H. SUDHUNDRA THIRTHA SWAMIAR fl. COMMISSIONER FOR HINDU RELIGIOUS & CHARITABLE ENDOWMENTS v. V enkata C/uitapathi GuruBUlamigal

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(l)(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 Matha which are reputed to be founded by Shree Madhvacharya, an exponent of the dualistic philosophy. . Each of these Matha is presided over by a Mathadhipati or Swami who is invariably a Brahmin Sanyasin. There exists another Math known as Bhri Krishna Deroru. Math of which the administration is carried on according to long-standing usage by the Swamis of tb.e eight .MatNI in turn, S/Jah, J. ' - 2 S.C.R. SUPREME COURT REPORTS 305 each Swami administering for two years. There is also the Sri Kanchi Kamakoti Pee tam 11fath of which Shree Sankaracharya Swamigal is the presiding head. These ten appeals are directed against ord<:rs passed by the High Court of Madras refusing to declare the provisions aforesaid ultra vires the State Legislature. 1962 H.H . .Sudhundra TJ.irtlla Swamiar •• Cammisrion·,, for Hindu R1litious & Chalilable Endoui.- mmts. Mysor1 Slu!Ji, J. In order to ensure proper management of Hindu religious endowments, the Provincial Legisla ture of Madras enacted the Hindu Religious Endow ments Act. II of 1927. The Act made divers provi sions 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 llfath (one of the eight maths at Udipi) a scheme for the administration of the Math he framed, it being alleged that the affairs of the Math were the Swami. The Board being mismanaged by satisfied that a case for settling a scheme was made the Swami of the Math a draft out served upon scheme and called upon him to file hisobje ctions thereto. The Swami filed a petition in the High Court of Madras challenging the vire.~ 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 II 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 adminis1ration of Hindu Religious Endowments. The Swami of Shirur Math obtained leave to amend I 1962 H.H. SuiAwliTa nirtM SuJ•i•' To Commiuioon for Hiaiu &litillu fl C/tarildll &Uw m1t1ts, M:110r1 Sh•h, 1. 306 SUPREME COURT REPORTS (1963] SUPP. 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 ( l) ultra vires because the State Legislature had thereby assumed powers to legislate for levy of a tax on the income of religi the State Legislature was ous endowments which 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'11 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 noti fication ofreligious institutions· and invoking thereby certain penal consequences.) This Court also held that s. 76 (1) which authorised levy of contributions at 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 Commis sioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt('). rate not exceeding five per cent of The Madras Legislature amended Act XXVII of 1954 which recciveq tQ.e President's sanction on Ill [l!IH) •• c. & . . . I "" If.II. Sn'1lwitlra Dirth• Swa.Ni r v. C.-iu""" /,, Hi•iu R.t;,imu CMrit•6l• Eruiow- ... ,,, M.wr1 Str.li,J. 2 S.C.R. SUPREME COURT REPORTS 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 appellants-heads of ten maths filed by challenging the validity of diverse provisions of the amend~d Act. The High Court by its order dated April 25, 1955 declared ss. 21, 30 (2), 31 and 76 (5), and Rule IO 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 SwamiB or are beyond the authority of the State Legislature. It may be observed initially that we are deal· ing with the validity of the impugned provisions. in their application to maths and not to religious in stitutions such as temples or other endowment.s. 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 tbc new Act because the territory in which these math.• are situated has, by the pro visions of the States Reorganisation Act, I 956 been integrated with November l, Hl5G and by virtue of s. 11!1 of the States Reorganisation Act these nu~ths continue to be governed by Act XIX of 1951 till that Act is modified or repealed by the Mysore State Legis ture. the State of Mysore 2s Section 52 (l) of the Act as amended pro· vides: "The Commissioner or any two or more per· soµs having interesi ~nd having obtained the t96Z ... H;H. Sudhrnulra Thirlho Swomlar CommiUimo,. Ju Hiadu R1li11..,.111 lAatiWI• &Uw maU; MJI0'1' Shah, J. 308 SUPREME COURT REPORTS [1963] SUPP. 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 speci fic endowment attached to a Math for any one or more of the following reasons, namely :- (a) th.~ trustee being of unsound mind; (b) his suffering from any physical or infirmity which mental defect or renders him unfit to be a trustee ; (c) (d) (e) (f) (g) (h) his having ceased to profess Hindu religion or the math; tenets of the his conviction for any offence volving moral turpitude ; breach by him of any trust created in respect of any of the properties of the Religious institutions ; waste of the funds or properties of the institution or the appJication of such funds or properties for purposes unconnected with the institution ; the adoption of devices to convert the income of the insti1ution or the funds or properties 'pathakanikas' ; thereof 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 wilful default by him in di<charging his duties or functions ut.der this Act or any other law." 1962

