TRAVANCORE DEVASWOM BOARD v. DEPUTY EXAMINER FOR LOCAL FUND AUDIT

Act deals with management of Devaswoms. As per Section 31, subject to the provisions of Part I and the rules made thereunder, the Board shall manage the properties and affairs of the Devaswoms, both incorporated and unincorporated as heretofore, and arrange for the conduct of the daily worship and ceremonies and of the festivals in every temple according to its usage.

Section 32 of the Act deals with Audit. As per sub- section (1) of Section 32, the Board shall keep regular accounts of all receipts and disbursements in respect of the institutions under its administration. As per sub-section (2) of Section 32, the accounts of the Board shall be audited annually. As per sub- section (3) of Section 32, the audit shall be made by auditors appointed by the High Court. In view of the provisions under sub-section (4) of Section 32, every auditor appointed under this Section shall be deemed to be a public servant within the meaning of the provisions under the Penal Code.

As per sub-section (5) of Section 32 of the Act, after completing the audit for any year or for any shorter period or for any transaction or series of transactions, as the case may be, the auditor shall send a report to the High Court. As per sub-section DBA No.12 of 2023 5 (6) of Section 32, the auditor shall specify in his report all cases of irregular, illegal or improper expenditure or of failure to recover money or other property due to the Board or to the institutions under its management or of loss or waste of money or other property thereof caused by neglect or misconduct. As per sub-section (7) of Section 32, the auditor shall also report on any other matter relating to the accounts as may be prescribed or on which the High Court may require him to report. As per sub-section (8) of Section 32, the High Court shall send to the Board a copy of every audit report and it shall be the duty of the Board to remedy any defects or irregularities pointed out by the auditor and report the same to the High Court.

As per sub-section (9) of Section 32 of the Act, if, on a consideration of the report of the auditor or otherwise, the High Court thinks that the Board or any member thereof was guilty of misappropriation or wilful waste of the funds of the institutions or of gross neglect resulting in a loss to the institutions under the management of the Board, the High Court may, after giving notice to the Board or the member as the case may be, to show cause why an order of surcharge should not be passed against the Board or the member, and after considering the explanation, if any, pass an order of surcharge against the DBA No.12 of 2023 6 Board or the member, as the case may be. As per sub-section (10) of Section 32, the order of surcharge may be executed against the member or members concerned of the Board as if it were a personal decree passed against them by the High Court. As per sub-section (11) of Section 32, an order of surcharge under this Section shall not bar a suit for accounts against the Board or the member concerned except in respect of the matter finally dealt with by such order. As per sub-section (12) of Section 32, a copy of the audit report shall be supplied to any person who duly applies for the same.

In exercise of the rule making powers under clause (c) of sub-section (2) of Section 35 of the Act, the Travancore Devaswom Board made the Devaswom Fund Accounts Rules on Double Entry System of Accounting, 2012, which was notified vide notification dated 08.10.2020. As stated in the explanatory note, this Court directed the implementation of Double Entry System of Accounting, with effect from 01.04.2010, and the Board decided to implement the said direction. In order to give statutory validity for the new accounting system, the rules formalise the procedures with retrospective effect

01.04.2010. As per Rule 2, Double Entry System of Accounting is implemented from where bank transactions originate. Hence the DBA No.12 of 2023 7 basic unit office for Double Entry System of Accounting is treated as Assistant Commissioner Offices/Maramath Division Offices where bank accounts are maintained. In addition, there may be separate bank accounts for P.D. Devaswoms maintained by the Assistant Commissioners concerned. As per Rule 3, for each bank account, separate Cash Book, Ledger and Journal have to be maintained, as per the specimen forms attached as Appendix I(a), I(b) & I(c) respectively. As per Rule 4, the Assistant Commissioner Offices and officials operating bank accounts shall prepare the monthly accounts related to each bank account and forward the same to the Devaswom Accounts Office before the 15th of the next month. Bank Reconciliation Statement and copy of Bank scroll shall accompany the monthly statements thus forwarded. The Maramath Divisions are also required to perform likewise.

