Case: H. H. Shri Swamiji of Shri Admar Mutt, Etc Vs. Commissioner, Hindu Religious and Charitable Endowments

2. Until November 1, 1956, when the States Reorganisation Act, 37 of 1956, came into force the District of South Kanara was a part of the former State of Madras. As a result of the States Reorganisation Ac t that District became a part of the State of Mysore, now the State of Karnataka.3. The Madras Legislature passed an Act called the Madras Hindu Religious and Charitable Endowments Act, 19 of 1951 ("the Madras Act of 1951"), to provide for the better administration and governance of Hindu Religious and Charitable Institutions and Endowments in the State of Madras Section 76(1) of the Act, as it stood originally, provided that 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 5 per centum of its income as may be prescribed. This provision and some other provisions of the Act were challenged in the Madras High Court on behalf of the Shirur Mutt and others. The challenge was upheld by the High Court and the appeal filed therefrom by the Commissioner, Hindu Religious Endowments, Madras, was dismissed b y this Court in The Commissioner, Hindu Religious Endowments, Madras, v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt. Section 76(1) was held void by this Court on the ground that the provision relating to the payment of annual contribution contained in it was in the nature of tax and not fee and therefore it was beyond the legislative competence of the Madras State Legislature to enact the provision. The Madras Legislature amended section 76(1) of the Act so as to provide that in respect of the services rendered by the Government and their officers, "and for defraying the expenses incurred on account of such services", every religious institution shall, from the income derived by it, pay to the Commissioner annually such contribution not exceeding five per centum of its income as may be prescribed. The validity of the amended section, was upheld by this Court in H. H. Sudhundra Thirtha Swamiar v. Commissioner for Hindu Religious &Charitable Endowments, Mysore.After the formation of the new State of Mysore under the States Reorganisation Act, 1956, laws which were in force in the areas which were formerly comprised within the Madras State, continued to apply to those areas notwithstanding the fact that they became part of the new State of Mysore. Section 199 of the Act of 1956 provides that the provisions of Part II (Territorial Changes and Formation of new States) shall not be deem ed to have effected any change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to an existing State shall, until otherwise provided by a competent Legislature or other competent authority, be construed as meaning the territories within that State immediately before the appointed day. It is by reason of this section that the Madras Act of 1951 continued to apply to the South Kanara District which prior to November 1, 1956, was a part of the Madras State but which became after that date a part of the Mysore State.4. We will refer to the facts of Civil Appeal 1445 of 1968 which arises out of Writ Petition 1575 of 1965. The facts of the other appeals are in material respect similar. The appellant who is the Mathadhipati of Shri Admar Mutt in the South Kanara District received a notice dated April 24, 1964 from the Commissioner, Hindu Religious and Charitable Endowments, Mysore demanding payment of contribution for Fasli years 1367 to 1370 which correspond to calendar years 1957 to 1960. By the notice, the Commissioner demanded a sum of Rs. 12, 724.60 for the Fasli year 1367, Rs. 12, 274.60 for the F asli year 1368, Rs. 11, 270.70 for the Fasli year 1369 and Rs. 12, 169.20 for the Fasli year 1370. The appellant disputed his liability to pay the contribution on the ground that the Commissioner was not entitled to make any demand for the period subsequent to November 1956, that even assuming that he had the lawful authority to make the demands, the amount demanded was excessive bearing no relationship with the services rendered by the Department and that the expenditure which was incurred on the maintenance of the office and staff of the Commissioner and the Deputy Commissioner could not wholly or in part be recovered from the appellant by way of contribution under section 76(1) of the Madras Act of 1951.Since the Commissioner did not accept the appellants contention, the appellants filed the Writ Petitions in the Mysore High Court asking that the demand notices be quashed as illegal. Those Writ Petitions were dismissed by the High Court but it has given to the appellants certificates to appeal to this Court under articles 133(1)(a) and (c) of the Constitution.5. Simultaneously with the States Reorganisation Act coming into force, the Government of Mysore issued a notification under section 122 of that Act authorising the Commissioner for Settlements and Charitable Endowments for Mysore to exercise the functions of the Commissioner under the Madras Act of 1951.The affidavit of Shri Annaji Rao in support of Writ Petition 1575 of 1965 filed by the Admar Mutt contains the following averments directed to establishing the absence of quid pro quo. It is stated in paragraphs 14 to 18 of the said affidavitin the district of South Kanara, there are about 310 major religious institutions which are dealt with by the establishment of the Commissioner. Out of these, only 30 have an annual income exceeding Rs. 20, 000/-. Out of these 30, 17 are Mutts and out of these 17, 9 are situated in Udipi, South Kanara.