Legal Aspects Of Business End Term Report

Submitted by Section 19B, Group-5 Group Members

S. No. 1 2 3 4 5 Name Shelly Jain Rachit Jain Gaurav Gulecha Tanya Malik Vivek Mandowara Roll No. S. No. 191111 6 191105 7 191085 8 191119 9 191121 10 Name Khem Singh Ankita Sehjpal Kulvir Singh Gill Abhijeet Sharma Pankaj Kakkar Roll No. 191090 191076 191092 191062 191102

Table of Contents
THE PREVENTION OF CORRUPTION ACT, 1988 ....................................................................................... 7 Introduction ........................................................................................................................................ 7 Genesis ................................................................................................................................................ 7 The Prevention Of Corruption Act, 1988 ............................................................................................ 7 Sec 2: Definations............................................................................................................................ 7 Who Is A Public Servant? ................................................................................................................ 8 Sec 3: Power to Appoint Special Judges.......................................................................................... 9 Sec 4: Cases Triable By Special Judges .......................................................................................... 10 Sec 5: Power & Function of Special Judges ................................................................................... 10 Sec 6: Power to Try Summarily ..................................................................................................... 11 Offences and Penalties (SECTION 7 16) ..................................................................................... 12 Investigation (SECTIONS 17 31).................................................................................................. 17 Conclusion ......................................................................................................................................... 19 COMMON WEALTH GAMES SCAM ....................................................................................................... 20 CWG Background .............................................................................................................................. 21 CWG XIX New Delhi........................................................................................................................... 21 How Delhi Got It - Bidding............................................................................................................. 22 Organizing Committee .................................................................................................................. 22 Key Stakeholders ........................................................................................................................... 24 Objectives of OC............................................................................................................................ 24 Vision, Mission & Values ............................................................................................................... 25 Costs .................................................................................................................................................. 26 Timeline of CWG ............................................................................................................................... 26 CWG Scam Irregularity ...................................................................................................................... 32 Labor Law Violations ..................................................................................................................... 34 CAG Report........................................................................................................................................ 35 Legal Cases against CWG Committee ............................................................................................... 36 Parties Involved................................................................................................................................. 38 Politicians Involved ....................................................................................................................... 38 Bureaucrats Involved .................................................................................................................... 38 Corporations Involved ................................................................................................................... 38 Businessmen Involved................................................................................................................... 39 Whistleblowers/ Law Enforcers .................................................................................................... 39 2

Scams ................................................................................................................................................ 39 Time Scoring Results System......................................................................................................... 39 Queens Baton Relay ...................................................................................................................... 39 Broadcast Network ....................................................................................................................... 40 Recruitment to Organising Committee ......................................................................................... 40 CNN-IBN NDTV Hindustan Times ...................................................................................................... 41 Response to Scam ............................................................................................................................. 41 CWG Impact ...................................................................................................................................... 42 Socio Economic Impact ................................................................................................................. 43 Organizational Failure ................................................................................................................... 45 Racism Allegation .......................................................................................................................... 47 Infrastructure Issue ....................................................................................................................... 48 Vandalism in games village by Athletes ........................................................................................ 49 Infrastructural compromise ............................................................................................... 50 Terror threats ...................................................................................................................... 51

Fear of dengue outbreak ........................................................................................................... 52 Illness ........................................................................................................................................... 52 Sporting Controversy ........................................................................................................................ 53 Doping ........................................................................................................................................... 53 Archery .......................................................................................................................................... 53 Boxing............................................................................................................................................ 54 Cycling ........................................................................................................................................... 54 Swimming...................................................................................................................................... 54 Wrestling ....................................................................................................................................... 55 Kalmadi: A Culprit or Victim? ............................................................................................................ 55 Effect on Brand Image of India ......................................................................................................... 58 CAG Audit Report Key Points ............................................................................................................ 59 Suggestions & Recommendations .................................................................................................... 60 Conclusion ......................................................................................................................................... 61 2G SCAM ............................................................................................................................................... 62 2G Timeline ....................................................................................................................................... 62 Oct 29, 2010: SC pulls up CBI for its tardy progress in the investigations into the scam ................. 74 Spectrum and Its Relation With Mobile Phone Services ................................................................ 118 2G And 3G Spectrum....................................................................................................................... 118 3

How the Telecom Operation Is Administered ................................................................................ 119 FCFS Policy ...................................................................................................................................... 119 Understanding 2G Spectrum Scam ................................................................................................. 119 Role of the Former Telecom Minister A Raja In The Scam ............................................................. 120 Senior Officers Involved In This Scam ............................................................................................. 122 Relation Between The 2G Spectrum Scam And The Radia Tapes ................................................... 122 Role Of The Finance Minister In This Scam ..................................................................................... 122 Who Estimated the Loss of Rs 1, 76,000 Crore ............................................................................... 122 Bodies Which Brought Out This Scam in The Public Domain.......................................................... 123 Role of The Investigative Agencies CBI, ED In This Scam ................................................................ 123 What Supreme Court Said About This Scam ................................................................................... 123 Action Taken By Government Taken Till Now ................................................................................ 124 What Did the Government Do To Cover Up This Scam .................................................................. 124 Arrests Made In This Scam .............................................................................................................. 124 Companies Being Investigated ........................................................................................................ 125 Changes in the Telecommunications Sector In India ...................................................................... 125 Gaps in Policy Implementation ....................................................................................................... 125 Telecom Commission Was Not Consulted .................................................................................. 126 Views and Concerns Of Ministry Of Finance Overruled.............................................................. 126 Advice of Ministry Of Law And Justice Were Ignored ................................................................. 127 Hon'ble Prime Minister's Suggestions Were Not Followed ........................................................ 127 Arbitrary Changes By Dot In The Cut-Off Date. .......................................................................... 128 FCFS Policy Was Not Followed .................................................................................................... 128 Issue of License to Ineligible Applicants ......................................................................................... 129 Growth In Telecom Sector .............................................................................................................. 130 Overview of Policies ........................................................................................................................ 130 Methodology for Entry And Fee Structure In Various Policy Regimes ........................................... 132 Role of Telecom Regulatory Authority Of India (TRAI) ................................................................... 134 Organizational Arrangement .......................................................................................................... 135 Issue of Licenses.............................................................................................................................. 135 Spectrum Allocation........................................................................................................................ 136 Gaps in Implementation Of UAS Regime ........................................................................................ 140 Issue of Price Discovery Of Spectrum Was Over Looked ................................................................ 145 Issue of UAS Licence to Ineligible Applicants .................................................................................. 148 4

Misrepresentation of Facts By The Nine Real Estate Companies ............................................... 150 False and Fictitious Claims Of Higher Paid Up Capital By 13 Companies.................................... 151 Access to Dual Technology.......................................................................................................... 152 Undue Benefits to Reliance Communications Limited ............................................................... 152 Violation of 2003 Cabinet Decision to Allow Additional Spectrum at 2001 Prices ..................... 154 Undue Advantage to Swan Telecom Pvt. Ltd in The Allocation Of Spectrum ............................ 154 Value of Spectrum Allocated Beyond the Contracted Quantity ................................................. 155 Non Fulfillment of the Roll out Obligations by the New Telecom Licensees .............................. 155 Financial Impact .............................................................................................................................. 156 Under Pricing Of 2G and Consequent Loss ................................................................................. 156 Conclusions ..................................................................................................................................... 158 RIGHT TO INFORMATION ACT, 2005................................................................................................... 159 Introduction .................................................................................................................................... 159 Freedom of Information Act, 2002 ................................................................................................. 159 State Level Laws .............................................................................................................................. 160 Scope ............................................................................................................................................... 160 Private Bodies ................................................................................................................................. 160 Right to Information ....................................................................................................................... 161 Process ........................................................................................................................................ 161 Partial Disclosure ........................................................................................................................ 162 Exclusions .................................................................................................................................... 162 Information Exclusions................................................................................................................ 163 Role of Government........................................................................................................................ 164 Effects.......................................................................................................................................... 164 CASE STUDY: CBSE vs. ADITYA BANDOPADHYAY & OTHERS .............................................................. 166 Case Notes: ..................................................................................................................................... 167 The Case .......................................................................................................................................... 170 Aditya Bandhopadhyays Petition ................................................................................................... 170 CBSEs Defense................................................................................................................................ 172 Evaluation Method Adopted By CBSE ............................................................................................. 173 Questions to Be Considered ........................................................................................................... 176 Relevant Legal Provisions................................................................................................................ 177 Exemption from Disclosure from Information (Section 8).......................................................... 178 Answers to the Questions ............................................................................................................... 182 5

Answer To Q1. ............................................................................................................................. 182 Answer To Q2. ............................................................................................................................. 185 Answer To Q3. ............................................................................................................................. 186 Answer To Q4. ............................................................................................................................. 191 Conclusion - Judgment .................................................................................................................... 197

THE PREVENTION OF CORRUPTION ACT, 1988

Introduction
"If we cannot make India corruption-free, then the vision of making the nation develop by 2020 would remain as a dream." - Dr. A.P.J.Abdul Kalam Corruption is considered to be one of the greatest impediments on the way towards progress for developing country like India. The economic, social and cultural structure of our country is very strong; however, due to the menace calledCorruption, it has been adversely affected and has become defenceless against the forces of anti-social elements. According to Shri N.Vittal, Former Chief Vigilance Commissioner, the first stage in the dynamics of the rule of law is the framing of effective rules and laws, which are equipped to hinder the ever-rising escalation of the corruption graph. It is in this context that the Prevention of Corruption Act, 1988 becomes highly significant.

Genesis
The Prevention of Corruption Act, 1988 (henceforth referred to as PCA) came into force on 9th September, 1988. it incorporated the Prevention of Corruption Act, 1947, the Criminal Law Amendment Act, 1952, and sec. 161 to 165-A of the Indian Penal Code with modifications, enlarged the scope of the definition of the expression 'Public Servant' and amended the Criminal Law Amendment Ordinanc,k1944. The PCA, 1988l, thereby widened the coverage, strengthened the provisions and made them more effective.

The Prevention Of Corruption Act, 1988

Sec 2: Definations

The most important definitions are that of: - Public duty - Public servant Public Duty: It means a duty that is dine for the benefit of the State, the public or the community at a large. In this context, State would mean:
7

a) A corporation established by or under a Central, Provincial or State Act. b) An authority or a body owned controlled or aided by the Government Company as defined in Sec. 617 of the Companies Act, 1956. Public Servant: It is unique term in Anti-corruption law, being the deciding factor at the threshold, of one's liability, depending on his being public servant. The term 'Public Servant' was not defined under the PCA, 1947 and the Act adopted the definition of the term under sec. 21 of the Indian Penal Code. The PCA of 1988 provides a wider definition in the Act itself under clause (c) of sec. 2. The following are the salient aspects of the new definition: a) Under clause (c) of Sec.2 of the PC, the emphasis is on public duty and not on the Authority remunerating. b) The definition is enlarged so as to include the office-bearers of the registered cooperative societies receiving any financial aid from the Government, or from a Government corporation or company, the employees of universities, public service commissions and banks etc.
Who Is A Public Servant?

a) Any person who is paid by the government or local authority or remunerated by way of fees or commission for the performance of or is in the service of a corporation established by or under a Central, Provincial or State Act, or an authority or body owned or controlled or aided by the Government company as defined in the Companies Act, 1956. b) Any Judge or any person authorized by a court of justice to perform any duty, in connection with the administration of justice or any arbitrator to whom any cause or matter has been referred for decision or report by a court of justice or report by a court of justice or by a competent public authority.

c) Any person who holds an office result to which he is empowered to prepare, publish maintain or revise an electoral roll or to conduct an election or part of an election, or is authorized or required to perform any public duty. d) Any person who is the president, secretary or other office bearer of a registered co-operative society engaged in agriculture, industry, trade or banking, receiving or having received any financial aid from the Central or State Government or any authority or body owned, controlled or aided by Government or Government company as defined in Sec. 617 of the Companies Act, 1956. e) Any person who is a chairman, member or employee of any service commission or Board or a member of any selection committee appointed by such Commission or Board for the conduct of any examination or making any selection on their behalf. f) Any person who is the Vice-Chancellor or member of any governing body, professor, reader or lecturer of any University and any person whose services have been availed of by a University. g) An office-bearer or an employee of an educational, scientific, social, cultural or other institution receiving or having received any financial assistance from the Central or State government or local or other public authority. Explanation 1 states that it is immaterial whether the person falling within the periphery of the above clauses is appointed by Government or not. Explanation 2 states that a person who is actually holding the position of the situation of public servant irrespective of the fact that he might not have th3e right to hold that situation shall be deemed to be 'public servant'.
Sec 3: Power to Appoint Special Judges

The Central and the State Government is empowered to appoint Special Judges by placing a Notification in the Official Gazette, to try the following offences: - Any offence punishable under this Act.

- Any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified under the Act. The qualification for the Special Judge is that he should be or should have been a Session Judge or an Additional Session Judge or Assistant Session Judge under the Code of Criminal Procedure, 1973
Sec 4: Cases Triable By Special Judges

Every offence mentioned in Section 3(1) shall be tried by the Special Judge for the area within which it was committed. When trying any case, a Special Judge may also try any offence other than what is specified in S. 3, which the accused may be, under Cr.P.C. be charged at the same trial. The Special Judge has to hold the trial of an offence on day-to-day basis. However, while complying with foretasted, it is to be seen that the Cr.P.C. is not bifurcated.
Sec 5: Power & Function of Special Judges

The following are the powers of the Special Judge: He may take cognizance of the offences without the accused being commissioned to him for trial. In trying the accused persons, shall follow the procedure prescribed by the Cr.P.C. for the trial of warrant cases by Magistrate, he may with a view to obtain the evidence of any person supposed to have been directly or indirectly concerned in or privy to an offence, tender pardon to such person provided that he would make full and true disclosure of the whole circumstances within his knowledge or in respect to any person related to the offence. Except as for S. 2(1), the provisions of Cr.P.C. shall apply to the proceedings before a Special Judge. Hence, the court of the Special Judge shall be deemed to be a Court of Session and the person conducting a prosecution before a Special Judge shall be deemed to be a public prosecutor. The provisions of sections 326 and 475 of the Cr.P.C. shall apply to the proceedings before a Special Judge and for purpose of the said provisions, a Special Judge shall be deemed to be a magistrate.

10

A Special Judge may pass a sentence authorized by law for the punishment of the offence of which a person is convicted. A Special Judge, while trying any offence punishable under the Act, shall exercise all powers and functions exercised by a District Judge under the Criminal Law Amendment Ordinance, 1944.
Sec 6: Power to Try Summarily

Where a Special Judge tries any offence specified in Sec. 3(1), alleged to have been committed by a public servant in relation to the contravention of any special order referred to in Sec.12-A(1) of the Essential Commodities Act, 1955 or all orders referred to in sub-section (2)(a) of that section then the special judge shall try the offence in a summarily way and the provisions of s. 262 to 265 (both inclusive) of the said code shall as far as may be apply to such trial. Provided that in the case of any conviction in a summary trial under this section this shall be lawful for the Special Judge to pass a sentence of imprisonment for a term not exceeding one year. However, when at the commencement of or in the course of a summary trial it appears to the Special Judge that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or it is undesirable to try the case summarily, the Special judge shall record all order to that effect and thereafter recall any witnesses who may have been examined and proceed to hear and re-hear the case in accordance with the procedure prescribed by the said code for the trial of warrant cases by Magistrates. Moreover, there shall be no appeal by a convicted person in any case tried summarily under this section in which the Special Judge passes a sentence of imprisonment not exceeding one month and of fine not exceeding Rs. 2000.

11

Offences and Penalties (SECTION 7 16)

Sec 7: Public servant taking gratification other than legal remuneration in respect of an official act Whoever, being, or expecting to be a public servant, accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, any gratification whatever, other than legal remuneration, as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official functions, favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person, with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment which shall be not less than six months but which may extend to five years and shall also be liable to fine.
Explanations

(a) "Expecting to be a public servant." If a person not expecting to be in office obtains a gratification by deceiving others into a belief that he is about to be in office, and that he will then serve them, he may be guilty of cheating, but he is not guilty of the offence defined in this section.

(b) "Gratification." The word "gratification" is not restricted to pecuniary gratifications or to gratifications estimable in money.

(c) "Legal remuneration." The words "legal remuneration" are not restricted to remuneration which a public servant can lawfully demand, but include all remuneration which he is permitted by the Government or the organisation, which he serves, to accept.

(d) "A motive or reward for doing." A person who receives a gratification as a motive or reward for doing what he does not intend or is not in a position to do, or has not done, comes within this expression.

12

(e) Where a public servant induces a person erroneously to believe that his influence with the Government has obtained a title for that person and thus induces that person to give the public servant, money or any other gratification as a reward for this service, the public servant has committed an offence under this section.

Sec 8: Taking gratification, in order, by corrupt or illegal means, to influence public servant Whoever accepts or obtains, or agrees to accept, or attempts to obtain, from any person, for himself or for any other person, any gratification whatever as a motive or reward for inducing, by corrupt or illegal means, any public servant, whether named or otherwise, to do or to forbear to do any official act, or in the exercise of the official functions of such public servant to show favour or disfavour to any person, or to render or attempt to render any service or disservice to any person with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment for a term which shall be not less than six months but which may extend to five years and shall also be liable to fine.

Sec 9: Taking gratification, for exercise of personal influence with public servant

Whoever accepts or obtains or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gratification whatever, as a motive or reward for inducing, by the exercise of personal influence, any public servant whether named or otherwise to do or to forbear to do any official act, or in the exercise of the official functions of such public servant to show favour or disfavour to any person, or to render or attempt to render any service or disservice to any person with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment for a term which shall be not less than six months but which may extend. to five years and shall also be liable to fine.

13

Sec 10: Punishment for abetment by public servant of offences defined in section 8 or 9 Whoever, being a public servant, in respect of whom either of the offences defined in section 8 or section 9 is committed, abets the offence, whether or not that offence is committed in consequence of that abetment, shall be punishable with imprisonment for a term which shall be not less than six months but which may extend to five years and shall also be liable to fine.

Sec 11: Public servant obtaining valuable thing, without consideration from person concerned in proceeding or business transacted by such public servant Whoever, being a public servant, accepts or obtains or agrees to accept or attempts to obtain for himself, or for any other person, any valuable thing without consideration, or for a consideration which he knows to be inadequate, from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by such public servant, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned, shall be punishable with imprisonment for a term which shall be not less than six months but which may extend to five years and shall also be liable to fine.

Sec 12: Punishment for abetment of offences defined in section 7 or 11 Whoever abets any offence punishable under section 7 or section 11 whether or not that offence is committed in consequence of that abetment, shall be punishable with imprisonment for a term which shall be not less than six months but which may extend to five years and shall also be liable to fine.

Sec 13: Criminal misconduct by a public servant (1) A public servant is said to commit the offence of criminal misconduct,-

(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification other than legal remuneration as a motive or reward such as is mentioned in section 7; or

14

(b) if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or for a consideration which he knows to be inadequate from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned; or

(c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do; or

(d) If he,-

(i) By corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or

(ii) By abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or

(iii) While holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or

(e) if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income.
Explanation

For the purposes of this section, "known sources of income" means income received from any lawful source and such receipt has been intimated in accordance with the

15

provisions of any law, rules or orders for the time being applicable to a public servant.

(2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine.

Sec 14: Habitual committing of offence under sections 8, 9 and 12 Whoever habitually commits-

(a) An offence punishable under section 8 or section 9; or (b) An offence punishable under section 12,

shall be punishable with imprisonment for a term which shall be not less than two years but which may extend to seven years and shall also be liable to fine.

Sec 15: Punishment for attempt Whoever attempts to commit an offence referred to in clause (c) or clause (d) of subsection (1) of section 13 shall be punishable with imprisonment for a term which may extend to three years and with fine.

Sec 16: Matters to be taken into consideration for fixing fine Where a sentence of fine is imposed, under sub-section (2) of section 13 or section 14, the court in fixing the amount of the fine shall taken into consideration the amount or the value of the property, if any, which the accused person has obtained by committing the offence or where the conviction is for an offence referred to in clause (e) of sub-section (1) of section 13, the pecuniary resources or property referred to in that clause for which the accused person is unable to account satisfactorily.

16

Investigation (SECTIONS 17 31)

Sec 17: Persons authorized to investigate Investigation shall be done by a police officer not below the rank of: a] In case of Delhi, of an Inspector of Police. b] In metropolitan areas, of an Assistant Commissioner of Police. c] Elsewhere, of a Deputy Superintendent of Police or an officer of equivalent rank shall investigate any offence punishable under this Act without the order of a Metropolitan Magistrate or a magistrate of first class, or make any arrest therefore without a warrant. If a police officer no below the rank of an Inspector of Police is authorized by the State Government in this behalf by general or special order, he may investigate such offence without the order of a Metropolitan Magistrate or Magistrate of First class or make arrest therefore without a warrant. Sec 19: Previous Sanctions Previous sanction is required in following cases: When an offence is punishable under sections 7,10,11,13 and 15 of the Act, In case of a person who is employed in connection with the affairs of the Union or State and is not removable from his office save by or with the sanction of the Central or State Government as the case may be. In case of any other person, of authority competent to remove him from his office. Previous sanction is required; if the court feels that a failure has occurred in the administration of justice, to do the following: Reversal or alteration by the Court of Appeal of any findings, or any sentence or order passed by a Special Judge. stay the proceedings on the ground of error, omission or irregularity. Revision of any interlocutory order passed in inquiry, trial, appeal or proceedings.
17

Sec 21: Accused: A Competent Witness Any person charged with an offence punishable under this Act, shall be a competent witness for the defence and may give evidence on oath in disproof of the charges made against him or any person charged together with him at the same trial: Provided that(a) He shall not be called as a witness except at his own request; (b) His failure to give evidence shall not be made the subject of any comment by the prosecution or give rise to any presumption against himself or any person charged together with him at the same trial; (c) He shall not be asked, and if asked shall not be required to answer, any question tending to show that he has committed or been convicted of any offence other than the offence with which he is charged, or is of bad character, unless(i) The proof that he has committed or been convicted of such offence is admissible evidence to show that he is guilty of the offence with which he is charged, or (ii) He has personally or by his pleader asked any question of any witness for the prosecution with a view to establish his own good character, or has given evidence of his good character, or the nature or conduct of the defence is such as to involve amputations on the character of the prosecutor or of any witness for the prosecution, or (iii) He has given evidence against any other person charged with the same offence. Sec 27: Appeal And Revision The High Court has given all power of appeal and revision that are provided to it through Cr.P.C. as if the Court of Special Judge were a Court of Session trying cases within the local limits of the High Court.

18

Conclusion
Corruption is a termite that is eating up the pith of our society it not only hampers the individual's growth but also the collective growth of our Country. Hence, it stands highly imperative to control and then stop this growing menace and in this case the Prevention of Corruption Act, 1988 comes to our aid. In fact, the Act has been beautifully drafted; however, a huge power has been vested in the hands of the Central and State Government in form of appointment of Special Judges, providing sanctions etc. Hence the Act would become oblivious if the matter in question is related to Central or State Governments. The PCA despite of this lacuna is a very powerful Act which needs proper implementation in order to curb corruption from grass root-level.

19

COMMON WEALTH GAMES SCAM

20

CWG Background
The Commonwealth Games is an international, multi-sport event involving athletes from the Commonwealth of Nations. The event was first held in 1930 and takes place every four years. It was initially known as the British Empire Games and was renamed to the British Empire and Commonwealth Games in 1954 and the British Commonwealth Games in 1970, before finally gaining its current title for the 1978 edition. The Games are overseen by the Commonwealth Games Federation (CGF), which also controls the sporting programme and selects the host cities. A host city is selected for each edition and eighteen cities in seven countries have hosted the event. As well as many Olympic sports, the Games also include some sports that are played mainly in Commonwealth countries, such as lawn bowls, rugby sevens and netball.[1] Only six teams have attended every Commonwealth Games: Australia, Canada, England, New Zealand, Scotland and Wales. Australia has been the highest achieving team for eleven games, England for seven and Canada for one. Although there are 54 members of the Commonwealth of Nations, 71 teams participate in the Commonwealth Games as a number of British overseas territories, Crown dependencies, and island states compete under their own flag. The four Home Nations of the United Kingdom England, Scotland, Wales and Northern Ireland also send separate teams.

CWG XIX New Delhi

The 2010 Commonwealth Games, officially known as the XIX Commonwealth Games, were held in Delhi, India, from 3 to 14 October 2010. A total of 6,081 athletes from 71 Commonwealth nations and dependencies competed in 21 sports and 272 events, making it the largest Commonwealth Games till date. It was also the largest international multi-sport event to be staged in Delhi and India, eclipsing the Asian Games in 1951 and 1982. The opening and closing ceremonies were held at the Jawaharlal Nehru Stadium, the main stadium of the event. It was the first time that the Commonwealth Games were held in India and the second time it was held in Asia after Kuala Lumpur, Malaysia in 1998. The official mascot of the Games was Shera and the official song of the Games, "Jiyo Utho Bado Jeeto", was composed by celebrated Indian musician A.R. Rahman.
21

Preparation for the Games received widespread international media attention, with criticism being leveled against the organizers for the slow pace of work, as well as issues related to security and hygiene. However, all member nations of the Commonwealth of Nations participated in the event, except Fiji, which is suspended from the Commonwealth, and Tokelau, which didn't send a team, in spite of threats of boycotts and athlete withdrawals. The internationally acclaimed opening ceremony improved the image of the Games, and dispelled negative notions surrounding them, with many observers remarking that they began on an apprehensive note, but were an exceptional experience with a largely positive ending. The President of the International Olympic Committee, Jacques Rogge, said that India had made a good foundation for a future Olympics bid, which was reiterated by the Australian Ministry of Sports. Commonwealth games Federation Chief Mike Fennell stated that "Delhi delivered a fantastic Games". Some observers accused sections of the media of bias, unfair expectations, and negative reporting. The final medal tally was led by Australia. The host nation India had its best performance ever to finish second.
How Delhi Got It - Bidding

The two principal bids for the 2010 Commonwealth Games were from Delhi, India and Hamilton, Ontario, Canada. A ballot of members was held in November 2003 at the Commonwealth Games Federation General Assembly in Montego Bay, Jamaica. Delhi bid won by a margin of 46 votes to 22, confirming India's first successful bid for the Games. The bid was Canada's attempt to hold the games for the fifth time. India's bid motto was - New Frontiers and Friendships. India shifted the balance in its favor in the second round of voting with a promise that it would provide US$100,000 to each participating country, along with air tickets, boarding, lodging and transport. The successful 2003 Afro-Asian Games in Hyderabad showed India had the resources, infrastructure and technical know-how to stage a big sporting event.
Organizing Committee

The Organizing Committee Commonwealth Games 2010 Delhi (OC CWG Delhi 2010) is organized into distinct Functional Areas, each relates to an area critical to the successful delivery of the Games. A Functional Area or a cluster of related
22

Functional Areas is headed by a Joint Director General (JDG) or an Additional Director General supported by Deputy Director Generals, Advisors, Directors, Project Officers, Assistant Project Officers, Administrative Assistant and Support Staff. A total of 36 Functional Areas are envisaged in the General Operational Plan (GOP) of the OC CWG Delhi 2010.

The OC CWG Delhi 2010 is structured along the following working groups: OC CWG Delhi 2010 General Body Executive Board Executive Management Assurance Sub-committees Secretariat Functional Areas Expert Groups & Consultants

23

Key Stakeholders

The Host City Contract identifies and binds the five key stakeholders who are responsible for the successful delivery of the XIX Commonwealth Games 2010 Delhi. It is incumbent upon these stakeholders to undertake all measures, including adequate financial provisions, to deliver the Games in the most befitting manner within the framework of the Constitution, Protocol and Guidelines of the Commonwealth Games Federation (CGF). The key delivery partners are:

Commonwealth Games Federation (CGF); Indian Olympic Association (IOA); Organizing Committee (OC); Government of the National Capital Territory of Delhi (GNCTD); Government of India (GoI).

Objectives of OC

Prepare for, organize and conduct the XIX Commonwealth Games 2010 Delhi in the National Capital Region (NCR) of Delhi; Prepare for, organize and conduct other events (including sports and cultural activities and festivals) as part of the XIX Commonwealth Games 2010 Delhi including the Commonwealth Youth Games;

Promote all such activities that may be useful, necessary or helpful and which contribute towards the conduct of the XIX Commonwealth Games 2010 Delhi; Conduct XIX Commonwealth Games 2010 Delhi in a manner that would encourage sports development and physical recreation and promote the shared values of integrity, fair play, competence, team work, commitment to excellence, respect for gender equality and tolerance including the fight against the use of drugs and unhealthy or performance enhancing substances;

Advise all offices, institutions, government and other bodies of associations that may be associated with the holding of the XIX Commonwealth Games 2010 Delhi;

Decide on all matters connected with the preparations and holding of the XIX Commonwealth Games 2010 Delhi and bringing it to a successful completion; and

24

Do all such lawful things that are incidental or conducive to the attainment of the above objectives or of any of them.

Vision, Mission & Values

Vision

The vision of the Organizing Committee Commonwealth Games 2010 Delhi is to inculcate sports consciousness and culture in every Indian. Mission Deliver the Best Commonwealth Games Ever Build state-of-the-art sporting and city infrastructure for the facilitation of the Games Create a suitable environment and opportunities for the involvement of the citizens in the Games Showcase the culture and heritage of India Project Delhi as a global destination Project India as an economic power Leave behind a lasting legacy

Values In fulfilling its mission, the OC CWG Delhi 2010 will exhibit and abide by the following values in its day-to- day operations: Sportsmanship Integrity Excellence Solidarity Diversity Competence Transparency Discipline

25

Costs
The initial total budget estimated by the Indian Olympic Association in 2003 for hosting the Games was 1,620 crore (US$328.54 million). In 2010, however, the official total budget soon escalated to an estimated 11,500 crore (US$2.33 billion), a figure which excluded non-sports-related infrastructure development. Business Today magazine estimated that the Games cost 60,000 crore (US$12.17 billion). The 2010 Commonwealth Games are reportedly the most expensive Commonwealth Games ever.

That is 114 times more than the estimated original price tag of the Games, and four times what the government spends on the National Rural Health Mission every year.

Timeline of CWG
In the run-up to the 3 October -14 October Games, the event which should have highlighted India as an emerging global power threatened to turn into a national embarrassment. Following is a timeline of events ********************* 22 September 2010 | Several big name athletes have pulled out of the Commonwealth Games citing security and health worries, adding to woes of an

26

event meant to showcase Indias ability to stand up with the likes of China on the world stage. 21 September 2010 | The Commonwealth Games Federation (CGF) has given the organizing committee two days to fix the facilities at the village even as the Prime Ministers Office (PMO) intervened to demand an explanation from all concerned agencies. 21 September 2010 | A footbridge under construction at the main stadium for the Delhi Commonwealth Games collapsed on Tuesday, injuring up to six laborers, an AFP reporter and police said. 21 September 2010 | Piling on the embarrassment for the organizers,

Commonwealth Games Federation chief executive Mike Hooper on Tuesday termed the Athletes Village as filthy and uninhabitable but hoped that with Commonwealth Games Federation president Michael Fennells intervention, the mess would be sorted out in the next two days. 20 September 2010 | The Commonwealth Games will be safe, organizers insisted Monday after a weekend gun attack sparked new security fears as the city gears up to host thousands of athletes. 16 September 2010 | Beset by stories of corruption, a dengue epidemic and leaking roofs of stadia, Commonwealth Games authorities showed off new venues in the

27

face of a Workers clear the debris from a pedestrian bridge that collapsed outside Jawaharlal Nehru stadium, the main venue for the Commonwealth Games, in New Delhi on Tuesday. Storm of media criticism amid worries the Games, a showcase for this emerging global giant, could be a disaster. 08 September 2010 | Just a week left for an international team to fly in for a final inspection and the Commonwealth Games Village still looks like an island in the Yamuna. Unable to drain the rainwater that has collected, which is breeding mosquitoes, a desperate Delhi government has decided to call in the army. 20 August 2010 | All allegations of corruption against Delhi Commonwealth Games organizers should be probed, CGF chief Mike Fennell said as he wrapped up a twoday inspection of the venues by identifying some areas of concern which need to be addressed immediately. 19 August 2010 Two state-run firms have withdrawn their sponsorship of the Delhi Commonwealth Games due to negative publicity of the event stemming from allegations of graft and mismanagement. 14 August 2010 | Against the backdrop of a spate of controversies surrounding the Commonwealth Games (CWG), Prime Minister Manmohan Singh will hold a meeting with the ministers concerned on Saturday evening to review preparations for the mega event to be held in October. 10 August 2010 | Mint deviates from the scandals emerging on an almost daily basis to look at ten things that need to be completed to ensure the Commonwealth games will be held at all. 06 August 2010 | Suresh Kalmadi, the man at the centre of the controversies surrounding the Commonwealth Games (CWG) survived to fight another day, but three of his aides were suspended by the Games organizing committee (OC). 06 August 2010 | From leaking venue roofs to inflated orders of taxis and mobile toilets, rows over New Delhis Commonwealth Games have prompted Indian soulsearching and piled pressure on the embattled ruling Congress party.

28

03 August 2010 | The Commonwealth Games seem to be sinking deeper into the quagmire as reports of corruption, faked certificates and unending construction delays become rife. 03 August 2010 | The growing allegations about the mismanagement of funds by the organizers of the Commonwealth Games provided ready ammunition to the opposition parties in Parliament as they trained their guns on the ruling Congress. 02 August 2010 | The governments plans to create a sizeable cushion to tide over any power shortage that could arise during the Commonwealth Games (CWG) suffered a setback following a delay in commissioning two proposed units of 500MW each. 28 July 2010 | The spiraling expenditure on the Commonwealth Games implies a heavy opportunity cost, while the benefit will only be a few moments in the limelight. 28 July 2010 | The Congress has disapproved of the public sparring between Mani Shankar Aiyar and Suresh Kalmadi over the Commonwealth Games, saying senior leaders of the party should speak responsibly when they reply to any issue in public. 22 July 2010 | The organizing committee of the Commonwealth Games (CWG) has floated 19 tenders for which the bidding deadline varies from as few as two days to a maximum of 21 days. 20 July 2010 | India aims the Commonwealth Games will be a showcase of its economic clout, but with less than three months to go, the worlds third largest sporting event is instead laying bare its perennial infrastructure problems. 23 march 2010 | Delhis Congress government has, citing a law that bans the sale of beef in the city-state, said it wouldnt be on offer to athletes and support staff during the Games, according to Raj Kumar Chauhan, minister for revenue and the public works department. Hindus consider the cow to be a holy animal. 04 march 2010 | The government has reinstated Sanjiv Mittal, a financial expert who was ousted from the Commonwealth Games (CWG) organizing committee by its chairman Suresh Kalmadi almost a fortnight back in what was perceived at the time as a snub to the Prime Ministers Office (PMO).

29

18 February 2010 | With less than 230 days left for the Commonwealth Games (CWG), an internal audit by the organizing committee in the first week of February revealed that none of the key logistics such as security, accommodation and transport to move officials as well as athletes have been completed by the 16 February deadline. 15 February 2010 | A delay of nearly four months in reaching a decision appears to have almost jeopardized the international broadcasting, security and data networks of 2010 Delhi Commonwealth Games (CWG). 13 February 2010 | In five police stations across Delhi, batches of 50 policemen-constables through inspectors--go through their classes in a day-and-a-half; with 16 such batches per police station, which translates into 4,000 policemen per month. 05 January 2010 | Delhis chief minister is nervous about the hosting of Commonwealth Games in the capital but the events Organising Committee head Suresh Kalmadi assures that all is well with the preparations despite umpteen delays. 26 November 2009 | Where theres a few million dollars of expenditure, theres usually an economic study pondering how the money was spent. This is particularly true of big-ticket sporting events such as the Olympic or Commonwealth Games. Even as the cost of hosting the Olympics touched a dizzying $40 billion in Beijing last yearmore than the entire gross domestic product of Sri Lankathe literature on the economic effects of such games has grown. Most scholars see only negative economic benefits to hosting these events. From past studies, Mint culls five key conclusions and transplants the benefit of their hindsight into Delhis preparations for the Games. 16 November 2009 | With less than a year left, work is being accelerated on Games venues and city infrastructure, but for construction workers it hasnt meant boom times. 09 November 2009 | India needs to draw up a comprehensive long-term sporting program so that the money thats being spent on the Commonwealth Games doesnt go down the drain.

