Important Judgements

II. Reghu Nath Kelkar Vs Union of India and others
in The High Court of Bombay
Public Interest Litigation No. 40 of 2008
Decided on: 24-3-2009
(Before Hon'ble Judges / Coram: Swatanter Kumar, CJ and D.Y. Chandrachud, J)

Powers of CAG regarding time, scope and extent of audit

In this case, decided by the High Court of Bombay, an allegation was made about the failure of the CAG to conduct a comprehensive audit. The Court considered the scope of Section 23 of the CAG (DPC) Act. The Court observed that the time, scope and extent of the audit are all matter which falls within the jurisdiction of the CAGand is not a matter on which Court ought to tread.

Extract of Judgement

9. In so far as prayer Clause (b) of the Petition is concerned, an affidavit has been filed on behalf of the Comptroller and Auditor General in which it has been stated that receipts and disbursements under the Market Stabilizations Scheme are duly budgeted in the receipt and expenditure budget which is subject to parliamentary control. The account of the Ministry of Finance and appropriation account of the Government of India are audited at 'regular frequency' by the Comptroller and Auditor General. Under Section 23 of the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971 the scope and extent of the audit are determined by the Comptroller and Auditor General. The Comptroller and Auditor General report his findings to Parliament by submitting audit reports under Article 151 of the Constitution. The Reserve Bank of India has clarified that funds collected from the sterilization of liquidity by the Market Stabilization Scheme form part of the Consolidated Fund of India and are hence, deemed to be audited by the Comptroller and Auditor General.
10. The Petitioner, however, relies upon a response received to a query under the Right to Information Act in which it has been disclosed by the Comptroller and Auditor General on 19th June 2008 that no specific audit in respect of the borrowings of the Central Government under the Market Stabilization Scheme was conducted since 2004 nor was there any specific audit of the application of funds borrowed thereunder. The Comptroller and Auditor General have also clarified that no audit has been conducted in respect of the currency and Gold Revaluation Account in the balance-sheet of the Reserve Bank of India since the accounts of the Reserve Bank of India do not fall under the audit jurisdiction of the Comptroller and Auditor General in response to the query for information that no specific audit was conducted either in respect of the borrowings or the application of funds under the Market Stabilization Scheme since 2004 does not in our view detract from what has been stated in the affidavit filed on behalf of the Comptroller and Auditor General. The affidavit discloses that under Section 23 of the Act the scope and extent of the audit is determined by the Comptroller and Auditor General and that the accounts of the Ministry of Finance, as well as the appropriation account of the Government of India, are audited at the regular frequency by the Comptroller and Auditor General. The timing, scope and extent of the audit are all matters which fall within the jurisdiction of the Comptroller and Auditor General and this does certainly not matter on which the Court ought to tread. There is neither a constitutional nor statutory dereliction of duties by the Comptroller and Auditor General and it is undoubtedly for the Comptroller and Auditor General to consider whether and if so to what extent a specific audit should be undertaken.