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  • 1. Legal Aspects Of Business End Term Report Submitted by Section 19B, Group-5 Group MembersS. No. Name Roll No. S. No. Name Roll No. 1 Shelly Jain 191111 6 Khem Singh 191090 2 Rachit Jain 191105 7 Ankita Sehjpal 191076 3 Gaurav Gulecha 191085 8 Kulvir Singh Gill 191092 4 Tanya Malik 191119 9 Abhijeet Sharma 191062 5 Vivek Mandowara 191121 10 Pankaj Kakkar 191102 1
  • 2. Table of ContentsTHE PREVENTION OF CORRUPTION ACT, 1988 ....................................................................................... 7 Introduction ........................................................................................................................................ 7 Genesis ................................................................................................................................................ 7 The Prevention Of Corruption Act, 1988 ............................................................................................ 7 Sec 2: Definations............................................................................................................................ 7 Who Is A Public Servant? ................................................................................................................ 8 Sec 3: Power to Appoint Special Judges.......................................................................................... 9 Sec 4: Cases Triable By Special Judges .......................................................................................... 10 Sec 5: Power & Function of Special Judges ................................................................................... 10 Sec 6: Power to Try Summarily ..................................................................................................... 11 Offences and Penalties (SECTION 7 – 16) ..................................................................................... 12 Investigation (SECTIONS 17 – 31).................................................................................................. 17 Conclusion ......................................................................................................................................... 19COMMON WEALTH GAMES SCAM ....................................................................................................... 20 CWG Background .............................................................................................................................. 21 CWG XIX New Delhi........................................................................................................................... 21 How Delhi Got It - Bidding............................................................................................................. 22 Organizing Committee .................................................................................................................. 22 Key Stakeholders ........................................................................................................................... 24 Objectives of OC............................................................................................................................ 24 Vision, Mission & Values ............................................................................................................... 25 Costs .................................................................................................................................................. 26 Timeline of CWG ............................................................................................................................... 26 CWG Scam Irregularity ...................................................................................................................... 32 Labor Law Violations ..................................................................................................................... 34 CAG Report........................................................................................................................................ 35 Legal Cases against CWG Committee ............................................................................................... 36 Parties Involved................................................................................................................................. 38 Politicians Involved ....................................................................................................................... 38 Bureaucrats Involved .................................................................................................................... 38 Corporations Involved ................................................................................................................... 38 Businessmen Involved................................................................................................................... 39 Whistleblowers/ Law Enforcers .................................................................................................... 39 2
  • 3. Scams ................................................................................................................................................ 39 Time Scoring Results System......................................................................................................... 39 Queens Baton Relay ...................................................................................................................... 39 Broadcast Network ....................................................................................................................... 40 Recruitment to Organising Committee ......................................................................................... 40 CNN-IBN NDTV Hindustan Times ...................................................................................................... 41 Response to Scam ............................................................................................................................. 41 CWG Impact ...................................................................................................................................... 42 Socio Economic Impact ................................................................................................................. 43 Organizational Failure ................................................................................................................... 45 Racism Allegation .......................................................................................................................... 47 Infrastructure Issue ....................................................................................................................... 48 Vandalism in games village by Athletes ........................................................................................ 49 Infrastructural compromise ............................................................................................... 50 Terror threats ...................................................................................................................... 51 Fear of dengue outbreak ........................................................................................................... 52 Illness ........................................................................................................................................... 52 Sporting Controversy ........................................................................................................................ 53 Doping ........................................................................................................................................... 53 Archery .......................................................................................................................................... 53 Boxing............................................................................................................................................ 54 Cycling ........................................................................................................................................... 54 Swimming...................................................................................................................................... 54 Wrestling ....................................................................................................................................... 55 Kalmadi: A Culprit or Victim? ............................................................................................................ 55 Effect on Brand Image of India ......................................................................................................... 58 CAG Audit Report Key Points ............................................................................................................ 59 Suggestions & Recommendations .................................................................................................... 60 Conclusion ......................................................................................................................................... 612G SCAM ............................................................................................................................................... 62 2G Timeline ....................................................................................................................................... 62 Oct 29, 2010: SC pulls up CBI for its tardy progress in the investigations into the scam ................. 74 Spectrum and Its Relation With Mobile Phone Services ................................................................ 118 2G And 3G Spectrum....................................................................................................................... 118 3
  • 4. How the Telecom Operation Is Administered ................................................................................ 119FCFS Policy ...................................................................................................................................... 119Understanding 2G Spectrum Scam ................................................................................................. 119Role of the Former Telecom Minister A Raja In The Scam ............................................................. 120Senior Officers Involved In This Scam ............................................................................................. 122Relation Between The 2G Spectrum Scam And The Radia Tapes ................................................... 122Role Of The Finance Minister In This Scam ..................................................................................... 122Who Estimated the Loss of Rs 1, 76,000 Crore ............................................................................... 122Bodies Which Brought Out This Scam in The Public Domain.......................................................... 123Role of The Investigative Agencies CBI, ED In This Scam ................................................................ 123What Supreme Court Said About This Scam ................................................................................... 123Action Taken By Government Taken Till Now ................................................................................ 124What Did the Government Do To Cover Up This Scam .................................................................. 124Arrests Made In This Scam .............................................................................................................. 124Companies Being Investigated ........................................................................................................ 125Changes in the Telecommunications Sector In India ...................................................................... 125Gaps in Policy Implementation ....................................................................................................... 125 Telecom Commission Was Not Consulted .................................................................................. 126 Views and Concerns Of Ministry Of Finance Overruled.............................................................. 126 Advice of Ministry Of Law And Justice Were Ignored ................................................................. 127 Honble Prime Ministers Suggestions Were Not Followed ........................................................ 127 Arbitrary Changes By Dot In The Cut-Off Date. .......................................................................... 128 FCFS Policy Was Not Followed .................................................................................................... 128Issue of License to Ineligible Applicants ......................................................................................... 129Growth In Telecom Sector .............................................................................................................. 130Overview of Policies ........................................................................................................................ 130Methodology for Entry And Fee Structure In Various Policy Regimes ........................................... 132Role of Telecom Regulatory Authority Of India (TRAI) ................................................................... 134Organizational Arrangement .......................................................................................................... 135Issue of Licenses.............................................................................................................................. 135Spectrum Allocation........................................................................................................................ 136Gaps in Implementation Of UAS Regime ........................................................................................ 140Issue of Price Discovery Of Spectrum Was Over Looked ................................................................ 145Issue of UAS Licence to Ineligible Applicants .................................................................................. 148 4
  • 5. Misrepresentation of Facts By The Nine Real Estate Companies ............................................... 150 False and Fictitious Claims Of Higher Paid Up Capital By 13 Companies.................................... 151 Access to Dual Technology.......................................................................................................... 152 Undue Benefits to Reliance Communications Limited ............................................................... 152 Violation of 2003 Cabinet Decision to Allow Additional Spectrum at 2001 Prices ..................... 154 Undue Advantage to Swan Telecom Pvt. Ltd in The Allocation Of Spectrum ............................ 154 Value of Spectrum Allocated Beyond the Contracted Quantity ................................................. 155 Non Fulfillment of the Roll out Obligations by the New Telecom Licensees .............................. 155 Financial Impact .............................................................................................................................. 156 Under Pricing Of 2G and Consequent Loss ................................................................................. 156 Conclusions ..................................................................................................................................... 158RIGHT TO INFORMATION ACT, 2005................................................................................................... 159 Introduction .................................................................................................................................... 159 Freedom of Information Act, 2002 ................................................................................................. 159 State Level Laws .............................................................................................................................. 160 Scope ............................................................................................................................................... 160 Private Bodies ................................................................................................................................. 160 Right to Information ....................................................................................................................... 161 Process ........................................................................................................................................ 161 Partial Disclosure ........................................................................................................................ 162 Exclusions .................................................................................................................................... 162 Information Exclusions................................................................................................................ 163 Role of Government........................................................................................................................ 164 Effects.......................................................................................................................................... 164CASE STUDY: CBSE vs. ADITYA BANDOPADHYAY & OTHERS .............................................................. 166 Case Notes: ..................................................................................................................................... 167 The Case .......................................................................................................................................... 170 Aditya Bandhopadhyay’s Petition ................................................................................................... 170 CBSE’s Defense................................................................................................................................ 172 Evaluation Method Adopted By CBSE ............................................................................................. 173 Questions to Be Considered ........................................................................................................... 176 Relevant Legal Provisions................................................................................................................ 177 Exemption from Disclosure from Information (Section 8).......................................................... 178 Answers to the Questions ............................................................................................................... 182 5
  • 6. Answer To Q1. ............................................................................................................................. 182 Answer To Q2. ............................................................................................................................. 185 Answer To Q3. ............................................................................................................................. 186 Answer To Q4. ............................................................................................................................. 191Conclusion - Judgment .................................................................................................................... 197 6
  • 7. THE PREVENTION OF CORRUPTION ACT, 1988Introduction"If we cannot make India corruption-free, then the vision of making the nationdevelop by 2020 would remain as a dream." - Dr. A.P.J.Abdul KalamCorruption is considered to be one of the greatest impediments on the way towardsprogress for developing country like India. The economic, social and culturalstructure of our country is very strong; however, due to the menace called-Corruption, it has been adversely affected and has become defenceless against theforces of anti-social elements.According to Shri N.Vittal, Former Chief Vigilance Commissioner, the first stage inthe dynamics of the rule of law is the framing of effective rules and laws, which areequipped to hinder the ever-rising escalation of the corruption graph. It is in thiscontext that the Prevention of Corruption Act, 1988 becomes highly significant.GenesisThe Prevention of Corruption Act, 1988 (henceforth referred to as PCA) came intoforce on 9th September, 1988. it incorporated the Prevention of Corruption Act,1947, the Criminal Law Amendment Act, 1952, and sec. 161 to 165-A of the IndianPenal Code with modifications, enlarged the scope of the definition of the expressionPublic Servant and amended the Criminal Law Amendment Ordinanc,k1944. ThePCA, 1988l, thereby widened the coverage, strengthened the provisions and madethem more effective.The Prevention Of Corruption Act, 1988Sec 2: DefinationsThe most important definitions are that of:- Public duty- Public servantPublic Duty: It means a duty that is dine for the benefit of the State, the public or thecommunity at a large. In this context, State would mean: 7
  • 8. a) A corporation established by or under a Central, Provincial or State Act.b) An authority or a body owned controlled or aided by the Government Company asdefined in Sec. 617 of the Companies Act, 1956.Public Servant: It is unique term in Anti-corruption law, being the deciding factor atthe threshold, of ones liability, depending on his being public servant. The termPublic Servant was not defined under the PCA, 1947 and the Act adopted thedefinition of the term under sec. 21 of the Indian Penal Code. The PCA of 1988provides a wider definition in the Act itself under clause (c) of sec. 2. The followingare the salient aspects of the new definition:a) Under clause (c) of Sec.2 of the PC, the emphasis is on public duty and not on theAuthority remunerating.b) The definition is enlarged so as to include the office-bearers of the registered co-operative societies receiving any financial aid from the Government, or from aGovernment corporation or company, the employees of universities, public servicecommissions and banks etc.Who Is A Public Servant?a) Any person who is paid by the government or local authority or remunerated byway of fees or commission for the performance of or is in the service of a corporationestablished by or under a Central, Provincial or State Act, or an authority or bodyowned or controlled or aided by the Government company as defined in theCompanies Act, 1956.b) Any Judge or any person authorized by a court of justice to perform any duty, inconnection with the administration of justice or any arbitrator to whom any cause ormatter has been referred for decision or report by a court of justice or report by acourt of justice or by a competent public authority. 8
  • 9. c) Any person who holds an office result to which he is empowered to prepare,publish maintain or revise an electoral roll or to conduct an election or part of anelection, or is authorized or required to perform any public duty.d) Any person who is the president, secretary or other office bearer of a registeredco-operative society engaged in agriculture, industry, trade or banking, receiving orhaving received any financial aid from the Central or State Government or anyauthority or body owned, controlled or aided by Government or Governmentcompany as defined in Sec. 617 of the Companies Act, 1956.e) Any person who is a chairman, member or employee of any service commissionor Board or a member of any selection committee appointed by such Commission orBoard for the conduct of any examination or making any selection on their behalf.f) Any person who is the Vice-Chancellor or member of any governing body,professor, reader or lecturer of any University and any person whose services havebeen availed of by a University.g) An office-bearer or an employee of an educational, scientific, social, cultural orother institution receiving or having received any financial assistance from theCentral or State government or local or other public authority.Explanation 1 states that it is immaterial whether the person falling within theperiphery of the above clauses is appointed by Government or not.Explanation 2 states that a person who is actually holding the position of the situationof public servant irrespective of the fact that he might not have th3e right to hold thatsituation shall be deemed to be public servant.Sec 3: Power to Appoint Special JudgesThe Central and the State Government is empowered to appoint Special Judges byplacing a Notification in the Official Gazette, to try the following offences:- Any offence punishable under this Act. 9
  • 10. - Any conspiracy to commit or any attempt to commit or any abetment of any of theoffences specified under the Act.The qualification for the Special Judge is that he should be or should have been aSession Judge or an Additional Session Judge or Assistant Session Judge under theCode of Criminal Procedure, 1973Sec 4: Cases Triable By Special JudgesEvery offence mentioned in Section 3(1) shall be tried by the Special Judge for thearea within which it was committed. When trying any case, a Special Judge may alsotry any offence other than what is specified in S. 3, which the accused may be, underCr.P.C. be charged at the same trial. The Special Judge has to hold the trial of anoffence on day-to-day basis. However, while complying with foretasted, it is to beseen that the Cr.P.C. is not bifurcated.Sec 5: Power & Function of Special JudgesThe following are the powers of the Special Judge:He may take cognizance of the offences without the accused being commissioned tohim for trial. In trying the accused persons, shall follow the procedure prescribed bythe Cr.P.C. for the trial of warrant cases by Magistrate, he may with a view to obtainthe evidence of any person supposed to have been directly or indirectly concerned inor privy to an offence, tender pardon to such person provided that he would make fulland true disclosure of the whole circumstances within his knowledge or in respect toany person related to the offence.Except as for S. 2(1), the provisions of Cr.P.C. shall apply to the proceedings beforea Special Judge. Hence, the court of the Special Judge shall be deemed to be aCourt of Session and the person conducting a prosecution before a Special Judgeshall be deemed to be a public prosecutor.The provisions of sections 326 and 475 of the Cr.P.C. shall apply to the proceedingsbefore a Special Judge and for purpose of the said provisions, a Special Judge shallbe deemed to be a magistrate. 10
  • 11. A Special Judge may pass a sentence authorized by law for the punishment of theoffence of which a person is convicted. A Special Judge, while trying any offencepunishable under the Act, shall exercise all powers and functions exercised by aDistrict Judge under the Criminal Law Amendment Ordinance, 1944.Sec 6: Power to Try SummarilyWhere a Special Judge tries any offence specified in Sec. 3(1), alleged to have beencommitted by a public servant in relation to the contravention of any special orderreferred to in Sec.12-A(1) of the Essential Commodities Act, 1955 or all ordersreferred to in sub-section (2)(a) of that section then the special judge shall try theoffence in a summarily way and the provisions of s. 262 to 265 (both inclusive) of thesaid code shall as far as may be apply to such trial. Provided that in the case of anyconviction in a summary trial under this section this shall be lawful for the SpecialJudge to pass a sentence of imprisonment for a term not exceeding one year.However, when at the commencement of or in the course of a summary trial itappears to the Special Judge that the nature of the case is such that a sentence ofimprisonment for a term exceeding one year may have to be passed or it isundesirable to try the case summarily, the Special judge shall record all order to thateffect and thereafter recall any witnesses who may have been examined andproceed to hear and re-hear the case in accordance with the procedure prescribedby the said code for the trial of warrant cases by Magistrates. Moreover, there shallbe no appeal by a convicted person in any case tried summarily under this section inwhich the Special Judge passes a sentence of imprisonment not exceeding onemonth and of fine not exceeding Rs. 2000. 11
  • 12. Offences and Penalties (SECTION 7 – 16)Sec 7: Public servant taking gratification other than legal remuneration in respect of anofficial actWhoever, being, or expecting to be a public servant, accepts or obtains or agrees toaccept or attempts to obtain from any person, for himself or for any other person, anygratification whatever, other than legal remuneration, as a motive or reward for doingor forbearing to do any official act or for showing or forbearing to show, in theexercise of his official functions, favour or disfavour to any person or for rendering orattempting to render any service or disservice to any person, with the CentralGovernment or any State Government or Parliament or the Legislature of any Stateor with any local authority, corporation or Government company referred to in clause(c) of section 2, or with any public servant, whether named or otherwise, shall bepunishable with imprisonment which shall be not less than six months but which mayextend to five years and shall also be liable to fine.Explanations(a) "Expecting to be a public servant." If a person not expecting to be in officeobtains a gratification by deceiving others into a belief that he is about to be in office,and that he will then serve them, he may be guilty of cheating, but he is not guilty ofthe offence defined in this section.(b) "Gratification." The word "gratification" is not restricted to pecuniary gratificationsor to gratifications estimable in money.(c) "Legal remuneration." The words "legal remuneration" are not restricted toremuneration which a public servant can lawfully demand, but include allremuneration which he is permitted by the Government or the organisation, which heserves, to accept.(d) "A motive or reward for doing." A person who receives a gratification as a motiveor reward for doing what he does not intend or is not in a position to do, or has notdone, comes within this expression. 12
  • 13. (e) Where a public servant induces a person erroneously to believe that his influencewith the Government has obtained a title for that person and thus induces thatperson to give the public servant, money or any other gratification as a reward forthis service, the public servant has committed an offence under this section.Sec 8: Taking gratification, in order, by corrupt or illegal means, to influence public servantWhoever accepts or obtains, or agrees to accept, or attempts to obtain, from anyperson, for himself or for any other person, any gratification whatever as a motive orreward for inducing, by corrupt or illegal means, any public servant, whether namedor otherwise, to do or to forbear to do any official act, or in the exercise of the officialfunctions of such public servant to show favour or disfavour to any person, or torender or attempt to render any service or disservice to any person with the CentralGovernment or any State Government or Parliament or the Legislature of any Stateor with any local authority, corporation or Government company referred to in clause(c) of section 2, or with any public servant, whether named or otherwise, shall bepunishable with imprisonment for a term which shall be not less than six months butwhich may extend to five years and shall also be liable to fine.Sec 9: Taking gratification, for exercise of personal influence with public servantWhoever accepts or obtains or agrees to accept or attempts to obtain, from anyperson, for himself or for any other person, any gratification whatever, as a motive orreward for inducing, by the exercise of personal influence, any public servantwhether named or otherwise to do or to forbear to do any official act, or in theexercise of the official functions of such public servant to show favour or disfavour toany person, or to render or attempt to render any service or disservice to any personwith the Central Government or any State Government or Parliament or theLegislature of any State or with any local authority, corporation or Governmentcompany referred to in clause (c) of section 2, or with any public servant, whethernamed or otherwise, shall be punishable with imprisonment for a term which shall benot less than six months but which may extend. to five years and shall also be liableto fine. 13
  • 14. Sec 10: Punishment for abetment by public servant of offences defined in section 8 or 9Whoever, being a public servant, in respect of whom either of the offences defined insection 8 or section 9 is committed, abets the offence, whether or not that offence iscommitted in consequence of that abetment, shall be punishable with imprisonmentfor a term which shall be not less than six months but which may extend to five yearsand shall also be liable to fine.Sec 11: Public servant obtaining valuable thing, without consideration from personconcerned in proceeding or business transacted by such public servantWhoever, being a public servant, accepts or obtains or agrees to accept or attemptsto obtain for himself, or for any other person, any valuable thing withoutconsideration, or for a consideration which he knows to be inadequate, from anyperson whom he knows to have been, or to be, or to be likely to be concerned in anyproceeding or business transacted or about to be transacted by such public servant,or having any connection with the official functions of himself or of any public servantto whom he is subordinate, or from any person whom he knows to be interested in orrelated to the person so concerned, shall be punishable with imprisonment for a termwhich shall be not less than six months but which may extend to five years and shallalso be liable to fine.Sec 12: Punishment for abetment of offences defined in section 7 or 11Whoever abets any offence punishable under section 7 or section 11 whether or notthat offence is committed in consequence of that abetment, shall be punishable withimprisonment for a term which shall be not less than six months but which mayextend to five years and shall also be liable to fine.Sec 13: Criminal misconduct by a public servant(1) A public servant is said to commit the offence of criminal misconduct,-(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain fromany person for himself or for any other person any gratification other than legalremuneration as a motive or reward such as is mentioned in section 7; or 14
  • 15. (b) if he habitually accepts or obtains or agrees to accept or attempts to obtain forhimself or for any other person, any valuable thing without consideration or for aconsideration which he knows to be inadequate from any person whom he knows tohave been, or to be, or to be likely to be concerned in any proceeding or businesstransacted or about to be transacted by him, or having any connection with theofficial functions of himself or of any public servant to whom he is subordinate, orfrom any person whom he knows to be interested in or related to the person soconcerned; or(c) if he dishonestly or fraudulently misappropriates or otherwise converts for his ownuse any property entrusted to him or under his control as a public servant or allowsany other person so to do; or(d) If he,-(i) By corrupt or illegal means, obtains for himself or for any other person anyvaluable thing or pecuniary advantage; or(ii) By abusing his position as a public servant, obtains for himself or for any otherperson any valuable thing or pecuniary advantage; or(iii) While holding office as a public servant, obtains for any person any valuablething or pecuniary advantage without any public interest; or(e) if he or any person on his behalf, is in possession or has, at any time during theperiod of his office, been in possession for which the public servant cannotsatisfactorily account, of pecuniary resources or property disproportionate to hisknown sources of income.ExplanationFor the purposes of this section, "known sources of income" means income receivedfrom any lawful source and such receipt has been intimated in accordance with the 15
  • 16. provisions of any law, rules or orders for the time being applicable to a publicservant.(2) Any public servant who commits criminal misconduct shall be punishable withimprisonment for a term which shall be not less than one year but which may extendto seven years and shall also be liable to fine.Sec 14: Habitual committing of offence under sections 8, 9 and 12Whoever habitually commits-(a) An offence punishable under section 8 or section 9; or(b) An offence punishable under section 12,shall be punishable with imprisonment for a term which shall be not less than twoyears but which may extend to seven years and shall also be liable to fine.Sec 15: Punishment for attemptWhoever attempts to commit an offence referred to in clause (c) or clause (d) of sub-section (1) of section 13 shall be punishable with imprisonment for a term which mayextend to three years and with fine.Sec 16: Matters to be taken into consideration for fixing fineWhere a sentence of fine is imposed, under sub-section (2) of section 13 or section14, the court in fixing the amount of the fine shall taken into consideration theamount or the value of the property, if any, which the accused person has obtainedby committing the offence or where the conviction is for an offence referred to inclause (e) of sub-section (1) of section 13, the pecuniary resources or propertyreferred to in that clause for which the accused person is unable to accountsatisfactorily. 16
  • 17. Investigation (SECTIONS 17 – 31)Sec 17: Persons authorized to investigateInvestigation shall be done by a police officer not below the rank of:a] In case of Delhi, of an Inspector of Police.b] In metropolitan areas, of an Assistant Commissioner of Police.c] Elsewhere, of a Deputy Superintendent of Police or an officer of equivalent rankshall investigate any offence punishable under this Act without the order of aMetropolitan Magistrate or a magistrate of first class, or make any arrest thereforewithout a warrant.If a police officer no below the rank of an Inspector of Police is authorized by theState Government in this behalf by general or special order, he may investigate suchoffence without the order of a Metropolitan Magistrate or Magistrate of First class ormake arrest therefore without a warrant.Sec 19: Previous SanctionsPrevious sanction is required in following cases:When an offence is punishable under sections 7,10,11,13 and 15 of the Act,In case of a person who is employed in connection with the affairs of the Union orState and is not removable from his office save by or with the sanction of the Centralor State Government as the case may be. In case of any other person, of authoritycompetent to remove him from his office.Previous sanction is required; if the court feels that a failure has occurred in theadministration of justice, to do the following:Reversal or alteration by the Court of Appeal of any findings, or any sentence ororder passed by a Special Judge. stay the proceedings on the ground of error,omission or irregularity. Revision of any interlocutory order passed in inquiry, trial,appeal or proceedings. 17
  • 18. Sec 21: Accused: A Competent WitnessAny person charged with an offence punishable under this Act, shall be a competentwitness for the defence and may give evidence on oath in disproof of the chargesmade against him or any person charged together with him at the same trial:Provided that-(a) He shall not be called as a witness except at his own request;(b) His failure to give evidence shall not be made the subject of any comment by theprosecution or give rise to any presumption against himself or any person chargedtogether with him at the same trial;(c) He shall not be asked, and if asked shall not be required to answer, any questiontending to show that he has committed or been convicted of any offence other thanthe offence with which he is charged, or is of bad character, unless-(i) The proof that he has committed or been convicted of such offence is admissibleevidence to show that he is guilty of the offence with which he is charged, or(ii) He has personally or by his pleader asked any question of any witness for theprosecution with a view to establish his own good character, or has given evidenceof his good character, or the nature or conduct of the defence is such as to involveamputations on the character of the prosecutor or of any witness for the prosecution,or(iii) He has given evidence against any other person charged with the same offence.Sec 27: Appeal And RevisionThe High Court has given all power of appeal and revision that are provided to itthrough Cr.P.C. as if the Court of Special Judge were a Court of Session tryingcases within the local limits of the High Court. 18
  • 19. ConclusionCorruption is a termite that is eating up the pith of our society it not only hampers theindividuals growth but also the collective growth of our Country. Hence, it standshighly imperative to control and then stop this growing menace and in this case thePrevention of Corruption Act, 1988 comes to our aid. In fact, the Act has beenbeautifully drafted; however, a huge power has been vested in the hands of theCentral and State Government in form of appointment of Special Judges, providingsanctions etc. Hence the Act would become oblivious if the matter in question isrelated to Central or State Governments. The PCA despite of this lacuna is a verypowerful Act which needs proper implementation in order to curb corruption fromgrass root-level. 19
  • 20. COMMON WEALTH GAMES SCAM 20
  • 21. CWG BackgroundThe Commonwealth Games is an international, multi-sport event involving athletesfrom the Commonwealth of Nations. The event was first held in 1930 and takesplace every four years.It was initially known as the British Empire Games and was renamed to the BritishEmpire and Commonwealth Games in 1954 and the British Commonwealth Gamesin 1970, before finally gaining its current title for the 1978 edition. The Games areoverseen by the Commonwealth Games Federation (CGF), which also controls thesporting programme and selects the host cities. A host city is selected for eachedition and eighteen cities in seven countries have hosted the event.As well as many Olympic sports, the Games also include some sports that areplayed mainly in Commonwealth countries, such as lawn bowls, rugby sevens andnetball.[1] Only six teams have attended every Commonwealth Games: Australia,Canada, England, New Zealand, Scotland and Wales. Australia has been thehighest achieving team for eleven games, England for seven and Canada for one.Although there are 54 members of the Commonwealth of Nations, 71 teamsparticipate in the Commonwealth Games as a number of British overseas territories,Crown dependencies, and island states compete under their own flag. The fourHome Nations of the United Kingdom – England, Scotland, Wales and NorthernIreland – also send separate teams.CWG XIX New DelhiThe 2010 Commonwealth Games, officially known as the XIX CommonwealthGames, were held in Delhi, India, from 3 to 14 October 2010. A total of 6,081athletes from 71 Commonwealth nations and dependencies competed in 21 sportsand 272 events, making it the largest Commonwealth Games till date. It was also thelargest international multi-sport event to be staged in Delhi and India, eclipsing theAsian Games in 1951 and 1982. The opening and closing ceremonies were held atthe Jawaharlal Nehru Stadium, the main stadium of the event. It was the first timethat the Commonwealth Games were held in India and the second time it was held inAsia after Kuala Lumpur, Malaysia in 1998. The official mascot of the Games wasShera and the official song of the Games, "Jiyo Utho Bado Jeeto", was composed bycelebrated Indian musician A.R. Rahman. 21
  • 22. Preparation for the Games received widespread international media attention, withcriticism being leveled against the organizers for the slow pace of work, as well asissues related to security and hygiene. However, all member nations of theCommonwealth of Nations participated in the event, except Fiji, which is suspendedfrom the Commonwealth, and Tokelau, which didnt send a team, in spite of threatsof boycotts and athlete withdrawals. The internationally acclaimed opening ceremonyimproved the image of the Games, and dispelled negative notions surrounding them,with many observers remarking that they began on an apprehensive note, but werean exceptional experience with a largely positive ending. The President of theInternational Olympic Committee, Jacques Rogge, said that India had made a goodfoundation for a future Olympics bid, which was reiterated by the Australian Ministryof Sports. Commonwealth games Federation Chief Mike Fennell stated that "Delhidelivered a fantastic Games". Some observers accused sections of the media ofbias, unfair expectations, and negative reporting.The final medal tally was led by Australia. The host nation India had its bestperformance ever to finish second.How Delhi Got It - BiddingThe two principal bids for the 2010 Commonwealth Games were from Delhi, Indiaand Hamilton, Ontario, Canada. A ballot of members was held in November 2003 atthe Commonwealth Games Federation General Assembly in Montego Bay, Jamaica.Delhi bid won by a margin of 46 votes to 22, confirming Indias first successful bid forthe Games. The bid was Canadas attempt to hold the games for the fifth time.Indias bid motto was - ―New Frontiers and Friendships‖.India shifted the balance in its favor in the second round of voting with a promise thatit would provide US$100,000 to each participating country, along with air tickets,boarding, lodging and transport. The successful 2003 Afro-Asian Games inHyderabad showed India had the resources, infrastructure and technical know-howto stage a big sporting event.Organizing CommitteeThe Organizing Committee Commonwealth Games 2010 Delhi (OC CWG Delhi2010) is organized into distinct Functional Areas, each relates to an area critical tothe successful delivery of the Games. A Functional Area or a cluster of related 22
  • 23. Functional Areas is headed by a Joint Director General (JDG) or an AdditionalDirector General supported by Deputy Director Generals, Advisors, Directors, ProjectOfficers, Assistant Project Officers, Administrative Assistant and Support Staff. Atotal of 36 Functional Areas are envisaged in the General Operational Plan (GOP) ofthe OC CWG Delhi 2010.The OC CWG Delhi 2010 is structured along the following working groups: OC CWG Delhi 2010 General Body Executive Board Executive Management Assurance Sub-committees Secretariat Functional Areas Expert Groups & Consultants 23
  • 24. Key StakeholdersThe Host City Contract identifies and binds the five key stakeholders who areresponsible for the successful delivery of the XIX Commonwealth Games 2010Delhi. It is incumbent upon these stakeholders to undertake all measures, includingadequate financial provisions, to deliver the Games in the most befitting mannerwithin the framework of the Constitution, Protocol and Guidelines of theCommonwealth Games Federation (CGF). The key delivery partners are: Commonwealth Games Federation (CGF); Indian Olympic Association (IOA); Organizing Committee (OC); Government of the National Capital Territory of Delhi (GNCTD); Government of India (GoI).Objectives of OC Prepare for, organize and conduct the XIX Commonwealth Games 2010 Delhi in the National Capital Region (NCR) of Delhi; Prepare for, organize and conduct other events (including sports and cultural activities and festivals) as part of the XIX Commonwealth Games 2010 Delhi including the Commonwealth Youth Games; Promote all such activities that may be useful, necessary or helpful and which contribute towards the conduct of the XIX Commonwealth Games 2010 Delhi; Conduct XIX Commonwealth Games 2010 Delhi in a manner that would encourage sports development and physical recreation and promote the shared values of integrity, fair play, competence, team work, commitment to excellence, respect for gender equality and tolerance including the fight against the use of drugs and unhealthy or performance enhancing substances; Advise all offices, institutions, government and other bodies of associations that may be associated with the holding of the XIX Commonwealth Games 2010 Delhi; Decide on all matters connected with the preparations and holding of the XIX Commonwealth Games 2010 Delhi and bringing it to a successful completion; and 24
  • 25. Do all such lawful things that are incidental or conducive to the attainment of the above objectives or of any of them.Vision, Mission & ValuesVisionThe vision of the Organizing Committee Commonwealth Games 2010 Delhi is toinculcate sports consciousness and culture in every Indian.Mission Deliver the ‗Best Commonwealth Games Ever‘ Build state-of-the-art sporting and city infrastructure for the facilitation of the Games Create a suitable environment and opportunities for the involvement of the citizens in the Games Showcase the culture and heritage of India Project Delhi as a global destination Project India as an economic power Leave behind a lasting legacyValuesIn fulfilling its mission, the OC CWG Delhi 2010 will exhibit and abide by the followingvalues in its day-to- day operations: Sportsmanship Integrity Excellence Solidarity Diversity Competence Transparency Discipline 25
