The Union Cabinet has given the green signal to seek a Presidential Reference on 2G spectrum allocation.
The reference document, prepared by the Ministry of Communications, raises key questions for the Supreme Court, which in February cancelled all 2G licences issued in January 2008.
The Ministry wants to know from the Supreme Court whether all licences issued since 1994 without auction should be cancelled. It has also raised the question as to whether the Government should cancel permits given to dual technology players as well.
Besides, it is seeking clarity on whether the Government should withdraw 3G spectrum given to operators whose licences have been cancelled. The reference also seeks to know how the Government should respond to claims of compensation from foreign investors who have been impacted by the apex court's decision to cancel licence.
“If Indian Government makes a policy and Supreme Court strikes down then a question of compensation arises for those people who have invested money. What should be our response to that question,” said a top Government functionary taking the example of Telenor.
The Norwegian telecom major has claimed innocence about allegations around 2G spectrum scam as it had picked up stake in Unitech Wireless after the DoT issued licences.
The questions raised by the Telecom Ministry have huge ramifications for the entire telecom industry as each of the points raised in the Presidential reference impacts one operator or the other.
For instance if the apex court takes a view that all licences issued on First-Come- First-Served basis was illegal then even older operators will get impacted.
The Presidential reference will now be sent to the President of India for ratification after which it will be presented before the Supreme Court. But the apex court is entitled to ignore or reply to the reference document.