NEW DELHI: The Delhi High Court has dismissed petitions filed by power distribution companies (discoms) challenging the proposed Comptroller and Auditor General (CAG) audit, paving the way for further proceedings on the matter before the Lieutenant Governor (LG). Delhi Power Minister Ashish Sood hailed the decision as a significant victory for transparency and consumer interests.
Addressing the media after the court’s decision, Sood alleged that the legal challenge mounted by the discoms had exposed what he described as a nexus between the previous Aam Aadmi Party government, its national convenor Arvind Kejriwal, and private power companies operating in the national capital.
He asserted that the Delhi government defended the interests of citizens with “complete political will and determination,” leading to the dismissal of the objections raised by the electricity companies.
“The very fact that the power companies approached the High Court to oppose the CAG audit has exposed the nexus between the Aam Aadmi Party government, Arvind Kejriwal and the power companies before the people of Delhi,” Sood said.
According to him, the High Court rejected the arguments put forward by the discoms and effectively cleared the path for the audit process to move ahead.
Sood further stated that the matter relating to the CAG audit can now be taken up before the Lieutenant Governor, who will oversee the next stage of the process.
Government’s Assurance on Electricity Tariffs
The Delhi government reiterated that it would not permit any increase in electricity tariffs that could place additional financial pressure on consumers.
Sood said the administration remains committed to ensuring uninterrupted power supply while simultaneously investigating how massive regulatory assets accumulated over the years.
“We will continue to fight till the very end to ensure that not even a single rupee of additional burden, in the form of increased electricity tariffs, is imposed on the people of Delhi,” he said.
The minister also accused the previous administration of failing to adequately scrutinise the functioning of private power distribution companies.
Case History: How the Controversy Began
The current dispute traces its origins to a wider judicial examination of “regulatory assets” accumulated by electricity distribution companies.
Supreme Court’s 2025 Directions
In August 2025, the Supreme Court directed electricity regulators across the country to conduct strict and intensive audits into the circumstances that led to the accumulation of regulatory assets by power distribution companies. The court also ordered that these assets should be liquidated within a fixed time frame.
Regulatory assets are essentially deferred costs that utilities are permitted to recover from consumers through future electricity tariffs instead of collecting them immediately. In Delhi, these accumulated liabilities are estimated to be around ₹38,500 crore.
DERC’s Move to Bring in CAG
Following the Supreme Court’s directions, the Delhi Electricity Regulatory Commission sought approval to appoint the CAG to conduct a special audit of Delhi’s three major private discoms.
These include:
- BSES Rajdhani Power Limited
- BSES Yamuna Power Limited
- Tata Power Delhi Distribution Limited
However, the move faced immediate opposition from the companies, which argued that appointing the CAG directly did not comply with statutory provisions under the CAG Act.
APTEL Intervention
In April 2026, the Appellate Tribunal for Electricity set aside the approval granted for the CAG audit.
The tribunal held that mandatory legal requirements under Section 20 of the CAG Act had not been fulfilled, particularly regarding establishing public interest and giving the concerned companies an opportunity to present their case before ordering such an audit.
APTEL instead directed DERC to appoint an independent chartered accountant to conduct the audit and instructed authorities to begin the process of liquidating regulatory assets.
Fresh Political Push by Delhi Government
After the formation of the new government, Power Minister Ashish Sood intensified demands for a fresh CAG audit, arguing that Delhi residents deserved transparency regarding thousands of crores in accumulated dues that could eventually impact consumer electricity bills.
The government subsequently explored alternative legal avenues to revive the audit process and initiated steps to examine the financial claims made by private discoms.
Political Battle Intensifies
The issue is now emerging as a major political flashpoint between the ruling BJP government in Delhi and the Aam Aadmi Party.
While the BJP alleges collusion between the previous government and private electricity distributors, the AAP has previously maintained that Delhi’s electricity reforms have delivered affordable and reliable power to consumers.
With the High Court’s latest decision allowing the process to move forward, attention will now shift to the Lieutenant Governor’s office and the next phase of the audit proceedings.
The outcome could significantly influence future electricity tariff policies and determine whether Delhi consumers will eventually bear the burden of decades of accumulated regulatory assets.
