# 11 S.C.R. 873 SUBRAMANIAN SWAMY v. A. RAJA

- **Citation:** [2012] 11 S.C.R. 873
- **Court:** Supreme Court of India
- **Decided:** 2012-08-24
- **Case number:** Civil Appeal No. 10660 of 2010
- **Bench:** G.S. Singhvi, K.S. Radhakrishnan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/11-s-c-r-873-subramanian-swamy-v-a-raja-28213
- **Pages:** 43

## Headnote

SCAM:
A
B
2G Spectrum Scam - Complaint by the appellant before C
Special Judge CBI to set in motion provisions of Prevention
of Corruption Act, against the then Telecom Minister - During
examination u/s. 200 Cr.P.C.,the appellant made a/legation
that the then Finance Minister and the Telecom Minister were
jointly and severely responsible for the scam - Prayer for
making the Finance Minister an accused and for carrying out D
investigation against him - Special Judge held that the
Finance Minister had no role in the subversion of the process
of issuance of LOI and UAS Licences and allocation of
spectrum in the year 2007-2008 and that there was no
evidence that he was acting pursuant to criminal conspiracy
E
- Prayers for making him accused and initiating investigation
against him rejected - Special Leave Petition - Contentions
intera/ia that the Finance Minister conspired with the Telecom
Minister and thus committed criminal misconduct and that he,
by illegal means, obtained pecuniary advantage - Held: The
F
materials available on record do not lead to the conclusion ·
that the Finance Minister conspired with the Telecom Minister
or that he attempted to hide the illegalities in the award of the
licences - Meeting of two ministers by itself would not be
sufficient to infer the existence of a conspiracy - Criminal G
conspiracy cannot be inferred on the mere fact that there were
official discussions between the officers of Ministry of Finance
and that of Department of Telecom and between the two
873
874
SUPREME COURT REPORTS
[2012] 11 S.C.R.
A Ministers - A wrong judgment or an inaccurate or incorrect
approach or poor management, by itself cannot be said to be
a product of criminal conspiracy - In view of the materials on
record, it cannot be said that Finance Minister had misused
his position or conspired or colluded with the Telecom
B Minister so as to fix low entry fee by non-visiting spectrum
charges fixed in the year 2001 - No materials were made
available even for a prima facie conclusion that the Finance
Minister had deliberately allowed dilution of equity .of the two
companies - There is also no material made available to
C conclude that the Finance Minister abused his official position
or used any corrupt or illegal means for obtaining any
pecuniary advantage for himself or for any other person - No
case is made out against him.
0
Centre for Public Interest Litigation and Ors. etc. v. Union
of India and Ors. (2012) 3 SCC 1- referred to.
lndo China $team Navigation Co. v. Jasjeet Singh 1964
(6) SCR 594;State of Maharashtra v. Hans George 1965 (1)
SCR 123; R.S. Joshi, Sales Tax Officer, Gujarat and Ors. v.
E Ajit Mills Ltd. and Anr. 1977 (4) sec 98: 1978 (1) SCR 338
- cited.
F
G
H
Case Law Reference:
1964(6) SCR 594
Cited
Para 7
1965 (1) SCR 123
Cite.<!
Para 7
1978 (1) SCR 338
Cited
Para 7
(2012) 3 sec 1
Referred to
Para 8

## Text

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[2012) 11 S.C.R. 873
SUBRAMANIAN SWAMY
v.
A. RAJA
(Special Leave Petition (Crl.) No. 1688 of 2012 etc.)
AUGUST 24, 2012
[G.S. SINGHVI AND K.S. RADHAKRISHNAN, JJ.]
SCAM:
A
B
2G Spectrum Scam - Complaint by the appellant before C
Special Judge CBI to set in motion provisions of Prevention
of Corruption Act, against the then Telecom Minister - During
examination u/s. 200 Cr.P.C.,the appellant made a/legation
that the then Finance Minister and the Telecom Minister were
jointly and severely responsible for the scam - Prayer for
making the Finance Minister an accused and for carrying out D
investigation against him - Special Judge held that the
Finance Minister had no role in the subversion of the process
of issuance of LOI and UAS Licences and allocation of
spectrum in the year 2007-2008 and that there was no
evidence that he was acting pursuant to criminal conspiracy
E
- Prayers for making him accused and initiating investigation
against him rejected - Special Leave Petition - Contentions
intera/ia that the Finance Minister conspired with the Telecom
Minister and thus committed criminal misconduct and that he,
by illegal means, obtained pecuniary advantage - Held: The
F
materials available on record do not lead to the conclusion ·
that the Finance Minister conspired with the Telecom Minister
or that he attempted to hide the illegalities in the award of the
licences - Meeting of two ministers by itself would not be
sufficient to infer the existence of a conspiracy - Criminal G
conspiracy cannot be inferred on the mere fact that there were
official discussions between the officers of Ministry of Finance
and that of Department of Telecom and between the two
873
874
SUPREME COURT REPORTS
[2012] 11 S.C.R.
