In a set back to telcos, the Supreme Court on Tuesday refused to stay a Delhi High Court order enabling the Comptroller and Auditor General (CAG) to audit their account books to ascertain revenue leakages in licence fee payable to the government.
A vacation bench headed by Justice Deepak Verma, while adjourning the matter till August, rejected Cellular Operator’s Association of India (COAI) counsel Smriti Mishra’s plea that the high court’s direction to allow CAG to inspect their account books was without merit.
?That is the statutory requirement of law…You (telcos) would have to cooperate,? the Bench observed.
Challenging the Delhi High Court’s order of May 26 that directed mobile operators to submit their account books to CAG, the joint petition filed by COAI, Bharti Airtel, and Vodafone Essar said.
CAG had no jurisdiction or power to conduct audit over them as they were private companies and only DoT can and does seek information and documents from them.
According to it, under Article 149 of the Constitution, CAG can only audit Union, states and other agency or body covered under the Comptroller and Auditor General of India (Duties, Powers and Conditions of Service) Act 1971.
Besides, DoT had already carried out a comprehensive and detailed special audit over the petitioners, which extended for eight months and the telcos had fully cooperated in providing details regarding revenue, the petition filed through law firm Karanjawala & Co stated.
The petitioner also requested that apex court to restrain the government and CAG ?from invoking or taking any coercive action against them? under the Rule 5 of the Trai Service Provider (Maintenance of Books of Accounts) Rules 2002 and from giving effect to CAG’s letters dated May 19.
The high court has asked the telecom operators to submit their account books to CAG, which has been asked by the government to check under-reporting of revenue for calculating the licence fee.
However, the court had clarified that CAG will not ask for any further document except the details relating to revenue sharing and the information should not be disclosed in the public domain or to any third-party.
While the high court had admitted the petition filed by GSM lobby COAI and CDMA lobby Association of Unified Telecom Service Providers of India, it had issued notice to the department of telecom and the Telecom Regulatory Authority of India.
Even the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on May 20 had declined a similar request from Bharti Airtel and Vodafone to stay the CAG audit.