India, April 11 -- Tensions have escalated between Pune's prestigious Gokhale Institute of Politics and Economics (GIPE) and its parent body, the Servants of India Society (SIS), with both sides locked in a public dispute over alleged financial improprieties and governance issues.

In a strongly worded press statement issued on Thursday, GIPE's communication officer Parag Waghmare accused SIS president Damodar Sahoo of misusing government funds for a personal legal battle. The statement stated Sahoo should also be named as an accused in an ongoing FIR pertaining to fund diversion case in which Milind Deshmukh, secretary of the 120-year-old body has already been arrested.

"Sahoo demanded money ( Rs.10 lakh) from the Gokhale Institute in 2...