2G scam: CBI defends Centre for not cancelling LoIs

Refutes statement that no rights were created on issuance of LoIs

The Central Bureau of Investigation (CBI) on Friday filed a note in the Supreme Court, defending the Centre's action in not cancelling the Letters of Intent (LoI) issued by the Department of Telecommunications (DoT) on January 10, 2008 and refuted the statement that no rights were created on issuance of LoIs.

The CBI filed its response to the petition filed by the Centre for Public Interest Litigation, represented by advocate Prashant Bhushan, contending that no rights were created on January 10, 2008 when the LoIs were issued.

On Thursday, the court questioned the Centre why no action was taken on the letter written by Prime Minister Manmohan Singh suggesting allocation of spectrum through auction. The court also wondered whether the LoIs could have been cancelled as they did not create any right but only an entitlement.

The CBI said “the issue of whether the LoI creates rights or not must be looked at with reference to the terms of LoI.” Quoting a judgment, it said, “where the language does not negative contractual intention, it is open to the courts to hold that the parties are bound by the document.”

The CBI note said, “the issue of LoI is dealt with in the charge sheet [filed in the special court]. The charge sheet discloses that LoIs were issued only on the bank draft being produced by each one of the allottees to the DoT at short notice. The LoIs identified the circles for which 2G services were to the rolled out by the allottees pursuant to the LoIs and they also provided that the licences would follow once certain conditions were fulfilled. That being so, the statement that no rights were created for the allottees on January 10, 2008 is legally unsound.”

It may not be correct to state that after receiving the amount of Rs. 1,600 crore for each licence and fulfilling the other conditions in the LoIs, the licences would still be open to cancellation. In such an event, the allottees would have taken recourse to the courts of law. The CBI also quoted a judgment to drive home the point that the LoI created rights.