(2) the 30 major institutions are dealt with by the Deputy Commissioner, South Kanara, Mangalore, under the powers delegated to him by the Commissioner. The remaining 280 Institution s are dealt with by the Assistant Commissioner who has a separate establishment of his own;(3) the Deputy Commissioner, who deals with the 30 major institutions, utilises the services of two Clerks and one Stenographer in his office at Mangalore, the expenditure on whose salary cannot exceed Rs. 6, 000/- per annum approximately. The only work that is being d one by the Deputy Commissioner in respect of the Mutts is to receive the draft Annual Budgets submitted by them and to make his remarks thereon. A service of this nature cannot cost m ore than Rs.200/- per annum;(4) for the petty services which are being rendered to the appellants, the five Udipi Mutts have been called up on to pay a sum of Rs. 30, 000/- for the four years in question. A sum of Rs. 25, 000/- is demanded from the other four Mutts for the same period. Apart from these 9 Mutts, there are 8 other Mutts and 13 other major institutions from whom a sum of Rs. 50, 000/- has been demanded. These demands are grossly uncorrelated to the cost of services rendered to the appellants.On December 20, 1966 an application was filed in the High Court o n behalf of the appellants asking that the respondents be directed to furnish the necessary particulars regarding, inter alia, (i) the date when the Religious Endowments Fund was constituted; (ii) the demands made in respect of the major institutions in South Kanara; (iii) the salaries payable to the establishments of the Commissioner and the Deputy Commissioner; (iv) the functions discharged by the Deputy Commissioner in respect of Mutts; (v) the expenditure incurred by the Com missioners office in Mangalore and in Bangalore and (vi) the total number of institutions controlled by the Department in the four areas which were formerly parts of other States but which had become a part of the State of Mysore under the States Reorganisation Act."

Court's reasoning:
10. The rules framed under the Madras Act of 1951 prescribed a fee varying from 3 to 5 per cent of the annual income of the institutions. The figures furnished by the Commissioner in the third statement dated August 10, 1967 which was filed in pursuance of the directive issued by the High Court show that the total demand made on all the religious institutions for fees during the years 1957 to 1964 amounted to Rs. 8, 80, 389/- while the allocable expense for the services was Rs. 7, 54, 160/-. It is not without significance that though the total demand made on the Mutts during the said period was in the sum of Rs. 3, 64, 591/-, the contribution received from the Mutts was Rs. 24, 526/- only. In the absence of any acceptable evidence showing that the Department had built up large accumulations or reserves out of the fees collected from the various institutions and considering that services are required to be rendered to a large class of institutions consisting of major and minor institutions, we do not think that we can positively come to the conclusion that there is no approximation or correspondence between t he fees levied on the appellants and the services rendered to the class to which they belong. The second contention thereforeis true that by section 80 of the Madras Act of 1951, the Commissioner is constituted a Corporation Sole with a perpetual succession. But the provisions of section 109(1) of the S. R. Act on which the argument rests do not support the argument. The relevant part of section 109 (1) provides that where any body corporate has been constituted under a State Act for an existing State, any part of which is by virtue of the provisions of Part II of the S .R. Act transferred to any other State, then notwithstanding such transfer, the body corporate shall, as from the appointed day continue to function and operate in those areas in respect of which it was functioning and operating immediately before that day, "subject to such directions as may from time to time be issued by the Central Government". Under this provision, it is competent to the Central Government to issue directions to a body corporate and by reason of sub-section 2 of section 109, any direction issued by the Central Government under sub-section (1) shall include a direction that any law by which the said body corporate is governed shall have effect subject to such exceptions and modifications as may be specified in the directions. In other words, the body corporate has to function within the scope of and in accordance with the directions issued by the Central Government from time to time. But the power of the body corporate to function under the parent Act is not conditional on the issuance of directions by the Central Government. If directions are issued by the Central Government, they have to be complied with by the body corporate. If no directions are issued, the power s and functions of the authority remain unimpaired and can nevertheless be exercised as contemplated by the Act which creates the body corporate.These decisions are authority for the validity of section 76(1) of the Madras Act of 1951 in its application to the South Kanara District of the State of Mysore, now the State of Karnataka. This Court has said time and again that dissimilar treatment does not necessarily offend against the guarantee of equality contained in article 14 of the Constitution. The rider is that there has to be a valid basis for classification and the classification must bear nexus with the object of the impugned provision. In matters arising out of reorganisation of States, continued application of laws of a State to territories, which were within that State but which have become a part of another State is not discriminatory since the classification rests on geographical considerations founded on historical reasons.In Bhopal Sugar Industries Ltd., (supra) Shah J., who spoke for the court, has traced t he genesis of section 119 of the States Reorganisation Act to which attention may usefully beis necessary to bear in mind that the various administrative units which existed in British India were the result of acquisition of territory by the East India Company