11.H. S.dhtWl•a nirtha &oontiar y, Comnd.uionor fsr Hind# &ti10us l!I Cl11mtd!• Bod°"'" mnlJ, Mys1r1 Shah1 J. 2 S.C.R. SUPREME COURT REPORTS 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 some what 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 trilstee of a Math or of a specific endowment, if the Conrt 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), (g) 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. (e) which regards breach of trust as entailing liability for removal, clsl (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 notwithstandmg his special rights in that property. It is urge~ by counsel for the appellants that s. 52(l)(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 funda mental right of the Matkadkipati under Art. 19{l)(f) of the Constitution. In order to ascertain the true scope of s. 52(l)(f) it is necessary to state the position of a Mathadhipati, 1Jt1a the property of the math. In Arunaokallam Oketty v. Venkataokalapatki Guru BUJamigal (') dealing with the title which a Makant of a math has in the property of the math, the Judicial Committee of the Privy Council observed : ."two propositions may be cited a8 now express· ing the general state of the law with regard to Ill (1919) L. R. 46 I. A. 204, 22f, 1162 H.H. SuJ/wnd.a Thirlha Swmni•r v. CommUsicm1r for Hin.iu Rllilins Chori1abl1 IJM,.,,.. mmts, M.Jsor1 Shah, J. 310 SUPREME COURTlU:l>ORTS [1963) SUPP. 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 doub~ be. true that. t!te own~rship in t~c tlen~al case 1s with the sp1ntual head of the mstitution, still to use the language of Sir Charles Tumver in Sammanatka Pandara v. Sellapa Ohetti (l.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 con ditions and subject to different incidents.' As pointed out in Ram Parkash DaB 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. Balusarni Ayyar (1 ) the Judicial C'Jmmittee dealing with the application of Arts. 134 and 141 to suits for recovery of p['('perty alienated by a former Matkadhipati observed : "It is alsG 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 ima~es consecrated and installed in temples, to religious institutions of every kind, and for all purposes considered meritorious in the Hindu social and religious system; brahmans, goswamis, sanyasis, etc. When the gift was to a holy person, it carried with it in terms or by usage and custom certain obliga In many tions. cases in Southern India, especially where the diffusion of Aryan Brahmanism was essential for bringing the Dravidian peoples, under the religioug rule of the Hindu system, colleges and monasteries under the names of math wore x x x x x (I) (1921) L, ll. 48 I, lw SO'l, 1962 H. H. 7/UJ!huura Thirtha Suwmidr ... Commiuinlr fir lfinJu Rlli1ious & Chorita611 End.w- 111111111 MJst111 Shon, J. 2 S.C.R. SUPRE:ME COURT REPORTS 311 founded under spiritual teachers of recognised sanctity. These inen had and have ample discretion in the application of the funds of the institution, but always subject to certain obliga tions and duties, equally govemed by custom and usage." In The Commissioner, Hindu Religi!YUB Endowments, Madras v. Sri Lalcshmindra Thirtha Swamiar of Sri Shirur Mutt (') (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 man~er 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 h~ 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. xx xx x x x xx 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 I he other. The personal or beneficial in the endowments interest of the Mahant attached to an institution is manifested in l}is large powers of disposal and administration and his right to create derivative tenures in respect to endowed proP.erties; and these and other rights of a similar character of proprietary right which, though anomalous to some extent, is still a genuine Tega! right." A Mahant is not a mere manager or custodian, nor is he trustee in the strict sense: holding the office of (I) (l!IM] S. C. ll. 1005, 1962 H.TI. Sudlwnd" Thirtha ~wam; or v. Coinmi sion1r for Hindu R1iigious l!I Charit11bl1 E11dow ments, }.fjsor1 S\ah. J, ' I I .. . / .... . 