  • 26. CostsThe initial total budget estimated by the Indian Olympic Association in 2003 forhosting the Games was 1,620 crore (US$328.54 million). In 2010, however, theofficial total budget soon escalated to an estimated 11,500 crore (US$2.33 billion), afigure which excluded non-sports-related infrastructure development. BusinessToday magazine estimated that the Games cost 60,000 crore (US$12.17 billion).The 2010 Commonwealth Games are reportedly the most expensive CommonwealthGames ever.That is 114 times more than the estimated original price tag of the Games, and fourtimes what the government spends on the National Rural Health Mission every year.Timeline of CWGIn the run-up to the 3 October -14 October Games, the event which should havehighlighted India as an emerging global power threatened to turn into a nationalembarrassment.Following is a timeline of events*********************22 September 2010 | Several big name athletes have pulled out of theCommonwealth Games citing security and health worries, adding to woes of an 26
  • 27. event meant to showcase India‘s ability to stand up with the likes of China on theworld stage.21 September 2010 | The Commonwealth Games Federation (CGF) has given theorganizing committee two days to fix the facilities at the village even as the PrimeMinister‘s Office (PMO) intervened to demand an explanation from all concernedagencies.21 September 2010 | A footbridge under construction at the main stadium forthe Delhi Commonwealth Games collapsed on Tuesday, injuring up to six laborers,an AFP reporter and police said.21 September 2010 | Piling on the embarrassment for the organizers,Commonwealth Games Federation chief executive Mike Hooper on Tuesday termedthe Athletes Village as ―filthy and uninhabitable‖ but hoped that with CommonwealthGames Federation president Michael Fennell‘s intervention, the mess would besorted out in the next two days.20 September 2010 | The Commonwealth Games will be safe, organizers insistedMonday after a weekend gun attack sparked new security fears as the city gears upto host thousands of athletes.16 September 2010 | Beset by stories of corruption, a dengue epidemic and leakingroofs of stadia, Commonwealth Games authorities showed off new venues in the 27
  • 28. face of a Workers clear the debris from a pedestrian bridge that collapsed outsideJawaharlal Nehru stadium, the main venue for the Commonwealth Games, in NewDelhi on Tuesday. Storm of media criticism amid worries the Games, a showcase forthis emerging global giant, could be a disaster.08 September 2010 | Just a week left for an international team to fly in for a finalinspection and the Commonwealth Games Village still looks like an island in theYamuna. Unable to drain the rainwater that has collected, which is breedingmosquitoes, a desperate Delhi government has decided to call in the army.20 August 2010 | All allegations of corruption against Delhi Commonwealth Gamesorganizers should be probed, CGF chief Mike Fennell said as he wrapped up a two-day inspection of the venues by identifying some areas of concern which need to beaddressed immediately.19 August 2010 Two state-run firms have withdrawn their sponsorship of the DelhiCommonwealth Games due to ―negative publicity‖ of the event stemming fromallegations of graft and mismanagement.14 August 2010 | Against the backdrop of a spate of controversies surrounding theCommonwealth Games (CWG), Prime Minister Manmohan Singh will hold a meetingwith the ministers concerned on Saturday evening to review preparations for themega event to be held in October.10 August 2010 | Mint deviates from the scandals emerging on an almost dailybasis to look at ten things that need to be completed to ensure the Commonwealthgames will be held at all.06 August 2010 | Suresh Kalmadi, the man at the centre of the controversiessurrounding the Commonwealth Games (CWG) survived to fight another day, butthree of his aides were suspended by the Games‘ organizing committee (OC).06 August 2010 | From leaking venue roofs to inflated orders of taxis and mobiletoilets, rows over New Delhi‘s Commonwealth Games have prompted Indian soul-searching and piled pressure on the embattled ruling Congress party. 28
  • 29. 03 August 2010 | The Commonwealth Games seem to be sinking deeper into thequagmire as reports of corruption, faked certificates and unending constructiondelays become rife.03 August 2010 | The growing allegations about the mismanagement of funds bythe organizers of the Commonwealth Games provided ready ammunition to theopposition parties in Parliament as they trained their guns on the ruling Congress.02 August 2010 | The government‘s plans to create a sizeable cushion to tide overany power shortage that could arise during the Commonwealth Games (CWG)suffered a setback following a delay in commissioning two proposed units of 500MWeach.28 July 2010 | The spiraling expenditure on the Commonwealth Games implies aheavy opportunity cost, while the benefit will only be a few moments in the limelight.28 July 2010 | The Congress has disapproved of the public sparring between ManiShankar Aiyar and Suresh Kalmadi over the Commonwealth Games, saying seniorleaders of the party should speak responsibly when they reply to any issue in public.22 July 2010 | The organizing committee of the Commonwealth Games (CWG) hasfloated 19 tenders for which the bidding deadline varies from as few as two days to amaximum of 21 days.20 July 2010 | India aims the Commonwealth Games will be a showcase of itseconomic clout, but with less than three months to go, the world‘s third largestsporting event is instead laying bare its perennial infrastructure problems.23 march 2010 | Delhi‘s Congress government has, citing a law that bans the sale ofbeef in the city-state, said it wouldn‘t be on offer to athletes and support staff duringthe Games, according to Raj Kumar Chauhan, minister for revenue and the publicworks department. Hindus consider the cow to be a holy animal.04 march 2010 | The government has reinstated Sanjiv Mittal, a financial expert whowas ousted from the Commonwealth Games (CWG) organizing committee by itschairman Suresh Kalmadi almost a fortnight back in what was perceived at the timeas a snub to the Prime Minister‘s Office (PMO). 29
  • 30. 18 February 2010 | With less than 230 days left for the Commonwealth Games(CWG), an internal audit by the organizing committee in the first week of Februaryrevealed that none of the key logistics such as security, accommodation andtransport to move officials as well as athletes have been completed by the 16February deadline.15 February 2010 | A delay of nearly four months in reaching a decision appears tohave almost jeopardized the international broadcasting, security and data networksof 2010 Delhi Commonwealth Games (CWG).13 February 2010 | In five police stations across Delhi, batches of 50 policemen--constables through inspectors--go through their classes in a day-and-a-half; with 16such batches per police station, which translates into 4,000 policemen per month.05 January 2010 | Delhi‘s chief minister is nervous about the hosting ofCommonwealth Games in the capital but the event‘s Organising Committee headSuresh Kalmadi assures that all is well with the preparations despite umpteendelays.26 November 2009 | Where there‘s a few million dollars of expenditure, there‘susually an economic study pondering how the money was spent. This is particularlytrue of big-ticket sporting events such as the Olympic or Commonwealth Games.Even as the cost of hosting the Olympics touched a dizzying $40 billion in Beijing lastyear—more than the entire gross domestic product of Sri Lanka—the literature onthe economic effects of such games has grown. Most scholars see only negativeeconomic benefits to hosting these events. From past studies, Mint culls five keyconclusions and transplants the benefit of their hindsight into Delhi‘s preparations forthe Games.16 November 2009 | With less than a year left, work is being accelerated on Gamesvenues and city infrastructure, but for construction workers it hasn‘t meant boomtimes.09 November 2009 | India needs to draw up a comprehensive long-term sportingprogram so that the money that‘s being spent on the Commonwealth Games doesn‘tgo down the drain. 30
  • 31. The first is the issue of legacy and the second is with respect to developing a robustand flexible disaster management system.05 November 2009 | Prime Minister Manmohan Singh has decided to get involved inthe effort to get the Capital ready for next year‘s Commonwealth Games, seeking toavert a potential national embarrassment on account of shoddy preparations for thecountry‘s biggest sporting event in 27 years.05 November 2009 | India has more than doubled the funds allotted for the2010Commonwealth Games and is convening a special meeting of the Union cabinet toreview preparations. The decisions by the cabinet come after Prime MinisterManmohan Singh decided to become involved in preparations for the Games thathave come in for significant criticism in the past few months.28 October 2009 | Earlier this year, the Comptroller and Auditor General (CAG)produced a report that evaluated the progress of Delhi‘s preparation for the 2010Commonwealth Games.01 October 2009 | Real estate developer Emaar MGF Land Ltd, preparing for aninitial public offering, will have to pay the Delhi Development Authority (DDA) apenalty if there is a delay in the completion of the Commonwealth Games Villageproject.03 June 2009 | After the Delhi Development Authority (DDA) bailed out real estatedeveloper Emaar MGF Land Ltd by agreeing to purchase 333 flats at theCommonwealth Games Village for Rs700 crore, the civil contractor for the projectsays that it had received most of the dues that Emaar MGF owed.15 March 2009 | The 2010 Commonwealth Games in New Delhi could be cancelledif a security assessment one month from the start deemed them unsafe to proceed,said a leading Australian official.08 March 2009 | The Commonwealth Games Village in Delhi is unlikely to becompleted on time because of alleged delays in payment by the developer, EmaarMGF Land Ltd. 31
  • 32. 04 March 2009 | The 2010 Commonwealth Games will adopt security methodssimilar to those used at last year‘s Beijing Olympics, its chief said, allaying fears theattack on the Sri Lankan cricket team could scupper the event.06 January 2009 | The global economic meltdown has hit the preparation of 2010Commonwealth Games and Indian Olympic Association president Suresh KalmadiTuesday said the budget for the mega-event will be increased in view of the financialcrisis.04 December 2008 | The Union government is concerned about the pace at whichinfrastructure projects sanctioned for the 2010 Commonwealth Games in New Delhiare being built and the availability of hotel rooms in the Capital for the event.According to Union minister for science and technology KapilSibal, the Centre hasformed a group of ministers (GoM) to monitor the construction work.24 March 2008 | The Union government appears to have made sure thatconstruction of the Commonwealth Games Village on the ecologically sensitiveYamuna riverbed will continue, despite at least two scientific studies concluding thatno permanent structures should come up in that area in order to protect the floodplain.08 March 2008 | State-owned India Tourism Development Corp. Ltd (ITDC) hasembarked on a makeover worth Rs170 crore at more than half of its 15 propertiesahead of the 2010 Commonwealth Games in New Delhi, a senior executive said.18 July 2007 | The initiative is an attempt to address what is expected to be ashortage of affordable rooms in the city during the 2010 Commonwealth Games.CWG Scam Irregularity Liquid Soap Dispensers rented for Rs 9,379 a piece or $206 After a bidding process, the OC selected four foreign firms for their mega turnkey deal and, as it now transpires, while one vendor, Nussli of Switzerland, for instance, is charging Rs 187 for renting out each ―liquid soap dispenser,‖ another firm, British consortium ESAJV, is charging Rs 9,379 for the same item. While the Hong Kong-based Pico Deepali Overlays 32
  • 33. Consortium is charging the OC Rs 2 for a single disposable glass, the ESAJV consortium is charging India Rs 37 per glass. All the hired items were split into seven operational ―clusters‖ covering all the 60 venues of the Games. Each cluster is made up of specific stadia and venues. An 82.5 KVA generator set is hired by OC for Rs 4.65 lakh from Pico Deepali. A generator of the same specifications was hired from Nussli for Rs 14.58 lakh. There is a difference of almost Rs 60 lakh for hiring a single public display system of identical size and pitch between Pico Deepali and ESAJV with several such systems being hired for a single games cluster Operating Expenses escalating from Rs 399 crore in December 2002 to Rs 1,628 crore finally. Medical equipment including tread mills have been bought or rented at 6-7 times their original price. Allegations that funds meant for Indias most deprived sections - the SC/ST - have been diverted to the games funds. Stealing from the poor to fund the elites luxuries?Construction so fragile, it falls before completion The commonwealth games 2010 related infrastructure projects have left Indias capital city, New Delhi, resembling a war zone. Practically all roads are dug up, cables lying all around, people jumping over little rocks as the pavements resemble Moon like craters. With more than 50,000 crore rupees already pumped in one would have expected at least decent output. Pitfalls: The newly built shooting range at the Siri Fort area collapsed after one heavy shower The foot over bridge adjacent to the main venue of the Commonwealth Games collapsed while being erected, injuring 27 workers who were dumped into a tow away truck to a municipal hospital and dished out a compensation of measly Rs 50,000 ($1097) for broken skulls and multiple fractures. 33
  • 34. Many of the games venues leaked during the monsoon and roofs of some collapsed. The Commonwealth Games village, the place where athletes from participating countries will be put up is infested with dog poo, snakes, clogged toilets, and unfinished work. Fancy bill boards have erected all over the city to hide the piles of garbage, slums that are a trademark sight in any major city in India.Labor Law Violations Campaigners in India have accused the organizers of enormous and systematic violations of labor laws at construction sites. Human Rights Law Network reports that independent investigations have discovered more than 70 cases where workers have died in accidents at construction sites since work began. Although official numbers have not been released, it is estimated that over 415,000 contract daily wage workers are working on Games projects. Unskilled workers are paid 85 (US$1.7) to 100 (US$2) per day while skilled workers are paid 120 (US$2.4) to 130 (US$2.6) INR per day for eight hours of work. Workers also state that they are paid 134 (US$2.7) to 150 (US$3) for 12 hours of work (eight hours plus four hours of overtime). Both these wages contravene the stipulated Delhi state minimum wage of 152 (US$3.1) for eight hours of work. Nearly 50 construction workers have died in the past two years while employed on Games projects. These represent violations of the Minimum Wages Act, 1948; Interstate Migrant Workmen (Regulation of Employment and Condition of Services) Act 1979, and the constitutionally enshrined fundamental rights per the 1982 Supreme Court of India judgment on Asiad workers. The public have been banned from the camps where workers live and work – a situation which human rights campaigners say prevents the garnering of information regarding labor conditions and number of workers. There have been documented instances of the presence of young children at hazardous construction sites, due to a lack of child care facilities for women workers living and working in the labor camp style work sites. Furthermore, 34
  • 35. workers on the site of the main Commonwealth stadium have reportedly been issued with hard hats, yet most work in open-toed sandals and live in cramped tin tenements in which illnesses are rife. The High Court of Delhi is presently hearing a public interest petition relating to employers not paying employees for overtime and it has appointed a four-member committee to submit a report on the alleged violations of workers‘ rights. During the construction of the Games Village, there was controversy over financial mismanagement, profiteering by the Delhi Development Authority and private real estate companies, and inhumane working conditions.CAG Report: Kalmadi deliberately delayed CWG contract  It was a significant failure and was the culmination of indecision of the OC on whether to execute the work internally or through outsourcing No agreement for foreign consultants  OC in February 2010 decided to engage the consultancy firm at a cost of Rs 98,500. Though the entire amount was released to the firm, OC couldnt produce to any formal agreement in support of the payment CWG DG colluded with vendors  Though Nusli with annual turnover of Rs 418,27cr was eligible for bidding for maximum 3 clusters, but OC allowed them to bid for 7 at the instance of VK Verma, Dir Gen. Reason for this has not been recorded in any of the documents Collusion between OC officials and vendors  Content of the consortium agreement indicates that the firm prior to the date of publication of EOI was aware of the requirement of forming consortium with Indian partners, about last date of submission of pre qualification bid, etc. This indicates collusion between OC officials and vendors Colluded to form a cartel  Such coincidence and precision of estimates, rarely seen in practice, points out towards a collusion and possibility of cartel among the vendors 35
  • 36. Corruption in marketing: SMAM angle?  Indifference is significant in the light of the fact that the OCs revenue generation targets were by then far behind schedule and expenditure had already gone up manifold, liability for which was ultimately borne by GoI.Legal Cases against CWG CommitteeThe CBI has registered ten FIRs so far in the cases related to alleged irregularities inthe conduct of Commonwealth Games. One of these cases has been discussed inbrief below:The CBI registered cases against six officials of CWG Organizing Committee andtwo private firms for extending undue favors while appointing official Master Licenseefor merchandising and retailing during the games. Immediately, after filing of thecase, a team of CBI officials carried out search operations at 10 locations in Delhi,Mumbai, Gurgaon, Chandigarh and Panchkula. The agency named six OC membersincluding the then director general Mr. VK Verma, joint director general (finance) Mr.KUK Reddy, DDG (legal) Mr. Ram Mohan, DDG (procurement) Mr. Surjit Lal, (F & A)Mr. M Jeychandran and the then ADG (Image and Look) Ms Sangita Welingkar andfirms Compact Disc India Limited (CDIL) and its group arm Premier Branch PrivateLimited (PBPL), official sources said. The CBI alleged that these officials entered intocriminal conspiracy with the officials of the firms and by abusing their officialpositions, extended undue favor to PBPL in appointing it as official Master Licensefor Merchandising and On-line and Retail Concessionaire for CWG-2010 forsportswear, casual wear, kids wears against a minimum royalty amount of Rs 7.05crore, they said.The agency alleged in the case that after scrapping of the earlier bid on flimsygrounds, the Evaluation Committee of the OC CWG-2010, dishonestly consideredthe PBPL on the basis of the goodwill of CDIL, and on negotiations, PBPL submittedan offer of Rs 5.20 crore for acquiring all the rights of master licensee formerchandising, they said.―Thereafter the private company (PBPL) submitted two cheques amounting to Rs 3.5crore but the same were dishonored by the bank and as such the OC did not receive 36
  • 37. any amount from the private company,‖ official spokesperson Ms Dharini Mishra saidhere. Thus, it is alleged that the accused private company actually used the CWGbrand properties and earned a huge profit, but did not pay anything to the OC, andthe accused public servants caused huge pecuniary advantage to director of theprivate company and corresponding wrongful loss to the government exchequer, shesaid.Further, Commonwealth Games Organizing Committee is fighting 14 legal casesfiled by several firms and its former employees seeking their dues. These casesrelated to the finance department, workforce, catering, merchandising unit, cleaningand waste management units, technology department and other works connectedwith organising of the Games. Some of these cases are: Ex-treasurer M Jayachandran, who is lodged in Tihar jail, has slapped a Rs five-crore defamation suit in the Delhi High Court against the OC for allegedly tarnishing his image. Jayachandran is an accused in the Timing-Scoring- Result (TSR) scam that has led to a loss of over Rs 95 crore to the exchequer. The CBI has accused him of manipulating the minutes of OCs Finance Committee to justify the alleged forgery in the award of TSR contract. OCs former chief of technology department Rajesh Kumar has moved the high court for alleged harassment by the management among other charges. Two companies - Unique Infoways and Bite and Byte - have also gone to the high court seeking dues. 37
  • 38. Parties Involved Politician Law Bureaucrats Enforcers CAG SCAM Business CorporationsPoliticians Involved Suresh Kalmadi, the Congress party representative to 15 Lok Sabha from the Pune constituency. He was the Chairman of the Organizing Committee of the Delhi Commonwealth games. Sheila Dikshit, Chief minister of Delhi: Was indicted for several irregularities in the CWG processes both by Shunglu committee and also by the CAGBureaucrats Involved Lalit Bhanot, Secretary General of the Organising committee TS Darbari, Joint Director General of the Organising committee Sanjay Mahindroo, Deputy Director General of the Organising committee BS Lalli, CEO of Prasar Bharati M Jayachandran, Joint Director General (Accounts and Finance)Corporations Involved AM Films 38
  • 39.  AM Cars SIS Live Jaypee Group, Its alleged that the proceeds of corruption are parked here through financial involvement of Suresh Kalmadis son, Sumeer Kalmadi in the F1 circuit project at Greater Noida. MTNL HCL InfosystemsBusinessmen Involved RSP Sinha, MTNL CMD SM Talwar, Executive director MTNL NK Jain, GM (Corporate Sales) MTNL Jitendra Garg, DGM MTNLWhistleblowers/ Law EnforcersThe scam was unearthed by CAG even before the conduct of the games. Presentlythe scam is being probed by the CBI.ScamsThe various contracts were manipulated by Kalmadi and team and allegedlymisappropriated huge amounts in the process.Time Scoring Results SystemKalmadi has been accused of awarding illegal contracts to a Swiss firm for Timing-Scoring-Result system for the Games causing a loss of Rs 95 crore to theexchequer.Queens Baton RelayThe Enforcement Directorate is probing the flow of funds and forex during theQueens Baton Relay held in London prior to the Commonwealth Games, apart frominvestigating the overlays-related works of the Games under the Prevention ofMoney Laundering Act. The ED case registered the case under Fema after Britishauthorities referred to the Indian High Commission a matter regarding hiring ofLondon-based transport firm AM Cars and Vans at exorbitant prices, and to similar 39
  • 40. high payments to AM Films for installing video screens at the venue of the QueensBaton Relay.Broadcast NetworkCBI registered another case in the Commonwealth Games scam and searchedresidences of officials of Mahanagar Telecom Nigam Limited, or MTNL, and Noidabased HCL Infosystems for allegedly inflating cost of setting up a broadcast networkfor the Games by nearly Rs 400 crore.It is alleged that MTNL awarded the work of broadcast network based on IP/MPLSTechnology at an exorbitant price of approximately Rs 570.12 crore by manipulatingspecifications in such a manner as to make them tailor made for the said bidder tothe said private company (HCL)," Mishra said. The agency alleged that initialestimate of broadcasting data transmission project for the sporting extravaganza wasvery limited with an initial estimate of Rs 31.43 crore, but MTNL officials included aBroadcast Video Network based on IP-MPLS technology, which resulted in costescalation by Rs 380.04 crore.CBI alleged that this change in specification was done with an intention to causehuge pecuniary advantage to HCL Infosystems, causing loss to the exchequer.Recruitment to Organising CommitteeCBI sources lodged Preliminary Enquiry report against unknown persons in theGames organising body after it received several complaints and references from theCentral Vigilance Commission claiming violation of norms in the appointments. Theysaid the complainants alleged involvement of sacked OC Chairman Suresh Kalmadi,who is at present in judicial custody, and his close aides for irregularities in therecruitment process.In its PE, the CBI has alleged that during the period of 2003 to 2009, some personswere nominated to the OC who had no expertise for various jobs. The Gamesorganising body had an overall strength of about 2,100 officials engaged for variousduties related to the mega sporting event. At present, there are about 100 officials onthe rolls. The CVC has also conducted an enquiry into the alleged recruitment scamfollowing complaints that it showed ghost employees on its muster rolls and violatednorms while inducting people. The High Level Shunglu Committee had also foundalleged irregularities in the recruitment procedures followed by certain OC officials. 40
  • 41. CNN-IBN NDTV Hindustan TimesThe CAG has questioned the deals between the CWG and certain media houses asthe organising committee (OC) apparently resorted to pick-and-choose policy in theaward of contracts worth over Rs. 6.73 crore. The CAG, in its report, tabled inParliament last week, has dubbed the process arbitrary and biased.The contract for production and broadcasting of commercials was given to two newschannels, CNN-IBN and NDTV. The CAG said the OC followed an arbitraryapproach with no planning for specific channels, time slots and cost benefit analysis.The CAG is more severe in its observations on the contract for creating a GamesTime website, meant to put out real time information on sporting events, given to HT-Hungama - a consortium comprising Hindustan Times and Hungama. It haslambasted the process of awarding the contract to the consortium and said theirwork was deficient. A benevolent OC overlooked the non-performance and did notencash the performance guarantee of Rs. 0.29 crore. A contract tweaked in favour ofHT-Hungama had no other provisions for penalties case of non-performance, theCAG said.It said the bidding process was squeezed and completed within two months, leadingto several irregularities. Among the three bidders, HT-Hungamas documentationwas deficient but ignored by the technical committee. It led the CAG to conclude thatthe process was tailored in HT-Hungamas favour.Response to Scam Kalmadi and Bhanot was sacked from the Organising Commitee by the Sports ministry on Jan 2011 Shunglu panel was constituted by Prime minister Manmohan Singh to go into the irregularities in the conduct of the Games. After his arrest on 25 Apr 2011, Suresh Kalmadi was suspended by the Indian National Congress 41
  • 42. CWG Impact Safety & security concern Socio Vandalism of economic games village impact Impact of CWG Infrastructure Organizational Issue failure Racism Sporting Allegation controversyWe will discuss all of them one by one. 42
  • 43. Socio Economic Impact Socio Economic Impact Social & Sex & Financial environmental Urban change prostitution impact BoomFinancialA leading research remarked that the 2010 Commonwealth Games will create "anegative financial legacy for the country" and asked "when one in three Indians livesbelow the poverty line and 40% of the hungry live in India, when 46% of Indiaschildren and 55% of women are malnourished, does spending billions of dollars on a12-day sports event build national pride or is it a matter of national shame?"One of the outspoken critics of the Games is Mani Shankar Aiyar, formerIndian Minister for Youth Affairs and Sports. In April 2007, Aiyar commented that theGames are "irrelevant to the common man" and criticized the Indian government forsanctioning billions of dollars for the Games even though India requires massiveinvestment in social development programs. In July 2010, he remarked that he wouldbe "unhappy if the Commonwealth Games are successful".Indian businessman Azim Premji called the 2010 Commonwealth Games a "drain onpublic funds" and said that hosting the high-expense Games in India is not justifiedgiven that the country had more important priorities facing it, such as education,infrastructure and public healthEnvironmental ImpactNearly 400,000 people from three large slum clusters in Delhi have been relocatedsince 2004. Gautam Bhan, an Indian urban planner with the University of California-Berkeley, said that the 2010 Commonwealth Games have resulted in "anunprecedented increase in the degree, frequency and scale of indiscriminate 43
  • 44. evictions without proper resettlement. We haven‘t seen [these] levels of evictions inthe last five years since the Emergency."In response to a Right to Information (RTI) application filed for study and statementsby civil society groups, a report by the Housing and Land Rights Network (HLRN) -an arm of the Habitat International Coalition - detailed the social and environmentalconsequences of the event. It stated that no tolerance zones for beggars areenforced in Delhi, and the city has arbitrarily arrested homeless citizens under the"Bombay Prevention of Begging Act 1959".Urban ChangeMitu Sengupta, a professor of politics at Ryerson University, Canada, points out thatthere is a ―tradition of using ‗urban spectacles‘ such as the Olympics and World‘sFairs to enhance a city‘s global recognition, image and status, and to push throughcontroversial policy reforms that might otherwise linger in the pending file for years (itis easier to undercut local opposition under the pressure of a fixed deadline and theinternational spotlight).‖ She writes that the reforms involved are often ―the inventionof an affluent, globally connected minority that is relatively detached from localconditions and the local population.‖ The 2010 Commonwealth Games, she says,are being used to invigorate an elite-driven program of urban transformation‖ thatcenters on privatization, securitization, and the construction of ―monuments tovanity.‖ Sengupta expands upon this argument in a subsequent article in ZMagazine Amita Baviskar, a professor of sociology at the Institute of EconomicGrowth, University of Delhi, makes a similar argument, on how mega-events, likethe Olympics and Commonwealth Games, are used to advance narrow agendas ofurban reform that cater to the middle class and rich. She focuses on how, inpreparation for the Commonwealth Games, the citys slums were bulldozed in orderto make room for shopping malls and expensive real estate. Writer and activistGautam Bhan also draws a connection between the Commonwealth Games andanti-poor urban development in an article posted on Kafila, an alternative webzineSex Slavery and Prostitution BoomThere has been a boom in the number of young girls, mostly from impoverishedparts of India, coming to Delhi after being offered jobs by disguised criminals, only tobe taken prisoner and forced into sex slavery. The number of victims is believed tobe in the hundreds. Many brothels have been running English courses for sex 44
  • 45. workers and upgrading their facilities in anticipation of a business upturn during thegames. Overseas prostitutes are also expected to come as tourists and ply theirtrade. One anti-trafficking NGO has claimed that there are reports of 40,000 womenbeing brought in from northeastern India alone. A spokesperson said that recruitsfrom that part of India were favoured because of their lighter skin. It has beenreported that over 3,000 bar girls in Mumbai have stopped going to work; this hasbeen blamed on an exodus to Delhi for the Commonwealth Games.Organizational Failure Organizational failureVigilance-related Preparation Mass volunteer Poor ticket sales Racismirregularities and delays walkout and attendance allegationsOver-InvoicingVigilance-Related Irregularities and Over-InvoicingOn 28 July 2010, the Central Vigilance Commission an Indian government bodycreated to address governmental corruption released a report showing irregularitiesin up to 14 CWG projects. As per official reports, total 129 works in 70 organizationshave been inspected. The detailed preliminary findings included the award of workcontracts at higher prices, poor quality assurance and management, and workcontracts awarded to ineligible agencies.There are also allegations of widespread corruption in various aspects of organisingthe games including procurement and awarding contracts for constructing the gamevenues. The Commonwealth Games Organising Committee on 5 August 2010suspended joint director T S Darbari and M Jayachandran following the report of thethree-member panel which was probing the financial irregularities related to theQueens Baton Relay. 45
  • 46. Also, Organising Committee treasurer Anil Khanna resigned from the post in thewake of allegations that his sons firm had secured a contract for laying syntheticcourts at a tennis stadium. The GlobalPost news agency reports that scandals havecome to light, such as "shadowy off-shore firms, forged emails, inexplicablepayments to bogus companies and inflated bills — for every purchase from toiletpaper to treadmills." Among the alleged corruption and defrauding of the gamesbudget, toilet paper rolls valued at $2 were costed at $80, $2 soap dispensers at$60, $98 mirrors at $220, $11,830 altitude training simulators at $250,190Preparation DelaysIn September 2009, CGF Chief Mike Fennell reported that the games were at risk offalling behind schedule and that it was "reasonable to conclude that the currentsituation poses a serious risk to the Commonwealth Games in 2010". A report bythe Indian Government released several months prior found that construction workon 13 out of the 19 sports venues was behind schedule.The Chief of the Indian Olympic Association Randhir Singh has also expressed hisconcerns regarding the current state of affairs. Singh has called for the revamp of theOrganising Committee commenting that India now has to "retrieve the games".OtherIndian officials have also expressed dismay at the ongoing delays but they havestated that they are confident that India will successfully host the games and do soon time.As the Times of India reports, all CWG projects were to be completed by May 2009and the last year should have been kept for trial runs. The newspaper further reportsthat the first stadium was handed over for trial runs in July 2010 only. To put thedelays in perspective, Beijing National Stadium was completed much ahead ofschedule for the 2008 Summer Olympics, while the venues for 2012 SummerOlympics in London are scheduled to be delivered one year before the games andthe construction of the venues is on track.In August 2010, the Cabinet Secretariat took a decision to appoint 10 officers of therank of Joint and Additional Secretaries to oversee the progress of the constructionof stadiums. Each officer is allocated a stadium and given the responsibility toensure that the work completes in time for the games. 46
  • 47. Mass Volunteer WalkoutAround 10,000 of the 22,000 selected volunteers quit, less than a week before theevent. This has been blamed on a lack of training for personnel, or dissatisfactionwith assignments. There are reports that some who have quit have not returned theiruniforms.Poor Ticket Sales and AttendanceThe start of the Games saw extremely poor ticket sales, with many venues nearempty.In a press conference, organising chairman Suresh Kalmadi admitted thatthere were problems, and blamed empty venues on ticket booths not being set upoutside stadiums.Commonwealth Games chief Mike Fennell admitted that manyvenues had been nearly empty on the opening day of the Games, saying "A numberof venues do not have lots of spectators one area which causes us concern". On thesecond day of competition, less than 100 people filled the hockey venue–the 19,000-seat MDC Stadium. Less than 20 people watched the first tennis match of thetournament in the 5,000-seat tennis stadium, and just 58 fans watched the netballopening match.One Indian competitor tried to buy tickets for relatives online, only to be informed bythe website that tickets were sold out. When he arrived to compete, he found thevenue to be empty.The streets of Delhi were deserted for the cycling road races and walking event.Racism AllegationAfrican countries have complained that they are getting second-class treatment fromthe Games organizers, in spite of them offering India a hand in the preparation of theGames. They have alleged that accommodation given to them was inferiorcompared to the accommodation provided to the Australian and New Zealand teams.They went on to state that India was complaining about being victims of racial bias inthe reporting of the Games; while simultaneously perpetrating the same kind ofracism against the African countries 47
  • 48. Infrastructure IssueTransport InfrastructureThe Delhi Airport Metro express built by Reliance Infrastructure and CAFBeasain missed its deadline of 31 July 2010 and the private consortium was fined Rs11.25 croreVenuesLess than two weeks before the opening ceremony, Fennell wrote to the Indiancabinet secretary, urging action in response to the village being "seriouslycompromised." He said that though team officials were impressed with theinternational zone and main dining area, they were "shocked" by the state of theaccommodation. "The village is the cornerstone of any Games and the athletesdeserve the best possible environment to prepare for their competition.The BBCpublished photographs of the village taken two days before 23 September showingunfinished living quarters.New Zealand, Canada, Scotland and Northern Ireland have expressed concernabout unlivable conditions. The Times of India newspaper reports that the Scottishdelegation apparently submitted a photograph of a dog defecating on a bed in thegames village. Hooper said that there was "excrement in places it shouldnt be" inthe athletes quarters and that members of visiting delegations had to help clean upthe unsanitary things. The BBC released images of bathrooms with brown-colored paan stains on the walls and floor, liquids on the floor, and brown paw printson athletes beds. Lalit Bhanot, the secretary general of the Organising Committee,rejected the complaint that sanitation was poor by saying that, due to culturaldifferences, there are different standards about cleanliness in India and the westernworld, a statement for which he was widely ridiculed in Indian and internationalmedia. Bhanot went on to say of the athletes village that, "This is a world-classvillage, probably one of the best ever.Pakistan also made reservations over the condition of the athletes‘ village andasked for an alternate accommodation to be made available to its contingent whilepreparation was still in progress. 48
  • 49. Problems with functionality of equipment and infrastructure during eventsOn the first night of swimming, debris landed in the swimming pool, causing delaysahead of a race. It is believed that part of the ceiling or its paint had fallen off.Before the last night of swimming finals, the filtration system broke down and thepool was turbid and murky during the warmup session and the finals, and the poolhas been described as the least clear ever seen for a swimming competition. Adisproportionate number of swimmers fell ill with intestinal complaints, leading toconcerns over the cleanliness and sanitation of the pool. Early suspicions rested onthe quality of water in the swimming pools of the SPM Complex,, but othercompeting teams, including South Africa, reported no such illness. Daily waterquality tests were being carried out on the water of the pools, as mandated by theevent standards. Additional tests were ordered after news of the illnesses, but theyalso did not find anything amiss. The Australian teams chief doctor, Peter Harcourt,ruled that the "chances of the [Delhi] pool being the cause of the problem is veryremote" and praised the hygiene and food quality in the Delhi Games Village.Hesuggested that it could be a common case of Travelers diarrhea (locally called Delhibelly), or the Australian swimmers could have contracted the stomach virus duringtheir training camp in Kuala Lumpur, Malaysia. English Olympic and Commonwealthgold-medalist swimmer Rebecca Adlington said that the water quality was absolutelyfine.A dog entered the athletics arena.After the opening ceremony, the ground at the athletics was damaged, and the grassinfield and the track was still being re-laid two hours before competition startedVandalism in games village by AthletesCondoms and Toilet BlockagesAn Indian newspaper during the games reported that used condoms flushed downthe toilets in the athletes village had caused some drains to become blocked,necessitating action by plumbers to clear the pipes. 49
  • 50. Athletes under Investigation for Trashing ApartmentsAustralian athletes have been accused of vandalizing the towers of the athletesvillage they were staying in by breaking furniture and electrical fittings. Delhi Policedid not press the case after the Organizing Committee refused to file a complaintwhile Indian external affairs minister SM Krishna dismissed it as a one-off incident.A washing machine was hurled from the eighth floor of the same tower. Nobody onthe ground was hit, but it is unclear who the culprit was. Indian newspapers havereported that the Australian Commonwealth Games Authority agreed to pay for thedamages and have apologized for the incident. The Australian High Commissionerrejected the claim, stating that the incident was the result of partying andcelebrations. Later comments by Australian officials have contradicted claims by LalitBhanot that they had admitted responsibility. Perry Crosswhite said that it was stillunclear if athletes from other nations present in the tower at the time had beenresponsibleSafety & Security Concern Infrastructural compromiseOn 21 September 2010, a footbridge under construction for the Games near theJawaharlal Nehru Stadium collapsed, injuring at least 23 people, mainly workers,underscoring fears of poor workmanship. Commenting on the incident, CM of DelhiSheila Dikshit controversially remarked that the footbridge was only meant forspectators and not for athletes. Following the collapse, Fennell expressed concernthat conditions at the Games Village, which had "shocked the majority", wouldseriously compromise the entire event. The company that was building the footbridge, P&R Infra projects, was subsequently blacklisted by the Delhi Governmentand was not allowed to get government contracts.Reportedly, progress was still slow and four or five accommodation towers builtby Emaar at the Games village were unfinished, lacking facilities such as wirelessinternet, fitted toilets and plumbing. In addition, rubble, unused masonry anddiscarded bricks littered the unfinished gardens. According to sports historian BoriaMajumdar, author of the Sellotape Legacy: Delhi and the Commonwealth Games,India "may have to pull a miracle.‖ The father of Australian track cyclist KaarleMcCulloch visited his daughter at the Olympic village. A builder in Australia,Grahame McCulloch criticized the structural soundness of the village; he said "those 50
  • 51. buildings are the dodgiest things I have ever seen...so substandard". He told hisdaughter not to use the balcony, fearing that it was collapsible.On 22 September 2010, part of the drop ceiling of the new Commonwealth Gamesweightlifting venue in New Delhi collapsed.Indian bantamweight boxer Akhil Kumar s bed in the Games village collapsed whenhe sat on it. "I sat down on my bed to rest but suddenly it gave way. After that Inoticed that part of it has no plywood,‖ he saidOn 27 September 2010, a South African athlete reported that a snake was present inhis room in the Games Village. A day earlier, animal authorities had to be called in toevacuate a king cobra from the tennis venue.On 7 October, a large scoreboard crashed to the ground at the rugby venue when asupporting chain snapped. The games however were due to start a week later so nomajor repercussions were experienced. Terror threatsFollowing the 2008 Mumbai attacks, some athletes and their representative bodiesexpressed security fears during the games. In April 2010, during the Indian PremierLeague, two low intensity bombs went off outside the stadium in Bangalore. Althoughthere were no casualties, this postponed the start of the game by an hour. Followingthis attack, foreign cricketers like Kevin Pietersen expressed fears for their safetyand questions were raised regarding the safety of athletes during theCommonwealth Games [2]. The UK and Canada also warned about potential attackson commercial targets in Delhi ahead of the games. Jama Masjid incidentMain article: 2010 Jama Masjid attackOn 19 September 2010, unknown gunmen on a motorbike opened fire with anautomatic pistol on a tourist bus outside the Jama Masjid mosque in Delhi. Theattacks, which came a fortnight before the start of the games, injured two Taiwanesetourists Two hours later, a Maruti car exploded in the vicinity, reportedly from adeliberate low-intensity pressure cooker bomb which had been assembled inside. Nofatalities or major damages were reported. The incidents, which were purportedlyclaimed by the Indian Mujahideen, provoked fears about lack of security in the city 51
  • 52. for the upcoming games. However, police in Delhi initially denied the role of anyorganised terror group and instead blamed the attacks on "disgruntled youths andlocal criminal gangs." Officials suggested that a possible motive of the strike was toinstill fear in people ahead of the Commonwealth Games.Fear of dengue outbreakThe heaviest monsoon rains in 15 years, along with large quantities of standingwater on CWG construction sites as well as in tanks and ponds, raised concernsover increased levels of mosquito-borne disease in Delhi. In the run-up to the gamesit was reported that 65-70 cases of dengue fever were being diagnosed each day inthe city, with the number of cases "likely to hit the 3,000 mark" by the opening on 3October.IllnessMany swimmers were reported to have fallen ill. Initially, concerns were raised overthe quality of water in the swimming pools of the SPM Complex . It was said thatmore than 20 percent of the English teams swimmers — about eight to 10competitors — had been struck down with a stomach virus. The Australian team alsoreported that at least six of its swimmers had been sick, including AndrewLauterstein, who had to withdraw from the 50-meter butterfly. CommonwealthGames Federation president Mike Fennell said officials would conduct tests to makesure the pools were not the source of the illness. "If there is something unsafe, youcannot swim in that water. It is a matter we have to deal with a great deal ofurgency," he said.However, other competing teams, including South Africa, reported no suchillness. Daily water quality tests were being carried out on the water of the pools, asmandated by the event standards. Additional tests were ordered after news of theillnesses, but they also did not find anything amiss. The Australian teams chiefdoctor, Peter Harcourt, ruled that the "chances of the [Delhi] pool being the cause ofthe problem is very remote" and praised the hygiene and food quality in the DelhiGames Village. He suggested that it could be a common case of Travelersdiarrhea (locally called Delhi belly), or the Australian swimmers could havecontracted the stomach virus during their training camp in Kuala Lumpur, 52
