Submitted by: Nishica Srivastava, a student at Amity University
INTRODUCTION
The term spectrum refers to the range of radio frequency waves which help in the transmission of signals. This electromagnetic spectrum includes a wide range of frequencies, from very low frequency used for radio communication and very high frequency for satellite communication and other advanced technologies.
This range of frequencies or spectrum is divided into different bands of specific frequency which are used for different purposes such as internet connection, mobile communication, broadcasting, Bluetooth, satellite communication and other telecommunication services.
Spectrum is a valuable finite resource in the modern world. Hence the efficient management and allocation of the same is vital. The systematic allocation of spectrum is necessary to prevent the interference of waves and enables seamless transmission of signals and optimal utilization of the available spectrum.
In India, spectrum licensing and allocation is conducted by the Department of Telecommunications (DoT). The Telecom Regulatory Authority of India (TRAI) is responsible for the regulation and management of spectrum in India.
Management of spectrum at the national level is done by dividing the geographic area of India into 22 telecom circles. In order to provide service in any of the 22 telecom circles, the telecom service provider must bid to obtain a license called the Unified Access Services (UAS).
In 2008, Andimuthu Raja, the then telecom minister, and other influential people and corporations were accused of being allegedly involved in a scam where 122 2G licenses were allotted in an manner which did not align with the prevailing standards to certain companies. According to an audit, the alleged scam supposedly resulted in a loss of 1760 billion rupees to the nation.
OVERVIEW
On September 25, 2007, the Department of Telecommunications (DoT) announced on its website that licenses would be granted to applicants filing between 3:30 and 4:30 pm that day. Despite the initial policy of a first-come, first-served basis introduced during the Atal Bihari Vajpayee Government, Raja modified the rules, making it applicable to compliance with conditions rather than the application itself. On January 10, 2008, companies were given a limited timeframe to submit Letters of Intent and payments. Allegedly, some executives received advance information from Raja. Swan Telecom, despite being ineligible, secured a license for 15.37 billion rupees and later sold a 45-percent share to UAE-based Etisalat for 42 billion rupees. Similarly, Unitech Wireless, a subsidiary of the Unitech Group, acquired a license for 16.61 billion rupees and subsequently sold a 60-percent share to Norway-based Telenor for 62 billion rupees.
In 2009, on May 4, a NGO specializing in telecom oversight raises concerns with the Central Vigilance Commission (CVC) about alleged improprieties in the allocation of spectrum to Loop Telecom. Subsequently, on May 19, Arun Agarwal files another complaint with the CVC, shedding light on the concession of low-cost spectrum to Swan Telecom. In response, the CVC instructs the Central Bureau of Investigation (CBI) to scrutinize potential irregularities in the allocation of 2G spectrum. Moving forward, on July 1, the Delhi High Court deems the acceleration of the cut-off date as illegitimate, following a petition from S-Tel. The situation intensifies on October 20 as the CBI formally registers a case, submitting a First Information Report against unidentified officials of the DoT and anonymous private individuals and companies, citing relevant sections of the Indian Penal Code and the Prevention of Corruption Act. Subsequent events include the Directorate General of Income Tax Investigation conducting raids on DoT offices on October 22, and on November 16, the CBI delves into a wiretapped conversation involving corporate lobbyist Niira Radia to unveil potential intermediaries’ involvement in the allocation of spectrum to telecom companies. Concurrently, information is sought from the Directorate General of Income Tax Investigation concerning Radia and her company.
In 2010, on March 31, the Comptroller and Auditor General flags substantial irregularities in spectrum allocation. The investigative landscape shifts on April 2, with the transfer of CBI Deputy Inspector General Vineet Agarwal and Indian Revenue Service Director General Milap Jain, who were probing the case. A pivotal moment unfolds on May 6 as a telephone conversation between Raja and Niira Radia, recorded by the Directorate General of Income Tax Investigation, is made public. This prompts the Centre for Public Interest Litigation to petition the Delhi High Court for a special investigation, but the court dismisses the petition on May 25. The dismissal is later appealed to the Supreme Court, leading to a refusal by the High Court to direct the prime minister to rule on a prosecution request by Janata Party chief Subramanian Swamy. The Supreme Court calls for responses from the government and Raja within 10 days to petitions alleging a 70,000 crore rupees scam in telecom license grants in 2008. A series of developments ensue, including Swamy petitioning the Supreme Court on September 24 to order the PM to prosecute Raja, the CBI and Directorate General of Income Tax Investigation pledging a charge sheet within three months on November 22, and the SC reserving verdict on Swamy’s request on November 24. Throughout this period, the CBI faces criticism for the sluggish pace of its investigation.