312 SUPREME COURT REPORTS [1963] SUPP. a Mahant by custom and usage of the institution he has beside large p >wers 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 Afahant of a Math 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 undoub· tedly, 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 maintain· ing the dignity of his office. But the property is attached to the office, and is devoted to the endow· ment. He cannot therefore iucur expenditure for personal luxury or objects incongruous with his posi tion as a Mahant. Power to waste the property or the income of the institution is therefore not claimed by the appellants and rightly so. the benefit of But counsel for the appellants says that over the income, the Mahant has absolute powers of disposal, ands. 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 restric tion upon the right of property vested in the Mahant. In the Commiss-ioner, Hindu Endownents, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (I) 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 conno tation and should not be extended to those well recognized types of interest which have the insignia or characteristics of· proprietary right." The right of a Maluint over property of the 'property' math is, therefore, undoubtedly (I) (!9S4] S. C.R. 1005. 1962 H.H. Sruih .. tlr• Thirtha Sw1miar •• CommiSJion'r for Hindu Rtlijiout& Clrari-t1bt1 E.1rd'Jw·· mtnts, M.Jsor• Shah, J. 2 S.C.R. SUPREME COURT REPORTS 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 ( l) ( 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 In Arunachallam Ghetty served by the restrictions. 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 accummulated income in the hands of the receiver who had been appointed during the pendency of a suit observed : "Under the decree quoted the gunikkal would be entitled to instant possession and entire that sum. If the beneficial enjoyment of 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 tD demand what is the true principle or nature of the administration. of surplus income. ]t is, of course, the duty of a trustee to retrain 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 asthaJ, and that whether the title to the same is in the gurukkal (I) (1919) L. R. 46 I.A. 204, 224. 1962 H.H. SudhunJra Thirtha Swami<11 v. Cemmiuilnlr for Hill du Rlli1ious I!/ Charild/1 Endow ments, M,:ysor1 Shch, J. 314 SUPREME COURT REPORTS [1963] SUPP. 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 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 there fore be applied for the purposes of the math, and con sistently with the usage and custom of the endow ment. By s. 52 (1) (f) application of funds or pro perties for purposes unconnected with the institution, i. e. purposes for which the custom of the institution does not warrant application, is a ground for remo val. 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 irntitution for pur poses unconnected with the institution, any unreason able restriction is sought to be placed. This pro vision does not in effect seek to cut down the autho rity 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 incongru ous with his position or for purposes wholly uncon nected with the Math : if he does so, he may by order of the Court be liable to be removed. Such a re· striction 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 Gommiasicmer, Hindu Endowments, Madras v. Sri l.GkBhmindra Thirtha Swarniar of Sri Shirur Mutt (') that "the real limitations on the Mathadhipathi are that he should not spend any of the monies of the Math for &tl [19MJ s.c.11.. 1005. 1962 H.H. Sud!umdra Thirlha Swamiar v. <AmmWion1r for Hindu &lip.., & Charila/Jll Entlow Menll~ Mysor1 Shu, J. 2 s.c.R. SUPREME COURT REPORTS 315 wicked or immoral purposes" does not seem to be warranted 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 large 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 c·overed by the second part of s. 52 ( l) ( f). 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. In our view Section 55, before it was amended, was cha! - lenged 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 (l) 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." 