2G scam: Did Kapil Sibal favour Anil Ambani?

Did Telecom Minister Kapil Sibal favour Anil Ambani-led Reliance Communications by helping it save Rs 45 crore (Rs 450 million) earlier this year?

This question was raised by lawyers Prashant Bhushan and Kamini Jaiswal, of the Centre for Public Interest Litigation, before the Supreme Court on Thursday.

According to another CPIL lawyer Pranav Sachdeva: "Our petition is regarding the violation of important conditions of the 2G licences."

This is the first time in the Rs 176,000 crore (Rs 1.76 trillion) 2G spectrum allocation scam that an allegation has been made against a Congress minister's direct involvement in financial matters.

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Union Home Minister P Chidambaram's role had been questioned before, but that was regarding a policy decision that former telecom minister A Raja adopted while allocating 2G spectrum.

The charge against Sibal is that, in February 2011, he reduced the penalty on RCom for violation of the United Access Service Licences agreement from Rs 50 crore to Rs 5 crore (Rs 50 million) per telecom circle.

The petitioners have also alleged that Attorney General Ghulam Vahanvati too disregarded the law ministry's direction to A Raja on 2G spectrum allocation when he (Vahanvati) was Solicitor General during the first term of United Progressive Alliance government.

The petition says, 'The facts clearly show that Sibal abused his position as minister to overrule the unanimous view taken by the Universal Service Obligation Fund branch of the Department of Telecommunications, the director of the Universal Service Obligation Fund, senior officers of DoT, member finance, and the telecom secretary, to benefit a private operator by closing the issue with only a penalty of Rs 5 crore.'

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The petition adds, 'This abuse of authority by Sibal to benefit the Anil Ambani-controlled Reliance Infocomm needs thorough investigation by the CBI.'

The non-governmental organisation has annexed documents to support its allegations that DoT officials too were unanimous in their view that the Reliance group should be imposed a penalty of Rs 50 crore per circle for 'violation of the terms and conditions of the USOF agreement and Universal Access Service Licence agreement by voluntary, unilateral and unauthorised switching-off/closure of services to subscribers from USOF sites without any notice'.

In fact, if one circle's penalty would have been kept at Rs 50 crore by Sibal, his ministry could have imposed a fine of Rs 650 crore (Rs 6.50 billion) for violation of agreement conditions in 13 circles. But Sibal reduced the amount to just Rs 5 crore.

'The DoT had issued a notice for a penalty of Rs 50 crore. If the same was imposed for all 13 circles in which Reliance had USOF agreements, the fine would have risen to Rs 650 crore. A detailed explanation was later also prepared by the director USOF branch, explaining why the penalty needs to be imposed,' the petition said.

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Vahanvati's role too also come under the scanner. The petition said that he gave advice to Raja disregarding the basic rule that senior law officers have to give any opinion through the proper channel of the law ministry.

'Under the terms of service of a law officer (AG/SG), no ministry can directly seek the advice/opinion of a law officer without routing it through the law ministry, and no law officer can give any opinion/advice to any department without it being routed through the law ministry.'

'But Vahanvati disregarded these basic rules, and continued to give opinions to the DoT under Raja, which were then used by him to justify his decisions and actions,' the petition said.

Even, the Public Accounts Committee report has expressed 'shock' that Vahanvati went out of his way when the law ministry was of the view that the matter has to be referred to the Empowered Group of Ministers.

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Talking about Vahanvati's clean chit to Swan Telecom, the petition says, 'When questions were repeatedly being raised about Swan Telecom, including by the DoT itself, Vahanvati again went out of his way to give a clean chit to Swan.'

Vahanvati stated that he had examined the matter and there was no violation of clause 8 of UASL guidelines by Reliance ADAG, and thus Swan was eligible (for the licence). He also stated that there was no need to refer the matter to the ministry of corporate affairs, the petition says.

The Comptroller and Auditor General and the Central Bureau of Investigation have both stated that Swan Telecom was a front company for Reliance ADAG. The CBI chargesheet states that Swan was 100 per cent owned by Reliance ADAG.

The petition linked to the 2G scam is likely to be heard on July 11.