,  for  grant  of money  or  pension  as  suitable maintenance  for  themselves.  By that  Act,  every  estate, mahal,  village or land which was exempted from the  payment of the whole or part of land revenue by special grant of, or contract  with the Crown, or under the provision of any  law or  rule for the time being in force or in pursuance of  any other instrument was after the appointed date made liable to land revenue from the year 1948-49, notwithstanding anything contained  in the grant, contract, law, rule or  instrument. The  appellants  held  estates  in  the  two  districts   on favourable terms as Jahgirdars Maufidars and Ubaridars,  and enjoyed an exemption from payment of land revenue  amounting in  the aggregate to Rs. 27,828-5-0 yearly.  On the  passing of  the  Act the exemption was lost and they claimed  to  be entitled  to grant of money or pension under the  provisions of the Act about to be set out.  They applied to the  Deputy Commissioner,  who forwarded their application to the  State Government.  The State Government by its order No. 993 /XVI- 4, dated April 26, 1955 rejected their petition.  No reasons



are contained in that order. The appellants thereupon filed a petition in the High  Court of  Madhya Pradesh under Art. 226 of the Constitution for  a writ  of  certiorari  to  quash  the  order  of  the   State Government.  In that LlSup./65-18 680 petition  they  contended  that  the,  rejection  of   their petition by the State Government without giving any  reasons amounted  to  no  decision at all and was  an  improper  and illegal exercise of the power vested in the State Government by  s.  5  of the Act.  The State  Government  resisted  the petition   by  contending  that  the  appellants  were   not descendants of any former ruling chief and further that  the exercise of the power by the State Government was proper and legal. The petition in the High Court was heard and disposed of  by a Full Bench.  The learned Chief Justice, who delivered  the judgment  on  behalf of the Full Bench held that  the  State Government  was  not  compelled to  grant  either  money  or pension  because  the exercise of the power under s.  5  was discretionary  and the petition, therefore was  incompetent. No  other  question  was gone into by the  High  Court  even though a suit is barred under the provisions of the Act  and a petition under Art. 226 would appear to be the only remedy in case the State Government failed to comply with the terms of the Act, or acted in an illegal manner. The  Act  consists  of eight sections.   The  revocation  of exemption from liability for land revenue is laid down by s. 3,  the  purport  of  which has  already  appeared  in  this judgment.   It is not necessary to refer to that section  in detail  because  in  addition it speaks of  lands  in  Berar governed  by  the Berar Land Revenue Code and  of  lands  in Madhya  Pradesh  governed  by  the  Central  Provinces  Land Revenue  Act, 1917 and lays down the classes of  such  lands and  the special rules applicable to them.  In  the  present appeal we are not concerned with these details and they may, therefore,  be  put  aside.   Section 4  of  the  Act  makes suitable  amendments in the Central Provinces  Land  Revenue Act,  1917 and the Berar Land Revenue Code  consequent  upon the  provisions of s. 3 of the Act.  We need not attempt  to set  out  these  amendments.  Section  5  then  provides  as follows :-               "5. Awards of money grants or pension.               (1)   Any  person  adversely affected  by  the               provisions  of  section  3 may  apply  to  the               Deputy  Commissioner of the district  for  the               award of a grant or money or pension.               (2)   The  Deputy Commissioner  shall  forward               the application to the Provincial  Government,               which may pass such orders as it deems fit.               (3)   The  Provincial  Government may  make  a               grant of money or pension-               681.               (i)   for  the  maintenance or upkeep  of  any               religious, charitable or public institution or               service of.& like nature; or               (ii)  for  suitable maintenance of any  family               of at descendant from a former ruling chief.               (4)   Any amount sanctioned by way of grant of               money or pension under this section shall be a               charge on the revenues of the Province." Section 6 bars the jurisdiction of civil courts.  Section  8 enables the Provincial Government to make rules for carrying out the purposes of the Act.  Section 7 grants power to the:



State  Government to grant exemptions from payment  of  land revenue  under the Central Provinces Land Revenue Act,  1917 and  the Berar Land Revenue Code in whole or in part, as  it may deem fit. The short question in this appeal is whether the  provisions of  s. 5(3) make it obligatory upon the State Government  to make  a  suitable grant of money or pension in  case  it  is proved  that the applicant has lost the exemption under  the Act  and  is a descendant from a former ruling  chief?   The Full Bench of the High Court was of the view that there  was no  obligation on the State Government to make such a  grant inasmuch  as  S. 5 (3) was  discretionary.   The  appellants contend  that  the  view of the High Court of S.  5  (3)  is erroneous  and the section is mandatory notwithstanding  the use  of  language  which appears  to  confer  a  discretion, provided  the  other  conditions  of  the  sub-section   are fulfilled. Before  we deal with this question we may also refer to  the rules  which have been framed under S. 8 of the Act.   These rules,  were  made for dealing  with  applications  received under  S. 5(1) of the Act.  They are six in  number.   After defining the terms ’maufi’, ’inane, ’maufidar’ and ’inamdar, rule  3 says that on receipt of the application  the  Deputy Commissioner may enquire into it personally or may  transfer it  to  a  Revenue  Officer not  below  the  rank  of  Extra Assistant Commissioner for enquiry and report.  Rule 4  then provides what the enquiry should cover.  Though the rule  is divided  into sub-rules (a) to (g), under sub-rules  (a)  to (e)  the enquiry is directed to ascertain the lands held  by the  applicant, his income, class of maufi or inam  and  the details  of the maufi and inam.  There were many  maufidars, ubaridars,  who were holding lands under diverse titles  and concessions.  Sub-rules (a) to (e) seem to apply to all  the applicants.    When,  however,  a  maufi  is  held  by   any religious,  charitable  or  public institution  or  for  any service  as stated in S. 5 (3) (i) quoted above or  is  held for maintenance  Sup./65- 19 682 by a descendant of a former ruling chief as mentioned in  s. 5 (3) (id), sub-rules (f) and (g) apply in addition to  sub- rules (a) to  (e).  Under sub-rule (f) some special  enquiry is  required to be made in respect of religious,  charitable or  public  institutions or service, such  as,  whether  the institution should be continued to be maintained or  service continued to be rendered and the minimum annual  expenditure required  for  the  maintenance of the  institution  or  the service.  Sub-rule (g) then says -- "In  the  case  of maufi or inam for the  maintenance  of  a descendant  of a former ruling chief the  following  further information should also be furnished This is followed by four sub-rules the first lays down  that the  minimum amount required to ensure suitable  maintenance of  the  family should be stated after enquiry;  the  second requires   that  any  other  source  of  income  should   be specified; the third requires the enquiring officer to state the  extent  to which such a person is  dependent  on  maufi income   and  the  fourth  requires  that  his  loyalty   to Government should be ascertained.  Rule 5 then enjoins  that after completing the enquiry the Deputy Commissioner  should make  his  report and his recommendation.  Rule  6  provides that the Deputy Commissioner should also consider whether it would be desirable to exempt some land from liability to pay land revenue in whole or part under S. 7 instead of making a money grant under S. 5(3).



It  is  contended on behalf of the State of  Madhya  Pradesh that  the  powers  exercisable  under the  Act  are  in  the discretion  of the Government and there can be no remedy  by way  of  a writ under Art. 226 of the Constitution.   It  is pointed out in support of the submission that sub-s. (2)  of S.  5 confers on the Government complete discretion  because it      says      "that     the      Provincial      (State) Government".    . .. .... ..." may pass  such  orders  as it deems fit" in respect of every application forwarded by  the Deputy  Commissioner, and that sub-s. (3) is also worded  in language  which is directory where it says  "The  Provincial (State)  Government  may make a grant of  money  or  pension etc."  This view ,appears to have been accepted in the  High Court. In  our opinion, this contention cannot be supported if  the scheme of the fifth section is closely examined.  No  doubt, the Deputy Commissioner is required to make enquiries and to forward  all applications to Government and  Government  has been 683 given the power to pass such orders as it deems fit but  the operation of sub-s. (2) and the discretion in it relates  to applications  in  general while in respect of  some  of  the applications  the order has to be made under the third  sub- section  where  the discretion is to a  considerable  extent modified.   The rules here help in the understanding of  the third sub section. In  all  cases  an enquiry has to be  made  which  generally follows a pattern disclosed by rule 4, sub-rules (a) to (e). But in cases of maufi or inam held by religious,  charitable or  public institutions or service or in case of a maufi  or inam for the maintenance of a descendant of a former  ruling chief  additional  enquiries have to be  made.   File  rules highlight the distinction between revocation of exemption in the case of persons belonging to two special categories  and the revocation of exemption in the case of others.  It  will be  noticed presently that S. 5 of the Act also follows  the same  scheme  and the rules do no more  than  emphasise  the special  character  of sub-s. (3) of S. 5.  Power  has  been conferred  on Government to make some other lands free  from land  revenue so that sometimes a grant of money or  pension and  sometimes exemption from land revenue may  be  ordered. It could hardly have been intended that sub-s. (3) of s. (5) was to be rendered nugatory in its purpose by the  operation of  the  discretion conferred by sub-s. (2).  The  two  sub- sections have to be read separately because though the  word "may" appears in both of them that word in sub-s. (3)  takes its meaning from an obligation which is laid upon Government in respect of certain institutions and persons if the stated conditions are fulfilled.  It is impossible to think that in the  case of a religious, charitable or  public  institution which  must  be continued or in the case of  descendants  of former  ruling  chiefs,  Government  possessed  an  absolute discretion to refuse to make a grant of money or pension for their  maintenance or upkeep even though they satisfied  all the  conditions  for such a grant and were  deserving  of  a grant  of money or pension.  The word "may" in s. 5(3)  must be  interpreted as mandatory when the conditions  precedent, namely,  the existence of a religious, charitable or  public institutions   which  ought  to  be  continued  or  of   the descendants  of a ruling chief, is established.   The  words "may pass such orders as it deems fit" in sub-s. (2) mean no more  than that Government must make its orders to  fit  the occasion,  the kind of order to be made being determined  by the necessity of the occasion.  As stated  in Maxwell on the