30

The first is the issue of legacy and the second is with respect to developing a robust and flexible disaster management system. 05 November 2009 | Prime Minister Manmohan Singh has decided to get involved in the effort to get the Capital ready for next years Commonwealth Games, seeking to avert a potential national embarrassment on account of shoddy preparations for the countrys biggest sporting event in 27 years. 05 November 2009 | India has more than doubled the funds allotted for the2010 Commonwealth Games and is convening a special meeting of the Union cabinet to review preparations. The decisions by the cabinet come after Prime Minister Manmohan Singh decided to become involved in preparations for the Games that have come in for significant criticism in the past few months. 28 October 2009 | Earlier this year, the Comptroller and Auditor General (CAG) produced a report that evaluated the progress of Delhis preparation for the 2010 Commonwealth Games. 01 October 2009 | Real estate developer Emaar MGF Land Ltd, preparing for an initial public offering, will have to pay the Delhi Development Authority (DDA) a penalty if there is a delay in the completion of the Commonwealth Games Village project. 03 June 2009 | After the Delhi Development Authority (DDA) bailed out real estate developer Emaar MGF Land Ltd by agreeing to purchase 333 flats at the Commonwealth Games Village for Rs700 crore, the civil contractor for the project says that it had received most of the dues that Emaar MGF owed. 15 March 2009 | The 2010 Commonwealth Games in New Delhi could be cancelled if a security assessment one month from the start deemed them unsafe to proceed, said a leading Australian official. 08 March 2009 | The Commonwealth Games Village in Delhi is unlikely to be completed on time because of alleged delays in payment by the developer, Emaar MGF Land Ltd.

31

04 March 2009 | The 2010 Commonwealth Games will adopt security methods similar to those used at last years Beijing Olympics, its chief said, allaying fears the attack on the Sri Lankan cricket team could scupper the event. 06 January 2009 | The global economic meltdown has hit the preparation of 2010 Commonwealth Games and Indian Olympic Association president Suresh Kalmadi Tuesday said the budget for the mega-event will be increased in view of the financial crisis. 04 December 2008 | The Union government is concerned about the pace at which infrastructure projects sanctioned for the 2010 Commonwealth Games in New Delhi are being built and the availability of hotel rooms in the Capital for the event. According to Union minister for science and technology KapilSibal, the Centre has formed a group of ministers (GoM) to monitor the construction work. 24 March 2008 | The Union government appears to have made sure that construction of the Commonwealth Games Village on the ecologically sensitive Yamuna riverbed will continue, despite at least two scientific studies concluding that no permanent structures should come up in that area in order to protect the flood plain. 08 March 2008 | State-owned India Tourism Development Corp. Ltd (ITDC) has embarked on a makeover worth Rs170 crore at more than half of its 15 properties ahead of the 2010 Commonwealth Games in New Delhi, a senior executive said. 18 July 2007 | The initiative is an attempt to address what is expected to be a shortage of affordable rooms in the city during the 2010 Commonwealth Games.

CWG Scam Irregularity

Liquid Soap Dispensers rented for Rs 9,379 a piece or $206 After a bidding process, the OC selected four foreign firms for their mega turnkey deal and, as it now transpires, while one vendor, Nussli of Switzerland, for instance, is charging Rs 187 for renting out each liquid soap dispenser, another firm, British consortium ESAJV, is charging Rs 9,379 for the same item. While the Hong Kong-based Pico Deepali Overlays

32

Consortium is charging the OC Rs 2 for a single disposable glass, the ESAJV consortium is charging India Rs 37 per glass. All the hired items were split into seven operational clusters covering all the 60 venues of the Games. Each cluster is made up of specific stadia and venues. An 82.5 KVA generator set is hired by OC for Rs 4.65 lakh from Pico Deepali. A generator of the same specifications was hired from Nussli for Rs 14.58 lakh. There is a difference of almost Rs 60 lakh for hiring a single public display system of identical size and pitch between Pico Deepali and ESAJV with several such systems being hired for a single games cluster Operating Expenses escalating from Rs 399 crore in December 2002 to Rs 1,628 crore finally. Medical equipment including tread mills have been bought or rented at 6-7 times their original price. Allegations that funds meant for India's most deprived sections - the SC/ST have been diverted to the games funds. Stealing from the poor to fund the elite's luxuries?

Construction so fragile, it falls before completion The commonwealth games 2010 related infrastructure projects have left India's capital city, New Delhi, resembling a war zone. Practically all roads are dug up, cables lying all around, people jumping over little rocks as the pavements resemble Moon like craters. With more than 50,000 crore rupees already pumped in one would have expected at least decent output. Pitfalls:

The newly built shooting range at the Siri Fort area collapsed after one heavy shower

The foot over bridge adjacent to the main venue of the Commonwealth Games collapsed while being erected, injuring 27 workers who were dumped into a tow away truck to a municipal hospital and dished out a compensation of measly Rs 50,000 ($1097) for broken skulls and multiple fractures.

33

Many of the games venues leaked during the monsoon and roofs of some collapsed.

The

Commonwealth

Games

village,

the

place

where athletes from

participating countries will be put up is infested with dog poo, snakes, clogged toilets, and unfinished work.

Fancy bill boards have erected all over the city to hide the piles of garbage, slums that are a trademark sight in any major city in India.

Labor Law Violations

Campaigners in India have accused the organizers of enormous and systematic violations of labor laws at construction sites. Human Rights Law Network reports that independent investigations have discovered more than 70 cases where workers have died in accidents at construction sites since work began. Although official numbers have not been released, it is estimated that over 415,000 contract daily wage workers are working on Games projects. Unskilled workers are paid 85 (US$1.7) to 100 (US$2) per day

while skilled workers are paid 120 (US$2.4) to 130 (US$2.6) INR per day for eight hours of work. Workers also state that they are paid 134

(US$2.7) to 150 (US$3) for 12 hours of work (eight hours plus four hours of overtime). Both these wages contravene the stipulated Delhi state minimum wage of 152 (US$3.1) for eight hours of work. Nearly 50 construction

workers have died in the past two years while employed on Games projects. These represent violations of the Minimum Wages Act, 1948; Interstate Migrant Workmen (Regulation of Employment and Condition of Services) Act 1979, and the constitutionally enshrined fundamental rights per the 1982 Supreme Court of India judgment on Asiad workers. The public have been banned from the camps where workers live and work a situation which human rights campaigners say prevents the garnering of information regarding labor conditions and number of workers.

There have been documented instances of the presence of young children at hazardous construction sites, due to a lack of child care facilities for women workers living and working in the labor camp style work sites. Furthermore,
34

workers on the site of the main Commonwealth stadium have reportedly been issued with hard hats, yet most work in open-toed sandals and live in cramped tin tenements in which illnesses are rife. The High Court of Delhi is presently hearing a public interest petition relating to employers not paying employees for overtime and it has appointed a four-member committee to submit a report on the alleged violations of workers rights.

During the construction of the Games Village, there was controversy over financial mismanagement, profiteering by the Delhi Development Authority and private real estate companies, and inhumane working conditions.

CAG Report:
Kalmadi deliberately delayed CWG contract 'It was a significant failure and was the culmination of indecision of the OC on whether to execute the work internally or through outsourcing' No agreement for foreign consultants 'OC in February 2010 decided to engage the consultancy firm at a cost of Rs 98,500. Though the entire amount was released to the firm, OC couldn't produce to any formal agreement in support of the payment' CWG DG colluded with vendors 'Though Nusli with annual turnover of Rs 418,27cr was eligible for bidding for maximum 3 clusters, but OC allowed them to bid for 7 at the instance of VK Verma, Dir Gen. Reason for this has not been recorded in any of the documents' Collusion between OC officials and vendors 'Content of the consortium agreement indicates that the firm prior to the date of publication of EOI was aware of the requirement of forming consortium with Indian partners, about last date of submission of pre qualification bid, etc. This indicates collusion between OC officials and vendors' 'Colluded to form a cartel' 'Such coincidence and precision of estimates, rarely seen in practice, points out towards a collusion and possibility of cartel among the vendors'
35

Corruption in marketing: SMAM angle? Indifference is significant in the light of the fact that the OC's revenue generation targets were by then far behind schedule and expenditure had already gone up manifold, liability for which was ultimately borne by GoI'.

Legal Cases against CWG Committee

The CBI has registered ten FIRs so far in the cases related to alleged irregularities in the conduct of Commonwealth Games. One of these cases has been discussed in brief below:

The CBI registered cases against six officials of CWG Organizing Committee and two private firms for extending undue favors while appointing official Master Licensee for merchandising and retailing during the games. Immediately, after filing of the case, a team of CBI officials carried out search operations at 10 locations in Delhi, Mumbai, Gurgaon, Chandigarh and Panchkula. The agency named six OC members including the then director general Mr. VK Verma, joint director general (finance) Mr. KUK Reddy, DDG (legal) Mr. Ram Mohan, DDG (procurement) Mr. Surjit Lal, (F & A) Mr. M Jeychandran and the then ADG (Image and Look) Ms Sangita Welingkar and firms Compact Disc India Limited (CDIL) and its group arm Premier Branch Private Limited (PBPL), official sources said. The CBI alleged that these officials entered into criminal conspiracy with the officials of the firms and by abusing their official positions, extended undue favor to PBPL in appointing it as official Master License for Merchandising and On-line and Retail Concessionaire for CWG-2010 for sportswear, casual wear, kids wears against a minimum royalty amount of Rs 7.05 crore, they said. The agency alleged in the case that after scrapping of the earlier bid on flimsy grounds, the Evaluation Committee of the OC CWG-2010, dishonestly considered the PBPL on the basis of the goodwill of CDIL, and on negotiations, PBPL submitted an offer of Rs 5.20 crore for acquiring all the rights of master licensee for merchandising, they said. Thereafter the private company (PBPL) submitted two cheques amounting to Rs 3.5 crore but the same were dishonored by the bank and as such the OC did not receive
36

any amount from the private company, official spokesperson Ms Dharini Mishra said here. Thus, it is alleged that the accused private company actually used the CWG brand properties and earned a huge profit, but did not pay anything to the OC, and the accused public servants caused huge pecuniary advantage to director of the private company and corresponding wrongful loss to the government exchequer, she said.

Further, Commonwealth Games Organizing Committee is fighting 14 legal cases filed by several firms and its former employees seeking their dues. These cases related to the finance department, workforce, catering, merchandising unit, cleaning and waste management units, technology department and other works connected with organising of the Games. Some of these cases are: Ex-treasurer M Jayachandran, who is lodged in Tihar jail, has slapped a Rs five-crore defamation suit in the Delhi High Court against the OC for allegedly tarnishing his image. Jayachandran is an accused in the Timing-ScoringResult (TSR) scam that has led to a loss of over Rs 95 crore to the exchequer. The CBI has accused him of manipulating the minutes of OC's Finance Committee to justify the alleged forgery in the award of TSR contract. OC's former chief of technology department Rajesh Kumar has moved the high court for alleged harassment by the management among other charges. Two companies - Unique Infoways and Bite and Byte - have also gone to the high court seeking dues.

37

Parties Involved

Politician

Law Enforcers

Bureaucrats

CAG SCAM

Business

Corporations

Politicians Involved

Suresh Kalmadi, the Congress party representative to 15 Lok Sabha from the Pune constituency. He was the Chairman of the Organizing Committee of the Delhi Commonwealth games.

Sheila Dikshit, Chief minister of Delhi: Was indicted for several irregularities in the CWG processes both by Shunglu committee and also by the CAG

Bureaucrats Involved

Lalit Bhanot, Secretary General of the Organising committee TS Darbari, Joint Director General of the Organising committee Sanjay Mahindroo, Deputy Director General of the Organising committee BS Lalli, CEO of Prasar Bharati M Jayachandran, Joint Director General (Accounts and Finance)

Corporations Involved

AM Films
38

AM Cars SIS Live Jaypee Group, Its alleged that the proceeds of corruption are parked here through financial involvement of Suresh Kalmadi's son, Sumeer Kalmadi in the F1 circuit project at Greater Noida.

MTNL HCL Infosystems

Businessmen Involved

RSP Sinha, MTNL CMD SM Talwar, Executive director MTNL NK Jain, GM (Corporate Sales) MTNL Jitendra Garg, DGM MTNL

Whistleblowers/ Law Enforcers

The scam was unearthed by CAG even before the conduct of the games. Presently the scam is being probed by the CBI.

Scams
The various contracts were manipulated by Kalmadi and team and allegedly misappropriated huge amounts in the process.
Time Scoring Results System

Kalmadi has been accused of awarding illegal contracts to a Swiss firm for TimingScoring-Result system for the Games causing a loss of Rs 95 crore to the exchequer.
Queens Baton Relay

The Enforcement Directorate is probing the flow of funds and forex during the Queens Baton Relay held in London prior to the Commonwealth Games, apart from investigating the overlays-related works of the Games under the Prevention of Money Laundering Act. The ED case registered the case under Fema after British authorities referred to the Indian High Commission a matter regarding hiring of London-based transport firm AM Cars and Vans at exorbitant prices, and to similar
39

high payments to AM Films for installing video screens at the venue of the Queen's Baton Relay.
Broadcast Network

CBI registered another case in the Commonwealth Games scam and searched residences of officials of Mahanagar Telecom Nigam Limited, or MTNL, and Noida based HCL Infosystems for allegedly inflating cost of setting up a broadcast network for the Games by nearly Rs 400 crore. It is alleged that MTNL awarded the work of broadcast network based on IP/MPLS Technology at an exorbitant price of approximately Rs 570.12 crore by manipulating specifications in such a manner as to make them tailor made for the said bidder to the said private company (HCL)," Mishra said. The agency alleged that initial estimate of broadcasting data transmission project for the sporting extravaganza was very limited with an initial estimate of Rs 31.43 crore, but MTNL officials included a Broadcast Video Network based on IP-MPLS technology, which resulted in cost escalation by Rs 380.04 crore. CBI alleged that this change in specification was done with an intention to cause huge pecuniary advantage to HCL Infosystems, causing loss to the exchequer.
Recruitment to Organising Committee

CBI sources lodged Preliminary Enquiry report against unknown persons in the Games organising body after it received several complaints and references from the Central Vigilance Commission claiming violation of norms in the appointments. They said the complainants alleged involvement of sacked OC Chairman Suresh Kalmadi, who is at present in judicial custody, and his close aides for irregularities in the recruitment process. In its PE, the CBI has alleged that during the period of 2003 to 2009, some persons were nominated to the OC who had no expertise for various jobs. The Games organising body had an overall strength of about 2,100 officials engaged for various duties related to the mega sporting event. At present, there are about 100 officials on the rolls. The CVC has also conducted an enquiry into the alleged recruitment scam following complaints that it showed ghost employees on its muster rolls and violated norms while inducting people. The High Level Shunglu Committee had also found alleged irregularities in the recruitment procedures followed by certain OC officials.
40

CNN-IBN NDTV Hindustan Times

The CAG has questioned the deals between the CWG and certain media houses as the organising committee (OC) apparently resorted to pick-and-choose policy in the award of contracts worth over Rs. 6.73 crore. The CAG, in its report, tabled in Parliament last week, has dubbed the process arbitrary and biased. The contract for production and broadcasting of commercials was given to two news channels, CNN-IBN and NDTV. The CAG said the OC followed an arbitrary approach with no planning for specific channels, time slots and cost benefit analysis. The CAG is more severe in its observations on the contract for creating a Games Time website, meant to put out real time information on sporting events, given to HTHungama - a consortium comprising Hindustan Times and Hungama. It has lambasted the process of awarding the contract to the consortium and said their work was deficient. A benevolent OC overlooked the non-performance and did not encash the performance guarantee of Rs. 0.29 crore. A contract tweaked in favour of HT-Hungama had no other provisions for penalties case of non-performance, the CAG said. It said the bidding process was squeezed and completed within two months, leading to several irregularities. Among the three bidders, HT-Hungama's documentation was deficient but ignored by the technical committee. It led the CAG to conclude that the process was tailored in HT-Hungama's favour.

Response to Scam

Kalmadi and Bhanot was sacked from the Organising Commitee by the Sports ministry on Jan 2011

Shunglu panel was constituted by Prime minister Manmohan Singh to go into the irregularities in the conduct of the Games.

After his arrest on 25 Apr 2011, Suresh Kalmadi was suspended by the Indian National Congress

41

CWG Impact

Safety & security concern Vandalism of games village Socio economic impact

Infrastructure Issue

Impact of CWG

Organizational failure

Racism Allegation

Sporting controversy

We will discuss all of them one by one.

42

Socio Economic Impact

Socio Economic Impact Social & environmental impact Sex & prostitution Boom

Financial

Urban change

Financial

A leading research remarked that the 2010 Commonwealth Games will create "a negative financial legacy for the country" and asked "when one in three Indians lives below the poverty line and 40% of the hungry live in India, when 46% of India's children and 55% of women are malnourished, does spending billions of dollars on a 12-day sports event build national pride or is it a matter of national shame?" One of the outspoken critics of the Games is Mani Shankar Aiyar, former Indian Minister for Youth Affairs and Sports. In April 2007, Aiyar commented that the Games are "irrelevant to the common man" and criticized the Indian government for sanctioning billions of dollars for the Games even though India requires massive investment in social development programs. In July 2010, he remarked that he would be "unhappy if the Commonwealth Games are successful". Indian businessman Azim Premji called the 2010 Commonwealth Games a "drain on public funds" and said that hosting the high-expense Games in India is not justified given that the country had more important priorities facing it, such as education, infrastructure and public health
Environmental Impact

Nearly 400,000 people from three large slum clusters in Delhi have been relocated since 2004. Gautam Bhan, an Indian urban planner with the University of CaliforniaBerkeley, said that the 2010 Commonwealth Games have resulted in "an unprecedented increase in the degree, frequency and scale of indiscriminate
43

evictions without proper resettlement. We havent seen [these] levels of evictions in the last five years since the Emergency." In response to a Right to Information (RTI) application filed for study and statements by civil society groups, a report by the Housing and Land Rights Network (HLRN) an arm of the Habitat International Coalition - detailed the social and environmental consequences of the event. It stated that no tolerance zones for beggars are enforced in Delhi, and the city has arbitrarily arrested homeless citizens under the "Bombay Prevention of Begging Act 1959".
Urban Change

Mitu Sengupta, a professor of politics at Ryerson University, Canada, points out that there is a tradition of using urban spectacles such as the Olympics and Worlds Fairs to enhance a citys global recognition, image and status, and to push through controversial policy reforms that might otherwise linger in the pending file for years (it is easier to undercut local opposition under the pressure of a fixed deadline and the international spotlight). She writes that the reforms involved are often the invention of an affluent, globally connected minority that is relatively detached from local conditions and the local population. The 2010 Commonwealth Games, she says, are being used to invigorate an elite-driven program of urban transformation that centers on privatization, securitization, and the construction of monuments to vanity. Sengupta expands upon this argument in a subsequent article in Z Magazine Amita Baviskar, a professor of sociology at the Institute of Economic Growth, University of Delhi, makes a similar argument, on how mega-events, like the Olympics and Commonwealth Games, are used to advance narrow agendas of urban reform that cater to the middle class and rich. She focuses on how, in preparation for the Commonwealth Games, the city's slums were bulldozed in order to make room for shopping malls and expensive real estate. Writer and activist Gautam Bhan also draws a connection between the Commonwealth Games and anti-poor urban development in an article posted on Kafila, an alternative webzine
Sex Slavery and Prostitution Boom

There has been a boom in the number of young girls, mostly from impoverished parts of India, coming to Delhi after being offered jobs by disguised criminals, only to be taken prisoner and forced into sex slavery. The number of victims is believed to be in the hundreds. Many brothels have been running English courses for sex
44

workers and upgrading their facilities in anticipation of a business upturn during the games. Overseas prostitutes are also expected to come as tourists and ply their trade. One anti-trafficking NGO has claimed that there are reports of 40,000 women being brought in from northeastern India alone. A spokesperson said that recruits from that part of India were favoured because of their lighter skin. It has been reported that over 3,000 bar girls in Mumbai have stopped going to work; this has been blamed on an exodus to Delhi for the Commonwealth Games.
Organizational Failure

Organizational failure

Vigilance-related irregularities and Over-Invoicing

Preparation delays

Mass volunteer walkout

Poor ticket sales and attendance

Racism allegations

Vigilance-Related Irregularities and Over-Invoicing

On 28 July 2010, the Central Vigilance Commission an Indian government body created to address governmental corruption released a report showing irregularities in up to 14 CWG projects. As per official reports, total 129 works in 70 organizations have been inspected. The detailed preliminary findings included the award of work contracts at higher prices, poor quality assurance and management, and work contracts awarded to ineligible agencies. There are also allegations of widespread corruption in various aspects of organising the games including procurement and awarding contracts for constructing the game venues. The Commonwealth Games Organising Committee on 5 August 2010 suspended joint director T S Darbari and M Jayachandran following the report of the three-member panel which was probing the financial irregularities related to the Queen's Baton Relay.

45

Also, Organising Committee treasurer Anil Khanna resigned from the post in the wake of allegations that his son's firm had secured a contract for laying synthetic courts at a tennis stadium. The GlobalPost news agency reports that scandals have come to light, such as "shadowy off-shore firms, forged emails, inexplicable payments to bogus companies and inflated bills for every purchase from toilet paper to treadmills." Among the alleged corruption and defrauding of the games budget, toilet paper rolls valued at $2 were costed at $80, $2 soap dispensers at $60, $98 mirrors at $220, $11,830 altitude training simulators at $250,190
Preparation Delays

In September 2009, CGF Chief Mike Fennell reported that the games were at risk of falling behind schedule and that it was "reasonable to conclude that the current situation poses a serious risk to the Commonwealth Games in 2010". A report by the Indian Government released several months prior found that construction work on 13 out of the 19 sports venues was behind schedule. The Chief of the Indian Olympic Association Randhir Singh has also expressed his concerns regarding the current state of affairs. Singh has called for the revamp of the Organising Committee commenting that India now has to "retrieve the games".Other Indian officials have also expressed dismay at the ongoing delays but they have stated that they are confident that India will successfully host the games and do so on time. As the Times of India reports, all CWG projects were to be completed by May 2009 and the last year should have been kept for trial runs. The newspaper further reports that the first stadium was handed over for trial runs in July 2010 only. To put the delays in perspective, Beijing National Stadium was completed much ahead of schedule for the 2008 Summer Olympics, while the venues for 2012 Summer Olympics in London are scheduled to be delivered one year before the games and the construction of the venues is on track. In August 2010, the Cabinet Secretariat took a decision to appoint 10 officers of the rank of Joint and Additional Secretaries to oversee the progress of the construction of stadiums. Each officer is allocated a stadium and given the responsibility to ensure that the work completes in time for the games.

46

Mass Volunteer Walkout

Around 10,000 of the 22,000 selected volunteers quit, less than a week before the event. This has been blamed on a lack of training for personnel, or dissatisfaction with assignments. There are reports that some who have quit have not returned their uniforms.
Poor Ticket Sales and Attendance

The start of the Games saw extremely poor ticket sales, with many venues near empty.In a press conference, organising chairman Suresh Kalmadi admitted that there were problems, and blamed empty venues on ticket booths not being set up outside stadiums.Commonwealth Games chief Mike Fennell admitted that many venues had been nearly empty on the opening day of the Games, saying "A number of venues do not have lots of spectators one area which causes us concern". On the second day of competition, less than 100 people filled the hockey venuethe 19,000seat MDC Stadium. Less than 20 people watched the first tennis match of the tournament in the 5,000-seat tennis stadium, and just 58 fans watched the netball opening match. One Indian competitor tried to buy tickets for relatives online, only to be informed by the website that tickets were sold out. When he arrived to compete, he found the venue to be empty. The streets of Delhi were deserted for the cycling road races and walking event.
Racism Allegation

African countries have complained that they are getting second-class treatment from the Games organizers, in spite of them offering India a hand in the preparation of the Games. They have alleged that accommodation given to them was inferior compared to the accommodation provided to the Australian and New Zealand teams. They went on to state that India was complaining about being victims of racial bias in the reporting of the Games; while simultaneously perpetrating the same kind of racism against the African countries

47

Infrastructure Issue Transport Infrastructure

The Delhi

Airport

Metro

express

built

by Reliance

Infrastructure

and CAF

Beasain missed its deadline of 31 July 2010 and the private consortium was fined Rs 11.25 crore
Venues

Less than two weeks before the opening ceremony, Fennell wrote to the Indian cabinet secretary, urging action in response to the village being "seriously compromised." He said that though team officials were impressed with the international zone and main dining area, they were "shocked" by the state of the accommodation. "The village is the cornerstone of any Games and the athletes deserve the best possible environment to prepare for their competition.The BBC published photographs of the village taken two days before 23 September showing unfinished living quarters. New Zealand, Canada, Scotland and Northern Ireland have expressed concern about unlivable conditions. The Times of India newspaper reports that the Scottish delegation apparently submitted a photograph of a dog defecating on a bed in the games village. Hooper said that there was "excrement in places it shouldn't be" in the athletes' quarters and that members of visiting delegations had to help clean up the unsanitary things. The BBC released images of bathrooms with browncolored paan stains on the walls and floor, liquids on the floor, and brown paw prints on athletes' beds. Lalit Bhanot, the secretary general of the Organising Committee, rejected the complaint that sanitation was poor by saying that, due to cultural differences, there are different standards about cleanliness in India and the western world, a statement for which he was widely ridiculed in Indian and international media. Bhanot went on to say of the athletes' village that, "This is a world-class village, probably one of the best ever. Pakistan also made reservations over the condition of the athletes village and asked for an alternate accommodation to be made available to its contingent while preparation was still in progress.

48

Problems with functionality of equipment and infrastructure during events

On the first night of swimming, debris landed in the swimming pool, causing delays ahead of a race. It is believed that part of the ceiling or its paint had fallen off. Before the last night of swimming finals, the filtration system broke down and the pool was turbid and murky during the warmup session and the finals, and the pool has been described as the least clear ever seen for a swimming competition. A disproportionate number of swimmers fell ill with intestinal complaints, leading to concerns over the cleanliness and sanitation of the pool. Early suspicions rested on the quality of water in the swimming pools of the SPM Complex,, but other competing teams, including South Africa, reported no such illness. Daily water quality tests were being carried out on the water of the pools, as mandated by the event standards. Additional tests were ordered after news of the illnesses, but they also did not find anything amiss. The Australian team's chief doctor, Peter Harcourt, ruled that the "chances of the [Delhi] pool being the cause of the problem is very remote" and praised the hygiene and food quality in the Delhi Games Village.He suggested that it could be a common case of Traveler's diarrhea (locally called Delhi belly), or the Australian swimmers could have contracted the stomach virus during their training camp in Kuala Lumpur, Malaysia. English Olympic and Commonwealth gold-medalist swimmer Rebecca Adlington said that the water quality was absolutely fine. A dog entered the athletics arena. After the opening ceremony, the ground at the athletics was damaged, and the grass infield and the track was still being re-laid two hours before competition started

Vandalism in games village by Athletes Condoms and Toilet Blockages

An Indian newspaper during the games reported that used condoms flushed down the toilets in the athlete's village had caused some drains to become blocked, necessitating action by plumbers to clear the pipes.

49

Athletes under Investigation for Trashing Apartments

Australian athletes have been accused of vandalizing the towers of the athletes' village they were staying in by breaking furniture and electrical fittings. Delhi Police did not press the case after the Organizing Committee refused to file a complaint while Indian external affairs minister SM Krishna dismissed it as a one-off incident. A washing machine was hurled from the eighth floor of the same tower. Nobody on the ground was hit, but it is unclear who the culprit was. Indian newspapers have reported that the Australian Commonwealth Games Authority agreed to pay for the damages and have apologized for the incident. The Australian High Commissioner rejected the claim, stating that the incident was the result of partying and celebrations. Later comments by Australian officials have contradicted claims by Lalit Bhanot that they had admitted responsibility. Perry Crosswhite said that it was still unclear if athletes from other nations present in the tower at the time had been responsible
Safety & Security Concern

Infrastructural compromise

On 21 September 2010, a footbridge under construction for the Games near the Jawaharlal Nehru Stadium collapsed, injuring at least 23 people, mainly workers, underscoring fears of poor workmanship. Commenting on the incident, CM of Delhi Sheila Dikshit controversially remarked that the footbridge was only meant for spectators and not for athletes. Following the collapse, Fennell expressed concern that conditions at the Games Village, which had "shocked the majority", would seriously compromise the entire event. The company that was building the foot bridge, P&R Infra projects, was subsequently blacklisted by the Delhi Government and was not allowed to get government contracts. Reportedly, progress was still slow and four or five accommodation towers built by Emaar at the Games village were unfinished, lacking facilities such as wireless internet, fitted toilets and plumbing. In addition, rubble, unused masonry and discarded bricks littered the unfinished gardens. According to sports historian Boria Majumdar, author of the Sellotape Legacy: Delhi and the Commonwealth Games, India "may have to pull a miracle. The father of Australian track cyclist Kaarle McCulloch visited his daughter at the Olympic village. A builder in Australia, Grahame McCulloch criticized the structural soundness of the village; he said "those
50

buildings are the dodgiest things I have ever seen...so substandard". He told his daughter not to use the balcony, fearing that it was collapsible. On 22 September 2010, part of the drop ceiling of the new Commonwealth Games weightlifting venue in New Delhi collapsed. Indian bantamweight boxer Akhil Kumar s bed in the Games village collapsed when he sat on it. "I sat down on my bed to rest but suddenly it gave way. After that I noticed that part of it has no plywood, he said On 27 September 2010, a South African athlete reported that a snake was present in his room in the Games Village. A day earlier, animal authorities had to be called in to evacuate a king cobra from the tennis venue. On 7 October, a large scoreboard crashed to the ground at the rugby venue when a supporting chain snapped. The games however were due to start a week later so no major repercussions were experienced. Terror threats

Following the 2008 Mumbai attacks, some athletes and their representative bodies expressed security fears during the games. In April 2010, during the Indian Premier League, two low intensity bombs went off outside the stadium in Bangalore. Although there were no casualties, this postponed the start of the game by an hour. Following this attack, foreign cricketers like Kevin Pietersen expressed fears for their safety and questions were raised regarding the safety of athletes during the

Commonwealth Games [2]. The UK and Canada also warned about potential attacks on commercial targets in Delhi ahead of the games. Jama Masjid incident

Main article: 2010 Jama Masjid attack On 19 September 2010, unknown gunmen on a motorbike opened fire with an automatic pistol on a tourist bus outside the Jama Masjid mosque in Delhi. The attacks, which came a fortnight before the start of the games, injured two Taiwanese tourists Two hours later, a Maruti car exploded in the vicinity, reportedly from a deliberate low-intensity pressure cooker bomb which had been assembled inside. No fatalities or major damages were reported. The incidents, which were purportedly claimed by the Indian Mujahideen, provoked fears about lack of security in the city
51

for the upcoming games. However, police in Delhi initially denied the role of any organised terror group and instead blamed the attacks on "disgruntled youths and local criminal gangs." Officials suggested that a possible motive of the strike was to instill fear in people ahead of the Commonwealth Games. Fear of dengue outbreak The heaviest monsoon rains in 15 years, along with large quantities of standing water on CWG construction sites as well as in tanks and ponds, raised concerns over increased levels of mosquito-borne disease in Delhi. In the run-up to the games it was reported that 65-70 cases of dengue fever were being diagnosed each day in the city, with the number of cases "likely to hit the 3,000 mark" by the opening on 3 October. Illness Many swimmers were reported to have fallen ill. Initially, concerns were raised over the quality of water in the swimming pools of the SPM Complex . It was said that more than 20 percent of the English team's swimmers about eight to 10 competitors had been struck down with a stomach virus. The Australian team also reported that at least six of its swimmers had been sick, including Andrew Lauterstein, who had to withdraw from the 50-meter butterfly. Commonwealth Games Federation president Mike Fennell said officials would conduct tests to make sure the pools were not the source of the illness. "If there is something unsafe, you cannot swim in that water. It is a matter we have to deal with a great deal of urgency," he said. However, other competing teams, including South Africa, reported no such illness. Daily water quality tests were being carried out on the water of the pools, as mandated by the event standards. Additional tests were ordered after news of the illnesses, but they also did not find anything amiss. The Australian team's chief doctor, Peter Harcourt, ruled that the "chances of the [Delhi] pool being the cause of the problem is very remote" and praised the hygiene and food quality in the Delhi Games Village. He suggested that it could be a common case of Traveler's diarrhea (locally called Delhi belly), or the Australian swimmers could have contracted the stomach virus during their training camp in Kuala Lumpur,

52

Malaysia. English Olympic and Commonwealth gold-medalist swimmer Rebecca Adlington said that the water quality was absolutely fine.

Sporting Controversy
Doping

Prior to the Games, four wrestlers, a shot-putter and two swimmers who were all part of India's Games squad tested positive for methylhexaneamine. Four others, who were not picked for the Games in the Indian capital, also failed drug tests conducted at the various training camps across the country. Oludamola Osayomi of Nigeria won the women's 100 metre sprint event. On 11 October 2010 it was reported that Osayomi had tested positive for a "banned substance" which was later revealed to be the stimulant methylhexaneamine. Another Nigerian athlete, hurdler Samuel Okon who placed sixth in the 110 metres hurdles, was reported to have tested positive for the same drug. In July 2011, three of the four women from India's gold-medal winning 400 metrerelay team tested positive for performance-enhancing drugs. Two of the racers, Sini Jose and Jauna Murmu tested positive for the anabolic steroid methandienone and Tiana Mary Thomas tested positiv for epi-methandienone.
Archery

In the archery event England criticised the crowds behaviour, but Williamson (the silver medallist) praised the crowd. Though earlier reports said that the team was upset that during the womens recurve event the crowd chanted loudly during the final shots. Claiming that the noise distracted the archers. Amy Oliver had complained about the chanting of "Come on India" as she took her shots. adding "The crowd was not good. They were pretty loud" In an action condemned in the Indian media , an English archery official allegedly abused an Indian coach, telling him to "f*** off." The comment came after the Indian team registered a onepoint win over England to claim the gold medal. The Indian archery head coach, Limba Ram, walked over to shake hands with officials of the rival team. In response, an English official showed his elbow in a gesture before uttering the remarks. Britain's archery team leader said she was unaware of the incident, "You must find out whether the person was one among us. If he was not wearing a red jersey, he would not be part of the side. I will speak to the Indian coach about it." Limba replied
53

that he failed to identify the person, as he had chosen to ignore the one-off incident. There have also been accusations that Limba Ram was called a monkey on two different occasions by an English official.
Boxing

During the weigh-in for the boxing competition the scales were giving inaccurate readings with athletes recording higher body weights on the official scales. The scales were deemed to be broken and the weigh-in was delayed 24 hours to find and calibrate new scales. The initial wrong measurements led to angry shouting between coaches, athletes and organisers. During the boxing competition there have been claims made by various teams including England andBotswana that jabs were not being scored by judges. This was attributed to the removal of a white scoring zone placed on the boxers gloves which is usually present in amateur boxing events. The BBC commentating team also claimed there to be a bias in judges scores towards Indian competitors.
Cycling

During the final of the Mens Keirin , Malaysian Azizulhasni Awang was disqualified for aggressive interference when he forced his way past two competitors. Race winner Josiah Ng said he was "mystified" over Awang's disqualification. In the semifinal round of the keirin , Australia's Shane Perkins was disqualified for dangerous riding with the official reason not being made clear. Perkins subsequently won the classification race and was described by Chris Boardman from the BBC to "have aimed an angry V-sign at officials"; he gestured to the judges with his index and middle finger held together. No subsequent action was taken against Perkins who later said, "the officials need to go back to school", referencing poor decisions he felt had been made in the sprint and keirin events.
Swimming

On another occasion, South African swimmer Roland Schoeman came under criticism when he referred to the crowd at the swimming as "going on like monkeys" in a post-race poolside interview. Schoeman's remarks came after he narrowly avoided being disqualified as he and England's Simon Burnett fell in at the start of the 50m freestyle when distracted by crowd noise. The swimming has been persistently affected by Indian spectators ignoring etiquette and shouting out while
54

the competitors were preparing for the start. His comment was regarded as possibly being a racial ethnic slur, although he later said that the word was commonly used in South Africa to refer to mischievous behaviour. At an official press conference, organising committee secretary-general Lalit Bhanot took the complaints about monkeys literally. Not being aware of the complaints, Bhanot felt Delhi's wildlife was at issue: "We know especially at the swimming pool there are a lot of monkeys and we have made efforts to keep them away from the swimming pool.
Wrestling

Australian wrestler Hassene Fkiri was ejected from the 96 kg Greco-Roman competition and stripped of the silver medal after making an obscene gesture at the international FILA judges during the final. According to an Australian official, Fkiri was furious at his Indian rival Anil Kumar, who he accused of breaking the rules a number of times in the first period by holding Fkiri around the neck and head with two hands. The Australian received his first warning after he made a comment to the referee as he walked off the mat at the end of the two-minute period; when Kumar repeated the same move in the next round, Fkiri headbutted him and was issued a second warning. He then proceeded to swing his arms uncontrollably afterwards, which resulted in his third warning and eventual disqualification. After losing, Fkiri refused to shake hands with the victor.

Kalmadi: A Culprit or Victim?

