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2G SCAM CASE ANALYSIS

Updated: Mar 27

Author: Shreya Jetly, V year of BA.LLB(H) from Amity Law School, Amity University, Noida



Introduction

It is a well-known fact that a spectrum is a natural resource that occurred in nature naturally just like water, minerals, land etc. a spectrum can be sold either through auction or by fixing its price but either of the two ways can be done by the government only. According to the government perspective selling the spectrum in the auction is more beneficial than fixing a price for the same. Government can favour any company via price-fixing. In 2008, the active government Congress and the minister of information technology Mr. A. Raja allocates 122 licenses of 2G spectrum by the way of fixing prices. The Indian government have to face a total loss of Rs. 1.76 lakh crore because of Mr. A. Raja sold the license for the 2G spectrum at a very low price.


Background of the Case

Around 2007-09 when the Congress was in active government, Mr. A. Raja was the IT and Communication Minister. In 2008 he allocated 122 licenses of 2G spectrum by opting for the fixed price approach by including a condition to favour some telecommunication companies. As in the fixed price approach, the price is decided by the minister only so in this case also he allotted those licenses at a very low price and also he didn’t make any rule and regulation at the time of allotting the same. Not only this, but he also postponed the deadline of applying for the license to 5th September 2007 from 1st October 2007. Due to this preponing of the deadline date, many of the companies didn’t apply for the license and on 10th January 2008 when the license was going to be issued, he gave only a few hours to the companies for the submission of the cheque and other documents. At that those companies which were favoured by the A. Raja were ready with all the documents and cheque. The comptroller and the auditor general of India submitted a report on 16th November 2010 in which he reported that Mr. A. Raja didn’t take any advice or refer it to the TRAI, Law Ministry and Finance ministry before allotting the license.


Charges alleged on Mr. A. Raja

Cheap Telecom Licenses

Entry fee for 2G spectrum licenses 2008 pegged at 2001 prices mobile subscriber base had shot up to 350 million in 2008 from 4 million in 2001.


No Procedures Followed

He didn’t follow any established procedure instead he changed the rules before allowing the application for the license of 2G spectrum. He also preponed the date for submission of the application without giving any prior information. He opts for a fixed price option instead of auction methods which is going to be a beneficial step for the government which was recommended by the TRAI.


The most important fact is that according to the report of the comptroller and auditor general of India he didn’t take any advice or suggestions from TRAI, Law Ministry and Finance ministry.


Raja among 18 named in 2G Scam Charge Sheet

In the charge sheet, CBI alleged 18 people for the 2G scam which includes Mr. A. Raja, his secretary RK Chandolia, Mr. Siddharth Behura ex-secretary of telecom ministry and Ex MD of Swan Telecom Shahid Usman Balwa.


The charge sheet prepared by CBI[1] consists of 127 pages accompanied by 88,000 annexures as documented by Justice O.P. Singh in the special court set up specifically for the 2G spectrum scam case. The organization has likewise recorded three major telecom companies which had been favoured with these changes are:-

  • Reliance Telecom: - the chief of ADAG (Anil Dhirubhai Ambani Group) Mr. Gautam Doshi, the bunch president Mr. Surendra Pipara, and VP Nair.

  • Swan Telecom: - executive Vinod Goenka.

  • Unitech Wireless:- the MD of the company Mr. Sanjay Chandra

The A. Raja; Mr. Chandolia; Mr. Behura and Mr. Balwa are in a correctional facility with all those alleged people of the corporates who were called to the court on 13th April.


All the alleged people were reserved for criminal connivance, deceiving, imitation and other different sections of the prevention of corruption act. Besides this Mr. A. Raja along with Chandolia and Behura were additionally alleged for the abuse of authority position. The detailed information was given in the charge sheet prepared by the CBI in which it was stated that Raja with the other community workers caused a loss of around Rs. 30,984 crore to the state exchequer.


In May 2007, it was affirmed by the CBI that the Chandolia and Behura had been designated by the A. Raja in a similar division with an expectation to incubate criminal connivance. The charge sheet further pursues that:

Raja went into the trick with other denounced people and organizations with a reason to issue UAS licenses to Swan (as the MD, Balwa, was known to him) and to organizations advanced by Unitech, by controlling the need list based on the letter of plan compliances as opposed to existing rules/routine with regards to choosing applications based on the date of utilizations according to the accessibility of the range,”


To favour Swan and Unitech, Raja even disregarded the law services and proceeded with the date which is suitable to them. The charge sheet further stated that it was re-imagined to profit made by the corporate at the time of managing the infringement of premise strategy.


While discussing the double innovation and range assignment, it was held that Raja had overlooked the suggestions given by the TRAI. The TRAI had suggested that a licensee for utilizing a particular innovation might be allowed to use that one by paying the charges fixed on that. Further, it was alleged that though TATA Teleservices and spice communication are in the need of the license Raja dispensed the rage to Swan in Delhi. By April 25, the CBI would draft the advantageous charge sheet with all the documents attested with it.


