THE Special Court judge Saini in his judgements running into thousands of pages on the 2G spectrum issue, seems to believe that let alone criminality, there was nothing wrong with the procedures that A Raja and his cronies adopted. His world, in which the allotment of 2G licenses or spectrum occurred, appears to be in a parallel universe from that in which the Controller of Auditor General (CAG), the Supreme Court and the Delhi High Court operated. All of them found A Raja and his close associates guilty of arbitrary changing of rules to help certain favoured companies. While Raja might be cleared of criminal charges, the fact remains that independently, three constitutional authorities have condemned A Raja, the then minister of communications and IT, of keeping the spectrum price low, and then manipulating the “first-come-first-serve” procedure to help his favoured companies; even when these companies did not meet the eligibility criteria set up by the department of telecom.

It is true that the CAG, the Supreme Court, and the Delhi High Court had examined the issue of 2G license and spectrum from different perspectives from that of the Special Court. The CAG was looking at the loss to the exchequer. The Supreme Court examined whether the allotment of licenses was in accordance with the constitutional provisions of equality before law. Another issue that Supreme Court and the CAG examined was how the DoT had alloted 85 licenses out of 122 granted to companies that were ineligible for licenses. The Delhi High Court looked at whether A Raja followed a valid first-come-first-served procedure.

The CAG and the Supreme Court found that there was indeed a loss to the exchequer. All the three – the CAG, the Supreme Court and the Delhi High Court – held that the procedures adopted by Raja and company violated existing procedures, and was patently arbitrary and unfair.

For the Courts – the Supreme Court and the Delhi High Court – it was a civil matter. The Special Court however was looking at the same set of issues, but from the point of view of criminal conspiracy. It is true that in a criminal matter, the bar of proof is “beyond reasonable doubt”, while in a civil matter, the proof is “preponderance of possibility”. So even if evidence showed that Raja’s procedure of awarding 2G licenses and spectrum had led to a loss to the exchequer and was patently unfair, the same evidence could still lead to an acquittal in the criminal case. It could be argued that his (and that of others) guilt was not proven beyond reasonable doubt.

 If the Special Court judge had stopped at acquittal, we could have still understood the verdict, even if we disagreed with it. But OP Saini, the Special Court judge, went much further. In his judgement, he states that he does not see evidence of a loss to the exchequer! Instead, the furore in the case was only due to “media”. This is where we enter an alternate universe.

In an earlier article on this judgement, we have detailed how Raja first kept the spectrum price low, and then manipulated the queue of applicants of the first-come-first-served policy to help his favoured companies, and allowed these companies to sell shares at a much higher price by virtue of securing high valued spectrum at dirt cheap prices.

A DIFFERENT VIEW

While the Special Court judge found Raja and his associates not guilty on all of these issues, the Supreme Court had taken a very different view when it cancelled the 122 licenses in 2012. The Supreme Court held that the “State is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles including the doctrine of equality and larger public good.” It held that the process of allotting the 122 licenses on a first-come-first-served basis did not serve public good, and was violative of Article 14 of the constitution of India. That is why it cancelled the licenses.

The Delhi High Court looked at the case on a much narrower issue: whether the first-come-first-served policy was being implemented correctly. It also found no merit in the arguments of DoT regarding defending its January 10, 2008 press release, and quashed it. However, the order was not executed, as the company that had filed the case against Raja and DoT officials manipulating the procedure, Ms. S Tel, withdrew its case, widely held to be due to pressure from the DoT.

The Supreme Court had held that the policy of first-come first-served was not transparent, and its subsequent change to “first to comply” was arbitrary. The Special Court accepted A Raja’s and R K Chandolia’s defence that changing the cut-off dates was due to the large number of applications they had received, an argument that the Supreme Court and the Delhi High Court had rejected.

The other element of the case before the Special Court was who benefitted from the scam? The prosecution argued that illegal gratification of Rs 200 crore was given to Kaliagnar TV, a family owned company of the DMK patriarch, Karunanidhi. A Raja from DMK was in the cabinet, as the DMK was a coalition partner in the Manmohan Singh UPA government.

The CBI provided Swan Telecom as a prime example of an ineligible company. Its net worth requirement was met by moneys funnelled from a number of Reliance entities – Tiger, Parrot, Zebra, etc. In effect, Swan Telecom was a benaami of Reliance Communications (Anil Dhirubhai Ambani Group). The Special Court refused to lift the corporate veil and go beyond what was the formal status of Swan Telecom. Lifting the corporate veil to establish the real owners of a company is a procedure well established in law in such cases. Instead, the Special Court took a restrictive view of when corporate veil could be lifted, did not go beyond the formal equity owners of Swan Telecom, and dismissed a very large part of the prosecution case.

The Special Court judge also felt, since Reliance Communications was eligible for a GSM license and spectrum as it held a CDMA license, why should it be interested in a second GSM license? The thought that spectrum is a precious resource and has immense commercial value, seems to have entirely escaped the judge. Even though there was evidence before him of Swan Telecom selling 45 per cent of its equity within two and a half months for a much higher value than what it had paid for its license.

With the Special Court judge dismissing the main case against Raja, his officers, the owners of Swan Telecom, the enforcement director’s case of money laundering, the proceeds of crime against Raja and others also collapsed. If there was no crime, as Saini held, there are no proceeds of crime, and therefore no money laundering.

A number of people are arguing that the CBI case was weak, or weakly prosecuted. I see no merit in this line of argument. U Lalit was the public prosecutor for a major part of the case, particularly in the phase where the evidence in the CBI case was presented. After his elevation to the Supreme Court as a judge, we had Anand Grover, as the public prosecutor. The CBI and its prosecution was supervised by the Supreme Court all through. Both the public prosecutors have a high reputation for honesty and competence. It is not credible that the two such highly competent and eminent prosecutors, working under the direct supervision of the Supreme Court, botched up the case.

MISSING THE WOODS FOR THE TREES

I believe that there are two major problems that the Special Court judge had. One is he saw each element of the conspiracy, and not the chain as a whole. For each link in the chain, he could then work out alternate explanations, a case of missing the woods for the trees. The second, and the more serious problem, is that he had no understanding of the spectrum and the license issues. He failed to appreciate the huge implications of cheap spectrum, and how a few honest officers in DoT were trying to fight the minister and his favoured officers, and how difficult it is to wage such a bureaucratic battle. It is simply inexplicable why he has harsh words to say of all of them, while upholding Raja’s decisions that were clearly arbitrary and biased.

The beneficiaries of the 2G scam – selling spectrum in 2008 at 2001 prices – are now also favoured by the Modi government. The biggest beneficiaries of the scam were the big corporate houses – the Ambanis, the Ruias, the Chandras (Unitech). Tatas and Ambanis benefitted from the cross-over license – allowing companies who held CDMA license to buy GSM license – again at 2001 prices, Airtel and Vodafone, who again secured cheap spectrum from Raja and the department of telecom.

Will the Modi led NDA government appeal in the High Court against this perverse order of the Special Court? Or will it keep quiet in the interest of the beneficiaries of cheap spectrum scam?