Akshaya Centres Not Meant To Create Unauthorized Wealth, Authorities Should Take Action To Prevent Proscribed Financial Transactions: Kerala HC

The petitioners had approached the Court challenging the orders issued by the District Collector and the Director of the Akshaya Project for the cancellation of the licence of Akshaya Centre alleging illegal financial transactions.

“…..when the existing licensee acts illegally and enters into proscribed financial transactions with another qua the 'Akshaya Centre', the Authorities are under an inviolable duty to step in and take action, as is mandated in law. If this is not done, it would be a premium for others to deal with 'Akshaya Centres', as a manner of creating unauthorized wealth and illegal gains, which can never be permitted, since it would tantamount to being flagrantly contrary to public interest, for which alone, such Centres are designed and established.”, stated Justice Devan Ramachandran

Background Facts

The petitioner no. 1 (WPC No. 4691/2023) was the original licensee of an Akshaya Centre who approached the Court against the orders issued by the District Collector and the Director of the Akshaya Project cancelling his licence. The petitioner no. 2 (WPC No. 37947/2023) has been operating the Akshaya Centre for the past three years and was paying the petitioner no. 1 consideration for it. She approached the Court stating that the Akshaya Centre has to be transferred in her name.

Thus, the Court considered the nature of financial transactions between petitioner no. 1 and 2 in connection with the impugned Akshaya Centre.

The Counsel for petitioner no. 1, Advocate Manas P Hameed submitted that he transferred Akshaya Centre to petitioner no. 2 since he was finding it difficult to run it due to personal reasons. It was argued that the transfer of licence was not an illegal transaction but was entered into out of necessity.

The Counsel for petitioner no. 2, Advocate Manu Ramachandran contended that the acts of petitioner no. 1 to retain the licence in his name were confutative and mischievous since he had obtained huge amounts of consideration on the promise that the licence of the Akshaya Centre would be transferred in her name. It was also stated that petitioner two was paying a rent of three thousand rupees per month to petitioner one for operating the Akshaya Centre for the past three years on the belief that he would transfer the licence in her name. Thus, the Counsel argued that the licence should be transferred in favour of petitioner two.

The Government Pleader, P S Appu submitted that the licence of Akshaya Centre could be transferred only in favour of a close relative if the existing licensee obtains Government Employment, unfortunately dies, suffers from mental or physical inability. It was argued that transactions between petitioner no.1 and 2 were questionable and the licence had to be cancelled and a fresh tendering process would be initiated.

Verdict

The Court found that when the exiting licence acts illegally to enter into prohibited financial transactions in connection with his licence of Akshaya Centre, the authorities can take action in accordance with law.

It found that petitioner no.1 who was the original licensee had allowed petitioner no. 2 to operate the Akshaya Centre for the past three years contrary to law and obtained illegal consideration for the same.

The Court noted that the transactions were illegal, “the conceded payment of Rs.3,40,000/- to ……(petitioner two) by ……(petitioner one), surely can only be found to be an illegal transaction, at least qua the terms of grant of licence for 'Akshaya Centres'; and hence, I cannot find fault with the impugned orders at all.”

Accordingly, the Court dismissed the writ petitions and upheld the orders issued by the authorities in cancelling the licence of petitioner no. 1 on account of his conduct and transactions entered with petitioner no. 2 for the transfer of the licence of the Akshaya Centre.

Citation: 2024 LiveLaw (Ker) 101

Case title: Ratheesh K R v Director, Akshaya Project & Connected Case

Case number: WP(C) NO. 4691 OF 2023, WP(C) NO. 37947 OF 2023

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