CAG can assess losses in natural resource allocations: SC

Observing that the Comptroller and Auditor General (CAG) “is not a ‘munimji’ or an auditor of a company or a corporation”, the Supreme Court today dismissed a PIL pleading for a declaration that the CAG had no power to assess losses in the allocation of natural resources such as coal blocks.

“If the CAG does not do it, who else will do it,” a Bench comprising Justices RM Lodha and Anil Dave asked petitioner Dr Arvind Gupta from Noida.

“The CAG is the principal auditor whose function is to go into the economy, effectiveness and efficiency of the use of natural resources by the government” and as such it was CAG’s “primary duty” to ensure effective use of such resources, the Bench noted.

Further, even if the CAG’s reports were not in conformity with its powers, “how does it affect anybody,” the Bench asked the petitioner.

If the CAG had exceeded its powers, it was for Parliament to take the final call on these reports and tell the CAG that its reports were “misconceived or misplaced for reasons A, B or C. How can you say the CAG has trespassed the functions of other organs,” the Bench asked the petitioner’s counsel Santosh Paul. Further, there was a full-fledged mechanism to consider the CAG reports. These were submitted to the President and then placed in both Houses of Parliament before being referred to the Public Accounts Committee (PAC) of Parliament for scrutiny, the Bench explained.

“Parliament is there to guide and correct the CAG.? We have to understand the scheme of the Constitution,” the Bench said, pointing out that Articles 148-151 had comprehensive provisions dealing with CAG’s powers.

In the case of states, the auditors’ reports were submitted to the respective Assembly for further action, the SC noted.

“The petition is misconceived and dismissed accordingly,” the Bench said in the order. During the arguments, the SC also observed that it was CAG’s duty to audit all receipts which went into the Consolidated Fund of India or the state exchequer to satisfy itself that the revenues were being utilised properly.