2G review: Has Uninor got it wrong and A Raja right?

The Supreme Court may not reverse its verdict on telecom licences cancellation, but the observations against Raja could surely be erased

Kartikeya March 26, 2012 12:00:21 IST
2G review: Has Uninor got it wrong and A Raja right?

The spate of 2G judgments handed down in February this year have created a lot of confusion and misunderstandings, apart from a lot of disgruntled individuals and companies. It is little surprise that the Union government, the Prime Minister's Office (PMO), Andimuthu Raja, Uninor and Subramanian Swamy have filed review petitions and/or appeals.

Even though these petitions and appeals have arisen from the same monumental 2G scam, each is discernibly different in nature, purpose and objective.

2G review Has Uninor got it wrong and A Raja right

Raja is asking the Supreme Court in his review petition is to set aside its decision to cancel 122 licences altogether. AFP

The petitions by the government of India and the PMO do not directly deal with the contentious issues on criminality of individuals like Raja and P Chidambaram. Issues raised in Swamy's appeal against the order by Judge OP Saini, which exonerated Chidambaram, require an independent analysis. This article seeks to help clear some of the confusion prevailing with the two review petitions by Uninor and Raja and provide an assessment of likely outcomes. (Firstpost has used The Economic Times story on Uninor as the basis for what it may argue. The action petition is still to be admitted.)

Uninor's review petition

In some ways, Uninor's review petition seeks to reverse the constitutional remedy provided by the Supreme Court, ie, cancellation of 122 licences, by providing to the court evidence relevant in a criminal proceeding in a trial court - evidence regarding complicity of Chidambaram and the Prime Minister. This is probably inspired primarily by the Supreme Court's entry into the realm of pinning down individual culpability in a decision which ought to have focused solely on the process.

As Firstpost has explained earlier, there is a very vital difference in the nature as well as the purpose of the two separate proceedings pertaining to the 2G scam.

The primary question before the Supreme Court in the constitutional matter was whether licences were granted by the Department of Telecom (DoT) in an arbitrary and unconstitutional manner, making them subject to cancellation. On the other hand, the question before the Special CBI court - and now the Supreme Court that will be hearing Swamy's appeal against it - in the criminal proceeding against Chidambaram was whether he can be convicted for various criminal offences, primarily under the Prevention of Corruption Act 1988 (POCA).

Therefore, the Supreme Court's focus was on the executive decision in deciding whether to cancel 122 2G licences, whereas the Supreme Court judges now hearing Swamy's appeal will have to focus on the executor of that decision, ie, Chidambaram.

The reason why Uninor's argument may lack a sound basis is clear from this vital difference. For the sake of an exaggerated assumption, if only to make a point, let us assume that the entire government of India was involved in the grant of licences in the manner they were so granted and can be put behind bars after a criminal trial. It still does not make the grant of licenses automatically constitutional. Uninor is essentially arguing that because the PM and the FM of the country assented to such a procedure as opposed to the telecom minister alone, its unconstitutionality must be ignored and reversed.

Indeed, at first glance, it may seem that Uninor has been deprived of the benefit of a valid contract independently entered into with a sovereign government having the authority to award licences. But, the principle of "sanctity of contract" cannot trump the Constitution of India. If the process under which licences have been granted is itself vitiated, arbitrary and unconstitutional, a court has no option but to annul such licences regardless of who (or how many) took the decision.

So, what recourse does Uninor have? Uninor may have a claim against the entity with which it had a contract - the government of India - for the loss it has suffered due to the arbitrary and unconstitutional process followed by that party to the contract which led to the grant of licences. However, if there is incontrovertible evidence that Uninor knew that the benefits flowing to it were a result of arbitrary and illegal process followed in the grant of licence, it is highly doubtful that a court of law would come to its rescue. Prashant Bhushan has stated in television interviews that telecom companies knew of the unconstitutionality in the process through which they obtained benefits.

A Raja's review petition

Raja, on the other hand, has valid grounds to ask the Supreme Court to strike down some serious indictments against him in the order cancelling 122 licences, primarily because of the same reason where Uninor's petition lacks grounds. However, what Raja is asking the Supreme Court in his review petition is to set aside its decision to cancel 122 licences altogether. That is highly unlikely due to the vital difference pointed out above.

At the most, the Supreme Court may strike down those paragraphs indicting Raja individually without affecting the cancellation of 122 licences - a partial strike-down of observations in the order.

The author of this article has argued aspects pertaining to Raja's review petition at length in the Business Standard here. As explained above, Raja's individual criminality has been taken by the Supreme Court as an additional basis for cancellation of 122 licences instead of basing its decision solely on the executive process alone, which would have been sufficient. And because the Supreme Court did not think it appropriate to hear Raja in doing so, it has resulted in a denial of natural justice given that such serious observations can prejudice the ongoing trial in the Special CBI court.

Kartikeya Tanna is a partner at Tanna Associates Advocates, Ahmedabad. He can be reached at kartikeya@tannaassociates.com.

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