Thursday, Jan 26, 2023

Govt orders CAG audit of discoms

Power companies decline comment,say matter is sub judice,chief minister rejects their contention.

Initiating a CAG audit of the finances of the three private power distributors in the capital,Chief Minister Arvind Kejriwal on Wednesday said the Lieutenant Governor has given the go-ahead for carrying out the audit.

The decision comes after Kejriwal rejected the contention of the discoms that the matter was sub judice.

On Tuesday,Kejriwal had given the discoms 24 hours to give their views on why there should not be a CAG audit of their accounts.

The three private power distribution companies — BSES Yamuna Power Ltd,BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd — filed their response on Wednesday,maintaining that a CAG audit was “sub judice as a case in this regard was pending in the the Delhi High Court”.

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However,after a meeting of the Cabinet,Kejriwal said,“The

L-G has given audit orders and the CAG has agreed to carry out the audit.’’ He said the audit will begin on Thursday. Sources in the

L-G’s office confirmed that the orders have been passed.


“The responses of the power companies were scrutinised by the power department. But there is no sufficient reason as to why they should not be audited. The matter is in the High Court and proceedings are on. No stay has been granted on carrying out an audit. Even now the proceedings will continue,’’ Kejriwal said.

Asked how long the audit would take,Kejriwal said the CAG had not given any time frame,but the government had requested that the audit be completed within three months. “It will depend on the cooperation shown by companies and will only become clear once it starts,’’ he said.

Kejriwal also took a dig at Sheila Dikshit’s three-time government. “What the previous government could not do in four years,we have done in four days,” he said.


Spokesperson for Anil Ambani-owned BSES Rajdhani and BSES Yamuna refused to comment on the matter. A spokesperson for Tata-owned TP-DDL said,“The matter is sub judice. The next date of hearing is January 22. We are awaiting the court’s order in the matter.”

In their response to the Delhi government,discoms referred to the 1971 CAG Act. They reasoned that the duties and powers of the national auditor are laid down with respect to audit of accounts of Union and state-owned government companies or corporations.

When Delhi’s power sector was privatised in 2002,the government retained 49 per cent stake in the discoms,while the private companies had 51 per cent stake.

Senior officials said the government has been following a prescribed legal procedure,which gives it the right to order a CAG audit of the power discoms if recommended by the Lieutenant Governor under Section 20 of the CAG Act.

While Chief Minister Arvind Kejriwal met CAG S K Sharma on Tuesday,a separate meeting was held between officials of the power department and CAG representatives as the first step in the process of auditing. Such a consultation is mandatory under the rules.


Under Section 20 of Comptroller and Auditor-General’s (Duties,Powers and Conditions of Service) Act,1971,the CAG has the power to audit private entities.

Section 20 empowers CAG to audit “accounts of any body or authority” that has “not been entrusted to the CAG by or under any law made by Parliament”. The CAG can be requested to carry out such an audit by the President,or the governor of a state or the administrator of a Union Territory.


“While the government has every right to go ahead with the CAG audit if recommended by the L-G under set terms and conditions,it would only be required to give a valid reason to the Delhi High Court for a change in circumstances of the case and the urgency to go for an audit when the matter is sub judice,” former power secretary Shakti Sinha said.

First published on: 02-01-2014 at 05:39 IST
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