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2015 (11) TMI 383 - HC - Indian LawsAudit of the accounts of the Distribution Companies (DISCOMs), entrusted with the work of distribution and retail of electricity in Delhi - Whether under Section 20(1) of the Comptroller and Auditor Generals‘ (Duties, Powers and Conditions of Service) Act, 1971 (CAG Act) the Comptroller and Auditor General of India (CAG) can be requested to undertake the audit of the accounts of the DISCOMs - Whether the audit so directed can be since the date of inception of DISCOMs i.e. 1st July, 2002 and if not, for what period - DISCOMs contended that once there had been privatisation of the electricity companies, CAG had no jurisdiction qua them - Held that:- The words “body or authority” in Article 149 of Constitution of India and in the CAG Act are of wide amplitude and not confined to “body or authority” which satisfy the test of ‘State‘ within the meaning of Article 12. They extend to “private body or authority also” and would cover the DISCOMs. The direction of the Administrator of Delhi for audit of DISCOMs in exercise of power under Section 20 of the CAG Act has to be on the aid and advice of the Council of Ministers, GNCTD and not eo nomine. Though the opportunity to represent against the proposal for audit, under Section 20(3) of the CAG Act, given to the DISCOMs, cannot be faulted on the ground of insufficiency of time but was not reasonable, having been given without disclosing the public interest in which audit of accounts of DISCOMs was deemed expedient and having been given before consultation with CAG and before the terms and conditions of audit were agreed between the GNCTD and the CAG. Such consultation and agreement are essential components of the proposal for audit, opportunity to represent whereagainst is required by Section 20(3) to be given. Audit under Section 20(1), for the reasons stated i.e. for determination of tariff is not expedient in public interest as the determination of tariff is on the sole domain of 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. Thus, the impugned direction for audit of DISCOMs under Section 20(1) of the CAG Act is quashed / set aside. We therefore allow the petitions of the DISCOMs by quashing the impugned directives of the GNCTD and dismiss the PIL. Needless to state, all actions undertaken in pursuance to impugned directive are also rendered inoperative and to no effect.
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