SC dismisses Loop Telecom's plea for refund of Rs 1,454.94 cr due to acquittal in 2G case

It emphasised that the acquittal of the promoters of the appellant of these criminal charges does not efface or obliterate the findings

The Supreme Court on Thursday dismissed Loop Telecom's appeal for refund of Rs 1,454.94 crore, inclusive of interest, paid to the Union government's Department of Telecommunication as entry fee for securing 2G spectrum and Unified Access License in 21 service areas in 2008.

The top court had in 2012, acting on a PIL, cancelled 122 licences, including that of Loop Telecom.

A bench presided over by Justice D Y Chandrachud, while upholding the TDSAT’s 2015 and 2018 decisions against refund, said mere acquittal of Loop Telecom's promoters by a special CBI court does not make the company and its promoters eligible for getting refunds as it had not secured licenses as per law and had engaged in “fraud” and “sham transactions” with the Essar Group.

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Loop had claimed a refund of Rs 1,454.94 crore paid as the Entry Fee (together with interest) and licence fees.

The top court noted that the scope of criminal trial before the lower court was limited to the question as to whether the Loop’s promoters had cheated the DoT by providing a false representation of its compliance with Clause 8 of the UASL Guidelines since it was allegedly being controlled by the Essar group.

"Loop was in pari delicto (in equal fault) with DoT and the then officials of the Union government. The appellant (Loop) was the beneficiary of the First Come First Serve policy which was intended to favour a group of private bidding entities at the cost of the public exchequer," the court said.

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It held that the appellant's contention that it was exculpated from any wrong doing by the judgment of this court (previously in 2012) is "patently erroneous".

"The process leading up to the award of the UASLs and the allocation of the 2G spectrum was found to be arbitrary and constitutionally infirm,” the bench, also comprising Justices Surya Kant and Vikram Nath, said in its 71-page judgement.

The promoters of the company Kiran Khaitan and I P Khaitan faced trial for fraud, conspiracy and corruption in the 2G case, but were eventually acquitted by a CBI court in 2017 for lack of evidence.

The court said that the acquittal of the company's promoters does not obliterate the findings contained in the top court verdict which had set aside spectrum licenses.

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