Supreme Court to hear CAG audit plea today

The Supreme Court will hear on Friday a special leave petition against a Delhi high court order quashing the Delhi government’s decision to get the accounts of three private power distribution companies audited by Comptroller and Auditor General (CAG) since inception.

The high court, while entertaining petitions from discoms on October 30, 2015, quashed the order dated January 7, 2014 bringing the discoms under the ambit of CAG audit. The high court held that the determination of tariff is on the sole domain of the DERC, which is well empowered to itself conduct the same or have the same conducted and the report of CAG of audit of discoms has no place in the regulatory regime brought about by the Electricity Act and the Reforms Act’. The high court rejected the ACG audit on the ground that the CAG audit would not serve any public purpose, as the scope of the CAG audit would only be tariff determination, which lies completely within the domain of the DERC.

Assailing this order, the United RWAs Joint Action in its special leave petition said the high court erred to appreciate the fact that the audit of the discoms for tariff determination in no manner assumes the power given to the DERC under the DERC Act, especially in light of the recommendations of the DERC vide letter dated 08.07.2010 for CAG audit and categorical stand taken by the Delhi government before the high court. The high court erred not to consider the allegations levelled and imputations made by the DERC, the PAC report and improper/ illegal tariff fixation.

The SLP said it was a fit case in which the high court ought to have ordered for CAG audit of discoms in public interest and also ordered a CBI investigation of the allegations of data manipulation by the discoms and of the misconduct by the members of the DERC. The high court failed to appreciate that during unbundling of the Delhi Vidyut Board (DVB), the assets of the government was transferred to the private discoms at throw away prices and loans of several crores were waived of to make the system of generation and distribution of electricity workable.

The Public Accounts Committee on Privatisation of Power in Delhi, which categorically mentions inter alia, “Prime land costing several thousand crores in Delhi has been handed over to the discoms for a license fee of Rs 1 per month for a period of 25 years which is nothing but pittance with no legal safeguards to prevent the aforesaid land from being commercially exploited by the discoms. The SLP sought quashing of the impugned judgment and an interim stay of its operation.