Safiya Malik

The High Court of Kerala Division Bench of Justice Raja Vijayaraghavan V and Justice K.V. Jayakumar has directed the Travancore Devaswom Board to submit a comprehensive report outlining concrete steps taken to fully computerise the accounts of all institutions under its administration. The Court stated that the Board must confirm whether it has implemented an End-to-End ERP System for complete digitisation and digitalisation of its institutions and operations, incorporating modules for Accounting & Audit, Contracts & Purchase Management, Procurement & Tendering, HR & Payroll, Project & Construction Management, Inventory & Stock Control, and Anti-Corruption Mechanisms. The Bench fixed a deadline for the submission of this report, requiring it to be filed on or before 22 August 2025. The Court warned that any further delay in implementing computerisation would be seen as abetting misappropriation and undermining public trust.

The matter before the High Court arose from a Special Audit Report (Final) filed by the Joint Director of the Kerala State Audit Department, Travancore Devaswom Audit, concerning serious embezzlement detected at the Travancore Devaswom Board's petrol pump at Nilakkal, operated under the name "Swamy Ayyappa Fuels." The Report disclosed a series of irregularities in record-keeping, cash handling, stock management, and reconciliation processes.

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The Report stated that the Stock Registers for fuels were not promptly recorded, reflecting a lack of supervision, control, and follow-up in maintaining accurate records. Entries were updated only up to 13 July 2024 for fuel stock, and credit sales to Government Departments were recorded only up to 13 September 2024. The Cash Book entries had not been verified by the Assistant Registrar or the Executive Engineer, and bank reconciliation statements were not prepared periodically. The financial reports did not match original records such as the Sales Register, Sales Slips, and Vouchers.

The daily remittances to the Dhanalekshmi Bank were delayed, and serious irregularities were noted in fuel stock management. Daily Sales Receipts, Collection Registers, remittance details, and the initial readings of each dispensing nozzle were recorded only in an unofficial handbook, which was not produced for audit verification. Stock Register balances were prepared based on the Daily Sales Register without independent verification. In the absence of official records, auditors relied on periodic inspection reports of IOCL conducted at the Nilakkal Fuel Station.

Machine readings from IOCL revealed discrepancies between actual sales and recorded figures. Specifically, the quantity of High-Speed Diesel sold during the relevant period was 1,90,510 litres as per IOCL, whereas the Stock Register and Daily Sales Register reflected 1,82,818 litres. After accounting for tank variation and evaporation loss of 705 litres, there remained a discrepancy of 6,987 litres. No cash receipts were provided to customers, and no proper reconciliation was conducted.

The audit estimated a short remittance of approximately Rs. 40 lakhs. Disciplinary proceedings appeared to have been initiated against employees for misappropriation and embezzlement. The Joint Director recommended urgent implementation of a digital record-keeping system to track fuel sales, credit slips, and stock levels in real time.

The Court enquired whether the Board had taken measures to computerise its temples, institutions, and activities. It was noted that as early as 2014, the Board had assured the Court that it would complete computerisation of all its institutions, but disputes arose regarding the awarded contract to KELTRON for a total cost of Rs. 9,73,61,396/-. The I.T. Mission found the software outdated and unsuitable. Detailed recommendations were made for adopting Agile methodology, updating technology, hosting applications in the cloud, and ensuring end-user training.

The Bench recorded that "From the embezzlement detected at Sri. Ayyappa Fuels, it is evident that the Board has failed to achieve the very objectives emphasised by this Court while disposing of the matter." The Court observed that even privately-run fuel stations maintain proper digital accounting, whereas the Board, despite managing a large institution, had not implemented basic safeguards.

It was noted that under the Travancore Cochin Hindu Religious Institutions Act, 1950, the Board is vested with the administration of Devaswoms and is duty-bound to monitor its officials, maintain institutions, and safeguard funds. The Apex Court decision in A.A. Gopalakrishnan v. Cochin Devaswom Board was cited, wherein it was stated that "Such acts of 'fences eating the crops' should be dealt with sternly."

The Court recorded: "It is shocking that a fuel pump catering to a large volume of vehicles has been permitted to operate without proper accounting mechanisms or real-time monitoring systems... Such gross administrative negligence cannot be allowed to persist." It further stated: "Any further delay in implementing end-to-end computerisation will only serve to abet the continued misappropriation of funds by unscrupulous elements operating with impunity."

The Court stated that "transparency, accountability, and the adoption of robust technological safeguards are no longer matters of administrative discretion; they are statutory obligations." It expressed the view that failure to act could lead to the inference that higher echelons of the Board were perpetuating the status quo.

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The Court directed the Board to ensure that a comprehensive, fully functional, tamper-proof software system is in place at the earliest. It stated that the system must be capable of tracking all receipts from every temple, institution, and commercial activity in real time, monitoring tenders, ensuring transparent procurement, capturing every voucher and stock transaction in a digital audit trail, integrating HR records, recording all prerequisites for construction, and managing contracts with performance and compliance clauses.

The Board was directed to place before the Court a comprehensive report on the concrete steps taken to computerise the accounts of all institutions it administers. This report must state whether an End-to-End ERP System has been implemented with modern, microservices-based, cloud-hosted technology, fully integrated with accounting software for seamless reconciliation. If no such exercise has been carried out, the Board must provide its explanation. The deadline for filing this report is 22 August 2025.

Advocates Representing the Parties:

For the Petitioner: Government Pleader for the Joint Director, Kerala State Audit Department, Travancore Devaswom Board

For the Respondent: Standing Counsel for the Travancore Devaswom Board

Case Title: Joint Director v. Secretary, Travancore Devaswom Board

Case Number: DBAR No. 2 of 2025

Bench: Justice Raja Vijayaraghavan V, Justice K.V. Jayakumar