SC issues notice to Govt on cancellation of 2G spectrum

The apex court also issued notices to 11 companies which allegedly did not fulfill the roll out obligations as per the terms and conditions of allocation of the spectrum.

The apex court also impleaded TRAI as a respondent in the petition. A bench comprising justices G S Singhvi and A K Ganguly sought the response from the Department of Telecom and the companies within three weeks and posted the matter for hearing on February 1.

"After considering submission of the petitioner's counsel that since TRAI has sent a letter dated November 15, 2010 to Secretary, DoT, which indicated that many companies have not complied with the roll out obligation and not started the services, we deem it fit to entertain the petition," the bench said.

"Accordingly, TRAI, through its Secretary, is impleaded as a party," it said.

The bench was hearing a petition filed by an NGO Centre for Public Interest Litigation (CPIL) seeking cancellation of the licenses alleging that all norms were violated.

The companies which were issued notices were Etisalat, Uninor, Loop Telecom, Videocon, S-Tel, Allianz Infra, Idea Cellular, Tata Teleservices, Sistema Shyam Teleservices, Dishnet wireless and Vodafone-Essar.

The bench was also hearing the petition filed by Janata Party Chief Subramanian Swamy who has also sought identical directions.

However, the bench asked Swamy to make the companies, who have not fulfiled the roll out obligations, as parties, and then it will hear the matter along with the CPIL petition. Advocate Prashant Bhushan, appearing for the CPIL, elaborated the grounds for the cancellation of the 2G licenses.

The bench also questioned the silence of TRAI, which is the highest regulatory authority in the telecom sector, on the issue of alleged delay in fulfilling roll-out obligations of the 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 in the actual loss to the national exchequer was mentioned, the bench said it will be for the government to spell out the actual loss suffered by the national exchequer in the allocation of the spectrum which was done by allegedly flouting several norms.

"How much loss has the national exchequer suffered? We will ask the government," the bench said. However, when Bhushan said that CAG report has given the amount, the bench said it is not the government's version.

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

When Bhushan made a submission that Telecom Minister Kapil Sibal had disputed the CAG report on the presumptive loss of 1.76 lakh crores saying it was not correct, the bench said, "We cannot take cognisance of that as it is not part of the record."

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 as telecom minister between 2008 and 2009.

While one petition was filed jointly on December 14 by various civil societies including Centre for Public Interest Litigation, Telecom Watchdog and Common Cause another was filed by Janata Party chief Subramanian Swamy on January 4.

Several eminent persons like former chief election commissioners J M Lyngdoh, T S Krishnamurthy and N Gopalaswami and former Central Vigilance Commissioner P Shankar are also petitioners in the petition filed by civil societies.

The second petition was filed after the apex court on an earlier plea by Swamy decided to monitor the ongoing probe into the scam by the CBI and Enforcement Directorate.
Citing two judgements by the Delhi High Court and the CAG's report on the issue of spectrum allocation, the two petitions have alleged that the process of the spectrum allocation was marred by "multiple illegalities, corruption and favouritism."

Citing the CAG report, they 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 by the condition on which they were given the licences.

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.