The Supreme Court on Monaday decided to examine the alleged illegalities in allocation of 2G spectrum during the tenure of former Telecom Minister A Raja, asking the Centre and telecom companies to explain why the licences be not cancelled.
"Why won't the licences be cancelled by this court" a bench of Justices G S Singhvi and A K Ganguly said while questioning the role of Telecom Regulatory Authority of India (TRAI) which remained silent when the telecom companies failed to fulfill the roll-out obligation for the 2G spectrum.
It made TRAI a party to the petition and issued notices to the Department of Telecom and 11 companies which allegedly did not fulfill the roll-out obligations as per the terms and conditions of allocation of the spectrum.
The court took note of the submission that TRAI did not react when the telecom companies, which were issued licences in January 2008, failed to roll out the spectrum within a year of allocation.
"Why did TRAI not take action? Why was it silent for around one year and seven months? TRAI is treated as the highest regulatory authority in telecom sector and even in terms of the consumer. What was it doing?" the Bench said.
The Bench was hearing the petition filed by an NGO, Centre for Public Interest Litigation (CPIL) seeking cancellation of all licences issued allegedly flouting all norms and which according to the CAG report has caused a loss of Rs 1.76 lakh crore to the national exchequer.
However, it refused to be drawn into the controversy in the wake of the statement of Telecom Minister Kapil Sibal who has disputed the CAG's figure of Rs 1.76 lakh crore.
"We cannot take cognizance of that as it is not part of our record," the Bench said.
The Bench was also informed that those companies which had failed to roll-out the services in stipulated time had been regularised after the payment of penalties.
However, it took note of the submission of CPIL's advocate Prashant Bhushan that TRAI has taken cognizance of some of the companies' failure to meet the roll-out obligation and a communication has been sent to DoT regarding this.
"After considering submission of the counsel that since TRAI has sent a letter dated November 15, 2010, to Secretary, DoT, which indicated that many companies have not complied with the roll-out obligation and not started the services. We deem it fit to entertain the petition," it said.
"Accordingly, TRAI, through its Secretary, is impleaded as a party," it said while issuing notices to 11 telecom companies - Etisalat, Uninor, Loop Telecom, Videocon, S-Tel, Allianz Infra, Idea Cellular, Tata Tele Services, Sistema Shyam Teleservices, Dishnet wireless and Vodafone-Essar.
When the Bench wanted to know about the competent authority which can cancel the licences, the advocate said it can be done by the government itself.
"Why not it cancel the licences if it is illegal?" the Bench said at one point during the hearing.
The court also wanted to know the companies which benefitted from allocation of spectrum.
The Supreme Court is currently seized of two public interest petitions seeking cancellation of allocation of telecom licences to ineligible operators during Raja's tenure as Telecom Minister.
While one petition was filed jointly on December 14 by various civil societies, including Centre for Public Interest Litigation, Telecom Watchdog and Common Cause, another was filed by Subramanian Swamy on January 4.
Several eminent persons like former Chief Election Commissioners J M Lyngdoh, T S Krishnamurthy and N Gopalaswami and former Central Vigilance Commissioner P Shankar are also petitioners in the petition filed by civil societies.
The second petition was filed after the apex court on on the plea of CPIL decided to monitor the ongoing probe into the scam by CBI and Enforcement Directorate.