Apart from cancelling 122 Licences, the SC has confirmed that there has been a loss to the Government despite Kabil Sibal’s assertion to the contrary, the important fact is that the government has netted additional 13,740 crores.
The Customers numbering about 70 Millions may have to switch operators.
Real fall out is that the crime has been confirmed and consequently the perpetrators, hopefully, will be punished.
The Government has been trying to side track the issue by declaring that there was no loss and CAG’s figures were notional.
With Dr.Subramanian Swami breathing down the neck of P.Chidambaram, whose compliance in this scam is a certainty,the case is expected to turn the heat on the Congress and probably set in motion a new alignment at the centre and the next election may well be a water shed in IndiaPolitical History.
“The cancellation of licences held by nine telecom companies will straightaway bring Rs 13,740 crore to the Government apart from the expected bonanza from the spectrum auction.
The clauses 5(G) (xiii) and 6 of telecom licence guidelines empower the Government to confiscate the entry fee, Finance Bank Guarantee (FBG) and Performance Bank Guarantee (PBG) in the event of licence cancellation due to the fault and fraud committed by the telecom operators.
According to Thursday’s judgement given by Supreme Court judges Justices GS Singhvi and AK Ganguly, all the 122 licences were cancelled because they were awarded in “illegal, arbitrary and unconstitutional” ways. “Hence the entire amount paid by them would be deemed to be confiscated,” said a top DoT official.
These nine companies paid Rs 9,013.94 crore as entry fee, which is now non-refundable as the court has held that the companies violated norms. For the licences, these companies paid Rs 3,390 crore as FBG and Rs 1,316 crore as PBG. In total, these operators deposited Rs 13,719.94 when they obtained licence in the controversial 2G spectrum allocation.
“In case of not adhering to licence conditions envisaged in para 5.G, the licence(s) granted to the company shall be deemed as cancelled and the licensor (Department of Telecom) shall have the right to encash the performance/financial bank guarantee(s) and the licensor (Department of Telecom) shall not be liable for loss of any kind,” say the clause 5G(xiii) of the existing Guidelines for Unified Access Services License, which came into force in December 2005. The clause 6 specifically mentions that the entry fee is “non-refundable”.
The SC verdict is in line with the CAG report which found that entire licences were allotted in illegal ways. The CAG report specifically mentioned that out of the 122 licences, 85 licences owned by Swan Telecom, Unitech, Loop, Videocon and STel were totally “ineligible” and based on forged documents.
The confiscated figure of Rs 13,719.94 crore from the cancelled licences will be in addition to the Rs 20 crore in the form of fine these companies will have to pay as per court’s directive. The SC had imposed Rs 5 crore as fine each on three companies for offloading shares to foreign companies and Rs 50 lakh was imposed on four companies for other violations.
“Customers will not be impacted from the cancellation of licences, TRAI Chairman reportedly said..
Nearly 70 million subscribers may have to change their operators as a result of the Supreme Court’s ruling to cancel licences, according to reports.
The Telecom Regulatory Authority of India reportedly said that there will not be much impact on customers as around 95% subscribers belong to operators which got licences before January 2008.
“Customers will not be impacted from the cancellation of licences, TRAI Chairman reportedly said.
The Supreme Court has given a four-month window to the Government and the operators to implement its orders.
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