Supreme Court (SC) of India on 17 April 2014 said that the national auditor, the Comptroller and Auditor General (CAG) is empowered to audit the revenues of private telecom companies.
The judgement was given by the SC bench of Justice K S Radhakrishnan and Justice Vikramjit Sen. The bench upheld the January 2014 decision of the Delhi High Court which ruled that CAG within the meaning of the law is empowered to conduct revenue audits of private telecom firms.
The court also issued a notice to Telecom Regulatory Authority of India (TRAI) on the issue related to the important question of law and requires hearing.
The judgement was given against the backdrop of a petition filed by the private telecom companies and Cellular Operators Association of India. In the petition they challenged the January 2014 ruling of the Delhi High Court.
The judgment of Delhi High Court was quoted as erroneous by the senior advocate Harish Salve, who was appearing on behalf of telecom firms. He claimed that section 16 of the CAG Act, doesn’t allow CAG to audit the files of private firms.
Whereas the Union Government in its argument said that the revenue generated by the licenses in private-public partnership ventures is required to be shared with the Union government in line with the licensing agreements.