A Ministers - A wrong judgment or an inaccurate or incorrect
approach or poor management, by itself cannot be said to be
a product of criminal conspiracy - In view of the materials on
record, it cannot be said that Finance Minister had misused
his position or conspired or colluded with the Telecom
B Minister so as to fix low entry fee by non-visiting spectrum
charges fixed in the year 2001 - No materials were made
available even for a prima facie conclusion that the Finance
Minister had deliberately allowed dilution of equity .of the two
companies - There is also no material made available to
C conclude that the Finance Minister abused his official position
or used any corrupt or illegal means for obtaining any
pecuniary advantage for himself or for any other person - No
case is made out against him.
0
Centre for Public Interest Litigation and Ors. etc. v. Union
of India and Ors. (2012) 3 SCC 1- referred to.
lndo China $team Navigation Co. v. Jasjeet Singh 1964
(6) SCR 594;State of Maharashtra v. Hans George 1965 (1)
SCR 123; R.S. Joshi, Sales Tax Officer, Gujarat and Ors. v.
E Ajit Mills Ltd. and Anr. 1977 (4) sec 98: 1978 (1) SCR 338
- cited.
F
G
H
Case Law Reference:
1964(6) SCR 594
Cited
Para 7
1965 (1) SCR 123
Cite.<!
Para 7
1978 (1) SCR 338
Cited
Para 7
(2012) 3 sec 1
Referred to
Para 8
CRIMINAL APPELLATE JURISDICTION: Special Leave
Petition (Crl) No. 1688 of 2012.
From the Judgment & Order dated 04.02.2012 of the
SUBRAMANIAN SWAMY v. A. RAJA
875
Sepcial Judge CBI (04) (2G Spectrum Cases), New Delhi in A
CC. No. 01 (A)/11.
WITH
I.A. No. 34 in Civil Appeal No. 10660 of 2010.
Subramanian Swamy (In-Person), H.P. Raval, ASG, P.P.
Rao, K.K. Venugopal, S. Wasim A. Qadri, Arijit Prasad, D.S.
Mahra Anirudh Sharma, Harsh N. Parekh, A.K. Sharma for the
Appearing parties.
The Order of the Court was delivered by
ORDER
K.S. RADHAKRISHNAN, J. 1. Common questions arise
B
c
for consideration in both these applications, hence they are D
being disposed of by a common order. SLP (Crl.) 1688 of
2012 arises out of an order dated 04.02.2012 in CC No.01(A)/
11 passed by the Special Judge, CBI (04) (2G Spectrum
Cases), New Delhi. I.A. No. 34 of 2012 has been filed by the
appellants in Civil Appeal No. 10660 of 2010 claiming almost E
identical reliefs.
2. Dr. Subramanian Swamy, the petitioner in special leave
petition filed a criminal complaint on 15.12.201 O before the
Special Judge, CBI of Central/Delhi to set in motion the
provisions of Prevention of Corruption Act (for short 'the PC F
Act') against A. Raja, the then minister of Telecommunications
and to appoint him as a prosecutor under Section 5(3) of the
PC Act. The complaint was numbered as CC No.1 of 2010 and
was heard on several occasions. The case was later
transferred to the Special Judge, CBI (04)(2G Spectrum G
Cases), New Delhi. CBI, after investigation, filed a charge sheet
in that complaint on 2.4.2011 regarding commission of
·offences during 2007-2009 punishable under Sections 120B,
420, 468, 471 IPC and also punishable under Section 13(2)
read with Section 13(1)(d) of the PC Act, against A. Raja and H
876
SUPREME COURT REPORTS
[2012] 11 S.C.R.
A others. Special Judge took cognizance on 2.4.2011. CBl's
further investigation disclosed that the monetary involvement
was much· more and charge was laid. Special Judge took
cognizance of the aforesaid charge sheet on 25.4.2011. Both
the charge sheets were clubbed together vide order dated
B 22.10.2011 under Section 1208 read with Sections 409, 420,
468 and 471 IPC and day to day trial began from 11.11.2011.
Dr. Subramanian Swamy's complaint case No.CC 0112011 was
also taken on file and renumbered as CC.No.1 (A)/2011.
C
3. Dr. Subramanian Swamy, the petitioner, herein, while
he was being examined under Section 200, Code of Criminal
Procedure in CC No. 01(A)/11 had deposed on 17.12.2011
as well as on 07.01.2012 that Shri A Raja, the first accused,
could not have alone committed the offences alleged against
him, but for the active connivance of Shri P. Chidambaram, the
D then Finance Minister. So far as the various charges were
concerned, it was alleged that both Shri A. Raja and Shri P.
Chidambaram were jointly and severely responsible. Reference
was also made to documents including Ext. CW 1/1 to CW 1/
28 with an emphasis that all those acts were done by the
E accused - Shri A Raja in connivance, collusion and consent of
Shri P. Chidambaram and hence Shri P. Chidambaram was
also guilty of commission of the offences under the P.C. Act
for which Shri A. Raja was already facing trial. Further, it was
also pointed out that Shri P. Chidambaram was also guilty of
F breach of trust on the question of national security for not
disclosing that Etisalat and Telenor were black-listed by the
Home Ministry. Further, it was pointed out that there was
enough incriminating materials on record for carrying out the
investigation against Shri P. Chidambaram and for making him
G an accused in the case. Further, it was also alleged that Shri
P. Chidambaram had played a vital role in the subversion of
the process of issuance of Letter of Intent (for short 'LOI'),
Unified Access Service (for short 'UAS') Licences and
allocation of spectrum in the year 2007-08. Further, it was also
H alleged that Shri P. Chidambaram was also complicit in fixing
SUBRAMANIAN SWAMY v. A. RAJA
877
[K.S. RADHAKRISHNAN, J.]
the price of the spect~um licence at 2001 level and permitting
A
two companies, which received the licence that is Swan Tele
Communication (P) Ltd. (for short 'Swan') and Unitech (T.N.)