As per Rule 5 of the Rules, the Devaswom Commissioner, Board Secretary and other officials are also required to perform the duties mentioned in Rule 4 within the time limit in respect of bank accounts operated/maintained by them. As per Rule 6, on receipt of the monthly accounts, the Devaswom Accounts Office will verify its correctness and record the details account-wise in separate registers. As per Rule 7, at DBA No.12 of 2023 8 the end of each financial year, valuation of assets and liabilities of the Board has to be completed on or before the end of May each year. The responsibility for such work vests with the Estate Division of the Board under the Executive Engineer and details of the Assets and Liabilities have to be forwarded to the Devaswom Accounts Office along with the proposal for the appreciation/ depreciation of their value for the previous year. Such work shall be completed by the Estate Division on or before 31st May of each year. As per Rule 8, in the valuation of assets mentioned above, land, buildings, musical instruments and other instruments, ornaments, valuables in the strong rooms, vehicles, animals and birds, machinery, etc., under the possession and ownership of the Board have to be evaluated. Sreekovil of temple, deities, thazhikakudam, thiruvabharanam and like items are to be exempted from such valuation.

As per Rule 9 of the Rules, the valuation of the assets has to be made in money terms. Straight Line Method has to be resorted to for reckoning depreciation of the valuable items. If the appreciation of assets (like land, gold, etc.) is revalued, the prevailing accounting standards are to be applied. As per Rule 10, evaluation for liabilities will be done in the Devaswom Accounts Office. As per Rule 11, after the close of the financial DBA No.12 of 2023 9 year, the Devaswom Accounts Office shall prepare the Annual Income and Expenditure Statement, Reconciliation Statement, Assets and Liabilities Statement and Balance Sheet for the year. Such work shall be completed on or before the 30th of September of the following year. As per Rule 12, notwithstanding anything contained in the above rules the present system of accounting as appearing in Chapter X of the Travancore Devaswom Manual Vol. I (published in 1955) will continue till such time as the Board will decide. Thus, both systems of accounting shall co-exist till the Double Entry System of Accounting becomes fully operational.

The Senior Deputy Director, Kerala State Audit Department filed DBAR No.8 of 2022 pointing out the default on the part of the Travancore Devaswom Board in submitting the accounts (Annual Financial Statements), for the year 2018-19, 2019-20 and 2020-21 and non-adherence of the time schedule fixed vide Devaswom Fund Accounts Rules. That DBAR was disposed of by Annexure A1 order dated 13.04.2023. In that order, this Court noticed that the audit of accounts of the Travancore Devaswom Board is conducted by Kerala State Audit Department (formerly known as Local Fund Audit Department) under the provisions in Section 32 of the Act and as entrusted by this Court. In compliance with the order of this Court in DBA DBA No.12 of 2023 10 No.14 of 2011, the Travancore Devaswom Board adopted Double Entry System of Accounting with effect from 01.04.2010. As per Rule 11 of the Devaswom Fund Accounts Rule in Double Entry System of Accounting 2012, the time schedule fixed for the preparation of Annual Financial Statements for a year is on or before 30th September of the following year. As there was an inordinate delay in furnishing the Annual Financial Statements for the years 2016-17 and 2017-18, the same was reported before this Court in DBAR No.7 of 2019. By the order dated

23.07.2019 in DBAR No.7 of 2019, this Court granted two months’ time to the Devaswom Board to furnish Annual Financial Statement for the year 2016-17 and four months’ time was granted to furnish the Annual Financial Statement for the year 2017-18. Vide order dated 18.11.2019 in I.A.No.1 of 2019 in DBAR No.7 of 2019, this Court granted further time to submit the Annual Financial Statements. The time for submitting Annual Financial Statement for the year 2016-17 was extended to

30.11.2019 and that for 2017-18 was extended to 30.01.2020. Accordingly, Annual Financial Statements for 2016-17 was furnished on 20.12.2019 and that for 2017-18 were furnished on

27.08.2021. The audit report for 2017-18 was submitted before this Court on 30.11.2021. Thereafter, the State Audit DBA No.12 of 2023 11 Department, vide office letter No.KSA.TDB/C-4/1035/2021 dated

01.11.2021 requested the Secretary of Travancore Devaswom Board to furnish the Annual Financial Statements for 2018-19, 2019-20 and 2020-21, without delay, which were due for furnishing on 30.09.2019, 30.09.2020 and 30.09.2021 respectively. As no reply was received, a reminder dated

29.12.2021 was sent, which was served on the Secretary of the Board, whereby the Board was directed to furnish the Annual Financial Statements, urgently. Again, a reminder was sent to the Secretary of the Board and the Devaswom Accounts Officer on 01.02.2022, requesting to furnish the Accounts for 2018-19, 2019-20 and 2020-21 urgently, wherein it was stated that non- furnishing of the Annual Financial Statements will be brought to the notice of this Court. However, it did not elicit any response. It was in these circumstances that, the non-furnishing of the accounts of the Travancore Devaswom Board for 2018-19, 2019- 20 and 2020-21 and non-adherence of the time schedule fixed vide Devaswom Fund Account Rules were brought to the notice of this Court for appropriate orders, by filing DBAR No.4 of 2022.

