HC refuses to stay govt's decision of CAG audit of discoms

Tags: News
In a jolt to three private discoms, the Delhi High Court today refused to stay the city government's decision asking the Comptroller and Auditor General (CAG) of India to audit their accounts.

The court also asked BSES Rajdhani Power Ltd, BSES Yamuna Power Ltd of Reliance Anil Dhirubhai Ambani Group and Tata Power Delhi Distribution Ltd to cooperate with CAG in auditing and asked the top auditor not to submit its report till it hears the discoms' petitions on March 19.

"This court is of the view that these matters require detailed hearing. Issue notice....However, the prayer for the stay on the audit/impugned order (of Delhi government) is declined. The Comptroller and Auditor General (CAG) of India shall not submit the report (to the government) till March 19, next date of hearing," Justice Manmohan said.

Discoms had moved the court against the January 7 decision of the Aam Aadmi Party-led government ordering CAG audit, saying that the top auditor is not empowered to scrutinise accounts of private companies.

During the hearing, Prashant Bhushan, appearing for the Delhi government, opposed the plea of the discoms that CAG was not empowered to audit them and rather sought transfer of the pleas to a division bench which is hearing a PIL on the same issue.

Senior advocate Harish Salve, appearing for the Tata firm, said the CAG Act provides for "safeguard" and deals with "body and authorities", besides the central and state government and their companies, which can be subjected to an audit by CAG and private firms cannot be audited by the auditor.

"Genesis of the problem is this. I am a private company registered under the Companies Act and the Delhi government is a minority stake holder. Who will decide on the auditor and my answer is only a majority stake holder can do it," he said.

"If you (government) are ordering audit to reduce the electricity tariff then the government has no role to decide it," he said, adding the issue of CAG audit should have been decided by the Lt Governor and not by Additional Power Secretary.

Countering the plea, Bhushan said, "The dispute has not started on a clean slate. The private companies were given away the assets of erstwhile Delhi Vidyut Board worth rupees thousands of crores in consideration of Rs one. The CAG provisions provide for such an audit."

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