You call it favouritism,I call it policy

The law ministrys opinion that watchdog bodies like the CAG and CVC cannot probe communication minister A Raja’s allotment of 122 telecom licences in 2008...

Written by Sunil Jain | Published: August 20, 2010 3:34:19 am

The law ministry’s opinion that watchdog bodies like the CAG and CVC cannot probe communication minister A Raja’s allotment of 122 telecom licences in 2008 at a throwaway price of Rs 9,000 crore—based on the valuations that some of the allottees sold part of their equity for,the loss is probably around Rs 60,000 crore—is amazing in terms of what it means,for its twisting of facts and for the manner in which it has been written.

After citing various court judgements that said courts cannot get into policies made by the government,which are “essentially empiric and (are) based on experimentation or what one may call trial and error method” (RK Garg vs Union of India,1981),the law ministry says the CAG can look into government accounts (law ministry’s itals,not mine)—in other words,if a bill has been raised and the amount not collected,the CAG can look into it. But if a bill has not been raised or deliberately underinvoiced,that’s another matter and outside the CAG’s purview. That,of course,is what happened in this case since Raja charged the companies a rate decided through an auction way back in 2002 but since he didn’t have an auction,nor did he do even a simple indexation to take into account inflation since 2002,there was no larger bill raised; there was no underpayment and,therefore,no violation of the government’s accounts!

So,in the case of the CAG,the opinion concludes that the CAG Act of 1971 “nowhere provides that he has any duty or power to question the wisdom of the policy/lawmakers as policy decision may involve trial and error theory” (a method is now a theory!). In case of the CVC,similarly,the opinion concludes “that,as per Section 8 of the Central Vigilance Commission Act,2003,CVC has not been assigned any functions or powers to issue directions relating to any policy matters.”

This is particularly problematic since,the opinion claims,even the courts tend not to question the government when it comes to what are called policy matters. Since every decision by politicians/bureaucrats can be garbed as ‘policy’,who is then to act as a check?

But that apart,all the quotes/interpretations given by the ministry are selective. In the Balco case,which the opinion cites,the “trial and error method”,or theory,has been qualified,but this is ignored in the final conclusion. In Balco Employees Union vs Union of India,2002 (the case against the privatisation),for instance,the court said “in matters relating to economic issues,the government has,while taking a decision,right to ‘trial and error’ as long as both trial and error are bona fide and within limits of authority.”

Well,in Raja’s case,the bona fides are what are being questioned. And,in any case,Raja is not saying he’s making new policy,so what’s the point of citing the ‘trial and error’ stuff? Raja said he was following the existing policy. But this claim was rubbished by the then telecom regulator who said the existing policy to award new licences was one of auctions,and that Raja was implementing his recommendations in a selective manner.

Also,the same law ministry,which is now supporting Raja,had said,on November 1,2007,that any decision to award licences should be referred to a larger group of ministers. As the CBI pointed out while filing an FIR on the matter,the timing of the press releases and the alacrity with which some companies were able to produce the bank drafts suggested they had inside knowledge of when the payment windows would be opened. Indeed,the day after the law ministry’s opinion,on November 2,2007,the Prime Minister was on record suggesting the licences be auctioned instead of being given out at the 2002 prices.

As for the courts not interfering,this is not always the case. In 2002,the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) used the government policy argument and decided not to intervene when some firms were misusing their fixed land licences to offer full-blown mobile services. The cellular mobile firms went to the Supreme Court. The 3-member bench,which had Chief Justice GB Pattanaik and Justice SB Sinha (who is now the head of the TDSAT),sent it back to the TDSAT,dismissing the policy argument and said it had to examine the complaint. That is when the TDSAT,under a new head by then,gave a ruling against WLL-mobiles offering full-blown mobility,following which the government came up with a compromise formula and the new Universal Access Service Licence.

In the current case involving Raja,one of the aggrieved firms,STel,went to the Delhi High Court to protest the unfair allotment and won the case; it also won the case when the government challenged it before a division bench of the same court. When the case was to come up in the Supreme Court,the government put pressure on STel by asking it to stop offering mobile services in the circles where it had licences—while this ensured STel withdrew its case against the government,the Supreme Court refused to quash the high court’s judgement.

So when the law ministry says the courts don’t interfere in government policy,it is being selective with the truth,more so in this case. As for the telecom ministry’s claim,while asking the law ministry for an opinion,that there was no loss in licence or other fees since the telecom sector was growing so rapidly,the less said the better—sure the sector is growing,but none of those firms that were,given the dirt-cheap licences,have got even half-serious subscriber numbers.

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