from time to time. The merger of Indian States since 1947 brought into the Dominion of India numerous Unions or States, based upon arrangements ad hoc, and the constitutional set up in 1950 did not attempt, on account of diverse reasons mainly political, to make any rational rearrangement of administrative units. Under the Constitution as originally promulgated there existed three categories of States, besides the centrally administered units of the Andaman and Nicobar island. Part A States were the former Governors Provinces, with which were merged certain territories of the former Indian States to make geographically homogeneous units: Part B States represented groups formed out of 275 bigger Indian States by mutual arrangement into Unions: Part C States were the former Chief Commissioners Provinces. These un its were continued under the Constitution merely because they formerly existed. Later an attempt was made under the States Reorganisation Act to rationalize the pattern of administration by reducing the four classes of units into two-States, and Union territories-and by making a majority of the States homogeneous linguistic units. But in the States so reorganised were incorporated regions governed by distinct laws, and by the mere pr ocess of bringing into existence reorganised administrative units, uniformity of laws could not immediately be secured. Administrative reorganisation evidently could not await adaptation of laws, so as to make them uniform, and immediate abolition of laws which gave distinctive character to the regions brought into the new units was politically inexpedient even if theoretically possible. An attempt to secure uniformity of laws before reorganisation of the units would also have considerably retarded the process of reorganisation. With the object of effectuating a swift transition, the States Reorganisation Act made a blanket provision i n section 119 continuing the operation of the laws in force in the territories in which they were previously in force notwithstanding the territorial reorganisation into different administrative units until the competent Legislature or authority amended, altered or modified those laws.......... Continuance of the laws of the old region after the reorganisation by section 119 of the States Reorganisation Act was by itself not discriminatory even though it resulted in differential treatment of persons, objects and transactions in the new State, because it was intended to serve a dual purpose-facilitating the early formation of homogeneous units in the larger interest of the Union, and maintaining even while merging its political identity in the new unit, the distinctive character of each region, till uniformity of laws was secured in those branches in which it was expedient after full enquiry to do so. The laws of the regions merged in the new units had therefore to be continued on grounds of necessity andin mind these considerations, we are of the view that the Madras Act of 1951, in its application to the South Kanara District of Mysore, now Karnataka, does not infringe article 14 of the Constitution.In this connection, a matter of primary importance to be borne in mind is that section 119 of the States Reorganisation Act, 1956, was intended, as said in Bhaiyalal Shukla, (supra) to serve a "temporary purpose", viz., to enable the new u nits to consider the special circumstances of the diverse units, before launching upon a process of adaptation of laws so as to make them reasonably uniform, having regard to the special needs of the various regions and the requirements of admi nistrative efficiency. Acts, Rules and Regulations whose constitutional validity is upheld and can be upheld only on the ground that no violation per so of article 14 is involved in the application of different laws to different components of a State, if the area to which unequal laws are applied has become a part of the State as result of the States "reorganization, cannot continue to apply to such area indefinitely. An indefinite extension and application of unequal laws for all time to come will militate against their true character as temporary measures taken in order to serve a temporary purpose. Thereby, the very foundation of their constitutionality shall have been destroyed, the foundation being that section 119 of the States Reorganization Act serves the significant purpose of giving reasonable time to the new units to consider the special circumstances obtaining in respect of diverse units. The decision to withdraw the application of unequal laws to equals cannot be delayed unreasonably because the relevance of historical reasons which justify the application of unequal laws is bound to wear out with the passage ofdo not however see any justification for holding that the continued application of the Madras Act of 1951 to South Kanara District became violative of article 14 as immediately as during the period under consideration, which was just five or six years after the passing of the States Reorganisation Act. Nor indeed are we disposed to hold that the continued application of that Act until now is shown by adequate data to be violative of article 14.16. But that is how the matter stands to-day. Twenty three years have gone by since the States Reorganisation Act was passed but unhappily, no serious effort has been made by the State Legislature to introduce any legislation-apart from two abortive attempts in 1963 and 1977-to remove the inequality between the temples and Mutts situated in the South Kanara District and those situated in other areas of Karnataka. Inequality is so clearly writ large on the face of the impugned statute in its application to the District of South Kanara only, that it is perilously near the periphery of unconstitutionality. We have restrained ourselves from declaring the law as inapplicable to the District of South Kanara from to-day but we would