New Delhi: The Supreme Court on Thursday dramatically raised the profile of the judicial intervention into the alleged scam involving the allotment of second-generation (2G) telecom spectrum by stating that the case deserved to be dealt with by a special court and at the same time asked for the arrest of all beneficiaries.
The court also asked investigators to give the case top priority and ordered that no other court could interfere in the probe. Closer legal scrutiny, as proposed by the apex court, could mean a quicker trial.
The court made these observations while stating there was “no parallel” to the magnitude of corruption involved. Although it did not state it as an order, the court told the legal representative of the Central Bureau of Investigation (CBI), “What action is to be taken against beneficiaries who may be called conspirators? Mere examination of these persons is not enough. You must arrest the conspirators.”
The government said it would get back to the court by 1 March on constituting a new court.
Separately, a special court allowed CBI to keep DB Realty Ltd promoter Shahid Usman Balwa and former telecom minister A. Raja in its custody for four more days for joint interrogation.
CBI’s lawyer told the special court that Balwa was being questioned on the shareholding structure of Swan Telecom and the further trail of money allegedly paid as quid pro quo to Raja and his party (Dravida Munnetra Kazhagam) for getting 2G licences.
“There was a transaction of about Rs 214 crore from Cineyug Films Pvt. Ltd to Kalaignar TV Pvt. Ltd in 2009,” the CBI lawyer said. Kalaignar belongs to Sharad Kumar and others who are closely associated with Raja. The funds were arranged by Cineyug Films from DB group firms, wherein family members of Balwa are directors and shareholders.
Balwa’s lawyer defended the transaction, saying there was nothing illegal about it.
“No favour was shown to Kalaignar TV or any other person. It was a business decision and money was lent to them. We charged interest on the money and TDS, too, was deducted. We had deposited Rs 31 crore TDS deduction to income tax and it can be verified,” Balwa’s lawyer told the court.
Kalaignar could not be reached for comment.
Meanwhile, CBI and the Enforcement Directorate filed sealed envelopes containing their progress reports in the Supreme Court, as the court has been monitoring the case since December. Portions of the reports were read in open court, making references to several firms and people against whom reports have appeared in the press on their alleged involvement in the scam.
The apex court questioned the role of Pradeep Baijal, chairman of the Telecom Regulatory Authority of India (Trai), in 2003. The regulator had recommended that all spectrum be auctioned and that had been cleared by the Union Cabinet. However, the spectrum was not auctioned and instead, was allotted on a first-come-first-served basis since then. This move was criticized by the justice Shivraj Patilcommittee set up by the department of telecommunications (DoT) to look into the “appropriateness of procedures followed” by the government in allocating spectrum between 2001 and 2009. Thecommittee’s report was made public on Thursday.
The apex court asked: “What action has been taken against those who were managing Trai at that time?” Baijal subsequently went to work for Vaishnavi Communications, which is owned by corporate lobbyist Niira Radia.
Baijal could not immediately be reached for comment.
Swan Telecom Pvt. Ltd, Unitech, STel Ltd, Videocon Telecommunications Ltd and Loop Telecom Pvt. Ltd were awarded a total of 122 licences in 2008. According to a Comptroller and Audit General of India report, 85 out of 122 licences were granted to those firms that did not satisfy the eligibility conditions prescribed by DoT.
CBI said it would file its first chargesheet by 31 March after placing it before the apex court four days earlier to get approval.
Balwa, according to CBI, did not cooperate with the agency, thereby leaving it no choice but to arrest him in Mumbai and bring him to Delhi, to be confronted jointly with Raja.
The court responded, “We have a large number of persons who feel they (are) a law unto themselves. The law must catch them. Merely because he is on the Forbes list of millionaires or billionaires doesn’t make a difference.”
Balwa is a high-school dropout who is one of the two partners in DB Realty, India’s third largest real estate firm, which in turn owns a 2G licence under the name Etisalat DB Teleservices Pvt Ltd. Balwa, 36, hails from Gujarat and appeared in Forbes India’s richest list at rank 50 in 2009 for a reported net worth of about $1.02 billion (Rs 4,650 crore today).
Investigators told the court that Raja was evasive on key questions of quid pro quo and that he hid facts. Raja’s diary from the time he was telecom minister is yet to be recovered for the probe.
CBI said it would need till 31 May to complete its investigation of issues from 2001-06 and three more months from Thursday to unearth details on foreign entities involved in the case. This effectively means that the probe will continue after the initial 31 March deadline, as CBI told the Supreme Court that it would be filing supplementary charge sheets as it continues to dig up information.
The agency also told the special court that Raja and Balwa were “highly influential persons” and there was every likelihood of evidence being tampered with, and “vital witnesses” being won over by them.
Balwa’s lawyer alleged that his client was being singled out by the agency. “Balwa is being unfairly targeted as there are many operators who have got licences, but they have neither been interrogated nor arrested,” he said and added Balwa had earlier been questioned by CBI seven times. CBI said it arrested Balwa after issuing him three notices.
Raja’s lawyer opposed his further police custody on the ground that it may lead to torture of the accused to extract a confession.
Shauvik Ghosh also contributed to this story.