MUMBAI ,February3, 2012: Exactly a year after former telecom minister A Raja was arrested, the Supreme Court on Thursday struck down as illegal his decision to grant 122 second generation (2G) licences to a few favoured telecom companies on a first-come-first-serve basis.A two-judge bench comprising justices GS Singhvi and A K Ganguly, however, provided partial relief for about five per cent of India’s nearly 900 million-plus mobile phone subscribers — affected by the order — by extending the validity of the licences for four months. The apex court slapped hefty fines on some of the telecom firms that had been allocated spectrum by the then minister. Uninor (a joint venture between Norway’s Telenor and India’s Unitech group), Swan Telecom (a joint venture between Etisalat and DB Telecom Pvt Ltd) and Tata Telecom were fined Rs50 million each, while Loop, S-Tel, Allianz Infratech and Sistema Shyam Tele Services will have to pay a penalty of Rs5 million each. Other telecom firms affected by the Supreme Court order include Videocon and Idea. Describing Raja’s act of allocating spectrum to the favoured firms as “wholly arbitrary, capricious and contrary to public interest,” the court noted that it was also violative of the doctrine of equality. It also slammed Raja, a key lieutenant of M Karunanidhi, the chief of the Dravida Munnetra Kazhagham (DMK), a major ally of the United Progressive Alliance government, for “virtually gifting away an important national asset at throwaway prices.” The court was also critical of the manner in which Raja rejected Prime Minister Manmohan Singh’s letter, written on November 2, 2007, directing him to maintain fairness while allocating scarce spectrum. Raja had refused to auction the spectrum, as suggested by Singh, claiming it would be unfair for the new applicants and would not give them a level playing field. It specifically referred to the jailed minister’s ‘arbitrary action’ of advancing the cut-off date for new applicants, from October 1, 2007 to September 25, 2007, which was “actually intended to benefit some of the real estate companies who did not have any experience in dealing with telecom services.” The apex court said: “Raja simultaneously introduced the cut-off date as 25.9.2007 for consideration of the applications received for grant of licence despite the fact that only one day prior to this, press release was issued by the Department of Telecommunication (DoT), fixing 1.10.2007 as the last date for receipt of the applications. “This arbitrary action of the minister, though appears to be innocuous, was actually intended to benefit some of the real estate companies who did not have any experience in dealing with telecom services and who had made applications only on 24.9.2007, i.e. one day before the cut-off date fixed by the minister on his own,” the judges declared.
