Travancore Devaswom Board (TDB) v. Deputy Examiner for Local Fund Audit, Kerala State Audit Department; State Bank of India; State of Kerala

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE ANIL K. NARENDRAN ``` ``` & ``` ``` THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR ``` ``` TUESDAY, THE 25[TH] DAY OF JULY 2023 / 3RD SRAVANA, 1945 ``` ``` DBA NO.1 OF 2023 ``` ## **`PETITIONER/S:`** ``` TRAVANCORE DEVASWOM BOARD - TDB ``` ``` DEVASWOM HEADQUARTERS, NANTHANCODE, KOWDIAR POST, THIRUVANANTHAPURAM PIN - 695003, REPRESENTED BY ITS SECRETARY. ``` ``` BY ADV G.BIJU ``` ## **`RESPONDENT/S:`** - **`1 DEPUTY EXAMINER FOR LOCAL FUND AUDIT KERALA STATE AUDIT DEPARTMENT, TRAVANCORE DEVASWOM BOARD AUDIT, TRAVANCORE DEVASWOM HEADQUARTERS, NANTHANCODE, THIRUVANANTHAPURAM, PIN - 695003`** - **`2 STATE BANK OF INDIA, THRISSUR AYODHYA ARCADE, ROUND WEST, NADUVILAL, THRISSUR REPRESENTED BY ITS CHIEF MANAGER, PIN - 680001`** - **`3 *(ADDL R3) STATE OF KERALA REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, REVENUE (DEVASWOM) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001.`** ``` *(SUO MOTU IMPLEADED AS ADDITIONAL 3RD RESPONDENT AS PER THE ORDER DATED 16.03.2023 IN DBA 1 OF 2023) ``` ``` BY ADV P.GOPAL ``` ``` OTHER PRESENT: ``` 2 DBA NO.1 OF 2023 ``` SRI S.RAJMOHAN- SR GOVERNMENT PLEADER, SRI P.GOPAL - STANDING COUNSEL, SBI ``` ``` THIS DEVASWOM BOARD APPLICATION HAVING COME UP FOR ADMISSION ON 25.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 3 DBA NO.1 OF 2023 ## **ORDER** ## Anil K. Narendran, J. The Travancore Devaswom Board has filed this Devaswom Board Application seeking permission to deposit 500 kg. of gold in ‘Gold Monetisation Scheme’ of the State Bank of India, for a period of five years. In the affidavit filed in support of this application, it is stated that the Board is in possession of approximately 600 Kg. of gold received as offerings in the temples under its management, which is presently kept in its strong rooms under different Groups. The Board as per order No.ROC.4939/21/M dated 06.10.2022 directed the Thiruvabaharanam Commissioner to take stock of the gold ornaments kept in different temples and in the strong rooms under different groups. Accordingly, the Thiruvabharanam Commissioner ascertained the stock of gold items in the different temples and in 16 strong rooms in different Groups. The gold ornaments are categorised into three and are stored separately. The first category is those ornaments, which are used for adorning the deity daily and/or during festivals or on special occasions as per the custom and usage of the temples. The second category is those ornaments which are considered to be having antique value and the third category is the ornaments, which do not come under the first and second categories. The Thiruvabharanam Commissioner has taken the stock of gold items under the third category separately. Approximately 535 Kg. is available under the third category, as stated in Annexure A1 report dated 16.12.2022 of 4 ## DBA NO.1 OF 2023 the Thiruvabharanam Commissioner, submitted before the Secretary of the Travancore Devaswom Board. 2. In the affidavit filed in support of this DBA, it is stated that the gold items coming under the third category are kept idle in the strong rooms without being used for any purpose. The State Bank of India provides ‘Gold Monetisation Scheme’ introduced by the Central Government, which collects gold as term deposits and interest will be given for the value of the gold deposited. A relevant extract of Gold Monetisation Scheme-2015 (updated up to 15.05.2021) of the 2[nd] respondent State Bank of India is produced herewith and marked as Annexure A2. The Travancore Devaswom Board had discussions with the State Bank of India authorities and the recognised agencies, who undertake the process of purification of gold, etc., and decided to deposit 500 Kg. of gold available with the Board, which are not being used for adorning the deity and not having any antique value, in the Gold Monetisation Scheme of State Bank of India, vide Annexure A3 order No.ROC.4939/11/M dated 30.11.2022, after obtaining permission from this Court. The Board has authorized the Devaswom Commissioner, Thiruvabharanam Commissioner and the Superintendent of Police, Vigilance and Security Wing to take further steps in the matter. The Chief Manager of the State Bank of India, Thrissur has forwarded Annexure A4 letter dated 04.11.2022 to the Devaswom Commissioner, expressing the willingness of the Bank to 5 ## DBA NO.1 OF 2023 accept gold under the Gold Monetisation Scheme, through its Thrissur Branch (00940). As per Annexure A2 scheme, if the deposit is made for a period of 5-7 years, the interest rate will be 2.25%. The deposit of gold items in the third category, in the Gold Monetisation Scheme of the 2[nd] respondent Bank, will generate a regular income for the Travancore Devaswom Board and the security threat in the strong rooms will also be eased. 3. On 16.03.2023, when this DBA came up for consideration, the State of Kerala, represented by the Principal Secretary to Government, Revenue (Devaswom) Department, was _suo motu_ impleaded as the additional 3[rd] respondent. The learned Senior Government Pleader took notice for respondents 1 and 3 and the learned Standing Counsel for State Bank of India took notice for the 2[nd] respondent. The learned Senior Government Pleader and also the learned Standing Counsel sought time to get instructions. 