SC Puts Delhi Discoms CAG Audit on Hold Until July 15 Hearing
SC Puts Delhi Discoms CAG Audit on Hold Until July 15 Hearing
The Supreme Court has stayed the CAG audit of Delhi's electricity discoms, ordering status quo until July 15. What does this mean for transparency in power distribution?
The Supreme Court has stepped in to halt the ongoing legal tussle surrounding the audit of Delhi’s electricity distribution companies (discoms). On Friday, the apex court issued a stay on an order by the Appellate Tribunal for Electricity (APTEL), which had previously set aside a directive from the Delhi Electricity Regulatory Commission (DERC) for a Comptroller and Auditor General (CAG) audit of the capital’s discoms.
This status quo order from the Supreme Court effectively puts both APTEL’s decision and the DERC’s original CAG audit instruction on hold. A Bench comprising Justices K.V. Viswanathan and Shree Chandrashekhar issued notice on a petition filed by the DERC and slated the next hearing for July 15.
The controversy stems from DERC’s decision to mandate a CAG audit for Delhi discoms, a move prompted by an August 2025 Supreme Court judgment. That earlier judgment had highlighted the "ineffective and inefficient functioning" of electricity regulatory commissions and their susceptibility to state government influence, leading to "regulatory failure." The court had then directed regulatory commissions to devise a roadmap for liquidating existing regulatory assets within four years, a deadline later extended to seven. Furthermore, it had called for "strict and intensive audits" into how discoms had managed without recovering these assets.
Following DERC’s directive for a CAG audit, the APTEL intervened, taking suo motu cognisance of the matter. On April 20, APTEL set aside DERC’s order, arguing that the 2025 Supreme Court judgment did not specifically obligate DERC to entrust the audit only to the CAG. APTEL suggested that "any" chartered accountant would have sufficed and directed DERC to appoint one to conduct a "strict and intensive" audit within three months. APTEL also noted that a CAG audit of Delhi discoms, in this context, was potentially violative of Section 20(3) of the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act.
The Supreme Court’s latest intervention means that for now, the proposed CAG audit of Delhi’s power discoms remains suspended, pending further deliberation in July. This decision underscores the complex legal and regulatory environment governing the capital’s electricity sector, keeping stakeholders in suspense about the future of transparency and accountability for the discoms.
