CAG can audit accounts of private telcos: Court

In a significant ruling, the Delhi High Court on Monday held that the Comptroller and Auditor General of India can audit the 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 Act.

It rejected the separate petitions of Association of Unified Telecom Service Providers and Cellular Operators Association of India filed against the decision of Telecom Disputes Settlement and Appellate Tribunal 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 license 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.