Supreme Court seeks reply from discoms over CAG audit

The Supreme Court on Monday sought the response of three private power distribution companies in the city to explain why an audit by the Comptroller and Auditor-General should not be conducted into their functioning since inception.

A bench of Justices Dipak Misra and N.V. Ramana issued a notice on special leave petitions against a Delhi high court order quashing the Delhi government’s decision to get the accounts of three private power distribution companies audited by CAG. The SLPs were filed by the Delhi government and United Raws Joint Action.

The high court while hearing petitions from discoms on October 30 had quashed the order dated January 7, 2014 bringing discoms under the ambit of the CAG audit. The high court has held that the determination of tariff is on the sole domain of DERC which is empowered to conduct the same. The court had also ruled that the 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 CAG audit on the ground that it 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 Derc.

The SLPs said the high court had erred to appreciate the fact that the audit of the discoms for tariff determination in no manner assumed 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 SLPs said it was a fit case in which the high court ought to have ordered for the CAG audit of discoms in public interest and also ordered a CBI probe 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 were transferred to the private discoms at throwaway prices and loans of several crores were waived 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 licence fee of '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 SLPs sought quashing of the impugned judgment and an interim stay of its operation.