Delhi High Court declines stay on audit of DistComs, asks companies to cooperate

Delhi HC likely to issue orders on the Delhi govt move to audit power distribution companies later on Friday.

New Delhi | Updated: January 24, 2014 1:28:34 pm
The power companies were represented by Mukul Rohatgi and Salve. (Express Archive) The power companies were represented by Mukul Rohatgi and Salve. (Express Archive)

A Delhi High Court on Friday declined stay on the Delhi government’s order calling for an audit of power distribution companies. The court asked the Comptroller and Auditor General (CAG) to not submit its final report till the case is heard. The apex court also directed the power companies to cooperate fully with the audit.

However, the power companies allege that the audit is a political ploy and that the order was passed with ‘malice on law’ without giving the DistComs an opportunity to be heard. The companies also argued that under the Electricity Act 2003, the LG should have initiated the file instead of agreeing with the government decision.

Earlier in the day, appearing for the power distribution companies of Delhi, senior lawyer Harish Salve called the AAP government’s order for an audit of these companies a ‘shaikh chilli order’ made without application of mind.

“If an audit of private companies is allowed, the Comptroller and Auditor General would have authority to audit every private citizen because all taxes go to the consolidated funds of India,” he argued in the Delhi High Court.

He told the Bench of Justice Manmohan that distcoms don’t share tariff receipts with the government, while telecom firms pay license fees to government and hence their audit was justified. He said the same provisions don’t apply to DistComs.

During the arguments, DistComs told the court that if the government wants to change tariffs it should approach the Electricity Regulatory Commission or agree to pay subsidy in advance. Demanding a stay on the audit during pendency of the case, they said the Delhi Government  does not have authority to order an audit. The power companies were represented by Mukul Rohatgi and Salve.

Appearing on behalf of the government, senior lawyer and AAP member Prashant Bhushan tells court that DERC had recommended CAG audit in 2010. “Public interest demands audit because there is manipulation of accounts,” he added.

After hearing the arguments, the judge said he would have to consider the matter carefully and may order that the audit report not be submitted before the court gets a detailed reply from the government. The court will have to examine government records as companies have alleged malice in law and pre-decision without hearing them, he added.

To this, Bhushan showed the court file notings by the LG saying he agrees with CM’s stand and that ‘flimsy excuses should not be allowed to interfere’. Salve, meanwhile, argued that the information given by companies to CAG should bot be shared with the govt till the matter is sub judice.

The private power distribution companies of the city – BSES Yamuna Power Ltd, BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd – had filed a writ petition in the Delhi High Court, challenging the ‘legality’ of the CAG audit announced by the AAP-led Delhi government. Following approval from Lt-Governor Najeeb Jung, the CAG had agreed to the Delhi government’s request to audit the three discoms for the entire period since 2002, when power distribution was privatised in Delhi.

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