HC refuses to stay Delhi govt’s order for CAG audit of discoms

Kaushal shroff Posted online: Saturday, Jan 25, 2014 at 0000 hrs
New Delhi : Reliance Infrastructure-owned BSES Yamuna and Rajdhani and Tata Power Delhi Distribution (TPDDL) were in for a setback on Friday after the Delhi High Court refused to stay a January 7 order by the AAP government directing CAG to audit the three discoms.

However, in some relief to the firms, the court directed the national auditor to refrain from submitting a final report till the next date of hearing, which is March 19. The court also directed the Delhi government and CAG to file a detailed counter-affidavit against the allegations of the discoms that the order concerning audit is “ultra-vires of the Constitution, CAG Act and the Electricity Act.”

Delhi CM Arvind Kejriwal had called for an audit of the three discoms alleging the trio had in the past manipulated accounts with an intention to hike power tariff. While the discoms have been opposing the audit, CAG had agreed to carry out an audit after receiving a formal request from Delhi’s Lieutenant Governor Najeeb Jung.

The Delhi government, at present, 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 Limited, BSES Rajdhani Power and BSES Yamuna Power.

During the course of the proceedings, counsels appearing on behalf of the discoms told the court 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.

On the other hand, senior counsel Prashant Bhushan, appearing on behalf of the government, said 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.