Author – Dishita Singh
College – Amity University Mumbai
TO THE POINT:
The case talks about biggest scam which conferred the huge loss to government where the Ministry of Communication and Information Technology, led by union minister made 2G spectrum in 900 MHz and 1800 MHz license allocation to telecom companies but by ‘first come first serve basis’s policy rather than competitive auction system. Firstly spectrum is very important because it allows telecom companies to provide services like calling and Internet , and the only legal process to giveaway is thought auction where companies bid and the highest bidder wins but the government used first-come-first served basis where the allegation was also recorded that government suddenly changed the last date of applying , some of the companies were pre-informed and license were given at very old price of 2001 rather than 2008 which later companies bought it for cheaper but made huge profits.
Telecom spectrum is scarce and finite resource owned by the state on behalf of people of India, due to its limited availability and commercial value, the method by which spectrum allocation profounds implication for both public revenue and fair competition in the telecom sector. The allocation initially appeared to be a policy decision under executive discretion but the manner it was implemented raised the question of equality and transparency. A first complained was filed by CVC in 2009 alleging gross regularities and possibilities of corrupt practices in allocation of spectrum licenses parallel investigative journalism also played an important role increasing the scope of this controversy and also the public awareness then CAG reporting in 2010. The report had an inference allocation was arbitrarily, no transparency and very great loss which served as definitive documentary evidence that made a suspicious into proper defined legal case. With this findings Central Public Interest Litigation filed a PIL before the Supreme Court challenging the legality of spectrum allocation method.
USE OF LEGAL JARGON:
It was evidentiary clear that the ignorance of expertise advice and guidance of TRAI, Law Ministry, Finance Ministry, taking decision without proper transparency and acting in favouritism.
Primarily sections used by Central Bureau of Investigation and Enforcement Directorate to charge the accused was:
Section 120- B, IPC – criminal conspiracy.
Section 420, IPC – Cheating and dishonestly inducing delivery of property.
Sections 468 and 471, IPC – Forgery with purpose of cheating and using forged documents.
Section 409, IPC – Criminal breach of trust by a public official.
Also, Prevention of Corruption Act, 1988 was specially used for offenses which were done by public servants for their illegal act and abusing their official power.
Section 7 – which deals with public servants taking bribes or other legal remuneration in respect of their official power.
Section 13(1)(d) & 13(2) – which deals with criminal misconduct by a public servant which clearly states public officials used their official position to illegally give the spectrum license in return taking a monetary advantage on private companies at the expense of the public exchequer.
Violation of Article 14 – which guarantees equality which also defines there should be no unreasonable, arbitrarily and discriminatory executive action that struck down the Article 14, in this matter FCFS process was arbitrary action.
Article 19(1)(g) which ensures the freedom to practice any profession but doing an illegal act of allocation harms the fair competition in telecom industry.
Also, Article 148 which gives the CAG constitutional authority for conducting audit of spectrum allocation process and present it before the Parliament.
Further, Article 39(b) of Directive Principles of State Policy which gives the ownership and control of material resources of community which particularly should be distributed so as to best subserve the common good which the court found was not there in this case.
THE PROOFS:
Issues particularly in the court was about the violation of Article 14 which clearly states infringement of equality and act if an arbitrary, whether first come first serve basis was constitutionally valid for allocating scarce natural resources, whether the eligibility conditions and process followed by Ministry were consistent with Telecom Policy of 1999 (NTP-99) and recommendations of TRAI.
The Violation of Public Trust Doctrine – in which constitutional jurisprudence holds including certain resources like spectrum, air, water and forests are held by state but with trust and benefit for public at large and state cannot transfer or distribute these resources arbitrarily or for private again.
The act of Ultra Vires means beyond the powers here the Minister’s actions were clearly ultra vires of telecom regulatory framework.
Also, the act against Doctrine of Legitimate Expectation where public authority ruled by his past actions and conduct or promise which led citizens or party to expect the same outcome but here it was different with application days and allocation method which was different for specific community than other.
The Supreme Court rulings by looking at documentary evidence in which
1) The manipulating of the Cutoff Date in which receipt of application was 1 October 2007 and without any public notice, Ministry advanced it to 25 September 2007 and also decision taken was without any consultation.