Ltd. (for short 'Unitech') and to dilute their shares even before
roll-out of their services.
4. Learned Special Judge, after referring to the various
B
documents, produced found no substance in the allegations
raised against Shri P. Chidambaram and found that he had no
role in the subversion of the process of issuance of the LOI,
UAS Licences and allocation of spectrum· in the year 2007-08.
C
Learned Judge concluded that there was no evidence on record
that he was acting in pursuant to the criminal conspiracy, while
being party to the two decisions regarding non-revision of the
spectrum pricing and dilution of equity by the two companies.
Consequently, the prayer made for carrying out the investigation
against Shri P. Chidambaram and to make him an accused
D
was rejected vide order dated 04.02.2012, against which SLP
(Crl.) No. 1688 of 2012 has been filed.
5. Dr. Swamy appeared in person and elaborately referred
to Annexure P-1 Final Report dated 03.04.2011 submitted by
E
CBI before the Special Judge especially Para E, charge
dealing with "Cheating the Government Exchequer by NonRevision of Entry Fee•. Reference was also made to the
. summary of his arguments raised before the Special Judge for
carrying out investigation against Shri P. Chidambaram and to
F
array him as an accused in the pending criminal case.
Reference was also made to the meetings that Shri P.
Chidambaram had with Shri A. Raja on 30.01.2008,
29.05.2008, 12.06.2008 and later with the Prime Minister on
04.07.2008 and submitted that in those meetings both of them G
conspired together for a common object and purpose in fixing
the pricing of spectrum at the year 2001 level and permitting
distribution equally by two companies Swan and Unitech.
Further, it was also pointed out that Shri P. Chidambaram was
fully aware, at least, on 09.01.2008 as to what Shri A Raja was
H
878
SUPREME COURT REPORTS
[2012) 11 S.C.R.
A planning to do on 10.01.2008. Referring to several documents
placed on record, it was pointed out that in fact Shri P.
Chidambaram did not pay heed to the opinions expressed by
the officials of his owrr Ministry and abeted to commit various
illegal acts.
B
6. Dr. Swamy referred to various ingredients of Section
13(1 )(d)(iii) of PC Act and pointed out that a bare reading of
the above mentioned provision shows that mens rea or criminal
intent was not an essential ingredient of that Section. Reference
C was made to the judgment of this Court reported in lndo China
Steam Navigation Co. v. Jasjeet Singh [1964(6) SCR 594],
State of Maharashtra v. Hans George [1965 (1) SCR 123) and
R.S. Joshi, Sales Tax Officer, Gujarat and Others v. Ajit Mills
Ltd. and Another [1977 (4) SCC 98) and submitted the ratio
of above judgments indicate that certain criminal offences
D imposing punishment of incarceration need not require mens
rea instead strict liability as enumerated in the statute itself. Dr.
Swamy pointed out that the above mentioned statutory
provision would indicate that the emphasis is on "obtains' and
"public interesr. Dr. Subramanian Swamy submitted that the
E learned trial judge had failed to notice those vital aspects and
has wrongly rejected the prayer for conducting investigation
against Shri P. Chidambaram and to array him as an accused.
7. Shri Prashant Bhushan, learned counsel appearing for
F the applicants in I.A. No. 34 of 2012 has indicated the necessity
of conducting a thorough investigation by the CBI into the role
of the then Finance Minister Shri P. Chidambaram in the matter
of fixing the spectrum pricing and allowing the sale of equity
by Swan and Unitech. Learned counsel pointed out that in that
G process, Shri P. Chidambaram had over-ruled the officers of
his own Ministry who favoured auction I market-based pricing
of spectrum and instead allowed varipus companies to make
windfall profits. Further, it was also stated that he had allowed
the above-mentioned companies to sell off their shares without
H charging any Government's share of its premium on account
SUBRAMANIAN SWAMY v. A. RAJA
879
[K.S. RADHAKRISHNAN, J.)
of spectrum valuation and without enforcing his own agreement A
with the then Telecom Minister.
8. Learned counsel made specific reference to para
2.1.2(3) and submitted that the Group of Ministers (GoMs) had
in their recommendation dated 30.10.2003 stated that the 8
Department of Telecom (DoT) and the Ministry of Finance
(MoF) would discuss and finalise spectrum pricing formula
which would include incentive for efficient use of spectrum as
well as disincentive for suboptimal usages. Learned counsel
pointed out that the above recommendation would clearly C
indicate that MoF officials were fully aware that unless such
'concurrence' based on discussion and finalization of spectrum
pricing formula between the DoT and the MoF had been
established, the DoT could not have moved ahead and
spectrum could have been allocated at 2001 rates in the year
2007-08.
