Probe ‘serious illegalities’ in 2G licences without fear: SC to CBI

This decision is significant for A Raja since he has maintained he followed the 2001 policy.

For the first time,the Supreme Court questioned telecom regulatory body TRAI on why it didn’t take any action on the grant of licences to “ineligible entities”. It ordered TRAI be probed for this inaction.

The apex court on Thursday also asked the CBI to register a case on the basis of the CAG report which said there had been a revenue loss of Rs 1.76 lakh crore to the exchequer in the arbitrary distribution of telecom licences.

The CBI didn’t spare public sector banks – which gave huge loans to these licencees – and asked the CBI to investigate the role of banks,companies and Department of Telecom officers in the hypothecation or reselling of these licences to foreign firms at a premium. The CBI has been asked to find out if DoT officials were signatory to the licence agreement.

The apex court also came down heavily on the Delhi High Court,saying it had committed a “serious error” in not entertaining the petition alleging serious irregularities in the 2008 2G spectrum allocation by A Raja. “The High Court has committed a serious error in dismissing the writ petition. Prima facie,there was sufficient material supported by documents to proceed on the allegations,” the Bench said.

A Bench of Justices G S Singhvi and A K Ganguly said: “We are prima facie satisfied that serious irregularities have been committed. The CVC report of 12.10.2009 (that had first brought to the fore irregularities in granting licences) has to be properly investigated. The CBI Director is to conduct an impartial and thorough investigation. There is no need for a special team to supervise the CBI investigation.” The Bench said the government has already agreed to a court-monitored probe which is moving in the right direction and that Solicitor General Gopal Subramanium and senior advocate K K Venugopal,appearing for the CBI,have assured there will be a comprehensive investigation by the CBI and the Enforcement Directorate (ED).

The apex court emphasised the ED and the CBI should conduct a comprehensive and coordinated probe.

The Bench added: “The CVC reports blatant violation of the terms and conditions in the 2G spectrum allocation. There should be a probe on how the licences were granted to unknown entities,who were responsible for this and why TRAI did not take action. The CBI and ED should carry out investigations without being influenced by any individual,their ranks,functionaries and agencies.”

The court then asked the CBI to take serious note of the recent CAG report. The Bench said the CAG report prima facie made it clear that spectrum allocation was allocated to ineligible licencees. It ordered: “If the CBI has not filed an FIR,it should now register a case on the revenue loss of Rs 1.76 lakh crore to the exchequer.”

The apex court also asked the Director General,Income Tax,to hand over to the CBI the remaining tapes of the tapped conversations it has recorded on the matter.

The Bench also asked the investigating agencies to probe the transfer of dual technology — CDMA and GSM,saying while the notification for the dual technology was issued on October 19,2007,one of the service provider was given the permission a day earlier.

The CBI and ED have been asked to file a status report on the investigation in a sealed cover on February 10,2011.

The apex court had earlier heard arguments forwarded by an NGO Centre for Public interest Litigation (CPIL),CBI,Enforcement Directorate (ED),Department of Telecommunication and former Telecom Minister A Raja who resigned from the Cabinet in the wake of the scam.

While wrapping up arguments on December 8,the apex court had sought to widen the ambit of CBI probe into the 2G spectrum scam to cover the period of the NDA government by suggesting that the controversial first-come first-served policy introduced in 2001 be also looked into.

The Bench had observed “the issue raised in the case is not limited to only Rs 1.76 lakh crore but has a much wider compass. We would not like to prejudice the probe. But what happened in 2001 needs to be looked into. It is for CBI to investigate and find out.”

The court had also taken the opportunity to express surprise over public sector banks providing loans to the tune of Rs 10,000 crores to the 2G spectrum licensees on the basis of hypothecation of licenses.

The CBI and ED had submitted in a sealed cover the reports on the status of the probe.

The agencies had assured the court that the investigations into the scam would be completed by March 2011.

Both of them,however,had maintained that they will need some more time to cover the international angle involved in the scam.

During the hearing,the agencies had agreed to the monitoring of the probe by the apex court.

The FIR in the scam was registered by CBI on October 21,2009,against the unnamed persons under the Prevention of Corruption Act.

The ED had lodged the complaint under the Prevention of Money Laundering Act and Foreign Exchange Management Act.

During the last hearing on December 8,ED had said the status report filed by it contains details of the investigation since March 9,2010 to November 29.

The ED had carried out the probe on the basis of the case related to the scam registered by CBI on October 21,2009. The report details the investigation carried out till November 29,2010.