4. The 2[nd] respondent Chief Manager of State Bank of India, Thrissur has sworn to an affidavit on behalf of the 2[nd] respondent, wherein it is stated that Gold Monetisation Scheme is offered by the Bank with the sanction of the Government of India. As per the Scheme, there are three modes of deposits, namely, ‘Short Term Bank Deposit’, ‘Medium Term Government Deposit’ and ‘Long Term Government Deposit’. As per Medium and Long Term Government Deposits, the minimum quantity to be deposited for post-melting of 6 ## DBA NO.1 OF 2023 gold is 10 grams and for the maximum quantity there is no limit. The tenure for deposit for Medium Term Government Deposit is 5 to 7 years and for the Long Term Government Deposit, it is 12 to 15 years. The rate of interest determined and paid by the Government of India for Medium Term Deposits is 2.25% p.a. and for Long Term Deposits it is 2.50% p.a. The interest will be calculated on the value of gold as on the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold. The lock-in period for Medium Term Government Deposits is 3 years. The penalty to be levied for breaking of deposit during the lock-in period of 3 years is 0.75% to 1.25% of the value of gold as on the date of premature withdrawal. After the lock-in period of 3 years, the penalty would be between 0.25% to 0.375%. The penalty would depend on the number of years the deposit has to run. Premature redemption of all gold deposits shall be in Indian Rupees only. The repayment option on maturity as per the Scheme is cash or gold. 0.50% administrative charges will be levied in case of gold redemption on maturity. The Bank will issue a provisional receipt on receipt of the quantity of gold offered under Gold Monetization Scheme. The gold offered up to 10 kg will be melted through the Minerals and Metals Trading Corporation of India, Products Artistiques Metaux Precieux (MMTC PAMP) unit at Thrissur itself. If the gold offered is above 10 kgs, it will be taken for melting to the Government of India approved agents situated either at 7 DBA NO.1 OF 2023 Minerals and Metals Trading Corporation of India, Products Artistiques Metaux Precieux (MMTC PAMP), Gurgaon, Haryana or at India Government Mint, Mumbai. The melting process will be done by the Government of India approved agents (approved for GMS by the Bureau of Indian Standards) in the presence of the representative of the Bank and the temple authorities. The Gold offered by the party will be kept in safe custody and will be taken to the melting agents on the day fixed for melting. The seal of the boxes shall be opened in the presence of temple authorities only. After melting, the melting agents will issue a certificate certifying the actual quantity of pure gold in kilograms. Based on the certificate issued by the melting agency, the Deposit Certificate will be issued by the State Bank of India, Bullion Branch, Mumbai. 5. The learned Senior Government Pleader has placed on record a statement dated 12.04.2023 of the Senior Deputy Director, Kerala State Audit Department, Travancore Devaswom Board Audit, wherein it is stated that the Travancore Devaswom Board is in possession of approximately 600 Kg. of gold received as offerings in the temples under its management and presently being kept in its strong rooms under different groups. The Board as per order No.ROC.4939/21/M dated 06.10.2022 directed the Thiruvabharanam Commissioner to take stock of the gold ornaments kept in different temples and in the strong rooms under different Groups. 8 ## DBA NO.1 OF 2023 Thiruvabharanam Commissioner ascertained the stock of gold items in the different temples and in the 16 strong rooms in different Groups. The gold ornaments are thus categorised into three different categories and are stored separately. The first category is those ornaments, which are used for adorning the deity daily and/or during festivals on special occasions as per the custom and usage of the temples. The second category is the ornaments, which are considered to have antique value and the third category is the ornaments which do not come under categories 1 and 2. Thiruvabharanam Commissioner has taken the stock of category 3 gold items separately and approximately 535 Kg. is available under this category. The State Bank of India provides a Gold Monetisation Scheme introduced by the Central Government, which collects gold as term deposits and interest will be given for the value of the gold deposited. The Board had discussions with the State Bank of India authorities and the recognised agencies, who undertake the process of purification of gold etc., and decided to deposit 500 Kg. of gold available with the Board (i.e., C category of gold), subject to the approval of this Court. The Devaswom Commissioner, Thiruvabharanam Commissioner and the Superintendent of Police, Vigilance and Security wing are authorised to take further steps in the matter. 6. In the statement dated 12.04.2023 of the Senior Deputy Director, Kerala State Audit Department, the key features of the Gold 9 DBA NO.1 OF 2023 ## Monetisation Scheme of the State Bank of Inda, are stated as follows; Gold Mobilization Scheme, which modifies the existing 'Gold Deposit Scheme' (GDS) and ‘Gold Metal Loan Scheme’ (GML), is intended to mobilize gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce country's reliance on the import of gold. 2. The scheme has two types of deposits, one is Short Term Bank Deposit (STBD) and the other is Medium and Long Term Government Deposit (MLTGD). The petition filed by the Board herein relates to the Medium and Long Term Government Deposits. (MLTD). 3. The Principal on STBD and MLTGD shall be denominated in gold. However, the interest on STBD and MLTGD shall be calculated in Indian Rupees with reference to the value of gold at the time of deposit. 4. All gold deposits under the scheme, whether tendered at the Collection and Purity Testing Centre (CPTC)/GMS Mobilization, Collection and Testing Agent (GMCTA) or the designated branches, shall be assayed at CPTC/GMCTA. 