Supreme Court notice to Delhi discoms: Why objection to CAG audit?

The Supreme Court on Monday issued a notice to three power discoms in national capital New Delhi, asking them what objection did they have to being audited by the office of Comptroller and Auditor General of India (CAG).

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Monday's notice came three days after the Delhi Government had moved the apex court to challenge a Delhi High Court verdict that disallowed the CAG audit of power distribution companies in the national capital.

The Delhi High Court had in October last year quashed a Delhi Government decision to get the accounts of the capital's three private power distribution companies scrutinised by the CAG.

The high court order had then upheld the plea of the three companies -- Tata Power Delhi Distribution, BSES Rajdhani Power and BSES Yamuna Power -- against the Delhi Government's January 7, 2014 order for CAG scrutiny of their accounts.

The three companies had then maintained that since they were privately owned and run, they did not come under the purview of the CAG purview.

According to a CAG petition, the three Delhi-based discoms enjoyed funding of more than Rs 5,000 crores from the Delhi Government since their inception on July 1, 2002, and therefore, required to be audited.

"Considering that the discoms enjoyed funding of more than Rs 5,000 crore from the state by way of equity, debt, transferred assets and also receivables, there is a nexus with the consolidated fund of the state, and hence the CAG has a statutory duty to scrutinize the books of accounts of discoms," the CAG said in its petition before the Supreme Court challenging the Delhi High Court order quashing the federal audit of discoms.

The petition further said "there were huge discrepancies in their (discoms) accounts" and the state government's decision in seeking an audit of their books was not unjustified.

The three discoms-Anil Ambani's ADAG-owned BRPL and BYPL and the Tata-owned NDPL-are joint ventures between these private companies and the Delhi Government.

In each of the discoms, the Delhi Government has a 49 percent stake, while the private entities have a 51 percent stake each.