By the order dated 24.05.2022, DBAR No.4 of 2022 was disposed of by directing the Board to file proper applications before this Court, seeking extension of time for submitting DBA No.12 of 2023 12 Annual Financial Statements for 2018-19, 2019-20 and 2020-21, stating sufficient cause for the delay. In the said order it was made clear that the delay on the part of the Board in submitting Annual Financial Statements for any year, beyond the time limit prescribed in Rule 11 of Devaswom Fund Accounts Rules on Double Entry System of Accounting shall be brought to the notice of this Court, by the Joint Director, Kerala State Audit Department, so as to enable this Court to take necessary action against those responsible for such delay.

In Annexure A1 order dated 13.04.2023 in DBAR No.8 of 2022, this Court noticed that the provisions under Section 32 of the Act make it explicitly clear that the Board is statutorily bound to keep regular accounts of all receipts and disbursements in respect of the institutions under its administration and the accounts of the Board shall be audited annually. After completing audit for any year or for any shorter period or for any transaction or series of transactions, as the case may be, the auditors appointed by this Court, under sub-section (3) of Section 32 of the Act, shall send report to this Court. In view of the provisions under sub-section (6) of Section 32, the auditor shall specify in his report all cases of irregular, illegal or improper expenditure or of failure to recover money or other property due to the Board or DBA No.12 of 2023 13 to the institutions under its management or of loss or waste of money or other property thereof caused by neglect or misconduct. Devaswom Fund Accounts Rules on Double Entry System of Accounting, 2012, came into force with retrospective effect from 01.04.2010. Rule 11 of the said Rules mandates that after the close of the financial year, Devaswom Accounts Office shall prepare Annual Income and Expenditure Statement, Reconciliation Statement, Assets and Liabilities Statement and Balance Sheet for the year. Such work shall be completed on or before 30th September of the following year.

In Annexure A1 order dated 13.04.2022 in DBAR No.8 of 2022, this Court has made it clear that it is for the Travancore Devaswom Board to file application seeking extension of time, in terms of the directions contained in the order dated 24.05.2022 in DBAR No.4 of 2022, for filing the Annual Financial Statements for 2018-19, 2019-20 and 2020-21, stating sufficient cause for the delay, within a period of three weeks from the date of receipt of a certified copy of that order. The question as to whether the Board has sufficient cause for the delay in submitting the Annual Financial Statements beyond the time limit prescribed in Rule 11 of the Devaswom Fund Account Rules on Double Entry System of Accounting will be considered in those applications. Paragraphs DBA No.12 of 2023 14 23 to 27 of Annexure A1 order read thus; “23. The report of the Joint Director, Kerala State Audit Department, Travancore Devaswom Board Audit and also the affidavits filed by the respondent would make it explicitly clear that there was inordinate delay on the part of the Travancore Devaswom Board in the preparation of the Annual Financial Statements for 2018-19, 2019-20 and 2020-21. In the order dated 24.05.2022 in DBAR No.4 of 2022, this Court noticed that, since there was delay on the part of the Board in submitting the Annual Financial Statements for 2018-19, 2019- 20 and 2020-21, which were due on 30.09.2019, 30.09.2020 and 30.09.2021 respectively, the State Audit Department, vide office letter dated 01.11.2021, requested the Secretary of the Board to furnish the same. As no reply was received, a reminder was sent on 29.12.2021, which was followed by another reminder sent on 01.02.2022. In the statement filed in DBAR No.4 of 2022, the respondent has no case that, on receipt of the letter dated 01.11.2021 or the reminder sent on

29.12.2021, a proper reply was given to the State Audit Department, explaining the reason for the delay in submitting the Annual Financial Statements for 2018-19, 2019-20 and 2020-21. After the receipt of the reminder sent on 01.02.2022, the respondent submitted a reply dated 15.02.2022, requiring the State Audit Department to return registers and records for 2018-19. In the said reply, the respondent has not stated any reason whatsoever for the delay in submitting the Annual Financial Statements for 2018-19, 2019-20 and 2020-21.