1962 H. H SudhwiJra Thirtha Swamiar •• CommiJsiontr Jo• HindU Religiou1 ·& Charitob/1 Erubw· metl fs, Mysore 316 SUPREME COURT REPORTS [1963]SUPP. By sub-section (2) the trustee had to maintain regular accounts of receipts and disburs(ments of the nature referred to in sub·section (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 represen tative 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 unrea~onable 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 Mahaot 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 re enacted a new clause : regular "The trustee of a math shall keep accounts of receipts of 'pathakanika' that is to 19112 H.H. ,f:udhundra Thirlha Swan.iar v. Commissioner jc;r Hindu Religio1u & Charitable Endo1t• me11ts, lvlysore Shah, J. 2 S.C.R. SUPREME COURT REPORTS 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 pro· perty made to a Mahant as the head of the Math. to keep By that section, the Mahant is required regular accounts of receipts of such gifts and is entitled to spend the same in accordance with the and usages of the institution, for such customs pathnkanikas received b¥ the Mahant are gifts to the Jlah·mt as the head of theMath and therefore, in truth gifts to the Math. Obligations imposed upon the M ahant to maintain regular accounts of the receipts of p(', thakanikas 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 ,If ahant. A M ahant being bound to discharge the duties of a trustee and being answerable as such, a provision requiring him to maintain accounts of to the effective such pathakanikas would conduce imposing an exercise of the control over him and obligation to spend the same in accordance with the customs a11d usages of the institution is not inconsis tent with his position a~ a Mnhan t even though he therein. Section 55 as ha~ a beneficial interest amended will not apply to pathakanikas which are proved to be gifts personal to the .1.Wahant. Our attention was invited by counsel for the appellants to cl. (g) of s. 52 (I) in which adoption of devices to convert the income of the institution or of the fund; or properties thereof into pathakanika i~ one of the grounds on which a suit for removal of a Mahant may lie. But the expression 'pathakanika' as in s. 52 (l) (g) appears to have the larger traditionally meaning in which that expression is /962 -R.H. Sudhundra Thirlho Sw.miar v. c.tnmission1r for Hindo Rlli1ious Ill C hm'itab/1 &dow· mmts, Mysore Shah, J. 318 SUPREME COURT REPORTS [1963] SUPP. unaerstoocl. In the context of s. 52 (1) (g), 'patha- kanika' would mean personal gifts to the Mahant. If the M~hant resorts to devices to convert the income of the institution or of the funds or properties thereof to him that would be into personal gifts made 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 'pa_thakanika' by using the words, 'that is to say, any gift of property made to him as the head of the 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 origi- nally stood in a different garb. The next section challenged is s. 76 (1). The section, as it originally stood before it was amended, provided: In respect of the services rendered by "76 (1) the Government and their officers, every religi ous 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 sub sections (1) and (2) shall be made, notwith standing anything to the contrary contained in I - 2 S.C.R. SUPREME COURT REPORTS 319 1962 institution H H. SuJhund•• Thfrtho sw-i•• v. Comnaiuicnlfr far HiUu ReliiiDus & Charilabll Endow· minis, M '3ore Sh.A, J. any scheme settled or deemed to be settled under this Act for the concerned. religious (4) The Government shall pay the salaries, allowances, pensions and other beneficial remu· neration of the Commissioner, Deputy Commi ssioners, Assistant Commissioners and other officers and servants than executive officers of religious institutions) employed for the purposes of this Act and the other expenses incurred for such purposes, expenses of Area Committees and the cost of auditing the accounts of religious institutions.'' including (other the lower The Court in the earlier case pointed out that the levy of an annual contribution permitted bys. 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 con tribution levied was made dependent upon the capa· city 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 income group and had income less than Rs. 1,000/· annually were excluded from liability to pay the additional charges under cl. (2) 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 the expenses had to be met not those collections but out of the general out of revenues by a proper method of appropriation in case of other Government as was done expenses. There was again a total absence of any incUJTc4 by the co-relation between the expenses 320 SUPREME COURT REPORTS [1963) SUPP. l962 H:H. Sudhrntdra Tlairtba .SWamiar v. Cc111missi1.n1r Jnr Hi11a'u Rtlitfow