  • 53. Malaysia. English Olympic and Commonwealth gold-medalist swimmer RebeccaAdlington said that the water quality was absolutely fine.Sporting ControversyDopingPrior to the Games, four wrestlers, a shot-putter and two swimmers who were all partof Indias Games squad tested positive for methylhexaneamine. Four others, whowere not picked for the Games in the Indian capital, also failed drug tests conductedat the various training camps across the country.Oludamola Osayomi of Nigeria won the womens 100 metre sprint event. On 11October 2010 it was reported that Osayomi had tested positive for a "bannedsubstance" which was later revealed to be the stimulant methylhexaneamine.Another Nigerian athlete, hurdler Samuel Okon who placed sixth in the 110 metreshurdles, was reported to have tested positive for the same drug.In July 2011, three of the four women from Indias gold-medal winning 400 metre-relay team tested positive for performance-enhancing drugs. Two of the racers, SiniJose and Jauna Murmu tested positive for the anabolic steroid methandienoneand Tiana Mary Thomas tested positiv for epi-methandienone.ArcheryIn the archery event England criticised the crowds behaviour, but Williamson (thesilver medallist) praised the crowd. Though earlier reports said that the team wasupset that during the women‘s recurve event the crowd chanted loudly during thefinal shots. Claiming that the noise distracted the archers. Amy Oliver hadcomplained about the chanting of "Come on India" as she took her shots. adding"The crowd was not good. They were pretty loud…" In an action condemned inthe Indian media , an English archery official allegedly abused an Indian coach,telling him to "f*** off." The comment came after the Indian team registered a one-point win over England to claim the gold medal. The Indian archery head coach,Limba Ram, walked over to shake hands with officials of the rival team. In response,an English official showed his elbow in a gesture before uttering the remarks.Britains archery team leader said she was unaware of the incident, "You must findout whether the person was one among us. If he was not wearing a red jersey, hewould not be part of the side. I will speak to the Indian coach about it." Limba replied 53
  • 54. that he failed to identify the person, as he had chosen to ignore the one-offincident. There have also been accusations that Limba Ram was called a monkey ontwo different occasions by an English official.BoxingDuring the weigh-in for the boxing competition the scales were giving inaccuratereadings with athletes recording higher body weights on the official scales. Thescales were deemed to be broken and the weigh-in was delayed 24 hours to find andcalibrate new scales. The initial wrong measurements led to angry shouting betweencoaches, athletes and organisers. During the boxing competition there have beenclaims made by various teams including England andBotswana that jabs were notbeing scored by judges. This was attributed to the removal of a white scoring zoneplaced on the boxers gloves which is usually present in amateur boxing events. TheBBC commentating team also claimed there to be a bias in judges scores towardsIndian competitors.CyclingDuring the final of the Men‘s Keirin , Malaysian Azizulhasni Awang was disqualifiedfor aggressive interference when he forced his way past two competitors. Racewinner Josiah Ng said he was "mystified" over Awangs disqualification. In the semi-final round of the keirin , Australias Shane Perkins was disqualified for dangerousriding with the official reason not being made clear. Perkins subsequently won theclassification race and was described by Chris Boardman from the BBC to "haveaimed an angry V-sign at officials"; he gestured to the judges with his index andmiddle finger held together. No subsequent action was taken against Perkins wholater said, "the officials need to go back to school", referencing poor decisions he felthad been made in the sprint and keirin events.SwimmingOn another occasion, South African swimmer Roland Schoeman came undercriticism when he referred to the crowd at the swimming as "going on like monkeys"in a post-race poolside interview. Schoemans remarks came after he narrowlyavoided being disqualified as he and Englands Simon Burnett fell in at the start ofthe 50m freestyle when distracted by crowd noise. The swimming has beenpersistently affected by Indian spectators ignoring etiquette and shouting out while 54
  • 55. the competitors were preparing for the start. His comment was regarded as possiblybeing a racial ethnic slur, although he later said that the word was commonly used inSouth Africa to refer to mischievous behaviour. At an official press conference,organising committee secretary-general Lalit Bhanot took the complaints aboutmonkeys literally. Not being aware of the complaints, Bhanot felt Delhis wildlife wasat issue: "We know especially at the swimming pool there are a lot of monkeys andwe have made efforts to keep them away from the swimming pool.‖WrestlingAustralian wrestler Hassene Fkiri was ejected from the 96 kg Greco-Romancompetition and stripped of the silver medal after making an obscene gesture at theinternational FILA judges during the final. According to an Australian official, Fkiriwas furious at his Indian rival Anil Kumar, who he accused of breaking the rules anumber of times in the first period by holding Fkiri around the neck and head withtwo hands. The Australian received his first warning after he made a comment to thereferee as he walked off the mat at the end of the two-minute period; when Kumarrepeated the same move in the next round, Fkiri headbutted him and was issued asecond warning. He then proceeded to swing his arms uncontrollably afterwards,which resulted in his third warning and eventual disqualification. After losing, Fkirirefused to shake hands with the victor.Kalmadi: A Culprit or Victim?He might be one of the responsible people, who now, in this situation being on theinterface, can be targeted by everyone for the failure of common wealth games. Buthe alone cannot be the real culprit. The biggest problem, in any governmentventures that take place in India, is the terrible structure upon which those venturesare planned. The terrible structure includes the immense possibilities of corruption(then whether it is mafiaism in the transport, traffic, roads, MCD... just endless, not tomention how much money has already been eaten up in the name of CWG ) . Theyalways want to make a structure without cleaning up the older and known problems.The people employed in the government bodies dont want to work. They knownobody can remove them, no matter they work or not. Additionally casteism and votebank groups include such problems. All this was started by the government so as 55
  • 56. grab the chair. But now it has become such a virus, that it badly plagues the wholesystem from head to toe.Kalmadi as CWG chief: Who is the culprit UPA or NDA?The Comptroller and Auditor General (CAG) indicted the Prime Minister Office(PMO) over Suresh Kalmadis appointment as CWG chief. But the PMO hasengaged in a blame game when it brought NDAs name in the picture. The PMOclaimed that according to an official agreement with the Commonwealth GamesFederation in 2003, the president of the Indian Olympics Association (IOA) will bethe chief of organizing committee (OC).The agreement was signed by the NDA government led by the then Prime MinisterAtal Bihari Vajpayee. Washing its hands completely from the disputed issue, thePMO claimed that it had no role in appointing Kalmadi as the OC chief in 2004.Kalmadi was the IOA president at that time.Political scenario during CWG Scams:There was political upheaval and resentment among common public which was wellreflected in various meetings which were called on frequent basis during that time.Eg on 6 august 2011,The Congress core committee met to discuss the politicalsituation, including the Comptroller and Auditor General (CAG) report that hasindicted the Prime Ministers Office (PMO) and the Delhi government for irregularitiesin the Commonwealth Games. The meeting was being held at Prime MinisterManmohan Singhs 7, Race Course Road residence, the sources added. BesidesManmohan Singh, the meeting was being attended by Finance Minister PranabMukherjee, Defense Minister A.K. Antony, Gandhis political secretary Ahmed Patel,party general secretary Janardan Dwivedi and other leaders.The issue has affected congress deeply as even during the Anna Hazare movementtime, congress is being attacked by mentioning CWG scams. Eg : BJP leaderRajnath Singh had said the Congress chief is silent on 2G, CWG and other scamsplaguing the UPA government and only making statements against social activistAnna Hazare. 56
  • 57. "Gandhi says nothing on 2G, CWG and other scams, while discharges her dutiesmerely by uttering some words against Hazare," Singh had told reporters. During thevarious early parliamentary sessions held, BJP questioned on the role of PrimeMinister Manmohan Singh himself since the circumstances under which Kalmadimanaged to have a free run of the Games preparations go to the heart of itsallegation that the Pune MP could not have commandeered the mega sports eventwithout the PMOs indulgence. Likewise, the debate gave the BJP enough elbowroom to also target Dikshit for her role in the scam; something that the Congresswished to avoid on the ground that parliament could discuss CAGs findings onlyafter they had been scrutinized by the PAC.In various other instances of allegation to congress or targeting Prime MinisterManmohan Singh, former Sports Minister Mani Shankar Aiyar also dragged HomeMinister P Chidambarams name for failure to check the Commonwealth Gamesscam.Mani Shankar Aiyar hit out at Chidambaram for not acting on the basis of hiscomplaints against wasteful expenditure in the organization of the games."My letters of complaint were neither acknowledged nor acted upon by MrChidambaram who was the finance minister till 2007," Aiyar told CNN-IBN.CNN-IBN has copies of letters written by Mani Shankar Aiyar, Sunil Dutt and MS Gillto the Prime Minister raising questions about the manner in which money was beingspent on the Commonwealth Games."Prithviraj Chavan, who was a minister in the PMO, was the one who initially alertedme that I should be careful about releasing funds for CWG," Aiyar told CNN IBN."The present Chief Election Commissioner SY Qureshi, who was my secretary in thesports ministry, also shared my concerns against wasteful expenditure in CWG," headded.The Prime Minister had remarked at his interaction with editors that Mani ShankarAiyar was ideologically opposed to the CWG. 57
  • 58. Effect on Brand Image of IndiaIt has affected the image of India adversely. Firstly, there were questions on Indiahosting CWG when large population of it falls below poverty line and with the deeprooted corruption done in its organising it has questioned the integrity, ethics andportrayed a poor image of India world-wide.Climatic change like global warming is causing an agricultural crisis for the peasantsall over the country, worsening their conditions which, in turn, is leading to inflation inthe economy, energy resources are getting depleted, unskilled and poor people areforced to get involved in unorganized employment with least possible wages andalso issues related to skilled and literate unemployed…but no one really cared,India was too busy with Commonwealth Games, Which has back fired in all terms.India‘s present goal should be the development of human resources, dealing withpoverty and creating a healthy, wealthy and literate India. As a result of theapproaching Commonwealth Games, India, especially Delhi underwent a completemakeover where the infrastructure was concerned. Lavish five-star hotels, betterflyovers, etc, were being constructed. Better buses were seen running on the roadsof Delhi. Why all this? Just to show that India is on its way to become a developednation soon? But it couldn‘t hide those shabby and disguised slums behind theshimmering and glamorous construction and even showed the inherent reality ofcorruption. Eg: Liquid Soap Dispensers rented for Rs 9,379 a piece or $206,Operating Expenses escalating from Rs 399 crore in December 2002 to Rs 1,628crore finally, Medical equipment including tread mills have been bought or rented at6-7 times their original price, Allegations that funds meant for Indias most deprivedsections - the SC/ST - have been diverted to the games funds. Stealing from thepoor to fund the elites luxuries.It has conveyed messaged that main aim behind organizing the games were to gainmoney by officials in name of games preparation which were awful as reflected invarious instances Eg :The newly built shooting range at the Siri Fort area collapsedafter one heavy shower, The foot over bridge adjacent to the main venue of theCommonwealth Games collapsed while being erected, injuring 27 workers who weredumped into a tow away truck to a municipal hospital and dished out acompensation of measly Rs 50,000 ($1097) for broken skulls and multiple fractures,Many of the games venues leaked during the monsoon and roofs of some collapsed,The Commonwealth Games village, the place where athletes from participating 58
  • 59. countries were put up is infested with dog poo, snakes, clogged toilets, andunfinished work.This all presented a poor image of India not only in terms of corruption but alsoaffected its image of being seen as a tourist attraction.CAG Audit Report Key PointsThere was notable discrepancy in the bailout package given by DDA to thedeveloper of games village. Scope of audit report included: overall planning anddevelopment, venue development, games village, city infrastructure projects,organization of the games, preparation of Indian teams, media, others. It showedthat flaws made from the starting:Proposal was made without underwriting a cap on government liability andguarantee was given not only from organising committee but also from governmentof India, the games thus became the property of GOI, and not only of OC. WhereasBid from Hamilton, Canada involved deficit guarantee only from Hamilton city councilnot from government of Canada.There were multiple committees and as the guarantee was given by GOI, thereshould have been proper government control in the management which was notdone.Bid document envisaged Organising committee (OC) as a government ownedregistered society but OC was ultimately set up as a non government society withShri Suresh Kalmadi, as chairman of OCEB. This was done with a chronologicalevents starting with a document titled ― updated bid ― which was illegal as contracthas been already awarded to Delhi.There was no accountability to government despite of funding and guarantee by thesame. There was lack of clear governance structure and various ad-hoc committeeswere created, disbanded and re-constituted at the different point of time leading to allconfusion and complete diffusion of accountability.There was no single clear focused budget, which kept on increasing further andfurther. There were numerous instances of contract being not taking taxation, legalplanning into account. There was not any proper documentation of sequence of 59
  • 60. award of contract and which were liabilities pending.Numerous contracts were givenon nomination basis to even not eligible vendors.Suggestions & RecommendationsThe contagious disease of scams demands perfect healing and a thorough clean-up.Implementation of The Santhanam Committee recommendations:The Santhanam Committee emphasized four major causes of corruption: Administrative delays Review of existing procedures and practices to find out the points at which delay occurs and device suitable steps to minimize the delay Prescribe definite time-limits for dealing with receipts, files etc., which should be strictly enforced Government taking upon themselves more than what they can manage by way of regulatory functions. Each Ministry/Department should undertake a review of the regulatory functions which are its responsibility, with a view to see whether all of them are strictly necessary and whether the manner of discharge of these functions and of the exercise of powers of control are capable of improvement Scope for personal discretion in the exercise of powers vested in different categories of government servants. Adequate methods of control should be devised over exercise of discretion. The right to act according to discretion does not mean right to act arbitrarily. The fairness of the method by which the discretionary decision was arrived at may certainly be looked into Cumbersome procedures of dealing with various matters which are of importance of citizens in their day to day affairs. Citizens should be educated properly with regard to the procedures of dealing with various matters. They should also be provided with an easy access to 60
  • 61. administration at various levels without the need for the intervention of touts and intermediariesConclusionWhile nobody will officially say this, we all know why costs have bloated andstadiums are collapsing. Officials and politicians make money on bribes fromcontractors, who win bids at the ―lowest‖ price and then earn super profits bycompromising on quality. Then they make more money citing over-runs and repairs.Material suppliers hoard construction materials and make a killing as we desperatelyrace to the deadline.But nobody will be indicted or arrested or tried. That is the way it works – too manyimportant people are making too much money. 61
  • 62. 2G SCAM2G TimelineMay 16, 2007: A Raja Becomes Telecom MinisterNEW DELHI: In significant changes after the abrupt exit of Dayanidhi Maran from theCabinet, senior DMK leader A Raja will now handle IT and communications aftershedding charge of environment and forests. The environment and forests portfoliowill be with Prime Minister Manmohan Singh.The somewhat intriguing aspect of the change is that DMK chief M Karunanidhi hasnot nominated a replacement for Raja in the forests and environment ministry.Instead, another DMK nominee, M Reghupathy, who was MoS in the home ministry,will be moved at the same designation to environment and forests.Reghupathy will be replaced by DMKs V Radhika Selvi in home ministry. Thechanges are seen to be a matter of DMK rearranging its furniture, but the absence ofa minister in the environment and forests ministry may indicate that Karunanidhi hasyet to decide who to nominate. Interestingly, Radhikas induction was announced bya Tamil Nadu government press release which said that she would be sworn in onMay 18.The likely induction of a member of the Karunanidhi clan, his daughter Kanimozhi, topolitics by way of a RS seat, has resulted in speculation that she may well be madea minister.Aug, 2007: Process of allotment of 2G spectrum for telecom along with Universal AccessService (UAS) Licences initiated by the Department of Telecommunications (DoT)Sept 25, 2007: Telecom Ministry issues press note fixing deadline for application asOctober 1, 2007Oct 11, 2007: DoT gets 575 applications for mobile licensesAt the final count, 46 companies have managed to log in a staggering 575applications for UAS (mobile) licenses with the DoT. This translates into an averageof 26 applications for each of the 22 telecom service areas.The frenzy for licenses is fuelled by the fact that spectrum — a precious and scarcenational resource for telecom services — comes along with the license at athrowaway price of Rs 1,660 crore. 62
  • 63. The excitement only grew after TRAIs August 28 recommendations on licensereforms and spectrum allocation ruled out auctions for 2G spectrums in the 800, 900and 1800 bands. Almost 80% of the total applications received by DoT (30companies with 461 applications) came in after this.Unable to stem the tide, the DoT finally, on September 24, said its doors would closefor UASL applications on October 1. However, roughly 20 companies still managedto place applications in the four working days following the announcement.According to the DoTs final list, 15 companies have applied for pan-India licenses,while four have applied for between 20 and 21 licenses.The UP (West) circle leads the tally with 29 applications, followed by Orissa andRajasthan with 28 each and Tamil Nadu, North East, J&K, Haryana, Gujarat andAssam with 27 each. Even Himachal Pradesh and Bihar both C category circleshave received 23 and 24 applications respectively. Himachal Pradesh with 23 is theleast in demand.The numbers are perplexing, considering each pan-India green field operationrequires a minimum investment of Rs 25,000 crore within the first three years tomount any credible competition for entrenched players.Surprisingly, despite the obvious opportunism on display, Trai and now even telecomminister, A Raja, are reluctant to nudge the industry towards paying the real value ofspectrum.The Rs 1,660 crore offer is a price linked to an auction for the 4th mobile license heldin mid-2001 when Indias subscriber base was four million and the overall target lessthan 100 million.The stakes are far higher today, with 200 million subscribers and a subscriber targetof 500 million by 2011, followed by a slowdown that will peak at nearly 750 millionsubscribers by 2017. Strangely, TRAI has shied away from prescribing auctionsdespite admitting in its August 28, 2007 (section 2.73) recommendations that thecurrent entry fee is linked to a 2001 transaction and recognizing the need torediscover its present value.The ball is now squarely in the Department of Telecoms court. If sanity does notrule, three companies are set to strike gold by getting spectrum worth Rs 15,000crore or more for a song. 63
  • 64. Nov 2, 2007: The Prime Minister writes to Raja directing him to ensure allotment of 2Gspectrum in a fair and transparent manner and to ensure that licence fee was properlyrevised. Raja writes back to the Prime Minister rejecting many of his recommendationsNov 22, 2007: Finance Ministry writes to DoT raising concerns over the procedure adoptedby it. Demand for review rejectedJan 10, 2008: DoT decides to issue licences on first-come-first-serve basis, preponing thecut-off date to September 25, from October 1, 2007. Later on the same day, DoT posted anannouncement on its website saying those who apply between 3.30 pm and 4.30 pmwould be issued licences in accordance with the said policyNov 12, 2008: Spectrum Allocation Policy - HC seeks govt responseThe Delhi High Court today sought a response from the Centre on a petitionchallenging its first- come-first-served procedure adopted in spectrum allocation.A Bench comprising Chief Justice A P Shah and Justice S Muralidhar asked thegovernment to file its response within three weeks and posted the matter toDecember 10 for hearing.The petition had challenged the Centres policy of allocating 2G spectrum andalleged it had caused a loss of crores of rupees to the exchequer.The PIL alleged that the procedure followed by the government was non-transparent,and was intended for the benefit of some private players in the telecom industry."The telecom ministrys deliberate inaction on the recommendations of the financeministry, Prime Ministers Office and Telecom Regulatory Authority of India hasbenefited private parties at the expense of public exchequer," individual petitionerArvind Gupta said.He also referred to an earlier judgment of the High Court delivered in 1993 by whichthe court had said that "first-come-first-served" policy is unreasonable and unfair."The basis of first-come-first- served for allotment of time slots on satellite channelsis arbitrary. It is unreasonable, unjust and unfair," Gupta said quoting the High Courtjudgment. 64
  • 65. He questioned the governments intention of not following a competitive biddingprocedure."The proximity of real estate developers to corridors of the Department of Telecomhas enabled even real estate developers to overnight turn into telecomentrepreneurs.Indian real estate developers and infrastructure promoters have also become Indiantelecom players," Gupta alleged in his petition.Sept 24, 2009: Etisalat buys stake in Swan TelecomNEW DELHI: Emirates Telecommunications Corporation (Etisalat), largest operatorin the Arab world, on Tuesday said it has signed a deal to acquire 45 per cent stakein recently-licensed Indian telecom firm Swan Telecom Private Limited (SwanTelecom) for $900 million.Swan Telecom, controlled by Mumbai-based real estate and hospitality businessgroup Dynamix Balwas (DB) Group, holds universal access service (UASL) licensesin 13 telecom circles across India, while it is in the process of acquiring UASLlicenses in an additional two telecom service areas. Swan Telecom is likely to startits operations in the first quarter of the next financial year.Commenting on the transaction, Mohammad Hassan Omran, Chairman of the UAEheadquartered Etisalat, said: ―Our entry in India, one of the largest and fastestgrowing mobile markets in the world today, marks an acceleration of our expansionstrategy and brings to us an opportunity which matches the scale of our ambitions.We are truly excited by the partnership with the DB Group and the prospect ofbuilding Swan Telecom into a leading telecom operator, emulating the successes wehave achieved in similar situations elsewhere.‖Etisalat operates in 16 countries across Asia, the Middle East and Africa, servicingover 6.4-crore customers.In a joint statement, DB Group‘s Chairman Vinod Goenka and its Managing DirectorShahid Balwa said: ―We believe that with Etisalat‘s operational and commercialexpertise and with our knowledge of the Indian market, Swan Telecom has thepotential to become a leading force in Indian telecommunications." 65
  • 66. May 4, 2009: An NGO Telecom Watchdog files complaint to the Central VigilanceCommission (CVC) on the illegalities in the spectrum allocation to Loop TelecomMay 19, 2009: Another complaint was filed to the CVC by Arun Agarwal, highlighting grantof spectrum to Swan Telecom at throwaway prices2009: CVC directs CBI to investigate thes irregularities in allocation of 2G spectrumJuly 1, 2009 : Delhi HC verdict on telecom licence cut-off date puts Trai in a tight spotThe Delhi High Court‘s judgment striking down as illegal the advancement of cut-offdate for licence eligibility in 2007 by the telecom minister A Raja has put Trai in a fix.This is because the stakeholders are likely to raise eyebrows on the TelecomRegulatory Authority of India (Trai) in the three-day consultative process, whichbegins on Monday.One of the key issues to be decided through the consultative process is whethertelecom licences should be given to more players or not. Analysts maintain that withthe High Court ruling declaring the cut-off date as illegal, the way for 16 companies,including the petitioner S Tel and US telecom major AT&T to be given licences. Inthis backdrop, Trai should either drop the issue from its agenda or first seek aclarification from the court.―Questions are bound to be raised on the legality of the whole exercise since thedivision bench of the High Court has struck the advancement of the cut-off date asillegal. The government has no choice but to grant licences to the balance applicantsof 16 companies. In such circumstances, how can TRAI ponder whether the balanceapplications should be processed or not?‖ asked an industry analyst.The reference of the matter by the Department of Telecommunications (DoT) to theTRAI in August was controversial since the latter had earlier given an undertaking tothe court that the balance applications have not been rejected but are on waitlist andwould be processed subsequently. In fact, the CBI is already enquiring why the DoTwent back on its undertaking to the court and sought TRAI view.As reported by FE earlier, the TRAI had recommended in August 2007 that thegovernment could continue with the policy of having unlimited number of operatorsper circle. However, seeing a deluge of applications, communications and IT ministerA Raja put a temporary cap that only the applications received by October 1, 2007 66
  • 67. would be processed. However, on January 10, 2008, through a controversial pressnote, the DoT advanced the cut-off date to September 25, 2007.This benefited eight companies that were awarded licenses in January 2008. Ofthem, Unitech Wireless and Swan Telecom have since sold stakes to foreigntelecom majors at huge valuations. The arbitrary advancement left the applicationsof 16 companies, including that of AT&T of US in limbo. One of the aggrievedcompanies, S Tel had moved court challenging the DoT‘s move. The Delhi HighCourt‘s single bench had struck the DoT‘s move illegal in July last year. However,the DoT had appealed to the division bench of the court, which dismissed its plea onNovember 24.Oct 21, 2009: Iregularities in spectrum allocation? CBI searches DoT officeNEW DELHI: The CBI on Thursday searched offices of the Department of Telecomin connection with alleged irregularities in allocation of 2G spectrum to some of thenew players.CBI sources said a team of its sleuths were conducting searches at the SancharBhawan here after registering a case in this connection last evening.The sources said that all records pertaining to the allocation of spectrum to newplayers in January 2008 will be taken to see if there were irregularities in theprocess.None of the DoT official was available for comments. In 2008, eight new playerswere given licences along with bundled 4.4 MHz spectrum to start mobile services.The telecom ministry had come under attack for doling out spectrum very cheapcompared to its actual market value.CVC had recommended a CBI probe into the procedures followed for selectingcompanies for giving 2G spectrum. Eyebrows were raised when two of the newplayers -- Unitech Wireless Services and Swan Telecom -- sold part of their stake athuge premium within days of getting the licences.The government had given telecom licence along with start up spectrum at Rs 1,651crore for pan-Indian services. 67
  • 68. Oct 23, 2009: CBI raids DoT offices over spectrum rowIn an unprecedented move, the CBI on Thursday raided the offices of theDepartment of Telecom (DoT), alleging criminal conspiracy between DoT officialsand private firms in the allotment of 2G spectrum.TOI was the first to report the unusual twists and turns in DoTs decision-makingprocess in the matter, and closely followed the sequence of events from July 2007 --when the rush for new telecom licences began -- to January 2008, when spectrumwas allocated to the new entrants -- right up till November 2008, as the controversysnowballed.CBI officials said a case under the Prevention of Corruption Act had been registeredagainst unidentified DoT officials and "private persons" before the raids were carriedout in the Wireless Planning Cell (WPC) and in the office of the Deputy DirectorGeneral (Access Services) at Sanchar Bhawan.According to the agency, all records pertaining to the allocation of spectrum to newentrants in January 2008 are being examined to ascertain whether or not there wasany irregularity in the process.It is learnt that AK Srivastav, DDG Access Services 1; Ashok Chandra, WirelessAdvisor and P K Mittal, DDG Access Services Cell 11, the senior officers in charge ofthese divisions, were taken to CBI headquarters for questioning. The CBI raid startedat 10am and finished at around 6pm.The Central Vigilance Commission (CVC) had earlier asked CBI to probe allegedirregularities in the award of Unified Excess Services Licenses to private companiesand the resultant loss of Rs 22,000 crore to the government."As per information received, there was criminal conspiracy between certain officialsof DoT and private firms in order to award licences to these companies by putting acap on the number of applicants against recommendations of the TelecomRegulatory Authority of India (TRAI) and by awarding licences to private companieson first-come-first-serve basis on the rates of 2001 without any competitive bidding,"said a senior CBI official.The CVC had asked CBI to investigate the identities of all beneficiaries in twocompanies that had bought stakes in Swan Telecom and Unitech Wireless Services.The two licencees had sold their stake even before they rolled out services for whichthey had been awarded licences. 68
  • 69. Unitech and Swan sold their equity to Telenor and Etisalat, respectively, at roughlyRs 9,000 to Rs 10,000 crore each -- or six to eight times the price at which they hadreceived spectrum from the government.Sources said though there was no quantification done on what was the loss to thegovernment on this account, a rough estimate based on what these telecomcompanies earned by offloading their stake could be anywhere between Rs 20,000crore and Rs 22,000 crore.However, industry watchers claim that the extent of the loss to the exchequer couldbe as high as Rs 50,000 crore. They point out that DoT gave away 2G spectrum to120 licencees at roughly Rs 9,000 crore when the market value was probably closerto Rs 60,000 crore.DoT chose to follow a first-come-first-served (FCFS) process to handpick companiesthough it could easily have chosen a global auction for 2G spectrum, as has nowbeen prescribed for 3G. The refusal to hold auctions when demand for spectrum faroutweighed its supply marked a departure from the policy of auctioning 2G spectrumtill 2001.Telecom minister A Raja had argued that he merely followed TRAIsrecommendations. However, TRAI vehemently denied making any suchrecommendations. Former TRAI chairman N Misra had clarified on many occasions,including in a letter to DoT, that his recommendations should be read in their totality.He had accused the government of cherry picking portions of TRAIsrecommendations rather than following them as a whole. All these developmentswere reported in TOI.The previous DoT secretary, D S Mathur, was asked to sign the new licences in2007, but refused to do so till he retired in December 2007. Once he was replaced,120 licences were subsequently awarded in January 2008.When criticised by the media and the opposition, Raja said his predecessors,Dayanadhi Maran and Arun Shourie, had followed the same FCFS policy. The bigdifference, however, was that there was no queue for spectrum during Shourie andMarans tenure. At the time that Raja chose to give away spectrum to a select 120companies, there were already 575 applications waiting and more could havefollowed. 69
  • 70. Raja was also accused of abruptly announcing a cutoff date and favoring only thosecompanies that had come in on or before September 25, 2007, even though thegovernment had officially asked for applications till October 1, 2007.The manner in which spectrum was allocated to companies within the FCFS normalso came under attack as there was no clarity whether winners were being selectedbased on date of application or date of licence fee payment.Nov 16, 2009: CBI seeks details of tapped conversation of corporate lobbyist Niira Radia tofind out involvement of middlemen in the grant of spectrum to telecom companiesAug 18, 2010: HC refuses to direct the Prime Minister to decide on a complaint by JanataParty chief Swamy seeking sanction to prosecute Raja for his involvement in 2G scamThe Delhi High Court on August 28th, 2010 refused to direct the Prime Minister totake a decision on a complaint seeking his sanction to prosecute Telecom Minister ARaja for his alleged involvement in the 2G spectrum allocation scam.The court dismissed the plea of Janata Party chief Subramanian Swamy seeking itsdirection to the Prime Minister to decide on granting sanction against his Cabinetcolleague Raja on a complaint pending before the PMO for the last two years.The court passed the order after the Centre contended that it was premature to takea decision on granting sanction against Raja in view of the ongoing investigation byCBI in the 2G spectrum allocation scam."In our considered opinion when the matter is being investigated by the CBI and it isin progress, it is not in fitness of things to pass any order," a bench headed by ChiefJustice DipakMisra said. It also added "We are not inclined to interfere in the matter".Sept 13, 2010: SC asks government, Raja to reply within 10 days to three petitions filed byCPIL and others alleging there was aRs 70,000 crore scam in the grant of telecom licencesin 2008A Bench comprising Justices G S Singhvi and A K Ganguly asked the Centre, Raja,CBI, Enforcement Directorate and the Income Tax Department to file their replieswithin 10 days. Advocate PrashantBhushan appearing for Centre for Public InterestLitigation, a registered civil society body, alleged that the Union government was 70
  • 71. trying to put a lid on the CBI investigation being carried out on the direction of theCentral Vigilance Commission. The other petitioners in the case are TelecomWatchdog, an NGO, and ParanjoyGuhaThakurtha, a journalist. Bhushan said thepetitioners had filed a plea seeking a thorough court-monitored investigation eitherby a Special Investigation Team (SIT) or by a special team of the CBI into the 2Gspectrum allocation scam that has caused the national exchequer an estimated Rs70,000 crore and led to huge national outrage. ―Simply in terms of the scale ofmoney that has been swindled, it is easily the biggest scam that this country hasever seen,‖ the petition said.―A sitting Union Cabinet minister has been found to bedirectly involved and tapes of his conversations with corporate middlemen areavailable,‖ said the petition.The judges wanted to know how the CBI was unaware against whom theinvestigations were on, despite continuing the process for several months and filingan FIR against unknown telecom ministry officials.The bench observed: ―Why theCBI is so uncertain about the charges and the involvement of the Department ofTelecom officials?‖Sept 24, 2010: Swamy moves SC seeking direction to the PM to sanction prosecution ofRaja.Former Union minister and Janata Party chief Subramanian Swamy on 24 thSeptember, 2010 moved the Supreme Court seeking a direction to Prime MinisterManmohan Singh to sanction the initiation of criminial proceedings againstcommunications minister A Raja in the alleged Rs 70,000-crore 2G spectrum scam.He alleged that the PM has failed to grant sanction even after enoughunimpeachable evidence was given to initiate prosecution and it is obligatory on hispart to grant the same.―Corruption is an urgent public issue. The Prime Minister must decide, exercising hisdiscretion here not as Prime Minister on the aid and advice of the council ofministers; but on his own,‖ the petition stated.The Prime Minister is a deciding authority to accord requisite sanction to prosecuteany member of the Union council of ministers under Section 19(1)(c ) of thePrevention of Corruption Act 1988 read with Article 75(1) of the Constitution of India. 71
  • 72. According to Janta party president, when an application for such sanction toprosecute for corruption is presented to the Prime Minister, it is the duty of thedeciding authority to apply his mind within a reasonable time either to accord thesanction or to reject the application.The government and the CBI have not even after 11 months of probe initiated anyproceedings against Raja despite being well acquainted with the facts and the suchprobe ―cannot stand in the way of a concerned citizen who desires to take on theonus of so prosecuting,‖ the plea said.Challenging the Delhi High Court judgment that dismissed his plea on the groundsthat ―the investigation by the CBI is in progress and this court had earlier declined tomonitor the same,‖ Swamy also sought permission from the apex court to appear inperson.Oct 8, 2010: SC asks government to respond to CAG report about the scamThe Supreme Court on Oct 8,2010 asked the government to respond to the CAGreport pointing out largescale irregularities and favoritism allegedly by telecomminister A Raja in the Rs 70,000-crore 2G spectrum allocation scam in 2008.A Bench comprising Justices G S Singhvi and A K Ganguly asked solicitor generalGopal Subramanium to go through the draft report alleging that the ministry oftelecom ignored the advice of the law ministry and the Prime Minister and allottedthe license by favoring "ineligible" companies at the lower rate on first-cum-first basisby arbitrarily deciding the cut off date.The Bench posted the matter for October 22 without perusing the status reports filedby CBI and Enforcement Directorate into the investigations in the case. It returnedthe reports filed in sealed covers to both the agencies stating that it will considerthem during the next date of hearing. Raja was represented by senior advocate T RAndhyarujina who was asked to be supplied with the copy of the CAG report. Earlier,Subramanium said he would like to allay any apprehension that investigations wouldnot be fair. "We are bound to conduct fair investigation," he added. 72
  • 73. However, he said it would be premature to say anything at this stage about the finalconclusion of the investigations in which more than one government agencies areinvolved.The solicitor general said FIR relating to the scam was registered against unnamedpersons a year ago and the matter has undergone judicial scrutiny in the Delhi HighCourt and the apex court.He said transcript of the tape involving telephonic conversation between severalpersons, including corporate lobbyist Nira Radia and some journalists, have to beexamined as it has a bearing on the allocation of 2G spectrum.However, advocate Prashant Bhushan, appearing for the NGO which has allegedfinancial irregularities by Raja in connivance with certain middlemen includingNiiraRadia, alleged the probe by CBI was not fair as even after the registration of FIRa year ago, none of the persons has been interrogated or arrested.He said neither Raja nor Radia has been interrogated or arrested till now despite thetapped conversation clearly throwing sufficient light on their alleged involvement inthe scam.Oct 21, 2010: Draft reports of CAG placed before the Supreme CourtDraft reports of the CAG, which pointed out that the scam on 2G spectrum allocationcaused a loss of Rs 1.4 lakh crore to the exchequer, were placed before theSupreme Court on Oct 21, 2010. The two draft reports were placed by an NGO,Centre for Public Interest Litigation, which had alleged irregularities in allocation ofspectrum. Parts of the reports were placed on October 8 by the NGO before theapex court which had asked the Department of Telecom to respond to charges oflarge-scale irregularities and favoritism allegedly on telecom minister A Raja.In the petition, it was alleged that there was corruption of Rs 70,000 crore. The reporthad made adverse remarks on the allotment of radio frequencies to Loop Telecomand Unitech Wiresless. In its application, the NGO has placed on record two recentCAG draft reports and claimed that the ineligible firms - Loop Telecom and UnitechWireless, a group firm of real estate major Unitech - were allotted 2G spectrum. 73
  • 74. The NGO has further contended that the illegal allotment of spectrum has cost thenational exchequer Rs 1.4 lakh crores as per proper audit calculations by CAG.According to the report, "DoT chose not to abide by its own guidelines and issued122 licenses without detailed verification of the documents submitted by theapplicants." The NGO further claimed that CAG auditors had on September 20, 2010wrote to DoT on the issue of license and spectrum to ineligible Loop Telecom."The submission of the applications for UAS License for 21 service areas by LoopTelecom Limited to DOT on 3rd September 2007 with altered MOA without fulldisclosure of the factual position was deliberate misrepresentation of the facts andwas done with fraudulent and malafide intentions of obtaining UAS license fromDOT, though they were not eligible to apply for the UAS licenses for this circle onthat date.Oct 29, 2010: SC pulls up CBI for its tardy progress in the investigations into the scamThe apex court adjourned the matter to November 15, as Solicitor General GopalSubramanium was not present at the hearing due to ill health. The Supreme Court ishearing a petition filed by NGO Centre for Public Interest Litigation, TelecomWatchdog and journalist Paranjoy Guha Thakurtha, challenging Delhi High Court‘sdismissal of their plea seeking a court-monitored probe into the scam by the premierinvestigating agency. The latest observations by the apex court has been taken noteof by some Congress leaders, who want Raja, a senior leader of UPA‘s ally DMK, tostep down till the probe is over.Nov 10, 2010: CAG submits report on 2G spectrum to government stating loss of Rs 1.76lakh crore to exchequerThe Comptroller and Auditor General of India on Nov 10, 2010 said it has submittedto the government the report on the 2G spectrum allotment that is presumed to havecaused a Sources in the know say that the CAG has accused the telecom ministryfor undervaluing 2G spectrum, sold to new players in 2008, and held that theallotment price was not realistic, which has caused a revenue loss of up to Rs 1,76,700 crore to the government. 74
  • 75. The report is also believed to have castigated telecom minister A Raja for ignoringthe advice of finance and law ministries on allocation of 2G spectrum to benefit a fewoperators. It is also believed to have criticized telecom regulator TRAI for standing asa helpless spectator when its recommendations were being ignored or misused.However, no confirmation on CAGs reported comments could be obtained.The report is believed to have said that the telecom ministry took arbitrary decisionswhile allotting 2G spectrum, bundled with licenses in January 2008.Sources said a copy of the report has been sent to the finance ministry and to thePresident. The process usually takes 10-15 days to finalise and then it would betabled in Parliament. The month-long winter session of Parliament began onNovember 9.Nine firms were issued licences, bundled with start up of 2G spectrum, in January2008 at Rs 1,658 crore for pan-India operations. The CAG report said the price atwhich the spectrum was alloted in 2008 was based on 2001 prices, which was quitelow and has resulted in a loss to the government exchequer.The report also said that Raja ignored the advice of the law ministry and PrimeMinister and advanced the cut-off date for giving the Letter of Intent (LoI). Thetelecom ministry had, however, hit at the CAG saying the policy decisions cannot be"assailed" as arbitrary and debunked CAGs assertion that 2G spectrum wasallocated in an arbitrary manner.CAG has reportedly put the revenue loss to exchequer at up to Rs 1.40 lakh crore, inaddition to another Rs 36,700 crore on allocation of spectrum beyond contractuallimit to existing nine operators.Nov 11, 2010: DoT files affidavit in SC saying CAG did not have the authority to questionthe policy decision as per which licence were issued to new players in 2008The telecom ministry told the Supreme Court on Nov 11, 2010 that the governmentauditor CAG did not have the authority to question the policy decision as per whichlicence were issued to new players in 2008. The assertion came within a day ofComptroller and Auditor General Vinod Rai stating that CAG has submitted its reporton 2G spectrum, which was believed to have indicted the telecom ministry forfavoritism and caused a loss of Rs 1.76 lakh crore to the exchequer. 75
  • 76. The counter affidavit filed in the apex court on Nov 11, 2010 said that all decisionswith regard to 2G spectrum allocation in 2008 were taken as per government policythat was being followed by all his predecessors since 1999.The ministry said that the CAG had similar harsh observations even in 1999 whenthe operators were migrated from fixed licence fee to revenue sharing regime. Andthe licences along with start-up 2G spectrum were also allocated in 2008 accordingto the same policy, ministry officials said. The CAG has submitted its latest report tothe government saying non-auction of 2G spectrum in 2008 may have cost theexchequer up to Rs 1.40 lakh crore besides over Rs 36,000 crore on account ofadditional spectrum to existing players beyond 6.2 Mhz. The officials pointed out thatthe additional 2G spectrum beyond 6.2 Mhz was given to the existing players by ARajas predecessors free of cost.Nov 14, 2010: A Raja resigns as Telecom MinisterYielding to relentless pressure, controversial A Raja resigned as Telecom Ministerafter being ordered to do so by his party, DMK, in the wake of allegations that hecaused a loss of Rs.1.76 lakh crore to the exchequer while allocating 2G Spectrumtwo years ago.Raja, the 57-year-old lawyer-politician, who got the coveted portfolio after the exit ofDayanidhiMaran in 2007 and retained it after the May, 2009 elections, drove toPrime Ministers residence late at night on Nov 14, 2010 to hand in his resignationafter steadfastly refusing to do so for the past few days even as the oppositionparalysed Parliament demanding his ouster. The resignation was submitted after hereturned to Delhi from Chennai where he met the party chief and state Chief MinisterM Karunanidhi twice that day.The top Congress leadership met in Delhi and discussed the issue anticipatinguproar in Parliament by the opposition which has been demanding his removal.Prime Minister Manmohan Singh, party president Sonia Gandhi and senior leadersPranab Mukherjee and Ahmad Patel, political secretary to the Congress chief,attended the meeting amid growing view in the party that Rajas continuance in officehas become untenable and that he must go. 76