In 2011, on January 4, Subramanian Swamy petitions the Supreme Court for the cancellation of licenses. By January 10, the Supreme Court notifies the government of Swamy’s petition and issues notices to 11 companies alleged to have not fulfilled rollout obligations or were ineligible. Tensions escalate as on January 30, the government’s decision to regularize licenses for companies failing to meet deadlines is contested in the Supreme Court. Significant developments unfold on February 2, with the arrests of former Telecom Minister Raja, former Telecom Secretary Siddharth Behura, and Raja’s former personal secretary R. K. Chandolia. Raja is remanded to two more days of CBI custody on February 8, while Behura and Chandolia are placed in judicial custody. Corporate promoter Shahid Usman Balwa of Swan Telecom is also arrested. The Supreme Court, on February 10, directs the CBI to investigate corporations benefiting from the spectrum allocation. Raja and Balwa are remanded to CBI custody for additional days. The month progresses with extensions of Raja’s and Balwa’s custody. On February 17, Raja is sent to judicial custody in Tihar Jail. Subsequent events include the questioning of Kani Mozhi by the Directorate General of Income Tax Investigation, revelations regarding Balwa facilitating transactions to Kalaignar TV, and Raja’s request for video-conferenced judicial proceedings due to perceived threats. The CBI informs the Supreme Court on March 1 that 63 individuals are under investigation. On March 11, the Delhi High Court establishes a special court, allowing Balwa to appear via video-conference. The Supreme Court reserves judgment on license cancellations on March 17, rejecting claims that estoppel cannot be applied to protect illegality. Further arrests occur on March 29 when Asif Balwa and Rajeev Agarwal are arrested. On April 2, the CBI files its first chargesheet. Subsequent events include a second chargesheet filed on April 25, summonses issued to Kanimozhi, Sharad Kumar, and Karim Morani, and court proceedings with bail requests and judgments. Notable incidents in May include the special court refusing bail requests for Kanimozhi and Kumar on May 20. In June, the Delhi High Court and the Supreme Court reject bail requests for Kanimozhi, maintaining the legal proceedings. By July 25, arguments commence, with Raja expressing the desire to summon the prime minister and former finance minister P. Chidambaram as witnesses. In August, the special CBI court grants Subramanian Swamy the opportunity to argue his own case. On August 30, the Directorate General of Income Tax Investigation freezes accounts and attaches properties under the Prevention of Money Laundering Act, primarily related to DB Realty, amounting to 223 crore rupees.
In September, the Enforcement Directorate submits a status report in the Supreme Court regarding a 100 billion rupees Foreign Exchange Management Act violation. Swamy urges charges against P. Chidambaram on September 15. The CBI, on September 22, defends Chidambaram in the Supreme Court, attributing blame to the Department of Telecommunications (DoT). On September 26, the CBI seeks criminal-breach-of-trust charges for Raja, Chandolia, and Behura. In October, the CBI files a First Information Report against Dayanidhi Maran and his brother in the Aircel-Maxis deal. The Supreme Court reserves judgment on Swamy’s request for a probe into Home Minister Chidambaram’s role. The CBI arrests former telecom minister Dayanidhi Maran and his brother on October 10. On October 22, the special CBI court finds prima facie evidence to try the accused, including Raja, on charges like criminal conspiracy, breach of trust, cheating, and forgery. On November 3, the special CBI court dismisses bail requests, including Kanimozhi’s. On November 8, the special court orders CBI to provide Swamy with files on equity sales by telecom companies related to P. Chidambaram’s involvement. The Delhi High Court refuses bail to Karim Morani on health grounds on November 9. Trial for the 17 accused begins on November 11. On November 14, the UPA government requests the Supreme Court to restrain Swamy from accusing UPA leaders publicly. The trial moves to Tihar jail on November 22, following a Delhi High Court order. On November 23, the Supreme Court grants bail to five corporate executives and the Delhi High Court grants bail to Kanimozhi and four others on November 28. On November 29, the special court grants bail to Shahid Balwa. On December 1, the special court grants bail to Raja’s former private secretary, R. K. Chandolia. The Delhi High Court stays the trial-court bail granted to Chandolia on December 2. On December 7, the Supreme Court stays the Delhi High Court’s order against Chandolia’s bail request. The special CBI court, on December 8, accepts Swamy’s request to summon Chidambaram as a witness and question two witnesses. On December 12, the CBI files a third chargesheet, naming Essar Group corporate promoters and Loop Telecom promoters. The Delhi High Court rejects Siddharth Behura’s bail request on December 16, stating he was the ‘perpetrator’ of Raja’s illegal designs and wouldn’t claim parity with others released on bail.
