The Case Of Unified Tele Services Providers & Others V. Union Of India

1204 Words Oct 15th, 2015 5 Pages
The verdict in the case of Association of Unified Tele Services Providers & Others v. Union of India was delivered on April 17, 2014 by a bench consisting of Justice K.S. Radhakrishnana and Justice Vikramajit Sen. The Supreme Court of India pronounced that the Comptroller & Auditor General of India (“CAG”) has the power to call for an audit of the accounts of private service providers who are parties to the UAS license scheme with the Government in order to ensure that the Government was receiving the revenue legitimately due to it.

The consequences of the judgment are significant. Every project or service carried out under a public-private partnership, which involves a revenue sharing pattern, will now be submitted to a CAG audit. This Supreme Court ruling directly impacts private companies who are currently parties to revenue distribution agreements with the Government, chiefly companies involved in the business of telecommunications, mining natural resources, public-private partnerships concerning infrastructure projects and private parties involved in any transaction which would necessitate them to credit a revenue receipt to the Government of India or State Government.

There have been previous instances of CAG audits and investigation of private companies’ books of accounts. Most prominent from recent instance are the power distribution companies in Delhi and Reliance Industries’ Krishna-Godavari basin gas examination. But, these were performed in an unambiguous…
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