New Delhi: The Supreme Court on Friday ordered maintenance of status quo in the dispute over the audit of Delhi’s private electricity distribution companies (discoms), staying further steps in relation to the proposed audit by the Comptroller and Auditor General (CAG) as well as the direction to appoint an independent chartered accountant.
A bench of Justices K.V. Viswanathan and Shree Chandrashekhar passed the interim order while hearing appeals filed by the Delhi Electricity Regulatory Commission (DERC) challenging orders of the Appellate Tribunal for Electricity (APTEL).
Issuing notice in the matter, the apex court observed that the controversy raises an important legal question requiring consideration and directed that status quo be maintained till further orders.
Listing the matter for further hearing on July 15, the Supreme Court stayed the operation of the relevant portion of the APTEL’s judgment directing the DERC to appoint an independent chartered accountant to conduct the audit.
It also directed that the CAG will not proceed further with the audit in the meantime.
The dispute traces its origin to an earlier apex court judgment in a batch of matters concerning tariff orders issued by the DERC between 2011 and 2014. In its August 2025 decision, the Supreme Court had expressed concern over the accumulation of regulatory assets by electricity distribution companies and directed electricity regulatory commissions to undertake a “strict and intensive” audit into the circumstances in which such regulatory assets had accumulated.
However, the judgment did not specify the authority that should conduct the audit.
Following the Supreme Court’s decision, the Delhi Lt Governor approved a proposal in March 2026 for the audit to be conducted by the CAG. The move was challenged before the APTEL, which held that the DERC could not assign the audit to the CAG under the statutory scheme and instead directed the regulator to appoint an independent chartered accountant for the purpose.
The DERC’s review petitions were subsequently dismissed, leading to the present appeals before the Supreme Court. During the hearing, Solicitor General Tushar Mehta, appearing for the DERC, submitted that the audit contemplated in the apex court judgment formed an integral part of the mechanism laid down for addressing regulatory assets and had to be completed before any recovery from consumers.
On the other hand, senior Advocate Abhishek Manu Singhvi, appearing for the discoms, opposed the contention and argued that the present controversy was confined to the question of who should conduct the audit, and that the issues relating to audit and recovery of regulatory assets were distinct.
Observing that the rival submissions required an interpretation of its August 2025 judgment, the Supreme Court directed that the matter be placed before the Chief Justice of India (CJI) – the master of the roster – for assignment to an appropriate Bench
(IANS)