5. As mentioned earlier the Board had opted for Medium and Long Term Government Deposit (MLTGD). The deposit under this category will be accepted by the designated banks on behalf of the Central Government. 6. The Medium Term Government Deposit (MTGD) can be made for 5-7 years and Long Term Government Deposit (LTGD) for 12-15 years or for such period as may be decided by the Central Government from time to time. Deposits can also be allowed for broken periods (e.g. 5 years 7 months; 13 years 4 months 15 days; etc.). 7. The rate of interest on such deposits will be decided by Central Government and notified by the Reserve Bank of India from time to time. The current rate of interest as notified by the Central Government for medium term is 2.25% per annum. 10 DBA NO.1 OF 2023 8. All the minimum lock in period and premature closing conditions applicable to ordinary financial deposits are also applicable to this scheme, the details of which have been specified by the RBI in the guidelines issued on 22.10.2015 as mentioned above. 9. The gold received under MLTGD will be auctioned by the agencies notified by Government and the sale proceeds will be credited to Government's account held with RBI. 10. The redemption of principal at maturity shall, at the option of the depositor, be either in Indian Rupee equivalent of the value of deposited gold at the time of redemption, or in gold. However, any premature redemption of MLTGD shall be only in INR. The designated bank shall seek the option of collecting maturing proceeds in gold or in Indian Rupee equivalent from the depositor at the time of initial deposit. 11. In case the redemption of the deposit is in gold, an administrative charge at a rate of 0.2% of the notional redemption amount as on the maturity date in terms of Indian Rupees (INR) will be collected from the depositor and paid to the designated banks to cover logistical and operational costs involved in redemption. However, only for depositors, who sought redemption in gold, will get an option form from the side of bank for withdrawing their deposit through gold or cash at the time of redemption. 12. If a depositor is interested to continue the deposit under GMS either as a MTGD or LTGD, he may be allowed to renew his deposit irrespective of the option exercised at the time of original gold deposit. However, renewal with retrospective effect shall not be allowed. Part of the deposit may also be allowed to be renewed. 13. The Central Government will notify the list of BIS certified Collection and Purity Testing Centers (CPTC)/Refiners under the Scheme and shall be communicated to the banks through Indian Banks' Association (IBA). Each designated bank authorizing a 11 DBA NO.1 OF 2023 CPTC to collect deposit of gold on its behalf shall ensure that its name is included in the list of such banks displayed by the CPTC. Before tendering the raw gold to a CPTC, the depositor shall indicate the name of the designated bank with whom he would like to place the deposit. 14. After assaying the gold, the CPTC will issue a receipt signed by authorized signatories of the centre showing the standard gold of 995 fineness on behalf of the designated bank indicated by the depositor. Simultaneously, the CPTC will also send advice to the designated bank regarding the acceptance of deposit. On submission of the deposit receipt by the depositor, the designated bank shall issue the final deposit certificate on the same day or 30 days after the date of the tendering of gold at the CPTC, whichever is later. 15. Jewellers/Refiners certified as CPTCs by BIS and meeting additional eligibility conditions set by IBA may be recognized by designated banks as GMS Mobilization, Collection and Testing Agent (GMCTA). 16. The designated banks will be free to select the refiners (list notified by Government is attached) based on their assessment regarding the credibility of these entities. The CPTCs will transfer the gold to the refiners as per the terms and conditions set out in the tripartite agreement made viz., CPTC, the refiner and the designated bank. The refiners/GMCTAs shall not collect any charge from the depositor. 17. Gold deposited under MLTGD will be auctioned by MMTC or any other agency authorized by the Central Government and the sale proceeds credited to the Central Government's account with RBI. 7. In the statement dated 12.04.2023 of the Senior Deputy Director, Kerala State Audit Department, suggestions put forward by the Audit Department regarding adoption of Gold Monetisation 12 DBA NO.1 OF 2023 Scheme with the State Bank of India, after verifying the affidavit and the annexures filed by the Travancore Devaswom Board in this DBA, are as follows; “a. The most important feature of this scheme is that the existing gold ornaments (C category Ornaments) in the hands of the Board will hand over to the Central Government through the State Bank of India. As the gold received under MLTOD will be auctioned by the government through auction, the board will get back only new gold at the time of redemption of the deposit on maturity. Relevant matter here is to ensure that the gold deposited by the Board contains only C category ornaments. That is the ornaments other than which are used for adorning the deity (തിരുവാഭരണം) and ornaments having antique value. b. Here Board had submitted that they had taken the stock of gold ornaments kept in different temples and in the strong rooms and categorized and stored the ornaments into categories A, B and C through Thiruvabharanam Commissioner vide ROC.4939/21/M. Accordingly, Thiruvabharanam Commissioner reported that approximately 535 Kg. of gold is available under C category. In order to ascertain the transparency and credibility of this process, it is better to seek the following information/documents to the Board - i. Details of complete steps followed in connection with procedure of categorization. - ii. Documents (eg: Mahazars, Stock registers, Thiruvabharanam Registers, etc.) prepared in connection with procedures. - iii. Details of officials and experts evolved in the process. - iv. The other relevant print to be noted here is how the Board categorised its stock of gold at different strong rooms and the various temples, the yardstick it employed for the purpose and whether it has got the approval of 13 DBA NO.1 OF 2023 the Honourable High Court. 