Interpretation of Statutes ( 11th edn. p. 23 1               "Statutes  which authorise persons to do  acts               for  the  benefit  of others,  or,  as  it  is               sometimes said. for the               684               public  good  or the advancement  of  justice,               have  often  given rise  to  controversy  when               conferring  the  authority  in  terms   simply               enabling and not mandatory.  In enacting  that               they "may", or "shall, if they think fit," or,               "shall  have  power,"  or that  "it  shall  be               lawful"  for  them to do such acts  a  statute               appears   to   use  the   language   of   mere               permission,  but it has been so often  decided               as to have become an axiom that in such  cases               such  expressions  may have-to say  the               least  compulsory force, and so would seem  to               be modified by judicial exposition." This is an instance where, on the existence of the condition precedent, the grant of money or pension becomes  obligatory on  the  Government  notwithstanding that  in  S.  5(2)  the Government  has been given the power to pass such orders  as it deems fit and in sub-s. (3) the word "may" is used.   The word "may" is often read as "shall" or "must" when there  is something in the nature of the thing to be done which  makes it the duty of the person on whom the power is conferred  to exercise the power.  Section 5 (2) is discretionary  because it takes into account all cases which may be brought  before the Government of persons claiming to be adversely  affected by the provisions of s. 3 of the Act.  Many such persons may have no claims at although they may in a general way be said to have been adversely affected by S. 3. If the power was to be  discretionary in every case there was no need  to  enact further  than sub-s. (2).  The reason why  two  sub-sections were  enacted is not far to seek.  That Government may  have to  select some for consideration under sub-s. (3) and  some under S. 7 and may have to dismiss the claims of some others requires the conferment of a discretion and sub-s. (2)  does no  more than to give that discretion to Government and  the word  "may" in that subsection bears its  ordinary  meaning. The  word  "may" in sub-s. (3) ha,-,, however,  a  different purport.   Under that sub-section Government must, if it  is satisfied  that an institution or service must be  continued or  that  there is a descendant of a  former  ruling  chief, grant  money or pension to the institution or service or  to the  descendant of the former ruling chief, as the case  may be.   Of  course,  it need not make a grant  if  the  person claiming  is not a. descendant of a former ruling  chief  or there  is  other  reasonable ground not to  grant  money  or pension.   But, except in those cases where there  are  good grounds for not granting the pension, Government is bound to make a grant to those who fulfill the required condition and the  word "may" in the third sub-section  though  apparently discretionary has to be read as "must".  File 685 High  Court  was in error in thinking that  the  third  sub- section   also  like  the  second  conferred   an   absolute discretion. The  next  question is whether Government was  justified  in making the order of April 26, 1955 ?  That order gives no reasons  at  all.  The Act lays upon the Government  a  duty which obviously must be performed in a judicial manner.  The appellants  do not seem to have been heard at all.  The  Act bars a suit and there is all the more reason that Government must  deal with such case in a quasi-judicial manner  giving



an  opportunity to the claimants to state their case in  the light  of  the-report  of  the  Deputy  Commissioner.    The appellants  were also entitled to know the reason why  their claim  for the grant of money or a pension was  rejected  by Government  and  how  they were considered  as  not  falling within  the class of persons who it was clearly intended  by the  Act  to be compensated in this manner.  Even  in  those cases  where  the  order of the  Government  is  based  upon confidential  material this Court has insisted that  reasons should  appear  when Government performs  curial  or  quasi- judicial  functions (see Messrs Hari Nagar Sugar Mills  Ltd. v.  Shyam Sunder Jhunjhunwala & Others(1).  The  High  Court did  not  go  into  any other question  at  all  because  it rejected the petition at the threshold on its interpretation of S. 5(3).  That interpretation has been found by us to  be erroneous and the order of the High Court must be set aside. As  the order of Government does not fulfil  the  elementary requirements of a quasi-judicial process we do not  consider it necessary to order a remit to the High Court.  The  order of the State Government must be set aside and the Government directed to dispose of the case in the light of our  remarks and  we  order accordingly.  The respondents shall  pay  the costs of the appellants in this Court and the High Court. Appeal allowed. [1962] 2 S.C.R. 339. Ip./65 -2) 686