Tata Power moves larger HC bench on CAG audit

Written by fe Bureau | New Delhi | Updated: Feb 5 2014, 06:29am hrs
Tata PowerI am told that these firms owe around Rs 4,000 crore to the government
Private power company Tata Power Delhi Distribution (TPDDL) on Tuesday moved a two-judge bench of the Delhi High Court against an earlier order by a single judge refusing to stay a CAG audit of the power discoms.

Senior advocate Sandeep Sethi, appearing for the Tata, mentioned the intra-court appeal against the order before a two-judge bench of Justices BD Ahmed and Sidhharth Mridul and sought its urgent listing and hearing.

"The records are voluminous and it will take at least two days in getting the petition listed for hearing by the (HC) registry. The matter requires urgent hearing," he said.

"You file it in the registry," the bench said.

Earlier on January 24, a single judge of the High Court directed the national auditor to refrain from submitting a final audit report till the next date of hearing, which is March 19. The court had also directed the Delhi government and the CAG to file a detailed counter-affidavit against the allegations of the discoms that the order concerning audit is ultra-vires of the constitution, the CAG Act and the Electricity Act.

Prior to the matter reaching the courts, Delhi chief minister Arvind Kejriwal had called for an audit of the three discoms, alleging that the trio have in the past manipulated accounts with an intention to hike power tariff. While the discoms have been opposing the audit, the CAG had agreed to carry out an audit after receiving a formal request from Delhis lieutenant governor Najeeb Jung.

The Delhi government has a 49% stake in these discoms, which is represented by the chief secretary, along with the finance and power secretaries in the boards of Tata Power Delhi Distribution, BSES Rajdhani Power and BSES Yamuna Power.

In the last hearing in January, counsels appearing on behalf of the discoms told Justice Manmohan that the discoms are private companies, in which the Delhi government is a minority shareholder, and that it is only the majority shareholder who can make a decision on the choice of the auditor.

They also highlighted the fact that the CAG had itself by a 2002 letter had communicated to the discoms that they are outside the CAG ambit. On the other hand, senior counsel Prashant Bhushan appearing on behalf of the government, highlighted that as far back as 2010 the DERC had written to the government, asking them to subject the discoms to a CAG audit.

He alleged that the companies were doubling and tripling the prices at which they had brought their capital goods from sister companies and that it was essential to inspect their accounts as power tariff is required to fixed by the regulator at the actual and normative costs incurred by these discoms.

We had the feeling that the previous Delhi government was in connivance with the discoms. The Delhi government has 49% stake in these private companies that were given the assets and equipment worth thousands of crores of rupees on a token amount of Rs 1 and not only that, I am told that these firms owe around Rs 4,000 crore to the government," he said.