8. In the statement dated 12.04.2023 of the Senior Deputy Director, Kerala State Audit Department, it is stated that an important point to be clarified by the Travancore Devaswom Board is whether the quantity of gold physically verified (i.e., 535 kg.) by them corroborates with the entries in the Thiruvabharanam Registers concerned, because various audit reports have pointed out several irregularities related to the maintenance of Thiruvabharanam Registers in the Devaswoms and the procedures related to the transfer of gold to the strong room. Approximately 600 kg. of gold is presently kept in different strong rooms. When assessing the same, whether the Board had conducted any reconciliation of the stock of gold at different strong rooms with the stock of gold as per the Thiruvabharanam Register of different temples in the different Groups. This is important since on verification of the Thiruvabharanam Register of Nediyanikkal Sub Group, the weight of gold when converted into Mudrapothi, for being kept in the strong room, weighed less than the same shown in the concerned Register in Nediyanikkal Sub Group. Hence the stock of gold as per the strong rooms has to be tallied with the stock as per the Thiruvabharanam Registers in all the Devaswoms, before making any attempt to melt it. Also, the gold received at the Devaswoms as per DFF No.3A receipt and those received as per the Mahazar are assessed only when it is entered at the time of its entry in DFF No.4A Thiruvabharanam 14 ## DBA NO.1 OF 2023 Register. The same is not assayed when taken to be kept in the strong room after converting it into Mudrapothis. As variance in the weight might occur, a reconciliation of the two - the stock of gold as per the DFF No.4A Thiruvabharanam Register and that as per the strong room - has to be resorted to before embarking on joining the Gold Monetisation Scheme. As there is no Thiruvabharanam Register kept at individual strong rooms and only mahazars are kept there, the task of assessing the items would be a Herculean one. 9. In the statement dated 12.04.2023 of the Senior Deputy Director, Kerala State Audit Department, it is also stated that a serious irregularity was noticed in connection with the conversion of multiple mudrapothis of gold into single mudrapothi in Nediyanikkal Sub Group, during the audit for the year 2018-19 (audit conducted on 12/2021). The gold in the strong room weighed less when it was converted into a single ‘Mudrapothi’. There is a difference of 100.55 gms. of gold found during this conversion. The Audit had issued Annexure R1(1) audit notes regarding this. All the irregularities noticed are to be addressed and replied to by the Board before joining the Gold Monetisation Scheme. 10. In reply to the statement dated 12.04.2023 of the Senior Deputy Director, Kerala State Audit Department, an affidavit dated 17.07.2023 has been filed on behalf of the Travancore Devaswom Board, wherein it is stated that the Board took a decision to sort the 15 ## DBA NO.1 OF 2023 gold items kept in the strong room of the temples and to prepare a detailed list of items. The Board entrusted the Thiruvabharanam Commissioner, Executive Officer, Administrative Officer and Accountant of Sabarimala Devaswom to sort out the gold items of Sabarimala Temple and the concerned Deputy Devaswom Commissioner and Assistant Devaswom Commissioner, Sub Group Officer/Administrative Officer, Vigilance Officer to sort out the gold items in other temples. The procedure adopted was by verifying the Thiruvabharanam Register and by preparing a detailed mahazar. The Thiruvabharanams required for daily pooja or for any festival are categorized as 'A' category. The ornaments having antique value and other ornaments were separately sorted out and kept in the strong room as category 'B'. The other items, especially the small items were weighed and separately kept as 'Mudrapothi' in the strong rooms. The items entered in the Thiruvabharanam Register and which were converted into Mudrapothi were removed from the Thiruvabharanam Register by making necessary corrections/entries. There are proper mahazar's and reports such as Thiruvabharanam Register, strong room Mahazar, etc., to verify and identify the items. During the verification of the items in Kazhakkoottam Temple of Ulloor Group, Thirunakkara Temple of Kottayam Group, Kaviyoor Temple of Thiruvalla Group, Thrikkuratti Temple of Thiruvalla Group, Cheruvally Temple of Mundakayam Group, Thiruvalla Temple of Thiruvalla Group, 16 ## DBA NO.1 OF 2023 Ayiroor Temple of Varkala group, the officials found difference in Thiruvabharanam register and the stock. Those items are not included in Annexure A1 for deposit in the Gold Monetisation Scheme. It is also submitted that no other case of shortage/difference with the Thiruvabharanam Register was found in ‘C’ category items. These items are converted into Mudrapothi and are now kept in the strong rooms. It is true that in Nediyanikkal Sub Group in Karunagappally Group, there was a loss of weight when it was converted to Mudrapothi. This dispute is pending in the respective audit notes. The Board has no proposal to use any items in respect of which objections are made by the State audit and other cases of shortage in stock. The Board seeks permission to deposit the stock of ‘C’ category gold kept as Mudrapothi in respect of which there is no dispute/audit objection in the Gold Monetisation Scheme of State Bank of India, for a period of 5 years. 