He might be one of the responsible people, who now, in this situation being on the interface, can be targeted by everyone for the failure of common wealth games. But he alone cannot be the real culprit. The biggest problem, in any government ventures that take place in India, is the terrible structure upon which those ventures are planned. The terrible structure includes the immense possibilities of corruption (then whether it is mafiaism in the transport, traffic, roads, MCD... just endless, not to mention how much money has already been eaten up in the name of CWG ) . They always want to make a structure without cleaning up the older and known problems. The people employed in the government bodies don't want to work. They know nobody can remove them, no matter they work or not. Additionally casteism and vote bank groups include such problems. All this was started by the government so as
55

grab the chair. But now it has become such a virus, that it badly plagues the whole system from head to toe. Kalmadi as CWG chief: Who is the culprit UPA or NDA? The Comptroller and Auditor General (CAG) indicted the Prime Minister Office (PMO) over Suresh Kalmadi's appointment as CWG chief. But the PMO has engaged in a blame game when it brought NDA's name in the picture. The PMO claimed that according to an official agreement with the Commonwealth Games Federation in 2003, the president of the Indian Olympics Association (IOA) will be the chief of organizing committee (OC). The agreement was signed by the NDA government led by the then Prime Minister Atal Bihari Vajpayee. Washing its hands completely from the disputed issue, the PMO claimed that it had no role in appointing Kalmadi as the OC chief in 2004. Kalmadi was the IOA president at that time. Political scenario during CWG Scams: There was political upheaval and resentment among common public which was well reflected in various meetings which were called on frequent basis during that time. Eg on 6 august 2011,The Congress core committee met to discuss the political situation, including the Comptroller and Auditor General (CAG) report that has indicted the Prime Minister's Office (PMO) and the Delhi government for irregularities in the Commonwealth Games. The meeting was being held at Prime Minister Manmohan Singh's 7, Race Course Road residence, the sources added. Besides Manmohan Singh, the meeting was being attended by Finance Minister Pranab Mukherjee, Defense Minister A.K. Antony, Gandhi's political secretary Ahmed Patel, party general secretary Janardan Dwivedi and other leaders. The issue has affected congress deeply as even during the Anna Hazare movement time, congress is being attacked by mentioning CWG scams. Eg : BJP leader Rajnath Singh had said the Congress chief is silent on 2G, CWG and other scams plaguing the UPA government and only making statements against social activist Anna Hazare.

56

"Gandhi says nothing on 2G, CWG and other scams, while discharges her duties merely by uttering some words against Hazare," Singh had told reporters. During the various early parliamentary sessions held, BJP questioned on the role of Prime Minister Manmohan Singh himself since the circumstances under which Kalmadi managed to have a free run of the Games preparations go to the heart of its allegation that the Pune MP could not have commandeered the mega sports event without the PMO's indulgence. Likewise, the debate gave the BJP enough elbow room to also target Dikshit for her role in the scam; something that the Congress wished to avoid on the ground that parliament could discuss CAG's findings only after they had been scrutinized by the PAC.

In various other instances of allegation to congress or targeting Prime Minister Manmohan Singh, former Sports Minister Mani Shankar Aiyar also dragged Home Minister P Chidambaram's name for failure to check the Commonwealth Games scam. Mani Shankar Aiyar hit out at Chidambaram for not acting on the basis of his complaints against wasteful expenditure in the organization of the games. "My letters of complaint were neither acknowledged nor acted upon by Mr Chidambaram who was the finance minister till 2007," Aiyar told CNN-IBN. CNN-IBN has copies of letters written by Mani Shankar Aiyar, Sunil Dutt and MS Gill to the Prime Minister raising questions about the manner in which money was being spent on the Commonwealth Games. "Prithviraj Chavan, who was a minister in the PMO, was the one who initially alerted me that I should be careful about releasing funds for CWG," Aiyar told CNN IBN. "The present Chief Election Commissioner SY Qureshi, who was my secretary in the sports ministry, also shared my concerns against wasteful expenditure in CWG," he added. The Prime Minister had remarked at his interaction with editors that Mani Shankar Aiyar was ideologically opposed to the CWG.

57

Effect on Brand Image of India

It has affected the image of India adversely. Firstly, there were questions on India hosting CWG when large population of it falls below poverty line and with the deep rooted corruption done in its organising it has questioned the integrity, ethics and portrayed a poor image of India world-wide. Climatic change like global warming is causing an agricultural crisis for the peasants all over the country, worsening their conditions which, in turn, is leading to inflation in the economy, energy resources are getting depleted, unskilled and poor people are forced to get involved in unorganized employment with least possible wages and also issues related to skilled and literate unemployedbut no one really cared,

India was too busy with Commonwealth Games, Which has back fired in all terms. Indias present goal should be the development of human resources, dealing with poverty and creating a healthy, wealthy and literate India. As a result of the

approaching Commonwealth Games, India, especially Delhi underwent a complete makeover where the infrastructure was concerned. Lavish five-star hotels, better flyovers, etc, were being constructed. Better buses were seen running on the roads of Delhi. Why all this? Just to show that India is on its way to become a developed nation soon? But it couldnt hide those shabby and disguised slums behind the shimmering and glamorous construction and even showed the inherent reality of corruption. Eg: Liquid Soap Dispensers rented for Rs 9,379 a piece or $206, Operating Expenses escalating from Rs 399 crore in December 2002 to Rs 1,628 crore finally, Medical equipment including tread mills have been bought or rented at 6-7 times their original price, Allegations that funds meant for India's most deprived sections - the SC/ST - have been diverted to the games funds. Stealing from the poor to fund the elite's luxuries. It has conveyed messaged that main aim behind organizing the games were to gain money by officials in name of games preparation which were awful as reflected in various instances Eg :The newly built shooting range at the Siri Fort area collapsed after one heavy shower, The foot over bridge adjacent to the main venue of the Commonwealth Games collapsed while being erected, injuring 27 workers who were dumped into a tow away truck to a municipal hospital and dished out a

compensation of measly Rs 50,000 ($1097) for broken skulls and multiple fractures, Many of the games venues leaked during the monsoon and roofs of some collapsed, The Commonwealth Games village, the place where athletes from participating
58

countries were put up is infested with dog poo, snakes, clogged toilets, and unfinished work. This all presented a poor image of India not only in terms of corruption but also affected its image of being seen as a tourist attraction.

CAG Audit Report Key Points

There was notable discrepancy in the bailout package given by DDA to the developer of games village. Scope of audit report included: overall planning and development, venue development, games village, city infrastructure projects, organization of the games, preparation of Indian teams, media, others. It showed that flaws made from the starting: Proposal was made without underwriting a cap on government liability and guarantee was given not only from organising committee but also from government of India, the games thus became the property of GOI, and not only of OC. Whereas Bid from Hamilton, Canada involved deficit guarantee only from Hamilton city council not from government of Canada. There were multiple committees and as the guarantee was given by GOI, there should have been proper government control in the management which was not done. Bid document envisaged Organising committee (OC) as a government owned registered society but OC was ultimately set up as a non government society with Shri Suresh Kalmadi, as chairman of OCEB. This was done with a chronological events starting with a document titled updated bid which was illegal as contract has been already awarded to Delhi. There was no accountability to government despite of funding and guarantee by the same. There was lack of clear governance structure and various ad-hoc committees were created, disbanded and re-constituted at the different point of time leading to all confusion and complete diffusion of accountability. There was no single clear focused budget, which kept on increasing further and further. There were numerous instances of contract being not taking taxation, legal planning into account. There was not any proper documentation of sequence of
59

award of contract and which were liabilities pending.Numerous contracts were given on nomination basis to even not eligible vendors.

Suggestions & Recommendations

The contagious disease of scams demands perfect healing and a thorough clean-up. Implementation of The Santhanam Committee recommendations: The Santhanam Committee emphasized four major causes of corruption: Administrative delays Review of existing procedures and practices to find out the points at which delay occurs and device suitable steps to minimize the delay Prescribe definite time-limits for dealing with receipts, files etc., which should be strictly enforced Government taking upon themselves more than what they can manage by way of regulatory functions. Each Ministry/Department should undertake a review of the regulatory functions which are its responsibility, with a view to see whether all of them are strictly necessary and whether the manner of discharge of these functions and of the exercise of powers of control are capable of improvement Scope for personal discretion in the exercise of powers vested in different categories of government servants. Adequate methods of control should be devised over exercise of discretion. The right to act according to discretion does not mean right to act arbitrarily. The fairness of the method by which the discretionary decision was arrived at may certainly be looked into Cumbersome procedures of dealing with various matters which are of importance of citizens in their day to day affairs. Citizens should be educated properly with regard to the procedures of dealing with various matters. They should also be provided with an easy access to
60

administration at various levels without the need for the intervention of touts and intermediaries

Conclusion
While nobody will officially say this, we all know why costs have bloated and stadiums are collapsing. Officials and politicians make money on bribes from contractors, who win bids at the lowest price and then earn super profits by compromising on quality. Then they make more money citing over-runs and repairs. Material suppliers hoard construction materials and make a killing as we desperately race to the deadline. But nobody will be indicted or arrested or tried. That is the way it works too many important people are making too much money.

61

2G SCAM 2G Timeline
May 16, 2007: A Raja Becomes Telecom Minister NEW DELHI: In significant changes after the abrupt exit of Dayanidhi Maran from the Cabinet, senior DMK leader A Raja will now handle IT and communications after shedding charge of environment and forests. The environment and forests portfolio will be with Prime Minister Manmohan Singh. The somewhat intriguing aspect of the change is that DMK chief M Karunanidhi has not nominated a replacement for Raja in the forests and environment ministry. Instead, another DMK nominee, M Reghupathy, who was MoS in the home ministry, will be moved at the same designation to environment and forests. Reghupathy will be replaced by DMK's V Radhika Selvi in home ministry. The changes are seen to be a matter of DMK rearranging its furniture, but the absence of a minister in the environment and forests ministry may indicate that Karunanidhi has yet to decide who to nominate. Interestingly, Radhika's induction was announced by a Tamil Nadu government press release which said that she would be sworn in on May 18. The likely induction of a member of the Karunanidhi clan, his daughter Kanimozhi, to politics by way of a RS seat, has resulted in speculation that she may well be made a minister. Aug, 2007: Process of allotment of 2G spectrum for telecom along with Universal Access Service (UAS) Licences initiated by the Department of Telecommunications (DoT) Sept 25, 2007: Telecom Ministry issues press note fixing deadline for application as October 1, 2007 Oct 11, 2007: DoT gets 575 applications for mobile licenses At the final count, 46 companies have managed to log in a staggering 575 applications for UAS (mobile) licenses with the DoT. This translates into an average of 26 applications for each of the 22 telecom service areas. The frenzy for licenses is fuelled by the fact that spectrum a precious and scarce national resource for telecom services comes along with the license at a throwaway price of Rs 1,660 crore.
62

The excitement only grew after TRAI's August 28 recommendations on license reforms and spectrum allocation ruled out auctions for 2G spectrums in the 800, 900 and 1800 bands. Almost 80% of the total applications received by DoT (30 companies with 461 applications) came in after this. Unable to stem the tide, the DoT finally, on September 24, said its doors would close for UASL applications on October 1. However, roughly 20 companies still managed to place applications in the four working days following the announcement. According to the DoT's final list, 15 companies have applied for pan-India licenses, while four have applied for between 20 and 21 licenses. The UP (West) circle leads the tally with 29 applications, followed by Orissa and Rajasthan with 28 each and Tamil Nadu, North East, J&K, Haryana, Gujarat and Assam with 27 each. Even Himachal Pradesh and Bihar both C category circles have received 23 and 24 applications respectively. Himachal Pradesh with 23 is the least in demand. The numbers are perplexing, considering each pan-India green field operation requires a minimum investment of Rs 25,000 crore within the first three years to mount any credible competition for entrenched players. Surprisingly, despite the obvious opportunism on display, Trai and now even telecom minister, A Raja, are reluctant to nudge the industry towards paying the real value of spectrum. The Rs 1,660 crore offer is a price linked to an auction for the 4th mobile license held in mid-2001 when India's subscriber base was four million and the overall target less than 100 million. The stakes are far higher today, with 200 million subscribers and a subscriber target of 500 million by 2011, followed by a slowdown that will peak at nearly 750 million subscribers by 2017. Strangely, TRAI has shied away from prescribing auctions despite admitting in its August 28, 2007 (section 2.73) recommendations that the current entry fee is linked to a 2001 transaction and recognizing the need to rediscover its present value. The ball is now squarely in the Department of Telecom's court. If sanity does not rule, three companies are set to strike gold by getting spectrum worth Rs 15,000 crore or more for a song.

63

Nov 2, 2007: The Prime Minister writes to Raja directing him to ensure allotment of 2G spectrum in a fair and transparent manner and to ensure that licence fee was properly revised. Raja writes back to the Prime Minister rejecting many of his recommendations Nov 22, 2007: Finance Ministry writes to DoT raising concerns over the procedure adopted by it. Demand for review rejected Jan 10, 2008: DoT decides to issue licences on first-come-first-serve basis, preponing the cut-off date to September 25, from October 1, 2007. Later on the same day, DoT posted an announcement on its website saying those who apply between 3.30 pm and 4.30 pm would be issued licences in accordance with the said policy

Nov 12, 2008: Spectrum Allocation Policy - HC seeks govt response The Delhi High Court today sought a response from the Centre on a petition challenging its first- come-first-served procedure adopted in spectrum allocation. A Bench comprising Chief Justice A P Shah and Justice S Muralidhar asked the government to file its response within three weeks and posted the matter to December 10 for hearing. The petition had challenged the Centre's policy of allocating 2G spectrum and alleged it had caused a loss of crores of rupees to the exchequer. The PIL alleged that the procedure followed by the government was non-transparent, and was intended for the benefit of some private players in the telecom industry. "The telecom ministry's deliberate inaction on the recommendations of the finance ministry, Prime Minister's Office and Telecom Regulatory Authority of India has benefited private parties at the expense of public exchequer," individual petitioner Arvind Gupta said. He also referred to an earlier judgment of the High Court delivered in 1993 by which the court had said that "first-come-first-served" policy is unreasonable and unfair. "The basis of first-come-first- served for allotment of time slots on satellite channels is arbitrary. It is unreasonable, unjust and unfair," Gupta said quoting the High Court judgment.

64

He questioned the government's intention of not following a competitive bidding procedure. "The proximity of real estate developers to corridors of the Department of Telecom has enabled even real estate developers to overnight turn into telecom entrepreneurs. Indian real estate developers and infrastructure promoters have also become Indian telecom players," Gupta alleged in his petition.

Sept 24, 2009: Etisalat buys stake in Swan Telecom NEW DELHI: Emirates Telecommunications Corporation (Etisalat), largest operator in the Arab world, on Tuesday said it has signed a deal to acquire 45 per cent stake in recently-licensed Indian telecom firm Swan Telecom Private Limited (Swan Telecom) for $900 million. Swan Telecom, controlled by Mumbai-based real estate and hospitality business group Dynamix Balwas (DB) Group, holds universal access service (UASL) licenses in 13 telecom circles across India, while it is in the process of acquiring UASL licenses in an additional two telecom service areas. Swan Telecom is likely to start its operations in the first quarter of the next financial year. Commenting on the transaction, Mohammad Hassan Omran, Chairman of the UAE headquartered Etisalat, said: Our entry in India, one of the largest and fastest growing mobile markets in the world today, marks an acceleration of our expansion strategy and brings to us an opportunity which matches the scale of our ambitions. We are truly excited by the partnership with the DB Group and the prospect of building Swan Telecom into a leading telecom operator, emulating the successes we have achieved in similar situations elsewhere. Etisalat operates in 16 countries across Asia, the Middle East and Africa, servicing over 6.4-crore customers. In a joint statement, DB Groups Chairman Vinod Goenka and its Managing Director Shahid Balwa said: We believe that with Etisalats operational and commercial expertise and with our knowledge of the Indian market, Swan Telecom has the potential to become a leading force in Indian telecommunications."

65

May 4, 2009: An NGO Telecom Watchdog files complaint to the Central Vigilance Commission (CVC) on the illegalities in the spectrum allocation to Loop Telecom May 19, 2009: Another complaint was filed to the CVC by Arun Agarwal, highlighting grant of spectrum to Swan Telecom at throwaway prices 2009: CVC directs CBI to investigate thes irregularities in allocation of 2G spectrum July 1, 2009 : Delhi HC verdict on telecom licence cut-off date puts Trai in a tight spot The Delhi High Courts judgment striking down as illegal the advancement of cut-off date for licence eligibility in 2007 by the telecom minister A Raja has put Trai in a fix. This is because the stakeholders are likely to raise eyebrows on the Telecom Regulatory Authority of India (Trai) in the three-day consultative process, which begins on Monday. One of the key issues to be decided through the consultative process is whether telecom licences should be given to more players or not. Analysts maintain that with the High Court ruling declaring the cut-off date as illegal, the way for 16 companies, including the petitioner S Tel and US telecom major AT&T to be given licences. In this backdrop, Trai should either drop the issue from its agenda or first seek a clarification from the court. Questions are bound to be raised on the legality of the whole exercise since the division bench of the High Court has struck the advancement of the cut-off date as illegal. The government has no choice but to grant licences to the balance applicants of 16 companies. In such circumstances, how can TRAI ponder whether the balance applications should be processed or not? asked an industry analyst. The reference of the matter by the Department of Telecommunications (DoT) to the TRAI in August was controversial since the latter had earlier given an undertaking to the court that the balance applications have not been rejected but are on waitlist and would be processed subsequently. In fact, the CBI is already enquiring why the DoT went back on its undertaking to the court and sought TRAI view. As reported by FE earlier, the TRAI had recommended in August 2007 that the government could continue with the policy of having unlimited number of operators per circle. However, seeing a deluge of applications, communications and IT minister A Raja put a temporary cap that only the applications received by October 1, 2007
66

would be processed. However, on January 10, 2008, through a controversial press note, the DoT advanced the cut-off date to September 25, 2007. This benefited eight companies that were awarded licenses in January 2008. Of them, Unitech Wireless and Swan Telecom have since sold stakes to foreign telecom majors at huge valuations. The arbitrary advancement left the applications of 16 companies, including that of AT&T of US in limbo. One of the aggrieved companies, S Tel had moved court challenging the DoTs move. The Delhi High Courts single bench had struck the DoTs move illegal in July last year. However, the DoT had appealed to the division bench of the court, which dismissed its plea on November 24.

Oct 21, 2009: Iregularities in spectrum allocation? CBI searches DoT office NEW DELHI: The CBI on Thursday searched offices of the Department of Telecom in connection with alleged irregularities in allocation of 2G spectrum to some of the new players. CBI sources said a team of its sleuths were conducting searches at the Sanchar Bhawan here after registering a case in this connection last evening. The sources said that all records pertaining to the allocation of spectrum to new players in January 2008 will be taken to see if there were irregularities in the process. None of the DoT official was available for comments. In 2008, eight new players were given licences along with bundled 4.4 MHz spectrum to start mobile services. The telecom ministry had come under attack for doling out spectrum very cheap compared to its actual market value. CVC had recommended a CBI probe into the procedures followed for selecting companies for giving 2G spectrum. Eyebrows were raised when two of the new players -- Unitech Wireless Services and Swan Telecom -- sold part of their stake at huge premium within days of getting the licences. The government had given telecom licence along with start up spectrum at Rs 1,651 crore for pan-Indian services.

67

Oct 23, 2009: CBI raids DoT offices over spectrum row In an unprecedented move, the CBI on Thursday raided the offices of the Department of Telecom (DoT), alleging criminal conspiracy between DoT officials and private firms in the allotment of 2G spectrum. TOI was the first to report the unusual twists and turns in DoT's decision-making process in the matter, and closely followed the sequence of events from July 2007 -when the rush for new telecom licences began -- to January 2008, when spectrum was allocated to the new entrants -- right up till November 2008, as the controversy snowballed. CBI officials said a case under the Prevention of Corruption Act had been registered against unidentified DoT officials and "private persons" before the raids were carried out in the Wireless Planning Cell (WPC) and in the office of the Deputy Director General (Access Services) at Sanchar Bhawan. According to the agency, all records pertaining to the allocation of spectrum to new entrants in January 2008 are being examined to ascertain whether or not there was any irregularity in the process. It is learnt that AK Srivastav, DDG Access Services 1; Ashok Chandra, Wireless Advisor and P K Mittal, DDG Access Services Cell 11, the senior officers in charge of these divisions, were taken to CBI headquarters for questioning. The CBI raid started at 10am and finished at around 6pm. The Central Vigilance Commission (CVC) had earlier asked CBI to probe alleged irregularities in the award of Unified Excess Services Licenses to private companies and the resultant loss of Rs 22,000 crore to the government. "As per information received, there was criminal conspiracy between certain officials of DoT and private firms in order to award licences to these companies by putting a cap on the number of applicants against recommendations of the Telecom Regulatory Authority of India (TRAI) and by awarding licences to private companies on first-come-first-serve basis on the rates of 2001 without any competitive bidding," said a senior CBI official. The CVC had asked CBI to investigate the identities of all beneficiaries in two companies that had bought stakes in Swan Telecom and Unitech Wireless Services. The two licencees had sold their stake even before they rolled out services for which they had been awarded licences.
68

Unitech and Swan sold their equity to Telenor and Etisalat, respectively, at roughly Rs 9,000 to Rs 10,000 crore each -- or six to eight times the price at which they had received spectrum from the government. Sources said though there was no quantification done on what was the loss to the government on this account, a rough estimate based on what these telecom companies earned by offloading their stake could be anywhere between Rs 20,000 crore and Rs 22,000 crore. However, industry watchers claim that the extent of the loss to the exchequer could be as high as Rs 50,000 crore. They point out that DoT gave away 2G spectrum to 120 licencees at roughly Rs 9,000 crore when the market value was probably closer to Rs 60,000 crore. DoT chose to follow a first-come-first-served (FCFS) process to handpick companies though it could easily have chosen a global auction for 2G spectrum, as has now been prescribed for 3G. The refusal to hold auctions when demand for spectrum far outweighed its supply marked a departure from the policy of auctioning 2G spectrum till 2001. Telecom minister A Raja had argued that he merely followed any TRAI's such

recommendations.

However,

TRAI

vehemently

denied

making

recommendations. Former TRAI chairman N Misra had clarified on many occasions, including in a letter to DoT, that his recommendations should be read in their totality. He had accused the government of cherry picking portions of TRAI's

recommendations rather than following them as a whole. All these developments were reported in TOI. The previous DoT secretary, D S Mathur, was asked to sign the new licences in 2007, but refused to do so till he retired in December 2007. Once he was replaced, 120 licences were subsequently awarded in January 2008. When criticised by the media and the opposition, Raja said his predecessors, Dayanadhi Maran and Arun Shourie, had followed the same FCFS policy. The big difference, however, was that there was no queue for spectrum during Shourie and Maran's tenure. At the time that Raja chose to give away spectrum to a select 120 companies, there were already 575 applications waiting and more could have followed.

69

Raja was also accused of abruptly announcing a cutoff date and favoring only those companies that had come in on or before September 25, 2007, even though the government had officially asked for applications till October 1, 2007. The manner in which spectrum was allocated to companies within the FCFS norm also came under attack as there was no clarity whether winners were being selected based on date of application or date of licence fee payment.

Nov 16, 2009: CBI seeks details of tapped conversation of corporate lobbyist Niira Radia to find out involvement of middlemen in the grant of spectrum to telecom companies Aug 18, 2010: HC refuses to direct the Prime Minister to decide on a complaint by Janata Party chief Swamy seeking sanction to prosecute Raja for his involvement in 2G scam The Delhi High Court on August 28th, 2010 refused to direct the Prime Minister to take a decision on a complaint seeking his sanction to prosecute Telecom Minister A Raja for his alleged involvement in the 2G spectrum allocation scam. The court dismissed the plea of Janata Party chief Subramanian Swamy seeking its direction to the Prime Minister to decide on granting sanction against his Cabinet colleague Raja on a complaint pending before the PMO for the last two years. The court passed the order after the Centre contended that it was premature to take a decision on granting sanction against Raja in view of the ongoing investigation by CBI in the 2G spectrum allocation scam. "In our considered opinion when the matter is being investigated by the CBI and it is in progress, it is not in fitness of things to pass any order," a bench headed by Chief Justice DipakMisra said. It also added "We are not inclined to interfere in the matter". Sept 13, 2010: SC asks government, Raja to reply within 10 days to three petitions filed by CPIL and others alleging there was aRs 70,000 crore scam in the grant of telecom licences in 2008 A Bench comprising Justices G S Singhvi and A K Ganguly asked the Centre, Raja, CBI, Enforcement Directorate and the Income Tax Department to file their replies within 10 days. Advocate PrashantBhushan appearing for Centre for Public Interest Litigation, a registered civil society body, alleged that the Union government was

70

trying to put a lid on the CBI investigation being carried out on the direction of the Central Vigilance Commission. The other petitioners in the case are Telecom Watchdog, an NGO, and ParanjoyGuhaThakurtha, a journalist. Bhushan said the petitioners had filed a plea seeking a thorough court-monitored investigation either by a Special Investigation Team (SIT) or by a special team of the CBI into the 2G spectrum allocation scam that has caused the national exchequer an estimated Rs 70,000 crore and led to huge national outrage. Simply in terms of the scale of money that has been swindled, it is easily the biggest scam that this country has ever seen, the petition said.A sitting Union Cabinet minister has been found to be directly involved and tapes of his conversations with corporate middlemen are available, said the petition. The judges wanted to know how the CBI was unaware against whom the investigations were on, despite continuing the process for several months and filing an FIR against unknown telecom ministry officials.The bench observed: Why the CBI is so uncertain about the charges and the involvement of the Department of Telecom officials? Sept 24, 2010: Swamy moves SC seeking direction to the PM to sanction prosecution of Raja. Former Union minister and Janata Party chief Subramanian Swamy on 24 th September, 2010 moved the Supreme Court seeking a direction to Prime Minister Manmohan Singh to sanction the initiation of criminial proceedings against communications minister A Raja in the alleged Rs 70,000-crore 2G spectrum scam. He alleged that the PM has failed to grant sanction even after enough unimpeachable evidence was given to initiate prosecution and it is obligatory on his part to grant the same. Corruption is an urgent public issue. The Prime Minister must decide, exercising his discretion here not as Prime Minister on the aid and advice of the council of ministers; but on his own, the petition stated. The Prime Minister is a deciding authority to accord requisite sanction to prosecute any member of the Union council of ministers under Section 19(1)(c ) of the Prevention of Corruption Act 1988 read with Article 75(1) of the Constitution of India.
71

According to Janta party president, when an application for such sanction to prosecute for corruption is presented to the Prime Minister, it is the duty of the deciding authority to apply his mind within a reasonable time either to accord the sanction or to reject the application. The government and the CBI have not even after 11 months of probe initiated any proceedings against Raja despite being well acquainted with the facts and the such probe cannot stand in the way of a concerned citizen who desires to take on the onus of so prosecuting, the plea said. Challenging the Delhi High Court judgment that dismissed his plea on the grounds that the investigation by the CBI is in progress and this court had earlier declined to monitor the same, Swamy also sought permission from the apex court to appear in person. Oct 8, 2010: SC asks government to respond to CAG report about the scam The Supreme Court on Oct 8,2010 asked the government to respond to the CAG report pointing out largescale irregularities and favoritism allegedly by telecom minister A Raja in the Rs 70,000-crore 2G spectrum allocation scam in 2008. A Bench comprising Justices G S Singhvi and A K Ganguly asked solicitor general Gopal Subramanium to go through the draft report alleging that the ministry of telecom ignored the advice of the law ministry and the Prime Minister and allotted the license by favoring "ineligible" companies at the lower rate on first-cum-first basis by arbitrarily deciding the cut off date. The Bench posted the matter for October 22 without perusing the status reports filed by CBI and Enforcement Directorate into the investigations in the case. It returned the reports filed in sealed covers to both the agencies stating that it will consider them during the next date of hearing. Raja was represented by senior advocate T R Andhyarujina who was asked to be supplied with the copy of the CAG report. Earlier, Subramanium said he would like to allay any apprehension that investigations would not be fair. "We are bound to conduct fair investigation," he added.

72

However, he said it would be premature to say anything at this stage about the final conclusion of the investigations in which more than one government agencies are involved. The solicitor general said FIR relating to the scam was registered against unnamed persons a year ago and the matter has undergone judicial scrutiny in the Delhi High Court and the apex court. He said transcript of the tape involving telephonic conversation between several persons, including corporate lobbyist Nira Radia and some journalists, have to be examined as it has a bearing on the allocation of 2G spectrum. However, advocate Prashant Bhushan, appearing for the NGO which has alleged financial irregularities by Raja in connivance with certain middlemen including NiiraRadia, alleged the probe by CBI was not fair as even after the registration of FIR a year ago, none of the persons has been interrogated or arrested. He said neither Raja nor Radia has been interrogated or arrested till now despite the tapped conversation clearly throwing sufficient light on their alleged involvement in the scam. Oct 21, 2010: Draft reports of CAG placed before the Supreme Court Draft reports of the CAG, which pointed out that the scam on 2G spectrum allocation caused a loss of Rs 1.4 lakh crore to the exchequer, were placed before the Supreme Court on Oct 21, 2010. The two draft reports were placed by an NGO, Centre for Public Interest Litigation, which had alleged irregularities in allocation of spectrum. Parts of the reports were placed on October 8 by the NGO before the apex court which had asked the Department of Telecom to respond to charges of large-scale irregularities and favoritism allegedly on telecom minister A Raja.

In the petition, it was alleged that there was corruption of Rs 70,000 crore. The report had made adverse remarks on the allotment of radio frequencies to Loop Telecom and Unitech Wiresless. In its application, the NGO has placed on record two recent CAG draft reports and claimed that the ineligible firms - Loop Telecom and Unitech Wireless, a group firm of real estate major Unitech - were allotted 2G spectrum.
73

The NGO has further contended that the illegal allotment of spectrum has cost the national exchequer Rs 1.4 lakh crores as per proper audit calculations by CAG. According to the report, "DoT chose not to abide by its own guidelines and issued 122 licenses without detailed verification of the documents submitted by the applicants." The NGO further claimed that CAG auditors had on September 20, 2010 wrote to DoT on the issue of license and spectrum to ineligible Loop Telecom.

"The submission of the applications for UAS License for 21 service areas by Loop Telecom Limited to DOT on 3rd September 2007 with altered MOA without full disclosure of the factual position was deliberate misrepresentation of the facts and was done with fraudulent and malafide intentions of obtaining UAS license from DOT, though they were not eligible to apply for the UAS licenses for this circle on that date. Oct 29, 2010: SC pulls up CBI for its tardy progress in the investigations into the scam The apex court adjourned the matter to November 15, as Solicitor General Gopal Subramanium was not present at the hearing due to ill health. The Supreme Court is hearing a petition filed by NGO Centre for Public Interest Litigation, Telecom Watchdog and journalist Paranjoy Guha Thakurtha, challenging Delhi High Courts dismissal of their plea seeking a court-monitored probe into the scam by the premier investigating agency. The latest observations by the apex court has been taken note of by some Congress leaders, who want Raja, a senior leader of UPAs ally DMK, to step down till the probe is over.

Nov 10, 2010: CAG submits report on 2G spectrum to government stating loss of Rs 1.76 lakh crore to exchequer The Comptroller and Auditor General of India on Nov 10, 2010 said it has submitted to the government the report on the 2G spectrum allotment that is presumed to have caused a Sources in the know say that the CAG has accused the telecom ministry for undervaluing 2G spectrum, sold to new players in 2008, and held that the allotment price was not realistic, which has caused a revenue loss of up to Rs 1, 76,700 crore to the government.

74

The report is also believed to have castigated telecom minister A Raja for ignoring the advice of finance and law ministries on allocation of 2G spectrum to benefit a few operators. It is also believed to have criticized telecom regulator TRAI for standing as a helpless spectator when its recommendations were being ignored or misused. However, no confirmation on CAG's reported comments could be obtained. The report is believed to have said that the telecom ministry took arbitrary decisions while allotting 2G spectrum, bundled with licenses in January 2008. Sources said a copy of the report has been sent to the finance ministry and to the President. The process usually takes 10-15 days to finalise and then it would be tabled in Parliament. The month-long winter session of Parliament began on November 9. Nine firms were issued licences, bundled with start up of 2G spectrum, in January 2008 at Rs 1,658 crore for pan-India operations. The CAG report said the price at which the spectrum was alloted in 2008 was based on 2001 prices, which was quite low and has resulted in a loss to the government exchequer. The report also said that Raja ignored the advice of the law ministry and Prime Minister and advanced the cut-off date for giving the Letter of Intent (LoI). The telecom ministry had, however, hit at the CAG saying the policy decisions cannot be "assailed" as arbitrary and debunked CAG's assertion that 2G spectrum was allocated in an arbitrary manner. CAG has reportedly put the revenue loss to exchequer at up to Rs 1.40 lakh crore, in addition to another Rs 36,700 crore on allocation of spectrum beyond contractual limit to existing nine operators. Nov 11, 2010: DoT files affidavit in SC saying CAG did not have the authority to question the policy decision as per which licence were issued to new players in 2008 The telecom ministry told the Supreme Court on Nov 11, 2010 that the government auditor CAG did not have the authority to question the policy decision as per which licence were issued to new players in 2008. The assertion came within a day of Comptroller and Auditor General Vinod Rai stating that CAG has submitted its report on 2G spectrum, which was believed to have indicted the telecom ministry for favoritism and caused a loss of Rs 1.76 lakh crore to the exchequer.
75

The counter affidavit filed in the apex court on Nov 11, 2010 said that all decisions with regard to 2G spectrum allocation in 2008 were taken as per government policy that was being followed by all his predecessors since 1999.

The ministry said that the CAG had similar harsh observations even in 1999 when the operators were migrated from fixed licence fee to revenue sharing regime. And the licences along with start-up 2G spectrum were also allocated in 2008 according to the same policy, ministry officials said. The CAG has submitted its latest report to the government saying non-auction of 2G spectrum in 2008 may have cost the exchequer up to Rs 1.40 lakh crore besides over Rs 36,000 crore on account of additional spectrum to existing players beyond 6.2 Mhz. The officials pointed out that the additional 2G spectrum beyond 6.2 Mhz was given to the existing players by A Raja's predecessors free of cost. Nov 14, 2010: A Raja resigns as Telecom Minister Yielding to relentless pressure, controversial A Raja resigned as Telecom Minister after being ordered to do so by his party, DMK, in the wake of allegations that he caused a loss of Rs.1.76 lakh crore to the exchequer while allocating 2G Spectrum two years ago. Raja, the 57-year-old lawyer-politician, who got the coveted portfolio after the exit of DayanidhiMaran in 2007 and retained it after the May, 2009 elections, drove to Prime Minister's residence late at night on Nov 14, 2010 to hand in his resignation after steadfastly refusing to do so for the past few days even as the opposition paralysed Parliament demanding his ouster. The resignation was submitted after he returned to Delhi from Chennai where he met the party chief and state Chief Minister M Karunanidhi twice that day. The top Congress leadership met in Delhi and discussed the issue anticipating uproar in Parliament by the opposition which has been demanding his removal. Prime Minister Manmohan Singh, party president Sonia Gandhi and senior leaders Pranab Mukherjee and Ahmad Patel, political secretary to the Congress chief, attended the meeting amid growing view in the party that Raja's continuance in office has become untenable and that he must go.
76

There were unconfirmed reports that senior leader Pranab Mukherjee had spoken to Karunanidhi conveying to him that Raja's resignation would be a better option to avoid any further deadlock in Parliament. The resignation came ahead of the next days Supreme Court hearing of two petitions alleging involvement of Raja in the spectrum scam. Also, the opposition parties had made it clear that they would not allow Parliament to function if Raja does not step down. The opposition had been demanding removal of Raja after the government auditor CAG is believed to have indicted the minister for not distributing 2G Spectrum in a transparent manner resulting in a revenue loss of over Rs.1.76 lakh crore. Nov 15, 2010: Kapil Sibal given additional charge of Telecom Ministry Minister Kapil Sibal was given the additional charge of the telecom ministry by Prime Minister Manmohan Singh on Nov 15, 2010 which took the portfolio away from DMK for the time being. Official sources said Sibal will hold the charge of the Ministry held by A Raja, who resigned on Nov 14, 2010 facing allegations of scam in 2G spectrum allocation. The arrangement was seen to be temporary in view of the ongoing Parliament session when issues related to the ministry were to be handled at the senior level, particularly at a time when the ministry was facing allegations of corruption of huge magnitude. By tradition, a reshuffle of the Council of Ministers is not undertaken during a Parliament session. Sibal, a renowned lawyer-turned-politician was a week earlier given the additional charge of Ministries of Science and Technology and Earth Sciences, which fell vacant after incumbent Prithviraj Chavan was made Chief Minister of Maharashtra. In another decision, V Narayansamy, Minister of State for Parliamentary Affairs, was given additional charge of Department of Personnel and Training (DoPT), which also fell vacant after Chavan's departure.

