Supreme Court clarifies the scope of audit for Sree Padmanabha Swamy Temple and its Trust: Marthanda Varma vs. State of Kerala (22 September 2021)

Introduction

Date of the Judgment: 22 September 2021
Citation: Not Available
Judges: Uday Umesh Lalit, S. Ravindra Bhat, Bela M. Trivedi, JJ.

Is a trust created for the benefit of a temple subject to the same audit as the temple itself? The Supreme Court of India recently addressed this question in a case concerning the Sree Padmanabha Swamy Temple and its associated trust. The core issue was whether the special audit of the temple should also include the Sree Padmanabha Swamy Temple Trust (SPSTT), given their distinct legal identities. This judgment clarifies the scope of the audit and provides directions for its completion. The bench comprised Justices Uday Umesh Lalit, S. Ravindra Bhat, and Bela M. Trivedi.

Case Background

The case involves the Sree Padmanabha Swamy Temple and the Sree Padmanabha Swamy Temple Trust (SPSTT). The temple faced a financial crisis due to the COVID-19 pandemic, which led to a halt in devotee entry and a loss of income. The Administrative Committee of the temple sought time from the government to return amounts expended by the State Government. The Supreme Court had previously directed a special audit of the temple for the last 25 years. The SPSTT, created in 1965 by the then Ruler of Travancore, claimed to be a separate entity from the temple, with its own income and objectives. The trust was created for the perpetual continuation of devotional offerings to the Temple, other specified religious rites and certain functions integral to his family traditions, which earlier were done by the erstwhile royal family. The trust’s primary income is from rentals of its properties, which it uses for maintenance, administrative expenses, and offerings to the temple.

Timeline:

Legal Framework

The case primarily revolves around the interpretation of the Supreme Court’s directions regarding the audit of the Sree Padmanabha Swamy Temple and its related entities. The Travancore Cochin Hindu Religious Endowments Act, 1950 (TC Act) is relevant to the administration of the temple. However, the specific sections of the TC Act are not mentioned in the provided text. The court’s directions were based on the recommendations of the learned Amicus Curiae, who suggested a comprehensive audit of the temple and its associated trusts.

Arguments

The Administrative and Advisory Committees of the Sree Padmanabha Swamy Temple argued that the special audit should include the Sree Padmanabha Swamy Temple Trust (SPSTT), as the trust was created for the benefit of the temple. They highlighted the financial crisis faced by the temple and the need for a comprehensive audit to ensure transparency and accountability.

The SPSTT, represented by Mr. Arvind P. Datar, contended that it is an independent entity, distinct from the temple. They argued that the trust was created for specific purposes, including the continuation of devotional offerings and family traditions, and that its funds are separate from the temple’s finances. The trust emphasized that it was not formed to manage the day-to-day affairs of the temple but to provide financial assistance for certain poojas and offerings. They also pointed out that previous audits had not found any commingling of funds or administrative control by the temple over the trust.

The innovativeness of the argument by the SPSTT lies in its emphasis on its separate legal identity and distinct purpose from the temple, despite being created for its benefit. It highlighted that the previous audits did not find any commingling of funds or administrative control, reinforcing its claim of independence.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the special audit of the Sree Padmanabha Swamy Temple, as directed by the Court, should also include the Sree Padmanabha Swamy Temple Trust (SPSTT).

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

• Report of the learned Amicus Curiae dated 15.04.2014, which recommended a special audit of the Sree Padmanabha Swamy Temple, Sree Padmanabha Swamy Temple Trust, and other allied trusts.
• Order of the Supreme Court dated 24.04.2014, directing a special audit of the Temple and its properties.
• Order of the Supreme Court dated 05.05.2015, recording the submissions of Mr. Arvind P. Datar for SPSTT, that the Trust would cooperate with the audit and directing that the audit report be forwarded to Mr. Vinod Rai for his perusal and evaluation.
• Report about Special Audit of Sree Padmanabhaswamy Temple, its properties and Sree Padmanabha Swamy Temple Trust filed by Mr. Vinod Rai in March 2016.
• Judgment of the Supreme Court dated 13.07.2020, which directed an audit for the last 25 years as suggested by the learned Amicus Curiae.

