CAG can audit private telco’s accounts says Delhi High Court

Moneylife Digital Team 06 January 2014

While rejected petitions filed by AUSPI and COAI, the High Court permitted CAG to conduct audit of private telecom companies under the TRAI Act

The Delhi High Court on Monday held that the Comptroller and Auditor General of India (CAG) can audit accounts of private telecom operators under the relevant provisions of the law.

A Bench of Justices Pradeep Nandrajog and V Kameswar Rao permitted the top accounting body to conduct audit of private telecom companies under the Telecom Regulatory Authority of India (TRAI) Act.

The HC rejected separate petitions filed by Association of Unified Telecom Service Providers (AUSPI) and Cellular Operators Association of India (COAI) against the decision of Telecom tribunal TDSAT on the issue in 2010.

The high court had reserved its order in November 2013 after conducting marathon hearings on the issue where it took on record submissions of the Centre, CAG and the petitioners — COAI and AUSPI.

Both the associations had argued, in essence, that CAG can’t audit private companies.

To achieve the purpose of audit, the operators had pointed out that they have already put in place mechanism of special audit as envisaged in the licence agreement between department of telecom and the companies.

The firms had claimed they maintain accounts in line with the TRAI rules and can’t be forced to furnish financials to CAG.

The CAG had vigorously staked its claim to audit the accounts and sought revenue sharing details from the telecom companies.

Comments

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Gopalakrishnan T V

1 decade ago

This is a welcome move and if seriously pursued more Scams will get revealed by auditing Telecom Companies.These Companies take the masses for a ride. They have millions and millions of Customers and and by fraudulent methods, if they hike the bills even by a rupee a month or enhance the bills through some messages uncalled for and unintended by the customer (which they are indulged in) these companies can make billions of rupees. Many a drop will make an ocean is the policy pursued by these companies and if the audit is serious and not an eye wash, many scams will be revealed. Last five years there is no semblance of administration in this country is a well known fact and loot has been the order every where. This is one of the reasons for Inflation and it cannot be contained by any economic policy measures.

MG Warrier

1 decade ago

Article 149 of the Constitution mentions inter alia that “ The CAG shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliamentâ€¦”. Perhaps those who drafted Indian Constitution might not have foreseen the kind of scrutiny now being necessitated by vanishing accountability on the part of ‘public servants’ who handle public funds. If the cardinal principle of financial management that sources and uses of funds should be subject to prudent accounting when money is collected from public is still valid, contesting the right to audit by those vested with that responsibility doesn’t stand reason. What baffles common man is the resistance to transparency in accounting, whether it is gold or money or any other assets. Government should make it clear that ‘public funds’ whether it be revenue receipts or funds mobilised by corporates or donations or offerings received by political parties or religious organisations, will have to be accounted in a transparent manner and will be subject to scrutiny by authorities mandated with such responsibility.
M G Warrier, Thiruvananthapuram