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SC notice to Trai, DoT and 11 firms

SC notice to Trai, DoT and 11 firms
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First Published: Mon, Jan 10 2011. 11 51 PM IST
Updated: Mon, Jan 10 2011. 11 51 PM IST
New Delhi: The government came under fresh pressure after the Supreme Court took cognizance of a petition seeking cancellation of the licences issued to 11 telecom companies in 2007 and 2008 on the grounds that these firms had violated the licensing agreement.
The licences of these firms could be cancelled if the petitioners can prove wrongdoing.
The apex court is already overseeing the investigation by the Central Bureau of Investigation (CBI) into alleged irregularities in the allocation of licences to six new entrants in 2008, and if the court follows through on the petition, it would have effectively brought almost every aspect of telecom policy under its purview.
The same petition also sought the court’s intervention to bar telecom minister Kapil Sibal from regularizing the licences.
The Congress party, which heads the United Progressive Alliance (UPA) government, denied that the court’s actions were a setback, even though the principal opposition, the Bharatiya Janata Party (BJP), was quick to seize the opportunity to reiterate its demand for an investigation by the joint parliamentary committee (JPC) into the controversy surrounding the issue of telecom licences to new entrants in 2008.
On Monday, ironically the second anniversary of the issue of telecom licences to these companies, the court served notices on the department of telecommunications (DoT), the Telecom Regulatory Authority of India (Trai) and 11 telecom companies that have been accused of violating the telecom licence agreements they signed with the government.
The companies that have been served notices include the six new entrants Etisalat DB Telecom India Pvt. Ltd (Swan), Unitech Wireless Ltd (Uninor), Loop Mobile (India) Ltd, Videocon Mobile Services Ltd, STel Ltd and Sistema Shyam Teleservices Ltd. The others who were served notices are Idea Cellular Ltd, Tata Teleservices Ltd, Dishnet Wireless Ltd (Aircel), Vodafone Essar South Ltd and Alliance Infratech (now part of Etisalat Swan).
According to the licence agreement, the companies are required to roll out their services in 90% of their service area in metros and 10% of district headquarters within 12 months from the date of award.
Some of the licensees have not only missed the one-year deadline, but also a 52-week grace period. DoT is at the moment evaluating which companies have violated the norms.
“Why did Trai not take action? It is the highest regulatory body. What were they doing?” the two-judge bench comprising justices G.S. Singhvi and A.K. Ganguly asked.
The court took up the matter based on a letter dated 18 November from Trai to DoT’s secretary, which asked the government to cancel the licences of companies who had failed to comply with their licence obligations. DoT is yet to cancel any licences.
All the concerned parties have to file their response within three weeks.
The petitioners, Centre for Public Interest Litigation, claimed that the allocation of second-generation (2G) spectrum and licences by DoT on 10 January 2008, after some last minute changes in bidding norms, were illegal. They contended the companies that received licences had prior knowledge of changes.
The petitioners have also asked that the licences be cancelled and the spectrum allotted be taken back by the government and auctioned.
State-owned banks that have loaned money against licences to some of the new entrants said they were not worried by the court’s move. “In case the licences get revoked, the government has to give back the fee to the operators and we get the money automatically,” said an executive director at one such bank, who asked that neither he nor the bank be identified.
Last week, telecom minister Sibal said the Comptroller and Auditor General of India (CAG), which pegged the upper bound of the total notional loss to the exchequer from the licence issue at Rs 1.76 trillion, has got the math wrong.
The court refused to take on record Sibal’s statement as reported in the press, saying that it was not yet a “part of the record“, but justice Singhvi observed: “CAG’s conclusions are being doubted.”
A senior DoT official, who spoke on condition of anonymity, said that this will likely be the government’s position when it files its affidavit to the court.
CAG responded on Monday, saying that it was bound by parliamentary procedures and could not react to the minister’s remarks. The agency’s official spokesperson, however, added: “We have no comments to offer. CAG stands 100% by its report on 2G spectrum allocation.”
Janata Party president Subramanian Swamy moved an application on Monday claiming contempt by the telecom minister for alleging that CAG’s findings were baseless.
He also said that Sibal should be prevented from adjudicating any irregularities on the part of companies that have failed to comply with licence obligations.
Swamy said DoT had in December levied penalties of Rs 218 crore on companies for not meeting the licence obligations, but allowed them to retain their licences. So far DoT has received Rs 105 crore in penalties with the balance due in a month.
Meanwhile, the Congress and the BJP continued to cross swords on the issue.
While the former was in damage-control mode, the latter was on the offensive after announcing at its national executive that fighting corruption would be the central electoral plank of the party.
“We are quite happy that the Supreme Court has taken cognizance of the matter. The government should now agree for the JPC that we have been demanding,” said BJP spokesperson Ravi Shankar Prasad.
Congress spokesperson Manish Tewari dismissed the claims.
Separately, the Congress launched an internal exercise to revive the party’s image even as the UPA announced on Saturday the setting up of a group of ministers on corruption headed by finance minister Pranab Mukherjee. This group will fast-track cases against public servants and suggest amendments to the Constitution to provide for summary proceedings in cases of grace misdemeanor involving bureaucrats. The eight-member committee is expected to give its recommendations to the cabinet within two months.
nikhil.k@livemint.com
Appu Esthose Suresh and Liz Mathew in New Delhi, Anup Roy in Mumbai, and PTI also contributed to this story.
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First Published: Mon, Jan 10 2011. 11 51 PM IST
More Topics: Supreme Court | CBI | Kapil Sibal | BJP | UPA |