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The Supreme Court Tuesday adjourned the hearing on a petition by cellular operators challenging the jurisdiction of the Comptroller and Auditor General of India (CAG) to seek details on their revenue sharing with the government.

The vacation bench of the Supreme Court headed by Justice Deepak Verma and comprising Justice K.S. Radhakrishnan adjourned the hearing on the petition by the Cellular Operators Association of India (COAI) till the second week of August.

A COAI petition challenging CAG’s decision to audit revenue sharing accounts of cellular companies with the department of telecommunication (DoT) is listed for hearing Aug 2 before the Delhi High Court.

In the apex court, the petitioner association has challenged the high court’s interim order directing the cellular operators to furnish information relating to revenue sharing to the CAG for the audit.

Counsel Smriti said for the petitioner association that the interim order of the high court was not sustainable given the statutory mandate of CAG.

COAI’s counsel said the CAG had no jurisdiction to audit the accounts of the private companies and sought a stay of the interim order.

The court said: ‘The question of a stay does not arise. This is an interim order. You are already protected. Only the revenue sharing details are to be made available to the CAG. This is a statutory requirement of the law.’

The court adjourned the matter and directed it to be listed in the second week of August.

When cellular operations were privatized, the companies made huge bids but subsequently could not pay the government the entire bid amount. As a via media, it was decided that the government would recover through a revenue sharing mechanism.

It was decided that the revenue sharing would be on adjusted gross revenue which effectively meant deducting connectivity and roaming charges and taxes from the gross revenue of the operators.

The gross revenue included the income generated from all telecom centric activities including retail operations of the cellular operators.

The cellular operators said they were furnishing details of revenue sharing accounts to DoT but said they were opposed to CAG auditing their accounts.


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