Court dismisses BSES Rajdhani Power Limited's plea against GNCTD's CAG audit notice, emphasizes procedural compliance and public interest.
In a significant ruling, the Delhi High Court has dismissed a writ petition filed by BSES Rajdhani Power Limited and its counterpart, BSES Yamuna Power Limited, challenging a show-cause notice issued by the Government of National Capital Territory of Delhi (GNCTD). The notice proposed an audit of the petitioners by the Comptroller and Auditor General of India (CAG) under Section 20(3) of the CAG Act, 1971.
The petition, filed under Article 226 of the Indian Constitution, contended that the notice was illegal and contrary to previous judicial pronouncements, particularly the Supreme Court's RA Judgment and the URJA Judgment by a Division Bench of the Delhi High Court. The petitioners argued that the notice was a misuse of power and intended to derail the liquidation of regulatory assets (RA).
However, the High Court, presided over by Justice Tejas Karia, found that the notice merely invited the petitioners to submit their representation regarding the proposed audit and did not record any adverse findings. The court emphasized that a show-cause notice, which facilitates a response opportunity, does not constitute an adverse order warranting judicial interference at this stage.
The court also addressed the applicability of the URJA Judgment, distinguishing it based on the context and purpose of the current audit, which is rooted in public interest and compliance with the Supreme Court's RA Judgment. The RA Judgment had directed a strict and intensive audit to ascertain circumstances leading to prolonged regulatory asset accumulation without recovery.
The court further clarified that the RA Judgment does not preclude the CAG from conducting the audit, provided it complies with statutory provisions. It also highlighted the audit's public interest angle, given its potential impact on consumer tariffs and electricity sector governance.
Concluding the judgment, the court maintained that the petition was premature and dismissed it, allowing the GNCTD to proceed with the audit process as per legal requirements. The court left open the rights and contentions of the parties concerning compliance with timelines and orders from the Appellate Tribunal for Electricity (APTEL), subject to ongoing Supreme Court proceedings.
Bottom line:-
Audit under Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971 cannot be challenged at show-cause stage if it merely affords an opportunity for representation and does not record adverse findings.
Statutory provision(s): Article 226 of the Constitution of India, 1950, Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971 Section 20(3), Electricity Act, 2003 Sections 61, 62, 86(2).
BSES Rajdhani Power Limited v. Government of NCT of Delhi, (Delhi) : Law Finder Doc id # 2927860