11. Today, when this DBA is taken up for consideration, the learned Senior Government Pleader has placed on record the remarks dated 25.07.2023 of the Senior Deputy Director, Kerala State Audit Department, to the affidavit dated 17.07.2023 filed on behalf of the Travancore Devaswom Board, wherein it is stated that, in reply, the Travancore Devaswom Board has stated that the Board entrusted the Thiruvabharanam Commissioner, the Executive Officer, the Administrative Officer and the Accountant of Sabarimala Devaswom to 17 ## DBA NO.1 OF 2023 sort out the gold items of Sabarimala Temple and the concerned Deputy Devaswom Commissioner and Assistant Devaswom Commissioner, Sub Group officer/Administrative Officer, Vigilance Officer to sort out the gold item in other temples. The Audit has no further remarks regarding this. Regarding the procedure adopted for sorting gold, the Board informed that they did it by verifying the Thiruvabharanam Register and by preparing a detailed mahazar. The Thiruvabharanams required for daily pooja or for any other are categorised as ‘A’ category. The ornaments having antique value and other ornaments were separately sorted out and kept in the strong room as category ‘B'. The other items especially the small items were in 'Mudrapothi' in the strong rooms. The items entered in the Thiruvabharanam Register, which were converted into Mudrapothi, were removed from the Thiruvabharanam Register by making necessary corrections/entries. This reply may be accepted subject to future audit verifications. Another remark put forward by the audit is regarding the documents prepared in connection with the stock taking of gold. For that, the Board replied that there are proper Mahazars and reports such as Thiruvabharanam Register, Strong Room Mahazar, etc., to verify and to identify the items with conspicuous differences in Thiruvabharanam Register and the stock in the following temples; 1 Kazhakootam Devaswom of Ullor Group 18 DBA NO.1 OF 2023 |1 OF 2023|| |---|---| |2|Thirunakkara Devaswom of Kottayam Group| |3|Kaviyoor Devaswom of Thiruvalla Group| |4|Thrikkuratti Devaswom of Thiruvalla Group| |5|Cheruvally Devaswom of Mundakkayam Group| |6|Thiruvalla Devaswom of Thiruvalla Group| |7|Ayiroor Devaswom of Varkala Group| The items of the abovementioned temples are not included in Annexure A1 for deposit in the Gold Monetisation Scheme. On verification of Annexure A1, it is noticed that the details of the temples and gold in the following Groups have not been submitted for verification. |1|Ullor Group| |---|---| |2|Kottayam Group| |3|Thiruvalla Group| Hence the Audit could not ascertain the veracity of the exclusion of the temples mentioned in para.6 of the affidavit dated 17.07.2023 of the Secretary of the Board. Hence the Board may be directed to submit the details to the Audit for verification at the earliest. Regarding the conversion of multiple mudrapothis into one, the Audit had pointed out some discrepancies by citing the example of Nediyanikkal Devaswom and audit notes issued in this regard, which were produced as Annexure R1(1) along with the statement dated 12.04.2023. In the affidavit dated 17.07.2023, the Board accepted the issue pointed out by the Audit in the said Devaswoms and stated that the dispute is pending in the respective Audit notes and that, the 19 ## DBA NO.1 OF 2023 Board has no proposal to use any items in respect of which objections are made by the State Audit and other cases of shortage of stock. In short, the stand taken by the Board in its affidavit dated 17.07.2023 is that the stock of gold has been assessed in an impeccable manner by employing all competent personnel, following all procedures and maintaining necessary records, except in the case of gold mentioned in Para 7 of the affidavit dated 17.07.2023. 12. Heard the learned Standing Counsel for Travancore Devaswom Board for the petitioner, the learned Senior Government Pleader for respondents 1 and 3 and also the learned Standing Counsel for the 2[nd] respondent. 13. Travancore-Cochin Hindu Religious Institutions Act, 1950 enacted by the State Legislature makes provision for the administration, supervision and control of incorporated and unincorporated Devaswoms and of other Hindu Religious Endowments and Funds. Sabarimala Devaswom is an incorporated Devaswom mentioned in Schedule I of the Act, under Chengannur Group, Pathanamthitta Taluk. 14. Section 15A of the Act, inserted by Act 5 of 2007, with effect from 12.04.2007, deals with duties of the Board. As per Section 15A, it shall be the duty of the Board to perform the following functions, namely, (i) to see that the regular traditional rites and ceremonies according to the practice prevalent in the religious 20 DBA NO.1 OF 2023 institutions are performed promptly; (ii) to monitor whether the administrative officials and employees and also the employees connected with religious rites are functioning properly; (iii) to ensure proper maintenance and upliftment of the Hindu religious institutions; (iv) to establish and maintain proper facilities in the temples for the devotees. 