like to make it clear that if the Karnataka Legislature does not act promptly and remove the inequality arising out of the application of the Madras Act of 1951 to the District of South Kanara only, the Act will have to suffer a serious and successful challenge in the not distant future. We do hope that the Government of Karnataka will act promptly and move an appropriate legislation, say, within a year or so. A comprehensive legislation which will apply to all temples and Mutts in Karnataka, which are equally situated in the context of the levy of fee, may perhaps afford a satisfactory solution to the problem. This, however, is a tentative view-point because we have not investigated whether the Madras Act of 1951, particularly section 76(1) thereof, is a piece of hostile legislation of the kind that would involve the violation of article 14. Facts in regard thereto may have to be explored, if and when occasion arises.It is thus quite clear that the appellants rested their plea of discrimination on the sole ground that the cont inued application of the provisions of the Act to South Kanara district of the reorganised State after 8 or 9 years from November 1, 1956, (when the State was formed) without "unifying" the legislation on the subject of Hindu religious and charitable endowments, was "wholly discriminatory." The other plea in paragraph 23 about "mixing" of mutts with temples is not quite intelligible and has not even been referred to by counsel during the course of their arguments. The ground which has been taken is therefore quite untenable for, as has been mentioned, it has been declared in the case of the Bhopal Sugar Industries that it is impossible to lay down any definite time limit within which the State has to make the necessary adjustment for the purpose of effectuating the equality clause of the Constitution, and that while the differential treatment could not be permitted to assume permanency without a rational basis to support it as years go by, a mere plea of differential treatment is by itself not sufficient to attract the application of article 14. The following further observation in that case clearly bears on the point undercannot be said that because a certain number of years have elapsed or that the State has made other laws uniform, the State has acted improperly in continuing an impost which operates upon a class of citizens more harshly than upon others.It may be that if the appellants had furnished the necessary particulars in support of their plea of discrimination, the respondents would have come out with whatever defence was available to them. For instance, the State might perhaps have found it possible to plead that the provision for the collection of the contribution under section 76 of the Madras Act of 1951 was beneficial to the religious and charitable institutions and endowments and was not burdensome in view of the services rendered by the authorities of the State government, and that sub-section (5) of that section was beneficial as it provided that if there was a surplus after meeting all the charges referred to in the preceding sub-section, it could be utilised for helping the poor and needy institutions etc. As it is, section 81 of the Act provides for the establishment of the Madras Hindu Religious and Charitable Endowments Administration Fund, which vests in the Commissioner, and not in the State, so that it has its separate existence and purpose, and it might have to be examined whether the provision for the making of compulsory contribution to it was unfair or discriminatory.27. If the appellants thought otherwise, it was necessary for them to plead and establish the necessary facts to enable a proper enquiry into their allegation of inequal or discriminatory treatment. But, as has been stated, that has not been done. I am therefore unable to think that, in the absence of the necessary pleadings, it can be said that inequality is so clearly writ large on the face of the impugned statute in its application to the district of South Kanara only, that is perilously near the periphery of unconstitutionality merely because of the lapse of 23 years.28. But quite apart from the unsatisfactory nature of the pleadings in these cases which, by itself, justified the dismissal of the writ petitions, and the fact that a Constitution Bench of this Court has taken the view, in the case of the Bhopal Sugar Industries Ltd., that it cannot be said that because a certain number of years have elapsed, the State has acted improperly in continuing an impost which operates upon a class of citizens more harshly than upon others, it has to be remembered that a mutt is a monastic institution for the use and benefit of ascetics belonging to a particular Order presided over by a superior who is its religious teacher. The mutt property, though originally given by a donor, belongs to that spiritual family represented by the superior or mahant. It does not, however, vest in him, as he is some sort of a "shabait", and vests in the mutt as a juristic person. This has been sufficiently born e out in the definition of "math" in clause 10 of section 6 of the Madras Act of 1951. A mutt has therefore a laudable object and it is in the interest of all concerned that such endowments should be properly administered. As there are mutts in the other areas of the Karnataka State (besides the South Kanara district) it is necessary that the State Government should examine whether the contribution provided for by the Madras Act of 1951 is really necessary and advantageous for the proper administration of the religious and charitable institutions and endowments in the State as a whole and if not, whether it is an inequality, and its continued applicability to the South Kanara district can be justified with reference to article 14 of the Constitution. I agree with the Chief Justice that this may be done "say, within a year or so."