Kerala High Court Orders Travancore Devaswom Board to Digitize All Accounts to Curb Financial Misuse

The Kerala High Court has come down heavily on the Travancore Devaswom Board (TDB) over alleged large-scale embezzlement at its Nilakkal petrol pump 'Swamy Ayyappa Fuels', directing it to explain the status of computerising accounts across all its institutions.

A division bench of Justice Raja Vijayaraghavan V and Justice K V Jayakumar perused a special audit report filed by the Joint Director of the Kerala State Audit Department. The bench noted that the report stated deeply disturbing and shocking observations.

The report recorded multiple accounting and supervisory failures: stock registers were not kept up to date (entries only up to July 13, 2024), credit sales of government departments were recorded only to September 13, 2024, cash book entries were not verified by the Assistant Registrar or Executive Engineer, and bank reconciliation statements were not prepared periodically. Daily remittances to the named bank were repeatedly delayed.

The auditors found that daily sales and nozzle initial readings were recorded in an unofficial handbook that was not produced for verification, and stock register balances were prepared without independent verification.

Because official records were deficient, auditors relied on an IOCL periodic inspection, which showed machine readings indicating 1,90,510 litres of high speed diesel sold while registers reflected 1,82,818 litres; after allowing for tank variation and evaporation of 705 litres, a shortfall of 6,987 litres remained.

Court noted disciplinary proceedings appear to have been initiated and that the short remittance is estimated at approximately Rs 40 lakh.

Court framed its analysis against statutory duties under the Travancore Cochin Hindu Religious Institutions Act, 1950. It recited the legal position that administration of Devaswoms and their properties vests in the Board under section 3, that section 15A imposes duties to monitor administrative officials and ensure proper maintenance and upliftment of institutions, that section 24 requires maintenance in a state of good repair, and that section 25 requires safeguarding and correct utilisation of Board funds.

The bench observed that the failures identified at Nilakkal represented a breach of these statutory obligations.

Drawing on earlier proceedings concerning computerisation, court highlighted that the Board had repeatedly assured the court of full implementation of digital systems. Court noted that work had been awarded to a vendor, KELTRON, by an earlier July 26, 2023 order for a project cost of Rs 9,73,61,396, but disputes rendered the software outdated and unsuitable.

Court pointed out that recommendations from the IT Mission and Special Commissioner had called for agile development, expert involvement, training, cloud hosting and a revised project report, which, it said, had not been meaningfully acted upon.

The Nilakkal embezzlement exposes a failure to implement the safeguards earlier directed. Delay in end-to-end computerisation will abet continued misappropriation and erode public trust, the bench said.

Court stressed that transparency, accountability and technological safeguards are statutory obligations of the Board.

Therefore, it directed the Board to ensure a comprehensive, tamper-proof software system capturing revenues and expenditures on a day-to-day basis and set out required capabilities, including real-time tracking of receipts across temples and commercial activities, digital audit trails for vouchers and stock transactions, procurement and tender monitoring, HR integration, and comprehensive contracts and purchase management functionality.

Court further ordered the travancore devaswom board to file a comprehensive and detailed statement before the court on or before August 22, 2025 specifying concrete steps taken to computerise accounts of all institutions, whether an end-to-end ERP has been implemented, and whether the technology platform is modern, microservices based, cloud hosted and fully integrated with accounting software; if no such exercise has been carried out, the Board must furnish an explanation.

The matter will be next heard on August 22, 2025.

Case Title: Joint Director, Kerala State Audit Department Vs. The Secretary, Travancore Devaswom Board

Order Date: August 8, 2025

Bench: Justice Raja Vijayaraghavan V and Justice K V Jayakumar