  • 77. There were unconfirmed reports that senior leader Pranab Mukherjee had spoken toKarunanidhi conveying to him that Rajas resignation would be a better option toavoid any further deadlock in Parliament.The resignation came ahead of the next day‘s Supreme Court hearing of twopetitions alleging involvement of Raja in the spectrum scam.Also, the opposition parties had made it clear that they would not allow Parliament tofunction if Raja does not step down. The opposition had been demanding removal ofRaja after the government auditor CAG is believed to have indicted the minister fornot distributing 2G Spectrum in a transparent manner resulting in a revenue loss ofover Rs.1.76 lakh crore.Nov 15, 2010: Kapil Sibal given additional charge of Telecom MinistryMinister Kapil Sibal was given the additional charge of the telecom ministry by PrimeMinister Manmohan Singh on Nov 15, 2010 which took the portfolio away from DMKfor the time being. Official sources said Sibal will hold the charge of the Ministry heldby A Raja, who resigned on Nov 14, 2010 facing allegations of scam in 2G spectrumallocation.The arrangement was seen to be temporary in view of the ongoing Parliamentsession when issues related to the ministry were to be handled at the senior level,particularly at a time when the ministry was facing allegations of corruption of hugemagnitude. By tradition, a reshuffle of the Council of Ministers is not undertakenduring a Parliament session.Sibal, a renowned lawyer-turned-politician was a week earlier given the additionalcharge of Ministries of Science and Technology and Earth Sciences, which fellvacant after incumbent Prithviraj Chavan was made Chief Minister of Maharashtra.In another decision, V Narayansamy, Minister of State for Parliamentary Affairs, wasgiven additional charge of Department of Personnel and Training (DoPT), which alsofell vacant after Chavans departure. 77
  • 78. Nov 20, 2010: Affidavit on behalf of PM filed in Supreme Court. Rejects charge of inactionon Swamy’s complaint.An affadavit on behalf of Prime Minister Manmohan Singh was filed with the SC onNov 20, 2010, which rejected the charge of inaction on the part of his office indealing with the request of sanction for prosecution of former Telecom Minister A.Raja in the 2G spectrum issue.In an 11 page affadavit, filed through Director, PMO, V Vidyawati, it was stated thatthere was no inaction on the Prt of the PMO on the complaint filed by Janata PartyPresident SubramaniumSwamy seeking the sanction for prosection of Raja.The affadavit has given in detail how various letters written by Swamy since Nov 29,2008 to Oct 5, 2010 have been dealt with by the PM‘s office and advice soughtd=from the Law Ministry.The Director, who filed the affadavit on behalf of the PM, said she prepared a noteon Feb 9, 2010 stating that ―according to the advice received from the Dept of Legalaffairs, the decision of granting sanction may be determined only after the perusal ofthe evidence (oral or documentary) collected by the investigating agency, i.e. CBIand other materials to be provided by the competent authorities.On this note, the Joint Secretary suggested that Ministry of Law and Justice could berequested to send an appropriate response to the petitioner Swamy. This wasapproved by the PM on Feb 13, 2010.The view of the Joint Secretary was endorsed by the Ministry of Law and Justice, theaffidavit said adding that the Law Ministry on February 22, 2010 stated that since itwas only an advisory body to tender a legal advice they were not administrativelyconcerned with the accord of sanction. The affidavit said that based on SwamysMarch 8, 2010 letter, a request was made to the Secretary DoPT and theDepartment of Telecommunication to immediately give the status of thecommunication from the Chief Vigilance Commissioner and registration of the caseby the CBI. The note on the response of DoT and DoPT was duly considered andapproved by the Principal Secretary to the Prime Minister, the affidavit said addingthat PMO asked the DoPT to send an appropriate reply to Swamy which was doneon March 19, 2010. Subsequently in April 2010, the Department of Legal Affairs 78
  • 79. informed that Swamy has filed a petition in the Delhi High Court and written letter toDoPT with a copy to Prime Minister on March 20, 2010, and later on May 20, June9, August 30 and October 5 wrote letters addressed to Singh which were sent toMinistry of Law and Justice.The affidavit said that on February 8, 2010 the PMO received advice from LawMinistry, duly approved by the Minister of Law on January 26, 2010 in which it wasstated that "decision to accord sanction of prosecution may be determined only afterthe perusal of the evidence (oral or documentary) collected by the investigatingagency i.e. CBI and other materials to be provided by the competent authorities".It said that the Private Secretary to the Prime Minister had raised a query regardingthe exact point on which the opinion of the Law Ministry was proposed to be soughtafter a complaint similar to Swamy was forwarded to the PMO from the PresidentSecretariat on April 30, 2009. The affidavit said that in response to PMOs May 29,2009 letter, the Department of Legal Affairs stated on June 8, 2009 stated that theyhad called for "input/views from the Ministry of Telecommunication enable them toexamine the matter in the right perspective."It said since the reply from the Department of Legal Affairs was awaited, it wasproposed that "issues raised by Swamy be examined on the sectoral side" whichwas considered at "various levels and approved."Nov 22, 2010: CBI tells SC it will file charge sheet in the case within three monthsThe The Central Bureau of Investigation (CBI) on Nov 22, 2010 told the SupremeCourt that it will complete investigation and file within three months a charge sheet inthe 2G spectrum allocation case.The apex court was informed by CBI counsel and senior advocate K. K. Venugopalthat the agency will take two months to complete the investigation and in anotherone month, it will arrive at a conclusion and file the charge sheet. Dravida MunnettraKazhagam (DMK) leader A. Raja had resigned as telecom minister earlier that monthin the wake of the spectrum scam. 79
  • 80. ―We are investigating the offences and for each charge there has to be evidence anddocuments. The CAG report is about financial impropriety and not a criminal act,‖Venugopal told a bench of justice G. S. Singhvi and A. K. Ganguly, adding that onlyafter the probe it could be said whether ―we have done our work properly or not.‖He said that the CBI will take two months time to finish the investigation as it wasexamining transcripts relating to 5,000 calls (out of which 3,800 have beenanalyzed), 6,000 files and 80,000 pages of documents.All these are being scrutinized, the senior advocate, who was representing the CBIfrom that, said. He further said since the matter was being examined by the CBI, theapex court should not go into the merits of the case. Venugopal said that the NGO,Central for Public Interest Litigation (CPIL), the main petitioner in the case, hassought monitoring of the investigation by the apex court.Venugopal said he would like to place two positions in law about the monitoring ofthe investigation by the court and this he would do by placing 15 or 16 judgementsbefore it. Meanwhile, advocate Prashant Bhushan, appearing for CPIL, maintainedthat the court can go into the nature of the investigation as 13 months has lapsedsince the registration of the FIR.Further, on 9 May, 2009, one Arun Agarwal had filed a complaint regarding SwanTechnology owned by Reliance Infocomm, the shares of which was transferred tounknown entity, he said.Bhushan said it has to be found out what happened after the registration of the caseby the CBI as the agency has written a letter to the Income Tax Department followingwhich the transcript of the alleged conversation between various persons includingcorporate lobbyist Nira Radia and others including Raja‘s private secretary R. K.Chandolia surfaced. Materials are enough to charge Raja and others with criminalmisconduct and abuse of official position which has been established by the CAGreport, Bhushan said. 80
  • 81. Nov 22, 2010: CBI tells SC role of corporate lobbyist Nira Radia would be questioned by it.The Enforcement Directorate on Nov 22, 2010 questioned corporate lobbyist NiraRadia for about seven hours regarding financial transactions and shareholdingpatterns of her firms as part of its probe into the 2G spectrum allotment scam.ED Sources said Radia gave a statement in writing running into 20 pages underSection 50 of the Prevention of Money Laundering Act (PMLA), which gives theDirectorate the power to summon a person for examination and submission ofdocuments.Sources said that besides the shareholding patterns in her firms, the ED officials alsoqueried Radia about the details of her bank accounts and income tax returns. Thequestions were based on the information collected by the ED during its probe andalso from documents running into 1,000 pages that Radia had earlier submitted tothe agency.Emerging from the Directorates office after questioning, Radia, who is at the centreof a controversy over certain taped conversations in connection with the spectrumallocation, told reporters that she was cooperating with the authorities. Officialsources said the questioning of Radia, who reached the ED office at about 9:30 inthe morning, began at 10:30. The questioning ended around 5:30 pm.The agency had also said it will take two months‘ time to complete the investigationas it was examining transcripts relating to 5,000 calls (out of which 3,800 have beenanalyzed), 6,000 files and 80,000 pages of documents.Later in a statement, a spokesperson for Vaishnavi Corporate Communications andNiiraRadia said, "There have been a lot of speculation about my whereabouts andrumours of my being outside India all this while. I wish to inform that I have beenvery much in India all this while."The statement said: "It is unfortunate that certain sections of the media have decidedto overlook the real issues and instead focused on spreading stories of 81
  • 82. misinformation and malice on myself, Vaishnavi Group and, in effect, on our reputedclient in the telecom sector."Nov 24, 2010: SC reserves verdict on Swamy’s plea seeking direction to PM for grant ofsanction to prosecute Raja.The Supreme Court on Nov 24, 2010 reserved its verdict on a plea seeking adirection to Prime Minister Manmohan Singh for grant of sanction to prosecuteformer telecom minister A Raja in the 2G spectrum case.A bench of Justices G S Singhvi and A K Ganguly reserved the verdict afterconcluding the hearing on the petition filed by Janata Party President SubramanianSwmy.The bench asked the Attorney General G E Vahanvati to place before it the numberof matters relating to sanction pending before the competent authority in variousgovernment departments in one week.Nov 25, 2010: SC ticks off CBI for not questioning Raja.The Supreme Court on Nov 25, 2010 came down heavily on the CBI for failing toquestion former telecom minster A Raja and telecom secretary in the 2G Spectrumscandal, saying it was "beating around the bush".A bench of justices G S Singhvi and A K Ganguly wondered why the premierinvestigating agency failed to question the duo despite the CVC and CAG reportsharply indicting them for their involvement.Nov 29, 2010: CBI files status report on 2G spectrum scam probeThe CBI on Nov 29, 2010 submitted to the Supreme Court the status report on itsongoing investigations into the 2G spectrum allocation scam allegedly involvingformer telecom minister A. Raja.The status report was submitted to the apex court registry in a sealed cover. Theapex court, earlier on November 25, had castigated the CBI on why it had notquestioned Mr Raja and the telecom secretary in the case, saying the agency was"beating around the bush" when "illegality is prima facie evident." 82
  • 83. A bench of justices G.S. Singhvi and A.K. Ganguly during the hearing had lambastedCBI for failing to examine the former minister and the telecom secretary, saying thatit was the "minimum expected" of it as the criticism had come from CAG, aConstitutional authority.CBI had offered to place a status report on Nov 30, 2010 before the court which alsotook on record the CAG report placed by Centre for Public Interest Litigation (CPIL)counsel Prashant Bhushan."The CAG reports deserved highest respect. We are on the limited point. CAG underConstitution has a very important position. It is an authority set up under theConstitution. If such an authority set up under the constitution gives such a report,any reasonable person will question the Minister and the Secretary," it had said.The CAG had estimated a "presumptive loss" of around Rs. 1.76 lakh crore to thepublic exchequer due to allocation of spectrum to various allegedly ineligible telecomoperators at throwaway prices.Nov 30, 2010: SC questions CVC P J Thomas’s moral right to supervise CBI’s probe into 2Gspectrum scam as he himself was Telecom Secretary at that point of timeThe Supreme Court on Nov 30, 2010 questioned Chief Vigilance Commissioner P JThomass moral right to supervise CBIs probe into the 2G spectrum scam as hehimself was telecom secretary at the relevant point of time.The bench, which termed as "mind-boggling" the countrys growing corruption, alsosought the Centres response to preserving tapes relating to corporate lobbyist NiraRadias recorded conversations after an apprehension was raised that it could bedestroyed as it exposed the nexus between politicians, bureaucrats and journalists.Advocate Prashant Bhushan, appearing for the NGO, Centre for Public InterestLitigation (CPIL) which has submitted the recorded conversations before the court,said the CBI should be directed to place in a sealed cover the original copies oftapes and questioned the opposition against their disclosure by a noted industrialist -- an obvious reference to Ratan Tata who had moved the apex court raising certainobjections over the leaks. 83
  • 84. There was also a sudden shift in the stand of government, which contrary to itsearlier strong objection agreed to the apex court monitoring the investigation. Thischange in stand comes in the backdrop of the growing clamour for a JPC probe anissue which had paralaysed Parliament for the past 13 days.Though Solicitor General Gopal Subramanium tried his best to convince the courtthat there was no violation of rules and the government had only displayeddynamism, the bench minced no words in expressing displeasure at the manner inwhich the spectrum was allotted.While Bhushan was reading purported extracts from the Radias conversations withRatan Tata, MPs, former bureaucrats and journalists, the bench observed, "Not onlywe are talking about pollution of the Ganga for the past 28-30 years. This pollution ismind-boggling. We do not live in a world of illusion. If there is peace, the real world isin the villages and forests.Subramanium, who was arguing for the Department of Telecom, also assured thecourt that he would respond to the courts query on the issue of CVC after seekingnecessary instruction from the government.However, senior counsel K K Venugopal appearing for the CBI, citing the CentralVigilance Act, submitted that there was a provision for allowing one of the vigilancecommissioners to take over the functions of the CVC. This is when a contingencyarises wherein it becomes difficult for the incumbent (CVC) to function for somereason or other.Bhushan submitted that he had no objection to such a proposal as VigilanceCommissioner R Shreekumar, a former DGP from Karnataka, "enjoys a goodreputation". But he insisted that apart from the vigilance commissioner monitoring thecase, the court should appoint another officer with impeccable integrity to ensure afair supervision of the investigation.At this point Bhushan once again raised the issue of Radias corporatecommunication company and said she had employed a former TRAI Chairman 84
  • 85. Pradeep Baijal, who was lobbying in the government department on behalf of her PRfirm as its CEO.However, the bench later took the name of the former TRAI Chairman and said "byjoining the firm, Baijal has given an illustrious example". Subramanium interruptedthe Bench and said Baijal was a Secretary level IAS officer in the Government and itis not known "under what circumstances he joined the PR firm of Radia".Dec 1, 2010: SC directs original tapes containing conversation between corporate lobbyistNira Radia and others be handed over to itThe Supreme Court on Dec 1, 2010 directed that the original tapes containing theconversation between corporate lobbyist Nira Radia and others pertaining to the 2Gspectrum allocation case be handed over to it in a sealed cover.The direction came from a bench comprising justices G S Singhvi and A K Gangulyafter government submitted that it has no objection in handing over the complete setof tapes in the wake of apprehensions that the tapes may be destroyed.Solicitor General Gopal Subramanium said that he has got instructions that therewas no objection in handing over the tapes and the court can give direction forpreserving them in whatever way it thinks best.The apex court had on Nov 30, 2010 asked the government to respond to the pleafor preserving the tapes containing conversation between Radia and others relatingto the 2G spectrum scam.The bench had asked the Solicitor General to take instructions from the authoritieson the plea made by NGO Centre for Public Interest Litigation (CPIL).Advocate Prashant Bhushan, who had appeared for the NGO, had made the pleathat the tapes prepared by the Director General of Income Tax containingconversation of Radia and others should be preserved while voicing apprehensionsthat the tapes may be tampered with.Dec 1, 2010: Raja questions CAG findings in the SC.Former telecom minister A Raja on Dec 1, 2010 questioned in the Supreme Courtthe comptroller and auditor general (CAG) finding that the exchequer had suffered a 85
  • 86. loss of Rs1.76 lakh crore in the allocation of second generation mobile telephonyspectrum, terming the figure as "mindboggling and speculative".Andhyarujina said the principle which has been applied by the CAG in its auditing isnot accepted as standard method of evaluation. The senior advocate furthermaintained that before Raja became minister his predecessors Dayanadhi Maranand Arun Shourie had already granted 52 licences.Andhyarujina said that whatever has been done by the telecom department was onthe basis of the TRAI recommendations which the CAG cannot override. Further, theinitial part of the CAG report gives out a wrong impression and it cannot beaccepted, he said.He also said though everything was done on the basis of TRAI recommendation, theCAG report conveys the impression Raja was responsible for the scam. The senioradvocate said Raja resigned on November 14 in view of the constitutionalresponsibility and political compulsions and with the wishes of his party, DMK.Pointing out that Parliament is not functioning for last 16 days because of the alleged2G spectrum allocation scam, Andhyrujina said, "It has never happened in theparliamentary history of the country that there is such a standstill."Dec 2, 2010: Government places recorded tapes in the SC.The government on Dec 2, 2010 placed before the Supreme Court in sealed coverrecorded tapes containing the conversations between corporate lobbyist Nira Radiaand others relating to the 2G spectrum allocation case.While placing the recorded conversation before the bench comprising justices G SSinghvi and A K Ganguly, Solicitor General Gopal Subramanium said that it is a harddisc drive directly downloaded from the server which contains the conversations.However, advocate Prashant Bhushan appearing for the NGO Centre for PublicInterest Litigation (CPIL) said though CBI maintains that there were 5,800conversations, it has prepared the transcript of only 3,000 such conversations. 86
  • 87. The Supreme Court had on Dec 1, 2010 directed that the original tapes containingthe conversation between Radia and others pertaining to the 2G spectrum allocationcase be handed over to it in a sealed cover.The direction from the bench had come after the government had submitted that ithas no objection in handing over the complete set of tapes in the wake ofapprehensions that the tapes may be destroyed.Subramanium had said that he has got instructions that there was no objection inhanding over the tapes and the court can give direction for preserving them inwhatever way it thinks best.Dec 2, 2010: SC comes down heavily on Raja for bypassing and overruling PM’s advice todefer allocation of 2G spectrum by a few days.The Supreme Court on Dec 2, 2010 came down heavily on former telecom ministerA Raja for "bypassing" and even "overruling" Prime Minister Manmohan Singhsadvice to defer the allocation of 2G spectrum by a few days. The apex court alsotook strong exception to the tone and tenor of Rajas letter to the Prime Minister,saying it amounted to showing "disrespect" to the highest authority in the country.The Bench of justices GS Singhvi and AK Ganguly said Raja had not paid heed tothe Prime Ministers letter asking him to wait for some days before taking any actionon the allocation of spectrum. Resuming hearing on the petition by NGO, Centre forPublic Interest Litigation (CPIL, on the spectrum scam, the court raised questions onRaja ignoring the Law ministrys advice seeking opinion of the AG as "out of context".The court made the remarks after noting that the Law Minister has given an opinionthat the matter be referred to the Empowered Group of Ministers (EGOM) forseeking the opinion of the law officers like the Attorney General and SolicitorGeneral.Andhyarujina, who faced a volley of questions, tried to impress upon the Bench thatRaja showed no disrespect to the Prime Minister, who, he said, was entitled to knoweverything about the allocation of spectrum. The apex court said Raja should have 87
  • 88. written back to the Law minister when the latter had expressed certain reservationsand there was no reason why he should have written a letter to the Prime Minister.Dec 8, 2010: SC asks Centre to consider setting up of a special court to try 2G spectrumscam caseA Bench of Justices G S Singhvi and A K Ganguly said, in view of the magnitude ofthe offence, the government should examine the idea of setting up special courts asotherwise the objective of the Prevention of Corruption Act and Foreign ExchangeManagement Act could not be achieved. The court was hearing arguments on apetition seeking a court-monitored probe by the Central Bureau of Investigation (CBI)or a Special Investigating Team (SIT) probe into the Rs 1.76 lakh crore scam.Verdict reserved The court reserved its order on the case. The apex court indicatedthat it might monitor the probe and the CBI would be asked to file periodic statusreports. The Bench also asked the CBI to probe the role of State Bank of India,Corporation Bank, Canara Bank, Allahabad Bank and others, which lent thousandsof crores of rupees to some telecom service providers in the form of bank draftsbefore the letter of intent for allocation of spectrum was issued to them by theDepartment of Telecommunication in January 2008. Senior advocate KKVenugopal, who appeared for the CBI, sought time till January 30,2011 to submit areport as he has to go through the bank data and the time of issuance of drafts.On the amount of money involved in the 2G scam, the bench observed that thereused to be scam of few crores of rupees in 1990s, but now ―all barriers of ourunderstanding of finances has been crossed as lakhs of crores of rupees areinvolved in them.‘‘ The bench also sought a reply from Solicitor General GopalSubramanium on setting up a special court to try offences of huge financialmagnitude. However, Venugopal opposed setting up an SIT to monitor the CBIprobe, saying the investigating agency is an independent body capable of probingthe scam.Dec 14, 2010: Another PIL in SC seeking cancellation of new telecom licences and 2Gspectrum allocated during Raja’s tenure. 88
  • 89. The Supreme Court on Dec 14, 2010 issued notice to the central government on theplea seeking cancellation of 2G spectrum licenses allocated during the tenure offormer telecom minister A Raja.The Apex Court also issued notices to 11 companies which allegedly did not fulfil theroll-out obligations as per the terms and conditions of allocation of the spectrum."After considering submission of the petitioners counsel that since Trai has sent aletter dated November 15, 2010 to secretary, DoT, which indicated that manycompanies have not complied with the roll out obligation and not started theservices, we deem it fit to entertain the petition," the bench said.The bench was hearing a petition filed by an NGO Centre for Public InterestLitigation seeking cancellation of the licenses alleging that all norms were violated.The companies which were issued notices were Etisalat, Uninor, Loop Telecom,Videocon, S-Tel, Allianz Infra, Idea Cellular, Tata Teleservices, SistemaShyamTeleservices, Dishnet wireless and Vodafone-Essar.The bench was also hearing the petition filed by Janata Party Chief SubramanianSwamy who has also sought identical directions.However, the bench asked Swamy to make the companies, who have not fulfilled theroll out obligations, as parties, and then it will hear the matter along with the CPILpetition.Advocate Prashant Bhushan, appearing for the CPIL, elaborated the grounds for thecancellation of the 2G licenses.The bench also questioned the silence of Trai, which is the highest regulatoryauthority in the telecom sector, on the issue of alleged delay in fulfilling roll-outobligations of the companies which were issued 2G spectrum licenses.When contradictions in the actual loss to the national exchequer was mentioned, thebench said it will be for the government to spell out the actual loss suffered by thenational exchequer in the allocation of the spectrum which was done by allegedlyflouting several norms.However, when Bhushan said that CAG report has given the amount, the bench saidit is not the governments version. Bhushan submitted that there was a huge loss to 89
  • 90. the government as the licenses were sold to other entities next day after itsallocation at three times the original price.However, the bench said that the amount of loss has now become a debatableissue. When Bhushan made a submission that Telecom Minister KapilSibal haddisputed the CAG report on the presumptive loss of 1.76 lakh crore (Rs 1.76 trillion)saying it was not correct, the bench said, "We cannot take cognisance of that as it isnot part of the record."A bench comprising justices G S Singhvi and A K Ganguly sought the response fromthe Department of Telecom and the companies within three weeks and posted thematter for hearing on February 1.Janata Party chief Subramanian Swamy had moved the Supreme Court seekingcancellation of the 2G spectrum licences allotted during the tenure of A Rajaallegedly in violation of all norms and procedure causing huge loss to the stateexchequer.The PIL filed by Swamy had sought a direction to the government for holding a freshauction for eligible entities for all the 122 licences in 22 circles across the country.Swamy had alleged in his petition that the allotment of spectrum, which according tothe CAG report has caused a loss of Rs 1.76 lakh crore (Rs 1.76 trillion) to the stateexchequer, has been sustained despite judgments of the Delhi high court that struckdown the policy of allocating radio waves at the 2001 price on first-come-first-servedbasis in 2007-08.Sibal on Friday had rejected the estimates of the Comptroller and Auditor General onthe losses of Rs 1.76 lakh crore (Rs 1.76 trillion) on account of allocation of 2Gspectrum to telecom operators saying it "had no basis and was utterly erroneous".Asserting that there were actually no losses to the exchequer, Sibal said "CAG hasdone injustice to itself and the Opposition is doing injustice to aamaadmi."We are extremely pained at methodology adopted by CAG for arriving at 2Gspectrum (allocation loss) figures that have no basis," Sibal had said.Swamyspetiton was second after an NGO, Centre for Public Interest Litigation, filedan identical PIL on December 14, 2010, seeking cancellation of the licences for 2G 90
  • 91. spectrum after the apex court decided to monitor the probe into the scam by CBI andEnforcement Directorate.The Janata Party leader in his petition contended the Department of Telecom, thenheaded by Raja, had arbitrarily and with malafide intention to benefit certain entitiesadvanced the cut-off date for making application for allocation of 2G spectrum fromOctober 1 to September 25, 2007.Swamy submitted DoT changed the cut-off date without consulting the Trai and gavea go-bye to various norms to benefit Rajas four favoured firms--Swan, Unitech, Loopand Datacomm. There has been allegation that Swan was owned by RelianceInfocom, while real estate major Unitech later entered into a joint venture withTelenor of Norway and Loop and Datacom were owned by Ruia Group andVideocon respectively.In later November, Sibal had said that the government would send notices to 85companies asking why their licences should not be cancelled for suppressing facts.These telecom firms will be given 60 days within which to respond, he had said.The Department of Telecom will issue notices to telecom companies which wereineligible to get spectrum. Many companies applied for 2G licences may not havedisclosed all facts, Sibal had saidDec 15, 2010: Swamy files petition in a Delhi court seeking his inclusion as a publicprosecutor in 2G spectrum caseJanata Party President Subramanian Swamy on Dec 15, 2010 filed a petition in aDelhi court seeking his inclusion as a public prosecutor in the 2G spectrum case.In his petition filed before Special CBI Judge Pradeep Chaddah, Swamy pleadedthat the court should take cognisance of his plea.Swamy submitted that he may be appointed as a public prosecutor in the case andalso sought a direction from the court that the CBI should assist him in theinvestigation.After hearing Swamy, the court reserved its order for January 7, 2011 on hiscomplaint also seeking prosecution of former Telecom Minister A Raja in the case. 91
  • 92. Swamy approached the CBI court following up on the Union government‘s argumentlate last month in the Supreme Court that there was no question of granting sanctionto prosecute Raja when there was no complaint filed against him in a competentcourt.Attorney General G E Vahanvati had contended this while terming Swamy‘scommunication to Prime Minister Manmohan Singh for grant of sanction against Rajaas ―misconceived and premature‖.Dec 16, 2010: SC decides to monitor the CBI inquiryA bench of Justices A.K. Ganguly and G. Singhvi directed the CBI to probe the grantof spectrum licences since 2001, thereby bringing the previous NDA governmentunder the ambit of the inquiry. The court sent out a strong message to the CBI andthe Enforcement Directorate not to be influenced by anybody in the 2G probe. TheCBI has been asked to file a status report on the probe by February 10 next year.Jan 4, 2011: Swamy moves SC seeking cancellation of 2G spectrum licencesJanata Party chief Subramanian Swamy moved the Supreme Court seekingcancellation of the 2G spectrum licences allotted during the tenure of former telecomminister A Raja allegedly in violation of all norms and procedure causing huge loss tothe state exchequer.The PIL filed by Swamy sought a direction to the government for holding a freshauction for eligible entities for all the 122 licences in 22 circles across the country.He alleged the allotment of spectrum, which according to the CAG report has causeda loss of Rs 1.76 lakh crore to the state exchequer, has been sustained despitejudgments of the Delhi High Court that struck down the policy of allocating radiowaves at the 2001 price on first-come-first-served basis in 2007-08.Swamys petition was second after an NGO, Centre for Public Interest Litigation(CPIL), filed an identical PIL on December 14, 2010, seeking cancellation of thelicences for 2G spectrum after the apex court decided to monitor the probe into thescam by CBI and enforcement directorate. 92
  • 93. The Janata Party leader in his petition contended the department of telecom, andthen headed by Raja, had arbitrarily and with malafide intention to benefit certainentities advanced the cut-off date for making application for allocation of 2Gspectrum from October 1 to September 25, 2007.Swamy submitted DoT changed the cut-off date without consulting the TelecomRegulatory Authority of India (TRAI) and gave a go-bye to various norms to benefitRajas four favoured firms--Swan, Unitech, Loop and Datacomm.There has been allegation that Swan was owned by Reliance Infocom, while realestate major Unitech later entered into a joint venture with Telenor of Norway andLoop and Datacom were owned by Ruia Group and Videocon respectively."All of these had an early, clandestine, undue and unauthorized intimation of thenovel changed prerequisites and were therefore able to fulfill immediately, wellnighinstantaneously, the paperwork and payment of license fees," the petition alleged."This is particularly intriguing since license fee rates (set in the region of Rs 1621crores a piece), were officially intimated only on that date; yet the favored four wereable to produce demand drafts for these huge amounts literally at a momentsnotice," he alleged.Swamy claimed that in less than a year, by September-October 2008, all Rajas‘ four"cronies" (favored companies) had divested themselves of part of their licenses atenormous profit.The petition alleged that Swan sold 45% of its shares to Etisalat of the United ArabEmirates and Unitech Wireless sold 60% of its shares to Telenor while TataTeleservices sold 26% of its shares to DoCoMo of Japan.The petition said DoT had received 575 applications for grant of licenses from 46companies for all the 22 service areas which were equally entitled to issue of thedesired licenses.Swamy said if the government has maintained that spectrum is a scarce resourceand it was not possible to allocate it in respect of all pending applications then someequitable and reasonable selection criteria of allottees had to be worked out. 93
  • 94. He contended the licences already allotted needs to be cancelled as DoT not onlyignored the advice of the ministry of law and justice but also did not follow thesuggestions of the Prime Minister and went ahead with issuing 85 of the 122licenses to ineligible entities, causing a huge loss to the state exchequer, perhaps ashigh as Rs 1, 76,000 crores.Jan 5, 2011: Swamy moves SC, seeks cancellation of all 2G licencesAfter giving some anxious moments to the PMO over the alleged silence on the pleafor grant of sanction to prosecute the then telecom minister A Raja in the 2Gspectrum scam, Janata Party president Subramanian Swamy again moved theSupreme Court to seek cancellation of all mobile service licences issued duringRajas tenure.Alleging that the allocation of spectrum during Rajas tenure as telecom minister wasarbitrary, Swamy in his writ petition said that all of those should be cancelled and afresh action be held inviting bids from all the eligible applicants who applied beforethe original cut-off date of October 1, 2007. The cut-off date was mentioned asOctober 1, 2007 but was later changed to September 25, 2007, through a pressrelease issued on October 10, 2007, thus eliminating many applicants allegedly tofavor the select few.NGO Peoples Union for Civil Liberties (PUCL), on whose appeal the SC had lastmonth agreed to monitor the probe by the CBI and Enforcement Directorate into the2G spectrum scam, has already filed a PIL seeking relief identical to that requestedfor by Swamy. It was Swamy who moved the SC against the Delhi HC order on hisrequest for grant of sanction for Rajas prosecution in the spectrum scam. The SChad sought an affidavit from the PMO about its 11-month long silence on his requestdated November 29, 2009, before telling him in March 2010 that CBI was inquiringinto the matter.Jan 10, 2011: Supreme Court issues notice to Centre on the plea seeking cancellation of 2Glicenses. Also issues notices to 11 companies which allegedly did not fulfil the roll-outobligations or were ineligibleThe Supreme Court issued notices to the centre and the telecom ministry onpetitions seeking cancellation of 2G spectrum allocation during the tenure of former 94
  • 95. telecom minister A Raja. The apex court also wondered how telecom minister KapilSibal could doubt the CAG finding when on that very basis the CVC had asked theCBI to register a case in the 2G scam.The court also made TRAI a party after taking exception to its silence on violation oflicence agreements by those who got spectrum and recommending cancellation oflicence only after A Rajas exit and SC taking up hearing of petitions. The courtasked the companies to respond by February 1.A Bench of Justices G.S. Singhvi and A.K. Ganguly also issued notice to the 11companies. The telecom companies to whom court issued notice are Etistat,Vodafone, Uninor, Loop Telecom, Videocon, S Tel, Allainz Infra, Idea Cellular, TataTele services, Sistema Shyam Teleservices and Dishnet Wireless..The apex court is hearing two petitions seeking cancellation of all the licenses of 2Gspectrum issued by former communications minister A Raja. Janata Party presidentSubramaniam Swamy and advocate Prashant Bhushan have moved court to cancelall the 122 licenses. The court had upheld the plea of Swamy. Kapil Sibal hadquestioned the figure of Rs 1.76 lakh crore arrived at by the CAG in calculating thelosses in 2G spectrum allocation. The CAG report had made a severe indictment ofA Raja for flouting rules in the allocation of 2G spectrum.The bench also questioned the silence of TRAI, which is the highest regulatoryauthority in the telecom sector, on the issue of alleged delay in fulfilling roll-outobligations of the companies which were issued 2G spectrum licenses.When contradictions in the actual loss to the national exchequer was mentioned, thebench said it will be for the government to spell out the actual loss suffered by thenational exchequer in the allocation of the spectrum which was done by allegedlyflouting several norms.Bhushan submitted that there was a huge loss to the government as the licenseswere sold to other entities next day after its allocation at three times the originalprice. However, the bench said that the amount of loss has now become a debatableissue. 95
  • 96. Jan 30, 2011: Government’s decision to regularise licences of the companieswhich failed to meet the deadline for roll-out obligation challenged in theSupreme CourtFeb 2, 2011: Raja, former Telecom Secretary Siddartha Behura and Raja’sformer Personal Secretary R K Chandolia arrested and next day they wereremanded in CBI custodyFeb 8, 2011: Raja remanded to two more days of CBI custody. Behura and Chandolia sentto judicial custodyA. Raja was remanded to two more days of CBI custody by a court for furtherinterrogation after the agency submitted that he was not divulging any ―usefulinformation‖ regarding his role in the 2G scam.Special judge O P Saini, however, sent former telecom secretary Siddartha Behuraand Raja‘s former personal secretary R K Chandolia to Tihar Jail under judicialcustody as the federal agency said it no longer needs them in its custody. Raja wasin CBI custody till 10 February.The trio, arrested by the agency on 2 February for their alleged role in the 2Gspectrum allocation scam, involving a loss of Rs. 22,000 crore to the publicexchequer as per the CVC estimates, were produced before the special judgefollowing the expiry of their five-day custody with the CBI.Refuting allegations by Raja‘s counsel Ramesh Gupta that the agency had notdisclosed to the court the outcome of the probe conducted so far in this case,Akhilesh said, ―The case diary has already been submitted to the court. Each andeverything cannot be disclosed in the open courtroom.‖"Some more documents are to be recovered and accused A Raja is to be confrontedwith them," senior CBI prosecutor Akhilesh submitted. About Behura and Chandolia,the CBI counsel said the agency no longer needs their custody. "The two can besent to Tihar Jail under judicial custody," he said.Feb 8, 2011: Shahid Usman Balwa, promoter of Swan Telecom, arrested by CBI 96
  • 97. Shahid Balwa, director of Etisalat DB Telecom, being investigated for his alleged rolein the multi-crore 2G spectrum scam, was arrested in Mumbai. Balwa was brought toDelhi on transit remand, said CBI spokesperson Vinitha Thakur. Balwa has earlierbeen summoned by the CBI, but did not turn up citing a death in his family.The agency has also sent a letter rogatory (LR) to Mauritius in connection with thescam, with specific questions on Swan Telecom, which was given 2G licence. Theletter rogatory has been sent to ascertain how Swan built the corpus to acquire 2Glicence, for which it paid Rs 1,537 crore. It also seeks to know the companiesincorporated in the licence and the sister companies of the group, a source said.The agency had to file a status report in SC. Raja, his former personal secretary R KChandolia and former telecom secretary Sidhartha Behura were under custody. CBIalso questioned former Wireless Advisor (Telecom), R P Aggarwal and K Sridhar,former Telecom Commission member.Feb 10, 2011: SC asks the CBI to bring under its scanner corporate houses which werebeneficiaries of the 2G spectrum. Raja remanded to CBI custody for four more days by aspecial CBI court along with BalwaBroadening the net, the Supreme Court asked the CBI to bring under its scannercorporate houses which were beneficiaries of the 2G spectrum scam without beinginfluenced by their status be it millionaires or whether they are on the Forbes list.Giving a free hand to the investigating agency and setting the contours of the probe,the Court asked the government to set up a special court exclusively to try thespectrum scam case.Advocate Prashant Bhushan, appearing for an NGO, Centre for Public InterestLitigation, pointed out that the agencies have not questioned the heads of severalcompanies including the Swan technology, which was controlled by Anil Ambani‘sReliance Group, when the spectrum was allocated.The apex court said freedom of probe agencies should not be curtailed and theyshould go beyond the role of the four persons already arrested including A Raja andtell the names of conspirators.It questioned CBI‘s strategy of seeking short custodial remands of the accused andsaid it must have free hand to question anyone. ―There is something which is 97
  • 98. surprising. CBI must have a free hand to question anyone. Whether its freedom iscurtailed by seeking short remand....complexity is involved. It is a very complicatedmatter. We feel that investigating agency must be given free hand to seek longerremand. Otherwise the whole purpose of investigation is frustrated,‖ the Bench said.Feb 14, 2011: Raja’s CBI custody extended for three more days. Balwa’s custody extendedfor four daysFormer Telecom Minister A Raja was remanded to CBI custody for 3 more days forinterrogation on his alleged role in 2G spectrum allocation scam along with SwamTelecom-promoter Shahid Usman Balwa whose custody was extended for fourdays. Special Judge O P Saini extended Rajas custody, ignoring his allegation thatCBI was being driven by political motive instead of probing the case against him."What is the purpose of police custody? (Its not clear) whether they (CBI) want it forunearthing the conspiracy or have political motive. CBI should not make it a politicalgame and they should investigate only," Rajas counsel Ramesh Gupta contendedbefore the court, opposing CBIs plea for extension of his clients custody.However, the judge said "the crime is enormous in nature and its investigation istime-consuming. Accordingly, considering the enormity of the crime, complex andcomplicated nature of the investigation, voluminous documents involved in the case,I find that the prayer for further custodial interrogation of the accused persons isjustified.The 47-year-old DMK leader, who has been facing an intense grilling by CBI sleuthsfor the last 11 days at the agency headquarters, opposed CBIs plea saying "no newfacts have come on record during the previous police custody remand."Seeking extension of remand, senior public prosecutor Akhilesh, said both theaccused were confronted with each other during the custodial interrogation but theywere "evasive in their replies". "Both the accused have been evasive in their repliesand as such, their interrogation could not be completed. In this case, the documentsare quite voluminous and the nature of the case is quite difficult and complicated. Assuch, their interrogation could not be completed," CBI said. 98
  • 99. Opposing CBIs plea for extension of Balwas custody, his counsel Vijay Aggarwalcontended before the court that his client was merely engaged in bonafidecommercial transactions and had not violated any law. He said Balwa has been co-operating with CBI throughout the investigation.Feb 17, 2011: Raja Sent To Tihar Jail under Judicial CustodyA Raja, arrested for his alleged role in 2G Spectrum allocation scam, was sent toTihar Jail by a Delhi Court under 14-days judicial custody. The judge also directedthe Tihar Jail authorities to let the former minister have access to home-made food,besides his medicines. The court gave this direction to the jail superintendent on aplea made by Rajas counsel Ramesh Gupta.Raja was arrested on February 2 for his alleged role in 2G spectrum allocation scam,which, as per the CBI, has caused a pecuniary loss of Rs 22,000 crore to the stateexchequer.Feb 18, 2011: Balwa Sent To Judicial CustodySwan Telecom promoter Shahid Usman Balwa, arrested for his alleged involvementin the 2G spectrum scam along with former Telecom Minister A Raja, was sent toTihar Jail after a Delhi court remanded him in judicial custody. The Dynamix Balwas(DB) group managing director was produced in court following expiry of his four-dayCBI custody. The court took into account CBI counsel Akhileshs submission that heis no longer required for interrogation but he may be remanded in judicial custody asthe probe into the case is not yet complete.The court also directed Tihar authorities to consider Balwas plea to have home-made food and special orthopaedic mattress and pillows in jail as per the relevantrules after his counsel pleaded for special privilege for his client saying he sufferedfrom acute back pain.The CBI had also questioned ADAG chairman Anil Ambani at its headquarters,confronting him with Raja and Balwa, amid allegations that his group receivedfavours from Raja in getting dual technology and a role for Reliance Telecom inpromoting Swan Telecom. 99
  • 100. Ambani is believed to have clarified to the CBI "about the ongoing issues" related tothe possible role of Reliance Telecom Limited (RTL), a subsidiary of ADAG, in Swan.Feb 24, 2011: CBI Tells A Delhi Court That Balwa Facilitated Transaction ToKalaignar TVFeb 28, 2011: Raja seeks judicial proceedings through video conferencing stating that hefaces threat to life from fellow prisonersA. Raja moved an application before a court seeking conduct of court proceedingsfrom Tihar Central Jail through videoconferencing, when his judicial remand ends.Special Judge (CBI) O.P. A lawyer representing Mr. Raja said this would help savetime incurred in transporting Mr. Raja from Tihar to Patiala House on the day of thehearing.Mr. Behuras counsel, senior advocate S.S. Gandhi, sought from Mr. Saini a copy ofthe 18-page order that the judge had delivered on February 25 while disposing of thebail applications moved by Shahid Usman Balwa and R.K. Chandolia to ensure thatthe same arguments were not made before the court again. A counsel for Mr. Rajaalso requested for a copy of the order.The CBI in its reply to Mr. Behuras bail application said that Mr. Raja and Mr.Behura had ignored serious issues raised regarding further verification of eligibilityconditions of Swan Telecom and had ―dishonestly approved the file on September 1,2008 for issue of Letters of Intent (LOI) for 13 telecom service areas.‖The CBI also opposed the bail application stating that the investigation has primafacie revealed that Mr. Behura ―in conspiracy with‖ Mr. Chandolia and others madearrangements at Sanchar Bhavan for distribution of LOIs and responses of theDepartment of Telecommunications (DoT) in an ―arbitrary and unfair manner.‖ Theinvestigating agency said that the LOIs and responses of the DoT were neitherdistributed simultaneously nor on a first-come, first-served basis, but instead were―distributed in a manner designed to benefit Swan Telecom and other companies.‖The CBI added that ―in furtherance of the said conspiracy,‖ Mr. Behura played a vitalrole in allocating the spectrum in an arbitrary and unfair manner to Swan Telecom inthe Delhi Telecom circle, where availability of 2G spectrum was not adequate tocater to the requirements of all spectrum applicants. The CBI sough more time from 100