D
9. Learned counsel also referred to the "Position Paper on
Spectrum Policy" prepared by the Department of Economic
Affairs (revised on 03.01.2008) which was forwarded along
with covering letter dated 09.01.2008. The Telecom
E
Commission meeting which was to take place on 09.01.2008
was postponed to 15.01.2008. Further, it was pointed out that
before the scheduled meeting of the Telecom Commission on
15.01.2008, DoT had already issued 122 LOls for UAS
licenses on 10.01.2008 and that LOls were converted into
F
licenses during 27.02.2008 to 7.3.2008 and the spectrum
allocation was started from 22.4.2008 and completed
6.5.2009. Learned counsel pointed out that, the then Finance
Minister had enough time to stop the scam, since the price was
not fixed by the DoT and MoF as authorized by the GoMs G
(2003).
10. Further, it was also stated that before the Telecom
Commission could meet, then Finance minister made a note
on 15.01.2008 to the Prime Minister of India pointing out that
the note did not deal with the need, if any, to revise entry fee or H
880
SUPREME COURT REPORTS
(2012] 11 S.C.R.
A the rate of revenue share, and also indicated the said note dealt
with spectrum charges for. 2G spectrum. Further, it was also
stated by Shri Prashant Bhushan that then Finance Minister and
Shri A Raja had met on 30.01.2008 to discuss the issue of
licensing and spectrum pricing. In that meeting, then Finance
B Minister had announced the issue of revising entry fee of 122
LOls already issued by DoT and that they were not seeking to
revisit the current regimes for entry fee or for revenue share.
11. Shri Bhushan ·also referred to the approach paper by
C Department of Teleccm Commission, which was forwarded by
the Secretary, DoT to the Finance Secretary, MoF, which would
indicate that the officials of Finance Ministry were keeri to stop
the allocation of spectrum of 4.4 MHz and were suggesting the
allocation of spectrum by way of auction.
D
12. Learned counsel also referred to the sequel note to the
Department of Economic Affairs dated 11.02.2008 which
according to the learned counsel, would indicate that the MoF
had deferred from the position of DoT and stated that there was
no contractual obligation to allot a start-up spectrum of 4.4 MHz
E to every licencee free of cost and that the entire range of the
spectrum allotted should be priced and that the issue of level
playing field could be addressed by charging the price even
on existing operators. Learned counsel pointed out that in spite
of objection raised by the officials of Ministry, the Finance
F Minister acted in connivance with Shri A Raja and Shri A Raja
went ahead and issued 122 licences which could have been
prevented by Shri P. Chidambaram, had he stood with the
views of his officials.
13. Learned counsel a.lso referred to note dated
G 07.04.2008 sent by the Finance Secretary after discussion with
the Finance Minister wherein it was noticed that DoT was
agreeable for pricing of spectrum beyond 4.4 MHz but wanted
that to be deferred till auction of 3G and WIMax was completed.
Reference was also made by the learned counsel to the note
H dated 03.04.2008 of the Additional Secretary (EA) and pointed
SUBRAMANIAN SWAMY v. A. RAJA
881
[K.S. RADHAKRISHNAN, J.]
out that then Finance Minister had agreed that spectrum usage
A
charge should be increased reflecting the scarcity value of
spectrum as indicated in their note dated 11.02.2008. Further,
the note also indicated the Finance Minister's view that they
should insist, in principle, on pricing spectrum beyond 4.4 MHz
although details could be worked out after the auction of 3G
B
spectrum.
14. Shri Prashant Bhushan also referred to the Office
Memorandum, MoF dated 8.4.2008 prepared by Shri Govind
Mohan, Director which, according to the learned counsel C
reflected the MoF's original position of 11.2.2008 on the issue
of subjecting the entire spectrum to specific pricing. Learned ·
counsel alleged that the note issued was later withdrawn and
the officer was reprimanded and a fresh Office Memorandum
was issued by the same Director. Learned counsel compared
the original Office Memorandum dated 08.04.2008 and the new D
Office Memorandum and submitted that the original Office
· Memorandum had required the entire range of spectrum to be
specifically priced and the revised Office Memorandum which
was prepared on 9.4. 2008 had presented with a date of
8.4.2008, specifically sought to exclude start-up spectrum upto E
4.4 MHz from being specifically charged, ensuring the entry fee
of 2001 that was fixed by the then Telecom Minister in 2008,
was not revised. Shri Bhushan submitted that the officer had
to apologize for his deeds and on 16.04.2008, the then Finance
Minister accepted the apology of the officer. ·
F
15. Learned counsel also referred to letter dated 21.4.
2008 sent by the then Finance Minister to Shri A Raja and
submitted that the spectrum issue "non paper" was silent on the
issue of entry fee for start-up spectrum for 122 licences already G
issued and the discussion mainly concentrated on the charging
for spectrum beyond 4.4 MHz. Reference was also made to the
Finance Secretary's updated note dated 29.04.2008 which,
according to the learned counsel, reflected the same position
preferred by MoF. Both Shri A Raja and Shri P. Chidambaram H
882
SUPREME COURT REPORTS
[2012] 11 S.C.R.