77

Nov 20, 2010: Affidavit on behalf of PM filed in Supreme Court. Rejects charge of inaction on Swamys complaint. An affadavit on behalf of Prime Minister Manmohan Singh was filed with the SC on Nov 20, 2010, which rejected the charge of inaction on the part of his office in dealing with the request of sanction for prosecution of former Telecom Minister A. Raja in the 2G spectrum issue. In an 11 page affadavit, filed through Director, PMO, V Vidyawati, it was stated that there was no inaction on the Prt of the PMO on the complaint filed by Janata Party President SubramaniumSwamy seeking the sanction for prosection of Raja. The affadavit has given in detail how various letters written by Swamy since Nov 29, 2008 to Oct 5, 2010 have been dealt with by the PMs office and advice sought d=from the Law Ministry. The Director, who filed the affadavit on behalf of the PM, said she prepared a note on Feb 9, 2010 stating that according to the advice received from the Dept of Legal affairs, the decision of granting sanction may be determined only after the perusal of the evidence (oral or documentary) collected by the investigating agency, i.e. CBI and other materials to be provided by the competent authorities. On this note, the Joint Secretary suggested that Ministry of Law and Justice could be requested to send an appropriate response to the petitioner Swamy. This was approved by the PM on Feb 13, 2010. The view of the Joint Secretary was endorsed by the Ministry of Law and Justice, the affidavit said adding that the Law Ministry on February 22, 2010 stated that since it was only an advisory body to tender a legal advice they were not administratively concerned with the accord of sanction. The affidavit said that based on Swamy's March 8, 2010 letter, a request was made to the Secretary DoPT and the Department of Telecommunication to immediately give the status of the communication from the Chief Vigilance Commissioner and registration of the case by the CBI. The note on the response of DoT and DoPT was duly considered and approved by the Principal Secretary to the Prime Minister, the affidavit said adding that PMO asked the DoPT to send an appropriate reply to Swamy which was done on March 19, 2010. Subsequently in April 2010, the Department of Legal Affairs
78

informed that Swamy has filed a petition in the Delhi High Court and written letter to DoPT with a copy to Prime Minister on March 20, 2010, and later on May 20, June 9, August 30 and October 5 wrote letters addressed to Singh which were sent to Ministry of Law and Justice. The affidavit said that on February 8, 2010 the PMO received advice from Law Ministry, duly approved by the Minister of Law on January 26, 2010 in which it was stated that "decision to accord sanction of prosecution may be determined only after the perusal of the evidence (oral or documentary) collected by the investigating agency i.e. CBI and other materials to be provided by the competent authorities".

It said that the Private Secretary to the Prime Minister had raised a query regarding the exact point on which the opinion of the Law Ministry was proposed to be sought after a complaint similar to Swamy was forwarded to the PMO from the President Secretariat on April 30, 2009. The affidavit said that in response to PMO's May 29, 2009 letter, the Department of Legal Affairs stated on June 8, 2009 stated that they had called for "input/views from the Ministry of Telecommunication enable them to examine the matter in the right perspective."

It said since the reply from the Department of Legal Affairs was awaited, it was proposed that "issues raised by Swamy be examined on the sectoral side" which was considered at "various levels and approved." Nov 22, 2010: CBI tells SC it will file charge sheet in the case within three months The The Central Bureau of Investigation (CBI) on Nov 22, 2010 told the Supreme Court that it will complete investigation and file within three months a charge sheet in the 2G spectrum allocation case. The apex court was informed by CBI counsel and senior advocate K. K. Venugopal that the agency will take two months to complete the investigation and in another one month, it will arrive at a conclusion and file the charge sheet. Dravida Munnettra Kazhagam (DMK) leader A. Raja had resigned as telecom minister earlier that month in the wake of the spectrum scam.

79

We are investigating the offences and for each charge there has to be evidence and documents. The CAG report is about financial impropriety and not a criminal act, Venugopal told a bench of justice G. S. Singhvi and A. K. Ganguly, adding that only after the probe it could be said whether we have done our work properly or not. He said that the CBI will take two months time to finish the investigation as it was examining transcripts relating to 5,000 calls (out of which 3,800 have been analyzed), 6,000 files and 80,000 pages of documents. All these are being scrutinized, the senior advocate, who was representing the CBI from that, said. He further said since the matter was being examined by the CBI, the apex court should not go into the merits of the case. Venugopal said that the NGO, Central for Public Interest Litigation (CPIL), the main petitioner in the case, has sought monitoring of the investigation by the apex court. Venugopal said he would like to place two positions in law about the monitoring of the investigation by the court and this he would do by placing 15 or 16 judgements before it. Meanwhile, advocate Prashant Bhushan, appearing for CPIL, maintained that the court can go into the nature of the investigation as 13 months has lapsed since the registration of the FIR. Further, on 9 May, 2009, one Arun Agarwal had filed a complaint regarding Swan Technology owned by Reliance Infocomm, the shares of which was transferred to unknown entity, he said. Bhushan said it has to be found out what happened after the registration of the case by the CBI as the agency has written a letter to the Income Tax Department following which the transcript of the alleged conversation between various persons including corporate lobbyist Nira Radia and others including Rajas private secretary R. K. Chandolia surfaced. Materials are enough to charge Raja and others with criminal misconduct and abuse of official position which has been established by the CAG report, Bhushan said.

80

Nov 22, 2010: CBI tells SC role of corporate lobbyist Nira Radia would be questioned by it. The Enforcement Directorate on Nov 22, 2010 questioned corporate lobbyist Nira Radia for about seven hours regarding financial transactions and shareholding patterns of her firms as part of its probe into the 2G spectrum allotment scam.

ED Sources said Radia gave a statement in writing running into 20 pages under Section 50 of the Prevention of Money Laundering Act (PMLA), which gives the Directorate the power to summon a person for examination and submission of documents.

Sources said that besides the shareholding patterns in her firms, the ED officials also queried Radia about the details of her bank accounts and income tax returns. The questions were based on the information collected by the ED during its probe and also from documents running into 1,000 pages that Radia had earlier submitted to the agency.

Emerging from the Directorate's office after questioning, Radia, who is at the centre of a controversy over certain taped conversations in connection with the spectrum allocation, told reporters that she was cooperating with the authorities. Official sources said the questioning of Radia, who reached the ED office at about 9:30 in the morning, began at 10:30. The questioning ended around 5:30 pm. The agency had also said it will take two months time to complete the investigation as it was examining transcripts relating to 5,000 calls (out of which 3,800 have been analyzed), 6,000 files and 80,000 pages of documents.

Later in a statement, a spokesperson for Vaishnavi Corporate Communications and NiiraRadia said, "There have been a lot of speculation about my whereabouts and rumours of my being outside India all this while. I wish to inform that I have been very much in India all this while."

The statement said: "It is unfortunate that certain sections of the media have decided to overlook the real issues and instead focused on spreading stories of
81

misinformation and malice on myself, Vaishnavi Group and, in effect, on our reputed client in the telecom sector." Nov 24, 2010: SC reserves verdict on Swamys plea seeking direction to PM for grant of sanction to prosecute Raja. The Supreme Court on Nov 24, 2010 reserved its verdict on a plea seeking a direction to Prime Minister Manmohan Singh for grant of sanction to prosecute former telecom minister A Raja in the 2G spectrum case. A bench of Justices G S Singhvi and A K Ganguly reserved the verdict after concluding the hearing on the petition filed by Janata Party President Subramanian Swmy. The bench asked the Attorney General G E Vahanvati to place before it the number of matters relating to sanction pending before the competent authority in various government departments in one week. Nov 25, 2010: SC ticks off CBI for not questioning Raja. The Supreme Court on Nov 25, 2010 came down heavily on the CBI for failing to question former telecom minster A Raja and telecom secretary in the 2G Spectrum scandal, saying it was "beating around the bush". A bench of justices G S Singhvi and A K Ganguly wondered why the premier investigating agency failed to question the duo despite the CVC and CAG report sharply indicting them for their involvement. Nov 29, 2010: CBI files status report on 2G spectrum scam probe The CBI on Nov 29, 2010 submitted to the Supreme Court the status report on its ongoing investigations into the 2G spectrum allocation scam allegedly involving former telecom minister A. Raja. The status report was submitted to the apex court registry in a sealed cover. The apex court, earlier on November 25, had castigated the CBI on why it had not questioned Mr Raja and the telecom secretary in the case, saying the agency was "beating around the bush" when "illegality is prima facie evident."
82

A bench of justices G.S. Singhvi and A.K. Ganguly during the hearing had lambasted CBI for failing to examine the former minister and the telecom secretary, saying that it was the "minimum expected" of it as the criticism had come from CAG, a Constitutional authority.

CBI had offered to place a status report on Nov 30, 2010 before the court which also took on record the CAG report placed by Centre for Public Interest Litigation (CPIL) counsel Prashant Bhushan. "The CAG reports deserved highest respect. We are on the limited point. CAG under Constitution has a very important position. It is an authority set up under the Constitution. If such an authority set up under the constitution gives such a report, any reasonable person will question the Minister and the Secretary," it had said. The CAG had estimated a "presumptive loss" of around Rs. 1.76 lakh crore to the public exchequer due to allocation of spectrum to various allegedly ineligible telecom operators at throwaway prices. Nov 30, 2010: SC questions CVC P J Thomass moral right to supervise CBIs probe into 2G spectrum scam as he himself was Telecom Secretary at that point of time The Supreme Court on Nov 30, 2010 questioned Chief Vigilance Commissioner P J Thomas's moral right to supervise CBI's probe into the 2G spectrum scam as he himself was telecom secretary at the relevant point of time. The bench, which termed as "mind-boggling" the country's growing corruption, also sought the Centre's response to preserving tapes relating to corporate lobbyist Nira Radia's recorded conversations after an apprehension was raised that it could be destroyed as it exposed the nexus between politicians, bureaucrats and journalists. Advocate Prashant Bhushan, appearing for the NGO, Centre for Public Interest Litigation (CPIL) which has submitted the recorded conversations before the court, said the CBI should be directed to place in a sealed cover the original copies of tapes and questioned the opposition against their disclosure by a noted industrialist - an obvious reference to Ratan Tata who had moved the apex court raising certain objections over the leaks.

83

There was also a sudden shift in the stand of government, which contrary to its earlier strong objection agreed to the apex court monitoring the investigation. This change in stand comes in the backdrop of the growing clamour for a JPC probe an issue which had paralaysed Parliament for the past 13 days. Though Solicitor General Gopal Subramanium tried his best to convince the court that there was no violation of rules and the government had only displayed dynamism, the bench minced no words in expressing displeasure at the manner in which the spectrum was allotted. While Bhushan was reading purported extracts from the Radia's conversations with Ratan Tata, MPs, former bureaucrats and journalists, the bench observed, "Not only we are talking about pollution of the Ganga for the past 28-30 years. This pollution is mind-boggling. We do not live in a world of illusion. If there is peace, the real world is in the villages and forests. Subramanium, who was arguing for the Department of Telecom, also assured the court that he would respond to the court's query on the issue of CVC after seeking necessary instruction from the government. However, senior counsel K K Venugopal appearing for the CBI, citing the Central Vigilance Act, submitted that there was a provision for allowing one of the vigilance commissioners to take over the functions of the CVC. This is when a contingency arises wherein it becomes difficult for the incumbent (CVC) to function for some reason or other. Bhushan submitted that he had no objection to such a proposal as Vigilance Commissioner R Shreekumar, a former DGP from Karnataka, "enjoys a good reputation". But he insisted that apart from the vigilance commissioner monitoring the case, the court should appoint another officer with impeccable integrity to ensure a fair supervision of the investigation. At this point Bhushan once again raised the issue of Radia's corporate communication company and said she had employed a former TRAI Chairman

84

Pradeep Baijal, who was lobbying in the government department on behalf of her PR firm as its CEO. However, the bench later took the name of the former TRAI Chairman and said "by joining the firm, Baijal has given an illustrious example". Subramanium interrupted the Bench and said Baijal was a Secretary level IAS officer in the Government and it is not known "under what circumstances he joined the PR firm of Radia". Dec 1, 2010: SC directs original tapes containing conversation between corporate lobbyist Nira Radia and others be handed over to it The Supreme Court on Dec 1, 2010 directed that the original tapes containing the conversation between corporate lobbyist Nira Radia and others pertaining to the 2G spectrum allocation case be handed over to it in a sealed cover. The direction came from a bench comprising justices G S Singhvi and A K Ganguly after government submitted that it has no objection in handing over the complete set of tapes in the wake of apprehensions that the tapes may be destroyed. Solicitor General Gopal Subramanium said that he has got instructions that there was no objection in handing over the tapes and the court can give direction for preserving them in whatever way it thinks best. The apex court had on Nov 30, 2010 asked the government to respond to the plea for preserving the tapes containing conversation between Radia and others relating to the 2G spectrum scam. The bench had asked the Solicitor General to take instructions from the authorities on the plea made by NGO Centre for Public Interest Litigation (CPIL). Advocate Prashant Bhushan, who had appeared for the NGO, had made the plea that the tapes prepared by the Director General of Income Tax containing conversation of Radia and others should be preserved while voicing apprehensions that the tapes may be tampered with. Dec 1, 2010: Raja questions CAG findings in the SC. Former telecom minister A Raja on Dec 1, 2010 questioned in the Supreme Court the comptroller and auditor general (CAG) finding that the exchequer had suffered a
85

loss of Rs1.76 lakh crore in the allocation of second generation mobile telephony spectrum, terming the figure as "mindboggling and speculative". Andhyarujina said the principle which has been applied by the CAG in its auditing is not accepted as standard method of evaluation. The senior advocate further maintained that before Raja became minister his predecessors Dayanadhi Maran and Arun Shourie had already granted 52 licences. Andhyarujina said that whatever has been done by the telecom department was on the basis of the TRAI recommendations which the CAG cannot override. Further, the initial part of the CAG report gives out a wrong impression and it cannot be accepted, he said. He also said though everything was done on the basis of TRAI recommendation, the CAG report conveys the impression Raja was responsible for the scam. The senior advocate said Raja resigned on November 14 in view of the constitutional responsibility and political compulsions and with the wishes of his party, DMK. Pointing out that Parliament is not functioning for last 16 days because of the alleged 2G spectrum allocation scam, Andhyrujina said, "It has never happened in the parliamentary history of the country that there is such a standstill." Dec 2, 2010: Government places recorded tapes in the SC. The government on Dec 2, 2010 placed before the Supreme Court in sealed cover recorded tapes containing the conversations between corporate lobbyist Nira Radia and others relating to the 2G spectrum allocation case. While placing the recorded conversation before the bench comprising justices G S Singhvi and A K Ganguly, Solicitor General Gopal Subramanium said that it is a hard disc drive directly downloaded from the server which contains the conversations. However, advocate Prashant Bhushan appearing for the NGO Centre for Public Interest Litigation (CPIL) said though CBI maintains that there were 5,800 conversations, it has prepared the transcript of only 3,000 such conversations.

86

The Supreme Court had on Dec 1, 2010 directed that the original tapes containing the conversation between Radia and others pertaining to the 2G spectrum allocation case be handed over to it in a sealed cover. The direction from the bench had come after the government had submitted that it has no objection in handing over the complete set of tapes in the wake of apprehensions that the tapes may be destroyed. Subramanium had said that he has got instructions that there was no objection in handing over the tapes and the court can give direction for preserving them in whatever way it thinks best. Dec 2, 2010: SC comes down heavily on Raja for bypassing and overruling PMs advice to defer allocation of 2G spectrum by a few days. The Supreme Court on Dec 2, 2010 came down heavily on former telecom minister A Raja for "bypassing" and even "overruling" Prime Minister Manmohan Singh's advice to defer the allocation of 2G spectrum by a few days. The apex court also took strong exception to the tone and tenor of Raja's letter to the Prime Minister, saying it amounted to showing "disrespect" to the highest authority in the country.

The Bench of justices GS Singhvi and AK Ganguly said Raja had not paid heed to the Prime Minister's letter asking him to wait for some days before taking any action on the allocation of spectrum. Resuming hearing on the petition by NGO, Centre for Public Interest Litigation (CPIL, on the spectrum scam, the court raised questions on Raja ignoring the Law ministry's advice seeking opinion of the AG as "out of context".

The court made the remarks after noting that the Law Minister has given an opinion that the matter be referred to the Empowered Group of Ministers (EGOM) for seeking the opinion of the law officers like the Attorney General and Solicitor General.

Andhyarujina, who faced a volley of questions, tried to impress upon the Bench that Raja showed no disrespect to the Prime Minister, who, he said, was entitled to know everything about the allocation of spectrum. The apex court said Raja should have

87

written back to the Law minister when the latter had expressed certain reservations and there was no reason why he should have written a letter to the Prime Minister. Dec 8, 2010: SC asks Centre to consider setting up of a special court to try 2G spectrum scam case A Bench of Justices G S Singhvi and A K Ganguly said, in view of the magnitude of the offence, the government should examine the idea of setting up special courts as otherwise the objective of the Prevention of Corruption Act and Foreign Exchange Management Act could not be achieved. The court was hearing arguments on a petition seeking a court-monitored probe by the Central Bureau of Investigation (CBI) or a Special Investigating Team (SIT) probe into the Rs 1.76 lakh crore scam. Verdict reserved The court reserved its order on the case. The apex court indicated that it might monitor the probe and the CBI would be asked to file periodic status reports. The Bench also asked the CBI to probe the role of State Bank of India, Corporation Bank, Canara Bank, Allahabad Bank and others, which lent thousands of crores of rupees to some telecom service providers in the form of bank drafts before the letter of intent for allocation of spectrum was issued to them by the Department of Telecommunication in January 2008. Senior advocate K

KVenugopal, who appeared for the CBI, sought time till January 30,2011 to submit a report as he has to go through the bank data and the time of issuance of drafts.

On the amount of money involved in the 2G scam, the bench observed that there used to be scam of few crores of rupees in 1990s, but now all barriers of our understanding of finances has been crossed as lakhs of crores of rupees are involved in them. The bench also sought a reply from Solicitor General Gopal Subramanium on setting up a special court to try offences of huge financial magnitude. However, Venugopal opposed setting up an SIT to monitor the CBI probe, saying the investigating agency is an independent body capable of probing the scam. Dec 14, 2010: Another PIL in SC seeking cancellation of new telecom licences and 2G spectrum allocated during Rajas tenure.

88

The Supreme Court on Dec 14, 2010 issued notice to the central government on the plea seeking cancellation of 2G spectrum licenses allocated during the tenure of former telecom minister A Raja. The Apex Court also issued notices to 11 companies which allegedly did not fulfil the roll-out obligations as per the terms and conditions of allocation of the spectrum. "After considering submission of the petitioner's counsel that since Trai has sent a letter dated November 15, 2010 to secretary, DoT, which indicated that many companies have not complied with the roll out obligation and not started the services, we deem it fit to entertain the petition," the bench said. The bench was hearing a petition filed by an NGO Centre for Public Interest Litigation seeking cancellation of the licenses alleging that all norms were violated. The companies which were issued notices were Etisalat, Uninor, Loop Telecom, Videocon, S-Tel, Allianz Infra, Idea Cellular, Tata Teleservices, SistemaShyam Teleservices, Dishnet wireless and Vodafone-Essar. The bench was also hearing the petition filed by Janata Party Chief Subramanian Swamy who has also sought identical directions. However, the bench asked Swamy to make the companies, who have not fulfilled the roll out obligations, as parties, and then it will hear the matter along with the CPIL petition. Advocate Prashant Bhushan, appearing for the CPIL, elaborated the grounds for the cancellation of the 2G licenses. The bench also questioned the silence of Trai, which is the highest regulatory authority in the telecom sector, on the issue of alleged delay in fulfilling roll-out obligations of the companies which were issued 2G spectrum licenses. When contradictions in the actual loss to the national exchequer was mentioned, the bench said it will be for the government to spell out the actual loss suffered by the national exchequer in the allocation of the spectrum which was done by allegedly flouting several norms. However, when Bhushan said that CAG report has given the amount, the bench said it is not the government's version. Bhushan submitted that there was a huge loss to
89

the government as the licenses were sold to other entities next day after its allocation at three times the original price. However, the bench said that the amount of loss has now become a debatable issue. When Bhushan made a submission that Telecom Minister KapilSibal had disputed the CAG report on the presumptive loss of 1.76 lakh crore (Rs 1.76 trillion) saying it was not correct, the bench said, "We cannot take cognisance of that as it is not part of the record." A bench comprising justices G S Singhvi and A K Ganguly sought the response from the Department of Telecom and the companies within three weeks and posted the matter for hearing on February 1. Janata Party chief Subramanian Swamy had moved the Supreme Court seeking cancellation of the 2G spectrum licences allotted during the tenure of A Raja allegedly in violation of all norms and procedure causing huge loss to the state exchequer. The PIL filed by Swamy had sought a direction to the government for holding a fresh auction for eligible entities for all the 122 licences in 22 circles across the country. Swamy had alleged in his petition that the allotment of spectrum, which according to the CAG report has caused a loss of Rs 1.76 lakh crore (Rs 1.76 trillion) to the state exchequer, has been sustained despite judgments of the Delhi high court that struck down the policy of allocating radio waves at the 2001 price on first-come-first-served basis in 2007-08. Sibal on Friday had rejected the estimates of the Comptroller and Auditor General on the losses of Rs 1.76 lakh crore (Rs 1.76 trillion) on account of allocation of 2G spectrum to telecom operators saying it "had no basis and was utterly erroneous". Asserting that there were actually no losses to the exchequer, Sibal said "CAG has done injustice to itself and the Opposition is doing injustice to aamaadmi." We are extremely pained at methodology adopted by CAG for arriving at 2G spectrum (allocation loss) figures that have no basis," Sibal had said. Swamy'spetiton was second after an NGO, Centre for Public Interest Litigation, filed an identical PIL on December 14, 2010, seeking cancellation of the licences for 2G
90

spectrum after the apex court decided to monitor the probe into the scam by CBI and Enforcement Directorate. The Janata Party leader in his petition contended the Department of Telecom, then headed by Raja, had arbitrarily and with malafide intention to benefit certain entities advanced the cut-off date for making application for allocation of 2G spectrum from October 1 to September 25, 2007. Swamy submitted DoT changed the cut-off date without consulting the Trai and gave a go-bye to various norms to benefit Raja's four favoured firms--Swan, Unitech, Loop and Datacomm. There has been allegation that Swan was owned by Reliance Infocom, while real estate major Unitech later entered into a joint venture with Telenor of Norway and Loop and Datacom were owned by Ruia Group and Videocon respectively. In later November, Sibal had said that the government would send notices to 85 companies asking why their licences should not be cancelled for suppressing facts. These telecom firms will be given 60 days within which to respond, he had said. The Department of Telecom will issue notices to telecom companies which were ineligible to get spectrum. Many companies applied for 2G licences may not have disclosed all facts, Sibal had said Dec 15, 2010: Swamy files petition in a Delhi court seeking his inclusion as a public prosecutor in 2G spectrum case Janata Party President Subramanian Swamy on Dec 15, 2010 filed a petition in a Delhi court seeking his inclusion as a public prosecutor in the 2G spectrum case. In his petition filed before Special CBI Judge Pradeep Chaddah, Swamy pleaded that the court should take cognisance of his plea. Swamy submitted that he may be appointed as a public prosecutor in the case and also sought a direction from the court that the CBI should assist him in the investigation. After hearing Swamy, the court reserved its order for January 7, 2011 on his complaint also seeking prosecution of former Telecom Minister A Raja in the case.

91

Swamy approached the CBI court following up on the Union governments argument late last month in the Supreme Court that there was no question of granting sanction to prosecute Raja when there was no complaint filed against him in a competent court. Attorney General G E Vahanvati had contended this while terming Swamys communication to Prime Minister Manmohan Singh for grant of sanction against Raja as misconceived and premature. Dec 16, 2010: SC decides to monitor the CBI inquiry A bench of Justices A.K. Ganguly and G. Singhvi directed the CBI to probe the grant of spectrum licences since 2001, thereby bringing the previous NDA government under the ambit of the inquiry. The court sent out a strong message to the CBI and the Enforcement Directorate not to be influenced by anybody in the 2G probe. The CBI has been asked to file a status report on the probe by February 10 next year. Jan 4, 2011: Swamy moves SC seeking cancellation of 2G spectrum licences Janata Party chief Subramanian Swamy moved the Supreme Court seeking cancellation of the 2G spectrum licences allotted during the tenure of former telecom minister A Raja allegedly in violation of all norms and procedure causing huge loss to the state exchequer. The PIL filed by Swamy sought a direction to the government for holding a fresh auction for eligible entities for all the 122 licences in 22 circles across the country. He alleged the allotment of spectrum, which according to the CAG report has caused a loss of Rs 1.76 lakh crore to the state exchequer, has been sustained despite judgments of the Delhi High Court that struck down the policy of allocating radio waves at the 2001 price on first-come-first-served basis in 2007-08. Swamy's petition was second after an NGO, Centre for Public Interest Litigation (CPIL), filed an identical PIL on December 14, 2010, seeking cancellation of the licences for 2G spectrum after the apex court decided to monitor the probe into the scam by CBI and enforcement directorate.

92

The Janata Party leader in his petition contended the department of telecom, and then headed by Raja, had arbitrarily and with malafide intention to benefit certain entities advanced the cut-off date for making application for allocation of 2G spectrum from October 1 to September 25, 2007. Swamy submitted DoT changed the cut-off date without consulting the Telecom Regulatory Authority of India (TRAI) and gave a go-bye to various norms to benefit Raja's four favoured firms--Swan, Unitech, Loop and Datacomm. There has been allegation that Swan was owned by Reliance Infocom, while real estate major Unitech later entered into a joint venture with Telenor of Norway and Loop and Datacom were owned by Ruia Group and Videocon respectively. "All of these had an early, clandestine, undue and unauthorized intimation of the novel changed prerequisites and were therefore able to fulfill immediately, wellnigh instantaneously, the paperwork and payment of license fees," the petition alleged. "This is particularly intriguing since license fee rates (set in the region of Rs 1621 crores a piece), were officially intimated only on that date; yet the favored four were able to produce demand drafts for these huge amounts literally at a moment's notice," he alleged. Swamy claimed that in less than a year, by September-October 2008, all Rajas four "cronies" (favored companies) had divested themselves of part of their licenses at enormous profit. The petition alleged that Swan sold 45% of its shares to Etisalat of the United Arab Emirates and Unitech Wireless sold 60% of its shares to Telenor while Tata Teleservices sold 26% of its shares to DoCoMo of Japan. The petition said DoT had received 575 applications for grant of licenses from 46 companies for all the 22 service areas which were equally entitled to issue of the desired licenses. Swamy said if the government has maintained that spectrum is a scarce resource and it was not possible to allocate it in respect of all pending applications then some equitable and reasonable selection criteria of allottees had to be worked out.

93

He contended the licences already allotted needs to be cancelled as DoT not only ignored the advice of the ministry of law and justice but also did not follow the suggestions of the Prime Minister and went ahead with issuing 85 of the 122 licenses to ineligible entities, causing a huge loss to the state exchequer, perhaps as high as Rs 1, 76,000 crores. Jan 5, 2011: Swamy moves SC, seeks cancellation of all 2G licences After giving some anxious moments to the PMO over the alleged silence on the plea for grant of sanction to prosecute the then telecom minister A Raja in the 2G spectrum scam, Janata Party president Subramanian Swamy again moved the Supreme Court to seek cancellation of all mobile service licences issued during Raja's tenure. Alleging that the allocation of spectrum during Raja's tenure as telecom minister was arbitrary, Swamy in his writ petition said that all of those should be cancelled and a fresh action be held inviting bids from all the eligible applicants who applied before the original cut-off date of October 1, 2007. The cut-off date was mentioned as October 1, 2007 but was later changed to September 25, 2007, through a press release issued on October 10, 2007, thus eliminating many applicants allegedly to favor the select few. NGO People's Union for Civil Liberties (PUCL), on whose appeal the SC had last month agreed to monitor the probe by the CBI and Enforcement Directorate into the 2G spectrum scam, has already filed a PIL seeking relief identical to that requested for by Swamy. It was Swamy who moved the SC against the Delhi HC order on his request for grant of sanction for Raja's prosecution in the spectrum scam. The SC had sought an affidavit from the PMO about its 11-month long silence on his request dated November 29, 2009, before telling him in March 2010 that CBI was inquiring into the matter. Jan 10, 2011: Supreme Court issues notice to Centre on the plea seeking cancellation of 2G licenses. Also issues notices to 11 companies which allegedly did not fulfil the roll-out obligations or were ineligible The Supreme Court issued notices to the centre and the telecom ministry on petitions seeking cancellation of 2G spectrum allocation during the tenure of former

94

telecom minister A Raja. The apex court also wondered how telecom minister Kapil Sibal could doubt the CAG finding when on that very basis the CVC had asked the CBI to register a case in the 2G scam. The court also made TRAI a party after taking exception to its silence on violation of licence agreements by those who got spectrum and recommending cancellation of licence only after A Raja's exit and SC taking up hearing of petitions. The court asked the companies to respond by February 1. A Bench of Justices G.S. Singhvi and A.K. Ganguly also issued notice to the 11 companies. The telecom companies to whom court issued notice are Etistat, Vodafone, Uninor, Loop Telecom, Videocon, S Tel, Allainz Infra, Idea Cellular, Tata Tele services, Sistema Shyam Teleservices and Dishnet Wireless.. The apex court is hearing two petitions seeking cancellation of all the licenses of 2G spectrum issued by former communications minister A Raja. Janata Party president Subramaniam Swamy and advocate Prashant Bhushan have moved court to cancel all the 122 licenses. The court had upheld the plea of Swamy. Kapil Sibal had questioned the figure of Rs 1.76 lakh crore arrived at by the CAG in calculating the losses in 2G spectrum allocation. The CAG report had made a severe indictment of A Raja for flouting rules in the allocation of 2G spectrum. The bench also questioned the silence of TRAI, which is the highest regulatory authority in the telecom sector, on the issue of alleged delay in fulfilling roll-out obligations of the companies which were issued 2G spectrum licenses. When contradictions in the actual loss to the national exchequer was mentioned, the bench said it will be for the government to spell out the actual loss suffered by the national exchequer in the allocation of the spectrum which was done by allegedly flouting several norms. Bhushan submitted that there was a huge loss to the government as the licenses were sold to other entities next day after its allocation at three times the original price. However, the bench said that the amount of loss has now become a debatable issue.

95

Jan 30, 2011: Governments decision to regularise licences of the companies which failed to meet the deadline for roll-out obligation challenged in the Supreme Court Feb 2, 2011: Raja, former Telecom Secretary Siddartha Behura and Rajas former Personal Secretary R K Chandolia arrested and next day they were remanded in CBI custody Feb 8, 2011: Raja remanded to two more days of CBI custody. Behura and Chandolia sent to judicial custody A. Raja was remanded to two more days of CBI custody by a court for further interrogation after the agency submitted that he was not divulging any useful information regarding his role in the 2G scam. Special judge O P Saini, however, sent former telecom secretary Siddartha Behura and Rajas former personal secretary R K Chandolia to Tihar Jail under judicial custody as the federal agency said it no longer needs them in its custody. Raja was in CBI custody till 10 February. The trio, arrested by the agency on 2 February for their alleged role in the 2G spectrum allocation scam, involving a loss of Rs. 22,000 crore to the public exchequer as per the CVC estimates, were produced before the special judge following the expiry of their five-day custody with the CBI. Refuting allegations by Rajas counsel Ramesh Gupta that the agency had not disclosed to the court the outcome of the probe conducted so far in this case, Akhilesh said, The case diary has already been submitted to the court. Each and everything cannot be disclosed in the open courtroom. "Some more documents are to be recovered and accused A Raja is to be confronted with them," senior CBI prosecutor Akhilesh submitted. About Behura and Chandolia, the CBI counsel said the agency no longer needs their custody. "The two can be sent to Tihar Jail under judicial custody," he said.

Feb 8, 2011: Shahid Usman Balwa, promoter of Swan Telecom, arrested by CBI

96

Shahid Balwa, director of Etisalat DB Telecom, being investigated for his alleged role in the multi-crore 2G spectrum scam, was arrested in Mumbai. Balwa was brought to Delhi on transit remand, said CBI spokesperson Vinitha Thakur. Balwa has earlier been summoned by the CBI, but did not turn up citing a death in his family. The agency has also sent a letter rogatory (LR) to Mauritius in connection with the scam, with specific questions on Swan Telecom, which was given 2G licence. The letter rogatory has been sent to ascertain how Swan built the corpus to acquire 2G licence, for which it paid Rs 1,537 crore. It also seeks to know the companies incorporated in the licence and the sister companies of the group, a source said. The agency had to file a status report in SC. Raja, his former personal secretary R K Chandolia and former telecom secretary Sidhartha Behura were under custody. CBI also questioned former Wireless Advisor (Telecom), R P Aggarwal and K Sridhar, former Telecom Commission member. Feb 10, 2011: SC asks the CBI to bring under its scanner corporate houses which were beneficiaries of the 2G spectrum. Raja remanded to CBI custody for four more days by a special CBI court along with Balwa Broadening the net, the Supreme Court asked the CBI to bring under its scanner corporate houses which were beneficiaries of the 2G spectrum scam without being influenced by their status be it millionaires or whether they are on the Forbes list. Giving a free hand to the investigating agency and setting the contours of the probe, the Court asked the government to set up a special court exclusively to try the spectrum scam case. Advocate Prashant Bhushan, appearing for an NGO, Centre for Public Interest Litigation, pointed out that the agencies have not questioned the heads of several companies including the Swan technology, which was controlled by Anil Ambanis Reliance Group, when the spectrum was allocated. The apex court said freedom of probe agencies should not be curtailed and they should go beyond the role of the four persons already arrested including A Raja and tell the names of conspirators. It questioned CBIs strategy of seeking short custodial remands of the accused and said it must have free hand to question anyone. There is something which is
97

surprising. CBI must have a free hand to question anyone. Whether its freedom is curtailed by seeking short remand....complexity is involved. It is a very complicated matter. We feel that investigating agency must be given free hand to seek longer remand. Otherwise the whole purpose of investigation is frustrated, the Bench said. Feb 14, 2011: Rajas CBI custody extended for three more days. Balwas custody extended for four days Former Telecom Minister A Raja was remanded to CBI custody for 3 more days for interrogation on his alleged role in 2G spectrum allocation scam along with Swam Telecom-promoter Shahid Usman Balwa whose custody was extended for four days. Special Judge O P Saini extended Raja's custody, ignoring his allegation that CBI was being driven by political motive instead of probing the case against him.

"What is the purpose of police custody? (It's not clear) whether they (CBI) want it for unearthing the conspiracy or have political motive. CBI should not make it a political game and they should investigate only," Raja's counsel Ramesh Gupta contended before the court, opposing CBI's plea for extension of his client's custody. However, the judge said "the crime is enormous in nature and its investigation is time-consuming. Accordingly, considering the enormity of the crime, complex and complicated nature of the investigation, voluminous documents involved in the case, I find that the prayer for further custodial interrogation of the accused persons is justified.

The 47-year-old DMK leader, who has been facing an intense grilling by CBI sleuths for the last 11 days at the agency headquarters, opposed CBI's plea saying "no new facts have come on record during the previous police custody remand."

Seeking extension of remand, senior public prosecutor Akhilesh, said both the accused were confronted with each other during the custodial interrogation but they were "evasive in their replies". "Both the accused have been evasive in their replies and as such, their interrogation could not be completed. In this case, the documents are quite voluminous and the nature of the case is quite difficult and complicated. As such, their interrogation could not
98

be

completed,"

CBI

said.

Opposing CBI's plea for extension of Balwa's custody, his counsel Vijay Aggarwal contended before the court that his client was merely engaged in bonafide commercial transactions and had not violated any law. He said Balwa has been cooperating with CBI throughout the investigation. Feb 17, 2011: Raja Sent To Tihar Jail under Judicial Custody A Raja, arrested for his alleged role in 2G Spectrum allocation scam, was sent to Tihar Jail by a Delhi Court under 14-days' judicial custody. The judge also directed the Tihar Jail authorities to let the former minister have access to home-made food, besides his medicines. The court gave this direction to the jail superintendent on a plea made by Raja's counsel Ramesh Gupta. Raja was arrested on February 2 for his alleged role in 2G spectrum allocation scam, which, as per the CBI, has caused a pecuniary loss of Rs 22,000 crore to the state exchequer. Feb 18, 2011: Balwa Sent To Judicial Custody Swan Telecom promoter Shahid Usman Balwa, arrested for his alleged involvement in the 2G spectrum scam along with former Telecom Minister A Raja, was sent to Tihar Jail after a Delhi court remanded him in judicial custody. The Dynamix Balwas (DB) group managing director was produced in court following expiry of his four-day CBI custody. The court took into account CBI counsel Akhilesh's submission that he is no longer required for interrogation but he may be remanded in judicial custody as the probe into the case is not yet complete. The court also directed Tihar authorities to consider Balwa's plea to have homemade food and special orthopaedic mattress and pillows in jail as per the relevant rules after his counsel pleaded for special privilege for his client saying he suffered from acute back pain. The CBI had also questioned ADAG chairman Anil Ambani at its headquarters, confronting him with Raja and Balwa, amid allegations that his group received favours from Raja in getting dual technology and a role for Reliance Telecom in promoting Swan Telecom.

