Important note: The passage actually says "The man's cub is ours -- to kill if we choose."
The passage develops the important relationships between Mogli, the wolf pack, and Shere Khan the Tiger. It establishes Shere Khan as an antogonist and enemy of Mogli the mancub. It also establishes that the wolves have taken Mogli in and intend to protect him from Shere Khan, creating greater hostility between the wolves and Shere Khan. The development of the plot centers greatly around this triangular relationship, pitting Shere Khan, who wants to kill Mogli, against the wolves, who want to protect him.