A met on 29.05.2008 as well as on 12.06.2008. Learned counsel
also pointed out that on 4.7.2008, the then Finance Minister,·
Shri A Raja along with Finance Secretary met the Prime
Minister. By the time, LOls were already issued which were
converted to licences, allocation of start-up spectrum was
B started. Learned counsel also made reference to the CAG
report and the pointed out the reference made to Shri P.
Chidambaram. Reference was also made to the briefing made
by the Prime Minister, to the Media on 16.2.2011 and also the
address made by the Prime Minister in Rajya Sabha on
c 24.2.2011.
16. Learned counsel also pointed out that there was no
justification, in any view, in allotting the start-up spectrum 4.4
MHz to every licensee free of cost and submitted that the entire
range of spectrum allotted should have been priced. Learned
D counsel pointed out that one price of spectrum between 4.4
MHz and 6.2MHz and different price for spectrum between
beyond 6.2 MHz would be non-transparent and illegal. Learned
counsel pointed out that in fact the MoF had initially objected
the above stand of DoT but subsequently yielded after the
E meeting Shri P. Chidambaram had with Shri A Raja.
17. Learned counsel pointed out all those facts which
would clearly indicate that Shri P. Chidambaram the then
Finance Minister was also equally responsible. Non-revision of
F spectrum price though specifically recommended by the GoMs
in the year 2003 would indicate, according to the counsel, that
Shri P. Chidambaram colluded up with Shri A Raja in nonauctioning of the spectrum and went on for allotment of first
come first served basis at 2001 rates. Further, it was also
G pointed out that Shri P. Chidambaram had not revised his
position from giving away 4.4 MHz of spectrum at 2001 prices
and giving away 6.2 MHz of spectrum at 2001, thus causing
huge loss to the exchequer. Further, he was also instrumental
along with Shri A. Raja for allowing companies like Swan and
H Unitech to sell off their shares without charging any
SUBRAMANIAN SWAMY v. A. RAJA
883
[K.S. RADHAKRISHNAN, J.]
Government's share of its premium. Counsel therefore prayed
A
for a direction of CBI to conduct a thorough investigation I further
investigation into the role of Shri P. Chidambaram in 2G
spectrum scam under the close scrutiny of this court.
18. We heard Dr. Subramnian Swamy, appearing in
person and Shri Prashant Bhushan, learned counsel at length.
B
Arguments raised give rise to the following questions:
(1)
Whether Shri P. Chidambaram has conspired with
Shri A Raja in fixing the price of the spectrum at
2001 level thereby committed the offence of criminal c
misconduct.
(2)
Whether Shri P. Chidambaram by corrupt and
illegal means obtained for himself or for Shri Raja
any valuable thing or pecuniary advantage.
(3)
Whether Shri P. Chidambaram has deliberately
allowed dilution of equity by Swam Telecom Pvt.
Ltd. and Unitech Wireless (Tamil Nadu) Ltd. at the
cost of public exchequer.
D
(4)
Whether Shri P. Chidambaram has conspired with
E
Shri A. Raja in fixing one price of spectrum
between 4.4 MHz and 6.2 MHz and another price
for spectrum beyond 6.2 MHz for unlawful gain, for
benefiting the licensees.
(5)
Whether the above mentioned acts fall within the
scope of Section 13(1)(d)(i) to (ii) of the P.C. Act
and the materials on record are sufficient to
conclude so.
F
19. Shri P. Chidambaram was the Finance Minister of the
G
Union of India from 22.5.2004 to 31.11.2008. Brief reference
to facts prior to 22.5.2004 has already been made by this Court
in its judgment in Centre for Public Interest Litigation and
Others etc. v. Union of India and Others (2012) 3 SCC 1 and
hence not repeated, but reference to few facts is necessary to
H
884
SUPREME COURT REPORTS
[2012) 11 S.C.R.
A appreciate and understand the alleged involvement of Shri P.
Chidambaram in the 2G Scam
20. The Telecom Regulatory Authority of India (for short
'TRAI'), a statutory authority constituted under the Telecom
8 Regulatory Authority of India Act, 1997 (for short "1997 Act"),
had made certain recommendations on 27.10.2003 on UAS
Licence for the allocation of spectrum under Sections
11(1)(a)(i), (ii), (iv) and (vii) of the 1997 Act. Para 7.30 of the
recommendations emphasized the necessity of efficient
utilisation of spectrum by all service providers and indicated that
C it would make further recommendations on efficient 'Utilisation
of spectrum, spectrum pricing, availability and spectrum
allocation procedure and that the DoT might issue spectrum
related guidelines based on its recommendations.
D
21. A GoMs was constituted on 10.9.2003 with the
approval of the then Prime Minister to consider various issues
as to how to ensure release of adequate spectrum for the
telecom sector, including the issues relating to merger and
acquisition in the telecom sector and to recommend how to
E move forward. GoMs made detailed recommendations on
30.10.2003. Para 2.1.2(3) of the recommendations reads as
follows:
F
"(3) The Department of Telecom and Ministry of
Finance would discuss and finalise spectrum pricing
formula which will include incentive for efficient use of
spectrum as well as disincentive for sub-optimal usages.·
Para 2.1.2(4) stated that the allotment of additional
spectrum would be transparent, fair and equitable, avoiding
G monopolistic situation regarding spectrum allotment usage.