l!I Charitable Enrlow mtnt.f, Mysor1 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 appli · cation. The Court accordingly held that the con tribution 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. The Legislature has by Act XXVII of 1954 altered the scheme of s. 76. The Madras High Court has declared the newly enacted cl. (fi) ultra vires and that part of the decision of the Court is not challenged before us. By the impugned cl. ( l) the defects in the original section have been remedied by the Legislature. Contributions arc 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 kss than one thousand rupees, has to pay to the Commi ssioner 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 Commi ssioner, Deputy Commissioner, Assistant Commi ssioners 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 ofreligious institutions. The sec tion 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 Rs. 1,000/- or more, but all the amounts collected under els: (1) and (2) ·have to be spent for meeting institutions of which income 1962 HH • .$Mdh .. dro Thirtho Swamiar v. <:.mmiuimur for Hinh lhlitioru & CAt1ritabl1 Er1dow- •111ts. M.710r1 Slid J. ' 2 S.C.R. SUPREME COURT REPORTS 321 called 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 "The Madras Hindu Religious Fund and Charitable Endowments Administration Fund" is constituted and that Fund vests in the Commi ssioner, and by cl. (2) of that section the contributions payable under s. 76 (I) and the audit fee payable realized are credited under s. 76 (2) when the said Fund. The two principal objections against the levy of the contributicn 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 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 amount raised by contribution under the provision of s. 76. The Legislature has by the amendment ofs. 76 (I) 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 rendering services : they do not go into the Consolidated Fund of the State, but are included in a separate Fund. Th¢ Contri butions are not even payable to the Govot:nment : they are payable to the Commissioner. incurred by the Government and expenses for It was urged that there was no co-relation between the expenses h1curred and the amounts coll ected as contributions, but there is no reliable eVid ence on the record in support of this plea. Our atten tion was invit.ed 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 1962 H.H. Sudlumdrr> Thirtha Swali~r y, Commirsio111' /or Hi111lu iuu1;,., & Ch•rltabl1 Endow· aunts, M;1s1r1 Shah, J. ' 322 SUPREME COURT REPORTS [1963] SUPP. an abstract of the receipts and charges was set out. It was stated in that document: to Rs. "During the period from 30th September 1951 to 30th June 1952 the total receipts under the head XXXVI Miscellaneous-(c) ~fiscellaneous -Administration of Madras Hindu Religious and Charitable Endowments Act, l!l5l" 3,16,013-1-3 and the total amounts receipts under "XLVI-Miscellaneous (d) fees for Government Audit" by way of contribution recovered from the religious institutions amoun ted to Rs. 2,27,531-4-10. The total expendi ture during the said period towards salary and allowances of the officers and staff contingen cies and fees paid to private auditors for audit ing the accounts of religious institutions amotm· ted to Rs. 6,93,539-10-3." Then followed a chart for fasti years 1361, 1362, 1363 and 1364 setting out different heads such as Arrear Demand, Current Demand, Total Demand, Write off, Net Demand, Collection and Balance. J appears from the Chart that there were lar:;e arrears in th~ 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 3! out It is difficult of the four years was Rs. 26.4 lakhs. 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 ren:lered the endowments by the administration. Our attention was also invited to a statement of account 1962 H.H .. ~udhwcar• TAir"'4 Swamior y, COlffmilsfn.,r for HiridM &li1ious 6' Clumtab/1 EndOUJ- mnts, M,7Hr1 Shah, J. ' - 2 S.C.R. SUPREME COURT REPORTS 323 showing that the Commissioner received when the Act of J 951 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 a.::oum exceeding Rs. 18 lakhs. But is the accummulation 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 accummulated. From this state ment 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 coer civeness 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 1 btains the benefit of the service. If with a view to provide is imposed by law and a specific expenses for maintaining the service are met 01 •t 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 that ordinarily a fee is uniform and no is. true