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  1. CAG lacks jurisdiction to vet accounts, say Delhi discoms

CAG lacks jurisdiction to vet accounts, say Delhi discoms

More than a decade ago, the Comptroller and Auditor General (CAG) had refused to do an audit of one of Delhi’s three private power distribution companies (discoms).

By: | New Delhi | Published: October 19, 2015 12:40 AM

More than a decade ago, the Comptroller and Auditor General (CAG) had refused to do an audit of one of Delhi’s three private power distribution companies (discoms). Now, the companies have told the Delhi High Court to validate their claim that their the national auditor lacked a jurisdiction to vet their accounts.

The CAG in 2002 rejected the request for audit of the discom on the ground that the firm had ceased to exist as a government entity. It added that the audit could only have been done if the government had directed the CAG before the entity was privatised.

The discoms — BYPL, BRPL and TPDDL — are citing this precedent in the court at a time the CAG has just completed the exit conference with the discoms on its draft audit report on these discoms. The draft report reportedly said that these firms had inflated assets, got unjustifiable assistances from the state government and indulged in various other irregularities. The Arvind Kejriwal-led Delhi government, which has insisted on the CAG audit of the discoms, is of the view that Delhi’s power tariff could be brought down if the discoms move to more efficient practices.

“From July, 2002, the company (discom) is not a government company under sector 617 of the Companies Act 1956.

Since the company is not a government company as on today, the office can not appoint a statutory auditor for the period when it was a government entity,” CAG had replied to one of the discoms in 2002.

“One of the discoms had requested the CAG to audit the companies as it would have helped them start on a clean slate after taking over operations from the government-owned Delhi Vidyut Board in 2002,” an official with one of the discoms said.

Although after the exit interviews, the CAG will now proceed to prepare the final audit report and submit it to the state government, a court verdict in favour of the discom could  make the 18-month long audit process redundant, analysts feel.

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