Kerala High Court Orders Digitalization Of All Temple Accounts In Wake Of Misappropriation By Travancore Devaswom Board

The Kerala High Court has directed for complete digitalization of the accounts after the special audit report disclosed misappropriation and embezzlement of funds to the tune of ₹40 lakhs in Petrol Station run by the Travancore Devaswom Board of the Kerala government that manages many Hindu Temples.

The Court was considering a Special Report (Final) on the serious embezzlement detected at the petrol pump run by the Travancore Devaswom Board at Nilakkal in the name and style of 'Swamy Ayyappa Fuels'.

The Division Bench of Justice Raja Vijayaraghavan V and Justice K. V. Jayakumar held, "We are of the considered view that it is the bounden duty of the Boar to ensure that a comprehensive, fully functional, and tamper-proof software system of all the institutions governed by the Board is in place at the earliest, so that all revenues and expenditures are captured, monitored, and reconciled on a day-to-day basis."

The Court took note of the "deeply disturbing" findings mentioned in the Special Report which included gross lack of supervision, control, and follow-up in maintaining accurate and up-to-date records, non-preparation of bank reconciliation statements periodically, inordinate delay in remittances to the daily collections, serious irregularities in fuel stock management, absence of proper official records, no cash receipts to customers, and no proper records to reconcile the sales with the machine readings.

It also took into consideration that in view of these serious discrepancies, disciplinary proceedings have been initiated against employees for misappropriation and embezzlement to the amount of approximately ₹40 lakhs and the Joint Director has made various recommendations, including the urgent implementation of a digital record-keeping system to track fuel sales, credit slips, and stock levels in real time.

It noted that the Board has failed to comply with its earlier directions to take effective steps to carry out computerisation either with the original vendor or another competent agency and observed, "The magnitude of the laxity becomes stark when one considers that even privately-run fuel stations maintain proper digital accounting of their operations, whereas the Board, despite managing an institution of such scale and sanctity, has not implemented even the most basic safeguards."

Referring to the Supreme Court's ruling in A.A Gopalakrishnan v. Cochin Devaswom Board And Others, wherein the Supreme Court highlighted the importance of protecting the properties of deities, temples and Devaswom boards, the Court observed that 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.

"This Court is constrained to observe that this instance appears to be merely the tip of the iceberg. Such gross administrative negligence cannot be allowed to persist. As early as 2015, clear and binding directions were issued mandating the complete computerisation of operations to prevent corruption, mismanagement, and embezzlement, and to ensure transparency in both financial and administrative affairs. We also take note that there is a long delay in completing the statutory audit of various temples and institutions and the same is attributable to the failure to reconcile accounts and the continued dependence on outdated manual accounting processes. This is a disturbing reflection of the absence of financial integrity within the institution", the Court observed.

It thus made it clear that any further delay in implementing end-to-end computerization will only serve to abet the continued misappropriation of funds by unscrupulous elements operating with impunity. Such inaction not only compromises the sanctity of temple administration but also gravely undermines public trust in the functioning of the board.

"We would like to reiterate that transparency, accountability, and the adoption of robust technological safeguards are no longer matters of administrative discretion; they are statutory obligations that the Board is legally and morally bound to discharge without exception. We are of the view that any failure to act can lead to only one inference: that the higher echelons of the Board are somehow or other perpetuating the status quo for reasons best known to them. Financial irregularities can be brought to a stop, and systematic loss of income out of Devaswom assets and properties can only be prevented by adopting sound accounting practices, a prerequisite of which is computerisation. It must also be emphasised that if these institutions are administered efficiently and with full transparency, the legitimate generation of revenue would increase manifold, enabling better upkeep of temples and welfare activities for devotees. Any further delay by the Board can only be attributed to depriving these institutions of their rightful financial growth and sustainability", the Court held.

It thereby directed that a comprehensive and detailed report outlining the concrete steps taken to computerize the accounts of all institutions under its administration be prepared with specification as to whether the Board has implemented an End-to-End ERP System for the complete digitisation and digitalisation of its institutions and operations, incorporating modular functionalities for Accounting & Audit, Contracts & Purchase Management, Procurement & Tendering, HR & Payroll, Project & Construction Management, Inventory & Stock Control, and Anti-Corruption Mechanisms.

"The Board shall further clarify whether the technology platform adopted is modern, microservices-based, cloud-hosted, and fully integrated with accounting software to enable seamless reconciliation. If no such exercise has been carried out, the Board shall furnish its explanation", the Court observed directing for production of the report by August 22, 2025.

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

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