99

Ambani is believed to have clarified to the CBI "about the ongoing issues" related to the possible role of Reliance Telecom Limited (RTL), a subsidiary of ADAG, in Swan. Feb 24, 2011: CBI Tells A Delhi Court That Balwa Facilitated Transaction To Kalaignar TV Feb 28, 2011: Raja seeks judicial proceedings through video conferencing stating that he faces threat to life from fellow prisoners A. Raja moved an application before a court seeking conduct of court proceedings from Tihar Central Jail through videoconferencing, when his judicial remand ends. Special Judge (CBI) O.P. A lawyer representing Mr. Raja said this would help save time incurred in transporting Mr. Raja from Tihar to Patiala House on the day of the hearing. Mr. Behura's counsel, senior advocate S.S. Gandhi, sought from Mr. Saini a copy of the 18-page order that the judge had delivered on February 25 while disposing of the bail applications moved by Shahid Usman Balwa and R.K. Chandolia to ensure that the same arguments were not made before the court again. A counsel for Mr. Raja also requested for a copy of the order. The CBI in its reply to Mr. Behura's bail application said that Mr. Raja and Mr. Behura had ignored serious issues raised regarding further verification of eligibility conditions of Swan Telecom and had dishonestly approved the file on September 1, 2008 for issue of Letters of Intent (LOI) for 13 telecom service areas. The CBI also opposed the bail application stating that the investigation has prima facie revealed that Mr. Behura in conspiracy with Mr. Chandolia and others made arrangements at Sanchar Bhavan for distribution of LOIs and responses of the Department of Telecommunications (DoT) in an arbitrary and unfair manner. The investigating agency said that the LOIs and responses of the DoT were neither distributed simultaneously nor on a first-come, first-served basis, but instead were distributed in a manner designed to benefit Swan Telecom and other companies. The CBI added that in furtherance of the said conspiracy, Mr. Behura played a vital role in allocating the spectrum in an arbitrary and unfair manner to Swan Telecom in the Delhi Telecom circle, where availability of 2G spectrum was not adequate to cater to the requirements of all spectrum applicants. The CBI sough more time from
100

the court to reply to Mr. Behura's application to defreeze his bank accounts to pay for the medical expenses incurred for a surgery performed on his wife. Mar 1, 2011: CBI tells SC that 63 persons are under scanner. Raja allowed by CBI court to appear before it via video-conferencing Sixty-three persons, including promoters and CEOs of 10 telecom firms have come under its scanner in the 2G spectrum case, the CBI told the Supreme Court which expressed satisfaction over the ongoing probe. The central government, which is also party to the case, informed a bench of justices G S Singhvi and A K Ganguly that it is in favour of setting up a special court to try the accused in the 2G case and the law minister has written a letter to the Delhi high court chief justice asking him to constitute a court and identify a judge for this purpose. Senior advocate K K Venugopal, representing the CBI, apprised the bench about the progress by the CBI and placed the probe status report in a sealed cover. "63 persons including promoters and CEOs of 10 companies have come under the scanner of the CBI in its probe into the 2G spectrum scam," Venugopal said. The bench asked the CBI and the Enforcement Directorate to place before it their reports about the investigation by March 10 and posted the matter for further hearing on March 15. Senior advocate Harish Salve, appearing for Tata group of companies, meanwhile, pleaded for in-camera proceedings. Earlier on February 10, while hearing a plea by Centre for public interest litigation for probe into the 2G case, the Supreme Court had asked the CBI to widen its probe ambit and include into it high flying corporate honchos without getting influenced by their status. While giving the CBI a free hand to probe the case, the court had also asked the government to set up a special court to exclusively try the spectrum scam case accused. "We have a large number of persons who think themselves to be the law. Law must catch them. It should be done with greater expedition. Merely that they are on the Forbes list or they are millionaires does not make any difference," the bench had remarked after perusing the CBI's probe status report in which names of big corporate houses and their officials had been mentioned.
101

But Counsel Prashant Bhushan appearing for petitioner CPIL had pointed out to the court that the agencies have not questioned the heads of several companies including those of Swan Technology, which was controlled by Anil Ambani's Reliance Group, when the spectrum was allocated. Seeking to widen the CBI's probe ambit, the apex court had said the agency's freedom to investigate the matter should not be curtailed in any way and asked the agency to go beyond the role of the four persons, including former Telecom Minister A Raja, already arrested in the case. "This investigation has led to prima-facie conclusion about the culpability of four persons. What about the beneficiaries. They are part of a larger conspiracy. We want to know about them. You (CBI) take instructions and tell us what action you are planning to take," the bench had told the CBI. Mar 14, 2011: The Delhi High Court sets up special court to deal exclusively with 2G cases. Balwa also allowed to appear via video-conferencing The delhi high court has decided to set up a special court exclusively to hold the trial in the 2g spectrum allocation scan for expeditious hearing in the case. The high court sources told PTI that CBI judge O.P. Saini, who is dealing with the case, has been appointed as the special judge to exclusively deal with the matter. The decision came in light of the Supreme Courts remark on setting up a special court in view of the magnitude of the offense. Mar 29, 2011: SC permits CBI to file charge sheet on April 2 instead of March 31. Two more persons Asif Balwa and Rajeev Agarwal arrested Apr 2, 2011: The CBI files its first charge sheet in the 2G spectrum allocation scam A Raja and eight others including former telecom secretary Siddharth Behura and three telecom companies were today indicted in the 2G spectrum allocation scam in which the CBI filed its first charge sheet pegging the loss to the exchequer at Rs 30,984 crore. The companies named in the charge sheet filed in a Delhi court include Reliance Telecom, Unitech Wireless and Swan Telecom. A supplementary charge sheet was to be filed later in the month in the case that is being monitored by the Supreme
102

Court. The charge sheet running into about 80,000 pages was filed before Judge O P Saini in the special court constituted exclusively to try the case that has hit the UPA government politically in less than two years of its return to power. Charges of cheating, forgery, criminal conspiracy and corruption have been levelled against Raja, his Private Secretary R K Chandolia, Behura and Swan Telecom promoter Shahid Usman Balwa. The CBI said that investigation into issuance of new Unified Access Services Licences and subsequent allocation of 2G Spectrum during 2008-09 has established commission of offences under Indian Penal Code and the Prevention of Corruption Act. Others named in the charge sheet include Vinod Goenka, a Director of Mumbaibased DB Realty, which was also the promoter of Etisalat DB, Sanjay Chandra, Managing Director of Gurgaon-based real estate company Unitech and Unitech Wireless(Tamil Nadu) Pvt Ltd and Gautam Doshi, Hari Nair and Surendra Pipara, Group Managing Director and two Senior Vice Presidents of Mumbai-based Reliance Telecom Company. The Comptroller and Auditor General of India had estimated a presumptive loss of Rs 1.76 lakh crores in the issuance of 2G spectrum licenses. Apr 25, 2011: CBI files second charge sheet and court issues summons to Kanimozhi, Sharad Kumar and Karim Morani taking cognizance of the charge sheet In a move that could possibly impact on Congress-DMK relations, the CBI has charge sheeted M. Karunanidhis daughter and Rajya Sabha MP Kanimozhi in the 2G Spectrum scam. A special court in New Delhi summoned Kanimozhi and four others to appear before it on May 6 as accused in 2G spectrum case saying "there is enough incriminating material on record" to proceed against them. The court issued summons also to Kalaignar TV managing director Sharad Kumar, Karim Morani, director of Cineyug Media and Entertainment (Pvt) Ltd, who are named as accused, for May 6. The three have not been arrested so far.

103

"There is enough incriminating material on record to proceed against the accused persons," Special Judge O P Saini said. The investigating agency, however, has not named Karunanidhi's wife Dayaluammal, whose name had figured in the 2G probe, as the accused in the supplementary chargesheet. Kanimozhi has been charged with section 7 and 11 of the Prevention of Corruption Act. The sections deal with acceptance of alleged gratification. The court's summons came after CBI filed the second chargesheet in the 2G spectrum case. The court also directed CBI to produce the Swan Telecom promoter Shahid Usman Balwa's cousin Asif Balwa and Rajeev Agarwal, directors of Kusegaon Fruits and Vegetables Pvt Ltd, who have been chargsheeted along with Kanimozhi and were in judicial custody. CBI has charged Kanimozhi with having entered into a criminal conspiracy with the other accused under the Indian Penal Code and also under section 7 and 11 of the Prevention of Corruption Act which deals with acceptance of alleged gratification. The chargesheet said the investigation into the case disclosed that Rs 200 crore had travelled from DB Realty to Kalaignar TV. Kanimozhi, Dayaluammal and Sharad Kumar, managing director of Kalaignar TV, have 20, 60 and 20 per cent shares in the channel. Meanwhile, Tamil Nadu Chief Minister M Karunanidhi evaded questions about DMK planning to quit the Union cabinet after his family members were named by CBI in the second generation mobile telephony spectrum allocation scam. "I don't know," he claimed to a question on reports that his daughter Kanimozhi, MP and wife Dayalu could be named. The 87 year-old leader went on to add that the names will be revealed as the media would report it after the charge sheet was filed in a Delhi court. Responding to reports about DMK's possible exit from the UPA cabinet in this connection, he shot back "Is that your desire?" Taking a dig at the media, he said they would report "the "slightest of dirt" on DMK, but said he would still continue to read the newspapers. Former Telecom Minister A Raja had been arrested in connection with the alleged scam, and the investigating agency had questioned Dayalu and Kanimozhi in Chennai recently.

104

May 6, 2011: Kanimozhi and Sharad Kumar appear before court and file bail pleas while Morani sought exemption from appearance on medical ground In a surprise move, Rajya Sabha member Kanimozhi and Kalaignar TV director Sharad Kumar filed bail applications in the special court hearing the 2G spectrum allocation scam case, ahead of the order on framing of charges. The court has listed the matter for hearing on October 1. The two have been in judicial custody at the Tihar Central Jail here since May 20. On June 20, the Supreme Court denied Ms. Kanimozhi and Mr. Kumar bail, but allowed them to file fresh bail applications in the special court under Section 439 of the Criminal Procedure Code after charges were framed. The special court was due to pass an order on framing of charges on September 15, but heard additional arguments relating to the Telecom Regulatory Authority of India's report on spectrum pricing on that date and is yet to dispose of applications relating to filing in court of the Union Law Ministry's note on the definition of an associate' company. The CBI has termed the note unsolicited. Ms. Kanimozhi also argued that the Supreme Court's order entitled her to invoke provisions of Section 437(1) of the Cr.PC, which allows for bail if a person is under the age of sixteen years or is a woman or is sick or infirm. Claiming innocence, Ms. Kanimozhi said the offences made out against her were based on no evidence and she was falsely implicated because of biased media reporting and on the basis of conjectures and surmises. The application said the allegation of her strong association with co-accused A. Raja is mischievous and misleading. There is absolutely no evidence of her involvement in conspiracy. She also denied having benefited from, or having had any role in, the alleged conspiracy to allocate UAS licences and spectrum in various telecom circles and grant other undue favours to Swan Telecom during 2007-2009. Her bail petition said she was a postgraduate, a Member of Parliament and the Whip of the DMK in the Rajya Sabha and had a minor school-going child to take care of and that her husband was employed abroad.

105

In his application, Sharad Kumar said he was only a Director and a 20 per cent minority shareholder in Kalaignar TV and not the CEO or Managing Director. Both Ms. Kanimozhi and Mr. Kumar said the Rs.200 crore received from Cineyug Films was a loan which was repaid in due course. Mr. Kumar's plea said he was an MBA and a respectful person having deep roots in society, and he is having two very young school-going children to be taken care of. He has to take care of the children and his own aged mother. His wife is a homemaker and needs his emotional and financial support. May 6, 2011: SC issues contempt notice to Sahara India managing director Subroto Roy and two others for alleged interference in the ongoing ED investigation into the 2G spectrum case The Supreme Court issued a contempt of court notice to Sahara India Managing Director Subroto Roy and two others on a petition alleging interference in the ongoing Enforcement Directorate (ED) investigation into the 2G spectrum scam.

The bench of Justices G.H. Singhvi and Asok Kumar Ganguly said the threat to publish a series of stories by Sahara Samay about Rajeshwar Singh, assistant director ED, came after the agency sent summons to Roy.

The court said it was prima facie satisfied that an attempt had been made to interfere with the investigation into 2G telephone spectrum scam being carried out by investigating officer Rajeshwar Singh. The court restrained Sahara Samay and its channel from carrying out any story relating to Rajeshwar Singh in respect of the 25 questions it had sent to him. ED says Roy did not turn up before it for questioning despite its repeated notices. It also says Roy's newspaper published an item about Rajeshwar Singh, pointing fingers at him. According to the ED, Roy's Sahara Group transferred Rs.150 crore to Swan Telecom allegedly in connection with the 2G scam, which relates to alleged irregularities in the allocation of spectrum to telecom companies.

106

May 7, 2011: Special CBI Court reserves order on Kanimozhi and Sharad Kumars bail applications A Special Court fixed November 3 as the date for pronouncing its order on the bail applications of DMK MP Ms Kanimozhi and four other accused in the 2G spectrum case. This was after the CBI did not raise any objections regarding bail being granted to them. The court then reserved its order on the bail plea for November 3. The four other accused include Mr Sharad Kumar (Director and promoter of Kalaignar TV), Mr Rajiv B Agarwal and Mr Asif Balwa (directors of Kusegaon Fruits and Vegetables Pvt Ltd) and Mr Karim Morani (director of Cineyug Media and Entertainment Pvt Ltd). These five were named accused in the supplementary chargesheet filed by the CBI on April 25 before the Special Court. The court had framed charges against the 17 accused in the case including Ms Kanimozhi and former Telecom Minister Mr A Raja. During the proceedings, the special public prosecutor Mr U U Lalit, representing the CBI, said bail could be granted to these five accused subject to the court's discretion and by imposing conditions including asking them to be present in the court as and when required during the hearing of the case. Opposes bail plea of Shahid Balwa, Chandolia However, the CBI counsel opposed the bail application of two other accused Mr Shahid Balwa (promoter of Swan Telecom) and Mr R K Chandolia (former personal secretary to Mr Raja) -- saying that if one takes into account only the specific charges framed against these two, they could lead to a maximum punishment of seven years if they are found guilty. These specific charges are apart from the "umbrella" charges (against all the accused) of criminal conspiracy as well as criminal breach of trust (which has a maximum punishment of life imprisonment). On the other hand, the specific charges framed against the other five accused including Ms Kanimozhi would lead to a maximum punishment of five years' imprisonment. Therefore, one can make such a distinction, the CBI counsel said.

107

Mr Shahid Balwa and Mr Chandolia were named accused in the main chargesheet filed on April 2. During the hearing earlier in the day, citing a June order of the Supreme Court, Ms Kanimozhi's counsel Mr Altaf Ahmed told the court that according to that order, Ms Kanimozhi and Mr Sharad Kumar was at liberty to move their bail application before the Special Court after the order on framing of charges. Mr Ahmed also said Ms Kanimozhi, being a woman, could be enlarged on bail and referred to a special provision under law (Section 437 of the Code of Criminal Procedure) in this regard. He also said the court could impose any condition as it deems fit on Ms Kanimozhi including asking her to be present during the proceedings whenever required. Besides, he indicated that the trial could take a long time as there are 17 accused, 154 witnesses and documents of over a lakh pages. Ms Kanimozhi was arrested on May 20 and has since been lodged in Tihar jail. May 14, 2011: Special CBI Court defers order on their bail pleas for May 20 After being decimated in the elections and knocked out of power in Tamil Nadu, the Dravida Munnetra Kazhagam escaped another potential embarrassment as the CBI special court deferred its verdict on the bail application of Rajya Sabha MP Kanimozhi and Kalaignar TV managing director Sharad Kumar to May 20. Kanimozhi, the daughter of DMK chief Karunanidhi, and Sharad Kumar hold 20% stake each in the party-controlled Kalaignar TV and have been charged by the CBI in accepting `209 crore as 'illegal gratification' or brides from DB Group in returns for favours former telecom minister A Raja had extended to that company and helping it obtain a telecoms licence. "The order is deferred to May 20," Special CBI Judge OP Saini said after marking the presence of all the accused including 43-year-old Kanimozhi. Justice Saini also asked why the court room contained so many journalists before passing his orders. CBI lawyer AK Singh told reporters outside the court that the Justice Saini's orders were not ready, leading to the verdict being reserved for another week. Kanimozhi was accompanied by husband G Aravindan and DMK parliamentary party leader TR Baalu. The court had on May 7 reserved its order on the bail pleas of
108

Kanimozhi and Kumar after hearing extensive arguments by criminal lawyer Ram Jethmalani who, citing the charge sheet, blamed Raja for the offence attributed to Kanimozhi. May 20, 2011: Special CBI Court rejects bail pleas of Kanimozhi and Sharad Kumar and orders their forthwith arrest saying that there was a possibility of witnesses being influenced considering the magnitude of the crime The Special CBI court dismissed the bail application of DMK member of Parliament Kanimozhi, one of the accused in the 2G case, holding that no concession could be given merely because she is a woman. She has been in jail since May 20. The court also rejected the bail plea of seven others Sharad Kumar of Kalaignar TV; Siddarth Behura, R.K. Chandolia, Shahid Usman Balwa, Asif Balwa, Rajeev Aggarwal and Karim Morani (on health grounds). Special Judge O.P. Saini said: It has been submitted that being a woman, Ms. Kanimozhi is entitled to the beneficial provision [Section 437 Cr.PC] in law. He said the reason for incorporating such a provision was that women are generally considered weak and exploited section of society, both socially and economically, and as such require some extra protection and a sympathetic treatment. But, the accused Ms. Kanimozhi belongs to the upper echelons of society and is also a member of Parliament. By no stretch of imagination can she be said to be suffering from any discrimination on the ground of being a woman alone. Mr. Saini said the facts of the case as well as the charges levelled against the accused are of a very serious nature having grave implications for the economy of the country. Quoting a Supreme Court judgment in the Sathyam case, he said: The ultimate objective was to use public money in a carefully planned manner for personal use with no right to do it. The entire community will be aggrieved if economic offenders who ruin the economy of the state are not brought to book. It was submitted on behalf of Ms. Kanimozhi that she had nothing to do with the alleged transaction of Rs. 200 crore received by Kalaignar TV and that her association with the organisation was much before the registration of the case. And whatever Mr. Sharad Kumar did, he did so on the authority of the board and that he did not do anything on his own.
109

On this contention, Mr. Saini said prosecution witnesses had stated that at the February 13, 2009 board meeting, both Ms. Kanimozhi and Mr. Sharad Kumar participated and he was authorised to raise funds from Cineyug Films (P) Ltd. up to Rs. 200 crore. June 8, 2011: Delhi HC rejects bail pleas of Kanimozhi and Sharad Kumar citing that there are certain prima facie evidences against the accused and they may be in a position to influence the 2G probe DMK leader and Karunanidhi's daughter Kanimozhi will continue to stay in jail asDelhi high court rejected her bail plea. The court also rejected the bail plea of Kalaignar TV MD Sharad Kumar. According to Times Now, rejecting Kanimozhi's bail plea, the court said there was 'sufficient evidence to show criminal conspiracy'. The verdict came as a huge disappointment to Kanimozhi's mother, Rajathi Ammal, who was present in the court and broke into tears as soon as the judge gave the verdict. Kanimozhi had applied for bail on the grounds that she needs to look after her young son, since her husband travels abroad frequently for work. Several DMK leaders including TR Baalu were present in the court as it rejected Kanimozhi's bail plea. June 20, 2011: SC rejects Kanimozhis bail plea A special Supreme Court bench rejected bail pleas of DMK MP Kanimozhi and Kalaignar TV MD Sharad Kumar in the 2G spectrum scam case. However, the SC gave liberty to Kanimozhi to move to trial court afresh for bail after framing of charges in the case. The apex court said she could invoke section 437 of criminal procedure code which provides for grant of bail to women in cognizable offences. This means Kanimozhi and other accused, including A Raja and corporate biggies, must wait in jail for framing of charges before they can move fresh bail pleas. The case was heard by a bench headed by Justice GS Singvi, who has been monitoring the case since the beginning and had asked searching questions to the government on the role of several influential people in the multi-crore scam.

110

Kanimozhi and Kumar have been accused by the CBI to be involved in the illegal transaction of Rs 200 crore to Kalaignar TV which was alleged to be a bribe given by a telecom operator which had benefited in the scam, PTI reported. Earlier two judges -- P Sathasivam and AK Patnaik -- before whom the matter was listed had recused themselves from the high-profile case. Instead, Justice Singhvi, whose bench has been monitoring the case, will hold a special hearing along with Justice BS Chauhan to decide the bail. According to informed sources, justices P Sathasivam and A K Patnaik conveyed their decision to recuse to Chief Justice SH Kapadia, following which he constituted another bench. Opposing the bail plea, the probe agency contended in its affidavit that Kanimozhi and Kumar were key conspirators and Rs 200 crore transferred to Kalaignar TV was part of the "bribe" amount and not a loan as claimed by the accused. The central agency submitted the special CBI court and later the Delhi high court carefully evaluated material evidence and other factors to refuse bail to them. The court had also asked CBI to come out with a status report on the loss to the state exchequer due to the award of 13 licences to one of the telecom operators and trial proceedings in the CBI special court. Kanimozhi and Kumar moved the apex court seeking bail on June 10 challenging the Delhi high court verdict that rejected their bail on the ground that they have strong political connections and the possibility of them influencing witnesses cannot be ruled out. July 25, 2011: Arguments on Charge begins. Raja seeks to make Prime Minister and former finance minister P Chidambaram as witness. Former Telecom Minister A Raja today told a Delhi court that then Finance Minister P Chidambaram should be summoned and examined as a witness to prove the minutes of a Cabinet meeting that cleared the off-loading of shares by Swan Telecom and Unitech to two foreign firms. A Raja said that the sale of equity by Swan and Unitech to foreign companies was to attract FDI, nothing wrong as per corporate law. Dragging the Prime Minister into the 2G mess, Raja claimed that the finance minister had said that the sale of equity is not illegal adding that he said this in presence of PM and let the PM deny it.
111

He said if policy pursued by him was wrong, then all former telecom ministers since 1993 should also be in jail with him. As telecom minster Arun Shourie distributed 26 licences while Dayanidhi Maran distributed 25 and he distributed 122 licences. Numbers make no difference, however, it is to be noted that none of them auctioned the spectrum. Aug 26, 2011: Special CBI court allows Subramanian Swamy to argue his own case (mainly to address the possible loop holes in CBI investigation of the case) A special CBI court, designated to hear the 2G spectrum scam case, on Aug 26 th, 2011 allowed Janata Party chief Subramanian Swamy to conduct his private complaint in the telecom scam. The court also gave him time for filing an application which seeks to make then finance minister P Chidambaram an accused in the case after he informed the court that one of his applications was pending before the Supreme Court. Aug 30, 2011: ED orders freezing of accounts, attachment of properties worth Rs 223 crore of five companies mainly related to DB Realty under the provisions of Prevention of Money Laundering Act (PMLA) Enforcement Directorate ordered freezing of bank accounts and attachment of immovable properties worth Rs 223 crore of five companies in connection with the alleged bribe of Rs 200 crore paid to Kalaignar TV in the 2G spectrum allocation scam. The value of properties attached of these companies are Dynamix Realty (Rs 134

crore), Conwood Construction and Developers (Rs 22 crore), Nihar Constructions (Rs 1.10 crore), DB Realty (Rs 52 crore) and Eversmile Construction Company (Rs 13 crore). When contacted, representatives of the construction companies said they were awaiting the order. ED has made the CBI chargesheet in this regard as the basis for this order. As per the charge sheets of CBI, a bribe of Rs200 crores was given by Swan Telecom Pvt Ltd. (now M/s Etisalat DB Telecom Pvt Ltd.) to Kalaignar TV through a number of intermediary companies in the garb of loan or share application money.

112

However, the same was returned to Dynamix Realty (a company of Shahid Usman Balwa and Vinod Goenka). Sept 15, 2011: Swamy pleads before special CBI court that P Chidambaram should be made co-accused Janata Party chief Subramanian Swamy Thursday moved a fresh application before a special trial court seeking directions to make Home Minister P. Chidambram a coaccused in the second generation (2G) spectrum allocation case.

The petition before the special court of the Central Bureau of Investigation (CBI), presided over by Judge O.P. Saini, also wanted Chidambarams testimony to be recorded afresh.

Swamy said subsequent to a statement by Prime Minister Manmohan Singh in parliament it was a known fact that former telecom minister A. Raja alone was not responsible for allocating spectrum. Swami, in his application filed under Section 311 of CrPC for summoning witnesses, alleged, Facts clearly show Chidambaram was in collusion and active connivance with the then Minister for Communication and IT, A Raja, to fix the prices at 2001 level jointly and with their unlawful acts both of them thereby caused an unlawful loss to the public exchequer and have taken unlawful gain for themselves.
Sept 22, 2011: CBI defends Chidambaram in SC, blames DoT for all wrongs.

CBI on Sep 22nd, 2011 defended Home Minister P Chidamabaram in the Supreme Court in the 2G scam by blaming the Department of Telecommunication (DoT) for "jumping the gun" in spectrum allocation. He said Chidamabaram, who was then the Finance Minister, cannot be held responsible for the decision not to auction the radio waves as the Ministry of Finance was represented on the issue by the Finance Secretary during its meeting with the Ministry of Telecom then headed by A Raja.
Sept 26, 2011: CBI moves plea for framing fresh charge for criminal breach of trust against Raja, Chandolia and Behura

113

The CBI moved a designated special court for slapping the fresh charge of breach of trust by public servants against former Telecom Minister A Raja and two others in the 2G spectrum allocation case. Special Public Prosecutor U U Lalit filed an application before Special CBI Judge O P Saini, saying a case of criminal breach of trust under Section 409 of the Indian Penal Code is "certainly made out" against Raja, his former private secretary R K Chandolia and former telecom secretary Siddharth Behura.
Sept 29, 2011: CBI says role of Anil Ambani being probed, gives a virtual clean chit to Tata and Videocon group

The Central Bureau of Investigation (CBI) told the Supreme Court that Anil Ambani was being probed in the 2G spectrum case, as three jailed corporate honchos of Anil Dhirubhai Amabani Group (ADAG) have distanced themselves from any wrongdoing. In the same breath, it virtually gave a clean chit to Tata and Videocon groups in 2G spectrum scam.

The agency said it was conducting further investigation to find out the real beneficiaries as the arrested executives of the ADAG group have "resiled" from the statements given by them during the probe of the scam.

The company, in a statement, however claimed that none of its three executives has offered to become approver in the case.

CBI, which refuted the allegation of not probing the role of corporate czars, said the three ADAG executives - Gautam Doshi, Surendra Pipara and Hari Nair - in their statements under section 161 of Code of Criminal Procedure had taken the entire responsibility for the decision but in the Delhi High Court they retracted. Oct 9, 2011: CBI Files FIR Against Maran And His Brother In Aircel-Maxis Deal The Central Bureau of Investigation on Monday conducted simultaneous searches on the premises of the former Union Minister, Dayanidhi Maran, and his elder brother and Sun Network managing director, Kalanithi Maran, in connection with a case arising out of the Aircel-Maxis deal. Special teams conducted the searches in New Delhi, Chennai and Hyderabad, sources in the agency said. Earlier, the CBI registered a case against the Maran brothers as well as against Ralph Marshall and T. Ananda Krishnan of Maxis

114

Communications, Malaysia. The agency has also named three private companies, including SUN Direct TV and Maxis Communications, in the First Information Report (FIR). Oct 10, 2011: The Supreme Court reserves order against Subramanian Swamys plea for a probe into Home Minister Chidambarams role in the 2G scam The Supreme Court today reserved notice against Subramanian Swamys plea for a probe into Home Minister Chidambarams role in the 2G scam. The court opposed the two applications, one filed by Prashant Bhushan asking for the setting up of an SIT to monitor the 2G case, and two, Subramanian Swamys application seeking probe in Chidambarams role. When hearing commenced, the CBI led the charge, followed by the Central government council, both strongly opposing both demands. The CBI said that demands for an SIT, and to make Tata, Chidu and Anil Ambani accused in the case would be throwing a cloud at CBI investigations. Moreover, the SC found CBIs investigations into the case satisfactory. The CBI and the central government also said there has been no precedent of an SIT being set up over and above the CBI. Oct 22, 2011: Special CBI Court finds prima facie evidence to put on trial all 17 accused including Raja on various counts like criminal conspiracy, breach of trust, cheating and forgery The 2G spectrum case reached an important milestone with a Delhi court framing charges against all the 17 accused including former telecom minister A Raja, DMK MP Kanimozhi and corporate honchos.

Special CBI judge O P Saini also ordered that trial in the case will commence from November 11 with all the accused refusing to plead guilty to various offences. Nov 3, 2011: Special CBI court dismisses bail pleas of all the 8 applicants (including Kanimozhi) In his 76-page order on the bail plea of eight accused in the 2G case, the Special Judge, Mr O.P. Saini, took care to note that he was not influenced by the earlier orders on the bail applications of the accused or by any other extraneous' factor.

115

This observation assumes significance as speculation was rife that the chances of DMK MP Ms Kanimozhi and four other accused (Mr Sharad Kumar,

Director/Promoter, Kalaignar TV; Mr Asif Balwa and Mr Rajiv Agarwal, Directors of Kusegaon Fruits and Vegetables and Mr Karim Morani, Director of Cineyug Media and Entertainment) getting bail were bright because the CBI had not opposed their bail applications. But the court dismissed the bail plea of all the eight accused who had applied for bail after finding that their bail plea was without merit. Nov 8, 2011: Special CBI court orders CBI to give copy of file on sale of equity by telecom companies (for investigating P Chidambaram's involvement) to Swamy The CBI handed over a file pertaining to the lock-in period relating to 2G spectrum allocation to Janata Party Chief Subramanian Swamy following a court order. Swamy arrived at the CBI headquarters on Thursday afternoon and met CBI officials who handed over the file to him but the agency later clarified the document is "not relevant" to the ongoing 2G scam investigations.

The file has letters, other official records and memos that include the ministers' views on the permission that Mr Raja granted to Swan and Unitech Wireless to dilute their equity by bringing foreign partners on board. Mr Chidambaram and other ministers have said that the transactions were legitimate - the companies did not sell stake, they created fresh equity, acceptable according to the guidelines for telecom policy at the time. The profits ran into thousands of crores. Nov 9, 2011: Delhi HC refuses to grant interim bail to Karim Morani on health grounds wondering Why everybody falls sick once he is in custody? The Supreme Court today declined to grant interim bail to Bollywood producer Karim Morani, an accused in 2G case, on medical ground, saying he could approach the special court conducting the trial if Tihar jail authorities do not provide the treatment needed by him. Morani, 53, who is accused of facilitating routing of Rs 200 crore bribes to DMK-run Kalaignar TV through various companies of co-accused Shahid Balwa and his own

116

firm Cineyug Films, moved for interim bail saying he needed to consult his doctors for proper management of his health problems including cardiac ailments. Nov 11, 2011: Trial of the 17 accused begins in Patiala House special CBI court Trial today commenced in a Delhi court in the 2G spectrum allocation case in which former Telecom Minister A Raja, DMK MP Kanimozhi, corporate honchos and telecom firms are among the high-profile accused. Special CBI Judge O P Saini started recording statement of Anand Subramaniam, Assistant Vice President of Reliance Capital Ltd, as a prosecution witness. The court had also summoned for today two other prosecution witnesses Group President of Reliance A N Sethuraman and Chief Regulatory Officer of Etisalat DB Telecom Pvt Ltd Vinod Kumar Budhiraja for their examination.

The CBI, in its first list, had submitted names of 28 persons to be examined as prosecution witnesses before the court in the month of November.

The court after framing charges against 17 accused, including three telecom firms, had slated the trial to begin from today. Nov 14, 2011: : UPA govt moves SC seeking to restrain Dr Subramanian Swamy from making public allegations against the UPA leadership Rattled over the 2G Spectrum Scam, Centre approached Supreme Court to restrain one of the main petitioners Subramanian Swamy from making public allegations against Home Minister P Chidambaram and UPA Chairperson Sonia Gandhi. In a two-page application, annexing media reports of Swamys public speeches against the duo, the UPA Government said that such kind of things is subjudice. The contents of speech clearly demonstrate that Dr Subramanian Swamy, who is intervener/applicant in the above mentioned appeal (2G cases) has by pressing issues which are the subject matter of pending judicial proceedings in this court and in the trial court has deliberately interfered with the course of distare(sic).

117

Nov 22, 2011: The Special CBI court shifts the trial to the Tihar Jail complex following a Delhi high court order The Delhi High Court today stayed its order to shift the trial of the 2G spectrum case accused to the high-security Tihar Jail from Patiala House court in the heart of the Capital. The stay came after the accused in the 2G case, their relatives and lawyers had expressed their unhappiness over yesterdays announcement of shifting of the trial. Former Telecom Minister A Raja and DMK MP Kanimozhi are among the accused in the case. The seven-judge administrative committee headed by Acting Chief Justice A K Sikri said the courts administrative notification yesterday to shift the trial will not come into effect and that the hearing will continue in the Patiala House court complex itself till an alternative arrangement is made. Nov 23, 2011: SC grants bail to 5 corporate executives The Supreme Court on Wednesday granted bail to five corporate executives facing prosecution for their alleged involvement in the 2G case. The five are Sanjay Chandra of Unitech Wireless, Vinod Goenka of DB Realty as well as Reliance Group's Gautam Doshi, Surendra Pipara and Hari Nayar. An apex court bench of Justice G.S. Singhvi and Justice H.L. Dattu said all the five would be released on furnishing a surety of Rs.5 lakh each to the satisfaction of the trial court.

Spectrum and Its Relation With Mobile Phone Services

Spectrum is airwaves. Each operator is assigned a set of frequencies. In normal basic telephone service, a pair of wires is used for communication. But in case of mobile/wireless communications, airwaves are used instead of wires. These spectrum/airwaves are licensed by the Government. It is allocated in Mega Hertz.

2G And 3G Spectrum
2G is the 2nd Generation of mobile phone services. Next phase of mobile services is 3G, or 3rd Generation. The difference between 2G and 3G is that we can have faster internet services in 3G, whereas in 2G the speed is slow.

118

How the Telecom Operation Is Administered

The entire country is divided into 22 Telecom Circles and Metros. Each state is one circle, like Bihar, UP (E), UP (W), Tamil Nadu, etc. For every Circle or a Metro, a separate telecom license is issued. For each license, separate applications are to be submitted. We call a company is having a Pan-India license, when that company has telecom licenses for all the 22 Telecom Circles and Metros. A Pan-India license (in fact 22 licenses) was issued for an Entry Fee of Rs 1,658 crore during an open bidding in the year 2001. This rate eventually became reference rates for licenses issued in future under FCFS policy, and is a matter of scam.

FCFS Policy
Under First Come First Serve (FCFS) policy, licenses with start-up spectrum (4.2 MHz) were issued for mobile services on the basis of who applies first. This policy was good only when there were very less takers for licenses. Between 2003 and 2006, there were only 51 applications for the licenses and all of them were issued licenses on FCFS basis. That means there were very less takers at that time. They were charged Entry Fess @ Rs 1,658 crore for pan-India license determined in the year 2001. But in February 2007, Hutchison sold its entire stake to Vodafone for a very high value. After this, many companies applied for telecom licenses as they realized that the value of licenses has gone up. After this, the Government stopped issuing telecom licenses. But it continued to receive applications. Over a few months, the number of applications piled up. As on October 1, 2007, the Government had received 575 applications for telecom licenses but it had very limited spectrum. Therefore, with so many pending applications, the government should not have opted for auction route for awarding telecom licenses instead of following FCFS policy.

