SC on CAG

The Supreme Court snubbed an attempt to restrain the Comptroller and Auditor General (CAG) from commenting on the merits of government’s policy decisions, asserting that the top federal auditor was not supposed to be the traditional ‘munimji’.
Justices R M Lodha and A R Dave dismissed a PIL by Arvind Gupta who had argued that CAG’s reports on coalgate, airport privatization and power sector went beyond its constitutional mandate with a sharp observation. “Do not confuse the constitutional office of CAG with that of an auditor of a company or corporation,” the bench said.
The petitioner contended that CAG was supposed to audit government expenditures rather than comment on rationality of policy decisions, echoing the lament of many in the government and Congress who have reacted to the embarrassing observations of the auditor by accusing the constitutional body of bias and of pursuing a hidden agenda.

However, justices Lodha and Dave stressed that the auditor was merely doing its job. “CAG is not the traditional munimji to prepare only balance sheets. It is constitutionally mandated to examine the efficiency, effectiveness and economy of the decisions of the government in using resources. If the CAG will not do this, then who will?” the bench asked.
Petitioner’s counsel Santosh Paul attempted to elaborate on the meaning of “performance audit” to be conducted by the CAG and said neither the constitutional provisions nor the CAG (Duties, Power and Services) Act, 1971 and the rules framed thereunder empowered the national auditor to question the efficacy of the government policy.
It did not impress the bench, which said: “Article 149 of the Constitution, the 1971 Act and the Rules clearly mandate the CAG to examine the efficiency, effectiveness and economy of the decisions. One should not forget that CAG report is tabled in Parliament through the President. There is a full-fledged mechanism to examine the CAG report and then a debate in Parliament. A constitutional office, as we said, should not be confused with a traditional munimji.”
It said, “The CAG’s function is to carry out examination of efficiency, effectiveness and economy of the expenditures and the use of resources by the government. The performance audit report submitted by the CAG has to be read accordingly.” Dismissing the PIL as “misconceived, it said: “If the CAG exceeded the brief, the Parliament will surely correct him and tell him that the methodology adopted by him for preparation of the report was not correct.”