2G spectrum scam judgment an anticlimax in light of SC cancelling licences, onus of proof being on public servants

The 2G spectrum scam was billed as the second biggest scam after Watergate by Time magazine

S Murlidharan December 21, 2017 12:47:11 IST
2G spectrum scam judgment an anticlimax in light of SC cancelling licences, onus of proof being on public servants

The 2G spectrum scam was billed as the second biggest scam after Watergate by Time magazine. One also got a foretaste of what was to come in the criminal case after the Supreme Court in 2012 cancelled all 122 licences issued on the basis of the dubious first-come-first-served (FCFS) policy. But Thursday's judgment acquitting A Raja, then telecom minister and DMK supremo M Karunanidhi's daughter Kanimozhi among others bears out more the I-said-so smug comment of the former finance minister P Chidambaram that 2G was a scam that never was!

To be sure, the Supreme Court was seized of the policy issue and not the criminal conspiracy aspect of the issue when it cancelled the licences, but the reason it gave its thumbs down to FCFS was that it was potentially mischievous — lending itself to abuse in the wrong hands besides depriving the exchequer of the best price possible.

The relevant part of the CBI chargesheet exemplifies and brings out the nub of the issue to prove that the potential loss indeed was actual loss too:

…though the foreign direct investment limit was raised from 49 to 74 percent in December 2005, there was no lock-in period or restriction imposed on the sale of equity or issue of additional equity. As a result, M/s Swan Telecom Pvt Ltd, which paid the Department of Telecom (DoT) Rs 1,537 crore for the UAS licences for 13 circles, offloaded its 45 percent equity to M/s Etisalat of the UAE for Rs 4,200 crore. Similarly, M/s Unitech Wireless (a group of eight companies), which paid the DoT Rs 1,658 crore for UAS licences of all 22 circles, offloaded its 60 percent equity to M/s Telenor of Norway for Rs 6,100 crore. These stakes were sold by the said companies even before the rollout of services by them. The estimated loss to the government by grant of licences to these two companies alone comes to Rs 7,105 crore)."

2G spectrum scam judgment an anticlimax in light of SC cancelling licences onus of proof being on public servants

File image of Kanimozhi. PTI

The ebullient Kapil Sibal, the then law minister in the UPA government mocked the charges saying they were a figment of the imagination and that there was in fact, zero loss to the exchequer. His colleague Chidambaram called the profit made on the sly by front companies, some of whom had nothing to do with telecom, as smart business dealings, when it was evident that the scam was carefully scripted and the revenue loss was foretold.

In the event, the 2G criminal case verdict was keenly awaited. The politicians in the dock, Raja and Kanimozhi, were also public servants. The Prevention of Corruption Act 1988 that seeks to punish corruption at high places with its reverse jurisprudence — the onus of proving innocence is on the accused public servant — squarely applies to them both and in fact, they were tried under it as well.

In the event, it is curious that the trial judge OP Saini has used the same touchstone to every accused when he perhaps ought to have applied the more rigorous touchstone of guilt under the Prevention of Corruption Act. The CBI was obviously unsuccessful in establishing the money trail leading to these politicians and their mentors, although money did slosh around from the front companies.

The prime reason it was stymied was because of the institution of benami that DMK politicians in particular have been alleged to be experts at using. It is only recently that the Narendra Modi government has given teeth to the prohibition of benami transactions law by empowering the Central Board of Direct Taxes (CBDT) to confiscate properties suspected to be held under fictitious names.

Kanimozhi in particular had to satisfactorily explain how Kalaignar TV, promoted by her with her family, got Rs 200 crore as a loan from one of the front companies from a bank in Seychelles. Perhaps, the judge let her off on the grounds that even under the Prevention of Corruption Act, the accused does not have to prove innocence beyond reasonable doubt (VD Jhingan versus State of UP AIR 1966 SC 1762).

Obviously, the judge found this strange back-to-back transfer of money to be a genuine commercial transaction, as explained by the TV channel. Of course it is the CBI’s fault that it did not prove a direct link between the favour shown to the front company and the munificence in the form of back-to-back loans.

The NDA government ought to amend the Prevention of Corruption Act and turn it less frightful to upright officers and more menacing to politicians.

Follow all the LIVE updates from the 2G spectrum case judgment here

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