Delhi HC rules against CAG audit of discoms

In a surprise move, the Delhi high court on Friday quashed the Aam Aadmi Party government’s decision to get accounts of the three power distribution companies — Tata Power Delhi Distribution Ltd (TPDDL), BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd — audited by the Comptroller and Auditor General (CAG).

CAG’s draft report had earlier mentioned that Delhi’s three power distribution companies had inflated their losses to the tune of Rs 8,000 crore, manipulated consumer figures, bought costly power, suppressed revenue and gave undue favours to group firms.

The draft report had also questioned conduct of power regulator DERC and government nominees on the board of the three discoms.

On Friday, a Division Bench of Chief Justice G Rohini and Justice R S Endlaw ruled that the CAG’s audit process carried out so far as well its draft report would be “non-est” with no bearing any more. The court accepted the discoms’ contentions about procedural lapses by the Delhi government. The discoms had moved court seeking stay of the draft audit report released by CAG recently.

Earlier, the Delhi government had said that CAG has “full right” to carry out a comprehensive audit of private discoms as the issue involves “public interest”.

Disagreeing with the high court’s verdict of disallowing the CAG audit of private power distribution companies (discoms), the Aam Aadmi Party on Friday asked the state government to file an appeal in this regard in the Supreme Court.

“Del HC order is a temporary setback for the people of Del. Del govt will soon file an appeal in SC,” Chief Minister Arvind Kejriwal tweeted.

He also wrote: “I am committed to providing cheap electricity to people of Delhi. Our fight will continue.” His party colleague and legislator Saurabh Bhardwaj said the official auditor had already probed the books of these three companies and had found discrepancies.

The party also argued that it was necessary to investigate how electricity tariffs were fixed, were the rates at par with neighbouring states, how and at which rate discoms purchased electricity during the earlier Congress regime.

“The findings of the CAG draft report which have been widely reported in the media and contents of which have not been denied by any concerned party, make it crystal clear that the discoms indulged in a mega financial scam.

“Not only have the discoms inflated their regulatory asset claims by thousands of crores, the CAG draft findings have put this exaggerated claim at Rs 8,000 crore,” the party said in a statement.

During polls, AAP had promised audit of discoms if it came to power. Following its victory in December 2013, the state government had ordered a CAG audit. The CAG is yet to submit its final report.

The discoms had challenged the AAP government’s January 7, 2014, decision ordering a CAG audit of their accounts.

They had also challenged an order of a single judge of the high court who had refused to stall the CAG audit. The single judge, in his January 24, 2014 order, had also asked the discoms to “fully cooperate with CAG in the audit process”.