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Section 121: Audit by Comptroller and Auditor General of India

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter X: Finance and Accounts
Competent Labour Forum
Act No. 36 of 2020
Section 120 All 163 Sections of Code on Social Security, 2020 Section 122

Legal Commentary & Landmark Judgments: Section 121

Section 121 of the Code on Social Security, 2020 establishes the constitutional and statutory audit of Social Security Organisations by the Comptroller and Auditor General of India (CAG), empowering the supreme audit institution to conduct comprehensive financial and performance reviews.

  • CAG Constitutional Audit Jurisdiction: Mandates that the accounts of every Social Security Organisation shall be audited by the Comptroller and Auditor General of India at such intervals as may be specified by him, invoking the constitutional authority of Article 149 of the Constitution of India.
  • Unrestricted Access to Records, Cash, and Assets: Invests the CAG or any person appointed by him in connection with the audit of accounts with the same rights, privileges, and authority as the CAG has in connection with the audit of Government accounts; specifically, the right to demand the production of books, accounts, connected vouchers, electronic databases, and cash in hand.
  • Compilation and Transmission of the CAG Audit Report: Requires the CAG to prepare an independent, comprehensive audit report detailing all financial irregularities, waste, fund diversions, and system leakages, forwarding the report to the Social Security Organisation and the Central Government.
  • Mandatory Presentation Before Parliament: The Central Government is statutorily mandated to cause the CAG audit report to be laid before each House of Parliament, subjecting the organisations to direct democratic scrutiny by the Public Accounts Committee (PAC).
Key Landmark Precedents:
  • Arvind Gupta v. Union of India (2013) 1 SCC 393: The Supreme Court affirmed that the Comptroller and Auditor General of India is a constitutional authority whose audit mandate under Article 149 ensures financial integrity, transparency, and propriety across public institutions and statutory welfare bodies.
  • Association of Unified Telecommunications Service Providers of India v. Union of India (2014) 6 SCC 572: The Supreme Court held that the CAG's audit jurisdiction extends to any entity or body where public revenues, statutory levies, or welfare funds are involved, and auditors are entitled to complete access to all accounting records.
  • Centre for Public Interest Litigation v. Union of India (2012) 3 SCC 1: Reiterated that CAG audit reports constitute authoritative constitutional assessments of financial governance that Parliament and the judiciary rely upon to enforce public accountability.
Courtroom Practice & Strategic Litigation Guidance:

Social Security Organisations must establish a permanent 'CAG Liaison Cell' headed by an officer of the rank of Additional Commissioner. Upon receipt of the CAG Audit Inspection Report, the cell must circulate draft paragraphs to relevant department heads immediately. Compile evidence-backed Action Taken Notes (ATNs) addressing each audit observation within four weeks to prevent adverse paragraphs from being incorporated into the CAG's final Union Audit Report presented to Parliament.

Section 120 All 163 Sections of Code on Social Security, 2020 Section 122