Section 121 of Electricity Act permits Tribunal to quash Commission actions violating statutory audit provisions.

The Delhi Electricity Regulatory Commission (Review Petitioner) sought a review of the Tribunal's order dated 20th April 2026. That order had quashed the Lt. Governor’s approval to entrust the audit of Delhi Discoms (Respondents 31-33) to the Comptroller and Auditor General (CAG)

The Tribunal had instead directed the Commission to appoint a private chartered accountant for a "strict and intensive audit" as mandated by a Supreme Court RA judgment dated 6th August 2025

The Commission argued that previous interim orders dated 11th February 2026 and 26th September 2025 had impliedly permitted a CAG audit

The Commission requested an extension of time to appoint an auditor and sought to delay the commencement of the liquidation of regulatory assets (valued at ₹38,552 crores) until July 2026

1. Whether the Tribunal’s prior interim orders constituted an approval for the Commission to conduct the special audit through the CAG.

2. Whether the Tribunal lacked jurisdiction under Section 121 of the Electricity Act, 2003, to decide on the entrustment of the audit to the CAG.

3. Whether the Commission should be granted an extension to appoint a chartered accountant and a delay in commencing the liquidation of regulatory assets.

Section 121 of the Electricity Act, 2003, which empowers the Tribunal to issue orders/instructions to Regulatory Commissions for the performance of statutory functions, provided it does not involve adjudicating a pending dispute before the Commission itself

Section 21 of the CAG (DPC) Act, 1971, to hold that a CAG audit of private Discoms was legally impermissible in this context

Precedent of Andhra Pradesh State Load Despatch Centre v. M/s KSK Mahanadi Power Company Ltd. regarding the scope of Section 121 power

Electricity Regulatory Commission (Appointment of Consultants) Regulations, 2001 regarding the procedural timeframe for hiring auditors

The Tribunal rejected the Commission's interpretation of previous orders, clarifying that merely recording a submission or refraining from an early examination of an issue does not constitute legal approval

Regarding jurisdiction, the Tribunal held that it was acting under the Supreme Court's mandate to monitor the audit process; therefore, it was duty-bound to ensure that the Commission’s actions complied with statutory limits, such as Section 21 of the CAG Act

The Tribunal noted that failing to intervene when a Commission contravenes statutory provisions would violate the spirit of Section 121

Regarding the regulatory assets, the Tribunal observed that since the assets are massive (₹38,552 crores), any delay causes undue prejudice to consumers, and the "true-up" process for FY 2023-24 is not a valid legal impediment to starting liquidation

For Review Petition 7/2026, the Tribunal granted a limited extension of 45 days (from the original one week) to complete the appointment of a chartered accountant, citing mandatory consultant appointment regulations

For Review Petition 8/2026, the Tribunal refused to modify the direction to liquidate regulatory assets and ordered the process to commence positively by 16th June 2026