15. As per Section 16 of the Act, the Board shall, subject to the provisions of Part I of the Act, exercise supervision and control over the acts and proceedings of all officers and servants of the Board and of the Devaswom Department. Section 25 of the Act deals with Devaswom fund. As per clause (a) of Section 25, Devaswom Fund constituted for the Devaswoms mentioned in Schedule I shall consist of - the sum of fifty one lakhs of rupees mentioned in Article 238(10)(ii) of the Constitution of India as payable to the Devaswom Fund; the moneys realised from time to time by the sale of movable properties belonging to the said Devaswoms; all voluntary contributions and offerings made by devotees; profits and interest received from investments of funds belonging to the said Devaswoms; and all other moneys belonging to or other income received by the said Devaswoms. 16. Section 26 of the Act deals with Devaswom surplus fund and its administration. As per sub-section (1) of Section 26, the unspent balance of each year out of the Devaswom Fund constituted 21 ## DBA NO.1 OF 2023 under Section 25 or such portion of it as may be determined by the Devaswom Board, shall be added on to the Devaswom Surplus Fund. The Devaswom Surplus Fund shall be administered, subject to the Direction and control of the Board, by the Devaswom commissioner appointed by the Board. As per sub-section (2) of Section 26, subject to such rules as may be prescribed in this behalf and with the special sanction of the Board, the Devaswom Commissioner shall have power, where it becomes necessary for any of the Devaswoms mentioned in Schedule I to purchase property, movable or immovable, with moneys from the Devaswom Surplus Fund, and he shall likewise and with the like sanction have power to take, hold, manage or assign on lease any property vested in or belonging to the Devaswom Surplus Fund and to do all other acts incidental to the management of such property. As per sub-section (3) of Section 26, the Board may make rules prescribing the restrictions, limitations and conditions subject to which assignments of property on lease could be made. 17. As per Section 31 of the Act, 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. 22 DBA NO.1 OF 2023 ## 18. In **Ram Mohan Das v. Travancore Devaswom** **Board [1975 KLT 55]** a learned Single Judge of this Court held that, under Section 31 of the Travancore-Cochin Hindu Religious Institutions Act, the Travancore Devaswom Board shall manage the properties and affairs of the Devaswoms, both incorporated and unincorporated and arrange for the conduct of the daily worship and ceremonies and of the festivals in every temple according to its usage. The position of the Board in regard to the Devaswoms - incorporated and unincorporated - is analogous to that of trustees. Any improper act of the Trustees could be questioned by a worshipper. 19. In **M.V. Ramasubbiar v. Manicka Narasimachara** **[(1979) 2 SCC 65]** , in the context of Sections 49, 51 and 52 of the Trusts Act, 1882, the Apex Court explained the nature of the fiduciary position of the trustee and his duties and obligations. It is the duty of the trustees of the property to be faithful to the Trust and execute any document with reasonable diligence in the manner of an ordinary prudent man of business would conduct his own affairs. A trustee could not, therefore, occasion any loss to the Trust and it is his duty to sell the property if at all that was necessary, to the best advantage. Paragraph 4 of that decision reads thus; “4. There is some controversy on the question whether defendant 1 made an outright purchase of the suit property for and on behalf of the trust for Rs. 21,500 on April 19, 1959, or whether he intended to purchase it for himself and then decided to pass it on to the trust, for defendants have led their evidence 23 DBA NO.1 OF 2023 to show that the property was allowed to be sold for Rs.21,500, which was less than its market value, as it was meant for use by the trust and that Defendant 1 was not acting honestly when he palmed off the property to his son soon after by the aforesaid sale deed Ext.B13 dated July 14, 1960. The fact, however, remains that Defendant 1 was the trustee of the property, and was his duty to be faithful to the trust and to execute it with reasonable diligence in the manner an ordinary prudent man of business would conduct his own affairs. He could not therefore occasion any loss to the trust and it was his duty to sell the property, if at all that was necessary, to best advantage. It has in fact been well recognised as an inflexible rule that a person in a fiduciary position like a trustee is not entitled to make a profit for himself or a member of his family. It can also not be gainsaid that he is not allowed to put himself in any such position in which a conflict may arise between his duty and personal interest, and so the control of the trustee's discretionary power prescribed by Section 49 of the Act and the prohibition contained in Section 51 that the trustee may not use or deal with the trust property for his own profit or for any other purpose unconnected with the trust, and the equally important prohibition in Section 52 that the trustee may not, directly or indirectly, buy the trust property on his own account or as an agent for a third person, cast a heavy responsibility upon him in the matter of discharge of his duties as the trustee. It does not require much argument to proceed to the inevitable further conclusion that the Rule prescribed by the aforesaid sections of the Act cannot be evaded by making a sale in the name of the trustee's partner or son, for that would, in fact and substance, indirectly benefit the trustee. Where therefore a trustee makes the sale of a property belonging to the trust, without any compelling reason, in favour of his son, without obtaining the permission of the court