Judgment

The Supreme Court held that the special audit of the Sree Padmanabha Swamy Temple should also include the Sree Padmanabha Swamy Temple Trust (SPSTT). The court reasoned that the direction for audit was not intended to be confined to the temple alone but also extended to SPSTT, considering the report of the learned Amicus Curiae and the submissions of the SPSTT made in the order dated 05.05.2015.

The Court viewed the authorities as follows:

• Report of the learned Amicus Curiae dated 15.04.2014: The Court relied on this report, which recommended a comprehensive audit of the Temple and its associated trusts, to justify including SPSTT in the audit.
• Order of the Supreme Court dated 24.04.2014: The Court considered this order, which initially directed the special audit of the Temple and its properties, as a basis for the audit.
• Order of the Supreme Court dated 05.05.2015: The Court considered the submissions of the SPSTT’s counsel, which indicated cooperation with the audit process, as a reason why the SPSTT should cooperate with the current audit.
• Report about Special Audit of Sree Padmanabhaswamy Temple, its properties and Sree Padmanabha Swamy Temple Trust filed by Mr. Vinod Rai in March 2016: The Court considered the report of the Special Audit.
• Judgment of the Supreme Court dated 13.07.2020: The Court interpreted its earlier direction for a 25-year audit in light of the Amicus Curiae’s report and the submissions of SPSTT, as including SPSTT.

What weighed in the mind of the Court?

The Supreme Court’s decision to include the Sree Padmanabha Swamy Temple Trust (SPSTT) in the special audit was primarily influenced by the need for transparency and accountability in the management of the temple’s resources. The Court emphasized that the audit should be comprehensive and not limited to the temple alone, given the close relationship between the temple and the trust. The Court also considered the previous recommendations of the learned Amicus Curiae and the earlier orders of the Court, which had contemplated a broader audit. The financial crisis faced by the temple also weighed in the mind of the court. The Court also took into account the fact that the SPSTT had previously agreed to cooperate with the audit process.

The Court’s reasoning was primarily based on legal considerations, specifically the interpretation of its previous orders and the recommendations of the Amicus Curiae. While the factual aspects of the case, such as the financial crisis and the separate legal identity of the trust, were acknowledged, they were not the primary drivers of the decision. The Court’s emphasis was on ensuring a thorough and transparent audit, which it believed could only be achieved by including SPSTT in the audit’s scope.

The Court did not consider any alternative interpretations that would exclude the SPSTT from the audit. The Court’s decision was based on its understanding of the scope of the audit as per its previous orders and the recommendations of the Amicus Curiae.

The Court’s decision was that the special audit should include both the Sree Padmanabha Swamy Temple and the Sree Padmanabha Swamy Temple Trust (SPSTT).

The reasons for the decision are:

• The Court’s direction for the audit was not intended to be confined to the Temple but was also with respect to SPSTT.
• This direction has to be seen in the light of the report dated 15.04.2014 of the learned Amicus Curiae.
• This direction has to be seen in the light of the submissions of Mr. Arvind P. Datar, learned Senior Advocate, as recorded in the order dated 05.05.2015.

The Court quoted the following from the judgment:

“If direction No.116(g) as stated above , is considered in the light of developments leading to the passing of the Judgment dated 13.07.2020, it is quite clear that the audit contemplated by said direction was not intended to be confined to the Temple but was also with respect to SPSTT.”

“This direction has to be seen in the light of the report dated 15.04.2014 of the learned Amicus Curiae and the submissions of Mr. Arvind P. Datar, learned Senior Advocate, as recorded in the order dated 05.05.2015.”

“As the order dated 05 .05.2015 had recorded the statement of Mr. Arvind P. Datar, learned Senior Advocate for SPSTT, we are certain that SPSTT will render complete cooperation in the conduct of special audit.”

There were no majority or minority opinions in this case. The bench was unanimous in its decision.

