Cochin Devaswom Board v. Deputy Director, Kerala State Audit Department

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ``` THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN ``` ``` & ``` ``` THE HONOURABLE MR. JUSTICE HARISANKAR V. MENON FRIDAY, THE 3[RD] DAY OF MAY 2024 / 13TH VAISAKHA, 1946 ``` ``` DBA NO. 1 OF 2024 ``` ## **`APPLICANT:`** ``` COCHIN DEVASWOM BOARD ROUND NORTH, THRISSUR – 680001, REPRESENTED BY ITS SECRETARY. ``` ``` BY ADV K.P.SUDHEER ``` ## **`RESPONDENT:`** ``` THE DEPUTY DIRECTOR KERALA STATE AUDIT DEPARTMENT, COCHIN DEVASWOM AUDIT, ROUND NORTH, THRISSUR – 680001. ``` ``` BY ADVS. ADVOCATE GENERAL OFFICE KERALA GOVERNMENT PLEADER(GP-1) ``` ## **`OTHER PRESENT:`** ``` SRI S.RAJMOHAN - SR GOVERNMENT PLEADER; SRI NEERAJ NARAYAN -ADVOCATE FOR COMPLAINANT IN DBP 26/23; SRI RAJIT - ADVOCATE FOR ADDL R3 IN DBP 26/23. ``` ``` THIS DEVASWOM BOARD APPLICATION HAVING COME UP FOR ADMISSION ``` ``` ON 03.05.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 2 D.B.A. No.1 of 2024 ## **O R D E R** ## **Anil K. Narendran, J.** The Cochin Devaswom Board has filed this DBA seeking approval for Annexure A3 draft tender notification for letting out ‘Cochin Sathram’ at Varanasi. This application is filed in terms of the directions contained in the order of this Court dated 29.09.2023 in DBP No.26 of 2023. That DBP was registered based on Report No.9 of 2023 of the learned Ombudsman in Complaint No.13 of 2023 made by one Guruprasad, seeking permission to lease out the building in question. That DBP was disposed of by the order dated 29.09.2023, directing the Cochin Devaswom Board to take necessary steps for letting out ‘Cochin Sathram’ at Varanasi, taking note of the law laid down by this Court in **Krishnakumar v. Cochin Devaswom Board [2022 (4) KLT 798]** . The Board was directed to file a DBA before this Court, seeking appropriate orders, after evolving a proper method for letting out ‘Cochin Sathram’ at Varanasi. 2. On 15.03.2024, when this DBA came up for consideration the learned Senior Government Pleader was 3 D.B.A. No.1 of 2024 directed to obtain the remarks of the respondent Deputy Director. 3. The respondent has sworn to an affidavit dated 06.04.2024. Paragraph 3 of that affidavit contains remarks of the Audit on the application filed by the Cochin Devaswom Board. Sub-paras 1 to 5 of paragraph 3 read thus; “3. On verification of the file and Application, the following remarks are submitted on behalf of Audit. 1) Since the Sathram is situated at Varanasi, tender notification may be prepared in Hindi and English also apart from Malayalam and published in Vernacular News Papers concerned. 2) Tender conditions remain silent on Security Deposit. As per tender condition-14 Earnest Money Deposit (EMD) will be forfeited to Devaswom Fund if the successful bidder wants to discontinue. Earnest Money Deposit is an amount obtained from the bidders as a refundable deposit in order to safeguard against a bidder from being withdrawing or altering his bid during the bid validity period. Amount obtained from the successful bidder as security to ensure due performance of the contract, is termed as Security Deposit. Hence condition with regard to Security Deposit may be incorporated in the Tender Conditions. 3) The Board has to ensure that the successful bidder (lessee) shall not do anything that affect the reputation or good will of the Board. Hence a clause to that effect may be incorporated in the tender conditions. 4 D.B.A. No.1 of 2024 4) The Board has to ensure that the successful bidder adheres to legal obligations such as compliance with zoning laws, health and safety regulations and licensing requirements. Hence, a clause to that effect may also be incorporated in the tender conditions. 5) In the case of disputes arising out of the contract between the Board and the successful bidder, the jurisdiction of the Court may be specifically mentioned.” 4. Along with the memo dated 11.04.2024 filed by the learned Standing Counsel for Cochin Devaswom Board Annexure A4 revised tender notification prepared in terms of the remarks of the Local Fund Audit is placed on record. 5. On 12.04.2024 when this DBA came up for consideration the learned Senior Government Pleader sought time to get instructions on Annexure A4 revised tender notification. By the order dated 12.04.2024, Registry was directed to list this matter today (03.05.2024), in a special sitting, after obtaining the orders of the Hon’ble the Chief Justice. 6. Today, when this DBA is taken up for consideration the respondent has sworn to an affidavit dated 02.05.2024. Paragraph 3 of that affidavit which contains remarks of the Audit, reads thus:- 5 ## D.B.A. No.1 of 2024 “3) The Audit has filed an affidavit on 06.04.2024 in the above Devaswom Board Application before the Honourable High Court of Kerala. In addition to that, on verification of the copy of revised tender notification prepared by the Cochin Devaswom Board, the following remarks are submitted on behalf of Audit. 3.1) Clause 3 of the revised tender notification may be amended as such that the Earnest Money Deposit would be returned to the bidders after the confirmation of the tender (EMD of the successful bidder may be returned or adjusted to Security Deposit after the confirmation of the tender). 3.2) In clause 6 of the revised tender notification, the second sentence may be amended as “security deposit would be returned without interest at the expiry of the term of lease, if found to be free of liabilities.” 3.3) In clause 13 of the revised tender notification, a condition to the effect that at least six months’ notice is necessary before termination of contract by the lessee may be incorporated with a suitable penal provision (like forfeiture of Security Deposit) for premature cancellation of contract. 