The Superb Court docket on Friday ordered establishment within the dispute over the audit of Delhi’s electrical energy distribution corporations (discoms), maintaining that neither the Comptroller and Auditor Common (CAG) nor a chartered accountant will behavior the audit till the Court docket examines the scope of its personal August 2025 judgment.
A Bench of Justices KV Viswanathan and Shree Chandrashekhar issued realize on appeals filed by way of the Delhi Electrical energy Regulatory Fee (DERC) towards orders of the Appellate Tribunal for Electrical energy (APTEL), which had held that DERC may now not entrust the audit to the CAG and had as an alternative directed it to nominate an impartial Chartered Accountant.
Pending additional orders, the Court docket stayed the operation of paragraph 40 of APTEL’s judgment directing DERC to nominate a chartered accountant. It additionally directed that the CAG shall now not continue with the audit. The subject has been indexed on July 15 and can be positioned prior to the Leader Justice of India for task to an acceptable Bench.To handle the problem, the Court docket directed electrical energy regulatory commissions around the nation to make sure price lists remained extensively cost-reflective, prescribed timelines for liquidation of regulatory property and laid down a roadmap to forestall contemporary accumulation.
As a part of the ones instructions, the apex court docket additionally required regulatory commissions to adopt a strict and in depth audit into the cases wherein distribution corporations had endured with out convalescing regulatory property. It additional directed APTEL to observe compliance by way of exercising its powers underneath Segment 121 of the Electrical energy Act.
Alternatively, whilst directing that such an audit be performed, the Superb Court docket didn’t specify who will have to behavior it.Performing at the Superb Court docket’s instructions, the Lieutenant Governor of Delhi licensed an offer on March 5, 2026 for the audit to be carried out by way of the CAG.
This transfer used to be challenged prior to APTEL, which held that DERC’s resolution to entrust the audit to the CAG used to be opposite to the statutory scheme. The Tribunal quashed the proposal and as an alternative directed DERC to nominate an impartial Chartered Accountant inside of one week to hold out the workout. DERC’s evaluation petitions have been later disregarded, prompting the prevailing appeals prior to the Superb Court docket.
Throughout nowadays’s listening to, Solicitor Common Tushar Mehta, showing for the DERC argued that the audit pondered by way of the Superb Court docket’s August 2025 judgment needed to be finished prior to any restoration of regulatory property may well be made out of electrical energy shoppers.
Senior Recommend Abhishek Manu Singhvi, showing for the discoms disputed this interpretation. He argued that the problem of audit and the problem of restoration of regulatory property have been impartial, and that the prevailing appeals involved best the query of who will have to behavior the audit.
The Court docket stated that the rival submissions require an interpretation of its personal August 6 2025 judgment. Therefore, it directed that the subject be positioned prior to the Leader Justice of India for task to an acceptable Bench. It indexed the case for listening to on July 15.Pending additional orders, the Court docket directed that neither the CAG nor a chartered accountant shall continue with the audit.
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