H
Para 2.4.6(ii) of the recommendations reads as follows:
"(ii) The recommendations of TRAI with regard to
implementation of the Unified Access Licensing Regime
for basic and cellular services may be accepted."
SUBRAMANIAN SWAMY v. A. RAJA
885
[K.S. RADHAKRISHNAN, J.]
22. The recommendations of the GoMs were accepted by A
the Council of Ministers on 31.10.2003, the meeting of which
was chaired by the then Prime Minister. The then Minister of
Communications
on
24.11.2003
accepted
the
recommendations that entry fee for new UAS licensees would
be the entry fee of the fourth cellular operator and where there
B
was no fourth cellular operator, it would be the entry fee fixed
by the Government for the basic operator. A decision was also
taken by the then Minister for Communications for the grant of
spectrum licenses on first-come-first served basis. Shri
Dayanidhi Maran became the Minister for Telecommunications c
on 26.5.2004.
23. TRAI later made comprehensive recommendations on
13.5.2005 on various issues relating to spectrum policy i.e.
efficient utilisation of spectrum, spectrum allocation, spectrum D
pricing, spectrum charging and allocation for other terrestrial
wireless links. On 23.2.2006, the Prime Minister approved the
constitution of a GoMs consisting of the Minister of Defence,
Home Affairs, Finance, Parliamentary Affairs, Information and
Broadcasting and Communications, to look into issues relating
E
to vacation of spectrum. Deputy Chairman, Planning
Commission was a special invitee. The Terms of Reference of
GoMs, inter alia, suggested a spectrum pricing policy. Shri
Dayanidhi Maran, the then Minister of Telecommunications
wrote a letter dated 28.2.2006 to the Prime Minister indicating
that the terms of reference of the GoMs would impinge upon
F
the work of his Ministry since wider in scope and requested that
they be modified in accordance with the draft enclosed along
with his letter. The draft forwarded by the Minister, however, did
not contain any formula for spectrum pricing. However, on
7 .12.2006, the Cabinet Secretary conveyed the approval of the G
Prime Minister to the modified terms of reference which did not
contain any formula for spectrum pricing.
24. DoT, later, vide its letter dated 13.4.2007 requested
TRAI to furnish its recommendations under Section 11 (1 )(a) of H
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(2012] 11 S.C.R.
A the 1997 Act on the issues of limiting the number of access
providers in each service area and for the review of the terms
and conditions in the access provider licence mentioned in the
letter. Shri Dayanidhi Maran had by the time resigned on
14.5.2007 and Shri A. Raja became the Minister for
B Telecommunications on 16.5.2007.
25. TRAI made its recommendations on 28.8.2007. One
of the recommendations made by TRAI was that in future all
spectrums excluding the spectrum in 800, 900 and 1800 MHz
c bands in 2G services should be auctioned. Para 2.73 of the
recommendations is of some importance and hence extracted
hereunder:
"2. 73 .............. The Authority in the context of 800, 900
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and 1800 MHz is conscious of the legacy i.e. prevailing
practice and the overriding consideration of level playing
field. Though the dual charge in present form does not
reflect the present value of spectrum it needed to be
continued for treating already specified bands for 2G
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services i.e. 800, 900 and 1800 MHz. It is in this
background that the Authority is not recommending the
standard options pricing of spectrum, however, it has
elsewhere in the recommendation made a strong case for
adopting auction procedure in the allocation of all other
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spectrum bands except 800, 900 and 1800 MHz.'
Paras 2.74, 2.75, 2.76, 2.77, 2.78 and 2.79 are also
relevant for determining the various issues which arise for
consideration in this case and hence given below for ready
G reference:
"2.74 Some of the existing service providers have
already been allocated spectrum beyond 6.2 MHz in GSM
and 5 MHz in CDMA as .specified in the license
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agreements without charging any extra one time spectrum
SUBRAMANIAN SWAMY v. A. RAJA
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[K.S. RADHAKRISHNAN, J.]
charges. The maximum spectrum allocated to a service A
provider is 10 MHz so far. However, the spectrum usage
charge is being increased with increased allocation of
spectrum. The details are available at Table 8.
2.75 The Authority has noted that the allocation
8
beyond 6.2 MHz for GSM and 5 MHz for CDMA at
enhanced spectrum usage charge has already been
implemented. Different licensees are at different levels of
operations in terms of the quantum of spectrum. Imposition
of additional acquisition fee for the quantum beyond these C
thresholds may not be legally feasible in view of the fact
that higher levels of usage charges have been agreed to
and are being collected by the Government. Further, the
Authority is conscious of the fact that further penetration
of wireless services is to happen in semi-urban and rural
areas where affordability of services to the common man D
is the key to further expansion.
