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4. III. National Dairy Development Boards Vs CAG of India. in The High Court of Delhi
III. National Dairy Development Boards Vs CAG of India.
in The High Court of Delhi
W.P. (Civil) 4834 OF 1998
Decided on: 27-1-2010
(Before Hon'ble Justice Sanjeev Khanna)
Powers of CAG to conduct an audit
In this case, decided by the Delhi High Court, the powers of the CAG to conduct audit under section 14, 15 and 19 of the CAG (DPC) Act was considered. The Petitioner challenged the authority of the CAG to invoke and exercise the powers under Section 14 (2) of the 1971 Act to conduct an audit of accounts of the NDDB which is governed by its ownAct viz.NDDBAct, 1987, and which has a provision of overriding effect to theNDDBAct over any other law. The Court laid down the following proposition:-
- CAGAct is a SpecialAct as distinguished from a general.
- CAG's power to audit under Section 14 (1) can be curtailed, conditional or even prohibited under any law applicable to the Body or authority.
- Section 14 (2) is an independent section which will apply once the conditions mentioned in the said Section are satisfied and the fact that the body or authority cannot be subject to audit under Section 14 (1) is irrelevant.
- Section 15 confers power to undertake scrutiny of the accounts/records of the sanctioning authority to ensure that proper procedure was followed while sanctioning any grant/loan.
- Section 15 and Section 14 (2) are independent sections and come into operation when the preconditions mentioned therein are satisfied. Section 15 cannot be read to override Section 14 (2) or vice-versa.
- The provisions of Section 19 are clarificatory in nature. Section 19 (2) does not override the provisions of Section 14 (2) and other provisions of the CAG (DPC) Act. Section 19(2) protects the power and right given to the CAGto audit accounts of Corporations under the law made by Parliament by which they are established. This means that CAG can conduct audit under Section 14 (1), 14 (2) or 15 of theCAGAct in respect of any corporation when under the respective legislation annual financial audit is not undertaken by the CAG.