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Updated: February 3, 2012 03:06 IST

Raja threw public interest to the winds; favoured firms at the cost of exchequer, says Supreme Court

J. Venkatesan
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Advocate Prashant Bhushan briefing the media outside the Supreme Court after the verdict in 2G case, in New Delhi on Thursday. Photo: V. Sudershan
The Hindu
Advocate Prashant Bhushan briefing the media outside the Supreme Court after the verdict in 2G case, in New Delhi on Thursday. Photo: V. Sudershan

“First come, first served policy has dangerous implications; Raja rejected Prime Minister's suggestion within minutes”

The exercise undertaken by officials of the Department of Telecommunications between September 2007 and March 2008, under the leadership of the then Minister A. Raja, was wholly arbitrary, capricious and contrary to the public interest, besides being violative of the doctrine of equality, the Supreme Court ruled on Thursday.

After analysing the records, a Bench of Justices G.S. Singhvi and A.K. Ganguly said: “The material produced before the court shows that the Minister [Mr. Raja] wanted to favour some companies at the cost of the public exchequer, and for this purpose, he took the following steps: soon after his appointment as Minister, he directed that all applications received for grant of UAS licence should be kept pending till the receipt of TRAI recommendations; the recommendations made by the TRAI on August 28, 2007 were not placed before the full Telecom Commission which, among others, would have included the Finance Secretary. The notice of meeting of the Telecom Commission was not given to any of the non-permanent members, despite the fact that the recommendations made by TRAI for allocation of spectrum in the 2G bands (800, 900 and 1800 Mhz) had serious financial implications. (This has been established from the pleadings and the records produced before this court that after issue of licences, three applicants transferred their equities for a total sum of Rs. 24,493 crore in favour of foreign companies).”

Writing the judgment, Justice Singhvi said: “In such matter, it was absolutely necessary for the DoT to take the opinion of the Finance Ministry as per the requirement of the Government of India (Transaction of Business) Rules, 1961. The officers of the DoT who attended the meeting of the Telecom Commission held on October 10, 2007 hardly had any choice but to approve the recommendations made by the TRAI. If they had not done so, they would have incurred the wrath of the Telecom Minister.”

The Bench pointed out that in view of the approval by the Council of Ministers of the recommendations made by the Group of Ministers, 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 on the TRAI's recommendations. However, as the Minister [Mr. Raja] 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.”

The Bench said the Minister brushed aside the suggestion made by the Minister of Law and Justice for placing the matter before the empowered Group of Ministers. The suggestion made by the Prime Minister, in his November 2, 2007 letter, that keeping in view the inadequacy of spectrum, transparency and fairness should be maintained in its allocation was rejected by the Minister within minutes, saying it would be unfair, discriminatory, arbitrary and capricious to auction the spectrum to new applicants because it would not give them a level-playing field.

The Bench noted that Mr. Raja simultaneously introduced the cut-off date as September 25, 2007 for consideration of the applications for grant of licences, despite the fact that a day prior to this, the DoT issued a press release fixing October 1, 2007 as the last date for receipt of applications. “This arbitrary action of the Minister [Mr. Raja], though appears to be innocuous, was actually intended to benefit some of the real estate companies which did not have any experience in dealing with telecom services and which had made applications only on September 24, 2007, i.e., one day before the cut-off date was fixed by the Minister on his own.”

Criticising the first come, first served policy, the Bench said: “In matters involving award of contracts or grant of licence or permission to use public property, the invocation of the principle has inherently dangerous implications. Any person who has access to power corridors at the highest or 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 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. To put it differently, the state and its agencies/instrumentalities must always adopt a rational method for disposal of public property, and no attempt should be made to scuttle the claim of worthy applicants. 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 interested only in garnering maximum financial benefit and who have no respect for the constitutional ethos and values.”

Rejecting the Centre's stand that policy decisions could not be a matter of judicial review, the Bench said: “When matters like these are brought before the judicial constituent of the state by public-spirited citizens, it becomes the duty of the court to exercise its power in the larger public interest and ensure that institutional integrity is not compromised by those in whom the people have reposed trust and who have taken oath to discharge duties in accordance with the Constitution and the law without fear or favour, affection or ill-will and who, as any other citizen, enjoy fundamental rights but are bound to perform duties.”

