NEW DELHI: The Delhi High Court on Monday dismissed petitions against a government notice proposing a Comptroller and Auditor General (CAG) audit of BSES Discoms, saying that the challenge was premature.
The petitions filed by BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL) had challenged the notice issued by the Government of NCT of Delhi (GNCTD). Justice Tejas Karia said the communication challenged by the petitioners was only a show-cause notice and not a final decision. The judge said the notice merely granted the discoms an opportunity to submit their representations and participate in a hearing before any final decision on entrustment of audit was taken.
“It does not record any adverse finding against the petitioners warranting any interference on merits at this stage in the exercise of writ jurisdiction. The present petition is, therefore, premature,” the judge said. During the hearing, the GNCTD contended that consumers bear the burden of regulatory assets through tariffs and surcharges, and therefore an independent audit was necessary to examine the financial position of the distribution companies and ensure transparency and accountability.
The judge accepted the preliminary objection regarding maintainability and reiterated that writ courts ordinarily do not interfere at the stage of a show-cause notice.
The judge also held that the earlier judgement cited by the petitioners did not bar the present proposal for a CAG audit. He held that the earlier case arose in a different factual and legal context. The judge also made it clear that the order is confined only to the validity of the notice and does not decide the merits of whether the audit should ultimately be entrusted to the CAG.
Reacting to the order, Delhi power minister Ashish Sood on Monday said that the High Court’s order paves the way for the CAG audit process to move forward. He said the Delhi government had defended the matter before the court in the interest of electricity consumers and described the ruling as a step towards greater transparency in the power sector.
Notably, the proposal for a CAG audit of discoms was made by the government in the wake of pending `38,500 crore dues of regulatory assets (RA) of discoms. The liquidation of the RA, which is shifted to the consumers, would mean higher electricity bills.
Sood hit out at the previous AAP government, accusing it of a deep-rooted nexus and collusion with private electricity distribution companies to deliberately evade financial accountability and fleece the residents of Delhi.
“In 2015, using a particular judgement as an excuse, it was falsely claimed that conducting a CAG audit of the discoms was not allowed. Arvind Kejriwal and his government simply sat back and did nothing.”
Reassuring the consumers, he stated that a formal hearing process has already been set in motion by the Lieutenant Governor’s office, a move that remained unhindered as the Supreme Court declined to impose any stay.
“We had issued a notice stating that the L-G, Taranjit Singh Sandhu in accordance with the standards regarding the CAG audit, should grant the electricity companies an opportunity for a hearing. The date of the 22nd was given to the electricity companies for this,” Sood explained, promising stringent action against any wrongdoing discovered during the process.
Govt supports audit
BSES companies had challenged the GNCTD’s proposal to entrust the audit of BRPL and BYPL to the CAG, claiming that it violated earlier judicial decisions, including a Delhi High Court’s 2015 judgement quashing an earlier attempt to a CAG audit. The GNCTD contended that consumers bear the burden of regulatory assets through tariffs and surcharges, and therefore an independent audit was necessary.