CAG audit: SC regular bench to hear pleas of discoms

The Supreme Court today declined a plea of power distribution companies seeking setting up of a constitution bench for hearing the issue of validity of an audit by the Comptroller and Auditor General (CAG).
A bench of Justices J Chelameswar and S Abdul Nazeer said that the regular bench will hear the matter on merit.
The apex court verdict came on a plea filed by the United RWA Joint Action and others. It posted the matter for further hearing on July eight.
Challenging Delhi High Court order, power distributing companies had contended that CAG was not empowered to scrutinise the accounts of private firms under Section 20 of the CAG Act.

Delhi government in 2014 had ordered the audit of three power distribution companies - BSES Rajdhani Power Ltd, BSES Yamuna Power Ltd and Tata Power Delhi Distribution Ltd - by the CAG.
It had sought the audit on the ground of alleged financial irregularities in the accounts of these companies that supply power to the city.

The High Court had termed as "populist" the decision of the AAP government to have CAG audit of discoms -- Tata Power Delhi Distribution Ltd (TPDDL), BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd, which supply power in Delhi.
There can be no other audit by CAG at the instance of the state government when regulatory body, Delhi Electric Regulatory Commission, is already there to audit the accounts of the discoms, it had said.

"Such populist measures without considering the ultimate advantage thereof, not only end up being contrary to public interest but also put unnecessary burden on the courts," the High Court had said.
The court had made the observations while quashing the Delhi government's January 7, 2014 directive to carry out an audit of the three discoms by the CAG.
It had also not agreed with the government's contention that the audit was ordered in public interest for determining the tariff, saying "determination of tariff is in sole domain of DERC which is well empowered to itself conduct the same or have the same conducted and the report of CAG audit of discoms has no place in the Regulatory Regime brought about by the Electricity Act and the Reforms Act".

The discoms are 51:49 per cent joint venture between the private companies and the Delhi government.