CAG can audit telecom firms: SC

New Delhi :  The Supreme Court on Thursday held that the Comptroller and Auditor General of India can audit the account books of private telecom companies which share revenue with government for using spectrum.

A bench comprising justices K S Radhakrishnan and Vikramajit Sen said CAG can carry out the audit to examine whether the companies are giving a proper share of their revenue to the government.

The court passed the order on a batch of petitions filed by telecom companies’ associations, challenging the Delhi High Court verdict which had given green signal for CAG audit of the firms’ accounts.

The apex court had on February 3 sought responses from the Centre and CAG on the pleas of the associations. The firms had challenged the high court order which had said that it was the duty of CAG to audit telecom companies as a part of their revenue goes to the Consoli-

dated Fund of India. Earlier, the telecom firms had submitted before the apex court that the high court had erred in holding that CAG was empowered to conduct their revenue audits. The firms had said that the high court had wrongly assumed that they share revenue with the government and contended that they only pay a licence fee, which was a percentage of their revenue.

In the apex court, the government had argued in favour of the CAG audit saying telecom companies were under-reporting revenues, a part of which is shared with the government in the form of licence and spectrum fee.

The telecom department said it was found in two special audits that Bharti Airtel Ltd and Reliance Communications under-reported their revenues for two years — from 2006 to 2008. Following that, the DoT had sought an audit by CAG.