2G: Swamy submits fresh documents against Chidambaram

Legal Correspondent
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P. Chidambaram
P. Chidambaram

Janata Party president Subramanian Swamy on Thursday produced fresh documents in the Supreme Court, including an office memorandum, to show the alleged active involvement of Union Home Minister P. Chidambaram, the then Finance Minister, in the decision relating to the fixing of price in the allocation of 2G spectrum by the former Telecom Minister, A. Raja.

A document, which was placed before a Bench of Justices G.S. Singhvi and A.K. Ganguly, is dated March 25, 2011. It is written by P.G.S Rao, Deputy Director in the Finance Ministry, to Vini Mahajan, Joint Secretary in the Prime Minister's Office on the allocation and pricing of 2G spectrum. It said: “Finance Minister Pranab Mukherjee approved the note after personally inspecting the 11-page document.”

It referred to a Department of Telecom (DoT) letter, dated November 29, 2007, recommending both the revision of entry fee fixed in 2003 as well as the adoption of the auction methodology for determining the spectrum usage charges. It said the position paper was prefaced with a note dated January 9, 2008, which inter alia mentioned that a meeting of the full Telecom Commission, scheduled for January 9, 2008, was postponed to January 15, 2008.

It said, “This position paper was used by the then Finance Minister as a basis of his ‘secret note' to the Prime Minister on January 15, 2008, wherein an auction-based mechanism was recommended for future allocation of spectrum [beyond the start-up spectrum] with the spectrum allocations having been made in the past to be treated as a closed chapter.”

The DoT would have been forced to cancel the 2G licences had the Finance Ministry, under Mr. Chidambaram, stuck to its original demand for auctioning the initial ‘start-up spectrum' of 4.4 MHz each allotted to the 2008 licensees.

Implicit agreement

It said that the Ministry “implicitly agreed to the imposition of the same entry fee as that prevailing in 2001 for licences allotted up to December 31, 2008.” This despite a November 22, 2007 note by the then Finance Secretary and the present RBI Governor, D. Subbarao, that the 2001 mobile licence entry fee of Rs.1,650 crore was applied and not the market price at that time.

The note explained how there was a consensus between Mr. Raja and Mr. Chidambaram not to charge more for spectrum, up to 4.4 MHz. It said: “However, these were not charged [beyond the normal spectrum usage charges] since there was consensus, at the levels of the Ministers concerned, that only spectrum beyond the ‘start-up' levels [beyond 4.4 MHz] only should be charged.”

On January 30, 2008, at a meeting of Mr. Chidamabaram and Mr. Raja, “it was noted by the then Finance Minister that he was, for now, not seeking to revisit the current regimes for entry fee or revenue share.”

It said, “Based on the DoT letter, an internal note was prepared on February 11, 2008, by the Department of Economic Affairs, wherein the entire range of spectrum was proposed to be charged for both new and old operators.”

The note to the PMO said the DEA was legally within its rights to revise the spectrum pricing, even though the Letter of Intents (LoIs) were already granted and though there was an anticipation of litigation from companies who were already allocated 2G spectrum licences.

On April 21, 2008, Mr. Chidambaram sent a ‘non-paper' to Mr. Raja, conveying that an ‘in-principle' decision “may be taken to price spectrum beyond 4.4 MHz, as suggested by the DoT.

It said, “It may be mentioned that while the UAS licences were signed between February 27 and March 7, 2008, spectrum allocations were done starting only in April, 2008, almost four months after the LoIs were issued. However, these were not charged [beyond the normal spectrum usage charges] since there was consensus, at the levels of the Ministers concerned, that spectrum beyond the start-up levels only should be charged.”

Dr. Swamy urged the court to consider these fresh documents to drive home the demand for a CBI probe against Mr. Chidambaram. Arguments will continue on Thursday.



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