concerned, it is the duty of the court, in which the sale is challenged, to examine whether the trustee 24 DBA NO.1 OF 2023 has acted reasonably and in good faith or whether he has committed a breach of the trust by benefitting himself from the transaction in an indirect manner. The sale in question has therefore to be viewed with suspicion and the High Court committed an error of law in ignoring this important aspect of the law although it had a direct bearing on the controversy before it.” (underline supplied) 20. In **A.A. Gopalakrishnan v. Cochin Devaswom Board** **[(2007) 7 SCC 482]** a Three-Judge Bench of the Apex Court held that the properties of deities, temples and Devaswom Boards, require to be protected and safeguarded by their trustees/archakas/shebaits/employees. Instances are many where persons entrusted with the duty of managing and safeguarding the properties of temples, deities and Devaswom Boards have usurped and misappropriated such properties by setting up false claims of ownership or tenancy, or adverse possession. This is possible only with the passive or active collusion of the authorities concerned. Such acts of ‘fence eating the crops’ should be dealt with sternly. The Government, members or trustees of boards/trusts, and devotees should be vigilant to prevent any such usurpation or encroachment. It is also the duty of courts to protect and safeguard the properties of religious and charitable institutions from wrongful claims or misappropriation. 21. In **Travancore Devaswom Board v. Mohanan Nair [(2013) 3 KLT 132]** a Division Bench of this Court noticed that in **A.A. Gopalakrishnan [(2007) 7 SCC 482]** a Three-Judge Bench 25 DBA NO.1 OF 2023 of the Apex Court emphasised that it is the duty of the courts to protect and safeguard the interest and properties of the religious and charitable institutions. The Division Bench further noticed that the relevant principles under the Hindu law will show that the deity is always treated similar to that of a minor and there are some points of similarity between a minor and a Hindu idol. The High Court is the guardian of the deity and apart from the revisional jurisdiction under Section 103 of the Kerala Land Reforms Act, 1963, the High Court is having inherent jurisdiction and the doctrine of _parens patriae_ will also apply in exercising the jurisdiction. 22. In **Suo motu v. State of Kerala and others [2022 (2) KHC 411]** this Court held that in view of the provisions under the Travancore-Cochin Hindu Religious Institutions Act and the law laid down in the decisions referred to supra, the 3[rd] respondent Travancore Devaswom Board is duty bound to ensure proper administration, supervision and control of Sabarimala Devaswom, which is an incorporated Devaswom mentioned in Schedule I of the said Act, under the Chengannur Group. The Board has a statutory duty to monitor whether its administrative officials and employees and also the employees connected with religious rites are functioning properly. The Board is duty bound to exercise proper supervision and control over the acts and proceedings of all officers and servants and to manage the properties and affairs of Sabarimala Devaswom and 26 ## DBA NO.1 OF 2023 conduct daily worships and ceremonies and also festivals in the temple according to its usage. The position of the Board in this regard is analogous to that of trustees, as held by this Court in **Ram Mohan Das [1975 KLT 55]** . Any improper act of the trustees could be questioned by a worshiper. 23. In **Suo motu [2022 (2) KHC 411]** this Court held that the Travancore Devaswom Board and those entrusted with the duty of managing the properties and affairs of Sabarimala Devaswom are duty bound to protect the properties of the deity from any wrongful claims, theft or misappropriation. The position of the Board in this regard is analogous to that of trustees. Any such wrongful claims, theft or misappropriation with the passive or active collusion of the authorities concerned, which are acts of ‘fence eating the crops’ should be dealt with sternly. The deity being a perpetual minor, this Court is having inherent jurisdiction to protect and safeguard the interest and properties of the deity and the doctrine of _parens patriae_ will also apply in the exercise of such jurisdiction. 24. In the instant case, the Travancore Devaswom Board filed this DBA seeking permission to deposit 500 kg. of gold of the Devaswoms in ‘Gold Monetisation Scheme’ of the State Bank of India for a period of five years. Those gold ornaments fall under the third category, i.e., the ornaments which do not come under the first category (those ornaments which are used for adorning the deity daily 27 DBA NO.1 OF 2023 and/or during festivals or on special occasions as per the custom and usage of the temples) and that under the second category (those ornaments, which are considered to be having antique value). The ‘Gold Monetisation Scheme’ is being offered by the 2[nd] respondent State Bank of India with the sanction of the Government of India. Under the said scheme, Medium Term Government Deposit for 5-7 years will attract the interest rate of 2.25% p.a., which will be calculated on the value of gold as on the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold. Premature redemption of gold deposits shall be in Indian rupees only, which would attract penalty. The repayment option on maturity as per the scheme is cash or gold. 0.50% administrative charges will be levied in case of gold redemption on maturity. 