Supreme Court halts CAG audit of Delhi power discoms

New Delhi: The Supreme Court on Friday temporarily stayed the Comptroller and Auditor General's (CAG) audit of Delhi's three private power distribution companies-BSES Yamuna Power, BSES Rajdhani Power and Tata Power Delhi Distribution.

A bench of Justices K V Viswanathan and Shree Chandrashekhar also ordered status quo on the Delhi power regulator's move to recover ₹38,552 crore from consumers towards regulatory assets (RAs) owed to the three discoms.

Regulatory assets represent costs incurred by discoms that are not immediately recovered through electricity tariffs. These deferred expenses are recorded on their balance sheets and recovered over time, but have accumulated over decades.


The Delhi government had directed the CAG to conduct a strict and intensive audit into the circumstances under which the regulatory assets continued to accumulate without being recovered from consumers.

Staying an order of the Appellate Tribunal for Electricity (Aptel), which had directed the appointment of a chartered accountant to audit the discoms, the apex court ordered status quo on all aspects, including recovery of regulatory assets from consumers, until July 15, when it will hear the matter again.

The court noted that the Delhi Electricity Regulatory Commission (DERC) would file an appeal against Aptel's order rejecting its request for more time to recover the regulatory assets.

It observed that the matter involved interpretation of its August 6, 2025 judgment on the issue and directed that the case be heard by the same bench that had laid down the framework for phased liquidation of Delhi's regulatory assets until 2031 while ordering a "strict and intensive audit" into the reasons for their accumulation.

The apex court also sought responses from the three discoms to DERC's plea seeking clarity on whether the audit should be conducted by the CAG or an independent private auditor.

Appearing for DERC, Solicitor General Tushar Mehta told the court that the lieutenant governor had recently approved the CAG audit after complying with the procedural requirements identified by the tribunal. "The direction was to liquidate. Liquidation has been prohibited by the lieutenant governor Thursday. They want recovery without the audit. Consumers should not be saddled with cost they will have to pay if they go ahead with liquidation," he argued.

Senior advocate A M Singhvi, appearing for the discoms, argued that the issues of audit and recovery of regulatory assets were separate.He said the Supreme Court had already laid down the roadmap for liquidation of regulatory assets until 2031, and the present proceedings concerned only the appointment of the auditor.

In its August 2025 judgment, the Supreme Court directed electricity regulators across states and Union territories to provide a roadmap for clearing regulatory assets, including carrying costs. It said existing regulatory assets should be liquidated within a maximum of seven years from April 1, 2026.