  • 101. the court to reply to Mr. Behuras application to defreeze his bank accounts to pay forthe medical expenses incurred for a surgery performed on his wife.Mar 1, 2011: CBI tells SC that 63 persons are under scanner. Raja allowed by CBI court toappear before it via video-conferencingSixty-three persons, including promoters and CEOs of 10 telecom firms have comeunder its scanner in the 2G spectrum case, the CBI told the Supreme Court whichexpressed satisfaction over the ongoing probe.The central government, which is also party to the case, informed a bench of justicesG S Singhvi and A K Ganguly that it is in favour of setting up a special court to try theaccused in the 2G case and the law minister has written a letter to the Delhi highcourt chief justice asking him to constitute a court and identify a judge for thispurpose.Senior advocate K K Venugopal, representing the CBI, apprised the bench about theprogress by the CBI and placed the probe status report in a sealed cover. "63persons including promoters and CEOs of 10 companies have come under thescanner of the CBI in its probe into the 2G spectrum scam," Venugopal said.The bench asked the CBI and the Enforcement Directorate to place before it theirreports about the investigation by March 10 and posted the matter for further hearingon March 15. Senior advocate Harish Salve, appearing for Tata group of companies,meanwhile, pleaded for in-camera proceedings.Earlier on February 10, while hearing a plea by Centre for public interest litigation forprobe into the 2G case, the Supreme Court had asked the CBI to widen its probeambit and include into it high flying corporate honchos without getting influenced bytheir status. While giving the CBI a free hand to probe the case, the court had alsoasked the government to set up a special court to exclusively try the spectrum scamcase accused."We have a large number of persons who think themselves to be the law. Law mustcatch them. It should be done with greater expedition. Merely that they are on theForbes list or they are millionaires does not make any difference," the bench hadremarked after perusing the CBIs probe status report in which names of bigcorporate houses and their officials had been mentioned. 101
  • 102. But Counsel Prashant Bhushan appearing for petitioner CPIL had pointed out to thecourt that the agencies have not questioned the heads of several companiesincluding those of Swan Technology, which was controlled by Anil Ambanis RelianceGroup, when the spectrum was allocated.Seeking to widen the CBIs probe ambit, the apex court had said the agencysfreedom to investigate the matter should not be curtailed in any way and asked theagency to go beyond the role of the four persons, including former Telecom MinisterA Raja, already arrested in the case."This investigation has led to prima-facie conclusion about the culpability of fourpersons. What about the beneficiaries. They are part of a larger conspiracy. We wantto know about them. You (CBI) take instructions and tell us what action you areplanning to take," the bench had told the CBI.Mar 14, 2011: The Delhi High Court sets up special court to deal exclusively with 2G cases.Balwa also allowed to appear via video-conferencingThe delhi high court has decided to set up a special court exclusively to hold the trialin the 2g spectrum allocation scan for expeditious hearing in the case. The high courtsources told PTI that CBI judge O.P. Saini, who is dealing with the case, has beenappointed as the special judge to exclusively deal with the matter. The decisioncame in light of the Supreme Court‘s remark on setting up a special court in view ofthe magnitude of the offense.Mar 29, 2011: SC permits CBI to file charge sheet on April 2 instead of March31. Two more persons — Asif Balwa and Rajeev Agarwal — arrestedApr 2, 2011: The CBI files its first charge sheet in the 2G spectrum allocation scamA Raja and eight others including former telecom secretary Siddharth Behura andthree telecom companies were today indicted in the 2G spectrum allocation scam inwhich the CBI filed its first charge sheet pegging the loss to the exchequer at Rs30,984 crore.The companies named in the charge sheet filed in a Delhi court include RelianceTelecom, Unitech Wireless and Swan Telecom. A supplementary charge sheet wasto be filed later in the month in the case that is being monitored by the Supreme 102
  • 103. Court. The charge sheet running into about 80,000 pages was filed before Judge OP Saini in the special court constituted exclusively to try the case that has hit theUPA government politically in less than two years of its return to power.Charges of cheating, forgery, criminal conspiracy and corruption have been levelledagainst Raja, his Private Secretary R K Chandolia, Behura and Swan Telecompromoter Shahid Usman Balwa.The CBI said that investigation into issuance of new Unified Access ServicesLicences and subsequent allocation of 2G Spectrum during 2008-09 has establishedcommission of offences under Indian Penal Code and the Prevention of CorruptionAct.Others named in the charge sheet include Vinod Goenka, a Director of Mumbai-based DB Realty, which was also the promoter of Etisalat DB, Sanjay Chandra,Managing Director of Gurgaon-based real estate company Unitech and UnitechWireless(Tamil Nadu) Pvt Ltd and Gautam Doshi, Hari Nair and Surendra Pipara,Group Managing Director and two Senior Vice Presidents of Mumbai-based RelianceTelecom Company.The Comptroller and Auditor General of India had estimated a presumptive loss ofRs 1.76 lakh crores in the issuance of 2G spectrum licenses.Apr 25, 2011: CBI files second charge sheet and court issues summons to Kanimozhi,Sharad Kumar and Karim Morani taking cognizance of the charge sheetIn a move that could possibly impact on Congress-DMK relations, the CBI hascharge sheeted M. Karunanidhi‘s daughter and Rajya Sabha MP Kanimozhi in the2G Spectrum scam.A special court in New Delhi summoned Kanimozhi and four others to appear beforeit on May 6 as accused in 2G spectrum case saying "there is enough incriminatingmaterial on record" to proceed against them.The court issued summons also to Kalaignar TV managing director Sharad Kumar,Karim Morani, director of Cineyug Media and Entertainment (Pvt) Ltd, who arenamed as accused, for May 6. The three have not been arrested so far. 103
  • 104. "There is enough incriminating material on record to proceed against the accusedpersons," Special Judge O P Saini said. The investigating agency, however, has notnamed Karunanidhis wife Dayaluammal, whose name had figured in the 2G probe,as the accused in the supplementary chargesheet. Kanimozhi has been chargedwith section 7 and 11 of the Prevention of Corruption Act. The sections deal withacceptance of alleged gratification.The courts summons came after CBI filed the second chargesheet in the 2Gspectrum case. The court also directed CBI to produce the Swan Telecom promoterShahid Usman Balwas cousin Asif Balwa and Rajeev Agarwal, directors ofKusegaon Fruits and Vegetables Pvt Ltd, who have been chargsheeted along withKanimozhi and were in judicial custody.CBI has charged Kanimozhi with having entered into a criminal conspiracy with theother accused under the Indian Penal Code and also under section 7 and 11 of thePrevention of Corruption Act which deals with acceptance of alleged gratification.The chargesheet said the investigation into the case disclosed that Rs 200 crore hadtravelled from DB Realty to Kalaignar TV. Kanimozhi, Dayaluammal and SharadKumar, managing director of Kalaignar TV, have 20, 60 and 20 per cent shares inthe channel.Meanwhile, Tamil Nadu Chief Minister M Karunanidhi evaded questions about DMKplanning to quit the Union cabinet after his family members were named by CBI inthe second generation mobile telephony spectrum allocation scam."I dont know," he claimed to a question on reports that his daughter Kanimozhi, MPand wife Dayalu could be named. The 87 year-old leader went on to add that thenames will be revealed as the media would report it after the charge sheet was filedin a Delhi court. Responding to reports about DMKs possible exit from the UPAcabinet in this connection, he shot back "Is that your desire?"Taking a dig at the media, he said they would report "the "slightest of dirt" on DMK,but said he would still continue to read the newspapers. Former Telecom Minister ARaja had been arrested in connection with the alleged scam, and the investigatingagency had questioned Dayalu and Kanimozhi in Chennai recently. 104
  • 105. May 6, 2011: Kanimozhi and Sharad Kumar appear before court and file bail pleas whileMorani sought exemption from appearance on medical groundIn a surprise move, Rajya Sabha member Kanimozhi and Kalaignar TV directorSharad Kumar filed bail applications in the special court hearing the 2G spectrumallocation scam case, ahead of the order on framing of charges. The court has listedthe matter for hearing on October 1. The two have been in judicial custody at theTihar Central Jail here since May 20.On June 20, the Supreme Court denied Ms. Kanimozhi and Mr. Kumar bail, butallowed them to file fresh bail applications in the special court under Section 439 ofthe Criminal Procedure Code after charges were framed.The special court was due to pass an order on framing of charges on September 15,but heard additional arguments relating to the Telecom Regulatory Authority ofIndias report on spectrum pricing on that date and is yet to dispose of applicationsrelating to filing in court of the Union Law Ministrys note on the definition of an‗associate company. The CBI has termed the note ―unsolicited.‖Ms. Kanimozhi also argued that the Supreme Courts order entitled her to invokeprovisions of Section 437(1) of the Cr.PC, which allows for bail if a person ―is underthe age of sixteen years or is a woman or is sick or infirm.‖Claiming innocence, Ms. Kanimozhi said the offences made out against her were―based on no evidence‖ and she was falsely implicated because of biased mediareporting and on the basis of ―conjectures and surmises.‖ The application said the―allegation of her strong association with co-accused A. Raja is mischievous andmisleading. There is absolutely no evidence of her involvement in conspiracy.‖She also denied having benefited from, or having had any role in, the allegedconspiracy to allocate UAS licences and spectrum in various telecom circles andgrant other undue favours to Swan Telecom during 2007-2009.Her bail petition said she was a postgraduate, a Member of Parliament and the Whipof the DMK in the Rajya Sabha and had a minor school-going child to take care ofand that her husband was employed abroad. 105
  • 106. In his application, Sharad Kumar said he was only a Director and a 20 per centminority shareholder in Kalaignar TV and not the CEO or Managing Director. BothMs. Kanimozhi and Mr. Kumar said the Rs.200 crore received from Cineyug Filmswas a loan which was ―repaid in due course.‖Mr. Kumars plea said he was an MBA and a ―respectful person having deep roots insociety, and he is having two very young school-going children to be taken care of.He has to take care of the children and his own aged mother. His wife is ahomemaker and needs his emotional and financial support.‖May 6, 2011: SC issues contempt notice to Sahara India managing director SubrotoRoy and two others for alleged interference in the ongoing ED investigation into the 2Gspectrum caseThe Supreme Court issued a contempt of court notice to Sahara India ManagingDirector Subroto Roy and two others on a petition alleging interference in theongoing Enforcement Directorate (ED) investigation into the 2G spectrum scam.The bench of Justices G.H. Singhvi and Asok Kumar Ganguly said the threat topublish a series of stories by Sahara Samay about Rajeshwar Singh, assistantdirector ED, came after the agency sent summons to Roy.The court said it was prima facie satisfied that an attempt had been made to interferewith the investigation into 2G telephone spectrum scam being carried out byinvestigating officer Rajeshwar Singh. The court restrained Sahara Samay and itschannel from carrying out any story relating to Rajeshwar Singh in respect of the 25questions it had sent to him. ED says Roy did not turn up before it for questioningdespite its repeated notices. It also says Roys newspaper published an item aboutRajeshwar Singh, pointing fingers at him. According to the ED, Roys Sahara Grouptransferred Rs.150 crore to Swan Telecom allegedly in connection with the 2G scam,which relates to alleged irregularities in the allocation of spectrum to telecomcompanies. 106
  • 107. May 7, 2011: Special CBI Court reserves order on Kanimozhi and Sharad Kumar’s bailapplicationsA Special Court fixed November 3 as the date for pronouncing its order on the bailapplications of DMK MP Ms Kanimozhi and four other accused in the 2G spectrumcase.This was after the CBI did not raise any objections regarding bail being granted tothem. The court then reserved its order on the bail plea for November 3.The four other accused include Mr Sharad Kumar (Director and promoter ofKalaignar TV), Mr Rajiv B Agarwal and Mr Asif Balwa (directors of Kusegaon Fruitsand Vegetables Pvt Ltd) and Mr Karim Morani (director of Cineyug Media andEntertainment Pvt Ltd). These five were named accused in the supplementarychargesheet filed by the CBI on April 25 before the Special Court.The court had framed charges against the 17 accused in the case including MsKanimozhi and former Telecom Minister Mr A Raja. During the proceedings, thespecial public prosecutor Mr U U Lalit, representing the CBI, said bail could begranted to these five accused subject to the courts discretion and by imposingconditions including asking them to be present in the court as and when requiredduring the hearing of the case.Opposes bail plea of Shahid Balwa, ChandoliaHowever, the CBI counsel opposed the bail application of two other accused – MrShahid Balwa (promoter of Swan Telecom) and Mr R K Chandolia (former personalsecretary to Mr Raja) -- saying that if one takes into account only the specificcharges framed against these two, they could lead to a maximum punishment ofseven years if they are found guilty.These specific charges are apart from the "umbrella" charges (against all theaccused) of criminal conspiracy as well as criminal breach of trust (which has amaximum punishment of life imprisonment). On the other hand, the specific chargesframed against the other five accused including Ms Kanimozhi would lead to amaximum punishment of five years imprisonment. Therefore, one can make such adistinction, the CBI counsel said. 107
  • 108. Mr Shahid Balwa and Mr Chandolia were named accused in the main chargesheetfiled on April 2. During the hearing earlier in the day, citing a June order of theSupreme Court, Ms Kanimozhis counsel Mr Altaf Ahmed told the court thataccording to that order, Ms Kanimozhi and Mr Sharad Kumar was at liberty to movetheir bail application before the Special Court after the order on framing of charges.Mr Ahmed also said Ms Kanimozhi, being a woman, could be enlarged on bail andreferred to a special provision under law (Section 437 of the Code of CriminalProcedure) in this regard. He also said the court could impose any condition as itdeems fit on Ms Kanimozhi including asking her to be present during theproceedings whenever required.Besides, he indicated that the trial could take a long time as there are 17 accused,154 witnesses and documents of over a lakh pages. Ms Kanimozhi was arrested onMay 20 and has since been lodged in Tihar jail.May 14, 2011: Special CBI Court defers order on their bail pleas for May 20After being decimated in the elections and knocked out of power in Tamil Nadu, theDravida Munnetra Kazhagam escaped another potential embarrassment as the CBIspecial court deferred its verdict on the bail application of Rajya Sabha MPKanimozhi and Kalaignar TV managing director Sharad Kumar to May 20.Kanimozhi, the daughter of DMK chief Karunanidhi, and Sharad Kumar hold 20%stake each in the party-controlled Kalaignar TV and have been charged by the CBI inaccepting `209 crore as illegal gratification or brides from DB Group in returns forfavours former telecom minister A Raja had extended to that company and helping itobtain a telecoms licence."The order is deferred to May 20," Special CBI Judge OP Saini said after markingthe presence of all the accused including 43-year-old Kanimozhi. Justice Saini alsoasked why the court room contained so many journalists before passing his orders.CBI lawyer AK Singh told reporters outside the court that the Justice Sainis orderswere not ready, leading to the verdict being reserved for another week.Kanimozhi was accompanied by husband G Aravindan and DMK parliamentary partyleader TR Baalu. The court had on May 7 reserved its order on the bail pleas of 108
  • 109. Kanimozhi and Kumar after hearing extensive arguments by criminal lawyer RamJethmalani who, citing the charge sheet, blamed Raja for the offence attributed toKanimozhi.May 20, 2011: Special CBI Court rejects bail pleas of Kanimozhi and Sharad Kumar andorders their forthwith arrest saying that there was a possibility of witnesses beinginfluenced considering the magnitude of the crimeThe Special CBI court dismissed the bail application of DMK member of ParliamentKanimozhi, one of the accused in the 2G case, holding that no concession could begiven merely because she is a woman. She has been in jail since May 20.The court also rejected the bail plea of seven others — Sharad Kumar of KalaignarTV; Siddarth Behura, R.K. Chandolia, Shahid Usman Balwa, Asif Balwa, RajeevAggarwal and Karim Morani (on health grounds).Special Judge O.P. Saini said: ―It has been submitted that being a woman, Ms.Kanimozhi is entitled to the beneficial provision [Section 437 Cr.PC] in law.‖ He saidthe reason for incorporating such a provision was that women ―are generallyconsidered weak and exploited section of society, both socially and economically,and as such require some extra protection and a sympathetic treatment.‖But, ―the accused Ms. Kanimozhi belongs to the upper echelons of society and isalso a member of Parliament. By no stretch of imagination can she be said to besuffering from any discrimination on the ground of being a woman alone.‖ Mr. Sainisaid ―the facts of the case as well as the charges levelled against the accused are ofa very serious nature having grave implications for the economy of the country.‖Quoting a Supreme Court judgment in the Sathyam case, he said: ―The ultimateobjective was to use public money in a carefully planned manner for personal usewith no right to do it. The entire community will be aggrieved if economic offenderswho ruin the economy of the state are not brought to book.‖It was submitted on behalf of Ms. Kanimozhi that she had nothing to do with thealleged transaction of Rs. 200 crore received by Kalaignar TV and that herassociation with the organisation was much before the registration of the case. Andwhatever Mr. Sharad Kumar did, he did so on the authority of the board and that hedid not do anything on his own. 109
  • 110. On this contention, Mr. Saini said prosecution witnesses had stated that at theFebruary 13, 2009 board meeting, both Ms. Kanimozhi and Mr. Sharad Kumarparticipated and he was authorised to raise funds from Cineyug Films (P) Ltd. up toRs. 200 crore.June 8, 2011: Delhi HC rejects bail pleas of Kanimozhi and Sharad Kumar citing that thereare certain prima facie evidences against the accused and they may be in a position toinfluence the 2G probeDMK leader and Karunanidhis daughter Kanimozhi will continue to stay in jailasDelhi high court rejected her bail plea. The court also rejected the bail plea ofKalaignar TV MD Sharad Kumar.According to Times Now, rejecting Kanimozhis bail plea, the court said there wassufficient evidence to show criminal conspiracy. The verdict came as a hugedisappointment to Kanimozhis mother, Rajathi Ammal, who was present in the courtand broke into tears as soon as the judge gave the verdict.Kanimozhi had applied for bail on the grounds that she needs to look after her youngson, since her husband travels abroad frequently for work. Several DMK leadersincluding TR Baalu were present in the court as it rejected Kanimozhis bail plea.June 20, 2011: SC rejects Kanimozhi’s bail pleaA special Supreme Court bench rejected bail pleas of DMK MP Kanimozhi andKalaignar TV MD Sharad Kumar in the 2G spectrum scam case.However, the SC gave liberty to Kanimozhi to move to trial court afresh for bail afterframing of charges in the case.The apex court said she could invoke section 437 of criminal procedure code whichprovides for grant of bail to women in cognizable offences. This means Kanimozhiand other accused, including A Raja and corporate biggies, must wait in jail forframing of charges before they can move fresh bail pleas.The case was heard by a bench headed by Justice GS Singvi, who has beenmonitoring the case since the beginning and had asked searching questions to thegovernment on the role of several influential people in the multi-crore scam. 110
  • 111. Kanimozhi and Kumar have been accused by the CBI to be involved in the illegaltransaction of Rs 200 crore to Kalaignar TV which was alleged to be a bribe given bya telecom operator which had benefited in the scam, PTI reported.Earlier two judges -- P Sathasivam and AK Patnaik -- before whom the matter waslisted had recused themselves from the high-profile case. Instead, Justice Singhvi,whose bench has been monitoring the case, will hold a special hearing along withJustice BS Chauhan to decide the bail. According to informed sources, justices PSathasivam and A K Patnaik conveyed their decision to recuse to Chief Justice SHKapadia, following which he constituted another bench.Opposing the bail plea, the probe agency contended in its affidavit that Kanimozhiand Kumar were key conspirators and Rs 200 crore transferred to Kalaignar TV waspart of the "bribe" amount and not a loan as claimed by the accused. The centralagency submitted the special CBI court and later the Delhi high court carefullyevaluated material evidence and other factors to refuse bail to them.The court had also asked CBI to come out with a status report on the loss to thestate exchequer due to the award of 13 licences to one of the telecom operators andtrial proceedings in the CBI special court.Kanimozhi and Kumar moved the apex court seeking bail on June 10 challengingthe Delhi high court verdict that rejected their bail on the ground that they havestrong political connections and the possibility of them influencing witnesses cannotbe ruled out.July 25, 2011: Arguments on Charge begins. Raja seeks to make Prime Minister and formerfinance minister P Chidambaram as witness.Former Telecom Minister A Raja today told a Delhi court that then Finance MinisterP Chidambaram should be summoned and examined as a witness to prove theminutes of a Cabinet meeting that cleared the off-loading of shares by SwanTelecom and Unitech to two foreign firms.A Raja said that the sale of equity by Swan and Unitech to foreign companies was toattract FDI, nothing wrong as per corporate law. Dragging the Prime Minister into the2G mess, Raja claimed that the finance minister had said that the sale of equity isnot illegal adding that he said this in presence of PM and let the PM deny it. 111
  • 112. He said if policy pursued by him was wrong, then all former telecom ministers since1993 should also be in jail with him. As telecom minster Arun Shourie distributed 26licences while Dayanidhi Maran distributed 25 and he distributed 122 licences.Numbers make no difference, however, it is to be noted that none of them auctionedthe spectrum.Aug 26, 2011: Special CBI court allows Subramanian Swamy to argue his own case (mainlyto address the possible loop holes in CBI investigation of the case)A special CBI court, designated to hear the 2G spectrum scam case, on Aug 26 th,2011 allowed Janata Party chief Subramanian Swamy to conduct his privatecomplaint in the telecom scam.The court also gave him time for filing an application which seeks to make thenfinance minister P Chidambaram an accused in the case after he informed the courtthat one of his applications was pending before the Supreme Court.Aug 30, 2011: ED orders freezing of accounts, attachment of properties worthRs 223 crore of five companies mainly related to DB Realty under theprovisions of Prevention of Money Laundering Act (PMLA)Enforcement Directorate ordered freezing of bank accounts and attachment ofimmovable properties worth Rs 223 crore of five companies in connection with thealleged bribe of Rs 200 crore paid to Kalaignar TV in the 2G spectrum allocationscam.The value of properties attached of these companies are Dynamix Realty (Rs 134crore), Conwood Construction and Developers (Rs 22 crore), Nihar Constructions(Rs 1.10 crore), DB Realty (Rs 52 crore) and Eversmile Construction Company (Rs13 crore).When contacted, representatives of the construction companies said they wereawaiting the order. ED has made the CBI chargesheet in this regard as the basis forthis order.As per the charge sheets of CBI, a bribe of Rs200 crores was given by SwanTelecom Pvt Ltd. (now M/s Etisalat DB Telecom Pvt Ltd.) to Kalaignar TV through anumber of intermediary companies in the garb of loan or share application money. 112
  • 113. However, the same was returned to Dynamix Realty (a company of Shahid UsmanBalwa and Vinod Goenka).Sept 15, 2011: Swamy pleads before special CBI court that P Chidambaram should bemade co-accusedJanata Party chief Subramanian Swamy Thursday moved a fresh application beforea special trial court seeking directions to make Home Minister P. Chidambram a co-accused in the second generation (2G) spectrum allocation case.The petition before the special court of the Central Bureau of Investigation (CBI),presided over by Judge O.P. Saini, also wanted Chidambaram‘s testimony to berecorded afresh.Swamy said subsequent to a statement by Prime Minister Manmohan Singh inparliament it was a known fact that former telecom minister A. Raja alone was notresponsible for allocating spectrum.Swami, in his application filed under Section 311 of CrPC for summoning witnesses,alleged, ―Facts clearly show Chidambaram was in collusion and active connivancewith the then Minister for Communication and IT, A Raja, to fix the prices at 2001level jointly and with their unlawful acts both of them thereby caused an unlawful lossto the public exchequer and have taken unlawful gain for themselves.‖Sept 22, 2011: CBI defends Chidambaram in SC, blames DoT for all wrongs.CBI on Sep 22nd, 2011 defended Home Minister P Chidamabaram in the SupremeCourt in the 2G scam by blaming the Department of Telecommunication (DoT) for"jumping the gun" in spectrum allocation.He said Chidamabaram, who was then the Finance Minister, cannot be heldresponsible for the decision not to auction the radio waves as the Ministry of Financewas represented on the issue by the Finance Secretary during its meeting with theMinistry of Telecom then headed by A Raja.Sept 26, 2011: CBI moves plea for framing fresh charge for criminal breach of trust against Raja,Chandolia and Behura 113
  • 114. The CBI moved a designated special court for slapping the fresh charge of breach oftrust by public servants against former Telecom Minister A Raja and two others inthe 2G spectrum allocation case.Special Public Prosecutor U U Lalit filed an application before Special CBI Judge OP Saini, saying a case of criminal breach of trust under Section 409 of the IndianPenal Code is "certainly made out" against Raja, his former private secretary R KChandolia and former telecom secretary Siddharth Behura.Sept 29, 2011: CBI says role of Anil Ambani being probed, gives a virtual clean chit to Tata andVideocon groupThe Central Bureau of Investigation (CBI) told the Supreme Court that Anil Ambaniwas being probed in the 2G spectrum case, as three jailed corporate honchos of AnilDhirubhai Amabani Group (ADAG) have distanced themselves from any wrongdoing.In the same breath, it virtually gave a clean chit to Tata and Videocon groups in 2Gspectrum scam.The agency said it was conducting further investigation to find out the realbeneficiaries as the arrested executives of the ADAG group have "resiled" from thestatements given by them during the probe of the scam.The company, in a statement, however claimed that none of its three executives hasoffered to become approver in the case.CBI, which refuted the allegation of not probing the role of corporate czars, said thethree ADAG executives - Gautam Doshi, Surendra Pipara and Hari Nair - in theirstatements under section 161 of Code of Criminal Procedure had taken the entireresponsibility for the decision but in the Delhi High Court they retracted.Oct 9, 2011: CBI Files FIR Against Maran And His Brother In Aircel-Maxis DealThe Central Bureau of Investigation on Monday conducted simultaneous searcheson the premises of the former Union Minister, Dayanidhi Maran, and his elder brotherand Sun Network managing director, Kalanithi Maran, in connection with a casearising out of the Aircel-Maxis deal.Special teams conducted the searches in New Delhi, Chennai and Hyderabad,sources in the agency said. Earlier, the CBI registered a case against the Maranbrothers as well as against Ralph Marshall and T. Ananda Krishnan of Maxis 114
  • 115. Communications, Malaysia. The agency has also named three private companies,including SUN Direct TV and Maxis Communications, in the First Information Report(FIR).Oct 10, 2011: The Supreme Court reserves order against Subramanian Swamy’s plea for aprobe into Home Minister Chidambaram’s role in the 2G scamThe Supreme Court today reserved notice against Subramanian Swamy‘s plea for aprobe into Home Minister Chidambaram‘s role in the 2G scam. The court opposedthe two applications, one filed by Prashant Bhushan asking for the setting up of anSIT to monitor the 2G case, and two, Subramanian Swamy‘s application seekingprobe in Chidambaram‘s role.When hearing commenced, the CBI led the charge, followed by the Centralgovernment council, both strongly opposing both demands. The CBI saidthat demands for an SIT, and to make Tata, Chidu and Anil Ambani accused in thecase would be ―throwing a cloud at CBI investigations‖. Moreover, the SC foundCBIs investigations into the case satisfactory. The CBI and the central governmentalso said there has been no precedent of an SIT being set up over and above theCBI.Oct 22, 2011: Special CBI Court finds prima facie evidence to put on trial all 17 accusedincluding Raja on various counts like criminal conspiracy, breach of trust, cheating andforgeryThe 2G spectrum case reached an important milestone with a Delhi court framingcharges against all the 17 accused including former telecom minister A Raja, DMKMP Kanimozhi and corporate honchos.Special CBI judge O P Saini also ordered that trial in the case will commence fromNovember 11 with all the accused refusing to plead guilty to various offences.Nov 3, 2011: Special CBI court dismisses bail pleas of all the 8 applicants (includingKanimozhi)In his 76-page order on the bail plea of eight accused in the 2G case, the SpecialJudge, Mr O.P. Saini, took care to note that he was not influenced by the earlierorders on the bail applications of the accused or by any other ‗extraneous factor. 115
  • 116. This observation assumes significance as speculation was rife that the chances ofDMK MP Ms Kanimozhi and four other accused (Mr Sharad Kumar,Director/Promoter, Kalaignar TV; Mr Asif Balwa and Mr Rajiv Agarwal, Directors ofKusegaon Fruits and Vegetables and Mr Karim Morani, Director of Cineyug Mediaand Entertainment) getting bail were bright because the CBI had not opposed theirbail applications.But the court dismissed the bail plea of all the eight accused who had applied for bailafter finding that their bail plea was ―without merit‖.Nov 8, 2011: Special CBI court orders CBI to give copy of file on sale of equity by telecomcompanies (for investigating P Chidambarams involvement) to SwamyThe CBI handed over a file pertaining to the lock-in period relating to 2G spectrumallocation to Janata Party Chief Subramanian Swamy following a court order.Swamy arrived at the CBI headquarters on Thursday afternoon and met CBI officialswho handed over the file to him but the agency later clarified the document is "notrelevant" to the ongoing 2G scam investigations.The file has letters, other official records and memos that include the ministers viewson the permission that Mr Raja granted to Swan and Unitech Wireless to dilute theirequity by bringing foreign partners on board. Mr Chidambaram and other ministershave said that the transactions were legitimate - the companies did not sell stake,they created fresh equity, acceptable according to the guidelines for telecom policyat the time. The profits ran into thousands of crores.Nov 9, 2011: Delhi HC refuses to grant interim bail to Karim Morani on health groundswondering Why everybody falls sick once he is in custody?The Supreme Court today declined to grant interim bail to Bollywood producer KarimMorani, an accused in 2G case, on medical ground, saying he could approach thespecial court conducting the trial if Tihar jail authorities do not provide the treatmentneeded by him.Morani, 53, who is accused of facilitating routing of Rs 200 crore bribes to DMK-runKalaignar TV through various companies of co-accused Shahid Balwa and his own 116
  • 117. firm Cineyug Films, moved for interim bail saying he needed to consult his doctorsfor proper management of his health problems including cardiac ailments.Nov 11, 2011: Trial of the 17 accused begins in Patiala House special CBI courtTrial today commenced in a Delhi court in the 2G spectrum allocation case in whichformer Telecom Minister A Raja, DMK MP Kanimozhi, corporate honchos andtelecom firms are among the high-profile accused.Special CBI Judge O P Saini started recording statement of Anand Subramaniam,Assistant Vice President of Reliance Capital Ltd, as a prosecution witness.The court had also summoned for today two other prosecution witnesses— GroupPresident of Reliance A N Sethuraman and Chief Regulatory Officer of Etisalat DBTelecom Pvt Ltd Vinod Kumar Budhiraja— for their examination.The CBI, in its first list, had submitted names of 28 persons to be examined asprosecution witnesses before the court in the month of November.The court after framing charges against 17 accused, including three telecom firms,had slated the trial to begin from today.Nov 14, 2011: : UPA govt moves SC seeking to restrain Dr Subramanian Swamy frommaking public allegations against the UPA leadershipRattled over the 2G Spectrum Scam, Centre approached Supreme Court to restrainone of the main petitioners Subramanian Swamy from making public allegationsagainst Home Minister P Chidambaram and UPA Chairperson Sonia Gandhi.In a two-page application, annexing media reports of Swamy‘s public speechesagainst the duo, the UPA Government said that such kind of things is ―subjudice‖.―The contents of speech clearly demonstrate that Dr Subramanian Swamy, who isintervener/applicant in the above mentioned appeal (2G cases) has by pressingissues which are the subject matter of pending judicial proceedings in this court andin the trial court has deliberately interfered with the course of distare(sic). 117
  • 118. Nov 22, 2011: The Special CBI court shifts the trial to the Tihar Jail complex following aDelhi high court orderThe Delhi High Court today stayed its order to shift the trial of the 2G spectrum caseaccused to the high-security Tihar Jail from Patiala House court in the heart of theCapital. The stay came after the accused in the 2G case, their relatives and lawyershad expressed their unhappiness over yesterday‘s announcement of shifting of thetrial. Former Telecom Minister A Raja and DMK MP Kanimozhi are among theaccused in the case.The seven-judge administrative committee headed by Acting Chief Justice A K Sikrisaid the court‘s administrative notification yesterday to shift the trial will not come intoeffect and that the hearing will continue in the Patiala House court complex itself tillan alternative arrangement is made.Nov 23, 2011: SC grants bail to 5 corporate executivesThe Supreme Court on Wednesday granted bail to five corporate executives facingprosecution for their alleged involvement in the 2G case. The five are SanjayChandra of Unitech Wireless, Vinod Goenka of DB Realty as well as RelianceGroups Gautam Doshi, Surendra Pipara and Hari Nayar.An apex court bench of Justice G.S. Singhvi and Justice H.L. Dattu said all the fivewould be released on furnishing a surety of Rs.5 lakh each to the satisfaction of thetrial court.Spectrum and Its Relation With Mobile Phone ServicesSpectrum is airwaves. Each operator is assigned a set of frequencies. In normalbasic telephone service, a pair of wires is used for communication. But in case ofmobile/wireless communications, airwaves are used instead of wires. Thesespectrum/airwaves are licensed by the Government. It is allocated in Mega Hertz.2G And 3G Spectrum2G is the 2nd Generation of mobile phone services. Next phase of mobile services is3G, or 3rd Generation. The difference between 2G and 3G is that we can have fasterinternet services in 3G, whereas in 2G the speed is slow. 118
  • 119. How the Telecom Operation Is AdministeredThe entire country is divided into 22 Telecom Circles and Metros. Each state is onecircle, like Bihar, UP (E), UP (W), Tamil Nadu, etc. For every Circle or a Metro, aseparate telecom license is issued. For each license, separate applications are to besubmitted. We call a company is having a Pan-India license, when that company hastelecom licenses for all the 22 Telecom Circles and Metros. A Pan-India license (infact 22 licenses) was issued for an Entry Fee of Rs 1,658 crore during an openbidding in the year 2001. This rate eventually became reference rates for licensesissued in future under FCFS policy, and is a matter of scam.FCFS PolicyUnder First Come First Serve (FCFS) policy, licenses with start-up spectrum (4.2MHz) were issued for mobile services on the basis of who applies first. This policywas good only when there were very less takers for licenses. Between 2003 and2006, there were only 51 applications for the licenses and all of them were issuedlicenses on FCFS basis. That means there were very less takers at that time. Theywere charged Entry Fess @ Rs 1,658 crore for pan-India license determined in theyear 2001.But in February 2007, Hutchison sold its entire stake to Vodafone for a very highvalue. After this, many companies applied for telecom licenses as they realized thatthe value of licenses has gone up. After this, the Government stopped issuingtelecom licenses. But it continued to receive applications. Over a few months, thenumber of applications piled up. As on October 1, 2007, the Government hadreceived 575 applications for telecom licenses but it had very limited spectrum.Therefore, with so many pending applications, the government should not haveopted for auction route for awarding telecom licenses instead of following FCFSpolicy.Understanding 2G Spectrum ScamThe government awarded 122 telecom licenses with 2G spectrum in January 2008 at2001 rates (Rs 1,685 crore) ignoring the current market value of the spectrum. InFebruary 2007, Hutch sold its 67% equity to Vodafone at Rs 75,000 cr signallingsubstantial increase in spectrum value. Even if 15% of this is considered to bespectrum value, then it is Rs 11,250 crore per pan-India licenses. However, Raja 119
  • 120. ignores this price. In November 2007, S-TEL offered Rs 6,000 cr for pan-Indialicense; in December 2007, it increased the offer to Rs 13,752 crore. This was alsoignored by Raja.After obtaining licenses at cheap rates, the private companies sold (diluted) theirequities to foreign telecom companies at a very high price. Every company that hadpan-India licenses was valued at about Rs 10,000 cr in which it had assets of 2Gspectrum (Rs 1,659 cr. Thus, the difference in these figures (Rs 10,000 cr and Rs1,659 cr) is per pan-India license loss to the Government and gain to privatecompanies.- Shyam Telecom: Sold 74% to Sistema of Russia (MTS brand)- Unitech: Sold 67% to Telenor of Norway (Uninor brand)- Swan Telecom: Sold DB Group about 45% to Etisalat, UAE (Cheers brand) and 5%to Genex, Chennai- Tata Teleservice: Sold 26% to NTT of Japan (DoCoMo brand)Role of the Former Telecom Minister A Raja In The ScamHe played multiple tricks to ensure that the spectrum is allocated to its favouritecompanies.First, Reliance Communication (Anil Ambani Group) wanted entry into GSM segmentas there was not much of demand in CDMA. The company applied for fresh licensethrough Swan, and also applied for dual-technology permission. In October 2007, MrRaja allowed dual technology. But it appears that Reliance gave away the control ofSwan to DB Group (Shahid Balwa), who was close to Mr Raja. The advantage withthis company (Swan) was that it had already applied for licenses in March 2007.Second, Essar Group (Ruias brother) also applied for a license under Loop Telecomthrough her sister Ms Kiran Khaitan. Ms Khiatan spent Rs 100,000 to create LoopTelecom and the balance money of Rs 1,700 crore came from Ruias. They could nothave applied for license as they already had operation through Vodafone-Essarcompany in which they had 33% equity stake. This major illegality was ignored byRaja. 120
  • 121. Third, he also had old association with the Unitech Group, which had interest in theconstruction activities. This group under different names applied for Pan-Indianlicenses on 24.09.2007.Fourth, Shyam Telecom (Mr. Rajiv Malhotra, MD) has very close relationship withCongress because of which Mr. Malhotra also had close relationship with Mr Raja.This company applied for 21 licenses on 25.09.2007. These dates 24th (For Unitech)and 25th for Shyam are very important as discussed later.Only Raja knew in advance what he is going to do with the policy. On 25.09.2007 heissued a Press Release (dated 24.09.2007) declaring the cut-off date for receivingapplications as 01.10.2007. So, Mr. Raja ensured that after his favourite companieshave submitted the applications, the window is closed shortly. He opened thewindow for only five working days. But even during those five days as many as 343new applications were received. This he did not expect. As on October 1, 2007, thegovernment had 575 pending applications for telecom licenses. So, then Mr Rajasought advice of Ministry of Law. The ministry replied that the matter should bereferred to GoM. Mr. Raja protested on this. He wrote to Mr. Pranab Mukherjee, andalso to the PM. Within his ministry, two senior officers had objected to his approach.Mr. Raja waited for their retirement on December 31, 2007. He brought in his favoriteofficer (Mr. Siddhartha Behura as Secretary DoT). Thereafter, he got the PM‘s nodon January 3, 2008.On January 10, 2008, he issued first Press Release on DoT‘s web site stating thatthe applications of only those have been considered who had applied till 25.09.2007.This way he preponed the cut-off date to suit his favourite companies. Thereafter, heput up another Press Release at about 2:45pm on the same day disclosing a list ofshortlisted companies and asking them to come between 3:30 to 4:30 PM to collectthe LOIs. He also said that whosoever complies with the conditions of LOIs first (thatmeans deposit of Rs 1,658 crore by draft, Bank Guarantees worth several hundredcrores separate for each service areas), will be issued spectrum first. So, his friendsknew about these conditions. They kept their drafts and guarantees ready one day inadvance and were first to comply with LOI condition and were first to get spectrum.This way even the FCFS policy was altered; earlier it used to be date of applicationand everyone used to be given 15 days time for compliance; Mr Raja even changed 121
  • 122. the FCFS policy to date of compliance of LOIs. Later, the CAG found that out of 122licenses, 85 did not meet eligibility criteria.Senior Officers Involved In This ScamRaja kept his close confidants in the chain of officers who would listen to hisdirections. Two top most officers of the DoT did not agree with his approach. Onewas Mr D.S. Mathur, Secretary-DoT, and another one was Ms Manu Madhavan,Member (Finance), DoT. Mr Raja waited for their retirement till December 31, 2007.From 1st January 2008, he brought his own person Mr Siddhartha Behura asSecretary DoT. He completely followed his instructions.Relation Between The 2G Spectrum Scam And The Radia TapesMs Nira Radia runs many consultancy and Public Relation companies. Her mainclient was Tatas. Later, she got Unitech, Reliance (Mukesh Group), Bharti also asher clients. From the leaked tapes, it is revealed that she was all the time talking forrelease of spectrum to Tatas. She had very close relationship with Mr Raja, and thefamily members of Tamil Nadu Chief Minister Mr M Karunanidhi. The Supreme Courthas taken these issues very seriously.Role Of The Finance Minister In This ScamMoney collected by the DoT on account of Entry Fee is deposited into the accountsof the Finance Ministry. Therefore, the DoT must consult the Finance Ministry for apolicy change that has impact on its revenue. The Finance Ministry took a u-turn andallowed this scam to happen. A number of times, the Finance Ministry had in writingobjected to the DoT‘s plan to award licenses at 2001 rates. One such letter waswritten by the Finance Secretary on November 22, 2007 to the DoT Secretary. AfterDoT has issued 122 LOIs (Letter of Intents) on January 10, 2008, the FinanceMinister wrote a consenting letter to Mr Raja that whatever has happened is ok, butnext time the spectrum should be auctioned. After this, on 25.01.2008 Mr Rajaconverted LOIs into Licenses. If the Finance Minister really wanted to stop furtherprocess of converting LOIs into Licenses, then he could have issued direction to theDoT to stop further process.Who Estimated the Loss of Rs 1, 76,000 CroreComptroller Auditor General of India (CAG) started auditing of new licenses in March2010. On 8.11.2010, CAG submitted its report to the President of India in which it 122
  • 123. estimated the loss on account of 2G scam as Rs 1.76 lakh crore. Apart from this, italso found that of the 122 licenses issued on 10.01.2008, 85 licenses were issued tocompanies which were not eligible to get license.Bodies Which Brought Out This Scam in The Public DomainInitially, a Delhi based NGO, Telecom Watchdog, complained to the investigatingagencies. When the investigation was slow or non-existent, later two Delhi basedNGOs (Centre for Public Interest Litigation, Telecom Watchdog) and one seniorjournalist Mr Pranjoy Guha Thukrata filed a PIL in Delhi High Court pleading forCourt monitored investigation. It was dismissed. Thereafter an appeal was filed bythem in the Supreme Court, which was allowed. Now, the Supreme Court is directlymonitoring the investigation of this case.Role of The Investigative Agencies CBI, ED In This ScamThe case was initially referred by the Central Vigilance Commission to the CBI forfurther investigation on 12.10.2009 as the DoT officers were not forthcoming with theright answers/information. On 21.10.2009, the CBI registered an FIR againstunknown persons and officials. On 22.10.2009, the CBI raided the DoT‘sheadquarter and took away all the relevant files. Subsequently the offices of privatecompanies who got the licenses were also raided. The officials were questioned bythe CBI. The ED also carried out its investigation independently. Initially CBI as wellas Enforcement Directorate were investigating the matter properly, but aftersometime, they also started playing into the hands of their political bosses andcorporates who were the beneficiaries. Practically, further investigation was stopped.Then further exposure could be done through PIL.What Supreme Court Said About This ScamDuring the hearing of the PIL, the Hon‘ble Supreme Court made severalobservations including the one ―that the same minister is still continuing‖, thateventually led to the exit of Mr. Raja. The investigation was expedited after SC‘scomments, ―does CBI do this kind of slow investigation in every matter, how long willit take .... 20 years‖. The SC also said, ―You (CBI, ED, I-T) have to do your jobwithout any fear and favour‖.The SC also ordered that the Court will monitor investigation. It also suggestedcreation of Special Court for this 2G scam. It is suspecting that the Government and 123
  • 124. Corporates might still interfere in the investigation because of which it has orderedthat before filling of the charge-sheet, the investigating agencies (CBI, ED, I-T) mustproduce before the SC the charges that it is likely to file and the evidence collectedto support them. The SC also took strong view on Mr Kapil Sibal‘s statement that thefigure of loss pointed by the CAG is erroneous. After that Mr Sibal stopped attackingCAG. The SC also said why no one has been arrested in this case.Action Taken By Government Taken Till NowInfact the Government did not do anything. Whatever is happening, it is because ofthe Supreme Court, pressure from the opposition parties, and media. First, Mr Rajaresigned. Thereafter, after Mr Kapil Sibal took over as Telecom Minister, he issuedshow-cause notices to certain companies and collected about Rs 280 crore aspenalty from them for not fulfilling the rollout obligations. Thereafter the Governmenthas not taken any step.What Did the Government Do To Cover Up This ScamMr Kapil Sibal started a campaign against the CAG calling their figure of loss of Rs1.76 crore as erroneous. He also said that no loss has happened. Later, he startedsaying that the Government followed the same policy of FCFS as was followedduring NDA period.Arrests Made In This ScamAs on 13.2.2011, CBI has arrested four people. Mr A Raja, Mr Siddharatha Behura(Secretary-DoT), and Mr RK Chandolia (PS to Mr Raja) were arrested first.Thereafter, Mr Balwa (MD of DB Group, and promoter of Swan Telecom) was alsoarrested.Were bribes paid to RajaYes. The CBI and ED‘s investigations have revealed that substantial investment(money) coming into the accounts of people/companies associated with Mr Raja.This money is coming from many companies in India and abroad. As per mediareports, so far Rs 3,000 crore has been linked to the bribes paid to Mr Raja and DMKparty and the Mr Karunaidhi‘s relatives. This is even revealed in Raida tapes. 124