24. In the matter of Audit Report of the Travancore Devaswom Board for the year 1967-68 (Sabarimala Improvement Fund) reported in [1990 (1) KLT 347], in the context of Section 32 of the Act, a Division Bench of this Court reminded the President and members of the Travancore DBA No.12 of 2023 15 Devaswom Board about their public accountability. In the said decision it was made clear that it is for all persons concerned to see that greater vigil is exercised by the President and members of the Board in the overall administration of the Board and in the collection and disbursement of funds. Paragraph 16 of the abovesaid decision reads thus: “12. Before concluding, we should record our appreciation of the invaluable services rendered by the audit in bringing to light the way in which the Board had functioned during the relevant time. But, for the untiring efforts of the audit, the entire matter would have escaped attention.

We take this opportunity to remind the President and members of the Board, about their public accountability. It is true that there is delay in the submission of the audit report and the consideration of the matter by this Court. In the meanwhile, the term of the President and/or members of the Board may ordinarily expire. These have contributed to the impression that the President and members of the Board or the officers will not be answerable for the lapses or acts or omissions, when the matter is finally adjudicated after some time or delay occurs considering the matter. Impression seems to have gathered ground in recent times that the members of the Board or the officers can easily ward off their liability or responsibility by putting forth filmsy excuses. This is a matter which cannot be countenanced in public interest. It is for all persons concerned to see that greater vigil is exercised by the President and members of the Board in the overall administration of the Board and in the collection and disbursement of funds.

It is also necessary for all concerned to see that every year the audit is completed, at the quickest possible time, and the matter is considered by this Court, when the DBA No.12 of 2023 16 President and members of the Board, who are responsible for it, are in a position to have their defences adjudicated effectively. It is also in public interest to see that adequate and proper provisions are made, to make the officers and other outsiders, liable and responsible for all acts of omissions or commissions and for unauthorised collections and for accounting the funds which really belong to the Devaswom. Public accountability should be emphasized and effectuated in larger public interest and appropriate legislation, to suit the needs of the time and situation, in the light of past experience, should be enacted, so that the public will continue to have confidence in such institutions.”

25. In M.K.Ramachandra Menon v. Cochin Devaswom Board and others [2004 (2) KLJ 820] a Division Bench of this Court in the context of Section 68 of the Act, which deals with Cochin Devaswom Board, held that Section 102 of the Act states that the accounts of the Board shall be audited annually. The board shall keep regular accounts of all receipts and disbursements. Audit shall be made by auditors appointed by the High Court in the case of the accounts of the Board. After completing the audit for any year or for any shorter period or for any transaction or series of transactions, as the case may be, the auditor shall send a report to the High Court in the case of the accounts of the Board. Section 104 stipulates that the auditor shall specify in his report all cases of irregular, illegal or improper expenditure or of failure to recover moneys or other property due to the Board or to incorporated or unincorporated Devaswoms or institutions under management of the Board, as the case may be, or of loss or waste of money or other property thereof caused by neglect or misconduct Section 105 of the Act deals with rectification of irregularities. The High Court may send to the Board a copy of DBA No.12 of 2023 17 every audit report relating to the accounts of incorporated and unincorporated Devaswoms and those of the Board and it shall be the duty of the Board to remedy any defects or irregularities pointed out by the auditor and report the same to the High Court. The said position was reiterated by the very same Division Bench in Vijayan v. Cochin Devaswom Board [2004 (3) KLT 670].

26. In the order dated 24.05.2022 in DBAR No.4 of 2022, this Court noticed that, in view of the provisions under Rule 11 of Devaswom Fund Accounts Rules on Double Entry System of Accounting, the respondent ought to have submitted the Annual Financial Statements for 2018-19, 2019-20 and 2020- 21, on 30.09.2019, 30.09.2020 and 30.09.2021 respectively. The respondent has also not chosen to file any application before this Court, seeking extension of time for submitting Annual Financial Statements for those years, stating sufficient cause for the delay. As done in the case of Annual Financial Statements for 2016-17 and 2017-18, which was the subject matter in DBAR No.7 of 2019 filed by the Joint Director, Kerala State Audit Department, the respondent is seeking extension of time for submitting Annual Financial Statements for 2018- 19, 2019-20 and 2020-21, in the statement filed in this DBAR, harbouring the notion that courts are required to grant such extension as a matter of course.

