The Supreme Court on Friday stayed an Appellate Tribunal for Electricity (APTEL) order that had set aside a Delhi Electricity Regulatory Commission (DERC) direction for a Comptroller and Auditor General (CAG) audit of the Capital’s electricity distribution companies (discoms). The apex court’s status quo order also placed on hold the original DERC direction to conduct a CAG audit of the discoms.A Bench of Justices K.V. Viswanathan and Shree Chandrashekhar issued notice on a petition filed by the DERC. The court posted the matter for further hearing on July 15.The APTEL had set aside the DERC order on April 20 and directed the commission to appoint “any” chartered accountant to conduct a “strict and intensive” audit within three months.The controversy over the audit centred around an August 6, 2025, judgment of the Supreme Court, which held that the ineffective and inefficient functioning of electricity regulatory commissions, coupled with their acting under the dictation of State governments, had led to regulatory failure.The court directed regulatory commissions to draw up a road map for the liquidation of existing regulatory assets within four years, starting April 1, 2024. The deadline was later extended to seven years on a plea by the discoms. The court had also directed regulatory commissions to undertake strict and intensive audits into how distribution companies had continued without recovering regulatory assets.Following the judgment, the DERC decided to have the Delhi discoms audited by the CAG. However, the APTEL took suo motu cognisance of the move and examined whether the DERC’s action was legally permissible.On April 20, the appellate tribunal noted that the Supreme Court judgment had not obligated the DERC to entrust the audit only to the CAG; any chartered accountant would have sufficed.Besides, the move for a CAG audit of Delhi discoms was violative of Section 20(3) of the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971.The provision makes it mandatory that a CAG audit in cases not covered by parliamentary law may be conducted only if the President or the Governor is satisfied that it “involves public interest”. The APTEL said communications exchanged among the CAG, the Delhi government and the DERC demonstrated no such satisfaction on the part of the Lieutenant-Governor.The tribunal said it could not remain a “mute spectator” while the DERC violated the law.The Bench on Friday said the case would be placed before the Chief Justice of India for reference to an appropriate Bench, which would then hear the matter in detail and examine the scope of the August 6 judgment. Published - July 04, 2026 01:01 am IST