The Court’s reasoning was based on a careful analysis of its previous orders, the recommendations of the Amicus Curiae, and the submissions of the parties. The Court interpreted its earlier directions broadly to ensure a comprehensive audit that would cover all relevant entities. The Court’s decision to include SPSTT in the audit was a logical application of its previous orders and the need for a thorough investigation of the temple’s finances.

The decision has potential implications for future cases involving religious and charitable endowments. It suggests that trusts created for the benefit of a temple may be subject to the same audit as the temple itself, even if they are legally distinct entities. This could lead to greater transparency and accountability in the management of such endowments.

No new doctrines or legal principles were introduced in this judgment. The Court’s decision was primarily based on the interpretation of its previous orders and the specific facts of the case.

Key Takeaways

• The special audit of the Sree Padmanabha Swamy Temple should also include the Sree Padmanabha Swamy Temple Trust (SPSTT).
• Trusts created for the benefit of a temple may be subject to the same audit as the temple itself.
• The Court emphasized the need for transparency and accountability in the management of religious endowments.
• The Court’s decision was based on a comprehensive interpretation of its previous orders and the recommendations of the Amicus Curiae.
• This decision may have implications for future cases involving similar trusts and religious institutions.

Directions

The Supreme Court directed that the special audit with respect to Sree Padmanabha Swamy Temple and SPSTT be completed as early as possible, preferably within three months from the date of the order. The Court also expressed confidence that SPSTT would render complete cooperation in the conduct of the special audit.

Development of Law

The ratio decidendi of the case is that the special audit of a temple can include trusts created for its benefit, even if those trusts are legally separate entities. This decision clarifies that the scope of an audit can be broad and include all entities closely related to the temple. This judgment does not change the previous position of law, but clarifies the scope of the audit.

Conclusion

In conclusion, the Supreme Court clarified that the special audit of the Sree Padmanabha Swamy Temple should also include the Sree Padmanabha Swamy Temple Trust (SPSTT). The Court emphasized the need for a comprehensive audit to ensure transparency and accountability in the management of the temple’s resources. The decision was based on a careful analysis of previous orders, the recommendations of the Amicus Curiae, and the submissions of the parties. The Court directed that the audit be completed within three months and expressed confidence that SPSTT would cooperate fully.

Category

Parent Category: Religious and Charitable Endowments
Child Category: Audit of Religious Institutions
Child Category: Sree Padmanabha Swamy Temple
Child Category: Sree Padmanabha Swamy Temple Trust
Child Category: Travancore Cochin Hindu Religious Endowments Act, 1950

FAQ

Q: What was the main issue in the Supreme Court case regarding the Sree Padmanabha Swamy Temple?
A: The main issue was whether the special audit of the Sree Padmanabha Swamy Temple should also include the Sree Padmanabha Swamy Temple Trust (SPSTT).

Q: What did the Supreme Court decide?
A: The Supreme Court decided that the special audit should include both the Sree Padmanabha Swamy Temple and the Sree Padmanabha Swamy Temple Trust (SPSTT).

Q: Why did the Supreme Court include the Sree Padmanabha Swamy Temple Trust in the audit?
A: The Court included the trust because it was created for the benefit of the temple and to ensure transparency and accountability in the management of the temple’s resources. The Court also relied on previous recommendations and orders which had contemplated a broader audit.

Q: What is the Sree Padmanabha Swamy Temple Trust?
A: The Sree Padmanabha Swamy Temple Trust (SPSTT) is an independent trust created in 1965 by the then Ruler of Travancore for the perpetual continuation of devotional offerings to the Temple, other specified religious rites and certain functions integral to his family traditions.

Q: Does this decision mean that all trusts associated with temples will be audited?
A: This decision suggests that trusts created for the benefit of a temple may be subject to the same audit as the temple itself, even if they are legally distinct entities.

Q: What are the implications of this decision?
A: The decision implies that there will be greater transparency and accountability in the management of religious endowments.

Q: What was the timeline for the audit?
A: The Supreme Court directed that the special audit be completed as early as possible, preferably within three months from the date of the order (September 22, 2021).