Apex court issues notices to government, 11 firms in 2G saga

Monday, January 10, 2011

NEW DELHI - The Supreme Court Monday issued notices to the union government and 11 firms on a plea seeking cancellation of aiwaves issued for second generation (2G) telecom services during the tenure of former communications minister A. Raja.

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

The companies that have been issued notices 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 the 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 obligation, 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 of a non-government organisation, Centre for Public Interest Litigation (CPIL), that sought cancellation of the licenses on the ground that all the norms were violated in award of scarce spectrum.

The bench was also hearing the 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 will hear the matter together.

Lawyer Prashant Bhushan, who appeared for the non-profit CPIL, elaborated the grounds for demanding cancellation of the 2G telecom licenses.

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 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 licenses were sold to other entities the next day after its 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 crores, the bench said: We cannot take cognisance of that as it is not part of the record.

Short of rejecting the auditor’s report, Sibal said Friday the methodology used was “utterly erroneous” in pegging Rs.1.76 lakh crore ($40 billion) as the notional loss while awarding airwaves for 2G phone services in 2008.

Raja was forced to resign in November after the official auditor indicted him in the spectrum allocation saga. The saga also blocked legislative business with the opposition unrelenting in its demand for a parliamentary probe.

But Sibal slammed the opposition for disrupting the entire winter session of parliament and spreading what he termed as “utter falsehood” on the matter, and said the previous National Democratic Alliance (NDA) government had framed the spectrum policy.

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