Delivering a big blow to the UPA Government and what could lead to a major shake-up in the telecom sector, the Supreme Court, in a landmark judgment, on Thursday cancelled the 122 spectrum licences issued ‘on or after January 10, 2008' during the tenure of the then Telecom Minister, Mr A. Raja.

These 2G licences (bundled with spectrum) were “quashed” by the court after finding that their allocation was done in an “illegal” manner.

According to a Comptroller and Auditor General report, since the licences were given in 2008 at 2001 prices, without an auction, it led to a loss of Rs 1.76-lakh crore to the exchequer.

FRESH AUCTION

A Bench comprising Justices Mr G.S. Singhvi and Mr A.K. Ganguly in effect said these licences will be valid only for four more months.

Further, the court said, “Keeping in view the decision taken by the Centre in 2011, TRAI shall make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 Service Areas by auction, as was done for allocation of spectrum in 3G band.”

It asked the Centre to consider the TRAI recommendations and take appropriate decision within the next one month, adding that fresh licences be granted by auction.

TELCOs TO PAY COST

The court observed that Etisalat DB (earlier Swan Telecom), Unitech Wireless Group and Tata Teleservices “were benefited by a wholly arbitrary and unconstitutional action taken by the Department of Telecom for grant of UAS Licences and allocation of spectrum in 2G band and off-loaded their stakes for many thousand crores (of rupees) in the name of fresh infusion of equity or transfer of equity.”

It directed these three companies to pay a cost of Rs 5 crore each.

The court also said Loop Telecom, S Tel, Allianz Infratech and Sistema Shyam Tele Services (Shyam Telelink) shall pay cost of Rs 50 lakh each because they too had similarly illegally benefited.

However, it added, “We have not imposed cost on the respondents who had submitted their applications in 2004 and 2006 and whose applications were kept pending till 2007.” Of the cost amount (of Rs 5 crore and Rs 50 lakh each), the court wanted 50 per cent to be deposited with the Supreme Court Legal Services Committee to be used for providing legal aid to poor and indigent litigants.

The remaining 50 per cent shall be deposited in the funds created for Resettlement and Welfare Schemes of the Ministry of Defence, it said.

Plea by NGOs

This order came on a plea by the NGOs, Centre for Public Interest Litigation (represented by advocate Mr Prashant Bhushan) and Common Cause, as well as some well-known citizens. The Government got only around Rs 9,000 crore from these 122 licences, while fewer number of 3G licences, given after fresh auction, fetched it Rs 69,000 crore. The court had reserved its order on March 17, 2011 in the matter.

Decision on Chidambaram

Also, the apex court in effect left it to the Special Court to take a decision on a probe into the Home Minister, Mr P. Chidambaram's alleged role in the 2G spectrum case.

It declined to direct the CBI to probe the matter saying the petitioner Dr Subramanian Swamy has already filed an application before the Special Court for summoning Mr Chidambaram as an accused.

Role for CVC

It also found no justification to appoint Special Investigation Team to supervise the CBI probe.

However, the apex court asked the Central Vigilance Commission to assist it in the monitoring of the case.

arun.s@thehindu.co.in

(This article was published on February 2, 2012)
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