In a major setback to the Arvind Kejriwal Government, the Delhi High Court on Friday quashed the Delhi Government’s decision to get the accounts of three private power distribution companies audited by the Comptroller and Auditor General (CAG) terming it a “misguided exercise” as the audit report “cannot impact tariff”.
Calling the Delhi HC’s judgement “a temporary setback for the people of Delhi”, Chief Minister Kejriwal said that the Government will soon file an appeal in the Supreme Court.
“Del HC order is a temporary setback for the people of Del. Del Govt will soon file an appeal in SC (sic),” he tweeted. “I am committed to providing cheap electricity to people of Delhi. Our fight will continue,” Kejriwal added.
Meanwhile, all the three discoms —Tata Power Delhi Distribution limited (TPDDl), BSES Rajdhani
Power limited (BRPl) and BSES Yamuna Power limited (BYPl) — welcomed the HC’s order.
A draft report in August after the CAG’s audit into the books of the discoms had reportedly said they inflated their previous losses.
Calling the Delhi Government’s decision to audit the three discoms a “misguided exercise,” the Bench comprising Chief Justice G Rohini and Justice RS Endlaw observed that since the report of the CAG “cannot impact tariff”, hence it would “not also serve any public interest”.
“The Government of National Capital Territory of Delhi, instead of strengthening the Delhi Electricity Regulatory Commission (DERC), we are constrained to observe, has undertaken a misguided exercise by issuing a direction to the CAG to audit the accounts of the discoms when the report of such audit would not have any sanctity in law for achieving the desired results. The directions for audit of discoms by CAG, when the report of the CAG cannot impact the tariff, would not also serve any public interest,” the High Court verdict reads.
Observing that it was unable to find any purpose the report of the official auditor would serve, the Bench headed by Chief Justice Rohini said: “Once the discoms, before incurring any expenditure above a limit, are required to obtain the prior approval of the DERC, and therefore, once the DERC approves the said expenditure, we fail to see how the CAG can be allowed to arrive at a different conclusion.”
The Bench further observed that there can be no other audit as there is already a watchdog in the DERC with powers to audit the accounts of discoms. “Once by law, a regulatory body has been constituted with powers inter alia to have the accounts of the discoms audited there can be no other audit at the instance of the State Government… We are unable to decipher anything which the DERC cannot and which the CAG can unearth. DERC is neither found to be helpless nor dependent on the balance sheet filed by discoms,” it added in its 139-page judgement.
Meanwhile, in a series of tweets, Chief Minister Arvind Kejriwal called the High Court order a “temporary setback”.
It may be recalled that on January 7 last year, the Delhi Government had ordered CAG audit of the three private discoms. It had argued that CAG audit was necessary to clarify alleged anomalies in their accounts.
The discoms, meanwhile, welcomed the High Court’s order. Reacting to the same, a BSES spokesperson said: “We welcome Delhi High Court’s judgement. Power distribution is a regulated business with in-built checks and balances. The entire process is transparent and scrutinized by DERC on a regular basis. As a responsible organisation, we have always adhered to the highest standards of corporate governance and ethical practices. All aspects of our interactions and dealings have always been guided by the principles of trust, integrity and transparency.”
TPDDl also welcomed the judgement and said that it is “accountable to the Regulatory Commission, the Government and its consumers”.