2.76 However, the Authority is of the view that the
approach needs to be different for allocating and pricing
spectrum beyond 10 MHz in these bands i.e. 800, 900 and
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1800 MHz. In this matter, the Authority is guided by the
need to ensure sustainable competition in the market
keeping in view the fact that there are new entrants whose
subscriber acquisition costs will be far higher than the
incumbent wireless operators. Further, the technological
F
progress enables the operators to adopt a number of
technological solutions towards improving the efficiency of
the radio spectrum assigned to them. A cost-benefit
analysis of allocating additional spectrum beyond 10 MHz
to existing wireless operators and the cost of deploying G
additional CAPEX towards technical improvements in the
networks would show that there is either a need to place
a cap on the maximum allocable spectrum at 10 MHz or
to impose framework of pricing through additional
acquisition fee beyond 10 MHz.
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The Authority feels it appropriate to go in for
additional acquisition fee of spectrum instead of placing
a cap on the amount of spectrum that can be allocated to
any wireless operator. In any case, the Authority is
recommending a far stricter norm of subscriber base for
allocation of additional spectrum beyond the initial
allotment of spectrum. The additional acquisition fee
beyond 10 MHz could be decided either administratively
or through an auction method from amongst the eligible
wireless service providers. In this matter, the Authority has
taken note of submissions of a number of stakeholders
who have cited evidences of the fulfillment of the quality of
service benchmarks of the existing wireless operators at
10 MHz and even below in almost all the licensed service
areas. Such an approach would also be consistent with the
Recommendation of the Authority in keeping the door
open for new entrant without putting a limit on the number
of access service providers.
2.77 The Authority in its recommendation on
"Allocation and pricing of spectrum for 3G and broadband
wireless access services" had recommended certain
reserve price for 5 MHz of spectrum in different service
areas. The recommended price are as below:
Service areas
Price (Rs. in million)
for 2 MHz x 5 MHz
Mumbai, Delhi and
800
Category A
Chennai, Kolkata and
400
Category B
Category C
150
The Authority recommends that any licensee who
seeks to get additional spectrum beyond 10 MHz in the
SUBRAMANIAN SWAMY v. A. RAJA
889
[K.S. RADHAKRISHNAN, J.]
existing 2G bands i.e. 800,900 and 1800 MHz after A
reaching the specified subscriber numbers shall have to
pay a onetime spectrum charge at the above mentioned
rate on prorata basis for allotment of each MHz or part
thereof of spectrum beyond 10 MHz. For one MHz
allotment in Mumbai, Delhi and Category A service areas,
B
the service provider will have to pay Rs. 160 million as one
time spectrum acquisition charge.
2.78 As far as a new entrant is concerned, the question
arises whether there is any need for change in the pricing
methodology for allocation of spectrum in the 800, 900 and
C
1800 MHz bands. Keeping in view the objective of growth,
affordability, penetration of wireless services in semi-urban
and rural areas, the Authority is not in favour of changing
the spectrum fee regime for a new entrant. Opportunity for
equal competition has always been one of the prime D
principles of the Authority in suggesting a regulatory
framework in telecom services. Any differential treatment
to a new entrant vis-a-vis incumbents in the wireless sector
will go against the principle of level playing field. This is
specific and restricted to 2G bands only i.e. 800, 900 and
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1800 MHz. This .approach assumes more significance
particularly in the context where subscriber acquisition east
for a new entrant is likely to be much higher than for the
incumbent wireless operators.
2.79 In the case of spectrum in bands other than 800,
900 and 1800 MHz i.e. bands that are yet to be allocated,
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the Authority examined various possible approaches for
pricing and has come to the conclusion that it would be
appropriate in future for a market based price discovery G
systems. In response to the consultation paper, a number
of stakeholders have also strongly recommended that the
allocation of spectrum should be immediately de-linked
from the license and the future allocation should be based
on auction. The Authority in its recommendation on
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[2012] 11 S.C.R.
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"Allocation and pricing of spectrum for 3G and broadband
wireless access services" has also favored auction
methodology for allocation of spectrum for 3G and BWA
services. It is therefore recommended that in future all
spectrum excluding the spectrum in 800, 900 and 1800
B
bands should be auctioned so as to ensure efficient
utilization of this scarce resource. In the 2G bands (800
MHz/900 MHz/1800 MHz), the allocation through auction
may not be possible as the service providers were
allocated spectrum at different times of their license and
c
the amount of spectrum with them varies from 2X4.4 MHz
to 2X10 MHz for GSM technology and 2X2.5 MHz to 2X5
MHz in CDMA technology. Therefore, to decide the cut off
after which the spectrum is auctioned will be difficult and
might raise the issue of level playing field."
D
26. The Internal Committee of DoT considered the above
recommendations made by TRAI and its report was placed
before the Telecom Commission on 10.10.2007. The Finance
Secretary and other three non-permanent members were not
informed of that meeting, but attended only by the officials of
E DoT and the report of the Internal Committee was approved by
the Telecom Commission. Shri A. Raja accepted the
recommendations of Telecom Commission. Consequently, the
recommendations of TRAI dated 28.8.2007 stood approved by
the Internal Committee of DoT, Telecom Commission and DoT.
F
DoT, it may be noted, did not get in touch with the Ministry of
Finance to discuss and finalise the spectrum pricing formula
which had to include incentive for efficient use of spectrum as
well as disincentive for suboptimal usage in terms of the
Cabinet decision of 2003.