  • 125. Companies Being InvestigatedThe following companies received the licenses in January 2008 from MrRaja:Unitech (Unionor), Swan Telecom (DB Etisalat), Loop Telecom, STel,Datacom/Videocon, Shyam Telecom (MTS), Spice, Idea, Reliance Communications,and Tata. The investigation is being done against all of them. In addition, certaincompanies of Raja‘s associates and Ms Nira Radia are also being investigated forthe routing of money.Changes in the Telecommunications Sector In IndiaIn the last two decades the telecom sector witnessed rapid transformation with theNational Telecom Policy-94 setting the stage for opening up of the sector. Withchanges in the sector, cellular mobile services outgrew the fixed line services. Themost important change was the shift to a revenue sharing regime in NationalTelecom Policy (NTP) 1999 where the operators shared their revenue with theGovernment in the form of annual licence fee and spectrum charges. The UnifiedAccess Services Licence (UASL) 2003 sought to frame the road map for a uniformlicencing regime.Gaps in Policy ImplementationIn August 2003 TRAI had submitted a Report recommending a road map forallocation of licenses. This Report formed the basis for the UAS policy approved bythe Council of Ministers in October 2003. The implementation of UASL regime wasto be carried out in two phases with first phase of six months assigned for migrationof already existing Basic Service Operators (BSOs) and Cellular Mobile ServiceOperators (CMSOs) to the new regime. The entry fee for migration of BSOs wasdetermined as the fee equal to what was paid by the fourth cellular operatorintroduced through multi-stage bidding process in 2001. CMSOs were not required topay any entry fee for migrating as they had already entered the market through abidding process and thus paid a market determined price.The second phase was to start after the first phase in which a Unified Licencingregime, with a nominal entry fee for the licence with the spectrum being chargedseparately, was envisaged.However, the Department of Telecom did not implement the licensing regime asapproved by the Cabinet and implemented only the first phase of the policy, 125
  • 126. overlooking the second phase. In the actual implementation, the interim stage ofimplementation seems to have become the final destination. This appears to havebecome the underlying factor, quite erroneously, to value the spectrum in 2008 at2001prices. An important objective of this policy decision to delink the prices ofspectrum from the issue of licence and devise an efficient allocation formula forspectrum along with an appropriate price remained unachieved. Ministry of Financewas authorized by the Cabinet decision of 2003 to participate in the discussion forefficient allocation of spectrum and price fixation but DOT decided not to associatethe Ministry of Finance. As a consequence of such lacunae in the implementation ofthe policy laid down by theCouncil of Ministers in 2003 the issuance of licences in 2008 along with allocation ofspectrum has been done by DoT at prices determined in 2001 which were based ona totally nascent market despite the sector witnessing substantial transformation andmanifold growth. The issue was never placed before Cabinet for a review.Telecom Commission Was Not ConsultedThe High Powered Telecom Commission which also includes part time membersfrom the Ministry of Finance, Industry, IT and Planning Commission was notapprised of the TRAI recommendations of August 2007 and hence, was not affordedan opportunity to deliberate on the merits of the TRAI recommendations. It is alsoseen that the High Powered Telecom Commission was not even consulted at thetime of grant of 122 UAS licenses in 2008.Views and Concerns Of Ministry Of Finance OverruledDoT managed to keep the issue of spectrum pricing outside the purview of the GoM.The GoMs role in December 2006 was confined to issues concerning spectrumvacation. The ToRs left out the other two issues of efficient allocation and pricing,while all three were pronounced in the policy decision of 2003. Thus by getting thespectrum pricing issue deleted from the ToR, the DoT completely side-tracked thepricing issues. Also, the Ministry of Finance, in November 2007, had questioned thesanctity of continuing with the price determined way back in 2001 without anyindexation or current valuation. The Ministry had sought a review of the matter. Thisadvice of the Ministry of Finance was overlooked by the DoT ostensibly on the basisof a four-year old Cabinet decision (October 2003) on the premise that it was 126
  • 127. authorized to calculate the entry fee for licences as per the recommendations ofTRAI in 2003. DoT maintained that spectrum pricing was within the normal workcarried out by them.Advice of Ministry Of Law And Justice Were IgnoredIn October 2007 at its own initiative, the DoT requested the Ministry of Law andJustice to obtain and communicate the opinion of the Attorney General/SolicitorGeneral of India to enable the DoT to handle an unprecedented rush of applicationsin a fair and equitable manner which would be legally tenable. The Ministry of Law,at the level of the Honble Minister, opined that in view of the importance of the caseand the various options which seem to have emerged, it was necessary that thewhole issue be first considered by an Empowered Group of Ministers (EGoM) and inthat process legal opinion of the Attorney General can be obtained. Surprisingly, thisopinion, which the DoT had sought on its own volition, was felt to be out of contextat the level of the Honble MoC&IT and hence the benefit of a discussion in theEGoM was also forgone. Thus, such important decisions seem to have been taken inDoT without the issues being deliberated and discussed at an inter ministerial forum.Honble Prime Ministers Suggestions Were Not FollowedIn November 2007, the Hon‘ble Prime Minister wrote to Honble MoC & IT andexpressed concern that in the backdrop of the inadequate spectrum and theunprecedented number of applications received for fresh licenses, spectrum pricingthrough a fair and transparent method of auction for revision of entry fee, which iscurrently benchmarked on an old figure, needs to be reconsidered. This advice of theHon‘ble Prime Minister evoked an immediate response from the Honble MoC & ITwho on the same day replied that the issue of auction of spectrum was consideredby the TRAI and the Telecom Commission and it was not recommended by them asthe existing licence holders had already got spectrum upto 10 mega hertz per circlewithout any spectrum charge. Honble MoC & IT further informed that his Ministryhas come to the conclusion that it will be unfair, discriminatory, arbitrary andcapricious to auction spectrum to new applicants as it will not give them a levelplaying field. He had thus, justified the allotment of spectrum to a few new operatorsin 2008 without reconsidering the old entry fee discovered in 2001 ignoring theadvice of the Honble Prime Minister. 127
  • 128. Arbitrary Changes By Dot In The Cut-Off Date.The TRAI report of August 2007 had recommended no cap on the number oflicences in any service area. Despite this recommendation of TRAI, the DoT issued aPress Release on 24th September 2007 stating that applications for issue of licenceswould be accepted only upto 1.10.2007. This action, in effect, conveyed fixation ofan artificial cap in the number of licenses to be awarded. However, in its response(July 2010) to the report issued to the Ministry (July 2010), the Ministry has statedthat it accepted the recommendation of no cap by the TRAI in October 2007. Itseems that the Ministry, by issuing the press release in advance in September 2007had, in effect, circumvented the recommendation of TRAI by taking an action counterto the recommendation and itsacceptance by DoT in October 2007. To further compound the earlier decision, ofrestricting consideration of applications received up to 1.10.2007, the DoT furtheradvanced this date to restrict issuance of Letters of Intent (LoIs) only to applicationsreceived up to 25.09.2007. This was ostensibly to avoid legal implications in view ofthe shortage of spectrum for GSM services.FCFS Policy Was Not FollowedThe First Come First Served (FCFS) policy earlier internally adopted in DoT forallocation of spectrum was then extended for issue of new UAS licences. Under thispolicy, all applications are registered in the Central Registry Section of DoT wheredate of receipt and serial numbers are posted on it. Priority of applications isdetermined based on this date of receipt in the Central Registry. In a communicationdated 2nd November 2007, the Honble MoC&IT had even confirmed to the HonblePrime Minister that the processing of applications was to be on the FCFS basis.However, audit found that DoT deviated even from the FCFS policy in letter andspirit. The applications submitted between March 2006 and 25th September 2007were issued the LoIs simultaneously on a single day, viz. 10 th January 2008. A noticewas issued through a press release giving less than an hour to collect the same.This decision to issue LoIs simultaneously to all applicants was taken at the level ofthe Minister. As per the FCFS policy being followed those who were issued LoIswere given 15 days to fulfill the conditions. This included submission of aPerformance Bank Guarantee (PBG) and a Financial Bank Guarantee (FBG). Bychanging the FCFS criteria, some licensees, who could proactively anticipate suchprocedural changes were ready with the Demand Drafts drawn on dates prior to the 128
  • 129. notification of cutoff date by DoT and could avail the benefit of first right to allocationof spectrum, having jumped the queue. The entire process followed lackedtransparency and objectivity and has eroded the credibility of DoT.Issue of License to Ineligible ApplicantsProcess followed by the DoT for verification of applications for UAS licences forconfirming their eligibility lacked due diligence, fairness and transparency leading togrant of licences to applicants who were not eligible. Eighty five out of the 122licenses issued in 2008 were found to be issued to Companies which did not satisfythe basic eligibility conditions set by the DoT and had suppressed facts, disclosedincomplete information and submitted fictitious documents for getting UAS licensesand thereby access to spectrum.Value of additional spectrum allotted to 13 existing operators beyond contractedquantitiesSpectrum was allotted by DoT to the existing operators beyond the contracted limitswithout imposing any upfront charge for such allotment. The value of spectrum heldby 13 operators for 51 circles based on the 2001 rates worked out to ` 2561 crores.Based on the above indicators, value would be in the range of ` 12,000 crores and `37,000 crores. TRAIs recommendation (2010) for charging this additional quantity ofspectrum has not been accepted by the Government so far.Presumptive loss of spectrum allocated to 122 new UAS licensees and 35 Dual Technologylicenses in 2007-08The presumptive loss as per the methods adopted would be as given in the tablebelow: 129
  • 130. Growth In Telecom SectorIn the recent times, India has emerged as one of the fastest growing telecommarkets in the world. The Department of Telecommunication (DoT) under theMinistry of Communications and Information Technology (MoC & IT) was themonopoly agency providing communication facilities in India till 1994 when for thefirst time private players were invited to contribute to the telecom sector by way ofinvestment for providing telecom services in the country. Since then it has been oneof the few sectors in India, which has witnessed widespread structural andinstitutional reforms. With 62.13 crore telephone connections (Fixed lines- 3.70 croreand wireless 58.43 crore) as on March 31, 2010, it is the second largest network inthe world after China. The eleventh plan target of 50 crore connections by 2010stood achieved in September 2009 shown in the chart 1.1 below.Overview of Policies1.2.1 The first National Telecom Policy was announced by the Government in 1994(NTP-94) with the objectives of providing telephone on demand, provision ofworldclass services at reasonable prices and universal availability of basic telecom 130
  • 131. services to all villages. NTP-1994 recognized that the required resources forachieving these targets could not be made available only out of Government sourcesand private investment and involvement of the private sector was required to bridgethe large resource gap.1.2.2 While there were several achievements under the NTP 1994, some of theobjectives could not be met. Acknowledging several changes both at the nationaland global scenario in the telecom sector; a New Telecom Policy- NTP-99 wasannounced by Government w.e.f. 1st April 1999. Licensing of all telecom servicesthereafter was to be under the policy framework of NTP-99, which sought tosignificantly redefine the competitive nature of the industry. The new policy lifted therestrictions on the number of service providers for the Basic Service Providers(BSPs) as well as the Cellular Mobile Service Providers (CMSPs) making it open forparticipation by all bidders who satisfied the conditions of the DoT. The new policyalso required all operators who were under the fixed licence fee regime to migrate toa revenue sharing regime. In the revenue sharing model, the operators wererequired to pay a percentage of their Adjusted Gross Revenue (AGR) as annuallicense fee and spectrum usage charge to the Government. The percentage ofrevenue share depended on the service area* where they offered their services. 131
  • 132. 1.2.3 The Union Cabinet based on the recommendations of Group of Ministers(GoM) on Telecom matters constituted in September 2003 approved the policy forlicensing of Unified Access Services. The GoM had considered therecommendations submitted by Telecom Regulatory Authority of India (TRAI) on 27October 2003. The policy drew upon NTP-99. Through this approval, Cabinetbesides, a number of other related decisions, charted the course to a UniversalLicensing Regime. Guidelines for issue of licenses under UAS were issued on 11November 2003 where after licenses were issued only under UAS.1.2.4 In April 2007, the DoT sought the opinion of the TRAI on some specific pointsincluding that of putting a cap on the number of access service providers in a servicearea, as radio frequency spectrum required for wireless services was not sufficient tomeet the increasing demand from UAS Licensees. TRAI recommended (August2007) that no cap be placed on the number of access service providers in anyservice 1 area. the DoT issued 122 new licences to 17 companies in 2008 andspectrum was allotted to all operators except for four in Delhi service area(December 2009).1.2.5 TRAI in August 2007 also recommended that ―a licensee using one technologymay be permitted on request, usage of alternative technology and thus allocation ofdual spectrum. However, such a licensee must pay the same amount of fee whichhas been paid by the existing licenses using the alternative technology or whichwould bepaid by the new licensee going to use that technology‖. 35 licenses werepermitted to use dual spectrum and allocated spectrum in 2007-08.Methodology for Entry And Fee Structure In Various Policy RegimesPolicy Stage Methodology for Entry of Operators Fixed Fee RegimePolicy StageNTP 1994 In first phase (Nov-94), two License Fee was pre- CMTS licences were awarded in determined and bids were four Metro cities on beauty called on selected parade basis. parameters. 132
  • 133. In second phase (Dec-95), two CMTS licences were awarded in 18 telecom circles through a process of competitive bidding. Six companies were awarded Basic service licences through bidding process.NTP 1999 All existing BSOs and CMSPs One-time entry fee were required to migrate to the before signing the new regime. license agreement. Number and timing of new A fixed percentage of licenses was to be based on Adjusted Gross TRAIs recommendations. Revenue (AGR) as BSNL and MTNL became the annual license fee. third CMTS operator in 2000. A fixed percentage of Seventeen new CMTS licences Adjusted Gross as fourth cellular mobile Revenue (AGR) of operators in 2001 through a mobile services as multi-stage bidding process. annual spectrum Twenty Five new Basic service charge. licences in 2001 based on eligibility as per the guidelines issued on January 2001.UAS 2003 All the existing BSOs and One-time entry fee CMPSs were given option to before signing the migrate to UASL regime; by licence agreement. BSOs paying the difference of A fixed percentage of entry fee paid by them that as Adjusted Gross paid by the fourth CMTS Revenue (AGR) as operator in 2001and CMTS annual licence fee. operator at nil entry fee. A fixed percentage of 51 new UAS licences were Adjusted Gross awarded between 2004 to March Revenue (AGR) of 133
  • 134. 2006 at the entry fee determined mobile services as in 2001. annual spectrum 122 new UAS licences awarded charge. in 2008, also at the same entry fee of 2001.Introduction Approvals were issued in 2007-08 for One-time entry feeof dual dual technology (for using both CDMA equivalent to migrationtechnology and GSM) in 35 service areas at the fee for UAS based on entry fee equivalent to the migration fee 2001 entry fee of fixed in 2001. CMSPs was charged for allowing DT in 2007. Revenue sharing as for UAS 2003.Role of Telecom Regulatory Authority Of India (TRAI)The TRAI was set up in March 1997 and its mandate included makingrecommendations on the following matters: Need and timing for introduction of new service providers. terms and conditions of the licences to be given to service providers and Efficient management of the available spectrum.TRAI also had to notify the rates at which telecommunication services within Indiaand outside were to be provided under the TRAI Act, through Gazette notifications,from time to time. NTP-99 stipulated that the Government will invariably seek TRAIsrecommendations on the number and timing of new licences before taking decisionon issue of new licenses. The original Act of 1997 under which it was set up wasamended by the TRAI (Amendment) Act 2000. The new Act provided for theestablishment of two separate bodies i.e. the Telecom Dispute Settlement andAppellate Tribunal (TDSAT) for dispute settlements between the licensor andlicensees, between two or more service providers and between service providersand consumers and TRAI for regulatory functions. Thus, TRAI as a regulator hasonly an advisory role in the policy matters. 134
  • 135. Organizational ArrangementThe work relating to formulation of policy, issue of licences for various telecomservices and spectrum allocation are under the overall control of Ministry ofCommunications & IT. Secretary, DoT, reports to the Minister (Communications andIT) and is assisted by the Member (Finance), the Member (Technology), Member(Services), Member (Production) and Wireless Advisor.The Secretary, DoT, is also the Chairman of the Telecom Commission which is ahigh powered commission, established in 1989, consisting of four full time members(Production, Services, Technology and Finance) and four part-time members(Secretaries of the Ministries of Finance, Industrial Policy and Promotion, InformationTechnology and Planning Commission). The major functions of the TelecomCommission include policy formulation, review of performance, licensing, wirelessspectrum management, administrative monitoring of PSUs, research anddevelopment, standardization/ validation of equipment and International Relations.Issue of LicensesOperators intending to provide telecommunication services have to obtain a licencefrom the DoT. The guidelines for issuing new licences for various Telecom Servicesas approved (December 2005) by the DoT stipulated that an applicant would have toapply for a licence along with the requisite processing fees. Applicants meeting theeligibility criteria prescribed by the DoT would be issued a Letter of Intent (LoI). 135
  • 136. Thereafter the applicant was required to deposit the prescribed entry fees, submitthe requisite Bank guarantees and other necessary documents before the grant oflicence.Spectrum AllocationRadio Frequency Spectrum is the entire range of wavelengths of electromagneticradiation which is used as carrier of wireless transmission and thus a basicrequirement for providing wireless services. It is a finite but non-consumable globalnatural resource and commands high economic value in the telecommunicationsector.Radio frequency spectrum, i.e., the entire range of wavelengths of electromagneticradiation, is a finite global natural resource with a high economic value, due to itsheavy demand in the telecommunications sector. The word Spectrum basicallyrefers to the collection of various types of electromagnetic radiations of differentwavelengths. Frequencies are allocated by the International TelecommunicationUnion (ITU) at "World Radio Communication Conferences". Allocations are made ona regional basis and are made for different services. Allocation of spectrum in ITURadio Regulations exists from 9 KHz to 1000 GHz. In India, the radio frequenciesare confined between 9 KHz and 400 GHz. Some of the important and typicalcharacteristics of the radio frequency spectrum are that: Radio frequency spectrum does not respect international geographical boundaries as it is spread over a large terrestrial area. Use of radio frequency spectrum is susceptible to overlapping interference and requires the application of complex engineering tools to ensure interference free operation of various wireless networks. Unlike other natural resources, radio frequency spectrum is not consumed upon its usage. It is also liable to be wasted if it is not used optimally and efficiently.Assignment of radio frequencies is governed by international treaties formulatedunder the aegis of the ITU. India falls in the ITU Region III. In India, Mobile serviceswhich use GSM technology work in the frequency bands of 900 & 1800 MHz andthose in CDMA technology work in the 800 MHz band. 800, 900 and 1800 MHz 136
  • 137. bands were earlier allotted to the defence services for their mobile communicationusage. Presently, 25 MHz spectrum in 900 MHz band (890 – 915 / 935 – 960 MHz)and 75 MHz in the 1800 MHz band (1710 – 1785 / 1805 – 1880 MHz) is earmarkedfor GSM services. For CDMA services, 20 MHz spectrum in the 800 MHz band (824– 844 / 869 – 889 MHz) is available. Spectrum for the roll out of 3G services (voice,data and video) were allotted through e-auction in the 2.1 GHz (1920 – 1980 / 2110– 2170 MHz) band. All the above bands were historically allotted to the Defencesector for their mobile and point to point communication needs in India. Therefore,their cooperation was also required to make them available for commercial use. Tofacilitate the same, Government of India (GoI) has allocated funds from time to timeto provide optical fibre cables for use by the Defence Sector.1.7.1 The Wireless Planning & Coordination (WPC) Wing in the Department ofTelecommunications deals with the policy of spectrum management, wirelesslicensing and frequency assignments. The spectrum allocation policy is contained inthe National frequency allocation plan (NFAP) which is based on the InternationalRadio Regulations. The NFAP (1981) and its subsequent revisions in consultationwith the national users through the forum of Standing Advisory Committee on RadioFrequency Allocation (SACFA) provides the basis for assignment of frequency.Wireless licence is an independent licence and therefore any UAS licence holderintending to offer mobile services has to obtain a separate wireless licence fromWPC wing.BOX 2: Allocation of contractual and additional spectrumDetail of licences Allocation of contractual Allocation of additional spectrum spectrumCMTS licences for first A cumulative maximum of As per DoTs order datedand second Operators up to 4.4 MHz +4.4 MHz in 22nd September 2001(1994-1995) the 900 MHz band based bandwidth up to 6.2 on appropriate justification. MHz+6.2 MHz instead ofCMTS licences for A cumulative maximum of 4.4 MHz+4.4 MHz subjectthird Operators up to 4.4 MHz +4.4 MHz in to availability and 137
  • 138. (1997-98) the 900 MHz band based justification effective from on appropriate justification. 1.8.99.CMTS licences for fourth A cumulative maximum of As per DoTs order datedoperators (2001) CMTS up to 4.4 MHz +4.4 MHz in 1.2.2002, 1.8 MHz+1.8licences for fourth the 1800 MHz band. Based MHz spectrum beyond 6.2operators usage, justification and MHz (total 8 MHz+8 MHz)(2001) availability, additional would be assigned to an spectrum up to 1.8 operator on reaching a MHz+1.8 MHz making a subscriber base of 5 lakh total of 6.2 MHz+6.2 MHz. or more in a service area. Further, allocation of spectrum up to 10 MHz+10 MHz on reaching prescribed subscriber base could also be considered subject to availability.CMTS licences for Initially a cumulative In 2006, criteria forfourth operators maximum of up to 4.4 MHz allotment of additional(2001) + 4.4 MHz in TDMA/GSM spectrum in GSM beyond based systems or a initial spectrum (4.4 MHz) maximum of 2.5 MHz + 2.5 was revised which was MHz in CDMA based based on the minimum systems, on case by case subscriber base ranging basis subject to availability. from 2lakh subscribers for The Licensee operating 6.2 MHz to 26 lakh wireless services will subscribers for maximum continue to provide such of 15 MHz 2G spectrum services in already depending upon the allocated/contracted category (A/B/C) of the spectrum. circle or service area.New UAS Licences Initially a cumulative In January 2008, criteriagranted during maximum of up to 4.4 MHz for 138
  • 139. November 2003 to + 4.4 MHz in TDMA/GSM allotment of additionalMarch 2007 based systems or a spectrum in GSM band maximum of 2.5 MHz + 2.5 beyond initial spectrum MHz in CDMA based (4.4 MHz) was again systems, on case by case revised needing a basis subject to availability. minimum subscriber base Additional spectrum ranging from 15 lakh allowed based on optimal subscribers for 6.2 MHz to utilisation but not more 116 lakh subscribers for than 5+5 MHz in respect of maximum of 14.2 MHz 2G CDMA or 6.2+6.2 MHz in spectrum depending upon respect of TDMA/GSM. the category (A/B/C) of theUAS licences using Initially a cumulative circle or service area.dual technology maximum of up to 4.4 MHz(2008) + 4.4 MHz in TDMA/GSM based systems and a maximum of 2.5 MHz + 2.5 MHz in CDMA based systems, on case by case basis subject to availability. Additional spectrum allowed based on optimal utilisation but not more than 5+5 MHz in respect of CDMA or 6.2+6.2 MHz in respect of TDMA/GSM. 139
  • 140. Gaps in Implementation Of UAS RegimeIn October 2003 TRAI submitted its recommendations on Unified Licensing regimewhich envisaged total elimination of service based licensing. Unified Licence was anapproach towards convergence of access media. Full implementation of the newregime was to be completed in two phases. The Union Cabinet approved the TRAIreport in October 2003. Phase I was the first step of migration of existing licensees tothe Unified Access Licensing Regime. This was to be followed by a second phase ofa fully Unified Licensing / Authorization Regime having all telecom services underone licence. This was for grant of licences to new operators. However, the benefitsof Phase I were extended to new operators. Ministry replied that TRAI had submittedtwo more recommendations one on Unified Licensing (January 2005) and another onSpectrum Related issues (May 2005). Though Unified licensing was the first steptowards convergence, it was not implemented since the Convergence Bill lapsed inParliament. Thus the ultimate objective of Unified Licensing did not materialize. DoThowever, as explained earlier did not revisit the Unified licensing regime butimplemented it for new licensees also.3.1.1 TRAI, in its report on Unified Licensing accepted by Government in October2003, had recommended that Unified Licence Regime should aim at automaticlicensing / authorization for telecom services subject to notification to RegulatoryAuthority and compliance with published guidelines by operator thereby removing allbarriers for growth in the sector. The underlying principle was to allow licence atnominal entry fee and price the spectrum separately, it being a scarce publicresource. TRAI had further observed that ―spectrum was to be distributed by amechanism that it is allocated optimally to the most efficient user‖.3.1.2 Unified Licensing / Authorization being the main objective, TRAI hadrecommended a two-phase implementation. Recognizing that primary objective ofgrowth in teledensity depended on securing access network at low cost, in the firstphase, unification of access services at the Circle level was recommended wherebythe service providers of new Unified Access Licensing Regime would be able to offerbasic and/or cellular services using any technology (GSM or CDMA). The secondphase was to be soon followed by defining the guidelines and rules for fully UnifiedLicence /Authorisation Regime. 140
  • 141. 3.1.3 Based on the recommendations of Group of Ministers which agreed with theprinciples laid down by TRAI in its Report, Cabinet (31 October 2003) approved theproposal for charting the course for Universal Licensing Regime in the followingmanner:-In pursuance to the Cabinets approval, the DoT issued the guidelines on UASLicencing (11 November 2003), for moving towards UASL regime by giving theoption to all existing BSOs and CMSPs to migrate to UASL regime. The guidelinesalso included a condition that ―All applications for new Access Services Licence shallbe in the category of Unified Access Services Licence.‖ There was ambiguityregarding entry fee to be charged from the new licensees as TRAI had not given anyrecommendation regarding introduction of new operators in the first phase of UASLregime. Secretary, DoT, spoke to the Chairman, TRAI who clarified (14 November2003) that entry fee of the new unified licensee would be the entry 4th fee of CellularOperator and in service areas where there is no fourth operator, the entry fee ofexisting BSO fixed by the Government (based on TRAI recommendations). DoTdecided to receive all applications under UAS without revision of the spectrumallocation procedures/revision of entry fee, which automatically lifted the restrictionon the number of operators in the UAS regime.3.1.4 TRAIs Recommendations of 2003 not followed in spiritIn its recommendation, TRAI had considered three alternatives for migration ofexisting operators in para 7.16 to 7.18 of their Report submitted to Government on27 October 2003, including that of bidding by the existing and new prospectiveoperators, but did not favour it on the grounds of likely delay in implementation ofUAS regime. TRAI recommended a third option in para 7.18 of its Report whichsuggested migration of existing BSPs by charging entry fee determined through abidding process in 2001 for the fourth cellular operator and no entry fee from theexisting CMSPs. There was no mention regarding entry fee to be charged from the Atwo-stage process: the Unified Access Regime for basic and cellular operatorsallowing a migration path to existing BSPs and CMSPs in the first phase to beimplemented immediately followed by a second phase of a fully UnifiedLicensing/Authorisation Regime within six months, bringing all telecom servicesunder one licence, after a process of detailed consultation by TRAI; 141
  • 142. Fee paid by the fourth cellular operator to be used as benchmark for migration of BSOs to the new access regime and no fee to be paid by the existing CMSPs for migrating to new regime; The DoT to be authorised to finalise details of implementation of UAS and the fully Unified Licence Regime with the approval of the Honble Minister of Communication & Information Technology (MoC&IT) based on the recommendations of TRAI.In pursuance to the Cabinets approval, the DoT issued the guidelines on UASLicencing (11 November 2003), for moving towards UASL regime by giving theoption to all existing BSOs and CMSPs to migrate to UASL regime. The guidelinesalso included a condition that ―All applications for new Access Services Licence shallbe in the category of Unified Access Services Licence.‖ There was ambiguityregarding entry fee to be charged from the new licensees as TRAI had not given anyrecommendation regarding introduction of new operators in the first phase of UASLregime. Secretary, DoT, spoke to the Chairman, TRAI who clarified (14 November2003) that entry fee of the new unified licensee would be the entry 4 th fee of 4Cellular Operator and in service areas where there is no fourth operator, the entryfee of existing BSO fixed by the Government (based on TRAI recommendations).DoT decided to receive all applications under UAS without revision of the spectrumallocation procedures/revision of entry fee, which automatically lifted the restrictionon the number of operators in the UAS regime.3.1.4 TRAIs Recommendations of 2003 not followed in spiritIn its recommendation, TRAI had considered three alternatives for migration ofexisting operators in para 7.16 to 7.18 of their Report submitted to Government on27 October 2003, including that of bidding by the existing and new prospectiveoperators, but did not favour it on the grounds of likely delay in implementation ofUAS regime. TRAI recommended a third option in para 7.18 of its Report whichsuggested migration of existing BSPs by charging entry fee determined through abidding process in 2001 for the fourth cellular operator and no entry fee from theexisting CMSPs. There was no mention regarding entry fee to be charged from thenew licensees under UAS, as entry of new operators had not been recommended byTRAI in the first phase of UAS which was intended only for migration of existing 142
  • 143. BSOs and CMSPs. Thus, the first phase of six months was meant for migration ofexisting operators. TRAI had recommended new operators only in the fully UnifiedLicensing Regime. TRAI had also suggested that ―taking cognizance of spectrumavailability, TRAI is in favour of introducing more competition. However, wefeel that in lieu of more cellular operators it would be more appropriate to havecompetition in the Unified Licensing framework which will be initiated after 6months‖ (Para 7.37). TRAI in their same Report submitted to Government hadrecorded in para 7.39 that ―the induction of additional mobile service providersin various service areas can be considered if there is adequate availability ofspectrum. As the existing players have to improve the efficiency of utilisationof spectrum and if Government ensures availability of additional spectrumthen in the existing licensing regime, they may introduce additional playersthrough a multi-stage bidding process as was followed for fourth cellularoperator‖. TRAI also recommended that the guidelines for Unified licensing shouldinclude nominal entry fee, USO etc.Thus, the stipulation of the DoT to benchmark entry fee in respect of new licensesalso at the same level which was allowed for migration of existing BSOs was notconsistent with the recommendations of TRAI (2003). This issue was neitherdeliberated by the TRAI in its recommendations (2003) nor at the TelecomCommission level nor by the GoM on Telecom matters constituted in September2003. The Cabinet also did not give any directions on the issue.3.1.5 One of the major objectives of movement towards Unified licensing regime, ofwhich first step was migration of existing licensees, was to ultimately de-linkspectrum from licence and encourage its efficient use by rational allocationprocedure and pricing. Under the fully unified licensing regime it was envisaged thatthe licence fee would be nominal allowing the operator to provide different telecomservices with a separate procedure /regulation for allotting spectrum for which TRAIhad yet to give its recommendations. TRAIs recommendations in this regard havenot yet been implemented by the DoT, which also meant that an important andcrucial objective of 2003 policy remained unachieved.3.1.6 The Ministry justified the non revision of entry fee on the ground that the entryfee recommended by TRAI in August 2003 was not only for migration of existingoperators but also for new prospective UASL operators as well and the 143
  • 144. recommendations were approved by the Cabinet on 31.10.2003. Further, the UnionCabinet had authorised DoT to finalise the details of implementation with theapproval of Honble MoC&IT and hence the guidelines were issued in November2003. The Ministry also stated that their action was also consistent with theclarification given by the then Chairman TRAI (November 2003). It was also statedthat TRAI submitted two recommendations on fully Unified Licencing regime in 2005but could not be implemented since the Convergence Bill lapsed in Parliament.The contention is not correct as the issue of the non revision of entry fee for newprospective UASL operators had not even been raised in the note put up to theCabinet. Even TRAI in their report (October 2003) had recommended for a two stageimplementation of the UAS licensing regime in which the first phase was regardingmigration of existing BSOs and CMSPs to the UAS and the second phase for thenew UAS licences. The first phase was to be implemented immediately while thesecond phase was to commence only after the receipt of fresh recommendations ofTRAI within six months (Para 7.1 of TRAI recommendations of October 2003).Therefore the issue of non revision of entry fee for new licensees/operators was notdiscussed in any forum- Telecom Commission, TRAI, GOM or Cabinet. If the DoTneeded more clarity in implementing recommendations of the TRAI, it should havewritten for clarifications from the TRAI on the specific issues. Raising/discussing theissues on telephone and getting clarification even in a letter from the Chairman TRAIon the same day in his individual capacity on such a critical issue shows unduehaste and an avoidance for following the normal official procedures by the DoT.Further, the Chairman, TRAI did not have the authority to issue a clarification on anissue which had not been discussed and deliberated upon in the Authority. Theclarification was not in line with the recommendations of TRAI as para 7.39 of theReport read that ―if Government ensures availability of additional spectrum then inthe existing licensing regime, they may introduce additional players through a multi-stage bidding process as was followed for fourth cellular operator‖. Any suchclarification, which altered the TRAIs recommendations substantively, should havebeen taken to the GoM and Cabinet as their decision was based on the originalTRAIs recommendations.3.1.7 The DoTs action of applying the rates approved for the existing operators formigrating to UAS regime, to new applicants also by relying on the clarification of the 144
  • 145. Chairman TRAI in his individual capacity was inconsistent with the recommendationsof the TRAI (2003) and went beyond the authority given by the Cabinet. It alsoviolated all canons of financial propriety. The DoT had to resort to informalclarifications from TRAI before concluding that new applications would also be at theentry fee of price determined for 4th CMSP in 2001 as against TRAIsrecommendation of introducing new operators in the existing regime through a multi-stage bidding process. Elimination of bidding process without delinking licensingfrom spectrum was not intended by TRAI.Issue of Price Discovery Of Spectrum Was Over LookedThe MoF, right from the year 2003, quoting international practices and scarcity factorhad maintained that auction of spectrum and its trading under a regulatory frame-work could induce competition and transparency in the system and would result inmost efficient utilisation of spectrum. TRAI in October 2003, while recommendingUnified Services Licensing, had also proposed to submit a separate report regardingspectrum allocation and pricing. Based on these inputs, Cabinet, in its decision of 31October 2003 while charting the course to the UAS and US licencing regime hadalso approved the following: adequate spectrum would be made available for unimpeded growth of Telecom services for which WPC wing of the DoT and Ministry of Defence (MoD) should coordinate; MoF will provide MoD adequate budget and; The DoT and the MoF would discuss and finalise pricing formula for spectrum including incentive for efficient use and disincentive for sub-optimal usages.3.2.1 Thus, spectrum pricing issue was to be decided in consultation with the MoF.However, when a GoM was constituted in February 2006, its Terms of Reference(ToR) were modified at the instance of the DoT to keep the issue of spectrum pricingoutside its purview. Though MoF insisted for its inclusion in the ToR for the GoM,DoT maintained that spectrum pricing was within the normal work carried out bythem. The MoF opined that spectrum pricing was an issue which has far reachingconsequences for the economy and needed to be debated, but this was notconsidered at the highest level and the views of the DoT prevailed in finalization of 145
  • 146. ToR. The GoMs role, in December 2006, at the instance of the DoT, was confined toissues concerning spectrum vacation. Thus, without MoF getting a chance tocontribute to the issue of pricing of spectrum, new licences continued to be issuedalong with the spectrum.It was also noted that the DoT kept the applications for UAS licence pending sinceMarch 2006 on the grounds of non-availability of spectrum, though a decision to getthe spectrum vacated from MoD was taken way back in 2003. DoT admitted thatprior to April 2007, availability of spectrum was not quantified and GSM spectrumallotments to service providers/operators were made after due co-ordination withMoD on a case to case basis. Since the availability of spectrum had not beenquantified till April 2007, the basis for keeping the applications pending and seekingTRAI recommendation (April 2007) on limiting the number of Access ServiceProviders on the grounds of non-availability of spectrum is inexplicable.3.2.2 Again in August 2007, TRAI in its report observed that the entry fee as itexisted in2001 was not a realistic price for obtaining a licence in the changed situationconsidering the dynamism and growth of telecom sector and it needs to bereassessed through a market mechanism. It also observed that value of spectrumwas not correctly reflected in the extant pricing model and recommended again forde-linking of spectrum from licence. Yet, TRAI did not favour any change in 2Gspectrum pricing even for new entrants on the grounds that it would affect theprinciples for level playing field for the new operators. It is to be noted that the role ofTRAI, as per the TRAI Act is primarily to foster competition and to ensure a levelplaying field in the sector. Generation of revenue for the Government is not within thescope of its mandate and hence not perhaps a basis for framing itsrecommendations. Thus, while accepting the recommendations of TRAI, protectingthe financial interests of the Government should have been an importantconsideration for the DoT, more so, when it had left out MoF from the decisionmaking process with regard to the pricing formula of spectrum.3.2.3 The DoT in response to the audit observation, stated (July 2010) that inFebruary 2006 the then Honble MoC& IT had apprised the Honble Prime Ministerthat one major bottleneck in the sustained growth of telecom sector was the 146
  • 147. availability of spectrum and not its allocation and thus ToR was revised with theapproval of the Honble Prime Minister.3.2.4 While ensuring availability of spectrum which is also at a price, the DoT shouldnot have lost sight of the need for a realistic price for 2G spectrum, especially in thelight of the fact that the price being charged was discovered from a nascent telecommarket in the year 2001 and was approved by the Government as benchmark onlyfor the purpose of allowing migration of Basic Operators to UAS regime in 2003 foroperating mobile services.3.2.5 MoF while agreeing with the Audit view stated that the Ministry has at variouspoints of time been advocating for a more rational mechanism for allocation andpricing of 2G spectrum. Right from August 2003 they have been recommendinggreater orientation in spectrum allocation, keeping efficiency and optimal utilizationconsiderations in mind, through auction to users, who are willing to pay themaximum fee. MoF concurred with Audit that the assumption of the DoT to the effectthat spectrum pricing was within its normal work allocation was not tenable. The MoFobserved that ―in view the directions of the Union Cabinet (October 2003) andparticularly in the absence of requisite clarity in the recommendations of TRAIand decision of the Union Cabinet, in regard to the fixation of entry fees fornew licensees, prudent principles of governance would have required DoT toengage in further inter-ministerial discussions particularly with the MoF. Thefact that this was not done despite repeated advices from MoF does givescope for creation of doubt, on the validity of the decision taken to fix theentry fee for new licenses at 2001 levels‖.3.3 Move from Unified Access Service to Unified Licencing - Not Reviewed For6 YearsIt is important for a growing economy that a policy decision is subject to review /isrevisited constantly with adequate feed-back for application of collective wisdom ofGovernment, particularly if it relates to a sector witnessing transition and operatingwithin a dynamic environment, as was the case with the Telecom sector during2003-2009. In this case, despite gaps in policy implementation as detailed above, 147
  • 148. there was no attempt on the part of the DoT to review the implementation processesholistically, which is one reason for the pricing issue remaining unaddressed.When two-stage Unified Access Licensing policy could not be implemented fully ascleared by the Cabinet in October 2003, it was never again placed before theCabinet for charting/approving the next /alternative course of action. The Cabinet didnot get the chance to consider the changed scenario whereby Unified ServicesLicensing Regime introduced with the intention of de-linking spectrum allocation fromlicensing could not be fully achieved. An approved interim stage was thus treated asa final destination by the DoT.3.3.1 DoT justified continuance of 2001 rates for issue of licenses to Audit statingthat the Government treats telecom sector as an infrastructure sector andaccordingly the Governments broad policy of taxes and regulation of the sector arepromotional where revenue considerations play a secondary role. Also, the policy ofgrant of UAS licences was not changed since introduction because this has resultedin an unprecedented growth of telecom services. Change in policy is consideredwhen the existing policies are not delivering desired results which were not the casein the telecom sector.3.3.2 Policies are evolved through the initiatives of the concerned Ministries. Theresponse of DoT suggested that it had not taken into account the unprecedentedgrowth in the telecom sector, the scarcity of the resources and the increasingeconomic value of 2G spectrum, when it decided not to review the pricing ofspectrum. This was despiteTRAIs observation that value of spectrum needed to be reassessed through amarket mechanism and MoF also was advising for rational pricing.Issue of UAS Licence to Ineligible ApplicantsThe broad guidelines of the DoT (December 2005) details the eligibility conditions forgrant of Unified Access Services Licence in a Service Area. Important eligibilityconditions of the guidelines are: 148
