Try this theory on for size:

You're running this on an OS like Solaris, where the standard version of grep doesn't provide a -r option. Your system administrator has installed GNU grep (which does have this option) in /usr/local/bin or some such place.

When you run the script yourself, your PATH contains /usr/local/bin so the script uses GNU grep. When the web server runs your script, it gets a different path and ends up running /usr/bin/grep. This version just complains and exits, but you don't see the error message.