In a major development today the Supreme Court cancelled the 122 2G spectrum licences granted by former telecom minister A Raja on the ground that they were issued in a "totally arbitrary and unconstitutional" manner.
Imposing a fine of Rs five crore each on three telecom companies, which offloaded their shares after getting the licenses, the court directed regulator Telecom Regulatory Authority of India (TRAI) to make fresh recommendations on allocation of 2G licences.
Asking the government to take steps on the recommendations of TRAI within a month, a bench comprising justices G S Singhvi and A K Ganguly said the allocation of spectrum will be done through the policy of auction within four months.
The order came on petitions filed by NGO CPIL and Janata Party president Subramanian Swamy alleging scam in the allocation of spectrum licences by Raja in January, 2008 during the tenure of UPA-I government, on which the CAG had assumed the presumptive loss of upto Rs 1.76 lakhs.
The 122 licences were given by Raja for over Rs 9,000 crore, while 3G auctions for a smaller number of licences had fetched the government a sum of Rs 69,000 crores.
This is going to have a major impact on the telecom industry which is already finding it difficult to keep up with low tariff and high expenses.
The companies that are set to lose on account of the cancellation of the licences are Uninor (joint venture between Unitech and Telenor of Norway), Loop Telecom, Sistema Shyam (joint venture between Shyam and Sistema of Russia), Etisalat DB (joint venture between Swan and Etisalat ofUAE), S Tel, Videocon, Tatas and Idea.
Among the 122 licences issued by Raja in January 2008 on first-come first-serve basis, Uninor was alloted 22 pan India licences, Loop 21, Sistema-Shyam 21, Etisalat-DB 15, S Tel 6, Videocon 21, Idea 9 and Tatas 3.
Now the companies are hoping that their millions of subscribers and employees will not be unjustly affected
The Supreme Court also said the trial court will decide on Janata Party chief Subramanian Swamy's plea to make home minister Chidambaram a co-accused in the 2G spectrum allotment case. The apex court said that the trial court should decide the matter within two weeks. Special CBI Judge O P Saini, who is hearing a separate petition of Swamy to prosecute Chidambaram, has already reserved his order for February 4.
The Supreme Court has also asked the CBI to file status reports on its ongoing probe into the 2G spectrum allocation case to the Central Vigilance Commission (CVC).
The court's decision came on a plea for setting up a Special Investigation Team (SIT) to look into the 2G case, the bench asked CBI to submit status reports on further investigation into the matter to the CVC which will assist the court.
The bench asked CBI to submit status reports on further investigation into the case to the CVC which will assist the court.
Hailing the order, Swamy said the court's direction is a "de facto SIT".
Janta Party leader Subramanian Swamy welcomed the Supreme Court order cancelling 122 licences granted to telecom companies during the tenure of former communications minister A Raja.
The country was proud of its Supreme Court, Swamy -- who had filed the original petition before the apex court -- told reporters after the landmark order.
"This is the best judgment which could come... the country can be justifiably proud of the Supreme Court," Swamy, who had filed a petition in the Supreme Court, said.