  • 149. The applicant must be an Indian company, registered under the IndianCompanies Act1956.The Company shall acknowledge compliance with the licence agreement as apart of Memorandum of Association of the Company. Any violation of thelicence agreement shall automatically lead to the Company being unable tocarry on its business in this regard. The duty to comply with the licenceagreement shall also be made a part of Articles of Association.The applicant company shall have a minimum paid up equity capital of theamount as prescribed in the guidelines depending on the Service Area(s) theyare applying for as on the date of the application and shall submit a certificateto this effect by the applicants Company Secretary along with application.A promoter company/ legal person cannot have stakes in more than oneLicensee Company for the same service area. No single company/ legalperson, either directly or through its associates, shall have substantial equityholding in more than one Licensee Company in the same service area for theAccess Services namely; Basic, Cellular and Unified Access Service.Substantial Equity was defined as equity of 10% or more.The applicant and promoters of the applicant company should have acombined net-worth of amount as prescribed in the guidelines depending onthe service Area(s) they are applying for. The net-worth of only thosepromoters shall be counted, who have at least 10 % equity stake or more inthe total equity of the company.In case the applicant is found to be not eligible for the grant of licence forUnified Access Service, the applicant shall be informed accordingly.Thereafter the applicant is permitted to file a fresh application if so desired.Each applicant Company was required to provide inter alia followinginformation/ documents for each service area separately:-Certified copy of Certificate of Registration along with Articles of Associationand Memorandum of Understanding. (Company Secretary to certify the copy)Paid up capital as on the date of application (Certificate from CompanySecretary certifying the paid up capital to be provided.); 149
  • 150. Details/para no. of Memorandum of Association of Company for compliance to Clause 5.G (iii) of guidelines dated 14.12.2005; Power of Attorney by Resolution of Board of Directors that the person signing the application is an authorized signatory.The Applicant company was also required to give an undertaking to the effect that ifthe application was found to be incomplete in any respect and/or if found withconditional compliance, the same was to be summarily rejected. The applicant wasalso required to certify that if at any time, any averments made or informationfurnished for obtaining the licence was found incorrect, then his application and thelicence if granted thereto on the basis of such application shall be cancelled.Section-18(2) of the Companies Act, 1956 stipulates that a certificate of registrationby the Registrar of Companies shall be conclusive evidence that all the requirementsof the Act with respect to the alteration and the confirmation thereof has beencomplied with, and henceforth the memorandum so as altered shall be theMemorandum of the Company. Section 19(1) provides that no alternation will haveany effect until it has been duly registered in accordance with the relevant provisionsof the Act.Verification of the files of the DoT and public documents accessed from the Ministryof Corporate Affairs, Government of India, New Delhi, revealed that as many as 85Licenses out of the 122 new licenses issued to 13 Companies in 2008 were grantedto those companies which did not satisfy the eligibility conditions prescribed by theDoT. All 85 licenses were given to companies which did not have the stipulated paidup capital at the time of application. Further, 45 out of these 85 licenses were issuedto companies who failed to satisfy conditions of main object clause in theirMemorandum of Association.Misrepresentation of Facts By The Nine Real Estate CompaniesSix newly incorporated applicant companies* belonging to Unitech Group (Brandname Uninor) had submitted their applications for grant of UAS licenses for 20service areas to the DoT on 24 September 2007. Along with their applications, thesecompanies had submitted copies of their Memorandum of Association/ Articles ofAssociation (MOA/AOA) indicating the main object clause of Telecom Sector therebyclaiming to meet the eligibility criterion for the grant of UAS licence. 150
  • 151. On verification, it was revealed that all these companies had suppressed the fact ofconditional nature of certification of registration done by the Registrar of Companies(ROC) on 20 September 2007 while registering the alterations in the main objectclause in the MOA/AOA of these Companies. The ROC while certifying the alterationof the main object clauses of all six companies had stated that the certificate wassubject to the change of name of the Company. Since in terms of Section 21 of theCompanies Act 1956, the change of name of the Company could be done only withthe approval of the ―Central Government signified in writing‖, the condition of thechange of name of these applicant Companies was met in May 2008 only. As aresult, all these six new companies were registered afresh with the new names inMay 2008 by the ROC. Hence the alteration of the MOA of these Companiesbecame effective in May 2008 only. As a result thereof, the MOA of these companiesdid not permit them to operate in the telecom sector on the date of application i.e. 24September 2007. Hence, they were ineligible for the grant of UAS licenses.These six companies had suppressed the fact of conditional certification of thealterations in the MOA/AOA by the ROC while submitting their applications for UASlicence on 24 September 2007. All these companies also misrepresented the alteredMOA/AOA as the original MOA/AOA in their applications before DOT. Thesubmission of the altered MOA/AOA of the Companies without full disclosure of thefactual position of the alteration of the main object clause in the MOA/AOA and theirconditional registration by the ROC was a fraudulent act of these six companies withthe malafide intentions of obtaining the UAS licenses for 20 service areas bymisleading the DoT.False and Fictitious Claims Of Higher Paid Up Capital By 13 CompaniesPaid up capital of the applying Company was one of the important conditionsprescribed for obtaining a UAS Licence. The broad guidelines of the DoT (December2005) prescribe that the applicant company shall have a minimum paid up equitycapital of ` 3-10 crore depending on the Service Area(s) (Service Areas A- ` 10 crore,B- ` 5 crore and C - ` 3 crore) as on the date of the application and shall submit acertificate to this effect by the applicants Company Secretary along with application. 151
  • 152. Further the Companies Act 1956 prescribes the procedure to be followed forincrease in the authorised share capital of a company. Only after authorised sharecapital is increased and registered with ROC, the procedure for increasing the Paidup capital could be undertaken by a registered Company.Access to Dual TechnologyIn November 2003, based on Cabinet decision, the DoT had issued guidelines forUAS licence which stipulated that ―the service providers migrating to Unified AccessServices Licence will continue to provide wireless services in alreadyallocated/contracted spectrum and no additional spectrum will be allotted under themigration process for Unified Access Services Licence‖.In April 2007, the DoT requested TRAI to furnish their recommendations onpermitting ―service providers to offer access services using combination oftechnologies (CDMA, GSM and/or any other) under the same licence‖. TRAIsrecommendations on the issue were received along with other recommendations inAugust 2007. As per these recommendations, ―A licensee using one technology maybe permitted on request, usage of alternative technology and thus allocation of dualspectrum. However, such a licensee must pay the same amount of fee which hasbeen paid by existing licensees using the alternative technology or which would bepaid by a new licensee going to use that technology‖. Regarding inter se priority forspectrum allocation, when the existing licensee becomes eligible for allocation ofadditional spectrum specific to the new technology, such a licensee has to be treatedlike any other existing licensee in the queue and the inter se priority of allocationshould be based on the criteria that may be determined by the DoT for the existinglicensee.Undue Benefits to Reliance Communications LimitedFour Companies Reliance Communications Ltd., Tata Teleservices, Shyam TelelinkLtd. and HFCL Infotel Ltd. were providing CDMA based mobile service under UASlicence. Three Companies (Reliance Communications Ltd for 20 Service Areas,Shyam Telelink Ltd for Rajasthan Service Area and HFCL Infotel Ltd. for PunjabService Area) had applied for permission for using GSM technology in 2006. Sincethe combination of technologies (CDMA, GSM and/or any other) under the same 152
  • 153. licence was not permitted, DoT had not acceded to their request till April 2007.Based on the recommendations of TRAI, the decision for use of alternate technologywas taken for the first time by the DoT on 17 October 2007. This decision, however,was taken without referring the matter to the full Telecom Commission even when itinvolved allocation of spectrum in 2007 at the 2001 price.DoT issued a Press release in this regard on 19 October 2007. However, beforeannouncing the acceptance of the recommendations of the TRAI in this regard,inprinciple approval for using GSM technology ( dual/alternate technology) wasgiven, on 18 October 2007 itself (a day before the press release) to the threeoperators who had, sought for facility for using alternate technology in 2006 when ithad not even been contemplated. The undue haste shown in issuing in-principleapproval for using GSM technology to Reliance Communication (20 service areas),Shyam Telelink Ltd. (1 service area) and HFCL Infotel Ltd (1 service area) was notevident afterwards as when the Tata Teleservices Ltd applied for dual technologyimmediately after the issue of the Press notification on19 October 2007, LOI was notissued to them till January 2008. Further, other applicants* were still waiting forsimilar licence for over two and half years as of now.Reliance Communication Ltd. had complied with the requirements for permission touse dual technology on 19 October 2007 itself by depositing the non refundableentry fee of ` 1645 crore for 20 service areas through their sister concern RelianceInfocomm Ltd. Acceptance of bank drafts for ` 1645 crore by the orders of RelianceInfocomm Ltd (third party) on behalf of Reliance Communications Ltd was also not inorder and shows the hurry through which entry fee was deposited. As a result,Reliance Communications Ltd. could acquire the right for allocation of 2G spectrumin 20 service areas on the day the policy itself was announced.By taking the priority date of Reliance Communications Ltd. as the date on whichthey had moved application for use of alternate technology (when it was not evenformulated and permitted) i.e. 2006, they were allocated start-up spectrum on 10 and11 January 2008 in 14 service areas (the operator withdrew request for 6 serviceareas where they were already providing GSM services) ahead of other operatorswho had applied for new UAS licences and whose applications were kept pending on 153
  • 154. the grounds of non-availability of spectrum. Spectrum under dual technology wasallotted to HFCL Infotel Ltd. in Punjab only in September 2008 and Shyam TelelinkLtd.in Rajasthan in December 2008 though these companies also applied forspectrum under dual technology along with Reliance Communications Limited in2006. In Delhi service area, Reliance was allocated GSM spectrum in January 2008while Datacom Solutions Pvt. Ltd, Unitech Wireless Ltd, Spice Communications Ltd,Loop Telecom Pvt. Ltd. and Tata Teleservices Ltd. were not allocated GSMspectrum till September 2010. Thus the process followed by the DoT whileintroducing access to the dual technology to the existing telecom operators in Indialacked transparency and fairness. Equal opportunity was denied to other similarlyplaced operators who could apply for use of dual technology, only after the formalannouncement of the policy.Violation of 2003 Cabinet Decision to Allow Additional Spectrum at 2001 PricesDeviation from a Cabinet decision should normally be with the approval of Cabinet.However, in the present case, such a crucial decision to permit service providers tooffer access services using combination of technologies (CDMA, GSM and/or anyother) under the same licence with dual spectrum allocation was taken without thematter being referred to Cabinet.Undue Advantage to Swan Telecom Pvt. Ltd in The Allocation Of SpectrumIt was noted that the priority list was adjusted in Punjab, and Maharashtra serviceareas to give undue advantage to Swan Telecom Pvt. Ltd in allocation of spectrum.In Punjab service area, 15 MHz GSM spectrum was available in September 2008which was sufficient to meet the demand of only first three applicants in the prioritylist i.e. HFCL, Idea Cellular Ltd and Unitech Wireless Pvt. Ltd. The request of IdeaCellular Ltd who was at the second place in the priority list was, however, notconsidered on the grounds of its proposed merger with Spice Communications Ltdwho were offering service in Punjab service area. By keeping out Idea Cellular Ltdfrom the priority list, spectrum was allocated to Swan Telecom Pvt. Ltd who was atthe 4th position on the priority list. In identical situation in Maharashtra service area,Spice Communications Ltd was not allocated start-up spectrum citing its proposedmerger with Idea Cellular Ltd. Here too, the resultant beneficiary was Swan TelecomPvt. Ltd. 154
  • 155. Value of Spectrum Allocated Beyond the Contracted QuantityIt was noticed in audit that 9 operators as per the details in the box, were allottedspectrum beyond the upper limit laid down in the UASL agreement. Thus while theDoT, on one hand, was not processing pending applications for licence due to nonavailability of spectrum, on the other hand it was allotting spectrum to existingoperators beyond the contracted limit without any upfront charges being imposed orwithout determination of market price of spectrum. Based on the amount chargedfrom CDMA operators for grant of GSM spectrum in 2007, the value of spectrumheld by these operators beyond the contracted unit worked out to ` 2561 crorethough its market value on date would be higher.The Technical Committee appointed by Honble MoC&IT for ―Allocation of Access(GSM/CDMA) spectrum and pricing‖ recommended in May 2009, that the additionalspectrum assigned beyond 6.2+6.2 MHz in an service area should attract an upfrontcharge equivalent to the 3G auction price from the date of assignment.Subsequently, TRAI also recommended in May 2010 for charging the additionalspectrum held by operators beyond the licensed quantity which is underconsideration of the Government. In the event of these recommendations beingaccepted, the additional flow of revenue to the Government would come to ` 36,993crore.Non Fulfillment of the Roll out Obligations by the New Telecom LicenseesOut of 122 UAS Licences awarded in 2008, 85 Licences were awarded to the sixnew entrants (Unitech brand name Uninor, Swan name changed to Etisalat, Allianzsince merged with Etisalat, Shipping Stop Dot Com name changed to Loop Telecom,Datacom name changed to Videocon and S Tel) to the telecom sector. As per theconditions of the UAS Licenses, these licensees were required to roll out theservices in the 90 % service area in Metros and 10% District headquarters (DHQ) inother service areas within 12 months of the date of award of Licences. Audit foundthat though these 6 new operators obtained the initial 4.4 Mhz spectrum in 81service areas during the period April 2008 to January 2009, none of them had rolledout their services as per the provisions of the UAS Licences in any service area till31December 2009. Since there were many existing telecom UAS Licensees in direneed of this scarce natural resource, it resulted effectively into hoarding of the finitenatural resources of the Nation by these operators. Thus DOT did not earn any 155
  • 156. revenue from this natural resource during 2008-09 and 2009-10 due to inordinatedelay in the commencement of services by these operators. Further, DoT also failedto recover Liquated Damages and penalty of ` 679 crore from these 6 operators forinordinate delay in the rolling out their services till 31 December 2009.Financial ImpactWhether the entry fee was expected to reflect the value of the spectrum at all?The 2003 Cabinet decision intended to make the UAS licence only an instrument toenter the business of providing cellular and other telecom services irrespective of thetechnology used for the purpose.Companies could obtain spectrum of required type by paying its price throughauction or any other arrangement decided by an independent regulator to be set upfor spectrum pricing and management. Since no price discovery of spectrum wasattempted for 2G spectrum separately, the entry fee discovered in 2001 is mainly theprice of spectrum that came with UAS licence.Under Pricing Of 2G and Consequent LossUASL Applicant Had Offered Higher PriceS TEL Limited in a further communication addressed to Honble MoC&IT dated 27December 2007 enhanced its earlier offer of ` 6000 crore to ` 13,752 crore over aperiod of ten years for allotment of 6.2 MHz GSM spectrum.If the price offered by S Tel Ltd which he proposed to revise upwards in case of anycounter bids, is used as indicator of market valuation of 6.2 MHz of 2G spectrum atthat time, value in respect of all 122 new licences and 35 licences under dualtechnology after discounting the receivables of the future years work out to ` 65,909crore as against ` 12,386 crore collected by the DoT.This indicated that had an open process of bidding/auction been used for pricediscovery and hasty and abrupt changes in deadlines and dates not been made, itcould have been possible for the Government to have received at least this amount.Value Based On Prices Discovered For 3G SpectrumIf price is calculated at 3G rates which can also be taken as one of the indicators forassessing the value of 2G spectrum allocated to UAS licensees in 2008, the value 156
  • 157. works out to 1, 11,512 crore against ` 9014 crore realised by DoT. Similarly, forspectrum allotted under the dual technology as the value would have been ` 40526crore, as against ` 3,372 crore collected. The total difference in value worked outto ` 1,39,652 crore .Sale of Equity by UAS Licensee Firms at Higher ValueThree companies viz. Swan Telecom, S Tel and Unitech were new entrants in thetelecom sector. The fact that these operators could draw huge foreign investments,even before establishing a foothold in the Indian telecom market would suggest thatacquiring UASL and with it, allotment of 4.4 MHz of GSM spectrum for roll out, wasthe main factor which attracted the foreign investment.A comparison of foreign equity attracted by the new entrants in the Indian telecommarket would reveal that the cost of a pan India licence could be a value between `7758 crore to ` 9100 crore. However, the DoT issued pan India licences at ` 1658crore. As a result 122 licenses and 35 dual technology approvals issued in 2008could have earned the revenue ranging from ` 58,000 crore to ` 68,000 crore to theGovernment against the actual revenues of ` 12,386 crore earned by them.In an open transparent system, there is a possibility that Government would haveearned even more revenue than that these new entrants have been able to attract. 157
  • 158. ConclusionsThe entire process of allocation of UAS licences lacked transparency and wasundertaken in an arbitrary, unfair and inequitable manner. The DoT did not follow itsown guidelines on eligibility conditions, arbitrarily changed the cutoff date for receiptof applications post facto and altered the conditions of the FCFS procedure at crucialjunctures without valid reasons, which gave unfair advantage to certain companiesover others. 1. The Department of Telecommunications also did not do the requisite due diligence in the examination of the applications submitted for the UAS licenses, leading to the grant of 85 out of 122 UAS licences to ineligible applicants. 2. Dual Technology was also introduced by the DoT in October 2007 in a hasty and arbitrary manner and in-principle approval was given to 3 operators on a day prior to the announcement of the policy, which gave the perception of discrimination against other players in the field 3. The entire implementation process does not withstand the test of scrutiny, and hence, the widely held belief that it has benefitted a few operators and has not been able to maximize generation of revenue from allocation of such a scarce resource. The role of Telecom Regulatory Authority of India would also appear to have been reduced to that of a spectator as its recommendations were either ignored or applied selectively The entire process of allocation of 2G spectrum raises serious concern about the systems of governance in the Department of Telecommunications which need to be thoroughly reviewed and revamped. To ensure that such lapses do not occur in any Ministry or Department of the Government, there is an imperative need to fix responsibility and enforce accountability 158
  • 159. RIGHT TO INFORMATION ACT, 2005IntroductionThe Government of India has enacted "Right to Information Act 2005" for citizens tosecure access to information under the control of Public Authorities in order topromote transparency and accountability in the working of any public authority.The Right to Information Act 2005 (RTI) is an Act of the Parliament of India "toprovide for setting out the practical regime of right to information for citizens." TheAct applies to all States and Union Territories of India except the State of Jammuand Kashmir. Jammu and Kashmir has its own act called Jammu & Kashmir Right toInformation Act, 2009.Under the provisions of the Act, any citizen may request information from a "publicauthority" (a body of Government or "instrumentality of State") which is required toreply expeditiously or within thirty days.The Act also requires every public authority to computerize their records for widedissemination and to pro-actively publish certain categories of information so that thecitizens need minimum recourse to request for information formally. This law waspassed by Parliament on 15 June 2005 and came fully into force on 13 October2005.[1] Information disclosure in India was hitherto restricted by the Official SecretsAct 1923 and various other special laws, which the new RTI Act now relaxes.The formal recognition of a legal right to information in India occurred more than twodecades before legislation was finally enacted, when the Supreme Court of Indiaruled in State of U.P. v. Raj Narain that the right to information is implicit in the rightto freedom of speech and expression explicitly guaranteed in Article 19 of the IndianConstitution.Freedom of Information Act, 2002Passage of a national level law, however, proved to be a difficult task. Given theexperience of state governments in passing practicable legislation, the CentralGovernment appointed a working group under H. D. Shourie and assigned it the taskof drafting legislation. The Shourie draft, in an extremely diluted form, was the basisfor the Freedom of Information Bill, 2000 which eventually became law under the 159
  • 160. Freedom of Information Act, 2002. This Act was severely criticized for permitting toomany exemptions, not only under the standard grounds of national security andsovereignty, but also for requests that would involve "disproportionate diversion ofthe resources of a public authority". There was no upper limit on the charges thatcould be levied. There were no penalties for not complying with a request forinformation. The FoI Act, consequently, never came into effective force.State Level LawsThe RTI Laws were first successfully enacted by the state governments of — TamilNadu (1997), Goa (1997), Rajasthan (2000), Karnataka (2000), Delhi (2001),Maharashtra (2002), Assam (2002), Madhya Pradesh (2003), and Jammu andKashmir (2004). The Maharashtra and Delhi State level enactments are consideredto have been the most widely used. The Delhi RTI Act is still in force. Jammu &Kashmir has its own Right to Information Act of 2009, the successor to the repealedJ&K Right to Information Act, 2004 and its 2008 amendments.ScopeThe Act covers the whole of India except Jammu and Kashmir, where J&K Right toInformation Act is in force. It is applicable to all constitutional authorities, includingthe executive, legislature and judiciary; any institution or body established orconstituted by an act of Parliament or a state legislature. It is also defined in the Actthat bodies or authorities established or constituted by order or notification ofappropriate government including bodies "owned, controlled or substantiallyfinanced" by government, or non-Government organizations "substantially financed,directly or indirectly by funds" provided by the government are also covered in it.Private BodiesPrivate bodies are not within the Acts ambit directly. However, information that canbe accessed under any other law in force by a public authority can also berequested. In a landmark decision of 30-Nov-2006 (Sarbajit Roy versus DERC) theCentral Information Commission also reaffirmed that privatized public utilitycompanies continue to be within the RTI Act- their privatization not withstanding. 160
  • 161. Right to InformationThe right to information includes access to information which is held by or under thecontrol of any public authority and includes the right to inspect the work, document,records, taking notes, extracts or certified copies of documents / records andcertified samples of the materials and obtaining information which is also stored inelectronic form.The Act empowers every citizen to: Ask any questions from the Government or seek any information. Take copies of any governmental documents. Inspect any governmental documents. Inspect any Governmental works. Take samples of materials of any Governmental work.ProcessUnder the Act, all authorities covered must appoint their Public Information Officer(PIO). Any person may submit a request to the PIO for information in writing. It is thePIOs obligation to provide information to citizens of India who request informationunder the Act. If the request pertains to another public authority (in whole or part), itis the PIOs responsibility to transfer/forward the concerned portions of the request toa PIO of the other within 5 working days. In addition, every public authority isrequired to designate Assistant Public Information Officers (APIOs) to receiveRTI requests and appeals for forwarding to the PIOs of their public authority. Theapplicant is not required to disclose any information or reasons other than his nameand contact particulars to seek the information. "Apply RTI" [6] and "Rtination" [7] arethe online system which facilitates the filing of RTI (Right To Information Act, India)applications online. It aims primarily at minimizing the time taken and effort requiredin filing an application. The Act specifies time limits for replying to the request. If the request has been made to the PIO, the reply is to be given within 30 days of receipt. If the request has been made to an APIO, the reply is to be given within 35 days of receipt. 161
  • 162. If the PIO transfers the request to another public authority (better concerned with the information requested), the time allowed to reply is 30 days but computed from the day after it is received by the PIO of the transferee authority. Information concerning corruption and Human Rights violations by scheduled Security agencies (those listed in the Second Schedule to the Act) is to be provided within 45 days but with the prior approval of the Central Information Commission. However, if life or liberty of any person is involved, the PIO is expected to reply within 48 hours.Since the information is to be paid for, the reply of the PIO is necessarily limited toeither denying the request (in whole or part) and/or providing a computation of"further fees". The time between the reply of the PIO and the time taken to depositthe further fees for information is excluded from the time allowed. If information is notprovided within this period, it is treated as deemed refusal. Refusal with or withoutreasons may be ground for appeal or complaint. Further, information not provided inthe times prescribed is to be provided free of charge. For Central Departments as of2006, there is a fee of 10 for filing the request, 2 per page of information and 5for each hour of inspection after the first hour. If the applicant is a Below PovertyCard holder, then no fee shall apply. Such BPL Card holders have to provide a copyof their BPL card along with their application to the Public Authority. StatesGovernment and High Courts fix their own rules.Partial DisclosureThe Act allows those part(s) of the record which are not exempt from disclosure andwhich can reasonably be severed from parts containing exempt information to beprovided.ExclusionsCentral Intelligence and Security agencies specified in the Second Schedule likeIB,Directorate General of Income tax(Investigation), RAW, Central Bureau ofInvestigation (CBI), Directorate of Revenue Intelligence, Central EconomicIntelligence Bureau, Directorate of Enforcement, Narcotics Control Bureau, Aviation 162
  • 163. Research Centre, Special Frontier Force, BSF, CRPF, ITBP, CISF, NSG, AssamRifles, Special Service Bureau, Special Branch (CID), Andaman and Nicobar, TheCrime Branch-CID-CB, Dadra and Nagar Haveli and Special Branch, LakshadweepPolice. Agencies specified by the State Governments through a Notification will alsobe excluded. The exclusion, however, is not absolute and these organizations havean obligation to provide information pertaining to allegations of corruption and humanrights violations. Further, information relating to allegations of human rights violationcould be given but only with the approval of the Central or State InformationCommissionInformation ExclusionsThe following is exempt from disclosure [Section .8)] Information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, "strategic, scientific or economic" interests of the State, relation with foreign State or lead to incitement of an offense; Information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court; Information, the disclosure of which would cause a breach of privilege of Parliament or the State Legislature; Information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information; Information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information; Information received in confidence from foreign Government; Information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes; Information which would impede the process of investigation or apprehension or prosecution of offenders; 163
  • 164. Cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers; Information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual (but it is also provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied by this exemption); Notwithstanding any of the exemptions listed above, a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests. (NB: This provision is qualified by the proviso to sub-section 11(1) of the Act which exempts disclosure of "trade or commercial secrets protected by law" under this clause when read along with 8(1)(d))Role of GovernmentSection 26 of the Act enjoins the central government, as also the state governmentsof the Union of India (excluding J&K), to initiate necessary steps to: Develop educational programs for the public especially disadvantaged communities on RTI. Encourage Public Authorities to participate in the development and organization of such programs. Promote timely dissemination of accurate information to the public. Train officers and develop training materials. Compile and disseminate a User Guide for the public in the respective official language. Publish names, designation postal addresses and contact details of PIOs and other information such as notices regarding fees to be paid, remedies available in law if request is rejected etc.EffectsIn the first year of National RTI, 42,876 (not yet official) applications for informationwere filed to Central (i.e. Federal) public authorities. Of these 878 were disputed at 164
  • 165. the final appellate stage - the Central Information Commission at New Delhi. A few ofthese decisions have thereafter been mired in further legal controversy in the variousHigh Courts of India. The first stay order against a final appellate decision of theCentral Information Commission was granted on 3.May.2006 by the High Court ofDelhi in WP(C)6833-35/2006 cited as "NDPL & Ors. versus Central InformationCommission & Ors". The Government of Indias purported intention in 2006 toamend the RTI Act was postponed after public disquiet, but has been revived againin 2009 by the DoPT 165
  • 166. CASE STUDY: CBSE vs. ADITYA BANDOPADHYAY & OTHERSDecided On: 09.08.2011Appellants: Central Board of Secondary Education and Anr.VsRespondent: Aditya Bandopadhyay and Ors.Honorable Judges:R.V. RaveendranA.K. Patnaik, JJ.Subject: Right to InformationSubject: EducationActs / Rules / Orders:Right to Information Act, 2005 - Sections 2, 3, 4, 4(1), 4(2), 4(3), 4(4), 5, 6, 7, 7(9),8, 8(1), 8(3), 9, 10, 11, 19(8), 22 and 24; Official Secrets Act, 1923; Freedom toInformation Act, 2002 - Section 8; Constitution of India - Articles 14, 19 and19(1); Maharashtra Secondary and Higher Secondary Board Rules, 1977 - Rule104, 104(1) and 104(3)Cases Referred:Maharashtra State Board of Secondary Education v. Paritosh B.Sheth MANU/SC/0055/1984 : 1984 (4) SCC 27; Parmod Kumar Srivastava v.Chairman, Bihar PAC MANU/SC/0588/2004 : 2004 (6) SCC 714; Board ofSecondary Education v. Pavan Ranjan P 2004 (13) SCC 383; Board of SecondaryEducation v. S 2007 (1) SCC 603; Secretary, West Bengal Council of HigherSecondary Education v. I Dass MANU/SC/7960/2007 : 2007 (8) SCC 242; State ofUttar Pradesh v. Raj Narain MANU/SC/0032/1975 : (1975) 4 SCC 428; DineshTrivedi v. Union of India MANU/SC/1138/1997 : (1997) 4 SCC 306;Peoples Unionfor Civil Liberties v. Union of India MANU/SC/0019/2004 : (2004) 2 SCC476; Bristol and West Building Society v. Mothew 1998 Ch. 1; Wolf v. Superior 166
  • 167. Court 2003 (107) California Appeals, 4th 25; Bihar School Examination Board v.Suresh Prasad Sinha MANU/SC/1605/2009 : (2009) 8 SCC 483Prior History:From the Judgment and Order dated 05.02.2009 of the High Court of Calcutta inWrit Petition 18189 (W) of 2008Case Notes:1. Right to Information – Right to inspect evaluated answer books — Right toInformation Act, 2005 — Appeal against order of High Court holding thatevaluated answer-books of an examinee writing a public examinationconducted by statutory bodies like CBSE or any University or Board ofSecondary Education being a document, manuscript record, and opinion fellwithin definition of "information" under Act and therefore directed CBSE togrant inspection of answer books to examinees who sought information –Whether an examinees right to information under Act included a right to inspect hisevaluated answer books in a public examination or taking certified copies thereof –Held, When a candidate participates in an examination and writes his answers in ananswer-book and submits it to examining body for evaluation and declaration ofresult, answer-book was a document or record — When answer-book was evaluatedby an examiner appointed by examining body evaluated answer-book became arecord containing opinion of examiner – Therefore, evaluated answer-book was alsoan information under Act — Right of citizens to access any information held orunder control of any public authority should be read in harmony withexclusions/exemptions in Act — Unless examining bodies were able to demonstratethat evaluated answer-books fell under any of categories of exempted information,they would be bound to provide access to information and any applicant could eitherinspect document/record, take notes, extracts or obtain certified copies thereof 167
  • 168. 2. Right to Information – Right to inspect evaluated answer books — Right toInformation Act, 2005 — Whether decisions of this Court in Maharashtra StateBoard of Secondary Education v. Paritosh B. Sheth and subsequent decisionsfollowing same in any way affect or interfere with right of an examinee seekinginspection of his answer books or seeking certified copies thereof.Held, Principles laid down in decisions such as Maharashtra State Board dependupon provisions of Rules and Regulations of examining body — If Rules andRegulations of examining body provided for re-evaluation, inspection or disclosure ofanswer-books then none of principles in Maharashtra State Board or other decisionsfollowing it would apply or be relevant — Provision barring inspection or disclosure ofanswer-books or re-evaluation of answer-books and restricting remedy of candidatesonly to re-totalling was valid and binding on examinee — Provisions of Act wouldprevail over provisions of bye-laws/rules of examining bodies in regard toexaminations — Unless examining body was able to demonstrate that answer-booksfell under exempted category of information, examining body would be bound toprovide access to an examinee to inspect and take copies of his evaluated answer-books even if such inspection or taking copies was barred under rules/bye-laws ofexamining body governing examinations — Therefore, decision of Court inMaharashtra State Board of Secondary Education v. Paritosh B. Sheth andsubsequent decisions following same would not affect or interfere with right ofexaminee seeking inspection of answer-books or taking certified copiesthereof – Issue answered.3. Right to Information – Right to inspect evaluated answer books — Section8(1) of Right to Information Act, 2005 — Whether an examining body hadevaluated answer books "in a fiduciary relationship" and consequently had noobligation to give inspection of evaluated answer books underSection 8(1)(e) of ActHeld, Term fiduciary relationship was used to describe a situation or transactionwhere one person (beneficiary) places complete confidence in another person(fiduciary) in regard to his affairs, business or transactions — Fiduciary wasexpected to act in confidence and for benefit and advantage of beneficiary, and use 168
  • 169. good faith and fairness in dealing with beneficiary or things belonging to beneficiary— Examining bodies could be said to act in a fiduciary capacity with reference tostudents who participated in an examination – Examining body cannot be in afiduciary relationship either with reference to examinee who participated inexamination and whose answer-books were evaluated by examining body — Infurnishing copy of an answer-book, there was no question of breach ofconfidentiality, privacy, secrecy or trust — Examining body was principal andexaminer was agent entrusted with work of evaluation of answer-books —Examining body does not hold evaluated answer-books in a fiduciaryrelationship – Therefore, exemption under Section 8(1)(e)of Act was notavailable to examining bodies with reference to evaluated answer-books –Therefore, examining bodies would have to permit inspection sought byexaminees4. Right to Information – Right to inspect evaluated answer books — Section8(3) of Right to Information Act, 2005 — If examinee was entitled toinspection of evaluated answer books or seek certified copies thereof,whether such right was subject to any limitations, conditions or safeguardsHeld, right to access information does not extend beyond period during whichexamining body was expected to retain answer-books — If rules and regulationsgoverning functioning of respective public authority require preservation ofinformation for only a limited period, applicant for information will be entitled tosuch information only if he seeks information when it was available with publicauthority — Section 8(3) of Act was not a provision requiring all information to bepreserved and maintained for twenty years or more nor does it override any rulesor regulations governing period for which record, document or information wasrequired to be preserved by any public authority — Where information sought wasnot a part of record of a public authority and where such information was notrequired to be maintained under any law or rules or regulations of public authority,Act does not cast an obligation upon public authority to collect or collate such non-available information and then furnish it to an applicant — Order of High Courtdirecting examining bodies to permit examinees to have inspection of their 169
  • 170. answer books affirmed subject to clarifications regarding the scope of Actand safeguards and conditions subject to which information should befurnished — Appeals disposed of.Ratio Decidendi:“Examining body does not hold evaluated answer-books in a fiduciaryrelationship.”The CaseThe first Respondent appeared for the Secondary School Examination, 2008conducted by the Central Board of Secondary Education (for short CBSE or theAppellant). When he got the mark sheet he was disappointed with his marks. Hethought that he had done well in the examination but his answer-books were notproperly valued and that improper valuation had resulted in low marks. Thereforehe made an application for inspection and re-evaluation of his answer-books.CBSE rejected the said request by letter dated 12.7.2008. The reasons forrejection were:(i) The information sought was exempted under Section 8(1)(e) of RTI Act sinceCBSE shared fiduciary relationship with its evaluators and maintain confidentialityof both manner and method of evaluation.(ii) The Examination Bye-laws of the Board provided that no candidate shall claimor is entitled to re-evaluation of his answers or disclosure or inspection of answerbook(s) or other documents.(iii) The larger public interest does not warrant the disclosure of such informationsought.(iv) The Central Information Commission, by its order dated 23.4.2007 in appealno. ICPB/A-3/CIC/2006 dated 10.2.2006 had ruled out such disclosure.Aditya Bandhopadhyay’s PetitionFeeling aggrieved the first Respondent filed W.P. No. 18189(W)/2008 before theCalcutta High Court and sought the following reliefs: 170
  • 171. (a) For a declaration that the action of CBSE in excluding the provision of re-evaluation of answer-sheets, in regard to the examinations held by it was illegal,unreasonable and violative of the provisions of the Constitution of India;(b) For a direction to CBSE to appoint an independent examiner for re-evaluatinghis answer-books and issue a fresh marks card on the basis of re-evaluation;(c) For a direction to CBSE to produce his answer-books in regard to the 2008Secondary School Examination so that they could be properly reviewed and freshmarks card can be issued with re-evaluation marks;(d) For quashing the communication of CBSE dated 12.7.2008 and for a directionto produce the answer-books into court for inspection by the first Respondent. TheRespondent contended that Section 8(1)(e) of Right to Information Act, 2005 (RTIAct for short) relied upon by CBSE was not applicable and relied upon theprovisions of the RTI Act to claim inspection.The examinees and the Central Information Commission contended that the objectof the RTI Act is to ensure maximum disclosure of information and minimumexemptions from disclosure; that an examining body does not hold the evaluatedanswer books, in any fiduciary relationship either with the student or the examiner;and that the information sought by any examinee by way of inspection of hisanswer books, will not fall under any of the exempted categories of informationenumerated in Section 8 of the RTI Act. It was submitted that an examining bodybeing a public authority holding the information, that is, the evaluated answer-books, and the inspection of answer-books sought by the examinee beingexercise of right to information as defined under the Act, the examinee as acitizen has the right to inspect the answer-books and take certified copies thereof.It was also submitted that having regard to Section 22 of the RTI Act, theprovisions of the said Act will have effect notwithstanding anything inconsistent inany law and will prevail over any rule, regulation or bye law of the examining bodybarring or prohibiting inspection of answer books. 171
  • 172. CBSE’s DefenseCBSE resisted the petition. It contended that as per its Bye-laws, re-evaluationand inspection of answer-books were impermissible and what was permissiblewas only verification of marks. They relied upon the CBSE Examination Bye-lawNo. 61, relevant portions of which are extracted below:Bye – Law No. 61. Verification of marks obtained by a Candidate in a subject(i) A candidate who has appeared at an examination conducted by the Board mayapply to the concerned Regional Officer of the Board for verification of marks inany particular subject. The verification will be restricted to checking whether all theanswers have been evaluated and that there has been no mistake in the totalingof marks for each question in that subject and that the marks have beentransferred correctly on the title page of the answer book and to the award list andwhether the supplementary answer book(s) attached with the answer bookmentioned by the candidate are intact. No revaluation of the answer book orsupplementary answer book(s) shall be done.(ii) Such an application must be made by the candidate within 21 days from thedate of the declaration of result for Main Examination and 15 days forCompartment Examination.(iii) All such applications must be accompanied by payment of fee as prescribedby the Board from time to time.(iv) No candidate shall claim, or be entitled to, revaluation of his/her answers ordisclosure or inspection of the answer book(s) or other documents.(vi) In no case the verification of marks shall be done in the presence of thecandidate or anyone else on his/her behalf, nor will the answer books be shown tohim/her or his/her representative.(vii) Verification of marks obtained by a candidate will be done by the officialsappointed by or with the approval of the Chairman.(viii) The marks, on verification will be revised upward or downward, as per theactual marks obtained by the candidate in his/her answer book. 172
  • 173. Bye – Law No. 62. Maintenance of Answer BooksThe answer books shall be maintained for a period of three months and shallthereafter be disposed of in the manner as decided by the Chairman from time totime.CBSE submitted that 12 to 13 lakhs candidates from about 9000 affiliated schoolsacross the country appear in class X and class XII examinations conducted by itand this generates as many as 60 to 65 lakhs of answer-books; that as perExamination Bye-law No. 62, it maintains the answer books only for a period ofthree months after which they are disposed of. It was submitted that if candidateswere to be permitted to seek re-evaluation of answer books or inspection thereof,it will create confusion and chaos, subjecting its elaborate system of examinationsto delay and disarray. It was stated that apart from class X and class XIIexaminations, CBSE also conducts several other examinations (including the AllIndia Pre-Medical Test, All India Engineering Entrance Examination and JawaharNavodaya Vidyalayas Selection Test). If CBSE was required to re-evaluate theanswer-books or grant inspection of answer-books or grant certified copiesthereof, it would interfere with its effective and efficient functioning, and will alsorequire huge additional staff and infrastructure. It was submitted that the entireexamination system and evaluation by CBSE is done in a scientific and systemicmanner designed to ensure and safeguard the high academic standards and ateach level utmost care was taken to achieve the object of excellence, keeping inview the interests of the students.Evaluation Method Adopted By CBSEThe examination papers are set by the teachers with at least 20 years of teachingexperience and proven integrity. Paper setters are normally appointed fromamongst academicians recommended by then Committee of courses of the Board.Every paper setter is asked to set more than one set of question papers which aremoderated by a team of moderators who are appointed from the academicians ofthe University or from amongst the Senior Principals. The function of themoderation team is to ensure correctness and consistency of different sets ofquestion papers with the curriculum and to assess the difficulty level to cater to thestudents of different schools in different categories. After assessing the papers 173
