Notice to Centre, CAG on telecos' plea

The Supreme Court on Monday issued notice to the Centre and Comptroller and Auditor General (CAG) on two petitions filed by private telecom companies’ associations challenging a Delhi High Court verdict opening the firms to revenue audit by the country’s top auditor.

A bench of Justices K S Radhakrishnan and Vikramajit Sen also sought a response from the Telecom Regulatory Authority of India (Trai) and fixed the matter for consideration on February 11. Association of Unified Telecom Service Providers (AUTSP) and Cellular Operators Association of India (COAI) filed two separate special leave petitions against the January 6 verdict of the high court.

Senior advocate Harish Salve, appearing for the telecom firms, contended that the private firms could not be subjected to audit by the CAG while describing the judgment as erroneous.

The counsel, representing the Centre, opposed the plea of telecom operators saying in a private-public partnership venture, the revenue generated by the licencees was required to be shared with the Central government as per the licences agreements and the high court had rightly held that their revenue audits can be done by the CAG.

The petitioner-associations sought an interim stay on the operation of the order.

The high court said that the private telecom companies had undertaken the accounting responsibility on behalf of the Centre as per their licence agreement, so their accounts, in relation to revenue receipts, can be termed as the accounts of the Central government making them subject matter of CAG’s audit.

The court had dismissed the pleas by AUTSP and COAI, which represented private telecom firms. The firms had claimed that the CAG, under Article 149 of the Constitution, is empowered only to audit the accounts of the Union and of the States and of authorities or bodies prescribed under any law.