Court petitions demand Ayodhya Ram Mandir's CAG audit: What does law say?

With allegations of donations meant for the Ram Mandir in Ayodhya being siphoned off, triggering a political and legal controversy, demands are mounting for a CBI probe as well as a Comptroller and Auditor General (CAG) audit of the Shri Ram Janmabhoomi Teerth Kshetra Trust and the temple's finances.

Public interest litigations (PILs) have been filed before both the Allahabad High Court and the Supreme Court questioning the Special Investigation Team (SIT) constituted by the Uttar Pradesh government. One of the pleas before the High Court has also sought a CAG audit of the temple trust.

Since the Pran Pratishtha ceremony in January 2024, the temple has received millions of devotees and substantial donations in the form of cash, gold, silver, jewellery and other valuables from devotees across the country and abroad.

The allegations of financial misappropriation and theft of devotees' offerings have triggered a major political controversy, with claims that cash donations of at least Rs 7 crore, a figure that could be significantly higher, along with gold, silver and diamond-studded offerings, were embezzled due to lax oversight, failure to follow standard operating procedures and compromised CCTV footage. Amid mounting political pressure and a formal request from the Shri Ram Janmabhoomi Teerth Kshetra Trust, the Uttar Pradesh government constituted a three-member Special Investigation Team (SIT) to probe the allegations.

The key legal question now is whether the CAG can audit the Ram Temple trust?

WHAT POWERS DOES THE CAG HAVE?

The CAG ordinarily audits the accounts of the Union and state governments, government departments, government-owned corporations and statutory authorities.

Under Section 20 of the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971, however, the CAG may also audit the accounts of a body or authority that does not ordinarily fall within its jurisdiction if the President, a Governor or the Administrator of a Union Territory entrusts such an audit in public interest.

The provision also allows the CAG to seek access to the accounts of a body where a substantial amount has been invested in or advanced to it by the Central or a state government.

Broadly, a Section 20 audit requires:

a) substantial government investment or financial assistance, or other grounds justifying public interest;
b) a request from the President, Governor or UT Administrator; and
c) an opportunity for the concerned body to present its case before the audit is ordered.

The scope of Section 20 is also under scrutiny in an unrelated dispute between Delhi's power distribution companies (discoms) and the Delhi government.

The discoms have challenged a proposed CAG audit, arguing that they cannot be subjected to one. In April and May, the Appellate Tribunal for Electricity (APTEL) observed that there was no prima facie public interest warranting such an audit.

On Monday, however, the Delhi High Court held that there is no express legal bar on a CAG audit provided the procedure under Section 20 is strictly followed. The court also observed that the proposed audit appeared to be in public interest since regulatory assets directly affect electricity consumers.

The issue is likely to be examined further by a Division Bench and could eventually reach the Supreme Court. The outcome may also have implications for demands seeking a CAG audit of the Ram Temple trust.

CAN RAM TEMPLE TRUST BE BROUGHT UNDER 'PUBLIC INTEREST' CLAUSE?

The petition before the Allahabad High Court argues that the Ram Temple is a "religious and charitable institution of immense national significance" sustained by donations from devotees across India and abroad, as well as contributions from government organisations.

It contends that allegations of financial irregularities have the potential to erode the faith of millions of devotees and therefore warrant an independent and transparent audit.

However, when the matter was mentioned before the High Court, the Bench declined urgent listing, noting that the Uttar Pradesh government had already constituted an SIT.

WHAT DO LEGAL EXPERTS SAY?

Gauhar Mirza, Partner at Saraf & Partners, told India Today that while the CAG's powers are wide, they are not without limits.

"The Supreme Court’s ruling in the BSES case makes it clear that the CAG can scrutinise the use of public funds and subsidies flowing through private entities, but that does not translate into a general power to audit their entire affairs. Section 20 of the CAG Act provides an exceptional mechanism by which the President or a Governor may entrust the audit of bodies outside the CAG’s ordinary jurisdiction in public interest. Therefore, demands for a CAG audit of institutions such as the Ram Janmabhoomi Teerth Kshetra Trust must be tested against the statutory framework," Mirza pointed out.

He added that unless there is government ownership, substantial public financing or a specific entrustment under Section 20, "the CAG cannot exercise a roving jurisdiction over private or charitable bodies merely because they perform activities of public importance."

Advocate Amir Khan Wali said the legal threshold in the Ram Temple case is significantly higher.

"The expression 'public interest' is often misunderstood in audit jurisprudence. The CAG is not a general ombudsman empowered to audit every institution of public significance. Its authority flows from Articles 148 to 151 of the Constitution and the provisions of the CAG Act," he said.

According to Wali, the crucial legal question is the source of the CAG's jurisdiction over the Trust.

"At present, the Shri Ram Janmabhoomi Teerth Kshetra Trust does not fit neatly into any traditional category of auditable entity."

Although the Trust was constituted by the Union government pursuant to the Supreme Court's Ayodhya verdict, it is neither a government department, a government company, a statutory corporation, nor a body created by parliamentary legislation, and it is not substantially financed through government grants.

Consequently, Wali said, the temple's immense public significance alone does not automatically confer CAG jurisdiction.

WHAT ABOUT PREVIOUS TEMPLE AUDITS?

There have been court-directed audits of major temples in the past, but the legal basis was different.

The audit of the Padmanabhaswamy Temple was conducted by an independent team of auditors appointed pursuant to directions issued by the Supreme Court under its plenary powers under Article 142 of the Constitution.

In the case of Sabarimala, the temple is administered by the Travancore Devaswom Board, a statutory body established under state legislation and substantially funded by the government. That statutory character places it squarely within the CAG's audit jurisdiction.

The legal distinction, therefore, is that while the Ram Temple may be a matter of immense public importance, a CAG audit would require an independent statutory basis under the Constitution and the CAG Act, rather than public interest alone.

- Ends