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CAG is not a munim, SC clarifies to centre

On Monday, the Supreme Court, while dismissing a public-interest litigation [PIL] challenging the power of the Comptroller and Auditor General [CAG] to conduct performance audit of coal block allocation and other issues of the government to arrive at presumptive losses, observed that the national auditor was not just a munim or accountant and that scrutinising the effective use of resources is their primary duty and it was for Parliament to accept or reject their reports.

A bench of Justice R M Lodha and Justice Anil R Dave said that the CAG could not be constrained by mere labels of jurisdiction and look into the efficiency and efficacy of government decisions. It said that if the CAG exceeded his constitutional and statutory mandate, Parliament could say so while going into the audit reports.

Brushing aside the petitioner's argument that the CAG had no constitutional mandate to scrutinise the effectiveness or economic aspect of the government's policy matters, the court said that the CAG was something more than an auditor of a company or corporation and could comment on the efficacy of the government's policy decisions. It said that the CAG was a constitutional authority entitled to review and conduct such audit on revenue allocations relating to the centre, the states and the union territories.

'Parliament is there to guide and correct the CAG. CAG is the principal auditor whose function is to go into the economy, effectiveness and efficiency of the use of resources by the government. If the CAG will not do, then who else will do it.

'Effective use of resources is the primary duty of the CAG. CAG shall examine all aspects about effectiveness, efficiency and economy. There is a full-fledged mechanism to consider the CAG reports,' Justice Lodha observed.

The bench said that it was for the CAG to comment as to how the government had utilised the resources and ultimately it is for Parliament to take the final call on the CAG reports.
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