2) The First Come First Serve Basis in which during morning Ministry announced within short of hour the applicants mustcomply with conditions given of letter of Intent and clear alltheir payments by allotted time 3:30pm that day itself.
3) The spectrum Priced at 2001 rates leading to companies’huge profit
4) Ineligible Application and Misrepresentation, here all of licenses not even met the net worth, technical expertise in short, the eligibility criteria and prescribed UAS license guidelines.
All final concluding’s Judiciary hold the Public Trust Doctrine and mandate of Constitutional Article 14, state must act under a conditions and obligations, should not act arbitrarily while dealing with such scarce natural resources.
Court emphasized that Government could choose the method but not without consultation, transparency and arbitrarily, should be in favour of Public Interest. Any method which results out large gains to private parties at the expense of public exchequer and fails public interest will not stand constitutionally valid under Article 14. Court cleared FCFS was arbitrary act and non-transparent and method used for allocation of scare natural resources which is spectrum, commercial exploitation is involved here. Eligibility process was not properly handled by Ministry, and it bypassed its own rules and TRAI recommendations at stages.
Further, last final verdict took significant step of cancelling all 122 UAS licenses granted between 2001 and 2008 under 2G spectrum process, also court granted stay for 4 months to government to alternate arrangements and recommended Telecom Regulatory Authority of India (TRAI) to create fresh recommendations for grant of licenses in the 2G spectrum through auction process. It also ordered CBI to continue its investigation.
ABSTRACT
The primary accused was Shri.A.Raja , the former Telecom Minister and Shri Siddhartha Behura, former Telecom Secretary and a previous MD pf Swan Telecom ShahidUsman Balwa together 12 people and organization was on charge sheet by CBI in this case. The major companies that involved was Unitech Wireless, Swan Telecom, RelianceTelecom, Loop Telecom, Sistema Shyam TeleServices, Tata TeleServices, Videocon Telecommunications that supposedly was profited by reference appeared by Raja in this distribution, therefore the primary accused with criminal conspiracy, cheating and corruption under the Prevention of Corruption Act. In this matter it was considered one of the biggest scams in India because of the loophole of executive, using powers beyond their official reach and also unfair set up competition and India’s largest political corruption scandals in which when CAG report came it was a shocking news that an estimated revenue loss of Rs 1.76 Lacs.
CASE LAWS:
1) Ramana Dayaram Shetty Vs International Airport Authority of India (1979 3 SCC 489) – This case establishedthat it’s a responsibility of state, it should act fairly and not arbitrarily in contractual dealings upholding Article 14.
2) Natural Resources Allocation Reference, (2012 10 SCC 1) – Five judge Constitutional Bench clarified the method of auction is preferred one but constitution does not compulsorily force to act only in auction method in all circumstances but as per the government policy only with fairness and transparency
3) M.C Mehta Vs Kamal Nath (1997 1 SCC 388) – This case truly holds the Public Trust Doctrine, in which the natural resources held by state has to be used in favour of public Interest and this trust given to people cannot be used for profits of private parties instead of public interest.
CONCLUSION:
Hence, it clearly outlines that executive power and policy which have been already used in certain method has to be implemented that way, and any illegal means of any monetary transaction and distribution will not be acceptable. This case establishes that public interest and trust of people should always been maintained and state foremost priority will be the welfare of people by acting transparently, accountable and fairness with equality.
FAQ:
1) What does exactly the Spectrum mean?
– It refers to invisible radio frequency that is wireless signals for example voice calls, text messages and mobile data through air. It’s a limited range within the electromagnetic border. It’s like an invisible road where each frequency has a different land.
2) Why it’s natural resource and only method of auction is used?
– Just like water, land it’s also occurs in nature and belongs to public and has limited capacity making the management necessary and hence the method of auction is used rather than selling itself because government holds for common good and citizen.
3) What spectrum is made of, that gives so much importance to Public Trust Doctrine?
– This fundamentally made of energy oscillating as electromagnetic waves which are defined by their frequency, wavelength like a visible light of rainbow colours which is just one small silver line of this spectrum. It’s typically made seven bands from longest wavelength to shortest like radio waves, visible light, UV rays. In easier explanation a white light passing through glass prism which spreads out different band of colours (rainbow) so this band of light is spectrum. Thus, makes it very limited and scarce and obviously it belongs to nature and public, so the management of it to use it systematically depends upon the state upholding the trust of people.