Blow to government as court quashes Raja’s 122 phone licences

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New Delhi:In a blow to the government, the Supreme Court Thursday quashed all 122 licences for mobile phone services issued in 2008 and left it to a trial court to decide on a possible probe into the role of Home Minister P. Chidambaram, then finance minister.

In what also comes as a respite to some 45 million phone subscribers covered by the 122 licences, Justices G.S. Singhvi and A.K. Ganguly ordered that the services will carry on for four months, by which time the telecom watchdog will decide the future action plan.

The licences were issued to companies, which now operate under the brand names Uninor, Loop, Etisalat, Videocon, STel, Tata Tele, Idea and MTS. But not all the licences that are currently with them pertain to the tainted ones awarded in 2008.

The judges virtually thanked the petitioners — Janata Party president Subramanian Swamy and lawyer Prashant Bhushan — and said the “misuse and arbitrary use of powers” may not have come to light but for some enlightened citizens seeking good governance.

The court also slapped a fine of Rs.5 crore each on Unitech, Tata Teleservices and Swan Telecom and ordered half of that to go towards the court’s legal aid services and the remaining to defence services. It also imposed varying costs on other companies.

“The exercise by the officers between September 2007 and March 2008 under the leadership of then telecom minister A. Raja was wholly arbitrary, capricious and contrary to public interest apart from being violative of the doctrine of equality,” the verdict said.

“He (Raja) virtually gifted away the important national asset at throw away prices.”

The verdict pushed Communications Minister Kapil Sibal into an overdrive. He met Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee before a press conference in which he defended the government, saying implementation of policy alone was wrong.

“The court has indicted the ‘first come first serve’ policy. This was the policy of NDA (National Democratic Alliance) government,” he said. Blaming Raja, he added: “The order says the advise of finance ministry and Prime Minister’s Office wasn’t followed by then minister.”

His own ministry was then overseen by Raja, an undertrial who began his second year in jail Thursday.

India’s telecom network has grown into the the second largest in the world after China, with 926.53 million subscribers, serviced by 15 operators, including two state-run companies, Mahanagar Telephone Nigam and Bharat Sanchar Nigam.

With elections underway in five states, the opposition seized the opportunity to renew its demand for the ouster of the home minister, and said the United Progressive Alliance (UPA) government under Prime Minister Manmohan Singh had no moral right to continue.

“The Bharatiya Janata Party would like to ask Prime Minister Manmohan Singh: Would you take some action against Chidambaram or will you continue to express your confidence in him despite so much evidence?” wondered spokesperson Ravi Shankar Prasad.

The main petitioner was clearly elated.

“The court has said the government must now get market value of these licences,” Swamy told reporters here. “As far Chidambaram is concerned, the court said the trial court can decide.”

Justices Singhvi and Ganguly also said the Special Trial Court of the Central Bureau of Investigation (CBI) — that is hearing the 2G spectrum allocation case in which former telecom minister Raja is prime accused — will decide on Chidambaram within two weeks.

With this the focus shifts to the trial court, being presided over by Judge O.P Saini. This court has heard a separate petition of Swamy to prosecute Chidambaram and reserved its order on that matter for Feb 4.

Apart from the political arena, Thursday’s development had its impact on other areas as well. The stocks of the companies which hold the tainted licences fell sharply, even as that of older telecom firms gained in anticipation of subscribers shifting to them.

While subscribers served by these 122 tainted licences were left wondering about the fate of their service, experts said they were free to use the mobile number portability (MNP) scheme, which is in full force across the country.

“Basically, the time period of four months is the time for government to decide to come up with an enhanced market mechanism,” Rajan Mathews, director general of the Cellular Operators Association Of India (COAI), told IANS.

Thursday’s order does not affect companies that got licences before 2008, nor does it have an impact on 3G services for which licences were auctioned two years ago, even as Sibal remained optimistic on the future of India’s telecom sector.

“The judgement will bring clarity to the situation. It will bring sanity to the sector and it will bring hope to the sector because now the roadmap is clear. And we will get large investments,” Sibal said.