List of the accused in the scam

  • Ex- telecom minister A. Raja

  • Ex-telecom secretary Siddharth Behura

  • Raja’s PS R K Chandolia (right)

  • Swan promoter Shahid Usman Balwa

  • Unitech MD Sanjay Chandra

  • Vinod Goenka, director of Mumbai-based DB Realty

  • Gautam Doshi, group MD of Reliance Telecom

  • Hari Nair, Reliance ADAG senior vice-president

  • Surendra Pipara, group president, Reliance ADAG

  • Swan Telecom

  • Reliance Telecom

  • Unitech Wireless


Role of CAG in the Case

The comptroller and auditor general of India had finished the report by March 2010 and had been set up for the accommodation under Article 151 of the constitution to the president of India. The report presented by the CAG was composed of the consequences of the assessment by an audit done by CAG for the issue of license and allocation of 2G spectrum of telecom department and ministry of communication and IT. The review was done for 2003-04 till 2009-10.


Telecom Commission was not consulted

Through the investigation of records and data, it was stated that the High Powered Telecom Commission hired low maintenance individuals from the finance ministry; industry; IT and planning commission. It was held that the commission didn’t notify the proposal given by TRAI in 2007 and as a result of which it was not managed a chance to avail the benefits from the TRAI’s recommendations. It was also observed that the High Powered Telecom Commission in 2008 was not counselled at the time of award of 122 UAS licenses.


Hon’ble Prime Minister’s suggestions were not followed

The Hon’ble Prime Minister also wrote to communication and IT ministry in November 2007, by showing the worry for the insufficient range and the extraordinary number of uses for the crisp license, which range its value through the reasonable and straightforward strategy for modification of charged section, which is in present date is benchmarked an old figure which should be reconsidered.


The communication and IT ministry gave their quick reaction over the advice of the Hon'ble Prime Minister. The ministry responded that the issue regarding the sale of the range was considered by TRAI and Telecom commission. Both the authorities do not prescribe this, as the current permit holders got the range up to 10Mhz for each hover without any range charge.


The communication and IT ministry further stated that their ministry adopts a resolution that would be out of line, self-assertive, whimsical and oppressive to sell the range to the new users as it won’t provide them with a level playing field. In 2008, by disregarding the suggestions and recommendations of the Hon'ble Prime Minister, the ministry legitimized the portion of range to a new administration without considering the old section charge found in 2001.


Issue of the license to ineligible applicants

The process adopted by the DoT to verify the eligibility of the application for UAS licences lacked due diligence, fairness and transparency and as a result of it, the license was granted to those candidates also who were not eligible for the same. It was found that in 2008, 85 licenses out of 122 licenses which were granted by A. Raja were allotted to those companies who were not satisfied with the basic eligibility criteria set up by the DoT. These companies have suppressed the facts, disclosed incomplete information and most importantly the submitted fictitious documents to obtain the UAS licenses and access to the spectrum.


Court’s Verdict

The extraordinary court of CBI vindicated all the 18 denounces of the 2G spectrum assignment case which includes A Raja and K Kanimozhi. The strategy was exposed seven years prior when the comptroller and auditor general of India considered the telecommunication minister Mr. A Raja accused of causing a loss of Rs. 1, 76,379 crores to the state exchequer by dispensing the 2G spectrum license at disposable costs in its report. If we see today’s scenario the court yet found that the indictment neglected to demonstrate the charges. The decision of the extraordinary CBI court neither abrogate the judgment of the apex court nor it can detract it from the way licenses issued in 2G range distribution were unlawful.


The special judge Justice OP Saini while delivering its judgment[2] stated that the charge sheet of the present case depends for the most part on misreading; non- perusing; specific perusing, and outside the realm of relevance perusing the official record. Justice OP Saini further observed that the charge sheet depends upon some oral proclamations made by the examiner during the examination which the examiner or the observers have not possessed up in the observer box.


Conclusion

After this 2G scam came into the limelight, after six years all the licenses granted under this scam were cancelled by the apex court. The special court acquitted all the accused involved in this scam which includes the big names of ex telecom minister Mr. A raja; M Karunanidhi’s daughter Ms. Kanimozhi who was chief of DMK; her name was listed as one of the perpetrators of one of the biggest scams in the history of India. All the accused were acquitted because the prosecution miserably failed in proving the allegations made against any of the accused. The court stated that:-

“There is no proof on the record delivered under the steady gaze of the court showing any guiltiness in the demonstrations supposedly dedicated by the blamed people identifying with an obsession for the cut-off date, control of first-start things out served policy…I have positively no delay in holding that the indictment has pitiably neglected to demonstrate any charge against any of the denounced.”[3]


[1] Vinay Kumar, “Charge Sheet puts 2G scam loss at Rs. 22,000 crores”, The Hindu, Oct.1, 2016.

[2]Debayan Roy, “2G spectrum cases transferred from special CBI judge O.P. Saini to Ajay Kuhar”, The Print, Sept. 17, 2019.


[3] DNA web desk, “Full text of special CBI court's judgment in 2G spectrum allocation case”, DNA, Dec 21, 2017.


Author's Biography

Shreya is a final-year student at Amity Law School, Noida. She has an enthusiasm for studyingvarious legal issues and has keen interest in constitutional law, technology law, IPR and arbitration. She can be reached at: shreyajetly10@gmail.com