In an attempt to save face, UPA has given NDA a major political
concession where the 2G scam is concerned.
The review petition filed by the government against the Supreme Court
judgment cancelling the 123 UAS licenses and directing that the
spectrum be taken back from these companies and auctioned in the
future seems to be the result of detailed discussions within the
government, including presentations and meetings held under the
chairmanship of Prime Minister Manmohan Singh on February 11, 2012,
and a second presentation discussed with Finance Minister Pranab
Mukherjee on February 24, 2012.
While two actions have already been taken regarding clarification and
a review, discussions are still on about a presidential reference
under Article 143 of the Constitution with respect to the question of
the law, which have arisen in the context. Mail Today has got a copy
of the presentation that was discussed amongst the members of the
Cabinet, based on which the decision to file the review petition was
taken. A reading of this presentation shows that the DoT may have
stretched, even misrepresented, what the Supreme Court has said or the
inferences drawn – in a bid to extract an approval to file the review
petition. Under the Section ‘Suggested Approach’, the conclusions of
law that have been listed, based on which the review petition has been
argued, include an argument that the Supreme Court has exercised the
power of judicial review to examine the merits of a policy adopted by
the government.
The Department of Telecom has argued that since the First Come, First
Served (FCFS) is government policy, its rejection amounts to a
rejection of the policy of the government. While making this argument,
the presentation does not state anywhere that, in effect, FCFS was
announced for the allocation of spectrum for basic service operators
or fixed line companies in 2001. It does not inform that fixed line or
basic service licenses were never given out after 2001 and came to a
complete halt by October 2003, but more importantly, it has led the
government in desperation to defend the actions the NDA government as
a part of the review petition.
The now-jailed Telecom Minister A Raja had argued for the longest time
that he had continued the policy of FCFS adopted by the NDA government
in 2003. This has also been a subject matter of several press releases
and press conferences, including those held by his successor and
current Telecom Minister Kapil Sibal. In fact, Sibal’s argument has
been that the policy was correct and at best there was a problem with
implementation, and therefore Raja and Raja alone was to blame. The
Supreme Court, however, while writing the detailed judgment, has made
several adverse comments about the FCFS policy.
The Supreme Court has mentioned that, “There is a fundamental flaw in
the principle of first come, first served in as much as it involves an
element of pure chance or accident. In matters involving award of
contracts or grant of license or permission to use public property,
the invocation of first come, first served principle has inherently
dangerous principles.” The court then goes on to describe how FCFS is
misused by emphasizing, “Any person who has access to power corridor
at the highest or the lowest level may be able to obtain information
from the government files or the files of the agency/instrumentality
of the state that a particular public property or asset is likely to
be disposed of or a contract is likely to be awarded or a license or
permission would be given.
He would immediately make an application and would become entitled to
stand first in the queue at the cost of all others who may have a
better claim.” Then, in a bid to ensure that no further misuse of FCFS
occurs where scarce natural resources with high commercial auction
value are concerned, the court stated in its judgment, “This court has
repeatedly held that whenever a contract is to be awarded or a license
is to be given, the public authority must adopt a transparent and fair
method for making selections so that all eligible persons get a fair
opportunity of competition. To put it differently, the state and its
agencies/instrumentalities must always adopt a rational method for
disposal of public property and no attempt should be made to scuttle
the claim of worthy applicants.”
It is clear from the Supreme Court’s order that the court is paying
special attention to natural resources where demand far exceeds
supply, and those where private companies or businesses are willing to
pay monies to the exchequer since they believe that the contract (in
this case, spectrum) can, as a part of their business, generate income
for them and their shareholders. Making specific reference to such
natural resources which are qualified to raise revenue due to their
commercial worthiness, the court concluded, “When it comes to
alienation of scarce natural resources like spectrum etc, the state
must always adopt a method of auction by giving wide publicity so that
all eligible persons may participate in the process.”
Warning against other methods, the court makes a final comment, “Any
other methodology for disposal of public property or natural/national
assets is likely to be misused by unscrupulous people who are only
interested in garnering maximum financial benefit and have no respect
for the constitutional ethos or values.” The government is not only
upset with what they think is a Supreme Court decision which impacts
their right under the policy making function to decide auction versus
FCFS, but has in fact gone overboard in attacking auctions and by
consequence, defending FCFS by questioning the court’s judgment,
citing issues of public interest by way of tele density, affordability
and growth etc.
Now, while there is very little by way of evidence to show that the
government’s decision of utilizing FCFS resulted in any great increase
in teledensity, especially through the new entrants whose licenses
have now been cancelled, the entire petition seems to defend
vehemently the decisions made by the NDA government and therefore
bringing to naught any attempts by the CBI hereafter to find fault
with the allocation of spectrum between 2003 and 2007 by Arun Shourie
and later by Dayanidhi Maran.
It is unclear if the government realizes that its strong defence of
FCFS would essentially mean that any attempt to shift the blame to the
NDA is hereafter thwarted. In fact, the government also seems to have
gone out of its way during the hearing of the 2G cancellation matter
wherein the government lawyers told the court in specific terms while
referring to the decisions made by the NDA government in 2003 that,
“The policy decision taken by the DoT for migration of CDMA service
providers was neither illegal nor unconstitutional.”
It remains to be seen whether the Supreme Court will admit the
petition filed by the DoT, but it is quite clear that the UPA, in a
bid to hide its embarrassment, has taken steps that will now be used
by the NDA government if the issue about irregular or illegal favours
is ever brought up by the government or its spokespersons as it
relates to the NDA regime between 2001 and 2004. The presentation
made to the PM and FM also seems to be flawed by suggesting that the
court rejected the policy because it believed that “revenue
maximization should have been the overriding consideration.” A reading
of the judgment shows that the Supreme Court has never made such a
claim.
Sure, it has argued that exchequer revenue needs to be protected,
especially when private companies in turn earn monies from such
allocations, but stretching that to terms such as ‘revenue
maximization’ is certainly not within the purview of the judgment.
While the judicial review of the petition will depend upon its
admission, its political fallout by way of this massive concession
granted to the NDA, even if inadvertent, leaves the UPA even more
fragile in its defence after the judgment has held, contrary to the
PM’s and Sibal’s attempts, that the decision was not only illegal, but
that in fact, a massive loss has been caused to the government.
- MAIL TODAY , 11TH MARCH,2012
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