Explained: Delhi LG VK Saxena Removes AAP Govt's Nominees From Discom Boards, What's The Case About?

Delhi Lieutenant Governor VK Saxena on Saturday removed the Delhi government's nominees on the boards of three power distribution companies (discoms) and replaced them with senior government officials. 

The Aam Aadmi Party (AAP) termed Saxena's order "illegal and unconstitutional". AAP leader and Delhi's Deputy Chief Minister Manish Sisodia said the the LG of Delhi has no legal rights to issue such an order and the LG can only rule on issues related to police, land, and public order. 

Saxena ordered the removal of AAP government-appointees, including AAP leader Jasmine Shah, saying the appointments were "illegal". 

The three privately-held discoms involved are BSES Yamuna Power Limited (BYPL), BSES Rajdhani Power Limited (BRPL), and Tata Power Delhi Distribution Limited (TTPDL). The BYPL and BRPL are owned by Anil Ambani's Reliance Group. 

Here we explain what's the basis of Saxena's order, what the AAP has said, and what's the background of the case.

Why has Delhi LG removed AAP appointees?

Delhi LG VK Saxena on Saturday removed three AAP-appointed members on the boards of three private discoms. The members include AAP leader Jasmine Shah and AAP MP ND Gupta's son Naveen Gupta. 

Saxena ordered the removal as the appointment was allegedly illegal. It is also alleged that the discoms received undue advantage from the appointments.

The sources at the LG's office told PTI that the finance secretary, power secretary, and the MD of Delhi Transco will now represent the Delhi government on the boards of the discoms in line with the prevalent practice.

The sources further told PTI that Saxena had invoked "difference of opinion" under Article 239AA of the Constitution of India after the Arvind Kejriwal-led government persisted upon their continuance as government nominees, despite "proven misconduct and maleficence", by allegedly benefiting the discoms to the tune of more than 8,000 crore.

How has AAP responded?

The Aam Aadmi Party (AAP) said Delhi LG VK Saxena's order was "illegal and unconstitutional". It also said the proper procedure was not followed. 

AAP leader and Delhi Deputy CM Manish Sisodia said that such an order is out of the scope of Saxena's powers. 

He said in Hindi: "LG Sahab is reversing four-year-old decisions of Delhi government. Reason: Difference of opinion. LG Sahab has not got any right. Even if there is difference of opinion, there is a procedure. LG cannot take any decision on issues other than police, land, and public order. Only ministers can take decisions [on all other issues]."

The AAP also said that Saxena's order is in violations of precedents set by the Supreme Court.

The AAP said, "The LG has made a complete mockery of all Supreme Court orders and the Constitution. He is openly going around saying that SC orders are not binding on him."

What is the discoms case about?

Delhi LG VK Saxena's order removing the nominees of AAP-led Delhi government is not sudden. He had first sought the removal of AAP government's nominated members in January, according to an ANI story from the time. The removal is rooted in a report submitted earlier. 

The report was submitted by Delhi Power Department and the Chief Secretary in response to a complaint dated September 26, 2022, reported ANI in January.

The report alleged that the appointments by the Delhi government had caused benefit of thousands of crores to the two Anil Ambani-controlled discoms — BSES Yamuna Power Limited (BYPL) and BSES Rajdhani Power Limited (BRPL).

"These compromised nominees provided undue financial benefits running into thousands of crores to Ambani’s DISCOMs, at the cost of the state exchequer and Delhi government-run undertakings (DTL, IPGCL and PPCL). LG has asked for Chief Minister Arvind Kejriwal to be informed about this and action be taken," reported ANI about the content of the report. 

ANI further quoted the report as saying: "Once appointed these government nominees rather than taking care of the government interests, in cahoots with the Anil Ambani nominees on the Board, facilitated a decision of the DISCOMs Boards of unilaterally lowering interest rates charged on LPSC (that these DISCOMs owed to DTL/PPCL/IGPCL), from 15-18 per cent to 12 per cent, thereby causing a loss of Rs 8683.67 crore...However, these private nominees instead of protecting the interests of GNCTD, acted in collusion with the private companies to serve the financial interests of DISCOMs."

Both of these discoms —BYPL and BRPL— and the Tata-controlled TTPDL are joint ventures in which the Delhi government owns 49 per cent stake. ANI reported that Delhi government-nominated members hold veto powers in the discom decisions. 

The sources told PTI that senior officers used to serve on the boards of the discoms earlier, but the Kejriwal government started nominating politically affiliated persons to them.

(With PTI inputs)