Probe 2G from 2001: SC

The court urged the CBI to probe without fear or favour.

The CBI shall conduct the investigation without being influenced by any functionary,agency or instrumentality of the state and irrespective of the position,rank or status of the person to be investigated, the Bench said.

The courts decision to expand the ambit of the probe to the 2001 policy is significant as Rajas main defence in court was that he was simply following the policy decisions of his predecessors Pramod Mahajan,Arun Shourie and fellow DMK leader Dayanidhi Maran.

While wrapping up arguments on December 8,the court had sought to widen the ambit of the CBI probe into the 2G spectrum scam to cover the period of the NDA government by suggesting that the controversial first-come first-served policy introduced in 2001 be also looked into.

The Bench had observed the issue raised in the case is not limited to only Rs 1.76 lakh crore but has a much wider compass. We would not like to prejudice the probe. But what happened in 2001 needs to be looked into. It is for CBI to investigate and find out.

For the first time,the Supreme Court questioned telecom regulatory body TRAI on why it didnt take any action on the grant of licences to ineligible entities. It ordered TRAI be probed for this inaction.

The CBI should also probe how licences were granted to large number of ineligible applicants and who was responsible for the same and why the TRAI and DoT did not take actions against those licencees who sold their stakes/equities for many thousands of crores and also against those who failed to fulfill rollout obligations and comply with other conditions of licence, the court said.

The court cited examples of Swan Telecom and Unitech. The first,the order pointed out,paid a licence fee of Rs 1537 crore,only to offload 45 per cent of its stake to Etisalat for Rs 4,500 crore. Unitech,which obtained licence for 1651 crore,offloaded its 60 percent stake to Telenor for Rs 6120 crore.

The court directed the CBI to give particular emphasis to the CAG reports finding that Rajas spectrum allocation caused a public revenue loss of Rs 1.76 lakh crore. The Central Vigilance Commission complaint dated October 12,2009 to the CBI Director would form the basis of further investigations.

The complaint had resulted in the CBI registering an FIR against unnamed persons on October 21,2009 under the Prevention of Corruption Act. The ED had also lodged a complaint under the Prevention of Money Laundering Act and Foreign Exchange Management Act.

Both the CVC and CAG reports,the court said,have prima facie found serious irregularities in the grant of licences to the 122 applicants,blatant violations of the terms and conditions of licences and huge losses to the public exchequer running into several thousands of crores and deserves a thorough investigation.

The court did not spare public sector banks,which gave huge loans to these licencees,and asked the CBI to investigate the role of banks,companies and Department of Telecom officers in the hypothecation or re-selling of these licences to foreign firms at a premium. The CBI has been asked to find out if DoT officials were signatory to the licence agreement.

The court had earlier expressed surprise at how public sector banks provided loans to the tune of Rs 10,000 crore to the 2G spectrum licensees on the basis of hypothecation of licenses.

It also came down heavily on the Delhi High Court,saying it had committed a serious error in not entertaining the petition alleging serious irregularities in the 2008 2G spectrum allocation by Raja. The High Court has committed a serious error in dismissing the writ petition. Prima facie,there was sufficient material supported by documents to proceed on the allegations, the bench said.

The court,noting that the government had already agreed to a court-monitored probe,said it wants a comprehensive and co-ordinated probe by the CBI and the Enforcement Directorate ED. The court wants progress reports from both the probe agencies in sealed covers on February 10,2011,the next date of hearing. The hearings and judicial orders will be held in open court.

The apex court also asked the Director General,Income Tax,to hand over transcripts of the Niira Radia tapes to the CBI after analysis and with the approval of the Home Secretary.

It further directed the I-T Department also to continue its investigation without any hindrance or interference by anyone.

The bench asked the investigating agencies to probe the transfer of dual technology,CDMA and GSM,saying while the notification for the dual technology was issued on October 19,2007,one of the service provider was given the permission a day earlier. Both CBI and ED have been asked to file a status report on the investigation in a sealed cover on February 10,2011.