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Delhi discoms move HC against govt order of CAG audit of accounts

In a retort to the Delhi government order to get the power distribution companies audited by the officers of the Comptroller and Auditor General, three discoms on Wednesday filed a plea in the high court challenging the CAG’s authority to audit their finances.

The three discoms - Tata Power Delhi Distribution Ltd, BSES Rajdhani and BSES Yamuna - supply power to consumers in the capital.

‘A writ petition was filed today (Wednesday) in the Delhi High Court challenging the legality of the proposed CAG audit,’ a BSES official said. On 1 Jan, Lt Governor Najeeb Jung directed the Comptroller and Auditor General (CAG) to undertake the audit of the discoms.

Chief minister Arvind Kejriwal, soon after assuming office on 28 December, had met CAG Shashi Kant Sharma and urged him to audit the three private firms that supply power to the city’s residents. He alleged that the discoms were over-charging consumers.

The three companies have now challenged the proposed audit, contending that the CAG’s writ does not run over them.

‘We welcome any independent audit within the purview of law. The CAG’s powers do not extend to Delhi discoms,’ a BSES spokesperson said.

He said the Delhi Electricity Regulatory Commission has already conducted multiple special audits on the discoms. On 7 January, the Delhi government ordered an audit of the discoms by the CAG. Being aggrieved by the order, the discoms filed writ petitions before the high court.

The official said that the CAG vide a letter dated 23 October 2002 communicated to the discoms after privatisation in the same year that the firms were not government entities under the Companies Act. The CAG Act, under which the present audit is sought to be done, does not empower the CAG to conduct audit of private companies. It only talks of ‘bodies and authorities’ other than those incorporated ‘under any law made by Parliament’. The Delhi discoms are incorporated under the Companies Act, 1956 and granted licences by the DERC accordingly.
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