SC Halts Delhi Power Discom Audit by CAG: A Setback for Govt
SC Halts Delhi Power Discom Audit by CAG: A Setback for Govt
Supreme Court has paused the CAG audit of Delhi's private power discoms, a move that challenges the Delhi government's push to scrutinize ₹38,552 crore in regulatory assets. Find out what this means for consumers!
The Supreme Court has delivered a significant interim order, halting the Comptroller and Auditor General (CAG)-led audit of Delhi’s three private power distribution companies (discoms). This decision marks a notable setback for the Delhi government, which had championed the CAG audit as a crucial tool to scrutinize the finances of these private entities before allowing them to recover a staggering ₹38,552 crore in regulatory assets from consumers.
The dispute revolves around these regulatory assets, which are essentially deferred costs that discoms are allowed to recover from consumers over time. The Delhi Electricity Regulatory Commission (DERC) had initially moved to appoint the national auditor, CAG, to scrutinize these figures. However, the Appellate Tribunal for Electricity (APTEL) had previously ruled against this, stating that entrusting the audit to the CAG was contrary to the statutory framework. APTEL instead directed the DERC to appoint an independent chartered accountant for the audit.
Challenging APTEL’s ruling, the DERC subsequently appealed to the Supreme Court. A bench comprising Justices KV Viswanathan and Shree Chandrashekhar heard the appeal and, in its interim order, stayed both APTEL’s direction for an independent chartered accountant and the fresh CAG audit that the Delhi government had ordered earlier this month. The Supreme Court observed that the legality of DERC’s decision to appoint the CAG raised "an arguable question requiring examination."
With this stay order, the Supreme Court has directed that the status quo be maintained regarding the audit process. Neither the CAG nor any independent chartered accountant is to proceed with the audit until further orders from the court. The matter is scheduled to be heard again on July 15 by the same bench, which will further deliberate on the complex legal and financial implications of this case, directly impacting Delhi's power consumers.
