2G judgement: Strong language from Supreme Court

2G judgement: Strong language from Supreme Court
New Delhi Excerpts from the verdict delivered today by Justice GS Singhvi and AK Ganguly:

On how Chidambaram was not consulted by Raja
: The DoT had to discuss the issue of spectrum pricing with the Ministry of Finance. Therefore, the DoT was bound to involve the Ministry of Finance before any decision could be taken in the context of paragraphs 2.78 and 2.79 of TRAI's recommendations.  However, as the Minister of C&IT was very much conscious of the fact that the Secretary, Finance, had objected to the allocation of 2G spectrum at the rates fixed in 2001, he did not consult the Finance Minister or the officers of the Finance Ministry.

On the first-come-first-serve policy used to allocate licences: There is a fundamental flaw in the principle of first-come-first-served in as much as it involves an element of pure chance or accident.  In matters involving award of contracts or grant of licence or permission to use public property, the invocation of first-come-first-served principle has inherently dangerous implications.  Any person who has access to power corridor at the highest or the lowest level may be able to obtain information from the Government files or the files of the agency/instrumentality of the State that a particular public property or asset is likely to be disposed of or a contract is likely to be awarded or a licence or permission would be given.  He would immediately make an application and would become entitled to stand first in the queue at the cost of all others who may have a better claim.  This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. When it comes to alienation of scarce natural resources like spectrum etc., the State must always adopt a method of auction by giving wide publicity so that all eligible persons may participate in the process.  Any other methodology for disposal of public property and natural resources/national assets is likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values.

On the role of regulatory body TRAI which did not recommend an auction in 2008 for 2G frequency: TRAI itself had recognised that spectrum was a scarce commodity, it made recommendation for allocation of 2G spectrum on the basis of 2001 price by invoking the theory of level playing field...all this was done in the name of growth, affordability, penetration of wireless services in semi urban and rural areas, etc.  Unfortunately, while doing so, TRAI completely overlooked that one of the main objectives of NTP 1999 was that spectrum should be utilised efficiently, economically, rationally and optimally and there should be a transparent process of allocation of frequency spectrum as also the fact that in terms of the decision taken by the Council of Ministers in 2003 to approve the recommendations of the Group of Ministers the DoT and Ministry of Finance were required to discuss and finalise the spectrum pricing formula. 

On the deals struck by companies like Unitech Wireless and Swan with foreign investors:  To say the least, the entire approach adopted by TRAI was lopsided and contrary to the decision taken by the Council of Ministers and its recommendations became a handle for the then the Minister of C&IT and the officers of the DoT who virtually gifted away the important national asset at throw away prices.  This becomes clear from the fact that soon after obtaining the licences, some of the beneficiaries off-loaded their stakes to others, in the name of transfer of equity or infusion of fresh capital by foreign companies, and thereby made huge profits.  We have no doubt that if the method of auction had been adopted for grant of licence which could be the only rational transparent method for distribution of national wealth, the nation would have been enriched by many thousand crores.

On why all licences granted before Raja by first-come-first-serve policy should not be cancelled: The argument of Shri Harish Salve, learned senior counsel that if the Court finds that the exercise undertaken for grant of UAS Licences has resulted in violation of the institutional integrity, then all the licences granted 2001 onwards should be cancelled does not deserve acceptance because those who have got licence between 2001 and 24.9.2007 are not parties to these petitions and legality of the licences granted to them has not been questioned before this Court.

Story First Published: February 02, 2012 15:34 IST

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