  • 174. from every point of view, the team of moderators gives a declaration whether thewhole syllabus is covered by a set of question papers, whether the distribution ofdifficulty level of all the sets is parallel and various other aspects to ensure uniformstandard. The Board also issues detailed instructions for the guidance of themoderators in order to ensure uniform criteria for assessment.The evaluation system on the whole is well organized and fool-proof. All thecandidates are examined through question papers set by the same paper setters.Their answer books are marked with fictitious roll numbers so as to conceal theiridentity. The work of allotment of fictitious roll number is carried out by a teamworking under a Chief Secrecy Officer having full autonomy. The Chief SecrecyOfficer and his team of assistants are academicians drawn from the Universitiesand other autonomous educational bodies not connected with the Board. TheChief Secrecy Officer himself is usually a person of the rank of a Universityprofessor. No official of the Board at the Central or Regional level is associatedwith him in performance of the task assigned to him. The codes of fictitious rollnumbers and their sequences are generated by the Chief Secrecy Officer himselfon the basis of mathematical formula which randomize the real roll numbers andare known only to him and his team. This ensures complete secrecy about theidentification of the answer book so much so, that even the Chairman, of theBoard and the Controller of Examination of the Board do not have any informationregarding the fictitious roll numbers granted by the Chief Secrecy Officer and theirreal counterpart numbers.At the evaluation stage, the Board ensures complete fairness and uniformity byproviding a marking scheme which is uniformity applicable to all the examiners inorder to eliminate the chances of subjectivity. These marking schemes are jointlyprepared at the Headquarters of the Board in Delhi by the Subject Experts of allthe regions. The main purpose of the marking scheme is to maintain uniformity inthe evaluation of the answer books.The evaluation of the answer books in all major subjects including mathematics,science subjects is done in centralized "on the spot" evaluation centers where theexaminers get answer book in interrupted serial orders. Also, the answer booksare jumbled together as a result of which the examiners, say in Bangalore may be 174
  • 175. marking the answer book of a candidate who had his examination in Pondicherry,Goa, Andaman and Nicobar islands, Kerala, Andhra Pradesh, Tamil Nadu orKarnataka itself but he has no way of knowing exactly which answer book he isexamining. The answer books having been marked with fictitious roll numbers giveno clue to any examiner about the state or territory it belongs to. It cannot give anyclue about the candidates school or centre of examination. The examiner cannothave any inclination to do any favor to a candidate because he is unable todecodify his roll number or to know as to which school, place or state or territoryhe belongs to.The examiners check all the questions in the papers thoroughly under thesupervision of head examiner and award marks to the sub parts individually notcollectively. They take full precautions and due attention is given while assessingan answer book to do justice to the candidate. Re-evaluation is administrativelyimpossible to be allowed in a Board where lakhs of students take examination inmultiple subjects.There are strict instructions to the additional head examiners not to allow anyshoddy work in evaluation and not to issue more than 20-25 answer books forevaluation to an examiner on a single day. The examiners are practicing teacherswho guard the interest of the candidates. There is no ground to believe that theydo unjust marking and deny the candidates their due. It is true that in some casestotaling errors have been detected at the stage of scrutiny or verification of marks.In order to minimize such errors and to further strengthen and to improve itssystem, from 1993 checking of totals and other aspects of the answers has beentrebled in order to detect and eliminate all lurking errors.The results of all the candidates are reviewed by the Results Committeefunctioning at the Head Quarters. The Regional Officers are not the number of thisCommittee. This Committee reviews the results of all the regions and in case itdecides to standardize the results in view of the results shown by the regions overthe previous years, it adopts a uniform policy for the candidates of all the regions.No special policy is adopted for any region, unless there are some specialreasons. This practice of awarding standardized marks in order to moderate theoverall results is a practice common to most of the Boards of Secondary 175
  • 176. Education. The exact number of marks awarded for the purpose of standardizationin different subjects varies from year to year. The system is extremelyimpersonalized and has no room for collusion infringement. It is in a word ascientific system.CBSE submitted that the procedure evolved and adopted by it ensures fairnessand accuracy in evaluation of answer-books and made the entire process asfoolproof as possible and therefore denial of re-evaluation or inspection or grant ofcopies cannot be considered to be denial of fair play or unreasonable restrictionon the rights of the students.Questions to Be ConsideredOn the contentions urged, the following questions arise for our consideration:(i) Whether an examinees right to information under the RTI Act includes a right toinspect his evaluated answer books in a public examination or taking certifiedcopies thereof?(ii) Whether the decisions of this Court in Maharashtra State Board of SecondaryEducation [MANU/SC/0055/1984 : 1984 (4) SCC 27] and other cases referred toabove, in any way affect or interfere with the right of an examinee seekinginspection of his answer books or seeking certified copies thereof?(iii) Whether an examining body holds the evaluated answer books "in a fiduciaryrelationship" and consequently has no obligation to give inspection of theevaluated answer books under Section 8(1)(e) of RTI Act?(iv) If the examinee is entitled to inspection of the evaluated answer books or seekcertified copies thereof, whether such right is subject to any limitations, conditionsor safeguards? 176
  • 177. Relevant Legal ProvisionsTo consider these questions, it is necessary to refer to the statement of objectsand reasons, the preamble and the relevant provisions of the RTI Act. RTI Act wasenacted in order to ensure smoother, greater and more effective access toinformation and provide an effective framework for effectuating the right ofinformation recognized under Article 19 of the Constitution.The preamble to the Act declares the object sought to be achieved by the RTI Actthus:―An Act to provide for setting out the practical regime of right to information forcitizens to secure access to information under the control of public authorities, inorder to promote transparency and accountability in the working of every publicauthority, the constitution of a Central Information Commission and StateInformation Commissions and for matters connected therewith or incidentalthereto.‖Whereas the Constitution of India has established democratic Republic;And whereas democracy requires an informed citizenry and transparency ofinformation which are vital to its functioning and also to contain corruption and tohold Governments and their instrumentalities accountable to the governed;And whereas revelation of information in actual practice is likely to conflict withother public interests including efficient operations of the Governments, optimumuse of limited fiscal resources and the preservation of confidentiality of sensitiveinformation;And whereas it is necessary to harmonize these conflicting interests whilepreserving the paramountcy of the democratic ideal.Chapter II of the Act containing Sections 3 to 11 deals with right to information andobligations of public authorities.Section 3 provides for right to information and reads thus: "Subject to theprovisions of this Act, all citizens shall have the right to information." This section 177
  • 178. makes it clear that the RTI Act gives a right to a citizen to only access information,but not seek any consequential relief based on such information.Section 4 deals with obligations of public authorities to maintain the records in themanner provided and publish and disseminate the information in the mannerprovided.Section 6 deals with requests for obtaining information. It provides that applicantmaking a request for information shall not be required to give any reason forrequesting the information or any personal details except those that may benecessary for contacting him.Section 8 deals with exemption from disclosure of information and is extracted inits entirety:Exemption from Disclosure from Information (Section 8)(1) Notwithstanding anything contained in this Act, there shall be noobligation to give any citizen,-(a) information, disclosure of which would prejudicially affect the sovereignty andintegrity of India, the security, strategic, scientific or economic interests of theState, relation with foreign State or lead to incitement of an offence;(b) Information which has been expressly forbidden to be published by any courtof law or tribunal or the disclosure of which may constitute contempt of court;(c) Information, the disclosure of which would cause a breach of privilege ofParliament or the State Legislature;(d) Information including commercial confidence, trade secrets or intellectualproperty, the disclosure of which would harm the competitive position of a thirdparty, unless the competent authority is satisfied that larger public interestwarrants the disclosure of such information; 178
  • 179. (e) Information available to a person in his fiduciary relationship, unless thecompetent authority is satisfied that the larger public interest warrants thedisclosure of such information;(f) Information received in confidence from foreign Government;(g) Information, the disclosure of which would endanger the life or physical safetyof any person or identify the source of information or assistance given inconfidence for law enforcement or security purposes;(h) Information which would impede the process of investigation or apprehensionor prosecution of offenders;(i) Cabinet papers including records of deliberations of the Council of Ministers,Secretaries and other officers:Provided that the decisions of Council of Ministers, the reasons thereof, and thematerial on the basis of which the decisions were taken shall be made public afterthe decision has been taken, and the matter is complete, or over:Provided further that those matters which come under the exemptions specified inthis section shall not be disclosed;(j) Information which relates to personal information the disclosure of which has norelationship to any public activity or interest, or which would cause unwarrantedinvasion of the privacy of the individual unless the Central Public InformationOfficer or the State Public Information Officer or the appellate authority, as thecase may be, is satisfied that the larger public interest justifies the disclosure ofsuch information:Provided that the information which cannot be denied to the Parliament or a StateLegislature shall not be denied to any person.(2) Notwithstanding anything in the Official Secrets Act, 1923 (19 of 1923) nor anyof the exemptions permissible in accordance with Sub-section (1), a publicauthority may allow access to information, if public interest in disclosure outweighsthe harm to the protected interests. 179
  • 180. (3) Subject to the provisions of Clauses (a), (c) and (i) of Sub-section (1), anyinformation relating to any occurrence, event or matter which has taken place,occurred or happened twenty years before the date on which any request is madeunder Section 6 shall be provided to any person making a request under thatsection:Provided that where any question arises as to the date from which the said period oftwenty years has to be computed, the decision of the Central Government shall befinal, subject to the usual appeals provided for in this Act.Section 9 provides that without prejudice to the provisions of Section 8, a requestfor information may be rejected if such a request for providing access wouldinvolve an infringement of copyright.Section 9 deals with severability of exempted information and Sub-section (1)thereof which is extracted below:(1) Where a request for access to information is rejected on the ground that it is inrelation to information which is exempt from disclosure, then, notwithstandinganything contained in this Act, access may be provided to that part of the recordwhich does not contain any information which is exempt from disclosure under thisAct and which can reasonably be severed from any part that contains exemptinformation.Section 11 deals with third party information and Sub-section (1) thereof which isextracted below:(1) Where a Central Public Information Officer or a State Public InformationOfficer, as the case may be, intends to disclose any information or record, or partthereof on a request made under this Act, which relates to or has been supplied bya third party and has been treated as confidential by that third party, the CentralPublic Information Officer or State Public Information Officer, as the case may be,shall, within five days from the receipt of the request, give a written notice to suchthird party of the request and of the fact that the Central Public Information Officeror State Public Information Officer, as the case may be, intends to disclose theinformation or record, or part thereof, and invite the third party to make a 180
  • 181. submission in writing or orally, regarding whether the information should bedisclosed, and such submission of the third party shall be kept in view while takinga decision about disclosure of information:Provided that except in the case of trade or commercial secrets protected by law,disclosure may be allowed if the public interest in disclosure outweighs in importanceany possible harm or injury to the interests of such third party.The definitions of information, public authority, record and right to information inClauses (f), (h), (i) and (j) of Section 2 of the RTI Act are extracted below:(f) "information" means any material in any form, including records, documents,memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks,contracts, reports, papers, samples, models, data material held in any electronicform and information relating to any private body which can be accessed by apublic authority under any other law for the time being in force;(h) "Public authority" means any authority or body or institution of self-government established or constituted-(a) by or under the Constitution;(b) By any other law made by Parliament;(c) By any other law made by State Legislature;(d) By notification issued or order made by the appropriate Government, andincludes any-(i) Body owned, controlled or substantially financed;(ii) Non-Government organization substantially financed, directly or indirectly byfunds provided by the appropriate Government;(i) "Record" includes-(a) Any document, manuscript and file;(b) Any microfilm, microfiche and facsimile copy of a document;(c) Any reproduction of image or images embodied in such microfilm (whetherenlarged or not); and 181
  • 182. (d) any other material produced by a computer or any other device;(j) "Right to information" means the right to information accessible under this Actwhich is held by or under the control of any public authority and includes the rightto-(i) Inspection of work, documents, records;(ii) Taking notes, extracts or certified copies of documents or records;(iii) Taking certified samples of material;(iv) Obtaining information in the form of diskettes, floppies, tapes, video cassettesor in any other electronic mode or through printouts where such information isstored in a computer or in any other device;Section 22 provides for the Act to have overriding effect and is extracted below:The provisions of this Act shall have effect notwithstanding anything inconsistenttherewith contained in the Official Secrets Act, 1923 (19 of 1923), and any other lawfor the time being in force or in any instrument having effect by virtue of any lawother than this Act.Answers to the QuestionsAnswer To Q1.Q) Whether an examinees right to information under the RTI Act includes a right toinspect his evaluated answer books in a public examination or taking certified copiesthereof?Ans) The definition of information in Section 2(f) of the RTI Act refers to anymaterial in any form which includes records, documents, opinions, papers amongseveral other enumerated items.The term record is defined in Section 2(i) of the said Act as including anydocument, manuscript or file among others. When a candidate participates in anexamination and writes his answers in an answer-book and submits it to theexamining body for evaluation and declaration of the result, the answer-book is adocument or record. When the answer-book is evaluated by an examiner 182
  • 183. appointed by the examining body, the evaluated answer-book becomes a recordcontaining the opinion of the examiner.Therefore the evaluated answer-book is also an information under the RTIAct.Section 3 of RTI Act provides that subject to the provisions of this Act all citizensshall have the right to information.The term right to information is defined in Section 2(j) as the right to informationaccessible under the Act which is held by or under the control of any publicauthority. Having regarded to Section 3, the citizens have the right to accessto all information held by or under the control of any public authority exceptthose excluded or exempted under the Act.The object of the Act is to empower the citizens to fight against corruption andhold the Government and their instrumentalities accountable to the citizens, byproviding them access to information regarding functioning of every publicauthority. Certain safeguards have been built into the Act so that the revelation ofinformation will not conflict with other public interests which include efficientoperation of the governments, optimum use of limited fiscal resources andpreservation of confidential and sensitive information. The RTI Act providesaccess to information held by or under the control of public authorities and not inregard to information held by any private person.The Act provides the following exclusions by way of exemptions andexceptions (under Sections 8, 9 and 24) in regard to information held by publicauthorities:(i) Exclusion of the Act in entirety under Section 24 to intelligence and securityorganizations specified in the Second Schedule even though they may be "publicauthorities", (except in regard to information with reference to allegations ofcorruption and human rights violations). 183
  • 184. (ii) Exemption of the several categories of information enumerated inSection 8(1) of the Act which no public authority is under an obligation to give toany citizen, notwithstanding anything contained in the Act [however, in regard tothe information exempted under Clauses (d) and (e), the competent authority, andin regard to the information excluded under Clause (j), Central Public InformationOfficer/State Public Information Officer/the Appellate Authority, may directdisclosure of information, if larger public interest warrants or justifies thedisclosure].(iii) If any request for providing access to information involves an infringement of acopyright subsisting in a person other than the State, the Central/State PublicInformation Officer may reject the request under Section 9 of RTI Act.Having regard to the scheme of the RTI Act, the right of the citizens to accessany information held or under the control of any public authority, should beread in harmony with the exclusions/exemptions in the Act.The examining bodies (Universities, Examination Boards, and CBSE etc.) areneither security nor intelligence organizations and therefore the exemption underSection 24 will not apply to them. The disclosure of information with reference toanswer-books does not also involve infringement of any copyright and thereforeSection 9 will not apply.Resultantly, unless the examining bodies are able to demonstrate that theevaluated answer-books fall under any of the categories of exempted informationenumerated in Clauses (a) to (j) of Sub-section (1) Section 8, they will be bound toprovide access to the information and any applicant can either inspect thedocument/record, take notes, extracts or obtain certified copies thereof.The examining bodies contend that the evaluated answer-books are exemptedfrom disclosure under Section 8(1)(e) of the RTI Act, as they are information heldin its fiduciary relationship. They fairly conceded that evaluated answer-books willnot fall under any other exemptions in Sub-section (1) of Section 8. Everyexaminee will have the right to access his evaluated answer-books, by either 184
  • 185. inspecting them or take certified copies thereof, unless the evaluated answer-books are found to be exempted under Section 8(1)(e) of the RTI Act.Answer To Q2.Q) Whether the decisions of this Court in Maharashtra State Board of SecondaryEducation [MANU/SC/0055/1984 : 1984 (4) SCC 27] and other cases referred toabove, in any way affect or interfere with the right of an examinee seekinginspection of his answer books or seeking certified copies thereof?Ans) In Maharashtra State Board, this Court was considering whether denial of re-evaluation of answer-books or denial of disclosure by way of inspection of answerbooks, to an examinee, under Rule 104(1) and (3) of the Maharashtra Secondaryand Higher Secondary Board Rules, 1977 was violative of principles of naturaljustice and violative of Articles 14 and 19 of the Constitution of India. Rule 104(1)provided that no re-evaluation of the answer books shall be done and on anapplication of any candidate verification will be restricted to checking whether all theanswers have been examined and that there is no mistake in the totaling of marksfor each question in that subject and transferring marks correctly on the first coverpage of the answer book. Rule 104(3) provided that no candidate shall claim or beentitled to re-evaluation of his answer-books or inspection of answer-books as theywere treated as confidential.In these cases, the High Court has rightly denied the prayer for re-evaluation ofanswer-books sought by the candidates in view of the bar contained in the rulesand regulations of the examining bodies. It is also not a relief available under theRTI Act. Therefore the question whether re-evaluation should be permitted or not,does not arise for our consideration. What arises for consideration is the questionwhether the examinee is entitled to inspect his evaluated answer-books or takecertified copies thereof. This right is claimed by the students, not with reference tothe rules or bye-laws of examining bodies, but under the RTI Act which enablesthem and entitles them to have access to the answer-books as information andinspect them and take certified copies thereof. Section 22 of RTI Act provides thatthe provisions of the said Act will have effect, notwithstanding anythinginconsistent therewith contained in any other law for the time being in force. 185
  • 186. Therefore the provisions of the RTI Act will prevail over the provisions of the bye-laws/rules of the examining bodies in regard to examinations. As a result, unlessthe examining body is able to demonstrate that the answer-books fall under theexempted category of information described in Clause (e) of Section 8(1) of RTIAct, the examining body will be bound to provide access to an examinee to inspectand take copies of his evaluated answer-books, even if such inspection or takingcopies is barred under the rules/bye-laws of the examining body governing theexaminations. Therefore, the decision of this Court in Maharashtra StateBoard (supra) and the subsequent decisions following the same, will notaffect or interfere with the right of the examinee seeking inspection ofanswer-books or taking certified copies thereof.Answer To Q3.Q) Whether an examining body holds the evaluated answer books "in a fiduciaryrelationship" and consequently has no obligation to give inspection of theevaluated answer books under Section 8(1)(e) of RTI Act?Ans) Section 8(1) enumerates the categories of information which are exemptedfrom disclosure under the provisions of the RTI Act. The examining bodies relyupon Clause (e) of Section 8(1) which provides that there shall be no obligation onany public authority to give any citizen, information available to it in its fiduciaryrelationship. This exemption is subject to the condition that if the competentauthority (as defined in Section 2(e) of RTI Act) is satisfied that the larger publicinterest warrants the disclosure of such information, the information will have to bedisclosed. Therefore the question is whether the examining body holds theevaluated answer-books in its fiduciary relationship.The term fiduciary and fiduciary relationship refers to different capacities andrelationship, involving a common duty or obligation.Blacks Law Dictionary (7th Edition, Page 640) defines fiduciary relationship‘ as:―A relationship in which one person is under a duty to act for the benefit of the otheron matters within the scope of the relationship‖. 186
  • 187. Fiduciary relationships - such as trustee-beneficiary, guardian-ward, agent-principal,and attorney-client - require the highest duty of care. Fiduciary relationships usuallyarise in one of four situations:(i) When one person places trust in the faithful integrity of another, who as a resultgains superiority or influence over the first,(ii) When one person assumes control and responsibility over another,(iii) When one person has a duty to act for or give advice to another on mattersfalling within the scope of the relationship, or(iv) When there is a specific relationship that has traditionally been recognized asinvolving fiduciary duties, as with a lawyer and a client or a stockbroker and acustomer.Various other definitions of the term ―fiduciary relation‖ were considered for thecase.In a philosophical and very wide sense, examining bodies can be said to actin a fiduciary capacity, with reference to students who participate in anexamination, as a government does while governing its citizens or as the presentgeneration does with reference to the future generation while preserving theenvironment. But the words information available to a person in his fiduciaryrelationship are used in Section 8(1)(e) of RTI Act in its normal and wellrecognized sense, that is to refer to persons who act in a fiduciary capacity, withreference to a specific beneficiary or beneficiaries who are to be expected to beprotected or benefited by the actions of the fiduciary - a trustee with reference tothe beneficiary of the trust, a guardian with reference to a minor / physically / infirm/ mentally challenged, a parent with reference to a child, a lawyer or a charteredaccountant with reference to a client, a doctor or nurse with reference to a patient,an agent with reference to a principal, a partner with reference to another partner,a director of a company with reference to a share-holder, an executor withreference to a legatee, a receiver with reference to the parties to a lis, an employerwith reference to the confidential information relating to the employee, and anemployee with reference to business dealings/transaction of the employer. We donot find that kind of fiduciary relationship between the examining body and theexaminee, with reference to the evaluated answer-books, that come into thecustody of the examining body. 187
  • 188. The duty of examining bodies is to subject the candidates who have completed acourse of study or a period of training in accordance with its curricula, to a processof verification/examination/testing of their knowledge, ability or skill, or to ascertainwhether they can be said to have successfully completed or passed the course ofstudy or training. Other specialized Examining Bodies may simply subjectcandidates to a process of verification by an examination, to find out whether suchperson is suitable for a particular post, job or assignment. An examining body, if itis a public authority entrusted with public functions, is required to act fairly,reasonably, uniformly and consistently for public good and in public interest. ThisCourt has explained the role of an examining body in regard to the process ofholding examination in the context of examining whether it amounts to service toa consumer, in Bihar School Examination Board v. Suresh Prasad SinhaMANU/SC/1605/2009 : (2009) 8 SCC 483, in the following manner:The process of holding examinations, evaluating answer scripts, declaring resultsand issuing certificates are different stages of a single statutory non-commercialfunction. It is not possible to divide this function as partly statutory and partlyadministrative. When the Examination Board conducts an examination in dischargeof its statutory function, it does not offer its "services" to any candidate. Nor does astudent who participates in the examination conducted by the Board, hires or availsof any service from the Board for a consideration. On the other hand, a candidatewho participates in the examination conducted by the Board, is a person who hasundergone a course of study and who requests the Board to test him as to whetherhe has imbibed sufficient knowledge to be fit to be declared as having successfullycompleted the said course of education; and if so, determine his position or rank orcompetence vis-à-vis other examinees. The process is not therefore availment of aservice by a student, but participation in a general examination conducted by theBoard to ascertain whether he is eligible and fit to be considered as havingsuccessfully completed the secondary education course. The examination fee paidby the student is not the consideration for availment of any service, but the chargepaid for the privilege of participation in the examination.... The fact that in the courseof conduct of the examination, or evaluation of answer-scripts, or furnishing of mark-books or certificates, there may be some negligence, omission or deficiency, does 188
  • 189. not convert the Board into a service-provider for a consideration, nor convert theexaminee into a consumer....It cannot therefore be said that the examining body is in a fiduciaryrelationship either with reference to the examinee who participates in theexamination and whose answer-books are evaluated by the examining body.We may next consider whether an examining body would be entitled to claimexemption under Section 8(1)(e) of the RTI Act, even assuming that it is in afiduciary relationship with the examinee. That section provides thatnotwithstanding anything contained in the Act, there shall be no obligation to giveany citizen information available to a person in his fiduciary relationship. Thiswould only mean that even if the relationship is fiduciary, the exemption wouldoperate in regard to giving access to the information held in fiduciary relationship,to third parties. There is no question of the fiduciary withholding informationrelating to the beneficiary, from the beneficiary himself. One of the duties of thefiduciary is to make thorough disclosure of all relevant facts of all transactionsbetween them to the beneficiary, in a fiduciary relationship. By that logic, theexamining body, if it is in a fiduciary relationship with an examinee, will be liable tomake a full disclosure of the evaluated answer-books to the examinee and at thesame time, owe a duty to the examinee not to disclose the answer-books toanyone else.Therefore, if a relationship of fiduciary and beneficiary is assumed betweenthe examining body and the examinee with reference to the answer-book,Section 8(1)(e) would operate as an exemption to prevent access to any thirdparty and will not operate as a bar for the very person who wrote theanswer-book, seeking inspection or disclosure of it.An evaluated answer book of an examinee is a combination of two differentinformations. The first is the answers written by the examinee and second is themarks/assessment by the examiner. When an examinee seeks inspection of hisevaluated answer-books or seeks a certified copy of the evaluated answer-book,the information sought by him is not really the answers he has written in the 189
  • 190. answer-books (which he already knows), nor the total marks assigned for theanswers (which has been declared). What he really seeks is the informationrelating to the break-up of marks, that is, the specific marks assigned to each ofhis answers. When an examinee seeks information by inspection/certified copiesof his answer-books, he knows the contents thereof being the author thereof.When an examinee is permitted to examine an answer-book or obtain a certifiedcopy, the examining body is not really giving him some information which is heldby it in trust or confidence, but is only giving him an opportunity to read what hehad written at the time of examination or to have a copy of his answers. Therefore,in furnishing the copy of an answer-book, there is no question of breach ofconfidentiality, privacy, secrecy or trust. The real issue therefore is not in regard tothe answer-book but in regard to the marks awarded on evaluation of the answer-book. Even here the total marks given to the examinee in regard to his answer-book are already declared and known to the examinee. What the examineeactually wants to know is the break-up of marks given to him, that is how manymarks were given by the examiner to each of his answers so that he can assesshow is performance has been evaluated and whether the evaluation is proper asper his hopes and expectations. Therefore, the test for finding out whether theinformation is exempted or not, is not in regard to the answer book but in regard tothe evaluation by the examiner.This takes us to the crucial issue of evaluation by the examiner. The examiningbody engages or employs hundreds of examiners to do the evaluation ofthousands of answer books. The question is whether the information relating tothe evaluation (that is assigning of marks) is held by the examining body in afiduciary relationship. The examining bodies contend that even if fiduciaryrelationship does not exist with reference to the examinee, it exists with referenceto the examiner who evaluates the answer-books. On a careful examination wefind that this contention has no merit. The examining body entrusts the answer-books to an examiner for evaluation and pays the examiner for his expert service.The work of evaluation and marking the answer-book is an assignment given bythe examining body to the examiner which he discharges for a consideration.Sometimes, an examiner may assess answer-books, in the course of hisemployment, as a part of his duties without any specific or special remuneration. 190
  • 191. In other words the examining body is the principal and the examiner is the agententrusted with the work, that is, evaluation of answer-books. Therefore, theexamining body is not in the position of a fiduciary with reference to the examiner.On the other hand, when an answer-book is entrusted to the examiner for thepurpose of evaluation, for the period the answer-book is in his custody and to theextent of the discharge of his functions relating to evaluation, the examiner is inthe position of a fiduciary with reference to the examining body and he is barredfrom disclosing the contents of the answer-book or the result of evaluation of theanswer-book to anyone other than the examining body. Once the examiner hasevaluated the answer books, he ceases to have any interest in the evaluationdone by him. He does not have any copy-right or proprietary right, orconfidentiality right in regard to the evaluation. Therefore it cannot be said that theexamining body holds the evaluated answer books in a fiduciary relationship, quathe examiner.Therefore, held that an examining body does not hold the evaluated answer-books in a fiduciary relationship. Not being information available to anexamining body in its fiduciary relationship, the exemption underSection 8(1)(e) is not available to the examining bodies with reference toevaluated answer-books. As no other exemption under Section 8 is availablein respect of evaluated answer books, the examining bodies will have topermit inspection sought by the examinees.Answer To Q4.Q) If the examinee is entitled to inspection of the evaluated answer books or seekcertified copies thereof, whether such right is subject to any limitations, conditions orsafeguards?Ans) When an examining body engages the services of an examiner to evaluatethe answer-books, the examining body expects the examiner not to disclose theinformation regarding evaluation to anyone other than the examining body.Similarly the examiner also expects that his name and particulars would not bedisclosed to the candidates whose answer-books are evaluated by him. In theevent of such information being made known, a disgruntled examinee who is not 191
  • 192. satisfied with the evaluation of the answer books, may act to the prejudice of theexaminer by attempting to endanger his physical safety.Further, any apprehension on the part of the examiner that there may be danger tohis physical safety, if his identity becomes known to the examinees, may come inthe way of effective discharge of his duties. The above applies not only to theexaminer, but also to the scrutinizer, co-coordinator, and head-examiner who dealwith the answer book. The answer book usually contains not only the signatureand code number of the examiner, but also the signatures and code number of thescrutinizer / co-coordinator / head examiner. The information as to the names orparticulars of the examiners / co-coordinators / scrutinizers / head examiners aretherefore exempted from disclosure under Section 8(1)(g) of RTI Act, on theground that if such information is disclosed, it may endanger their physical safety.Therefore, if the examinees are to be given access to evaluated answer-bookseither by permitting inspection or by granting certified copies, such access willhave to be given only to that part of the answer-book which does not contain anyinformation or signature of the examiners / co-coordinators / scrutinizers / headexaminers, exempted from disclosure under Section 8(1)(g) of RTI Act. Thoseportions of the answer-books which contain information regarding the examiners /co-coordinators / scrutinizers / head examiners or which may disclose their identitywith reference to signature or initials shall have to be removed, covered, orotherwise severed from the non-exempted part of the answer-books, underSection 10 of RTI Act.The right to access information does not extend beyond the period during whichthe examining body is expected to retain the answer-books. In the case of CBSE,the answer-books are required to be maintained for a period of three months andthereafter they are liable to be disposed of/destroyed. Some other examiningbodies are required to keep the answer-books for a period of six months. The factthat right to information is available in regard to answer-books does not mean thatanswer-books will have to be maintained for any longer period than required underthe rules and regulations of the public authority. The obligation under the RTI Actis to make available or give access to existing information or information which is 192
  • 193. expected to be preserved or maintained. If the rules and regulations governing thefunctioning of the respective public authority require preservation of theinformation for only a limited period, the applicant for information will be entitled tosuch information only if he seeks the information when it is available with thepublic authority. For example, with reference to answer-books, if an examineemakes an application to CBSE for inspection or grant of certified copies beyondthree months (or six months or such other period prescribed for preservation of therecords in regard to other examining bodies) from the date of declaration ofresults, the application could be rejected on the ground that such information is notavailable. The power of the Information Commission under Section 19(8) of theRTI Act to require a public authority to take any such steps as may be necessaryto secure compliance with the provision of the Act, does not include a power todirect the public authority to preserve the information, for any period larger thanwhat is provided under the rules and regulations of the public authority.On behalf of the Respondents / examinees, it was contended that having regard toSub-section (3) of Section 8 of RTI Act, there is an implied duty on the part ofevery public authority to maintain the information for a minimum period of twentyyears and make it available whenever an application was made in that behalf. Thiscontention is based on a complete misreading and misunderstanding ofSection 8(3). The said Sub-section nowhere provides that records or informationhave to be maintained for a period of twenty years. The period for which anyparticular records or information has to be maintained would depend upon therelevant statutory rule or regulation of the public authority relating to thepreservation of records. Section 8(3) provides that information relating to anyoccurrence, event or matters which has taken place and occurred orhappened twenty years before the date on which any request is made underSection 6, shall be provided to any person making a request. This means thatwhere any information required to be maintained and preserved for a periodbeyond twenty years under the rules of the public authority, is exempted fromdisclosure under any of the provisions of Section 8(1) of RTI Act, then,notwithstanding such exemption, access to such information shall have to beprovided by disclosure thereof, after a period of twenty years except where theyrelate to information falling under Clauses (a), (c) and (i) of Section 8(1). In other 193
  • 194. words, Section 8(3) provides that any protection against disclosure that may beavailable, under Clauses (b), (d) to (h) and (j) of Section 8(1) will cease to beavailable after twenty years in regard to records which are required to bepreserved for more than twenty years. Where any record or information is requiredto be destroyed under the rules and regulations of a public authority prior to twentyyears, Section 8(3) will not prevent destruction in accordance with the Rules.Section 8(3)of RTI Act is not therefore a provision requiring all information to bepreserved and maintained for twenty years or more, nor does it override any rulesor regulations governing the period for which the record, document or informationis required to be preserved by any public authority.At this juncture, it is necessary to clear some misconceptions about the RTI Act.The RTI Act provides access to all information that is available and existing. Thisis clear from a combined reading of Section 3 and the definitions of informationand right to information under Clauses (f) and (j) of Section 2 of the Act. If apublic authority has any information in the form of data or analyzed data, orabstracts, or statistics, an applicant may access such information, subject to theexemptions in Section 8 of the Act. But where the information sought is not a partof the record of a public authority, and where such information is not required to bemaintained under any law or the rules or regulations of the public authority, the Actdoes not cast an obligation upon the public authority, to collect or collate suchnon-available information and then furnish it to an applicant. A public authority isalso not required to furnish information which require drawing of inferences and/ormaking of assumptions. It is also not required to provide advice or opinion to anapplicant, nor required to obtain and furnish any opinion or advice to anapplicant. The reference to opinion or advice in the definition of information inSection 2(f) of the Act, only refers to such material available in the records of thepublic authority. Many public authorities have, as a public relation exercise,provide advice, guidance and opinion to the citizens. But that is purely voluntaryand should not be confused with any obligation under the RTI Act.Section 19(8) of RTI Act has entrusted the Central / State InformationCommissions, with the power to require any public authority to take any such 194
  • 195. steps as may be necessary to secure the compliance with the provisions of theAct. Apart from the generality of the said power, Clause (a) of Section 19(8) refersto six specific powers, to implement the provision of the Act.Sub-clause (i) empowers a Commission to require the public authority to provideaccess to information if so requested in a particular form (that is either as adocument, micro film, compact disc, pen drive, etc.). This is to secure compliancewith Section 7(9) of the Act.Sub-clause (ii) empowers a Commission to require the public authority to appointa Central Public Information Officer or State Public Information Officer. This is tosecure compliance with Section 5 of the Act.Sub-clause (iii) empowers the Commission to require a public authority to publishcertain information or categories of information. This is to secure compliance withSection 4(1) and (2) of RTI Act.Sub-clause (iv) empowers a Commission to require a public authority to makenecessary changes to its practices relating to the maintenance, management anddestruction of the records. This is to secure compliance with Clause (a) ofSection 4(1) of the Act.Sub-clause (v) empowers a Commission to require the public authority to increasethe training for its officials on the right to information. This is to secure compliancewith Sections 5, 6 and 7 of the Act.Sub-clause (vi) empowers a Commission to require the public authority to provideannual reports in regard to the compliance with Clause (b) of Section 4(1). This isto ensure compliance with the provisions of Clause (b) of Section 4(1) of the Act.The power under Section 19(8) of the Act however does not extend to requiring apublic authority to take any steps which are not required or contemplated tosecure compliance with the provisions of the Act or to issue directions beyond theprovisions of the Act. The power under Section 19(8) of the Act is intended to beused by the Commissions to ensure compliance with the Act, in particular ensure 195
  • 196. that every public authority maintains its records duly catalogued and indexed inthe manner and in the form which facilitates the right to information and ensurethat the records are computerized, as required under Clause (a) of Section 4(1) ofthe Act; and to ensure that the information enumerated in Clauses (b) and (c) ofSections 4(1) of the Act are published and disseminated, and are periodicallyupdated as provided in subsections (3) and (4) of Section 4 of the Act. If theinformation enumerated in Clause (b) of Section 4(1) of the Act are effectivelydisseminated (by publications in print and on websites and other effective means),apart from providing transparency and accountability, citizens will be able toaccess relevant information and avoid unnecessary applications for informationunder the Act.The right to information is a cherished right. Information and right to informationare intended to be formidable tools in the hands of responsible citizens to fightcorruption and to bring in transparency and accountability. The provisions of RTIAct should be enforced strictly and all efforts should be made to bring to light thenecessary information under Clause (b) of Section 4(1) of the Act which relates tosecuring transparency and accountability in the working of public authorities and indiscouraging corruption. But in regard to other information,(that is informationother than those enumerated in Section 4(1)(b) and (c) of the Act), equalimportance and emphasis are given to other public interests (like confidentiality ofsensitive information, fidelity and fiduciary relationships, efficient operation ofgovernments, etc.).Indiscriminate and impractical demands or directions under RTI Act for disclosureof all and sundry information (unrelated to transparency and accountability in thefunctioning of public authorities and eradication of corruption) would be counter-productive as it will adversely affect the efficiency of the administration and resultin the executive getting bogged down with the non-productive work of collectingand furnishing information. The Act should not be allowed to be misused orabused, to become a tool to obstruct the national development and integration, orto destroy the peace, tranquility and harmony among its citizens. Nor should it beconverted into a tool of oppression or intimidation of honest officials striving to dotheir duty. The nation does not want a scenario where 75% of the staff of public 196
  • 197. authorities spends 75% of their time in collecting and furnishing information toapplicants instead of discharging their regular duties. The threat of penaltiesunder the RTI Act and the pressure of the authorities under the RTI Actshould not lead to employees of a public authorities prioritizing informationfurnishing, at the cost of their normal and regular duties.Conclusion - JudgmentIn view of the foregoing, the order of the High Court directing the examiningbodies to permit examinees to have inspection of their answer books isaffirmed, subject to the clarifications regarding the scope of the RTI Act andthe safeguards and conditions subject to which information should befurnished. The appeals are disposed of accordingly. 197