What are the legal provisions violated in 2G SPECTRUM CASE? An Overview

This article has been written by  Jayalakshmi. K a law graduate.

Abstract

The article which describes about the famous case  2G spectrum scam. The article had gone through the facts and tried to figure out the event time line and how the provisions were charged against the accused. This scam had been known all over India and the judgment were delivered.

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Introduction

The 2G spectrum case, a landmark in India’s legal history, unfolded as a saga of corruption and misuse of power. This scandal, which surfaced in 2010, involved the allocation of 2G spectrum licenses during the tenure of former Telecom Minister A. Raja. The case highlighted the blatant disregard for fair practices in the distribution of a valuable national resource – the electromagnetic spectrum.

Facts of the case

The 2G spectrum licenses were introduced in 2007 with the government planning to grant telecom licenses to eight new companies. The allocation was meant to be ‘first-come-first-served [1],’ and prices were set in 2001 to maintain low tariffs. However, the lack of clarity on terms and conditions allowed companies to exploit loopholes. Some bidders obtained licenses at lower prices and then sold them for substantial profits, with suspicions of proxy companies being created by larger players. The flawed policy indicated the involvement of the telecom department itself.

An example is Swan Telecom acquiring licenses for 13 circles at Rs 1,537 crore and later selling 45 percent of shares to UAE-based Etisalat for Rs 4,500 crore. The flawed policy led to a presumptive loss of Rs 1.76 lakh crore, according to the Comptroller and Auditor General (CAG) of India. There were speculations that the finance ministry oversaw the sales of shares to foreign companies. Despite the cancellation of 122 2G licenses by the Supreme Court, a Special Court acquitted all accused, including former Telecom Minister Andimuthu Raja and DMK chief M Karunanidhi’s daughter, Kanimozhi, in one of India’s biggest scams.

The Accused listed

The persons who caught in this scam were[2]

• Ex- telecom minister A. Raja
• Kanimozhi Karunanidhi,Member of Parliament, Dravida Munnetra Kazhagam
• Ex-telecom secretary Siddharth Behura
• R K Chandolia
• Swan promoter Shahid Usman Balwa
• Unitech MD Sanjay Chandra
• Vinod Goenka, director of Mumbai-based DB Realty
• Gautam Doshi, group MD of Reliance Telecom
• Hari Nair, Reliance ADAG senior vice-president
• Surendra Pipara, group president, Reliance ADAG
• Rajeev Agarwal, Director of Kusegaon Fruits and Vegetables
• Swan Telecom
• Reliance Telecom
• Unitech Wireless

Lack of rules

Before initiating the 2G Spectrum, A. Raja altered[3] several rules:

1. The date of application was reduced by 25 days.
2. Licenses were issued on a fixed-price basis.
3. There was no proper auction process followed.
4. A. Raja disregarded the advice of TRAI, Law Ministry, and Finance Ministry.
5. TRAI had recommended auctioning the spectrum at market rates, a suggestion that was ignored.

Provisions violated

The Charges were charged[4] against the

• A. Raja
• Criminal breach of trust by a public servant (section 409),
• criminal conspiracy (Section 120-B), cheating (Section 420) and
•  forgery (Sections 468 and 471); booked under the Prevention of Corruption Act for accepting illegal gratification
• Kanimozhi Karunanidhi,Member of Parliament, Dravida Munnetra Kazhagam
• Criminal conspiracy to cause criminal breach of trust by a public servant and criminal conspiracy (Section 120-B),
• cheating (Section 420) and
•  forgery (Sections 468 and 471).
• Siddharth Behura
• Criminal breach of trust by a public servant (Section 409),
• criminal conspiracy (Section 120-B),
• cheating (Section 420), forgery(Sections 468 and 471).
• RK Chandolia
• Criminal criminal conspiracy (Section 120 B),
• cheating (Section 420) and
•  forgery (Sections 468 and 471).
• Sanjay Chandra
• criminal conspiracy (Section 120-B),
• cheating (Section 420) and
• forgery (Sections 468 and 471).
• Umashankar
• Criminal conspiracy (Section 120-B),
• cheating (Section 420) and
• forgery (Sections 468 and 471).
• Hari Nair
• criminal conspiracy (Section 120-B)
• forgery (Sections 468 and 471).
• Gautam Doshi
• cheating (Section 420)
•  forgery (Sections 468 and 471).
• Surendra Pipara
• Forgery (Sections 468 and 471).
• Vinod Goenka
• Criminal conspiracy  (Section 120 B),
• Cheating (Section 420),
•  Forgery (Sections 468 and 471) and fabrication of evidence (Section 193).
• Unitech Wireless
• criminal conspiracy (Section 120-B),
• cheating (Section 420) and
• forgery (Sections 468 and 471)
• Reliance Telecom
• criminal conspiracy (Section 120-B) and
•  cheating (Section 420)
• Swan Telecom
• criminal conspiracy (Section 120-B) and
• cheating (Section 420).

