Government, 11 telecom firms get court notice on 2G spectrum (Roundup)

NEW DELHI - The Supreme Court Monday issued notice to the governments and 11 firms on a plea seeking cancellation of licences and award of spectrum for second generation (2G) phone services during former communications minister A. Raja’s tenure.

The court also said that it will ask the government how much loss, if any, the exchequer had suffered during the process, but observed it cannot take cognizance of the official auditor’s estimate of Rs.1.76 lakh crore as it did not form part of the record.

An apex court bench of Justice G.S. Singhvi and Justice A.K. Ganguly issued the notice to those 11 companies that allegedly did not fulfil their roll-out obligations as per the terms and conditions of being issued spectrum.

The companies that have been issued notice are Etisalat, S-Tel, Uninor, Loop Telecom, Videocon, Allianz Infra, Idea Cellular, Tata Teleservices, Sistema Shyam Teleservices, Dishnet Wireless and Vodafone-Essar.

The bench sought a response from the Department of Telecom (DoT) and the companies in three weeks and slated the next hearing Feb 1. The apex court also impleaded the Telecom Regulatory Authority of India (TRAI) as a respondent in the petition.

“After considering the submission of the petitioner’s counsel that since TRAI has sent a letter dated Nov 15, 2010, to secretary, DoT, which indicated that many companies have not complied with roll-out obligations, we deem it fit to entertain the petition,” the bench said.

“Accordingly, TRAI, through its secretary, is impleaded as a party.”

The bench was hearing a petition filed by an NGO, Centre for Public Interest Litigation (CPIL), that sought cancellation of the licences on the ground that all the norms were violated in awarding scarce spectrum.

The bench was also hearing a petition filed by Janata Party chief Subramanian Swamy who has sought identical directions. But the bench asked him to make the firms that have not fulfilled the roll-out obligations as parties and said it will hear the matter together.

Lawyer Prashant Bhushan, who appeared for CPIL, elaborated the grounds for demanding cancellation of the 2G licences.

The bench also questioned the silence of TRAI, the highest regulatory authority in the telecom sector, on the issue of alleged delay in fulfilling roll-out obligations of companies which were issued 2G spectrum licenses.

“Why did the TRAI not take action? Why was it silent for around one year and seven months? TRAI is treated as the highest regulatory authority in the telecom sector and even in terms of the consumer, what was it doing,” the bench asked.

When contradictions were mentioned in the loss to the national exchequer on account of allegedly flouting the norms, the bench said it will be for the government to spell out the figures.

“How much loss has the national exchequer suffered? We will ask the government,” said the bench. However, when Bhushan said the Comptroller and Auditor General (CAG) in a report has given the amount, the bench said it was not the government’s version.

Bhushan submitted that there was a huge loss to the government as the licences were sold to other entities the next day after their allocation at three times the original price. But the bench said the amount of loss has now become a debatable issue.

When counsel made a submission that current Communications Minister Kapil Sibal had disputed the report on the presumptive loss estimate of Rs.1.76 lakh crore, the bench said: “We cannot take cognisance of that as it is not part of the record.”

Raja was forced to resign in November after the official auditor indicted him in the spectrum allocation saga.

The Supreme Court is currently seized of two public interest petitions seeking cancellation of allocation of telecom licences to ineligible operators during Raja’s tenure.

While one petition was filed jointly Dec 14 by various groups, including CPIL, Telecom Watchdog and Common Cause, another was filed by the Janata Party chief Jan 4.

Several eminent people like former chief election commissioners J.M. Lyngdoh, T.S. Krishnamurthy and N. Gopalaswami and former central vigilance commissioner (CVC) P. Shankar are also petitioners in the suits filed by civil society groups.

Citing the CAG report, the petitioners said 85 of the 122 licences were given to companies which were not even eligible and as many as 343 applications were not even considered by the DoT.

The petitions have also pointed out that even the sectoral regulator has recommended cancellation of 69 out of the 122 licences as the licencees have failed to roll out their services as stipulated.

The petitions said internationally, in most legal systems, transactions tainted by bribery or corruption or made in violation of established norms and procedures are considered illegal and unenforceable.