Transfer of Rs. 10 Crore to IIRM

3.1 Transfer of Rs. 10 Crore to IIRM

Test check revealed that on 8th November 2002 one out of two authorized signatories for operating bank account instructed the Indian oversea Bank, Parliament Street New Delhi referring to the telephonic instruction of the chairman that Rs. 10Crore be transferred in favor of IIRM from the Authority's
Account CA-3000 Accordingly the bank prepared two pay orders (nos 608903& 608904 dated 8/11/2002) of Rs. 5 crore each on the sane day in favor of IIRM which is separate company registered under companies Act 1956. Thus Rs. 10 crore was transferred on the basis of letter signed by only one signatory. Which is highly irregular. Moreover Rs. Crore should have been first credited to bank account of the Authority and the pay order of the above said amount should have been issued.

On the matter being pointed out. The Authority stated (July 2004) that the transfer of Rs. 10 crore was only an act of execution of the decision of the Authority, which the single signatory did as a "designated officer' of the Authority. The reply is not tenable. As under the banking arrangements entered into by the Authority. The funds could have been transferred only under instructions of both the authorized cheque drawing signatories. The Authority has however noted audit observation for adherence in future.