In 2012, February 2, the Supreme Court annuls the 122 licenses issued by Raja and imposes fines on companies like Unitech, Swan, Tata Teleservices, Loop Telecom Pvt Ltd, S-Tel, Allianz Infratech, and Sistema Shyam Tele Services. The court requests a trial-court ruling on whether Home Minister P Chidambaram should face charges. On February 4, the special court, led by Justice O.P Saini, dismisses Swamy’s request to charge Chidambaram. The Enforcement Directorate and the Directorate General of Income Tax Investigation charge DMK leader Dayanidhi Maran with money laundering on February 8, along with his brother Kalanithi Maran for allegedly receiving about 5.5 billion rupees illegally in the Aircel-Maxis deal. Essar Group and Loop Telecom appeal their special-court subpoenas to the Supreme Court on February 9. The Supreme Court refuses an interim stay on the summonses by the special court. On February 22, the CBI files a complaint with the CVC about witness-tampering, allegedly at the behest of DMK Minister of State for Finance SS Palanimanickam. Swamy petitions the Supreme Court to overturn the trial-court dismissal of his request to charge Union Home Minister P. Chidambaram. On March 2, the government files a review petition in the Supreme Court questioning the court’s authority to supersede the first-come, first-served policy. On April 4, the Supreme Court dismisses all 10 review petitions, including those from Videocon Telecommunications, S Tel, Sistema Shyam Teleservices, Tata Teleservices, Unitech Wireless (Tamil Nadu), Etisalat DB Telecom, and Idea Cellular. The government requests an advisory opinion from the Supreme Court on April 12. On May 9, the Supreme Court grants bail to Siddharth Behura and upholds RK Chandolia’s bail. Raja is granted bail after 15 months, with the condition to have court permission to visit Tamil Nadu. On July 3, the Enforcement Directorate briefing the joint parliamentary committee states it has enough evidence to convict DMK chief Karunanidhi’s wife and daughter, Kanimozhi. On July 31, former DoT senior official A. K. Srivastava confirms the CBI’s allegation in his testimony, stating that Raja was the final authority on policy matters. On August 1, the Supreme Court, in its advisory opinion on the 2G judgment, criticizes the flawed implementation of the first-come, first-served policy.
On August 3, following a Supreme Court directive, the government of India revises the spectrum value to 140 billion rupees , discrediting the zero-loss theory and highlighting the 1,760 billion rupees revenue loss calculated by the CAG. On August 9, the government requests another extension from the Supreme Court, this time to November 12, for the deadline to begin auctioning spectrum licences. After the cancellation of 122 licences in February, the court had initially given four months to re-auction them, which had been extended to August 31. As of November 11, after one year of trial, 77 of 154 witnesses have been deposed.
Moving into 2013, on April 20, Communist Party of India senior MP Gurudas Dasgupta accuses Manmohan Singh of “dereliction of duty,” alleging that the PM was aware of irregularities in the allocation of telecom licences. Dasgupta claims that in a November 2007 letter, Kamal Nath advised the Prime Minister to establish a group of ministers to allocate spectrum. He also references a note from the Cabinet Secretary recommending an increase in the assessed value of spectrum licences. On April 23, in a 112-page written statement to the joint parliamentary committee, Raja asserts that he met with P. Chidambaram and Prime Minister Singh multiple times from November 2007 to July 2008 to inform them of all 2G-related decisions, claiming Singh agreed with him.
In 2017, on December 21, a special CBI court acquitted all individuals accused in the 2G spectrum case, stating that the prosecution had failed to prove any charges against any of the accused, as detailed in its well-choreographed charge sheet. Special Judge OP Saini stated that there was no evidence on the record presented before the Court indicating any criminality in the acts allegedly committed by the accused. Additionally, he observed that the chargesheet was based mainly on misreading, non-reading, selective reading, and out-of-context reading of the official record and that the chargesheet is based on some oral statements made by the witnesses during the investigation, which the witnesses have failed to testify in court.
In March 2018, the Enforcement Directorate and CBI filed appeals before the Delhi High Court against the verdict.
CONCLUSION
The 2G scam of 2008 stands as a watershed moment in India’s telecom history, revealing deep-rooted issues of corruption and mismanagement within the sector. The scandal not only eroded public trust but also had far-reaching implications for the economy and the telecom industry. The incident underscored the urgent need for transparency, efficiency, and fairness in the allocation of precious national resources. It prompted a reevaluation of regulatory frameworks, leading to the establishment of more robust systems aimed at curbing corruption and ensuring a level playing field for businesses. The 2G scam serves as a cautionary tale, emphasizing the critical role of institutional vigilance and public oversight in preventing malfeasance.
