Maharashtra discoms' CAG audit likely to hit legal hurdle

Both the companies do not have government equity unlike Delhi discoms

The Maharashtra government’s move to seek Comptroller and Auditor General of India (CAG) audit of Mumbai distribution companies Tata Power and Reliance Infrastructure is likely to face legal hurdles, according to experts. This is because the two discoms do not have any government equity, unlike their Delhi counterparts BSES Yamuna Power, BSES Rajdhani Power and Tata Power Delhi Distribution.

Maharashtra energy minister Chandrashekhar Bawankule on Tuesday said in the legislative assembly that these firms would be audited by the CAG, on the lines of the Delhi government’s resolve to get discoms in the city audited by the CAG. Bawankule’s announcement came after Bharatiya Janata Party legislator Ashish Shelar raised the issue about ‘inflated’ tariff by the two companies.

Both Tata Power and Reliance Infrastructure declined to comment on Bawankule’s announcement.

V P Raja, former chairman of Maharashtra Electricity Regulatory Commission (MERC), however, said the move would be a non-starter. “The Delhi situation is different from Mumbai. The Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Amendment Act, 1971 clearly says who are the organisations which can be audited. The CAG can audit all government organisations and organisations substantially funded by the state or the government of India or to which grant in aid is given by the government. Three Delhi discoms have government stakes. However, in Maharashtra, there is no government equity.”  

Raja observed that the government’s move wouldn’t stand the scrutiny of the high court or the Supreme Court.

He noted that the Delhi government’s move to order CAG audit on Delhi discoms was quashed by the Delhi High Court and the matter is pending in the Supreme Court.

Raja recalled that during his chairmanship of MERC, the state government in 2009 had issued directions under Section 108 of the Electricity Act 2003 to look into the complaints with regard to costly power purchases by Reliance Infrastructure. “I appointed the Administrative Staff College of India (ASCI) to examine. In its report, ASCI clearly noted that there was no hanky-panky in Reliance Infrastructure accounts. However, I put a rider that Reliance Infrastructure could have done power purchase more rationally.”

POWER PANGS

• Maharashtra’s two discoms  — Tata Power and Reliance Infrastructure— do not have any govt equity, unlike their Delhi counterparts
   
• The CAG can audit all govt organisations and organisations substantially funded by the state or the govt of India