The Bench clarified that it had not imposed costs on the respondents who had submitted their applications in 2004 and 2006 and whose applications were kept pending till 2007. It directed others to deposit, within four months, 50 per cent of the costs with the Supreme Court Legal Services Committee. It would be used for providing legal aid to poor and indigent litigants. The remaining costs should be deposited in funds created for the Resettlement and Welfare Schemes of the Defence Ministry.

The Bench made it clear that the observations made in this judgment should not, in any manner, affect the pending investigation by the CBI, the Directorate of Enforcement and other agencies or cause prejudice to those “who are facing prosecution in the cases registered by the CBI or who may face prosecution on the basis of charge sheet(s) which may be filed by the CBI in future, and the Special Judge, CBI, shall decide the matter uninfluenced by this judgment. We also make it clear that this judgment shall not prejudice any person in the action which may be taken by other investigating agencies under the Income Tax Act, 1961, the Prevention of Money Laundering Act, 2002, and similar statutes.”

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It is TOO EARLY to feel comfortable on this "" Rarest of the Rare "
Judicial affirmation of something known to all in the country.
The Govt.has already decided to file Review Petition which would stall the effects of the Judgment for years to come.
The specially designated court is in the advanced stages of the trials based on CBI findings and submissions.
How long the stamina and enthusisasm of Reports who pursued the scam,Mr.Swamy,Mr.Prashanth Bhushan etc will hold.

from:  arackal narayanan
Posted on: Feb 27, 2012 at 19:39 IST

The Judgment of the highest court in India is very candid and holds Raja the telecom minister fully accountable. To quote some of the excerpts from the judgment" However, as the minister(Raja)was very much consicous of the fact that the Secretary, Finance has objected to the allocation of 2G spectrum at the rates fixed in 2001, he did not consult the Finance Minister or the office of the finance ministry"...

"Further the suggestion made by the Prime Minister, in his Nov 2, 2007 letter that keeping in view the inadequacy of the spectrum transparency and fairness should be maintained in the allocation was rejected by the minister within minutes of the receipt of this letter saying it would be unfair, discriminatory, arbitrary and capricious to auction spectrum to new applicants because it would give them a level playing field". Mr.Raja stands exposed and made accountable. It is time for DMK to realise this. The saddest part why the Finance Minister choose to keep mum.

from:  RamachandranAthiballi
Posted on: Feb 4, 2012 at 12:06 IST

Policy decision of any ministry cannot separate itself from the clever
crony business decisions.It is unfortunate that the head, eyes,
feeding mouth wish to blame each other and save their own identity.
Finance Minister as the feeder mouth had lot of time and strength to
bring back Raja to discipline. How can PM separate itself from his
lazy office and look the other side on the question of fair
Governance. Running a ministry business during recession or correct
market prices needs real doctors who are holistic and are different.
Doctors who after removing the disease can restore the patient to
normal health. By helping the patient to motivate the healthy parts of
his body religiously. By not allowing the costly dirty disease to
enter again. Till then media commentators and paper tigers shall
continue to sit, pray and comment without correct grassroots controls
and workable medicine.

from:  Rakesh Manchanda
Posted on: Feb 3, 2012 at 13:20 IST

The lesson learned from this kind of scam is that obsolute freedom of a particular ministry and especially true for an individual who took the oath when called to do the job doesn't work in a populace democracy and evenso the current system is directing people in position to take advantage of to an extent that it goes undetected and finally when brought to light it is too late to reverse.

from:  Selva
Posted on: Feb 3, 2012 at 13:11 IST

Very wrong judgement. Why poor telcos to be punished for the wrong policy of NDA and stupid implmentation of UPA. Both NDA and UPA should share the blame and BJP & Congress togther refund the investments made by the Telcos.

from:  viola
Posted on: Feb 3, 2012 at 12:46 IST

It is time for Dr.Manmohan Singh to resign. His explanations that he does not know the illegal dealings in 2G - Scam, or that Mr.Raja has overlooked him, does not be acceptable. It is pittiable and regretable that a past Reserve Bank Governor, who has signed in the Indian Rupee Currency Notes, has entered into political ground and caught into this controvercy unnecessarily. Our Indian governing system should not allow certain selected Government officials like retired I.A.S.and I.P.S. officers, Reserve Bank governors, Election Commissioners, Supreme Court, High Court and even lower Court judges to enter politics. If they enter politics after their retirement, their decidings and judgements during their tenure before their retirement will be assumed to be partition and questionable.

from:  CA.S.Karthigeyan
Posted on: Feb 3, 2012 at 12:22 IST

One thing that is evident from the scam is - the whole Political System in the country is rotten to the core. This is the wake up call for the people of the nation to rise and raise their voices against the corrupt practices at the highest level.

from:  Kanav
Posted on: Feb 3, 2012 at 12:17 IST

Where is Chidambaram, MMS and others. They also should be accounted for. They are also culprits and should be booked.

from:  ravi
Posted on: Feb 3, 2012 at 11:42 IST

Public interest is only an excuse for personal gains . The people in this country want money back from those who have looted not just never ending investigations , court cases ,shifting blame etc

Posted on: Feb 3, 2012 at 11:32 IST

Alas! It is a national shame of system deficiency!!