Understanding 2G Spectrum Scam

The government awarded 122 telecom licenses with 2G spectrum in January 2008 at 2001 rates (Rs 1,685 crore) ignoring the current market value of the spectrum. In February 2007, Hutch sold its 67% equity to Vodafone at Rs 75,000 cr signalling substantial increase in spectrum value. Even if 15% of this is considered to be spectrum value, then it is Rs 11,250 crore per pan-India licenses. However, Raja

119

ignores this price. In November 2007, S-TEL offered Rs 6,000 cr for pan-India license; in December 2007, it increased the offer to Rs 13,752 crore. This was also ignored by Raja. After obtaining licenses at cheap rates, the private companies sold (diluted) their equities to foreign telecom companies at a very high price. Every company that had pan-India licenses was valued at about Rs 10,000 cr in which it had assets of 2G spectrum (Rs 1,659 cr. Thus, the difference in these figures (Rs 10,000 cr and Rs 1,659 cr) is per pan-India license loss to the Government and gain to private companies. - Shyam Telecom: Sold 74% to Sistema of Russia (MTS brand) - Unitech: Sold 67% to Telenor of Norway (Uninor brand) - Swan Telecom: Sold DB Group about 45% to Etisalat, UAE (Cheers brand) and 5% to Genex, Chennai - Tata Teleservice: Sold 26% to NTT of Japan (DoCoMo brand)

Role of the Former Telecom Minister A Raja In The Scam

He played multiple tricks to ensure that the spectrum is allocated to its favourite companies. First, Reliance Communication (Anil Ambani Group) wanted entry into GSM segment as there was not much of demand in CDMA. The company applied for fresh license through Swan, and also applied for dual-technology permission. In October 2007, Mr Raja allowed dual technology. But it appears that Reliance gave away the control of Swan to DB Group (Shahid Balwa), who was close to Mr Raja. The advantage with this company (Swan) was that it had already applied for licenses in March 2007. Second, Essar Group (Ruias brother) also applied for a license under Loop Telecom through her sister Ms Kiran Khaitan. Ms Khiatan spent Rs 100,000 to create Loop Telecom and the balance money of Rs 1,700 crore came from Ruias. They could not have applied for license as they already had operation through Vodafone-Essar company in which they had 33% equity stake. This major illegality was ignored by Raja.

120

Third, he also had old association with the Unitech Group, which had interest in the construction activities. This group under different names applied for Pan-Indian licenses on 24.09.2007. Fourth, Shyam Telecom (Mr. Rajiv Malhotra, MD) has very close relationship with Congress because of which Mr. Malhotra also had close relationship with Mr Raja. This company applied for 21 licenses on 25.09.2007. These dates 24th (For Unitech) and 25th for Shyam are very important as discussed later. Only Raja knew in advance what he is going to do with the policy. On 25.09.2007 he issued a Press Release (dated 24.09.2007) declaring the cut-off date for receiving applications as 01.10.2007. So, Mr. Raja ensured that after his favourite companies have submitted the applications, the window is closed shortly. He opened the window for only five working days. But even during those five days as many as 343 new applications were received. This he did not expect. As on October 1, 2007, the government had 575 pending applications for telecom licenses. So, then Mr Raja sought advice of Ministry of Law. The ministry replied that the matter should be referred to GoM. Mr. Raja protested on this. He wrote to Mr. Pranab Mukherjee, and also to the PM. Within his ministry, two senior officers had objected to his approach. Mr. Raja waited for their retirement on December 31, 2007. He brought in his favorite officer (Mr. Siddhartha Behura as Secretary DoT). Thereafter, he got the PMs nod on January 3, 2008. On January 10, 2008, he issued first Press Release on DoTs web site stating that the applications of only those have been considered who had applied till 25.09.2007. This way he preponed the cut-off date to suit his favourite companies. Thereafter, he put up another Press Release at about 2:45pm on the same day disclosing a list of shortlisted companies and asking them to come between 3:30 to 4:30 PM to collect the LOIs. He also said that whosoever complies with the conditions of LOIs first (that means deposit of Rs 1,658 crore by draft, Bank Guarantees worth several hundred crores separate for each service areas), will be issued spectrum first. So, his friends knew about these conditions. They kept their drafts and guarantees ready one day in advance and were first to comply with LOI condition and were first to get spectrum. This way even the FCFS policy was altered; earlier it used to be date of application and everyone used to be given 15 days time for compliance; Mr Raja even changed
121

the FCFS policy to date of compliance of LOIs. Later, the CAG found that out of 122 licenses, 85 did not meet eligibility criteria.

Senior Officers Involved In This Scam

Raja kept his close confidants in the chain of officers who would listen to his directions. Two top most officers of the DoT did not agree with his approach. One was Mr D.S. Mathur, Secretary-DoT, and another one was Ms Manu Madhavan, Member (Finance), DoT. Mr Raja waited for their retirement till December 31, 2007. From 1st January 2008, he brought his own person Mr Siddhartha Behura as Secretary DoT. He completely followed his instructions.

Relation Between The 2G Spectrum Scam And The Radia Tapes

Ms Nira Radia runs many consultancy and Public Relation companies. Her main client was Tatas. Later, she got Unitech, Reliance (Mukesh Group), Bharti also as her clients. From the leaked tapes, it is revealed that she was all the time talking for release of spectrum to Tatas. She had very close relationship with Mr Raja, and the family members of Tamil Nadu Chief Minister Mr M Karunanidhi. The Supreme Court has taken these issues very seriously.

Role Of The Finance Minister In This Scam

Money collected by the DoT on account of Entry Fee is deposited into the accounts of the Finance Ministry. Therefore, the DoT must consult the Finance Ministry for a policy change that has impact on its revenue. The Finance Ministry took a u-turn and allowed this scam to happen. A number of times, the Finance Ministry had in writing objected to the DoTs plan to award licenses at 2001 rates. One such letter was written by the Finance Secretary on November 22, 2007 to the DoT Secretary. After DoT has issued 122 LOIs (Letter of Intents) on January 10, 2008, the Finance Minister wrote a consenting letter to Mr Raja that whatever has happened is ok, but next time the spectrum should be auctioned. After this, on 25.01.2008 Mr Raja converted LOIs into Licenses. If the Finance Minister really wanted to stop further process of converting LOIs into Licenses, then he could have issued direction to the DoT to stop further process.

Who Estimated the Loss of Rs 1, 76,000 Crore

Comptroller Auditor General of India (CAG) started auditing of new licenses in March 2010. On 8.11.2010, CAG submitted its report to the President of India in which it
122

estimated the loss on account of 2G scam as Rs 1.76 lakh crore. Apart from this, it also found that of the 122 licenses issued on 10.01.2008, 85 licenses were issued to companies which were not eligible to get license.

Bodies Which Brought Out This Scam in The Public Domain

Initially, a Delhi based NGO, Telecom Watchdog, complained to the investigating agencies. When the investigation was slow or non-existent, later two Delhi based NGOs (Centre for Public Interest Litigation, Telecom Watchdog) and one senior journalist Mr Pranjoy Guha Thukrata filed a PIL in Delhi High Court pleading for Court monitored investigation. It was dismissed. Thereafter an appeal was filed by them in the Supreme Court, which was allowed. Now, the Supreme Court is directly monitoring the investigation of this case.

Role of The Investigative Agencies CBI, ED In This Scam

The case was initially referred by the Central Vigilance Commission to the CBI for further investigation on 12.10.2009 as the DoT officers were not forthcoming with the right answers/information. On 21.10.2009, the CBI registered an FIR against unknown persons and officials. On 22.10.2009, the CBI raided the DoTs headquarter and took away all the relevant files. Subsequently the offices of private companies who got the licenses were also raided. The officials were questioned by the CBI. The ED also carried out its investigation independently. Initially CBI as well as Enforcement Directorate were investigating the matter properly, but after sometime, they also started playing into the hands of their political bosses and corporates who were the beneficiaries. Practically, further investigation was stopped. Then further exposure could be done through PIL.

What Supreme Court Said About This Scam

During the hearing of the PIL, the Honble Supreme Court made several observations including the one that the same minister is still continuing, that eventually led to the exit of Mr. Raja. The investigation was expedited after SCs comments, does CBI do this kind of slow investigation in every matter, how long will it take .... 20 years. The SC also said, You (CBI, ED, I-T) have to do your job without any fear and favour. The SC also ordered that the Court will monitor investigation. It also suggested creation of Special Court for this 2G scam. It is suspecting that the Government and
123

Corporates might still interfere in the investigation because of which it has ordered that before filling of the charge-sheet, the investigating agencies (CBI, ED, I-T) must produce before the SC the charges that it is likely to file and the evidence collected to support them. The SC also took strong view on Mr Kapil Sibals statement that the figure of loss pointed by the CAG is erroneous. After that Mr Sibal stopped attacking CAG. The SC also said why no one has been arrested in this case.

Action Taken By Government Taken Till Now

Infact the Government did not do anything. Whatever is happening, it is because of the Supreme Court, pressure from the opposition parties, and media. First, Mr Raja resigned. Thereafter, after Mr Kapil Sibal took over as Telecom Minister, he issued show-cause notices to certain companies and collected about Rs 280 crore as penalty from them for not fulfilling the rollout obligations. Thereafter the Government has not taken any step.

What Did the Government Do To Cover Up This Scam

Mr Kapil Sibal started a campaign against the CAG calling their figure of loss of Rs 1.76 crore as erroneous. He also said that no loss has happened. Later, he started saying that the Government followed the same policy of FCFS as was followed during NDA period.

Arrests Made In This Scam

As on 13.2.2011, CBI has arrested four people. Mr A Raja, Mr Siddharatha Behura (Secretary-DoT), and Mr RK Chandolia (PS to Mr Raja) were arrested first. Thereafter, Mr Balwa (MD of DB Group, and promoter of Swan Telecom) was also arrested. Were bribes paid to Raja Yes. The CBI and EDs investigations have revealed that substantial investment (money) coming into the accounts of people/companies associated with Mr Raja. This money is coming from many companies in India and abroad. As per media reports, so far Rs 3,000 crore has been linked to the bribes paid to Mr Raja and DMK party and the Mr Karunaidhis relatives. This is even revealed in Raida tapes.

124

Companies Being Investigated

The following companies received the licenses in January 2008 from Mr Raja:Unitech (Unionor), Swan Telecom (DB Etisalat), Loop Telecom, STel, Datacom/Videocon, Shyam Telecom (MTS), Spice, Idea, Reliance Communications, and Tata. The investigation is being done against all of them. In addition, certain companies of Rajas associates and Ms Nira Radia are also being investigated for the routing of money.

Changes in the Telecommunications Sector In India

In the last two decades the telecom sector witnessed rapid transformation with the National Telecom Policy-94 setting the stage for opening up of the sector. With changes in the sector, cellular mobile services outgrew the fixed line services. The most important change was the shift to a revenue sharing regime in National Telecom Policy (NTP) 1999 where the operators shared their revenue with the Government in the form of annual licence fee and spectrum charges. The Unified Access Services Licence (UASL) 2003 sought to frame the road map for a uniform licencing regime.

Gaps in Policy Implementation

In August 2003 TRAI had submitted a Report recommending a road map for allocation of licenses. This Report formed the basis for the UAS policy approved by the Council of Ministers in October 2003. The implementation of UASL regime was to be carried out in two phases with first phase of six months assigned for migration of already existing Basic Service Operators (BSOs) and Cellular Mobile Service Operators (CMSOs) to the new regime. The entry fee for migration of BSOs was determined as the fee equal to what was paid by the fourth cellular operator introduced through multi-stage bidding process in 2001. CMSOs were not required to pay any entry fee for migrating as they had already entered the market through a bidding process and thus paid a market determined price. The second phase was to start after the first phase in which a Unified Licencing regime, with a nominal entry fee for the licence with the spectrum being charged separately, was envisaged. However, the Department of Telecom did not implement the licensing regime as approved by the Cabinet and implemented only the first phase of the policy,
125

overlooking the second phase. In the actual implementation, the interim stage of implementation seems to have become the final destination. This appears to have become the underlying factor, quite erroneously, to value the spectrum in 2008 at 2001prices. An important objective of this policy decision to delink the prices of spectrum from the issue of licence and devise an efficient allocation formula for spectrum along with an appropriate price remained unachieved. Ministry of Finance was authorized by the Cabinet decision of 2003 to participate in the discussion for efficient allocation of spectrum and price fixation but DOT decided not to associate the Ministry of Finance. As a consequence of such lacunae in the implementation of the policy laid down by the Council of Ministers in 2003 the issuance of licences in 2008 along with allocation of spectrum has been done by DoT at prices determined in 2001 which were based on a totally nascent market despite the sector witnessing substantial transformation and manifold growth. The issue was never placed before Cabinet for a review.

Telecom Commission Was Not Consulted

The High Powered Telecom Commission which also includes part time members from the Ministry of Finance, Industry, IT and Planning Commission was not apprised of the TRAI recommendations of August 2007 and hence, was not afforded an opportunity to deliberate on the merits of the TRAI recommendations. It is also seen that the High Powered Telecom Commission was not even consulted at the time of grant of 122 UAS licenses in 2008.
Views and Concerns Of Ministry Of Finance Overruled

DoT managed to keep the issue of spectrum pricing outside the purview of the GoM. The GoM's role in December 2006 was confined to issues concerning spectrum vacation. The ToRs left out the other two issues of efficient allocation and pricing, while all three were pronounced in the policy decision of 2003. Thus by getting the spectrum pricing issue deleted from the ToR, the DoT completely side-tracked the pricing issues. Also, the Ministry of Finance, in November 2007, had questioned the sanctity of continuing with the price determined way back in 2001 without any indexation or current valuation. The Ministry had sought a review of the matter. This advice of the Ministry of Finance was overlooked by the DoT ostensibly on the basis of a four-year old Cabinet decision (October 2003) on the premise that it was
126

authorized to calculate the entry fee for licences as per the recommendations of TRAI in 2003. DoT maintained that 'spectrum pricing was within the normal work carried out by them.'
Advice of Ministry Of Law And Justice Were Ignored

In October 2007 at its own initiative, the DoT requested the Ministry of Law and Justice to obtain and communicate the opinion of the Attorney General/Solicitor General of India to enable the DoT to handle an unprecedented rush of applications in a fair and equitable manner which would be legally tenable. The Ministry of Law, at the level of the Hon'ble Minister, opined that in view of the importance of the case and the various options which seem to have emerged, it was necessary that the whole issue be first considered by an Empowered Group of Ministers (EGoM) and in that process legal opinion of the Attorney General can be obtained. Surprisingly, this opinion, which the DoT had sought on its own volition, was felt to be 'out of context' at the level of the Hon'ble MoC&IT and hence the benefit of a discussion in the EGoM was also forgone. Thus, such important decisions seem to have been taken in DoT without the issues being deliberated and discussed at an inter ministerial forum.
Hon'ble Prime Minister's Suggestions Were Not Followed

In November 2007, the Honble Prime Minister wrote to Hon'ble MoC & IT and expressed concern that in the backdrop of the inadequate spectrum and the unprecedented number of applications received for fresh licenses, spectrum pricing through a fair and transparent method of auction for revision of entry fee, which is currently benchmarked on an old figure, needs to be reconsidered. This advice of the Honble Prime Minister evoked an immediate response from the Hon'ble MoC & IT who on the same day replied that the issue of auction of spectrum was considered by the TRAI and the Telecom Commission and it was not recommended by them as the existing licence holders had already got spectrum upto 10 mega hertz per circle without any spectrum charge. Hon'ble MoC & IT further informed that his Ministry has come to the conclusion that it will be unfair, discriminatory, arbitrary and capricious to auction spectrum to new applicants as it will not give them a level playing field. He had thus, justified the allotment of spectrum to a few new operators in 2008 without reconsidering the old entry fee discovered in 2001 ignoring the advice of the Hon'ble Prime Minister.

127

Arbitrary Changes By Dot In The Cut-Off Date.

The TRAI report of August 2007 had recommended 'no cap' on the number of licences in any service area. Despite this recommendation of TRAI, the DoT issued a Press Release on 24th September 2007 stating that applications for issue of licences would be accepted only upto 1.10.2007. This action, in effect, conveyed fixation of an artificial cap in the number of licenses to be awarded. However, in its response (July 2010) to the report issued to the Ministry (July 2010), the Ministry has stated that it accepted the recommendation of 'no cap' by the TRAI in October 2007. It seems that the Ministry, by issuing the press release in advance in September 2007 had, in effect, circumvented the recommendation of TRAI by taking an action counter to the recommendation and its acceptance by DoT in October 2007. To further compound the earlier decision, of restricting consideration of applications received up to 1.10.2007, the DoT further advanced this date to restrict issuance of Letters of Intent (LoIs) only to applications received up to 25.09.2007. This was ostensibly to avoid legal implications in view of the shortage of spectrum for GSM services.
FCFS Policy Was Not Followed

The First Come First Served (FCFS) policy earlier internally adopted in DoT for allocation of spectrum was then extended for issue of new UAS licences. Under this policy, all applications are registered in the Central Registry Section of DoT where date of receipt and serial numbers are posted on it. Priority of applications is determined based on this date of receipt in the Central Registry. In a communication dated 2nd November 2007, the Hon'ble MoC&IT had even confirmed to the Hon'ble Prime Minister that the processing of applications was to be on the FCFS basis. However, audit found that DoT deviated even from the FCFS policy in letter and spirit. The applications submitted between March 2006 and 25th September 2007 were issued the LoIs simultaneously on a single day, viz. 10 th January 2008. A notice was issued through a press release giving less than an hour to collect the same. This decision to issue LoIs simultaneously to all applicants was taken at the level of the Minister. As per the FCFS policy being followed those who were issued LoIs were given 15 days to fulfill the conditions. This included submission of a Performance Bank Guarantee (PBG) and a Financial Bank Guarantee (FBG). By changing the FCFS criteria, some licensees, who could proactively anticipate such procedural changes were ready with the Demand Drafts drawn on dates prior to the
128

notification of cutoff date by DoT and could avail the benefit of first right to allocation of spectrum, having jumped the queue. The entire process followed lacked transparency and objectivity and has eroded the credibility of DoT.

Issue of License to Ineligible Applicants

Process followed by the DoT for verification of applications for UAS licences for confirming their eligibility lacked due diligence, fairness and transparency leading to grant of licences to applicants who were not eligible. Eighty five out of the 122 licenses issued in 2008 were found to be issued to Companies which did not satisfy the basic eligibility conditions set by the DoT and had suppressed facts, disclosed incomplete information and submitted fictitious documents for getting UAS licenses and thereby access to spectrum.

Value of additional spectrum allotted to 13 existing operators beyond contracted quantities Spectrum was allotted by DoT to the existing operators beyond the contracted limits without imposing any upfront charge for such allotment. The value of spectrum held by 13 operators for 51 circles based on the 2001 rates worked out to ` 2561 crores. Based on the above indicators, value would be in the range of ` 12,000 crores and ` 37,000 crores. TRAI's recommendation (2010) for charging this additional quantity of spectrum has not been accepted by the Government so far.

Presumptive loss of spectrum allocated to 122 new UAS licensees and 35 Dual Technology licenses in 2007-08 The presumptive loss as per the methods adopted would be as given in the table below:

129

Growth In Telecom Sector

In the recent times, India has emerged as one of the fastest growing telecom markets in the world. The Department of Telecommunication (DoT) under the Ministry of Communications and Information Technology (MoC & IT) was the monopoly agency providing communication facilities in India till 1994 when for the first time private players were invited to contribute to the telecom sector by way of investment for providing telecom services in the country. Since then it has been one of the few sectors in India, which has witnessed widespread structural and institutional reforms. With 62.13 crore telephone connections (Fixed lines- 3.70 crore and wireless 58.43 crore) as on March 31, 2010, it is the second largest network in the world after China. The eleventh plan target of 50 crore connections by 2010 stood achieved in September 2009 shown in the chart 1.1 below.

Overview of Policies
1.2.1 The first National Telecom Policy was announced by the Government in 1994 (NTP-94) with the objectives of providing telephone on demand, provision of worldclass services at reasonable prices and universal availability of basic telecom

130

services to all villages. NTP-1994 recognized that the required resources for achieving these targets could not be made available only out of Government sources and private investment and involvement of the private sector was required to bridge the large resource gap.

1.2.2 While there were several achievements under the NTP 1994, some of the objectives could not be met. Acknowledging several changes both at the national and global scenario in the telecom sector; a New Telecom Policy- NTP-99 was announced by Government w.e.f. 1st April 1999. Licensing of all telecom services thereafter was to be under the policy framework of NTP-99, which sought to significantly redefine the competitive nature of the industry. The new policy lifted the restrictions on the number of service providers for the Basic Service Providers (BSPs) as well as the Cellular Mobile Service Providers (CMSPs) making it open for participation by all bidders who satisfied the conditions of the DoT. The new policy also required all operators who were under the fixed licence fee regime to migrate to a revenue sharing regime. In the revenue sharing model, the operators were required to pay a percentage of their Adjusted Gross Revenue (AGR) as annual license fee and spectrum usage charge to the Government. The percentage of revenue share depended on the service area* where they offered their services.

131

1.2.3 The Union Cabinet based on the recommendations of Group of Ministers (GoM) on Telecom matters constituted in September 2003 approved the policy for licensing of Unified Access Services. The GoM had considered the

recommendations submitted by Telecom Regulatory Authority of India (TRAI) on 27 October 2003. The policy drew upon NTP-99. Through this approval, Cabinet besides, a number of other related decisions, charted the course to a Universal Licensing Regime. Guidelines for issue of licenses under UAS were issued on 11 November 2003 where after licenses were issued only under UAS.

1.2.4 In April 2007, the DoT sought the opinion of the TRAI on some specific points including that of putting a cap on the number of access service providers in a service area, as radio frequency spectrum required for wireless services was not sufficient to meet the increasing demand from UAS Licensees. TRAI recommended (August 2007) that no cap be placed on the number of access service providers in any service 1 area. the DoT issued 122 new licences to 17 companies in 2008 and spectrum was allotted to all operators except for four in Delhi service area (December 2009). 1.2.5 TRAI in August 2007 also recommended that a licensee using one technology may be permitted on request, usage of alternative technology and thus allocation of dual spectrum. However, such a licensee must pay the same amount of fee which has been paid by the existing licenses using the alternative technology or which would bepaid by the new licensee going to use that technology. 35 licenses were permitted to use dual spectrum and allocated spectrum in 2007-08.

Methodology for Entry And Fee Structure In Various Policy Regimes

Policy Stage Methodology for Entry of Operators Policy Stage NTP 1994 In first phase (Nov-94), two License beauty called Fee was preFixed Fee Regime

CMTS licences were awarded in determined and bids were four Metro cities on on selected parameters.
132

parade basis.

In second phase (Dec-95), two CMTS licences were awarded in 18 telecom circles through a process of competitive bidding.

Six companies were awarded Basic service licences through bidding process.

NTP 1999

All existing BSOs and CMSPs were required to migrate to the new regime.

One-time before

entry signing

fee the

license agreement. timing of new A fixed percentage of Adjusted Revenue Gross (AGR) as

Number

and

licenses was to

be based on

TRAI's recommendations. BSNL and MTNL became the third CMTS operator in 2000. Seventeen new CMTS licences as fourth cellular mobile

annual license fee. A fixed percentage of Adjusted Revenue mobile annual charge. Gross (AGR) services of as

operators in 2001 through a multi-stage bidding process. Twenty Five new Basic service licences in 2001 based on

spectrum

eligibility as per the guidelines issued on January 2001. UAS 2003 All the existing BSOs and One-time before entry signing fee the

CMPSs were given option to migrate to UASL regime; by BSOs paying the difference of entry fee paid by them that as paid by the in fourth 2001and CMTS CMTS

licence agreement. A fixed percentage of Adjusted Revenue Gross (AGR) as

operator

annual licence fee. A fixed percentage of Adjusted Revenue Gross (AGR) of

operator at nil entry fee. 51 new UAS licences were awarded between 2004 to March
133

2006 at the entry fee determined in 2001. 122 new UAS licences awarded in 2008, also at the same entry fee of 2001. Introduction of Approvals were issued in 2007-08 for and GSM) in 35 service areas at the entry fee equivalent to the migration fee fixed in 2001.

mobile annual charge.

services

as

spectrum

One-time

entry

fee

dual dual technology (for using both CDMA

equivalent to migration fee for UAS based on 2001 entry fee of

technology

CMSPs was charged for allowing DT in

2007. Revenue sharing as for UAS 2003.

Role of Telecom Regulatory Authority Of India (TRAI)

The TRAI was set up in March 1997 and its mandate included making recommendations on the following matters: Need and timing for introduction of new service providers. terms and conditions of the licences to be given to service providers and Efficient management of the available spectrum.

TRAI also had to notify the rates at which telecommunication services within India and outside were to be provided under the TRAI Act, through Gazette notifications, from time to time. NTP-99 stipulated that the Government will invariably seek TRAI's recommendations on the number and timing of new licences before taking decision on issue of new licenses. The original Act of 1997 under which it was set up was amended by the TRAI (Amendment) Act 2000. The new Act provided for the establishment of two separate bodies i.e. the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) for dispute settlements between the licensor and licensees, between two or more service providers and between service providers and consumers and TRAI for regulatory functions. Thus, TRAI as a regulator has only an advisory role in the policy matters.
134

Organizational Arrangement
The work relating to formulation of policy, issue of licences for various telecom services and spectrum allocation are under the overall control of Ministry of Communications & IT. Secretary, DoT, reports to the Minister (Communications and IT) and is assisted by the Member (Finance), the Member (Technology), Member (Services), Member (Production) and Wireless Advisor. The Secretary, DoT, is also the Chairman of the Telecom Commission which is a high powered commission, established in 1989, consisting of four full time members (Production, Services, Technology and Finance) and four part-time members (Secretaries of the Ministries of Finance, Industrial Policy and Promotion, Information Technology and Planning Commission). The major functions of the Telecom Commission include policy formulation, review of performance, licensing, wireless spectrum management, administrative monitoring of PSUs, research and

development, standardization/ validation of equipment and International Relations.

Issue of Licenses
Operators intending to provide telecommunication services have to obtain a licence from the DoT. The guidelines for issuing new licences for various Telecom Services as approved (December 2005) by the DoT stipulated that an applicant would have to apply for a licence along with the requisite processing fees. Applicants meeting the eligibility criteria prescribed by the DoT would be issued a Letter of Intent (LoI).

135

Thereafter the applicant was required to deposit the prescribed entry fees, submit the requisite Bank guarantees and other necessary documents before the grant of licence.

Spectrum Allocation
Radio Frequency Spectrum is the entire range of wavelengths of electromagnetic radiation which is used as carrier of wireless transmission and thus a basic requirement for providing wireless services. It is a finite but non-consumable global natural resource and commands high economic value in the telecommunication sector.

Radio frequency spectrum, i.e., the entire range of wavelengths of electromagnetic radiation, is a finite global natural resource with a high economic value, due to its heavy demand in the telecommunications sector. The word 'Spectrum' basically refers to the collection of various types of electromagnetic radiations of different wavelengths. Frequencies are allocated by the International Telecommunication Union (ITU) at "World Radio Communication Conferences". Allocations are made on a regional basis and are made for different services. Allocation of spectrum in ITU Radio Regulations exists from 9 KHz to 1000 GHz. In India, the radio frequencies are confined between 9 KHz and 400 GHz. Some of the important and typical characteristics of the radio frequency spectrum are that: Radio frequency spectrum does not respect international geographical boundaries as it is spread over a large terrestrial area. Use of radio frequency spectrum is susceptible to overlapping interference and requires the application of complex engineering tools to ensure interference free operation of various wireless networks. Unlike other natural resources, radio frequency spectrum is not consumed upon its usage. It is also liable to be wasted if it is not used optimally and efficiently.

Assignment of radio frequencies is governed by international treaties formulated under the aegis of the ITU. India falls in the ITU Region III. In India, Mobile services which use GSM technology work in the frequency bands of 900 & 1800 MHz and those in CDMA technology work in the 800 MHz band. 800, 900 and 1800 MHz
136

bands were earlier allotted to the defence services for their mobile communication usage. Presently, 25 MHz spectrum in 900 MHz band (890 915 / 935 960 MHz) and 75 MHz in the 1800 MHz band (1710 1785 / 1805 1880 MHz) is earmarked for GSM services. For CDMA services, 20 MHz spectrum in the 800 MHz band (824 844 / 869 889 MHz) is available. Spectrum for the roll out of 3G services (voice, data and video) were allotted through e-auction in the 2.1 GHz (1920 1980 / 2110 2170 MHz) band. All the above bands were historically allotted to the Defence sector for their mobile and point to point communication needs in India. Therefore, their cooperation was also required to make them available for commercial use. To facilitate the same, Government of India (GoI) has allocated funds from time to time to provide optical fibre cables for use by the Defence Sector.

1.7.1 The Wireless Planning & Coordination (WPC) Wing in the Department of Telecommunications deals with the policy of spectrum management, wireless licensing and frequency assignments. The spectrum allocation policy is contained in the National frequency allocation plan (NFAP) which is based on the International Radio Regulations. The NFAP (1981) and its subsequent revisions in consultation with the national users through the forum of Standing Advisory Committee on Radio Frequency Allocation (SACFA) provides the basis for assignment of frequency. Wireless licence is an independent licence and therefore any UAS licence holder intending to offer mobile services has to obtain a separate wireless licence from WPC wing.

BOX 2: Allocation of contractual and additional spectrum Detail of licences Allocation spectrum CMTS licences for first and second Operators (1994-1995) of contractual Allocation spectrum of additional

A cumulative maximum of As per DoT's order dated up to 4.4 MHz +4.4 MHz in 22nd September up to 2001 6.2

the 900 MHz band based bandwidth on appropriate justification.

MHz+6.2 MHz instead of

CMTS licences for third Operators

A cumulative maximum of 4.4 MHz+4.4 MHz subject up to 4.4 MHz +4.4 MHz in to availability and

137

(1997-98)

the 900 MHz band based justification effective from on appropriate justification. 1.8.99.

CMTS licences for fourth A cumulative maximum of As per DoT's order dated operators (2001) CMTS up to 4.4 MHz +4.4 MHz in 1.2.2002, licences operators (2001) for 1.8 MHz+1.8

fourth the 1800 MHz band. Based MHz spectrum beyond 6.2 usage, justification and MHz (total 8 MHz+8 MHz)

availability, spectrum up

additional would be assigned to an to 1.8 operator on reaching a

MHz+1.8 MHz making a subscriber base of 5 lakh total of 6.2 MHz+6.2 MHz. or more in a service area. Further, spectrum allocation up to of 10

MHz+10 MHz on reaching prescribed base could subscriber also subject be to

considered availability. CMTS licences for fourth operators (2001) Initially a cumulative In 2006, of

criteria

for

maximum of up to 4.4 MHz allotment

additional

+ 4.4 MHz in TDMA/GSM spectrum in GSM beyond based systems or a initial spectrum (4.4 MHz)

maximum of 2.5 MHz + 2.5 was revised which was MHz in CDMA based based on the minimum

systems, on case by case subscriber base ranging basis subject to availability. The Licensee from 2lakh subscribers for MHz to 26 lakh

operating 6.2

wireless

services

will subscribers for maximum

continue to provide such of 15 MHz 2G spectrum services in already depending upon the

allocated/contracted spectrum. New UAS Licences granted during Initially a

category (A/B/C) of the circle or service area.

cumulative In January 2008, criteria

maximum of up to 4.4 MHz for

138

November 2003 to March 2007

+ 4.4 MHz in TDMA/GSM allotment based systems or

of

additional

a spectrum in GSM band initial spectrum

maximum of 2.5 MHz + 2.5 beyond MHz in CDMA based (4.4

MHz) was again needing a

systems, on case by case revised basis subject to availability. Additional

minimum subscriber base from 15 lakh

spectrum ranging

allowed based on optimal subscribers for 6.2 MHz to utilisation but not more 116 lakh subscribers for than 5+5 MHz in respect of maximum of 14.2 MHz 2G CDMA or 6.2+6.2 MHz in spectrum depending upon respect of TDMA/GSM. UAS licences using dual technology (2008) Initially a the category (A/B/C) of the

cumulative circle or service area.

maximum of up to 4.4 MHz + 4.4 MHz in TDMA/GSM based systems and a

maximum of 2.5 MHz + 2.5 MHz in CDMA based

systems, on case by case basis subject to availability. Additional spectrum

allowed based on optimal utilisation but not more than 5+5 MHz in respect of CDMA or 6.2+6.2 MHz in respect of TDMA/GSM.

139

Gaps in Implementation Of UAS Regime

In October 2003 TRAI submitted its recommendations on Unified Licensing regime which envisaged total elimination of service based licensing. Unified Licence was an approach towards convergence of access media. Full implementation of the new regime was to be completed in two phases. The Union Cabinet approved the TRAI report in October 2003. Phase I was the first step of migration of existing licensees to the Unified Access Licensing Regime. This was to be followed by a second phase of a fully Unified Licensing / Authorization Regime having all telecom services under one licence. This was for grant of licences to new operators. However, the benefits of Phase I were extended to new operators. Ministry replied that TRAI had submitted two more recommendations one on Unified Licensing (January 2005) and another on Spectrum Related issues (May 2005). Though Unified licensing was the first step towards convergence, it was not implemented since the Convergence Bill lapsed in Parliament. Thus the ultimate objective of Unified Licensing did not materialize. DoT however, as explained earlier did not revisit the Unified licensing regime but implemented it for new licensees also.

3.1.1 TRAI, in its report on Unified Licensing accepted by Government in October 2003, had recommended that Unified Licence Regime should aim at automatic licensing / authorization for telecom services subject to notification to Regulatory Authority and compliance with published guidelines by operator thereby removing all barriers for growth in the sector. The underlying principle was to allow licence at nominal entry fee and price the spectrum separately, it being a scarce public resource. TRAI had further observed that spectrum was to be distributed by a mechanism that it is allocated optimally to the most efficient user.

3.1.2 Unified Licensing / Authorization being the main objective, TRAI had recommended a two-phase implementation. Recognizing that primary objective of growth in teledensity depended on securing access network at low cost, in the first phase, unification of access services at the Circle level was recommended whereby the service providers of new Unified Access Licensing Regime would be able to offer basic and/or cellular services using any technology (GSM or CDMA). The second phase was to be soon followed by defining the guidelines and rules for fully Unified Licence /Authorisation Regime.
140

3.1.3 Based on the recommendations of Group of Ministers which agreed with the principles laid down by TRAI in its Report, Cabinet (31 October 2003) approved the proposal for charting the course for Universal Licensing Regime in the following manner:In pursuance to the Cabinet's approval, the DoT issued the guidelines on UAS Licencing (11 November 2003), for moving towards UASL regime by giving the option to all existing BSOs and CMSPs to migrate to UASL regime. The guidelines also included a condition that All applications for new Access Services Licence shall be in the category of Unified Access Services Licence. There was ambiguity regarding entry fee to be charged from the new licensees as TRAI had not given any recommendation regarding introduction of new operators in the first phase of UASL regime. Secretary, DoT, spoke to the Chairman, TRAI who clarified (14 November 2003) that entry fee of the new unified licensee would be the entry 4th fee of Cellular Operator and in service areas where there is no fourth operator, the entry fee of existing BSO fixed by the Government (based on TRAI recommendations). DoT decided to receive all applications under UAS without revision of the spectrum allocation procedures/revision of entry fee, which automatically lifted the restriction on the number of operators in the UAS regime.

3.1.4 TRAI's Recommendations of 2003 not followed in spirit In its recommendation, TRAI had considered three alternatives for migration of existing operators in para 7.16 to 7.18 of their Report submitted to Government on 27 October 2003, including that of bidding by the existing and new prospective operators, but did not favour it on the grounds of likely delay in implementation of UAS regime. TRAI recommended a third option in para 7.18 of its Report which suggested migration of existing BSPs by charging entry fee determined through a bidding process in 2001 for the fourth cellular operator and no entry fee from the existing CMSPs. There was no mention regarding entry fee to be charged from the A two-stage process: the Unified Access Regime for basic and cellular operators allowing a migration path to existing BSPs and CMSPs in the first phase to be implemented immediately followed by a second phase of a fully Unified Licensing/Authorisation Regime within six months, bringing all telecom services under one licence, after a process of detailed consultation by TRAI;
141

Fee paid by the fourth cellular operator to be used as benchmark for migration of BSOs to the new access regime and no fee to be paid by the existing CMSPs for migrating to new regime;

The DoT to be authorised to finalise details of implementation of UAS and the fully Unified Licence Regime with the approval of the Hon'ble Minister of Communication & Information Technology (MoC&IT) based on the

recommendations of TRAI. In pursuance to the Cabinet's approval, the DoT issued the guidelines on UAS Licencing (11 November 2003), for moving towards UASL regime by giving the option to all existing BSOs and CMSPs to migrate to UASL regime. The guidelines also included a condition that All applications for new Access Services Licence shall be in the category of Unified Access Services Licence. There was ambiguity regarding entry fee to be charged from the new licensees as TRAI had not given any recommendation regarding introduction of new operators in the first phase of UASL regime. Secretary, DoT, spoke to the Chairman, TRAI who clarified (14 November 2003) that entry fee of the new unified licensee would be the entry 4 th fee of 4 Cellular Operator and in service areas where there is no fourth operator, the entry fee of existing BSO fixed by the Government (based on TRAI recommendations). DoT decided to receive all applications under UAS without revision of the spectrum allocation procedures/revision of entry fee, which automatically lifted the restriction on the number of operators in the UAS regime.