account is taken of the varying abilities of ·different absence . of uniformity is not a recipients. criterion on which alone it can be said that it is of the nature of a tax. A fee being a levy in considera tion of renderimr service of a particular type, co relation between the expenditure by the Government an ii the levy must undoubted) y exist, but a levy will not be re!larded 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. service, levy ,But ' 1~2 H.H. S•dhU11dra Thirtha. StocU11iar v. CommissiMUr for Hiltdu R1l;,i°"1 {!! Charitable Endow· m111_is1 Mysttr1 Shah, J, 324 SUPREME COURT REPORTS [1963) SUPP. Section 80 makes the Commissioner a corpo ration sole with perp~tual succession and s. 81 pro vides for the constitution of the Madras Hindu Reli((ious 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 get era! 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 : - ( 1) Contributions under section 76( l) "82. and the further sums pai able under section 76(2) shall be payable with effect from the commencement of this Act. For the period from the commenceme·1t 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 Com· missioner 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 the Madras Hindu be, as amended by Religious and Charitable Endowments (Amend ment) 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 Commissionfr under section 76( I) and section 76( 2) as amended by the Madras Hindu Religious and (Amendment) Act, Charitable Endowments 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 com mencement of the Madras Hindu Religious 19~2 H H SJhundra Thirllul. Swami•r •• Commiuitm'' for Hindu Religious Of lharitob,, .&tJow. m1nts, M>so1f Shah, J. ' 2 S.C.R. SUPREME COURT REPORTS and Charitable Endowments (Amendment) Act, 1954, in pursuance of section 76(1) and section 76(2); after deducting therefrom sums paid by the Government under section 76(4)." 325 levies as fees by denuding It is true that th,~ contributions levied under s. 76( 1) of the Act before it was amended had the character istic of a tax, and the levy thereof was accordingly struck down. But the Legislature had power to enact appropriate retrospective ·legislation declaring them of the characteristics which went to make the levies of the nature of a tax. By the express provision contained in sub-section (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 deter mined under s. 76(2) as amended by the Act XXVII of 1954, and contributions and other sums P.aid to the Government were to be deemed as contnbutions and other sums paid to the Commissioner under ss. 76(1) and (2) as amended. Retrospectively payments received by the Government were dissocia ted 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 the Commissioner and not by the received by Government. That retrospective legislation may be In M/a. J. K. enacted is not now open fo question. Jute Mills Oo. Ltd. v. State of Uttar Pradesh (1 ). 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 limit ation imposed by the. Constitution. In the exercise of such a power it will be competent for the legislature to enact a law, which is (I) [1962) 2 S.C.R. I ' 1962 H.H. SudiwMr• Thirtll• Swamior v. Commiuiot11r for Hiridu' RltiP,.1 Bl Cll•tilablt E11d,_. mmts, MflO" Shah,/ 326 SUPREME COURT REPORTS [1963] SUPP. either prospective or retrospective. In Union of Indw v. Madan Gopal, 1954, SOR 541: it was held by this Court that the power to impose tax on income under entry 82 of List I Schedule VII to the Constitution, . compreh ended 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 AndhraPradesh, 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 legislatu· res imposing a tax on certain sales in the cou - rse 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 reject ing 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 Parli· ament. 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 enac ted 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 limit ation on that power.' And it was held that the law was within the competence of that Legislature. We must therefore hold that the 11161 H.H. SW,_ira 71irtAo S..11ior •• a-.w•.,, f•r Hitldu RlligNos 16 Cfloritabu & . . . nurds, -Mnet1 SMA,J. ' 2 S.C.R. SUPREME COURT REPORTS 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 retrospective! y. If the amounts received by the State have been expressly regarded as fee collected by the Commissioner under 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 declar ing ss. 52(l)(f), 55, 76(1) & (2), 80, 81 and 82 intra vires. The appeals_ therefore, fail and are dismissed with costs. One hearing fee. Appeal8 diami&aed.