2G spectrum: SC astonished at banks giving loans to licencees

"If it is true it is astonishing. It goes much far beyond what you are advancing," a Bench comprising Justices G S Singhvi and A K Ganguly observed when advocate Prashant Bhushan, appearing for the NGO, Centre for Public Interest Litigation (CPIL), was making his submission.

Bhushan was quoting some reports in which it was stated that PSU banks provided loans to about four licencees on the basis of the hypothecation of the 2G licences and the State Bank of India granted loan to the tune of Rs 2,500 crore to Uninor, which is a joint venture between real estate major Unitech Ltd and Norway's telecom giant Telenor.

"This is an indication that Rs 2,500 crore amount is given. It appears to be very substantial on the basis of hypothecation of licence only," the Bench said. "A bank which is the most premier bank of the country, the State Bank of India, functioning under the Act of Parliament, lending Rs 10,000 crore. It is a matter of such great public importance. It needs to be covered under the CBI investigation," the Bench observed while stressing that "investigation should be holistic".

While the Bench was making the remarks, senior advocate K K Venugopal, appearing for the CBI, said, "If the court wants, we can conduct preliminary inquiry." He said this aspect has not gone by the agency as FIR on this has to be registered by the CBI's other wing -- Securitization and Fraud Cell.

"The investigation on this issue cannot be carried out in the pending case and a fresh FIR has to be registered," he submitted before the Bench. Bhushan told the Bench that the loans were given to the licencees after the FIR was registered in the 2G spectrum allocation scam.

The CPIL counsel referred to the recorded conversations between corporate lobbyist Niira Radia and others and said it exposed various illegalities, alleging that bribes were given to political parties like DMK and Tamil Nadu Chief Minister.

However, the Bench said, "Till we get the contents of the tapes verified we will not comment as your words will become headlines (in newspapers). Unless someone has actually heard it (tapes)."

Bhushan told the Bench he himself has personally heard the tapes. "We will presume that you are an IT expert," the Bench said in a lighter vein and added that "unless authentication is given it has wider ramification as far as public sector banks are concerned".