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27. Above facts would indicate that neither Shri P.
Chidambaram nor the officials of MoF had any role in the
various decisions taken by TRAI on 28.8.2007, decision taken
by the Internal Committee of DoT and the decision of the
Telecom Commission taken on 10.10.2007.
SUBRAMANIAN SWAMY v. A. RAJA
891
[K.S. RADHAKRISHNAN, J.]
28. DoT then went ahead to process applications received A
for UAS licences. Between 24.9.2007 and 1.10.2007, over 300
applications were received. The Member (Technology},
Telecom Commission and ex-officio Secretary to the
Government of India sent a letter dated 26.10.2007 to the
Secretary, Department of Legal Affairs, Ministry of Law and
B
Justice seeking the opinion of the Attorney General of India/
Solicitor General of India for dealing with those applications for
licences. The Law Secretary placed the papers before the
Minister of Law and Justice on 1.11.2007 who had
recommended that the entire issue be considered by an c
Empowered GoMs and, in that process, opinion of the Attorney
General of India be obtained. When the note of the Law Minister
was placed before Shri A. Raja, he recorded a note on
2.11.2007 calling for discussion. Shri A. Raja, however, on the
same day, ordered the issuance of Lois to new applicants as D
per the then existing policy and authorised Shri R. K. Gupta,
ADG (AS-1) for signing the Lois on behalf of the President of
India. Shri A. Raja had also ordered for the issuance of Loi to
the applicants whose applications had been received up to
25.9.2007 and also sent a letter bearing DO No. 20/100/2007AS-I dated 2.11.2007 to the Prime Minister and took strong
E
objection to the suggestion made by the Law Minister by
describing his opinion as totally out of context.
29. The Prime Minister, however, vide his letter dated
2.11.2007 had requested Shri A. Raja to give urgent F
consideration to the various issues raised with a view to
ensuring fairness and transparency and requested him to inform
the Prime Minister of the position before taking any further
action. On the same day, Shri A.Raja sent a reply to the Prime
Minister brushing aside the suggestions made by the Prime G
Minister pointing out that it would be unfair, discriminatory,
arbitrary and capricious to auction the spectrum to new
applicants as it would not give them a level playing field. The
relevant portion of Para 3 of Shri A. Raja's letter is extracted
below:
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"3. Processing of a large number of applications
received for fresh licenses against the backdrop of
inadequate spectrum to cater to overall demand
The issue of auction of spectrum was considered by
the TRAI and the Telecom Commission and was not
recommended as the existing licence holders who are
already having spectrum upto 10 MHz per Circle have got
it without any spectrum charge. It will be unfair.
discriminatory, arbitrary and capricious to auction the
spectrum to new applicants as it will not give them level
playing field.
I would like to bring it to your notice that DoT has
earmarked totally 800 MHz in 900 MHz and 1800 MHz
bands for 2G mobile services. Out of this, so for a
maximum of about 35 to 40 MHz per Circle has been
allotted to different operators and being used by them. The
remaining 60 to 65 MHz, including spectrum likely to be
vacated by Defence Services, is still available for 2G
services.
Therefore, there is enough scope for allotment of
spectrum to few new operators even after meeting the
requirements of existing operators and licensees. An
increase in number of operators will certainly bring real
competition which will lead to better services and
increased teledensity at lower tariff. Waiting for spectrum
for long after getting licence is not unknown to the Industry
and even at present Aircel, Vodafone, Idea and Dishnet
are waiting for initial spectrum in some Circles since
December 2006."
30. Shri P. Chidambaram, it is seen, had no role in the
exchange of those communications or the expression of
opinions of the decisions taken between Shri A. Raja and the
Prime Minister's Office, a situation created by Shri A. Raja and
H the officials of DoT. Neither Shri P. Chidambaram nor the
SUBRAMANIAN SWAMY v. A. RAJA
893
[K.S. RADHAKRISHNAN, J.]
officials of the MoF did figure in those communications and
A
hence the allegation of involvement of Shri P. Chidambaram
in the 2G Scam has to be examined in that background.
31. The Secretary, DoT made a presentation of the
spectrum policy on 20.11.2007 to the Cabinet Secretary.
8 .
Finance Secretary, Dr. Subbarao, who had witnessed the
presentation sent a letter dated 22.11.2007 to the Secretary,
DoT to know whether proper procedure had been followed with
regard to financial diligence. The operative portion of the letter
reads as follows:
c
"2. That purpose of this letter is to confirm if proper
procedure has been followed with regard to financial
diligence. In particular, it is not clear how the rate of
Rs.1600 crore, determined as far back as in 2001, has
been applied for a license given in 2007' without any D
indexation, let alone current valuation. Moreover, in view
of the financial implications, the Ministry of Finance should
have consulted in the matter before you had finalized the
decision.
3. I request you to kindly review the matter and revert E
to us as early as possible with responses to the above
issues. Meanwhile, all further action to implement the
above licenses may please be stayed. Will you also kindly
send us copies of the letters of permission given and the
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date?"
32. DoT replied to the Finance· Secretary vide letter dated
29.11.2007.