25. Having considered the materials on record and also the submissions made at the Bar, we find that the third category of gold ornaments, i.e., gold ornaments which do not come under the first category (those ornaments which are used for adorning the deity daily and/or during festivals or on special occasions as per the custom and usage of the temples) and that under the second category (those ornaments, which are considered to be having antique value) received as offerings in the temples under the management of the Travancore Devaswom Board, which are presently kept in the strong rooms of the 28 DBA NO.1 OF 2023 Board under different Groups can be deposited in the ‘Gold Monetisation Scheme’ of the State Bank of India, for a period of 5 years, which will attract interest at the rate of 2.25% per annum on the value of the gold as on the date of its conversion, and deposited into tradable gold bars after refinement. The Travancore Devaswom Board shall opt for repayment on maturity in gold bars, instead of cash. The interest received by the Board from the said deposit, at the rate of 2.25% per annum on the value of the gold as on the date of its conversion, shall be credited in a separate account to be maintained by the Board. The utilisation of the said amount by the Board shall be based on the orders to be passed by this Court on the application filed seeking permission. It is ordered accordingly. 26. The quantity of gold to be deposited in the ‘Gold Monetisation Scheme’ of the State Bank of India is approximately 535 kg., which is now kept in 16 strong rooms of the Travancore Devaswom Board under 4 Devaswom districts and also at Sabarimala. The Thiruvabharanam Commissioner shall submit a detailed list of the gold to be deposited in the Gold Monetisation Scheme to the Senior Deputy Director, Kerala State Audit Department, Travancore Devaswom Board. On receipt of that list with necessary particulars, the Senior Deputy Director shall approve that list, in order to proceed with the matter further. If found necessary, the Senior Deputy Director shall seek clarifications from the Board, which shall be 29 DBA NO.1 OF 2023 furnished without any delay. With the approval of the Senior Deputy Director, the gold to be deposited shall be taken initially to the strong room of the Board at Valiyasala Devaswom or Sreekandeswaram Devaswom, after preparing separate mahazars in respect of each strong room, in which the weight of gold ornaments in each ‘Mudra Pothi’ shall be entered, after verifying the same with the mahazar inside each ‘Mudra Pothi’ and comparing the same with the relevant entry in the Thiruvabharanam Register. That exercise shall be undertaken in the presence of the Devaswom Commissioner, Thiruvabharanam Commissioner, Chief Vigilance and Security Officer (Superintendent of Police) and an officer deputed by the Senior Deputy Director, Travancore Devaswom Audit. Thereafter, the gold shall be kept in the strong room at Valiyasala Devaswom or Sreekandeswaram Devaswom, after due verification of its quantity at the strong room, in the presence of the Devaswom Commissioner, Thiruvabharanam Commissioner, the concerned officer in charge of that strong room, the Chief Vigilance and Security Officer (Superintendent of Police), the Senior Deputy Director, Travancore Devaswom Board Audit, an authorised representative of the State Bank of India and also the Government of India approved agent under the ‘Gold Monetisation Scheme’. After completing the required formalities, the authorised officer of the State Bank of India shall entrust the gold to the approved agent for its transportation to 30 ## DBA NO.1 OF 2023 Minerals and Metals Trading Corporation of India, Products Artistiques Mataus Precieus (MMTC PAMP) Unit, Gurgaon, Haryana. The melting process of gold by the Government of India approved agent shall be in the presence of the Devaswom Commissioner, Thiruvabharanam Commissioner, the Chief Vigilance and Security Officer (Superintendent of Police), the Senior Deputy Director, Travancore Devaswom Board Audit and also an authorised representative of the State Bank of India. The 2[nd] respondent Bank shall inform in writing the Secretary of the Travancore Devaswom Board and also the Senior Deputy Director, Travancore Devaswom Board Audit the scheduled date for melting gold at MMTC PAMP, Gurgaon, well in advance, and the seal of the boxes shall be opened only in the presence of the Devaswom Commissioner, the Senior Deputy Director and other officials. After melting at MMTC PAMP, Gurgaon, the melting agent shall issue a certificate certifying the actual quantity of pure gold in kilograms. Based on that certificate, the State Bank of India, Bullion Branch, Mumbai shall issue deposit certificate to the Travancore Devaswom Board. On receipt of deposit certificate, the Board shall file a fresh application before this Court seeking further orders in the matter. With the above directions, this DBA is disposed of. In case any further clarification is required in the matter, it would be open to the 31 DBA NO.1 OF 2023 Board or the State Audit Department to file application/report before this Court seeking appropriate orders. Sd/- ## **ANIL K. NARENDRAN, JUDGE** Sd/- **P.G. AJITHKUMAR, JUDGE** bkn/- 32 DBA NO.1 OF 2023 ## **`APPENDIX OF DBA 1/2023`** ``` PETITIONER ANNEXURES ``` ``` Annexure A1 TRUE COPY OF THE REPORT DATED 16.12.2022 SUBMITTED BY THE THIRUVABHARANAM COMMISSIONER Annexure A2 TRUE COPY OF THE RELEVANT PORTION OF THE GOLD MONETISATION SCHEME OF STATE BANK OF INDIA Annexure A3 TRUE COPY OF THE PROCEEDINGS OF THE TRAVANCORE DEVASWOM BOARD VIDE ORDER NO.ROC.4939/11/M DATED 30.11.2022 ANNEXURE AUDIT NOTES Annexure A4 TRUE COPY OF THE WILLINGNESS LETTER DATED 04.11.2022 ISSUED BY THE 2ND RESPONDENT TO THE DEVASWOM BOARD COMMISSIONER RESPONDENT ANNEXURES Annexure R1 True copy of the audit notes for the year 2018-2019 , conducted on 12/2021 ```