RAJIV SAHAI ENDLAW, J. - (1.) THE petitioner has filed this petition under Article 226 of the Constitution of India, as a Public Interest Litigation, pleading, (i) that the respondent no.1 is a Company owned by the Government of India; (ii) that the methodology used by the respondent no.1 with regard to booking of revenue in its annual accounts is incorrect; (iii) as a result of the said incorrectness, funds belonging to the Government of India which would ordinarily be audited by Comptroller and Auditor General of India (CAG) for 'Value For Money' are treated as funds belonging to respondent no.1 and in which capacity they are auditable by the respondent no.1's Chartered Accountant and not by CAG; (iv) that there is a vast difference between Chartered Accountant's Tax Audit and CAG's 'Value for Money' audit; (v) that upon the petitioner representing to the CAG, with prima facie evidence, that the turnover of the respondent no.1 was much lower than what the respondent no.1 reports in its annual accounts, CAG in or about the year 2011 ordered a special audit of respondent no.1; (vi) that though the audit report was not made public but the observations made by CAG were published by the respondent no.1 in its Annual Report for the year 2011 -2012; as per the said observations CAG vindicated the stand of the petitioner and found that the turnover of the respondent no.1 in the year 2011 -2012 was not Rs.86.5 crores as was reported by the respondent no.1 in its annual accounts but was only Rs.18.5 crores; (vii) however the respondent no.1 took a stand that its accounting practices being very old and being in consonance with the advice earlier given by the CAG, needed no change; (viii) CAG also did not press for correction; (ix) the petitioner also complained to the Institute of Chartered Accountants of India (ICAI) stating that the Chartered Accountant who certified the accounts of the respondent no.1 was negligent in his duties as he had booked the revenue of the respondent no.1 incorrectly; however the Disciplinary Committee of the ICAI dismissed the petitioner's complaint observing that there was no harm done because the resulting net profit or loss would remain the same; and, (x) that if the version of the petitioner fortified by the observations of the CAG is correct, then only Rs.18.5 crores can become part of annual accounts of the respondent no.1 and be subjected to the Tax Audit by respondent no.1's Chartered Accountant and the remaining Rs.68 crores being the money that was given to the respondent no.1 by its clients who are various entities of Government of India does not belong to the respondent no.1 and must be subjected to 'Value For Money' audit by CAG in the same manner as the CAG audits monies spent by other Government Departments.
(2.) THE petition therefore seeks reliefs of (i) a direction to the respondent no.1 to correct its annual accounts; (ii) a direction to the respondent No.3 CAG to commission a study to establish the magnitude of Government money that slips CAG's 'Value For Money' audit each year; (iii) a direction to the CAG and respondent No.2 ICAI to in turn instruct all Government owned companies and Chartered Accountants on how to book revenue correctly; (iv) a direction to the CAG to review and correct its Commercial Audit Manual; (v) a direction to the CAG to develop a procedure on how Government companies must maintain records of spending from their client accounts which are various Governments or Government owned bodies; (vi) a direction to the CAG to develop software for maintaining records of expenses out of a client account; and, (vii) a direction to the CAG to develop software for use by its Commercial Auditors to increase the extent and effectiveness of their Supplementary Audit.
(3.) THE petition came up before us first on 21st January, 2015 when after hearing the petitioner appearing in person we reserved order. The emphasis of the petition as well as of the oral submissions of the petitioner was on the CAG having found merit in the version of the petitioner.;