27. Despite the specific direction contained in the order dated

24.05.2022 in DBAR No.4 of 2022, the Board has not chosen to file proper applications before this Court seeking extension of time for submitting Annual Financial Statements for 2018- 19, 2019-20 and 2020-21, stating sufficient cause for the delay. Since there was a direction in the order dated

24.05.2022, whereby the Joint Director, Kerala State Audit Department to bring it to the notice of this Court the delay on DBA No.12 of 2023 18 the part of the Board in submitting Annual Financial Statements for any year, beyond the time limit prescribed in Rule 11 of the Devaswom Fund Accounts Rules on Double Entry System of Accounting, this DBAR is filed before this Court seeking appropriate orders. Since the Annual Financial Statement for 2018-19 has already been submitted before the Joint Director, Kerala Audit and Accounts Department along with Annexure R1(c) letter dated 07.11.2022, this DBAR is disposed of recording the said fact and taking note of the stand taken in the additional affidavit filed by the respondent dated

12.12.2022 that the preparation of the Annual Financial Statement for the year 2019-20 is expected to be completed on or before 30.06.2023 and that for the year 2020-21 on or before 30.11.2023 and that disciplinary proceedings have already been initiated against the officers, who have defaulted submission of accounts for the year 2019-20, by issuing show cause notice, vide Annexure R1(n) order dated 06.04.2023. It is for the Board to file applications seeking extension of time, in terms of the direction contained in the order dated

24.05.2022 in DBAR No.4 of 2022, for the Annual Financial Statements for 2018-19, 2019-20 and 2020-21 stating sufficient cause for the delay. Such applications shall be filed within a period of three weeks from the date of receipt of a certified copy of this order. The question as to whether the Board has sufficient cause for the delay in submitting the Annual Financial Statements beyond the time limit prescribed in Rule 11 of the Devaswom Fund Accounts Rules on Double Entry System of Accounting will be considered in those applications.”

After Annexure A1 order of this Court dated

13.04.2023 in DBAR No.8 of 2022, the Travancore Devaswom DBA No.12 of 2023 19 Board filed DBA No.9 of 2023 seeking extension of time till

30.11.2023 for submitting the Annual Account Statement for the year 2020-21. That DBA was filed only on 06.11.2023, though the time limit fixed in Annexure A1 order was three weeks from the date of receipt of a certified copy of that order. It is thereafter that the Board filed the present DBA on 15.12.2023 seeking extension of time till 31.01.2024 for submitting the Annual Account Statement for the year 2020-21. On 24.06.2023, the Board filed I.A.No.1 of 2023 in DBAR No.4 of 2022, seeking extension of time. That application was dismissed as withdrawn by the order dated 27.07.2023, without prejudice to the right of the Board to file a DBA, seeking extension of time.

In the affidavit filed in support of this DBA, the Travancore Devaswom Board has not offered a satisfactory explanation for the inordinate delay in submitting the Annual Accounts Statement for the year 2020-21, which ought to have been filed on or before 30th September of the following year.

As noticed by this Court in Annexure A1 order dated

13.04.2023 in DBAR No.8 of 2022, the Devaswom Fund Accounts Rules on Double Entry System of Accounting, 2012, came into force with retrospective effect from 01.04.2010. Rule 11 of the said Rules mandates that after the close of the financial year, DBA No.12 of 2023 20 Devaswom Accounts Office shall prepare Annual Income and Expenditure Statement, Reconciliation Statement, Assets and Liabilities Statement and Balance Sheet for the year. Such work shall be completed on or before 30th September of the following year.

In view of the statutory mandate in submission of Annual Accounts Statement within the time limit specified in Rule 11 of the Devaswom Fund Accounts Rules on Double Entry System of Accounting, 2012 and in the absence of a satisfactory explanation for the inordinate delay in submitting the Annual Account Statement for the year 2020-21, we find no reason to grant extension of time, as sought for in this DBA. In the result, this DBA is dismissed. Sd/- ANIL K. NARENDRAN, JUDGE Sd/- G. GIRISH, JUDGE DBA No.12 of 2023 21 APPENDIX OF DBA 12/2023 PETITIONER ANNEXURES Annexure-A1 TRUE COPY OF THE JUDGMENT DATED 13/04/2023 IN D.B.A.R. 8/2022. Annexure-A2 TRUE COPY OF THE CHARGE SHEET MEMO AS WELL AS CHARGE DATED 07/12/2023 ISSUED BY THE SECRETARY OF TDB TO THE EXECUTIVE OFFICER, SABARIMALA.