Blow for Arvind Kejriwal government, Delhi High Court rules against CAG audit of discoms

In a big blow for the Arvind Kejriwal government, the Delhi HC has ruled against audit of Discoms by Comptroller and Auditor General of India (CAG).

The HC pronounced its order on pleas filed by three discoms challenging the decision of the government to have their accounts audited by official auditor CAG.

The three discoms - Tata Power Delhi Distribution Ltd, BSES Rajdhani Power Ltd. and BSES Yamuna Power Ltd - had also challenged a January 24, 2014 order of single judge of the high court who had refused to stay the CAG audit and asked them to fully cooperate with it in the audit process.

The discoms had also moved the 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".

"Discoms are involved in distribution of power which is a public function and so they come under the fold of CAG audit," the Delhi government had told the court. The government had sought unhindered access to accounts of discoms for the CAG to carry out a comprehensive audit.

In its draft audit report, CAG had reportedly said that BSES Yamuna, BSES Rajdhani and Tata Power Delhi Distribution Ltd had inflated their previously incurred losses. The report is also stated to have claimed that the discoms manipulated consumer figures, bought costly power, inflated costs and suppressed revenue, favouring their group companies.

The city government had earlier told the court that a CAG audit of the private discoms was necessary as these companies discharged "public function". The discoms are a 51:49 per cent joint venture between the private companies and the Delhi government.

The AAP government on January 7, 2014 had asked CAG to audit their accounts.

It had said the government was not trying to stop their (discoms') functioning or interfere in it but was only trying to bring them under public audit, as 49 per cent stake in the discoms was held by the Delhi government which has also infused capital in these companies.

(With PTI inputs)