Delhi power discoms not subject to CAG audit: HC

In a major relief to Delhi's power distribution companies, the Delhi High Court today quashed the Aam Admi Party government's decision to have the accounts of three private discoms audited by the Comptroller and Auditor General of India (CAG).

"We have allowed the petitions of the discoms," a bench of Chief Justice G Rohini and Justice R S Endlaw said while clarifying that the entire audit process carries out so far as well as the draft report of the CAG would be "non-est" and would have no bearing any more.

The discoms - Tata Power Delhi Distribution Ltd (TPDDL), BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd - had challenged the AAP government's 7 January 2014 decision ordering a CAG audit of their accounts.

The discoms had also challenged an order of a single judge of the high court who had refused to stay the CAG audit.

The single judge, in his 24 January 2014 order, had also asked the discoms to "fully cooperate with CAG in the audit process".

While allowing the discoms' pleas today, the court dismissed a public interest plea filed by United RWAs Joint Action (URJA) which had sought an audit of the discoms' accounts by CAG.

Earlier, the state government had told the court that a CAG audit of the private discoms here 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 government had said it 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.

The court in its order said such an audit did not constitute public interest under Section 20(1) of the CAG Act, since "determination of tariff is not expedient in public interest as the determination of tariff is in the sole domain of Delhi Electricity Regulatory Commission (DERC) which is well empowered to itself conduct the same or have the same conducted and the report of CAG of audit of discoms has no place in the regulatory regime brought about by the Electricity Act and the Reforms Act".

Reacting to the verdict, Delhi Chief Minister Arvind Kejriwal said in post on microblogging site Twitter:

 Del HC order is a temporary setback for the people of Del. Del govt will soon file an appeal in SC.

- Arvind Kejriwal (@ArvindKejriwal) October 30, 2015

I am committed to providing cheap electricity to people of Delhi. Our fight will continue

- Arvind Kejriwal (@ArvindKejriwal) October 30, 2015

The court also said "populist measures such as the terms of reference cannot be used to determine tariff. Thus, any reform that the government wants to introduce can only be brought about through the DERC''.