SC observed- Allocation of 2G Spectrum under A. Raja was Arbitrary & Contrary to Public Interest

The Supreme Court observed that the allocation of 2G spectrum under  former telecom minister A. Raja was wholly arbitrary, capricious and contrary to public interest apart from being violative of the doctrine of equality favour some companies at the cost of the public exchequer. The Supreme Court cancelled all the 122 2G licenses. According to the verdict, telecom regulator TRAI is to make fresh recommendations on the grant of licenses.

The apex court cancelled the 2G licenses. The cancellation came on two writ petitions one by Janata Party leader Subramanian Swamy and the other filed jointly by Prashant Bhushan’s CPIL and several other NGOs and individuals, who stressed that the process of allotment was arbitrary and unconstitutional.

The importance of the verdict is underscored Article 141 of the Constitution, which states that the law declared by the Supreme Court shall be binding on all courts.

The court however decided against ordering a probe into Union home minister P. Chidambaram’s alleged role the scam thereby saving the UPA governemnt another embarassment. The SC left it to the special court conducting the 2G trial to take a decision in this regard.

The Judgement

In the third crucial verdict concerning the scam, a Bench comprising Justice G. S. Singhvi and Justice A. K. Ganguly decided to tighten its vigil over the probe by involving the Central Vigilance Commissioner ( CVC) and a senior vigilance commissioner in the monitoring process of the 2G scam proceedings. The SC however rejected a plea for constitution of a separate panel for the purpose.

In the first judgment concerning the cancellation of 2G licences granted to nine telecom operators, the court imposed heavy costs of Rs 5 crore each on Etisalat DB Telecom ( Swan Telecom), Unitech Wireless and Tata Teleservices. They were seen to have benefited by a wholly arbitrary and unconstitutional action of award of licences to them. They then offloaded their stakes for several thousand crores in the name of fresh infusion of equity or transfer of equity.

In addition to this, the SC ordered Loop Telecom, S- Tel, Allianz Infratech and Sistema Shyam Tele Services, who were also beneficiaries of the decision, to pay Rs 50 lakh each. Half the cost will have to be paid within four months and would be used for providing legal aid to the poor. The remaining was meant to be utilised by the defence ministry in resettlement and welfare schemes.

The Bench indicted TRAI for helping Raja allocate spectrum at throwaway prices. Post the judgement, Trai directed initiate a fresh proposal of grant of 2G licences. The Centre would have to take a decision on the recommendation month licences the auction first.