3.1.4 TRAI's Recommendations of 2003 not followed in spirit In its recommendation, TRAI had considered three alternatives for migration of existing operators in para 7.16 to 7.18 of their Report submitted to Government on 27 October 2003, including that of bidding by the existing and new prospective operators, but did not favour it on the grounds of likely delay in implementation of UAS regime. TRAI recommended a third option in para 7.18 of its Report which suggested migration of existing BSPs by charging entry fee determined through a bidding process in 2001 for the fourth cellular operator and no entry fee from the existing CMSPs. There was no mention regarding entry fee to be charged from the new licensees under UAS, as entry of new operators had not been recommended by TRAI in the first phase of UAS which was intended only for migration of existing

142

BSOs and CMSPs. Thus, the first phase of six months was meant for migration of existing operators. TRAI had recommended new operators only in the fully Unified Licensing Regime. TRAI had also suggested that taking cognizance of spectrum availability, TRAI is in favour of introducing more competition. However, we feel that in lieu of more cellular operators it would be more appropriate to have competition in the Unified Licensing framework which will be initiated after 6 months (Para 7.37). TRAI in their same Report submitted to Government had recorded in para 7.39 that the induction of additional mobile service providers in various service areas can be considered if there is adequate availability of spectrum. As the existing players have to improve the efficiency of utilisation of spectrum and if Government ensures availability of additional spectrum then in the existing licensing regime, they may introduce additional players through a multi-stage bidding process as was followed for fourth cellular operator. TRAI also recommended that the guidelines for Unified licensing should include nominal entry fee, USO etc.

Thus, the stipulation of the DoT to benchmark entry fee in respect of new licenses also at the same level which was allowed for migration of existing BSOs was not consistent with the recommendations of TRAI (2003). This issue was neither deliberated by the TRAI in its recommendations (2003) nor at the Telecom Commission level nor by the GoM on Telecom matters constituted in September 2003. The Cabinet also did not give any directions on the issue. 3.1.5 One of the major objectives of movement towards Unified licensing regime, of which first step was migration of existing licensees, was to ultimately de-link spectrum from licence and encourage its efficient use by rational allocation procedure and pricing. Under the fully unified licensing regime it was envisaged that the licence fee would be nominal allowing the operator to provide different telecom services with a separate procedure /regulation for allotting spectrum for which TRAI had yet to give its recommendations. TRAI's recommendations in this regard have not yet been implemented by the DoT, which also meant that an important and crucial objective of 2003 policy remained unachieved. 3.1.6 The Ministry justified the non revision of entry fee on the ground that the entry fee recommended by TRAI in August 2003 was not only for migration of existing operators but also for new prospective UASL operators as well and the
143

recommendations were approved by the Cabinet on 31.10.2003. Further, the Union Cabinet had authorised DoT to finalise the details of implementation with the approval of Hon'ble MoC&IT and hence the guidelines were issued in November 2003. The Ministry also stated that their action was also consistent with the clarification given by the then Chairman TRAI (November 2003). It was also stated that TRAI submitted two recommendations on fully Unified Licencing regime in 2005 but could not be implemented since the Convergence Bill lapsed in Parliament. The contention is not correct as the issue of the non revision of entry fee for new prospective UASL operators had not even been raised in the note put up to the Cabinet. Even TRAI in their report (October 2003) had recommended for a two stage implementation of the UAS licensing regime in which the first phase was regarding migration of existing BSOs and CMSPs to the UAS and the second phase for the new UAS licences. The first phase was to be implemented immediately while the second phase was to commence only after the receipt of fresh recommendations of TRAI within six months (Para 7.1 of TRAI recommendations of October 2003). Therefore the issue of non revision of entry fee for new licensees/operators was not discussed in any forum- Telecom Commission, TRAI, GOM or Cabinet. If the DoT needed more clarity in implementing recommendations of the TRAI, it should have written for clarifications from the TRAI on the specific issues. Raising/discussing the issues on telephone and getting clarification even in a letter from the Chairman TRAI on the same day in his individual capacity on such a critical issue shows undue haste and an avoidance for following the normal official procedures by the DoT. Further, the Chairman, TRAI did not have the authority to issue a clarification on an issue which had not been discussed and deliberated upon in the Authority. The clarification was not in line with the recommendations of TRAI as para 7.39 of the Report read that if Government ensures availability of additional spectrum then in the existing licensing regime, they may introduce additional players through a multistage bidding process as was followed for fourth cellular operator. Any such clarification, which altered the TRAI's recommendations substantively, should have been taken to the GoM and Cabinet as their decision was based on the original TRAI's recommendations.

3.1.7 The DoT's action of applying the rates approved for the existing operators for migrating to UAS regime, to new applicants also by relying on the clarification of the
144

Chairman TRAI in his individual capacity was inconsistent with the recommendations of the TRAI (2003) and went beyond the authority given by the Cabinet. It also violated all canons of financial propriety. The DoT had to resort to informal clarifications from TRAI before concluding that new applications would also be at the entry fee of price determined for 4th CMSP in 2001 as against TRAIs recommendation of introducing new operators in the existing regime through a multistage bidding process. Elimination of bidding process without delinking licensing from spectrum was not intended by TRAI.

Issue of Price Discovery Of Spectrum Was Over Looked

The MoF, right from the year 2003, quoting international practices and scarcity factor had maintained that auction of spectrum and its trading under a regulatory framework could induce competition and transparency in the system and would result in most efficient utilisation of spectrum. TRAI in October 2003, while recommending Unified Services Licensing, had also proposed to submit a separate report regarding spectrum allocation and pricing. Based on these inputs, Cabinet, in its decision of 31 October 2003 while charting the course to the UAS and US licencing regime had also approved the following: adequate spectrum would be made available for unimpeded growth of Telecom services for which WPC wing of the DoT and Ministry of Defence (MoD) should coordinate; MoF will provide MoD adequate budget and; The DoT and the MoF would discuss and finalise pricing formula for spectrum including incentive for efficient use and disincentive for sub-optimal usages.

3.2.1 Thus, spectrum pricing issue was to be decided in consultation with the MoF. However, when a GoM was constituted in February 2006, its Terms of Reference (ToR) were modified at the instance of the DoT to keep the issue of spectrum pricing outside its purview. Though MoF insisted for its inclusion in the ToR for the GoM, DoT maintained that 'spectrum pricing was within the normal work carried out by them'. The MoF opined that spectrum pricing was an issue which has far reaching consequences for the economy and needed to be debated, but this was not considered at the highest level and the views of the DoT prevailed in finalization of
145

ToR. The GoM's role, in December 2006, at the instance of the DoT, was confined to issues concerning 'spectrum vacation'. Thus, without MoF getting a chance to contribute to the issue of pricing of spectrum, new licences continued to be issued along with the spectrum. It was also noted that the DoT kept the applications for UAS licence pending since March 2006 on the grounds of non-availability of spectrum, though a decision to get the spectrum vacated from MoD was taken way back in 2003. DoT admitted that prior to April 2007, availability of spectrum was not quantified and GSM spectrum allotments to service providers/operators were made after due co-ordination with MoD on a case to case basis. Since the availability of spectrum had not been quantified till April 2007, the basis for keeping the applications pending and seeking TRAI recommendation (April 2007) on limiting the number of Access Service Providers on the grounds of non-availability of spectrum is inexplicable.

3.2.2 Again in August 2007, TRAI in its report observed that the entry fee as it existed in 2001 was not a realistic price for obtaining a licence in the changed situation considering the dynamism and growth of telecom sector and it needs to be reassessed through a market mechanism. It also observed that value of spectrum was not correctly reflected in the extant pricing model and recommended again for de-linking of spectrum from licence. Yet, TRAI did not favour any change in 2G spectrum pricing even for new entrants on the grounds that it would affect the principles for level playing field for the new operators. It is to be noted that the role of TRAI, as per the TRAI Act is primarily to foster competition and to ensure a level playing field in the sector. Generation of revenue for the Government is not within the scope of its mandate and hence not perhaps a basis for framing its recommendations. Thus, while accepting the recommendations of TRAI, protecting the financial interests of the Government should have been an important consideration for the DoT, more so, when it had left out MoF from the decision making process with regard to the pricing formula of spectrum.

3.2.3 The DoT in response to the audit observation, stated (July 2010) that in February 2006 the then Hon'ble MoC& IT had apprised the Hon'ble Prime Minister that one major bottleneck in the sustained growth of telecom sector was the
146

availability of spectrum and not its allocation and thus ToR was revised with the approval of the Hon'ble Prime Minister.

3.2.4 While ensuring availability of spectrum which is also at a price, the DoT should not have lost sight of the need for a realistic price for 2G spectrum, especially in the light of the fact that the price being charged was discovered from a nascent telecom market in the year 2001 and was approved by the Government as benchmark only for the purpose of allowing migration of Basic Operators to UAS regime in 2003 for operating mobile services.

3.2.5 MoF while agreeing with the Audit view stated that the Ministry has at various points of time been advocating for a more rational mechanism for allocation and pricing of 2G spectrum. Right from August 2003 they have been recommending greater orientation in spectrum allocation, keeping efficiency and optimal utilization considerations in mind, through auction to users, who are willing to pay the maximum fee. MoF concurred with Audit that the assumption of the DoT to the effect that spectrum pricing was within its normal work allocation was not tenable. The MoF observed that in view the directions of the Union Cabinet (October 2003) and particularly in the absence of requisite clarity in the recommendations of TRAI and decision of the Union Cabinet, in regard to the fixation of entry fees for new licensees, prudent principles of governance would have required DoT to engage in further inter-ministerial discussions particularly with the MoF. The fact that this was not done despite repeated advices from MoF does give scope for creation of doubt, on the validity of the decision taken to fix the entry fee for new licenses at 2001 levels.

3.3 Move from Unified Access Service to Unified Licencing - Not Reviewed For 6 Years It is important for a growing economy that a policy decision is subject to review /is revisited constantly with adequate feed-back for application of collective wisdom of Government, particularly if it relates to a sector witnessing transition and operating within a dynamic environment, as was the case with the Telecom sector during 2003-2009. In this case, despite gaps in policy implementation as detailed above,

147

there was no attempt on the part of the DoT to review the implementation processes holistically, which is one reason for the pricing issue remaining unaddressed. When two-stage Unified Access Licensing policy could not be implemented fully as cleared by the Cabinet in October 2003, it was never again placed before the Cabinet for charting/approving the next /alternative course of action. The Cabinet did not get the chance to consider the changed scenario whereby Unified Services Licensing Regime introduced with the intention of de-linking spectrum allocation from licensing could not be fully achieved. An approved interim stage was thus treated as a final destination by the DoT.

3.3.1 DoT justified continuance of 2001 rates for issue of licenses to Audit stating that the Government treats telecom sector as an infrastructure sector and accordingly the Government's broad policy of taxes and regulation of the sector are promotional where revenue considerations play a secondary role. Also, the policy of grant of UAS licences was not changed since introduction because this has resulted in an unprecedented growth of telecom services. Change in policy is considered when the existing policies are not delivering desired results which were not the case in the telecom sector.

3.3.2 Policies are evolved through the initiatives of the concerned Ministries. The response of DoT suggested that it had not taken into account the unprecedented growth in the telecom sector, the scarcity of the resources and the increasing economic value of 2G spectrum, when it decided not to review the pricing of spectrum. This was despite TRAI's observation that value of spectrum needed to be reassessed through a market mechanism and MoF also was advising for rational pricing.

Issue of UAS Licence to Ineligible Applicants

The broad guidelines of the DoT (December 2005) details the eligibility conditions for grant of Unified Access Services Licence in a Service Area. Important eligibility conditions of the guidelines are:

148

The applicant must be an Indian company, registered under the Indian Companies Act'1956. The Company shall acknowledge compliance with the licence agreement as a part of Memorandum of Association of the Company. Any violation of the licence agreement shall automatically lead to the Company being unable to carry on its business in this regard. The duty to comply with the licence agreement shall also be made a part of Articles of Association.

The applicant company shall have a minimum paid up equity capital of the amount as prescribed in the guidelines depending on the Service Area(s) they are applying for as on the date of the application and shall submit a certificate to this effect by the applicant's Company Secretary along with application.

A promoter company/ legal person cannot have stakes in more than one Licensee Company for the same service area. No single company/ legal person, either directly or through its associates, shall have substantial equity holding in more than one Licensee Company in the same service area for the Access Services namely; Basic, Cellular and Unified Access Service. 'Substantial Equity' was defined as equity of 10% or more.

The applicant and promoters of the applicant company should have a combined net-worth of amount as prescribed in the guidelines depending on the service Area(s) they are applying for. The net-worth of only those promoters shall be counted, who have at least 10 % equity stake or more in the total equity of the company.

In case the applicant is found to be not eligible for the grant of licence for Unified Access Service, the applicant shall be informed accordingly. Thereafter the applicant is permitted to file a fresh application if so desired.

Each applicant Company was required to provide inter alia following information/ documents for each service area separately:

Certified copy of Certificate of Registration along with Articles of Association and Memorandum of Understanding. (Company Secretary to certify the copy) Paid up capital as on the date of application (Certificate from Company Secretary certifying the paid up capital to be provided.);
149

Details/para no. of Memorandum of Association of Company for compliance to Clause 5.G (iii) of guidelines dated 14.12.2005; Power of Attorney by Resolution of Board of Directors that the person signing the application is an authorized signatory.

The Applicant company was also required to give an undertaking to the effect that if the application was found to be incomplete in any respect and/or if found with conditional compliance, the same was to be summarily rejected. The applicant was also required to certify that if at any time, any averments made or information furnished for obtaining the licence was found incorrect, then his application and the licence if granted thereto on the basis of such application shall be cancelled. Section-18(2) of the Companies Act, 1956 stipulates that a certificate of registration by the Registrar of Companies shall be conclusive evidence that all the requirements of the Act with respect to the alteration and the confirmation thereof has been complied with, and henceforth the memorandum so as altered shall be the Memorandum of the Company. Section 19(1) provides that no alternation will have any effect until it has been duly registered in accordance with the relevant provisions of the Act. Verification of the files of the DoT and public documents accessed from the Ministry of Corporate Affairs, Government of India, New Delhi, revealed that as many as 85 Licenses out of the 122 new licenses issued to 13 Companies in 2008 were granted to those companies which did not satisfy the eligibility conditions prescribed by the DoT. All 85 licenses were given to companies which did not have the stipulated paid up capital at the time of application. Further, 45 out of these 85 licenses were issued to companies who failed to satisfy conditions of main object clause in their Memorandum of Association.
Misrepresentation of Facts By The Nine Real Estate Companies

Six newly incorporated applicant companies* belonging to Unitech Group (Brand name Uninor) had submitted their applications for grant of UAS licenses for 20 service areas to the DoT on 24 September 2007. Along with their applications, these companies had submitted copies of their Memorandum of Association/ Articles of Association (MOA/AOA) indicating the main object clause of Telecom Sector thereby claiming to meet the eligibility criterion for the grant of UAS licence.
150

On verification, it was revealed that all these companies had suppressed the fact of conditional nature of certification of registration done by the Registrar of Companies (ROC) on 20 September 2007 while registering the alterations in the main object clause in the MOA/AOA of these Companies. The ROC while certifying the alteration of the main object clauses of all six companies had stated that the certificate was subject to the change of name of the Company. Since in terms of Section 21 of the Companies Act 1956, the change of name of the Company could be done only with the approval of the Central Government signified in writing, the condition of the change of name of these applicant Companies was met in May 2008 only. As a result, all these six new companies were registered afresh with the new names in May 2008 by the ROC. Hence the alteration of the MOA of these Companies became effective in May 2008 only. As a result thereof, the MOA of these companies did not permit them to operate in the telecom sector on the date of application i.e. 24 September 2007. Hence, they were ineligible for the grant of UAS licenses.

These six companies had suppressed the fact of conditional certification of the alterations in the MOA/AOA by the ROC while submitting their applications for UAS licence on 24 September 2007. All these companies also misrepresented the altered MOA/AOA as the original MOA/AOA in their applications before DOT. The submission of the altered MOA/AOA of the Companies without full disclosure of the factual position of the alteration of the main object clause in the MOA/AOA and their conditional registration by the ROC was a fraudulent act of these six companies with the malafide intentions of obtaining the UAS licenses for 20 service areas by misleading the DoT.
False and Fictitious Claims Of Higher Paid Up Capital By 13 Companies

Paid up capital of the applying Company was one of the important conditions prescribed for obtaining a UAS Licence. The broad guidelines of the DoT (December 2005) prescribe that the applicant company shall have a minimum paid up equity capital of ` 3-10 crore depending on the Service Area(s) (Service Areas A- ` 10 crore, B- ` 5 crore and C - ` 3 crore) as on the date of the application and shall submit a certificate to this effect by the applicant's Company Secretary along with application.

151

Further the Companies Act 1956 prescribes the procedure to be followed for increase in the authorised share capital of a company. Only after authorised share capital is increased and registered with ROC, the procedure for increasing the Paid up capital could be undertaken by a registered Company.

Access to Dual Technology

In November 2003, based on Cabinet decision, the DoT had issued guidelines for UAS licence which stipulated that the service providers migrating to Unified Access Services Licence will continue to provide wireless services in already

allocated/contracted spectrum and no additional spectrum will be allotted under the migration process for Unified Access Services Licence.

In April 2007, the DoT requested TRAI to furnish their recommendations on permitting service providers to offer access services using combination of technologies (CDMA, GSM and/or any other) under the same licence. TRAI's recommendations on the issue were received along with other recommendations in August 2007. As per these recommendations, A licensee using one technology may be permitted on request, usage of alternative technology and thus allocation of dual spectrum. However, such a licensee must pay the same amount of fee which has been paid by existing licensees using the alternative technology or which would be paid by a new licensee going to use that technology. Regarding inter se priority for spectrum allocation, when the existing licensee becomes eligible for allocation of additional spectrum specific to the new technology, such a licensee has to be treated like any other existing licensee in the queue and the inter se priority of allocation should be based on the criteria that may be determined by the DoT for the existing licensee.
Undue Benefits to Reliance Communications Limited

Four Companies Reliance Communications Ltd., Tata Teleservices, Shyam Telelink Ltd. and HFCL Infotel Ltd. were providing CDMA based mobile service under UAS licence. Three Companies (Reliance Communications Ltd for 20 Service Areas, Shyam Telelink Ltd for Rajasthan Service Area and HFCL Infotel Ltd. for Punjab Service Area) had applied for permission for using GSM technology in 2006. Since the combination of technologies (CDMA, GSM and/or any other) under the same

152

licence was not permitted, DoT had not acceded to their request till April 2007. Based on the recommendations of TRAI, the decision for use of alternate technology was taken for the first time by the DoT on 17 October 2007. This decision, however, was taken without referring the matter to the full Telecom Commission even when it involved allocation of spectrum in 2007 at the 2001 price.

DoT issued a Press release in this regard on 19 October 2007. However, before announcing the acceptance of the recommendations of the TRAI in this regard, 'inprinciple' approval for using GSM technology ( dual/alternate technology) was given, on 18 October 2007 itself (a day before the press release) to the three

operators who had, sought for facility for using alternate technology in 2006 when it had not even been contemplated. The undue haste shown in issuing in-principle' approval for using GSM technology to Reliance Communication (20 service areas), Shyam Telelink Ltd. (1 service area) and HFCL Infotel Ltd (1 service area) was not evident afterwards as when the Tata Teleservices Ltd applied for dual technology immediately after the issue of the Press notification on19 October 2007, LOI was not issued to them till January 2008. Further, other applicants* were still waiting for similar licence for over two and half years as of now.

Reliance Communication Ltd. had complied with the requirements for permission to use dual technology on 19 October 2007 itself by depositing the non refundable entry fee of ` 1645 crore for 20 service areas through their sister concern Reliance Infocomm Ltd. Acceptance of bank drafts for ` 1645 crore by the orders of Reliance Infocomm Ltd (third party) on behalf of Reliance Communications Ltd was also not in order and shows the hurry through which entry fee was deposited. As a result, Reliance Communications Ltd. could acquire the right for allocation of 2G spectrum in 20 service areas on the day the policy itself was announced.

By taking the priority date of Reliance Communications Ltd. as the date on which they had moved application for use of alternate technology (when it was not even formulated and permitted) i.e. 2006, they were allocated start-up spectrum on 10 and 11 January 2008 in 14 service areas (the operator withdrew request for 6 service areas where they were already providing GSM services) ahead of other operators who had applied for new UAS licences and whose applications were kept pending on
153

the grounds of non-availability of spectrum. Spectrum under dual technology was allotted to HFCL Infotel Ltd. in Punjab only in September 2008 and Shyam Telelink Ltd.in Rajasthan in December 2008 though these companies also applied for spectrum under dual technology along with Reliance Communications Limited in 2006. In Delhi service area, Reliance was allocated GSM spectrum in January 2008 while Datacom Solutions Pvt. Ltd, Unitech Wireless Ltd, Spice Communications Ltd, Loop Telecom Pvt. Ltd. and Tata Teleservices Ltd. were not allocated GSM spectrum till September 2010. Thus the process followed by the DoT while introducing access to the dual technology to the existing telecom operators in India lacked transparency and fairness. Equal opportunity was denied to other similarly placed operators who could apply for use of dual technology, only after the formal announcement of the policy.
Violation of 2003 Cabinet Decision to Allow Additional Spectrum at 2001 Prices

Deviation from a Cabinet decision should normally be with the approval of Cabinet. However, in the present case, such a crucial decision to permit service providers to offer access services using combination of technologies (CDMA, GSM and/or any other) under the same licence with dual spectrum allocation was taken without the matter being referred to Cabinet.
Undue Advantage to Swan Telecom Pvt. Ltd in The Allocation Of Spectrum

It was noted that the priority list was adjusted in Punjab, and Maharashtra service areas to give undue advantage to Swan Telecom Pvt. Ltd in allocation of spectrum. In Punjab service area, 15 MHz GSM spectrum was available in September 2008 which was sufficient to meet the demand of only first three applicants in the priority list i.e. HFCL, Idea Cellular Ltd and Unitech Wireless Pvt. Ltd. The request of Idea Cellular Ltd who was at the second place in the priority list was, however, not considered on the grounds of its proposed merger with Spice Communications Ltd who were offering service in Punjab service area. By keeping out Idea Cellular Ltd from the priority list, spectrum was allocated to Swan Telecom Pvt. Ltd who was at the 4th position on the priority list. In identical situation in Maharashtra service area, Spice Communications Ltd was not allocated start-up spectrum citing its proposed merger with Idea Cellular Ltd. Here too, the resultant beneficiary was Swan Telecom Pvt. Ltd.

154

Value of Spectrum Allocated Beyond the Contracted Quantity

It was noticed in audit that 9 operators as per the details in the box, were allotted spectrum beyond the upper limit laid down in the UASL agreement. Thus while the DoT, on one hand, was not processing pending applications for licence due to non availability of spectrum, on the other hand it was allotting spectrum to existing operators beyond the contracted limit without any upfront charges being imposed or without determination of market price of spectrum. Based on the amount charged from CDMA operators for grant of GSM spectrum in 2007, the value of spectrum held by these operators beyond the contracted unit worked out to ` 2561 crore though its market value on date would be higher. The Technical Committee appointed by Hon'ble MoC&IT for Allocation of Access (GSM/CDMA) spectrum and pricing recommended in May 2009, that the additional spectrum assigned beyond 6.2+6.2 MHz in an service area should attract an upfront charge equivalent to the 3G auction price from the date of assignment. Subsequently, TRAI also recommended in May 2010 for charging the additional spectrum held by operators beyond the licensed quantity which is under consideration of the Government. In the event of these recommendations being accepted, the additional flow of revenue to the Government would come to ` 36,993 crore.
Non Fulfillment of the Roll out Obligations by the New Telecom Licensees

Out of 122 UAS Licences awarded in 2008, 85 Licences were awarded to the six new entrants (Unitech brand name Uninor, Swan name changed to Etisalat, Allianz since merged with Etisalat, Shipping Stop Dot Com name changed to Loop Telecom, Datacom name changed to Videocon and S Tel) to the telecom sector. As per the conditions of the UAS Licenses, these licensees were required to roll out the services in the 90 % service area in Metros and 10% District headquarters (DHQ) in other service areas within 12 months of the date of award of Licences. Audit found that though these 6 new operators obtained the initial 4.4 Mhz spectrum in 81 service areas during the period April 2008 to January 2009, none of them had rolled out their services as per the provisions of the UAS Licences in any service area till 31December 2009. Since there were many existing telecom UAS Licensees in dire need of this scarce natural resource, it resulted effectively into hoarding of the finite natural resources of the Nation by these operators. Thus DOT did not earn any
155

revenue from this natural resource during 2008-09 and 2009-10 due to inordinate delay in the commencement of services by these operators. Further, DoT also failed to recover Liquated Damages and penalty of ` 679 crore from these 6 operators for inordinate delay in the rolling out their services till 31 December 2009.

Financial Impact
Whether the entry fee was expected to reflect the value of the spectrum at all? The 2003 Cabinet decision intended to make the UAS licence only an instrument to enter the business of providing cellular and other telecom services irrespective of the technology used for the purpose. Companies could obtain spectrum of required type by paying its price through auction or any other arrangement decided by an independent regulator to be set up for spectrum pricing and management. Since no price discovery of spectrum was attempted for 2G spectrum separately, the entry fee discovered in 2001 is mainly the price of spectrum that came with UAS licence.
Under Pricing Of 2G and Consequent Loss UASL Applicant Had Offered Higher Price

S TEL Limited in a further communication addressed to Hon'ble MoC&IT dated 27 December 2007 enhanced its earlier offer of ` 6000 crore to ` 13,752 crore over a period of ten years for allotment of 6.2 MHz GSM spectrum. If the price offered by S Tel Ltd which he proposed to revise upwards in case of any counter bids, is used as indicator of market valuation of 6.2 MHz of 2G spectrum at that time, value in respect of all 122 new licences and 35 licences under dual technology after discounting the receivables of the future years work out to ` 65,909 crore as against ` 12,386 crore collected by the DoT.

This indicated that had an open process of bidding/auction been used for price discovery and hasty and abrupt changes in deadlines and dates not been made, it could have been possible for the Government to have received at least this amount.
Value Based On Prices Discovered For 3G Spectrum

If price is calculated at 3G rates which can also be taken as one of the indicators for assessing the value of 2G spectrum allocated to UAS licensees in 2008, the value

156

works out to 1, 11,512 crore against ` 9014 crore realised by DoT. Similarly, for spectrum allotted under the dual technology as the value would have been ` 40526 crore, as against ` 3,372 crore collected. The total difference in value worked out to ` 1,39,652 crore .
Sale of Equity by UAS Licensee Firms at Higher Value

Three companies viz. Swan Telecom, S Tel and Unitech were new entrants in the telecom sector. The fact that these operators could draw huge foreign investments, even before establishing a foothold in the Indian telecom market would suggest that acquiring UASL and with it, allotment of 4.4 MHz of GSM spectrum for roll out, was the main factor which attracted the foreign investment. A comparison of foreign equity attracted by the new entrants in the Indian telecom market would reveal that the cost of a pan India licence could be a value between ` 7758 crore to ` 9100 crore. However, the DoT issued pan India licences at ` 1658 crore. As a result 122 licenses and 35 dual technology approvals issued in 2008 could have earned the revenue ranging from ` 58,000 crore to ` 68,000 crore to the Government against the actual revenues of ` 12,386 crore earned by them.

In an open transparent system, there is a possibility that Government would have earned even more revenue than that these new entrants have been able to attract.

157

Conclusions
The entire process of allocation of UAS licences lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner. The DoT did not follow its own guidelines on eligibility conditions, arbitrarily changed the cutoff date for receipt of applications post facto and altered the conditions of the FCFS procedure at crucial junctures without valid reasons, which gave unfair advantage to certain companies over others.

1. The Department of Telecommunications also did not do the requisite due diligence in the examination of the applications submitted for the UAS licenses, leading to the grant of 85 out of 122 UAS licences to ineligible applicants.

2. Dual Technology was also introduced by the DoT in October 2007 in a hasty and arbitrary manner and in-principle approval was given to 3 operators on a day prior to the announcement of the policy, which gave the perception of discrimination against other players in the field

3. The entire implementation process does not withstand the test of scrutiny, and hence, the widely held belief that it has benefitted a few operators and has not been able to maximize generation of revenue from allocation of such a scarce resource. The role of Telecom Regulatory Authority of India would also appear to have been reduced to that of a spectator as its recommendations were either ignored or applied selectively

The entire process of allocation of 2G spectrum raises serious concern about the systems of governance in the Department of Telecommunications which need to be thoroughly reviewed and revamped. To ensure that such lapses do not

occur in any Ministry or Department of the Government, there is an imperative need to fix responsibility and enforce accountability

158

RIGHT TO INFORMATION ACT, 2005

Introduction
The Government of India has enacted "Right to Information Act 2005" for citizens to secure access to information under the control of Public Authorities in order to promote transparency and accountability in the working of any public authority. The Right to Information Act 2005 (RTI) is an Act of the Parliament of India "to provide for setting out the practical regime of right to information for citizens." The Act applies to all States and Union Territories of India except the State of Jammu and Kashmir. Jammu and Kashmir has its own act called Jammu & Kashmir Right to Information Act, 2009. Under the provisions of the Act, any citizen may request information from a "public authority" (a body of Government or "instrumentality of State") which is required to reply expeditiously or within thirty days. The Act also requires every public authority to computerize their records for wide dissemination and to pro-actively publish certain categories of information so that the citizens need minimum recourse to request for information formally. This law was passed by Parliament on 15 June 2005 and came fully into force on 13 October 2005.[1] Information disclosure in India was hitherto restricted by the Official Secrets Act 1923 and various other special laws, which the new RTI Act now relaxes. The formal recognition of a legal right to information in India occurred more than two decades before legislation was finally enacted, when the Supreme Court of India ruled in State of U.P. v. Raj Narain that the right to information is implicit in the right to freedom of speech and expression explicitly guaranteed in Article 19 of the Indian Constitution.

Freedom of Information Act, 2002

Passage of a national level law, however, proved to be a difficult task. Given the experience of state governments in passing practicable legislation, the Central Government appointed a working group under H. D. Shourie and assigned it the task of drafting legislation. The Shourie draft, in an extremely diluted form, was the basis for the Freedom of Information Bill, 2000 which eventually became law under the
159

Freedom of Information Act, 2002. This Act was severely criticized for permitting too many exemptions, not only under the standard grounds of national security and sovereignty, but also for requests that would involve "disproportionate diversion of the resources of a public authority". There was no upper limit on the charges that could be levied. There were no penalties for not complying with a request for information. The FoI Act, consequently, never came into effective force.

State Level Laws

The RTI Laws were first successfully enacted by the state governments of Tamil Nadu (1997), Goa (1997), Rajasthan (2000), Karnataka (2000), Delhi (2001), Maharashtra (2002), Assam (2002), Madhya Pradesh (2003), and Jammu and Kashmir (2004). The Maharashtra and Delhi State level enactments are considered to have been the most widely used. The Delhi RTI Act is still in force. Jammu & Kashmir has its own Right to Information Act of 2009, the successor to the repealed J&K Right to Information Act, 2004 and its 2008 amendments.

Scope
The Act covers the whole of India except Jammu and Kashmir, where J&K Right to Information Act is in force. It is applicable to all constitutional authorities, including the executive, legislature and judiciary; any institution or body established or constituted by an act of Parliament or a state legislature. It is also defined in the Act that bodies or authorities established or constituted by order or notification of appropriate government including bodies "owned, controlled or substantially financed" by government, or non-Government organizations "substantially financed, directly or indirectly by funds" provided by the government are also covered in it.

Private Bodies
Private bodies are not within the Act's ambit directly. However, information that can be accessed under any other law in force by a public authority can also be requested. In a landmark decision of 30-Nov-2006 ('Sarbajit Roy versus DERC') the Central Information Commission also reaffirmed that privatized public utility companies continue to be within the RTI Act- their privatization not withstanding.

160

Right to Information
The right to information includes access to information which is held by or under the control of any public authority and includes the right to inspect the work, document, records, taking notes, extracts or certified copies of documents / records and certified samples of the materials and obtaining information which is also stored in electronic form. The Act empowers every citizen to:

Ask any questions from the Government or seek any information. Take copies of any governmental documents. Inspect any governmental documents. Inspect any Governmental works. Take samples of materials of any Governmental work.

Process

Under the Act, all authorities covered must appoint their Public Information Officer (PIO). Any person may submit a request to the PIO for information in writing. It is the PIO's obligation to provide information to citizens of India who request information under the Act. If the request pertains to another public authority (in whole or part), it is the PIO's responsibility to transfer/forward the concerned portions of the request to a PIO of the other within 5 working days. In addition, every public authority is required to designate Assistant Public Information Officers (APIOs) to receive RTI requests and appeals for forwarding to the PIOs of their public authority. The applicant is not required to disclose any information or reasons other than his name and contact particulars to seek the information. "Apply RTI" [6] and "Rtination" [7] are the online system which facilitates the filing of RTI (Right To Information Act, India) applications online. It aims primarily at minimizing the time taken and effort required in filing an application. The Act specifies time limits for replying to the request.

If the request has been made to the PIO, the reply is to be given within 30 days of receipt.

If the request has been made to an APIO, the reply is to be given within 35 days of receipt.
161

If the PIO transfers the request to another public authority (better concerned with the information requested), the time allowed to reply is 30 days but computed from the day after it is received by the PIO of the transferee authority.

Information concerning corruption and Human Rights violations by scheduled Security agencies (those listed in the Second Schedule to the Act) is to be provided within 45 days but with the prior approval of the Central Information Commission.

However, if life or liberty of any person is involved, the PIO is expected to reply within 48 hours.

Since the information is to be paid for, the reply of the PIO is necessarily limited to either denying the request (in whole or part) and/or providing a computation of "further fees". The time between the reply of the PIO and the time taken to deposit the further fees for information is excluded from the time allowed. If information is not provided within this period, it is treated as deemed refusal. Refusal with or without reasons may be ground for appeal or complaint. Further, information not provided in the times prescribed is to be provided free of charge. For Central Departments as of 2006, there is a fee of 10 for filing the request, 2 per page of information and 5 for each hour of inspection after the first hour. If the applicant is a Below Poverty Card holder, then no fee shall apply. Such BPL Card holders have to provide a copy of their BPL card along with their application to the Public Authority. States Government and High Courts fix their own rules.
Partial Disclosure

The Act allows those part(s) of the record which are not exempt from disclosure and which can reasonably be severed from parts containing exempt information to be provided.
Exclusions

Central Intelligence and Security agencies specified in the Second Schedule like IB,Directorate General of Income tax(Investigation), RAW, Central Bureau of Investigation (CBI), Directorate of Revenue Intelligence, Central Economic Intelligence Bureau, Directorate of Enforcement, Narcotics Control Bureau, Aviation
162

Research Centre, Special Frontier Force, BSF, CRPF, ITBP, CISF, NSG, Assam Rifles, Special Service Bureau, Special Branch (CID), Andaman and Nicobar, The Crime Branch-CID-CB, Dadra and Nagar Haveli and Special Branch, Lakshadweep Police. Agencies specified by the State Governments through a Notification will also be excluded. The exclusion, however, is not absolute and these organizations have an obligation to provide information pertaining to allegations of corruption and human rights violations. Further, information relating to allegations of human rights violation could be given but only with the approval of the Central or State Information Commission
Information Exclusions

The following is exempt from disclosure [Section .8)]

Information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, "strategic, scientific or economic" interests of the State, relation with foreign State or lead to incitement of an offense;

Information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court;

Information, the disclosure of which would cause a breach of privilege of Parliament or the State Legislature;

Information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information;

Information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;

Information received in confidence from foreign Government; Information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes;

Information which would impede the process of investigation or apprehension or prosecution of offenders;

163

Cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers;

Information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual (but it is also provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied by this exemption);

Notwithstanding any of the exemptions listed above, a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests. (NB: This provision is qualified by the proviso to sub-section 11(1) of the Act which exempts disclosure of "trade or commercial secrets protected by law" under this clause when read along with 8(1)(d))

Role of Government
Section 26 of the Act enjoins the central government, as also the state governments of the Union of India (excluding J&K), to initiate necessary steps to:

Develop educational programs for the public especially disadvantaged communities on RTI.

Encourage Public Authorities to participate in the development and organization of such programs.

Promote timely dissemination of accurate information to the public. Train officers and develop training materials. Compile and disseminate a User Guide for the public in the respective official language.

Publish names, designation postal addresses and contact details of PIOs and other information such as notices regarding fees to be paid, remedies available in law if request is rejected etc.