Posted on: Feb 3, 2012 at 10:18 IST

If as has been found Telecom Minister A.Raja took decisions on pricing and allocation of 2G spectrum without heeding the advice of the PM and FM or consulting them, doesn't it mean that the cabinet system of governance under the leadership of the PM is not working properly in the country today? Isn't it the PM's responsibility to see that it works? Why is the media not asking such questions? One thought that important decisions on various matters of governance is taken or at least approved by the cabinet. What was the cabinet decision on spectrum pricing and allocation?

from:  K.Vijayakumar
Posted on: Feb 3, 2012 at 09:29 IST

Appreciate the correction the only working branch of government has taken. It is much required for the pendulum to swing to the middle and this case becomes a deterrent to companies and Politicians which think that anything goes and the people who pay tax continue to be leeched.

from:  Ajay
Posted on: Feb 3, 2012 at 08:53 IST

It is amazing that despite the CBI and UPA going on full throttle to destroy the 2G scam evidencing documents, Court is able to find out so much loopholes. If only the CBI was faithful in its duty and not provided the ample opportunity to destroy evidence, by this many other political heads would have fallen. It is an injustice that Congress managed to cover up all its top leaders, despite such huge loss to the govt.

from:  moh
Posted on: Feb 3, 2012 at 08:45 IST

In the last 25 months of UPA rule, we have seen large scams by politicians wasting the tax payers hard earned money, scams like 2G,CWG,ISRO,adarsh the list goes on, Raja as an Individual could not have taken this decision. There are many politicians behind this 2 G scam. Without his party high command okay to go ahead he cannot take this decision.....CBI should be given free hand to go deep in to the Investigation and punish all those involved in this national shame.

from:  Gani
Posted on: Feb 3, 2012 at 07:24 IST

People of India feel comfortable to see that at last there is one SUPREME COURT reliable and dependable finally comes to such large scale corrution matters affecting in the long run the nation as a whole. My high regards to all concerned particularly Dr.Subramanian Swamy and Advocate Sri prashant Bhushan and the Hon Judges and the Supreme court as a whole. One word for Dr.Manmohanji ! Pl dont feel comfortable by shirking from the moral responsibility not being able to control Ministers under your nose,better accept your inability or lack of wilpower to handle the cumulative and overall responsibilities as a Prime minister of India and if furthur you cant handle like above Pl resign and pave way for your sccessor like Pranabji.If you dont do this people will ignore Congress Party next time.

from:  Mr.Pathy
Posted on: Feb 3, 2012 at 07:20 IST

In a country where even transparent tenders are manipulated by participants by stage managing the tender through predetermined quotations and distribution of the allocation of various locations the action of the then Telecom Minister in resorting to a first come first serve system intended to benefit beneficiaries already short listed is most shocking. It is strange that judicial intervention was required to set right the wrong without the Government in power taking appropriate corrective action citing the compulsions of coalition dharma as an excuse. In this it is felt Dr.Manmohan Singh has fallen short of public expectations and fallen down from the pedestal on which he has been perched on account of his renowned economic acumen and wisdom. It is indeed a national shame. If at all the Congress party wishes to redeem its fair name it should now come in the open and shake off its coaliton partners whose records are mired in rampant corruption. A person is known by the company he keeps

Posted on: Feb 3, 2012 at 06:06 IST

Now that the highest judicial authority of India has pronounced that Raja favoured a few organisations over others has opened up the next question; what was the quid pro quo between Raja (read as members of the Government) and the organisations, the quantum of the favours bestowed on the members of the Governemnt, how was the favours shared and where are such favours now?.
Unless these questions are answered and the guilty bought to book within the shortest possible time, the judgement would not have realised its goal of stopping the loot/rape of the nation.

from:  mani sandilya
Posted on: Feb 3, 2012 at 05:50 IST
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