Related to the corruption issue where, the Apex court ruled that, those Private companies that share revenue from natural resources like spectrum with the government would be subjected to CAG audit. It said so while dismissing the appeal of the Association of Unified Telecom Services Providers.
Association of Unified Tele Services Providers & Others v. Union of India
Apex Court ruled that, Comptroller and Auditor General of India (CAG) can scrutinise the books of private telecom operators that share revenue with the government on spectrum use. It was an appeal concerned with the scope and ambit of the powers and duties of the Comptroller and Auditor General of India (CAG), the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications (DoT) in relation to the proper computation and quantification of Revenue in determining the licence fee and spectrum charges payable to Union of India under Unified Access Services (UAS) Licences entered into between DoT and the private service providers.
The ruling by the apex court provides legal underpinning to the notion that non-state companies are subject to checks by the national auditor as long as they are involved in public-private partnership (PPP) projects and similar ventures.
Court observed that, CAG’s examination of accounts of service providers in a revenue sharing contract is extremely important to ascertain whether there is an unlawful gain to the service provider and an unlawful loss to the Union, because the revenue generated out of that has to be credited to the Consolidated Fund. However, Court refused to name it as Statutory Audit and further said that, CAG can carry out examination into the economy, efficacy and effectiveness with which the Union of India has used its resources, and whether it has realised the entire licence fee, spectrum charges and also whether the Union has correctly carried out the audit under… the UAS (unified access service) licence agreement.