3.4) An additional clause may be incorporated in the tender condition that in the event of any damage due to the negligence of the lessee to the Sathram during the term of the lease, if the security deposit is not sufficient to cover the loss, it shall be set off from the movable or immovable property of the successful bidder (lessee).” 7. Today, when this DBA is taken up for consideration along with the interlocutory application filed by the Cochin 6 ## D.B.A. No.1 of 2024 Devaswom Board in DBP No.26 of 2023, we heard the arguments of the learned Standing Counsel for Cochin Devaswom Board, the learned Senior Government Pleader for the respondent Deputy Director, the learned counsel for the complainant in DBP No.26 of 2023 and the learned counsel for the additional 3[rd] respondent in that DBP. 8. In **T. Krishnakumar v. Cochin Devaswom Board** **[2022 (4) KLT 798 : 2022 (5) KHC SN 8]** , a Division Bench of this Court, in which both of us were parties, held that in view of the law laid down by this Court in **Abu K.S. v. Travancore Devaswom Board and others [2022 SCC OnLine Ker 1642]** , relying on the decision of the Apex Court in **M.V. Ramasubbiar** **v. Manicka Narasimachara [(1979) 2 SCC 65]** , while leasing out the buildings owned by the Devaswoms, the Cochin Devaswom Board and its officials have to ensure that proper income is generated from the said buildings. In such transactions, the Board and its officials have to show reasonable diligence in the manner of an ordinary prudent man of business to conduct his own affairs. The action of the Board as a trustee cannot be equated to that of mere landlord. The best interest of the Devaswoms under the control of the Board would be subserved only if income is 7 ## D.B.A. No.1 of 2024 generated. 9. In **T. Krishnakumar [2022 (4) KLT 798]** , the Division Bench noticed that the major source of revenue of the Cochin Devaswom Board is the income received by way of offering by the devotees, the amount received from Vazhipadu and the revenue generated through the auction of temple premises for various activities in connection with rituals and festivals in the temples and also the rental income generated from the buildings owned by the respective Devaswoms. Therefore, while dealing with the buildings owned by the Devaswoms, the Cochin Devaswom Board and its officials have to ensure that proper income is generated from the said building. In such transactions, the Board and its officials have to show reasonable diligence in the manner of an ordinary prudent man of business to conduct his own affairs, by ensuring that the lease rental or licence fee of the buildings owned by the Devaswoms is not lower than the prevailing market rent. The action of the Board in demanding lease rental or licence fee for the buildings owned by the Devaswoms taking into consideration the prevailing market rent cannot be - termed as an action of the Board demanding exhorbitant or rack rent, since, while leasing out the buildings owned by the 8 ## D.B.A. No.1 of 2024 Devaswoms, the Board and its officials have to ensure that proper income is generated from the said buildings. Any default committed by the tenant or licensee of the buildings owned by the Devaswoms in payment of the monthly rent or licence fee, electricity charges, water charges, statutory dues, etc. has to be dealt with appropriately, so also the use of the building for another purpose or making material alteration or addition to the building. In view of the provisions under Section 73A of the Act, the Cochin Devaswom Board is duty bound to monitor whether its administrative staff and employees in the Maramath wing are functioning properly, by taking prompt action against any such default or violation of the terms and conditions of the lease deed or the licence deed. 10. During the course of arguments, the learned Standing Counsel for Cochin Devaswom Board would submit that the Board shall revise Annexure A4 tender notification produced along with the memo dated 11.04.2024 in terms of the remarks of the State Audit, as contained in paragraph 3 of the affidavit sworn to by the respondent dated 02.05.2024. Having considered the pleadings and materials on record and the submissions made at the Bar, we deem it appropriate 9 ## D.B.A. No.1 of 2024 to dispose of this DBA by directing the Cochin Devaswom Board to revise Annexure A4 tender notification, in terms of the remarks of the State Audit, as contained in paragraph 3 of the affidavit sworn to by the respondent dated 02.05.2024. Necessary steps in this regard shall be taken, as expeditiously as possible, at any rate, within a period of two weeks from the date of receipt of a certified copy of this order. In the tender process, the Board and its officials have to show reasonable diligence, as laid down by this Court in **T. Krishnakumar [2022 (4) KLT 798]** , in order to ensure that proper income is generated from ‘Cochin Sathram’ and that the licence fee of that building is not lower than the prevailing market rate. Sd/- Sd/- ## **HARISANKAR V. MENON, JUDGE** Skk **//03.05.2024** 10 ## D.B.A. No.1 of 2024 ## **`APPENDIX OF DBA NO.1/2024`** ## **`PETITIONER’S ANNEXURES:`** ``` ANNEXURE A 1TRUE COPY OF ORDER NO.R1.15290/14 DATED 13.02.2024 ISSUED BY THE APPLICANT. ANNEXURE A 2TRUE COPY OF ORDER NO. R1. 15290/14 DATED 22.02.2024 ALONG WITH THE STATE- MENT OF FACTS APPROVED BY THE BOARD ``` ``` ANNEXURE A 3TRUE COPY OF DRAFT TENDER NOTIFICATION PREPARED IN TERMS OF ANNEXURE A2. APPLICATIONAPPLICATION FILED UNDER SECTION 151 OF CPC ``` ``` ANNEXURE A 4TRUE COPY OF REVISED TENDER NOTIFICATION PREPARED BY THE COCHIN DEVASWOM BOARD. ```