CAG audit: 2nd setback for telcos as HC spurns plea for stay

In a setback to mobile operators, the Delhi High Court, today, asked them to submit their account books to the apex auditor CAG, which has been asked by the government to check under-reporting of revenue for calculating the licence fee.

A division bench comprising justices Sanjay Kishan Kaul and Valmiki Mehta directed telecom operators to provide details of their revenue sharing to the CAG for auditing.

"We direct that without prejudice to the rights and contentions of the parties, the petitioners (telcos) will make available the revenue sharing details/documents to the CAG for auditing," the bench said in an interim order.

Over the telcos plea that they are private industry players and do not fall under the domain of the CAG, the court said, "in our considered view, prima facie the interest of the government is the revenue generated under the licence agreement."
      
The court, however, also said the CAG will not ask for any further document except the details relating to revenue sharing. "No further material would be asked from petitioners except those concerning the revenue sharing arrangements," the court said.
     
The court further directed the CAG not to disclose the information given by the telcos in the public domain or to any third-party. "Since this information is being directed to be disclosed without prejudice to the rights and contentions of the petitioners, the said information shall not fall into the public domain and will not be disclosed to any third party," the court said.
     
The court, however, admitted the petition filed by the GSM lobby COAI and CDMA lobby AUSPI and issued notices to the department of telecom and the sectoral regulator Trai.
     
The COAI and AUSPI had challenged the recent CAG direction to the telcos to submit their revenue sharing details with it for auditing.
     
Earlier on May 20, telecom tribunal TDSAT had also declined a similiar request from Bharti Airtel and Vodafone to stay the CAG audit.