CAG can audit accounts of telecom firms: SC

The apex court said natural resources are vested with the government as a matter of trust of the people of the country and it is the solemn duty of the State to protect the national interest, and natural resources must always be used in the interest of the country and not in private interest.

"State is also bound to protect the resources for the enjoyment of general public rather than permit their use for purely commercial purposes. Public trust doctrine, it is well established, puts an implicit embargo on the right of the State to transfer public properties to private party if such transfer affects public interest.

"Further it mandates affirmative State action for effective management of natural resources and empowers the citizens to question ineffective management," it said.

The bench said duties and powers conferred by the Constitution on the CAG cannot be taken away by Parliament for being the basic structure of Constitution.

"By adopting that process, CAG is not carrying out any statutory audit of the accounts of the service providers, but for the limited purpose of ascertaining whether the Union is getting its legitimate share by way of Revenue Sharing. Service providers are, therefore, bound to provide all the records and documents called for by the CAG," it said.

The court passed the order on a batch of petitions filed by telecom companies' associations, including Association of Unified Telecom Service Providers of India (AUTSP) and Cellular Operators Association of India (COAI), challenging the Delhi High Court verdict which had given green signal for CAG audit of the firms' accounts.

The apex court had on February 3 sought responses from the Centre and CAG on the pleas of the associations.

The firms had challenged the high court order which had said that it was the duty of CAG to audit telecom companies as a part of their revenue goes to the Consolidated Fund of India.

Earlier, the telecom firms had submitted before the apex court that the high court had erred in holding that CAG was empowered to conduct their revenue audits.

The high court had upheld the validity of laws empowering CAG to conduct revenue audits of private telecom firms.