Supreme Court cancels 122 telecom licences issued after 2008
Moneylife Digital Team 02 February 2012

The apex court cancelled licences of 11 telcos, including 21 of Videocon, 22 Uninor, 9 Idea, 3 Tata Tele, 13 Swan, 21 Loop and asked TRAI to come up with guidelines to allocate newer licences

The Supreme Court on Thursday cancelled all licences given to 11 telecom companies issued after January 2008. The apex court has cancelled 122 licences, including 21 of Videocon, 22 of Uninor, 9 of Idea, 3 of Tata Tele, 13 of Swan, 21 of Loop, 6 of S-Tel and 2 of Allianz.

The ruling has come as a major blow to the Congress-led United Progressive Alliance (UPA) government. The Supreme Court observed that 85 out of the 122 licences granted by the UPA government on or after 8 January 2008 were outside the eligibility criteria for allocation of the 2G spectrum. "The 122 licences for 2G spectrum were granted in arbitrary and unconstitutional manner," the Court said.

A two-judge bench comprising justices GS Singhvi and AK Ganguly allowed the impugned licenses to run for four months after which the cancellation order will become operative.The apex court asked the Telecom Regulatory Authority of India (TRAI) to come up with fresh recommendation on granting of 2G licences. 

The SC imposed heavy costs of Rs5 crore on Etisalat DB Telecom Pvt Ltd (Swan Telecom Ltd), Unitech Wireless Group and Tata Teleservices Ltd, who were benefited by a "wholly arbitrary and unconstitutional" action of award of licenses to them and for off-loading their stakes for many thousand crores in the name of fresh infusion of equity or transfer of equity.

It ordered Loop Telecom Pvt Ltd, S-Tel, Allianz Infratech and Sistema Shyam Tele Services Ltd, who were also beneficiary of the decision, to pay a cost of Rs50 lakhs each.

Meanwhile, the Finance Ministry said it is working out the financial implication of the Supreme Court judgement to cancel 122 telecom licences on the banking sector. "We have to see the implication. Officers are working on the impact of judgement on the banks...we will soon have a clear picture," a senior finance ministry official told PTI.

Several lenders including the State Bank of India, ICICI Bank, Punjab National Bank and IDBI Bank have extended credit to the telecom companies whose licences have been cancelled. Country's largest lender SBI said the bank has fund based exposure of Rs1,100 crore in telecom companies affected by the apex court order.

In a release, Telenor, the holding company of Uninor, whose 22 licences are cancelled by the apex court, said, "Telenor has yet to review the ruling and will be able to comment further once we had a chance to review it".

The apex court also referred the matter on probing Home Minister P Chidambaram's role in the 2G scam to the Central Bureau of Investigation (CBI) Special Court. On Saturday Justice OP Saini of the Special Court is expected to deliver the verdict on whether Mr Chidambaram should be made a co-accused in the 2G scam.

In another important judgement, the Supreme Court refused to sanction a Special Investigation Team (SIT) to over-see the CBI inquiry in the 2G spectrum allocation scam. Instead, the apex court said, the Central Vigilance Commission (CVC) should monitor the investigation and the CBI should submit its status reports in sealed envelopes to the Commission.

Meanwhile, Central Vigilance Commissioner Pradeep Kumar has expressed satisfaction over the progress in 2G issue and said the Commission will give a prompt response after studying the Supreme Court judgement. "We will study that judgement. We will respect that judgement and CVC as you know has referred the matter to the CBI and we are glad that matter is progressing," Kumar told reporters in New Delhi.

Comments
Ramesh
1 decade ago
The frenzied media made a huge song and cry about a private episode in Norway, when two children were separated from their parents. One may believe that the Norwegian government acted under due process of law. Yet, the Indian authorities did not accept this process.

A much larger stake is involved here for a Norwegian firm which has invested Rs 6,100 cr under due process of law. We are not competent to comment on the merits or demerits of the decision of the court. But, will the Indian government react in the same manner, if Norway becomes persistent and even importunate in its demands for fair play? Shouldn't the licenses signed and issued under sovereign authority of the Government have some sacrosanct value? Otherwise, what is the use of the FIPB, or other bodies that have approved such investments?

We Indians are too consumed by the myth of our own self perceived power of size of population. That is why we sound the drumbeats in a shrill manner regarding a private episode in Norway concerning just two Indians. But doesn't fair play demand reciprocity?
Free Helpline
Legal Credit
Feedback