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SC cancels 122 ‘arbitrary’ 2G licences, government in trouble

New Delhi : In a fresh blow to the government, the Supreme Court Thursday cancelled all 122 licences for 2G spectrum allocated in 2008 and left the decision of a probe into the role of Home Minister P. Chidambaram, then finance minister, to the trial court.

In a judgement with implications for the government as well as the corporate sector, Justices G.S. Singhvi and A.K. Ganguly said that but for the initiative of enlightened citizens looking for clean governance, unsuspecting citizens would not have known the misuse and arbitrary manner in which second generation telecom licences were granted.

Ruling on the 2G spectrum case that is said to have cost the exchequer thousands of crores and saw several politicians, corporate honchos and then communications minister A. Raja – who completed a year in jail Thursday – behind bars, the court ruled the companies would continue to offer services for four months.
During this time, telecom regulator would look into the matter and make recommendations for a fresh auction.

The court also slapped a fine of Rs.5 crore each on Unitech, Swan Telecom and Tata Teleservices and said half of that would go to the court’s legal aid services and the remaining to defence services.

Responding to a plea by Janata Party leader Subramanian Swamy, it also imposed varying costs on other companies.

It left the matter of a probe into the role of Chidambaram – another petition by Swamy – to the trial court, adding that the CBI was free to investigate if it chose to do so.

“The court has said the government must now get the market value of these licences and the profit from the same should be set aside for legal aide and for ex-defence personnel,” a jubilant Swamy told reporters.

With the entire 2008 spectrum allocation all but nullified and elections to five states under way, the opposition seized its opportunity to renew its demand for the home minister’s resignation.

BJP leaders spoke out in chorus against Chidambaram and sought Prime Minister Manmohan Singh’s intervention in the case involving award of telecom spectrum to private players, which investigators say was done in a fraudulent manner causing massive losses.

“The finance minister is the custodian of the public exchequer. It is the prime responsibility of finance minister to ensure that there is no loot of public money,” Arun Jaitley told reporters in Lucknow.

“The CBI has elaborately argued for days together that the role of Chidambaram need not be investigated. Therefore, the upfront of today’s order is that his role has to be investigated,” added his colleague Ravi Shankar Prasad.

The ruling, just two days after the Supreme Court castigated the Prime Minister’s Office (PMO), for delaying the prosecution of Raja, could not have come at a more difficult time for the government with the crucial Uttar Pradesh elections less than a week away.

The government will examine the judgment and its implications,” Finance Minister Pranab Mukherjee, the government’s chief troubleshooter, said.

While the government battled the inevitable political consequences, there were other implications too, particularly for millions of subscribers and investors.
Stocks of firms that face cancellation of telecom licences fell sharply even as those of one established player registered hansome gains.

Experts also sought to clarify the position. Mobile number portability (MNP), which is in full force across the country, would help customers migrate without much trouble to an operator unaffected by the order.

“Basically, the time period of four months is the time for government to decide to come up with a enhanced market mechanism,” Rajan Mathews, director general, Cellular Operators Association Of India (COAI), told IANS.

The order does not affect companies that were granted licences before 2008; 3G services for which licences were auctioned would also not be interrupted.

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