Timeline of the case

The Chronological events[5] were as follows

• In May 2007, A Raja assumes the role of Telecom Minister.
• On September 24, 2007, the Department of Telecom (DoT) triggers a rush by announcing a one-week window for mobile license applications.
• By October 1, 2007, 575 applications flood in as lesser-known firms compete for a share of India’s booming telecom industry.
• Adding a twist on January 7, 2008, DoT states that those who applied on September 25, 2007, would be eligible for licenses and spectrum. Subsequently, on January 10, 2008, DoT gives applicants a mere 45 minutes to obtain and deliver a bank draft at Sanchar Bhawan, resulting in the issuance of 122 telecom licenses.
•  Fast forward to November 10, 2010, the Comptroller and Auditor General (CAG) submits a report on the 2G spectrum, highlighting a notional loss of Rs 1.76 lakh crore to the exchequer.
• In the aftermath, on November 14, 2010, A Raja resigns as the telecom minister.
• On February 2, 2011, the Central Bureau of Investigation (CBI) arrests A Raja for his alleged involvement in the 2G scam, leading to his judicial custody in Tihar Jail on February 17, 2011.
• The Delhi High Court establishes a special court exclusively for 2G cases on March 14, 2011.
• Subsequently, on April 2, 2011, the CBI files its first chargesheet, followed by a second chargesheet on April 25, 2011.
• The court issues summons to DMK chief M Karunanidhi’s daughter Kanimozhi, Sharad Kumar (Managing Director of Kalaignar TV), and Karim Morani (Cineyug Films’ director) based on the chargesheet.
• Kanimozhi, MP and daughter of DMK patriarch M Karunanidhi, gets arrested on May 20, 2011.
• Her bail plea is rejected by the Supreme Court on June 20, 2011, leading to the commencement of arguments on charges on July 25, 2011.
• On October 9, 2011, the CBI files an FIR against another DMK leader, former telecom minister Dayanidhi Maran, and his brother.
• The court puts all 17 accused on trial on October 22, 2011, rejecting the bail plea of Kanimozhi and seven others on November 3, 2011.
• Kanimozhi and others move bail in the Delhi High Court, which is granted on November 29, 2011.
• On February 2, 2012, the Supreme Court cancels 122 telecom licenses allocated to nine companies and asserts that natural resources cannot be allocated on a first-come-first-served basis.
• Following this, the government moves a presidential reference on April 12, 2012, with questions on judicial interference in policy matters and the sole mode of allocation being auction.
• On May 9, 2012, the Supreme Court grants bail to former telecom secretary Siddharth Behura. In the same timeframe, A Raja applies for bail within an hour. Special CBI judge OP Saini reserves the order on A Raja’s bail plea on May 11, 2012.
•  The government withdraws the review petition in the 2G case on May 11, 2012, opting to proceed with the presidential reference. The CBI special court grants bail to A Raja on May 15, 2012.
• On July 10, 2012, the Supreme Court begins hearing the presidential reference with a five-judge constitution bench, led by Chief Justice SH Kapadia.
• On September 27, 2012, the Supreme Court declares that auction is not mandatory for all resources. It asserts that the government has the right to decide policy, not the judiciary, and maximization of revenue cannot be the sole criterion in all situations.
• On January 8, 2013, the Income-Tax department submits 5,800 transcripts of tapped telephone conversations involving corporate lobbyist Niira Radia to the Supreme Court in a sealed cover.
• Following this, on February 21, 2013, the Supreme Court forms a six-member special team to examine the contents of these conversations between Radia, politicians, corporate honchos, and others.
• On February 27, 2013, a CBI special court experiences high drama as A Raja, the main accused and former telecom minister, confronts Attorney General GE Vahanvati during his deposition, accusing him of lying.
• On August 22, 2013, Anil Ambani appears in court to address questions about his company’s alleged links to firms under CBI scrutiny in the 2G telecom spectrum scam.
•  The next day, on August 23, 2013, Tina Ambani appears before a special court as a CBI witness, explaining the alleged links of the Reliance Group with companies under investigation.
• Moving forward to September 27, 2013, former Prime Minister Manmohan Singh and P Chidambaram receive a clean chit from a parliamentary panel on the 2G scam.
• However, on April 25, 2014, the Enforcement Directorate (ED) names A Raja and Rajya Sabha MP Kanimozhi in a charge sheet, accusing them of money laundering in the 2G spectrum allocation case.
• On May 2, 2014, a Delhi court summons A Raja and Kanimozhi in a 2G money-laundering case, and on May 26, 2014, they move bail applications before the court.[6]
•  On October 31, 2014, the Delhi court rules that A Raja, DMK patriarch M Karunanidhi’s wife Dayalu Ammal, Kanimozhi, and others must face trial on charges of money laundering.
• Special CBI judge OP Saini supplies a draft questionnaire with 400 questions to the counsel representing the 19 accused on March 4, 2015.
• On April 15, 2015, the CBI informs a special court that A Raja “misled” then Prime Minister Manmohan Singh on policy matters related to 2G spectrum allocation.
• The Supreme Court rejects pleas from DMK Rajya Sabha MP Kanimozhi and Swan telecom promoter Shahid Balwa to set aside the CBI case on November 3, 2015.
• On October 6, 2016, DMK Rajya Sabha member Kanimozhi asserts her innocence and right to be acquitted in the spectrum allocation scam.
• The special court concludes arguments on April 19, 2017, and on December 21, 2017, Special judge OP Saini acquits A Raja, DMK Rajya Sabha member Kanimozhi, and others facing prosecution.[7]

Conclusion

The 2G spectrum case remains a landmark event in India’s legal history, shedding light on the intricate nexus between politics and business. It exposed a glaring lack of integrity in the allocation of spectrum licenses, leading to significant reforms in the telecom sector.[8] As the nation reflects on this episode, it reinforces the imperative of upholding ethical standards and ensuring the judicious use of public resources to foster a fair and equitable society.

[1] India today 19 Oct 2012 what is 2G spectrum scam?

[2] Ndtv.com 2G spectrum a list of accused

[3] Studocu.com I pleader 2G spectrum case

[4] Scribd.com CBI charge sheet in 2G scam

[5] The Hindu Business linr – 2 G scam A chronology of events

[6]  Hindustan times 2G spectrum allocation scam

[7] Times of India 2G spectrum case judgment

[8] Globalanticorruption blog.. com India 2G spectrum case