Effects

In the first year of National RTI, 42,876 (not yet official) applications for information were filed to Central (i.e. Federal) public authorities. Of these 878 were disputed at
164

the final appellate stage - the Central Information Commission at New Delhi. A few of these decisions have thereafter been mired in further legal controversy in the various High Courts of India. The first stay order against a final appellate decision of the Central Information Commission was granted on 3.May.2006 by the High Court of Delhi in WP(C)6833-35/2006 cited as "NDPL & Ors. versus Central Information Commission & Ors". The Government of India's purported intention in 2006 to amend the RTI Act was postponed after public disquiet, but has been revived again in 2009 by the DoPT

165

CASE STUDY: CBSE vs. ADITYA BANDOPADHYAY & OTHERS

Decided On: 09.08.2011 Appellants: Central Vs Respondent: Aditya Bandopadhyay and Ors. Honorable Judges: R.V. Raveendran A.K. Patnaik, JJ. Board of Secondary Education and Anr.

Subject: Right to Information Subject: Education Acts / Rules / Orders:

Right to Information Act, 2005 - Sections 2, 3, 4, 4(1), 4(2), 4(3), 4(4), 5, 6, 7, 7(9), 8, 8(1), 8(3), 9, 10, 11, 19(8), 22 and 24; Official Secrets Act, 1923; Freedom to Information Act, 2002 - Section 8; Constitution of India - Articles 14, 19 and 19(1); Maharashtra Secondary and Higher Secondary Board Rules, 1977 - Rule 104, 104(1) and 104(3)

Cases Referred: Maharashtra State Board of Secondary Education v. Paritosh B. Sheth MANU/SC/0055/1984 : 1984 (4) SCC 27; Parmod Kumar Srivastava v. Chairman, Bihar PAC MANU/SC/0588/2004 : 2004 (6) SCC 714; Board of Secondary Education v. Pavan Ranjan P 2004 (13) SCC 383; Board of Secondary Education v. S 2007 (1) SCC 603; Secretary, West Bengal Council of Higher Secondary Education v. I Dass MANU/SC/7960/2007 : 2007 (8) SCC 242; State of Uttar Pradesh v. Raj Narain MANU/SC/0032/1975 : (1975) 4 SCC 428; Dinesh Trivedi v. Union of India MANU/SC/1138/1997 : (1997) 4 SCC 306;People's Union for Civil Liberties v. Union of India MANU/SC/0019/2004 : (2004) 2 SCC 476; Bristol and West Building Society v. Mothew 1998 Ch. 1; Wolf v. Superior

166

Court 2003 (107) California Appeals, 4th 25; Bihar School Examination Board v. Suresh Prasad Sinha MANU/SC/1605/2009 : (2009) 8 SCC 483 Prior History: From the Judgment and Order dated 05.02.2009 of the High Court of Calcutta in Writ Petition 18189 (W) of 2008

Case Notes:
1. Right to Information Right to inspect evaluated answer books Right to Information Act, 2005 Appeal against order of High Court holding that evaluated answer-books of an examinee writing a public examination conducted by statutory bodies like CBSE or any University or Board of Secondary Education being a 'document, manuscript record, and opinion' fell within definition of "information" under Act and therefore directed CBSE to grant inspection of answer books to examinees who sought information Whether an examinee's right to information under Act included a right to inspect his evaluated answer books in a public examination or taking certified copies thereof Held, When a candidate participates in an examination and writes his answers in an answer-book and submits it to examining body for evaluation and declaration of result, answer-book was a document or record When answer-book was evaluated by an examiner appointed by examining body evaluated answer-book became a record containing 'opinion' of examiner Therefore, evaluated answer-book was also an 'information' under Act Right of citizens to access any information held or under control of any public authority should be read in harmony with exclusions/exemptions in Act Unless examining bodies were able to demonstrate that evaluated answer-books fell under any of categories of exempted 'information', they would be bound to provide access to information and any applicant could either inspect document/record, take notes, extracts or obtain certified copies thereof

167

2. Right to Information Right to inspect evaluated answer books Right to Information Act, 2005 Whether decisions of this Court in Maharashtra State Board of Secondary Education v. Paritosh B. Sheth and subsequent decisions following same in any way affect or interfere with right of an examinee seeking inspection of his answer books or seeking certified copies thereof. Held, Principles laid down in decisions such as Maharashtra State Board depend upon provisions of Rules and Regulations of examining body If Rules and Regulations of examining body provided for re-evaluation, inspection or disclosure of answer-books then none of principles in Maharashtra State Board or other decisions following it would apply or be relevant Provision barring inspection or disclosure of answer-books or re-evaluation of answer-books and restricting remedy of candidates only to re-totalling was valid and binding on examinee Provisions of Act would prevail over provisions of bye-laws/rules of examining bodies in regard to examinations Unless examining body was able to demonstrate that answer-books fell under exempted category of information, examining body would be bound to provide access to an examinee to inspect and take copies of his evaluated answerbooks even if such inspection or taking copies was barred under rules/bye-laws of examining body governing examinations Therefore, decision of Court in Maharashtra State Board of Secondary Education v. Paritosh B. Sheth and subsequent decisions following same would not affect or interfere with right of examinee seeking inspection of answer-books or taking certified copies thereof Issue answered.

3. Right to Information Right to inspect evaluated answer books Section 8(1) of Right to Information Act, 2005 Whether an examining body had evaluated answer books "in a fiduciary relationship" and consequently had no obligation to give inspection of evaluated answer books under

Section 8(1)(e) of Act Held, Term 'fiduciary relationship' was used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transactions Fiduciary was expected to act in confidence and for benefit and advantage of beneficiary, and use
168

good faith and fairness in dealing with beneficiary or things belonging to beneficiary Examining bodies could be said to act in a fiduciary capacity with reference to students who participated in an examination Examining body cannot be in a fiduciary relationship either with reference to examinee who participated in examination and whose answer-books were evaluated by examining body In furnishing copy of an answer-book, there was no question of breach of confidentiality, privacy, secrecy or trust Examining body was 'principal' and examiner was agent entrusted with work of evaluation of answer-books Examining body does not hold evaluated answer-books in a fiduciary relationship Therefore, exemption under Section 8(1)(e)of Act was not available to examining bodies with reference to evaluated answer-books Therefore, examining bodies would have to permit inspection sought by examinees

4. Right to Information Right to inspect evaluated answer books Section 8(3) of Right to Information Act, 2005 If examinee was entitled to inspection of evaluated answer books or seek certified copies thereof, whether such right was subject to any limitations, conditions or safeguards

Held, right to access information does not extend beyond period during which examining body was expected to retain answer-books If rules and regulations governing functioning of respective public authority require preservation of information for only a limited period, applicant for information will be entitled to such information only if he seeks information when it was available with public authority Section 8(3) of Act was not a provision requiring all 'information' to be preserved and maintained for twenty years or more nor does it override any rules or regulations governing period for which record, document or information was required to be preserved by any public authority Where information sought was not a part of record of a public authority and where such information was not required to be maintained under any law or rules or regulations of public authority, Act does not cast an obligation upon public authority to collect or collate such nonavailable information and then furnish it to an applicant Order of High Court directing examining bodies to permit examinees to have inspection of their
169

answer books affirmed subject to clarifications regarding the scope of Act and safeguards and conditions subject to which 'information' should be furnished Appeals disposed of. Ratio Decidendi: Examining body does not hold evaluated answer-books in a fiduciary relationship.

The Case
The first Respondent appeared for the Secondary School Examination, 2008 conducted by the Central Board of Secondary Education (for short 'CBSE' or the 'Appellant'). When he got the mark sheet he was disappointed with his marks. He thought that he had done well in the examination but his answer-books were not properly valued and that improper valuation had resulted in low marks. Therefore he made an application for inspection and re-evaluation of his answer-books. CBSE rejected the said request by letter dated 12.7.2008. The reasons for rejection were: (i) The information sought was exempted under Section 8(1)(e) of RTI Act since CBSE shared fiduciary relationship with its evaluators and maintain confidentiality of both manner and method of evaluation.

(ii) The Examination Bye-laws of the Board provided that no candidate shall claim or is entitled to re-evaluation of his answers or disclosure or inspection of answer book(s) or other documents. (iii) The larger public interest does not warrant the disclosure of such information sought. (iv) The Central Information Commission, by its order dated 23.4.2007 in appeal no. ICPB/A-3/CIC/2006 dated 10.2.2006 had ruled out such disclosure.

Aditya Bandhopadhyays Petition

Feeling aggrieved the first Respondent filed W.P. No. 18189(W)/2008 before the Calcutta High Court and sought the following reliefs:

170

(a) For a declaration that the action of CBSE in excluding the provision of reevaluation of answer-sheets, in regard to the examinations held by it was illegal, unreasonable and violative of the provisions of the Constitution of India;

(b) For a direction to CBSE to appoint an independent examiner for re-evaluating his answer-books and issue a fresh marks card on the basis of re-evaluation; (c) For a direction to CBSE to produce his answer-books in regard to the 2008 Secondary School Examination so that they could be properly reviewed and fresh marks card can be issued with re-evaluation marks;

(d) For quashing the communication of CBSE dated 12.7.2008 and for a direction to produce the answer-books into court for inspection by the first Respondent. The Respondent contended that Section 8(1)(e) of Right to Information Act, 2005 ('RTI Act' for short) relied upon by CBSE was not applicable and relied upon the provisions of the RTI Act to claim inspection.

The examinees and the Central Information Commission contended that the object of the RTI Act is to ensure maximum disclosure of information and minimum exemptions from disclosure; that an examining body does not hold the evaluated answer books, in any fiduciary relationship either with the student or the examiner; and that the information sought by any examinee by way of inspection of his answer books, will not fall under any of the exempted categories of information enumerated in Section 8 of the RTI Act. It was submitted that an examining body being a public authority holding the 'information', that is, the evaluated answerbooks, and the inspection of answer-books sought by the examinee being exercise of 'right to information' as defined under the Act, the examinee as a citizen has the right to inspect the answer-books and take certified copies thereof. It was also submitted that having regard to Section 22 of the RTI Act, the provisions of the said Act will have effect notwithstanding anything inconsistent in any law and will prevail over any rule, regulation or bye law of the examining body barring or prohibiting inspection of answer books.

171

CBSEs Defense
CBSE resisted the petition. It contended that as per its Bye-laws, re-evaluation and inspection of answer-books were impermissible and what was permissible was only verification of marks. They relied upon the CBSE Examination Bye-law No. 61, relevant portions of which are extracted below: Bye Law No. 61. Verification of marks obtained by a Candidate in a subject (i) A candidate who has appeared at an examination conducted by the Board may apply to the concerned Regional Officer of the Board for verification of marks in any particular subject. The verification will be restricted to checking whether all the answer's have been evaluated and that there has been no mistake in the totaling of marks for each question in that subject and that the marks have been transferred correctly on the title page of the answer book and to the award list and whether the supplementary answer book(s) attached with the answer book mentioned by the candidate are intact. No revaluation of the answer book or supplementary answer book(s) shall be done. (ii) Such an application must be made by the candidate within 21 days from the date of the declaration of result for Main Examination and 15 days for Compartment Examination. (iii) All such applications must be accompanied by payment of fee as prescribed by the Board from time to time. (iv) No candidate shall claim, or be entitled to, revaluation of his/her answers or disclosure or inspection of the answer book(s) or other documents.

(vi) In no case the verification of marks shall be done in the presence of the candidate or anyone else on his/her behalf, nor will the answer books be shown to him/her or his/her representative. (vii) Verification of marks obtained by a candidate will be done by the officials appointed by or with the approval of the Chairman. (viii) The marks, on verification will be revised upward or downward, as per the actual marks obtained by the candidate in his/her answer book.

172

Bye Law No. 62. Maintenance of Answer Books The answer books shall be maintained for a period of three months and shall thereafter be disposed of in the manner as decided by the Chairman from time to time.

CBSE submitted that 12 to 13 lakhs candidates from about 9000 affiliated schools across the country appear in class X and class XII examinations conducted by it and this generates as many as 60 to 65 lakhs of answer-books; that as per Examination Bye-law No. 62, it maintains the answer books only for a period of three months after which they are disposed of. It was submitted that if candidates were to be permitted to seek re-evaluation of answer books or inspection thereof, it will create confusion and chaos, subjecting its elaborate system of examinations to delay and disarray. It was stated that apart from class X and class XII examinations, CBSE also conducts several other examinations (including the All India Pre-Medical Test, All India Engineering Entrance Examination and Jawahar Navodaya Vidyalaya's Selection Test). If CBSE was required to re-evaluate the answer-books or grant inspection of answer-books or grant certified copies thereof, it would interfere with its effective and efficient functioning, and will also require huge additional staff and infrastructure. It was submitted that the entire examination system and evaluation by CBSE is done in a scientific and systemic manner designed to ensure and safeguard the high academic standards and at each level utmost care was taken to achieve the object of excellence, keeping in view the interests of the students.

Evaluation Method Adopted By CBSE

The examination papers are set by the teachers with at least 20 years of teaching experience and proven integrity. Paper setters are normally appointed from amongst academicians recommended by then Committee of courses of the Board. Every paper setter is asked to set more than one set of question papers which are moderated by a team of moderators who are appointed from the academicians of the University or from amongst the Senior Principals. The function of the moderation team is to ensure correctness and consistency of different sets of question papers with the curriculum and to assess the difficulty level to cater to the students of different schools in different categories. After assessing the papers
173

from every point of view, the team of moderators gives a declaration whether the whole syllabus is covered by a set of question papers, whether the distribution of difficulty level of all the sets is parallel and various other aspects to ensure uniform standard. The Board also issues detailed instructions for the guidance of the moderators in order to ensure uniform criteria for assessment. The evaluation system on the whole is well organized and fool-proof. All the candidates are examined through question papers set by the same paper setters. Their answer books are marked with fictitious roll numbers so as to conceal their identity. The work of allotment of fictitious roll number is carried out by a team working under a Chief Secrecy Officer having full autonomy. The Chief Secrecy Officer and his team of assistants are academicians drawn from the Universities and other autonomous educational bodies not connected with the Board. The Chief Secrecy Officer himself is usually a person of the rank of a University professor. No official of the Board at the Central or Regional level is associated with him in performance of the task assigned to him. The codes of fictitious roll numbers and their sequences are generated by the Chief Secrecy Officer himself on the basis of mathematical formula which randomize the real roll numbers and are known only to him and his team. This ensures complete secrecy about the identification of the answer book so much so, that even the Chairman, of the Board and the Controller of Examination of the Board do not have any information regarding the fictitious roll numbers granted by the Chief Secrecy Officer and their real counterpart numbers. At the evaluation stage, the Board ensures complete fairness and uniformity by providing a marking scheme which is uniformity applicable to all the examiners in order to eliminate the chances of subjectivity. These marking schemes are jointly prepared at the Headquarters of the Board in Delhi by the Subject Experts of all the regions. The main purpose of the marking scheme is to maintain uniformity in the evaluation of the answer books. The evaluation of the answer books in all major subjects including mathematics, science subjects is done in centralized "on the spot" evaluation centers where the examiners get answer book in interrupted serial orders. Also, the answer books are jumbled together as a result of which the examiners, say in Bangalore may be
174

marking the answer book of a candidate who had his examination in Pondicherry, Goa, Andaman and Nicobar islands, Kerala, Andhra Pradesh, Tamil Nadu or Karnataka itself but he has no way of knowing exactly which answer book he is examining. The answer books having been marked with fictitious roll numbers give no clue to any examiner about the state or territory it belongs to. It cannot give any clue about the candidate's school or centre of examination. The examiner cannot have any inclination to do any favor to a candidate because he is unable to decodify his roll number or to know as to which school, place or state or territory he belongs to. The examiners check all the questions in the papers thoroughly under the supervision of head examiner and award marks to the sub parts individually not collectively. They take full precautions and due attention is given while assessing an answer book to do justice to the candidate. Re-evaluation is administratively impossible to be allowed in a Board where lakhs of students take examination in multiple subjects. There are strict instructions to the additional head examiners not to allow any shoddy work in evaluation and not to issue more than 20-25 answer books for evaluation to an examiner on a single day. The examiners are practicing teachers who guard the interest of the candidates. There is no ground to believe that they do unjust marking and deny the candidates their due. It is true that in some cases totaling errors have been detected at the stage of scrutiny or verification of marks. In order to minimize such errors and to further strengthen and to improve its system, from 1993 checking of totals and other aspects of the answers has been trebled in order to detect and eliminate all lurking errors. The results of all the candidates are reviewed by the Results Committee functioning at the Head Quarters. The Regional Officers are not the number of this Committee. This Committee reviews the results of all the regions and in case it decides to standardize the results in view of the results shown by the regions over the previous years, it adopts a uniform policy for the candidates of all the regions. No special policy is adopted for any region, unless there are some special reasons. This practice of awarding standardized marks in order to moderate the overall results is a practice common to most of the Boards of Secondary
175

Education. The exact number of marks awarded for the purpose of standardization in different subjects varies from year to year. The system is extremely impersonalized and has no room for collusion infringement. It is in a word a scientific system. CBSE submitted that the procedure evolved and adopted by it ensures fairness and accuracy in evaluation of answer-books and made the entire process as foolproof as possible and therefore denial of re-evaluation or inspection or grant of copies cannot be considered to be denial of fair play or unreasonable restriction on the rights of the students.

Questions to Be Considered
On the contentions urged, the following questions arise for our consideration: (i) Whether an examinee's right to information under the RTI Act includes a right to inspect his evaluated answer books in a public examination or taking certified copies thereof? (ii) Whether the decisions of this Court in Maharashtra State Board of Secondary Education [MANU/SC/0055/1984 : 1984 (4) SCC 27] and other cases referred to above, in any way affect or interfere with the right of an examinee seeking inspection of his answer books or seeking certified copies thereof?

(iii) Whether an examining body holds the evaluated answer books "in a fiduciary relationship" and consequently has no obligation to give inspection of the evaluated answer books under Section 8(1)(e) of RTI Act?

(iv) If the examinee is entitled to inspection of the evaluated answer books or seek certified copies thereof, whether such right is subject to any limitations, conditions or safeguards?

176

Relevant Legal Provisions

To consider these questions, it is necessary to refer to the statement of objects and reasons, the preamble and the relevant provisions of the RTI Act. RTI Act was enacted in order to ensure smoother, greater and more effective access to information and provide an effective framework for effectuating the right of information recognized under Article 19 of the Constitution.

The preamble to the Act declares the object sought to be achieved by the RTI Act thus: An Act to provide for setting out the practical regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority, the constitution of a Central Information Commission and State Information Commissions and for matters connected therewith or incidental thereto. Whereas the Constitution of India has established democratic Republic; And whereas democracy requires an informed citizenry and transparency of information which are vital to its functioning and also to contain corruption and to hold Governments and their instrumentalities accountable to the governed; And whereas revelation of information in actual practice is likely to conflict with other public interests including efficient operations of the Governments, optimum use of limited fiscal resources and the preservation of confidentiality of sensitive information; And whereas it is necessary to harmonize these conflicting interests while preserving the paramountcy of the democratic ideal. Chapter II of the Act containing Sections 3 to 11 deals with right to information and obligations of public authorities.

Section 3 provides for right to information and reads thus: "Subject to the provisions of this Act, all citizens shall have the right to information." This section

177

makes it clear that the RTI Act gives a right to a citizen to only access information, but not seek any consequential relief based on such information.

Section 4 deals with obligations of public authorities to maintain the records in the manner provided and publish and disseminate the information in the manner provided.

Section 6 deals with requests for obtaining information. It provides that applicant making a request for information shall not be required to give any reason for requesting the information or any personal details except those that may be necessary for contacting him.

Section 8 deals with exemption from disclosure of information and is extracted in its entirety:
Exemption from Disclosure from Information (Section 8)

(1) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,-

(a) information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence; (b) Information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court; (c) Information, the disclosure of which would cause a breach of privilege of Parliament or the State Legislature; (d) Information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information;

178

(e) Information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;

(f) Information received in confidence from foreign Government; (g) Information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes; (h) Information which would impede the process of investigation or apprehension or prosecution of offenders; (i) Cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers: Provided that the decisions of Council of Ministers, the reasons thereof, and the material on the basis of which the decisions were taken shall be made public after the decision has been taken, and the matter is complete, or over: Provided further that those matters which come under the exemptions specified in this section shall not be disclosed; (j) Information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or the State Public Information Officer or the appellate authority, as the case may be, is satisfied that the larger public interest justifies the disclosure of such information: Provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person.

(2) Notwithstanding anything in the Official Secrets Act, 1923 (19 of 1923) nor any of the exemptions permissible in accordance with Sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests.
179

(3) Subject to the provisions of Clauses (a), (c) and (i) of Sub-section (1), any information relating to any occurrence, event or matter which has taken place, occurred or happened twenty years before the date on which any request is made under Section 6 shall be provided to any person making a request under that section: Provided that where any question arises as to the date from which the said period of twenty years has to be computed, the decision of the Central Government shall be final, subject to the usual appeals provided for in this Act.

Section 9 provides that without prejudice to the provisions of Section 8, a request for information may be rejected if such a request for providing access would involve an infringement of copyright.

Section 9 deals with severability of exempted information and Sub-section (1) thereof which is extracted below:

(1) Where a request for access to information is rejected on the ground that it is in relation to information which is exempt from disclosure, then, notwithstanding anything contained in this Act, access may be provided to that part of the record which does not contain any information which is exempt from disclosure under this Act and which can reasonably be severed from any part that contains exempt information. Section 11 deals with third party information and Sub-section (1) thereof which is extracted below: (1) Where a Central Public Information Officer or a State Public Information Officer, as the case may be, intends to disclose any information or record, or part thereof on a request made under this Act, which relates to or has been supplied by a third party and has been treated as confidential by that third party, the Central Public Information Officer or State Public Information Officer, as the case may be, shall, within five days from the receipt of the request, give a written notice to such third party of the request and of the fact that the Central Public Information Officer or State Public Information Officer, as the case may be, intends to disclose the information or record, or part thereof, and invite the third party to make a
180

submission in writing or orally, regarding whether the information should be disclosed, and such submission of the third party shall be kept in view while taking a decision about disclosure of information: Provided that except in the case of trade or commercial secrets protected by law, disclosure may be allowed if the public interest in disclosure outweighs in importance any possible harm or injury to the interests of such third party. The definitions of information, public authority, record and right to information in Clauses (f), (h), (i) and (j) of Section 2 of the RTI Act are extracted below:

(f) "information" means any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force; (h) "Public authority" means any authority or body or institution of selfgovernment established or constituted(a) by or under the Constitution; (b) By any other law made by Parliament; (c) By any other law made by State Legislature; (d) By notification issued or order made by the appropriate Government, and includes any(i) Body owned, controlled or substantially financed; (ii) Non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; (i) "Record" includes(a) Any document, manuscript and file; (b) Any microfilm, microfiche and facsimile copy of a document; (c) Any reproduction of image or images embodied in such microfilm (whether enlarged or not); and
181

(d) any other material produced by a computer or any other device; (j) "Right to information" means the right to information accessible under this Act which is held by or under the control of any public authority and includes the right to(i) Inspection of work, documents, records; (ii) Taking notes, extracts or certified copies of documents or records; (iii) Taking certified samples of material; (iv) Obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts where such information is stored in a computer or in any other device; Section 22 provides for the Act to have overriding effect and is extracted below: The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act, 1923 (19 of 1923), and any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

Answers to the Questions

Answer To Q1.

Q) Whether an examinee's right to information under the RTI Act includes a right to inspect his evaluated answer books in a public examination or taking certified copies thereof? Ans) The definition of 'information' in Section 2(f) of the RTI Act refers to any material in any form which includes records, documents, opinions, papers among several other enumerated items.

The term 'record' is defined in Section 2(i) of the said Act as including any document, manuscript or file among others. When a candidate participates in an examination and writes his answers in an answer-book and submits it to the examining body for evaluation and declaration of the result, the answer-book is a document or record. When the answer-book is evaluated by an examiner
182

appointed by the examining body, the evaluated answer-book becomes a record containing the 'opinion' of the examiner.

Therefore the evaluated answer-book is also an 'information' under the RTI Act.

Section 3 of RTI Act provides that subject to the provisions of this Act all citizens shall have the right to information.

The term 'right to information' is defined in Section 2(j) as the right to information accessible under the Act which is held by or under the control of any public authority. Having regarded to Section 3, the citizens have the right to access to all information held by or under the control of any public authority except those excluded or exempted under the Act.

The object of the Act is to empower the citizens to fight against corruption and hold the Government and their instrumentalities accountable to the citizens, by providing them access to information regarding functioning of every public authority. Certain safeguards have been built into the Act so that the revelation of information will not conflict with other public interests which include efficient operation of the governments, optimum use of limited fiscal resources and preservation of confidential and sensitive information. The RTI Act provides access to information held by or under the control of public authorities and not in regard to information held by any private person.

The Act provides the following exclusions by way of exemptions and exceptions (under Sections 8, 9 and 24) in regard to information held by public authorities:

(i) Exclusion of the Act in entirety under Section 24 to intelligence and security organizations specified in the Second Schedule even though they may be "public authorities", (except in regard to information with reference to allegations of corruption and human rights violations).

183

(ii) Exemption of the several categories of information enumerated in Section 8(1) of the Act which no public authority is under an obligation to give to any citizen, notwithstanding anything contained in the Act [however, in regard to the information exempted under Clauses (d) and (e), the competent authority, and in regard to the information excluded under Clause (j), Central Public Information Officer/State Public Information Officer/the Appellate Authority, may direct disclosure of information, if larger public interest warrants or justifies the disclosure].

(iii) If any request for providing access to information involves an infringement of a copyright subsisting in a person other than the State, the Central/State Public Information Officer may reject the request under Section 9 of RTI Act.

Having regard to the scheme of the RTI Act, the right of the citizens to access any information held or under the control of any public authority, should be read in harmony with the exclusions/exemptions in the Act.

The examining bodies (Universities, Examination Boards, and CBSE etc.) are neither security nor intelligence organizations and therefore the exemption under Section 24 will not apply to them. The disclosure of information with reference to answer-books does not also involve infringement of any copyright and therefore Section 9 will not apply.

Resultantly, unless the examining bodies are able to demonstrate that the evaluated answer-books fall under any of the categories of exempted 'information' enumerated in Clauses (a) to (j) of Sub-section (1) Section 8, they will be bound to provide access to the information and any applicant can either inspect the document/record, take notes, extracts or obtain certified copies thereof.

The examining bodies contend that the evaluated answer-books are exempted from disclosure under Section 8(1)(e) of the RTI Act, as they are 'information' held in its fiduciary relationship. They fairly conceded that evaluated answer-books will not fall under any other exemptions in Sub-section (1) of Section 8. Every examinee will have the right to access his evaluated answer-books, by either
184

inspecting them or take certified copies thereof, unless the evaluated answerbooks are found to be exempted under Section 8(1)(e) of the RTI Act.

Answer To Q2.

Q) Whether the decisions of this Court in Maharashtra State Board of Secondary Education [MANU/SC/0055/1984 : 1984 (4) SCC 27] and other cases referred to above, in any way affect or interfere with the right of an examinee seeking inspection of his answer books or seeking certified copies thereof?

Ans) In Maharashtra State Board, this Court was considering whether denial of reevaluation of answer-books or denial of disclosure by way of inspection of answer books, to an examinee, under Rule 104(1) and (3) of the Maharashtra Secondary and Higher Secondary Board Rules, 1977 was violative of principles of natural justice and violative of Articles 14 and 19 of the Constitution of India. Rule 104(1) provided that no re-evaluation of the answer books shall be done and on an application of any candidate verification will be restricted to checking whether all the answers have been examined and that there is no mistake in the totaling of marks for each question in that subject and transferring marks correctly on the first cover page of the answer book. Rule 104(3) provided that no candidate shall claim or be entitled to re-evaluation of his answer-books or inspection of answer-books as they were treated as confidential. In these cases, the High Court has rightly denied the prayer for re-evaluation of answer-books sought by the candidates in view of the bar contained in the rules and regulations of the examining bodies. It is also not a relief available under the RTI Act. Therefore the question whether re-evaluation should be permitted or not, does not arise for our consideration. What arises for consideration is the question whether the examinee is entitled to inspect his evaluated answer-books or take certified copies thereof. This right is claimed by the students, not with reference to the rules or bye-laws of examining bodies, but under the RTI Act which enables them and entitles them to have access to the answer-books as 'information' and inspect them and take certified copies thereof. Section 22 of RTI Act provides that the provisions of the said Act will have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
185

Therefore the provisions of the RTI Act will prevail over the provisions of the byelaws/rules of the examining bodies in regard to examinations. As a result, unless the examining body is able to demonstrate that the answer-books fall under the exempted category of information described in Clause (e) of Section 8(1) of RTI Act, the examining body will be bound to provide access to an examinee to inspect and take copies of his evaluated answer-books, even if such inspection or taking copies is barred under the rules/bye-laws of the examining body governing the examinations. Therefore, the decision of this Court in Maharashtra State Board (supra) and the subsequent decisions following the same, will not affect or interfere with the right of the examinee seeking inspection of answer-books or taking certified copies thereof.

Answer To Q3.

Q) Whether an examining body holds the evaluated answer books "in a fiduciary relationship" and consequently has no obligation to give inspection of the evaluated answer books under Section 8(1)(e) of RTI Act?

Ans) Section 8(1) enumerates the categories of information which are exempted from disclosure under the provisions of the RTI Act. The examining bodies rely upon Clause (e) of Section 8(1) which provides that there shall be no obligation on any public authority to give any citizen, information available to it in its fiduciary relationship. This exemption is subject to the condition that if the competent authority (as defined in Section 2(e) of RTI Act) is satisfied that the larger public interest warrants the disclosure of such information, the information will have to be disclosed. Therefore the question is whether the examining body holds the evaluated answer-books in its fiduciary relationship.

The term 'fiduciary' and 'fiduciary relationship' refers to different capacities and relationship, involving a common duty or obligation. Black's Law Dictionary (7th Edition, Page 640) defines 'fiduciary relationship as: A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship.
186

Fiduciary relationships - such as trustee-beneficiary, guardian-ward, agent-principal, and attorney-client - require the highest duty of care. Fiduciary relationships usually arise in one of four situations:

(i) When one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (ii) When one person assumes control and responsibility over another, (iii) When one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (iv) When there is a specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer. Various other definitions of the term fiduciary relation were considered for the case.In a philosophical and very wide sense, examining bodies can be said to act in a fiduciary capacity, with reference to students who participate in an examination, as a government does while governing its citizens or as the present generation does with reference to the future generation while preserving the environment. But the words 'information available to a person in his fiduciary relationship' are used in Section 8(1)(e) of RTI Act in its normal and well recognized sense, that is to refer to persons who act in a fiduciary capacity, with reference to a specific beneficiary or beneficiaries who are to be expected to be protected or benefited by the actions of the fiduciary - a trustee with reference to the beneficiary of the trust, a guardian with reference to a minor / physically / infirm / mentally challenged, a parent with reference to a child, a lawyer or a chartered accountant with reference to a client, a doctor or nurse with reference to a patient, an agent with reference to a principal, a partner with reference to another partner, a director of a company with reference to a share-holder, an executor with reference to a legatee, a receiver with reference to the parties to a lis, an employer with reference to the confidential information relating to the employee, and an employee with reference to business dealings/transaction of the employer. We do not find that kind of fiduciary relationship between the examining body and the examinee, with reference to the evaluated answer-books, that come into the custody of the examining body.

187

The duty of examining bodies is to subject the candidates who have completed a course of study or a period of training in accordance with its curricula, to a process of verification/examination/testing of their knowledge, ability or skill, or to ascertain whether they can be said to have successfully completed or passed the course of study or training. Other specialized Examining Bodies may simply subject candidates to a process of verification by an examination, to find out whether such person is suitable for a particular post, job or assignment. An examining body, if it is a public authority entrusted with public functions, is required to act fairly, reasonably, uniformly and consistently for public good and in public interest. This Court has explained the role of an examining body in regard to the process of holding examination in the context of examining whether it amounts to 'service' to a consumer, in Bihar School Examination Board v. Suresh Prasad Sinha MANU/SC/1605/2009 : (2009) 8 SCC 483, in the following manner:

The process of holding examinations, evaluating answer scripts, declaring results and issuing certificates are different stages of a single statutory non-commercial function. It is not possible to divide this function as partly statutory and partly administrative. When the Examination Board conducts an examination in discharge of its statutory function, it does not offer its "services" to any candidate. Nor does a student who participates in the examination conducted by the Board, hires or avails of any service from the Board for a consideration. On the other hand, a candidate who participates in the examination conducted by the Board, is a person who has undergone a course of study and who requests the Board to test him as to whether he has imbibed sufficient knowledge to be fit to be declared as having successfully completed the said course of education; and if so, determine his position or rank or competence vis--vis other examinees. The process is not therefore availment of a service by a student, but participation in a general examination conducted by the Board to ascertain whether he is eligible and fit to be considered as having successfully completed the secondary education course. The examination fee paid by the student is not the consideration for availment of any service, but the charge paid for the privilege of participation in the examination.... The fact that in the course of conduct of the examination, or evaluation of answer-scripts, or furnishing of markbooks or certificates, there may be some negligence, omission or deficiency, does
188

not convert the Board into a service-provider for a consideration, nor convert the examinee into a consumer....

It cannot therefore be said that the examining body is in a fiduciary relationship either with reference to the examinee who participates in the examination and whose answer-books are evaluated by the examining body. We may next consider whether an examining body would be entitled to claim exemption under Section 8(1)(e) of the RTI Act, even assuming that it is in a fiduciary relationship with the examinee. That section provides that

notwithstanding anything contained in the Act, there shall be no obligation to give any citizen information available to a person in his fiduciary relationship. This would only mean that even if the relationship is fiduciary, the exemption would operate in regard to giving access to the information held in fiduciary relationship, to third parties. There is no question of the fiduciary withholding information relating to the beneficiary, from the beneficiary himself. One of the duties of the fiduciary is to make thorough disclosure of all relevant facts of all transactions between them to the beneficiary, in a fiduciary relationship. By that logic, the examining body, if it is in a fiduciary relationship with an examinee, will be liable to make a full disclosure of the evaluated answer-books to the examinee and at the same time, owe a duty to the examinee not to disclose the answer-books to anyone else.

Therefore, if a relationship of fiduciary and beneficiary is assumed between the examining body and the examinee with reference to the answer-book, Section 8(1)(e) would operate as an exemption to prevent access to any third party and will not operate as a bar for the very person who wrote the answer-book, seeking inspection or disclosure of it.

An evaluated answer book of an examinee is a combination of two different 'information's'. The first is the answers written by the examinee and second is the marks/assessment by the examiner. When an examinee seeks inspection of his evaluated answer-books or seeks a certified copy of the evaluated answer-book, the information sought by him is not really the answers he has written in the
189

answer-books (which he already knows), nor the total marks assigned for the answers (which has been declared). What he really seeks is the information relating to the break-up of marks, that is, the specific marks assigned to each of his answers. When an examinee seeks 'information' by inspection/certified copies of his answer-books, he knows the contents thereof being the author thereof. When an examinee is permitted to examine an answer-book or obtain a certified copy, the examining body is not really giving him some information which is held by it in trust or confidence, but is only giving him an opportunity to read what he had written at the time of examination or to have a copy of his answers. Therefore, in furnishing the copy of an answer-book, there is no question of breach of confidentiality, privacy, secrecy or trust. The real issue therefore is not in regard to the answer-book but in regard to the marks awarded on evaluation of the answerbook. Even here the total marks given to the examinee in regard to his answerbook are already declared and known to the examinee. What the examinee actually wants to know is the break-up of marks given to him, that is how many marks were given by the examiner to each of his answers so that he can assess how is performance has been evaluated and whether the evaluation is proper as per his hopes and expectations. Therefore, the test for finding out whether the information is exempted or not, is not in regard to the answer book but in regard to the evaluation by the examiner. This takes us to the crucial issue of evaluation by the examiner. The examining body engages or employs hundreds of examiners to do the evaluation of thousands of answer books. The question is whether the information relating to the 'evaluation' (that is assigning of marks) is held by the examining body in a fiduciary relationship. The examining bodies contend that even if fiduciary relationship does not exist with reference to the examinee, it exists with reference to the examiner who evaluates the answer-books. On a careful examination we find that this contention has no merit. The examining body entrusts the answerbooks to an examiner for evaluation and pays the examiner for his expert service. The work of evaluation and marking the answer-book is an assignment given by the examining body to the examiner which he discharges for a consideration. Sometimes, an examiner may assess answer-books, in the course of his employment, as a part of his duties without any specific or special remuneration.
190

In other words the examining body is the 'principal' and the examiner is the agent entrusted with the work, that is, evaluation of answer-books. Therefore, the examining body is not in the position of a fiduciary with reference to the examiner. On the other hand, when an answer-book is entrusted to the examiner for the purpose of evaluation, for the period the answer-book is in his custody and to the extent of the discharge of his functions relating to evaluation, the examiner is in the position of a fiduciary with reference to the examining body and he is barred from disclosing the contents of the answer-book or the result of evaluation of the answer-book to anyone other than the examining body. Once the examiner has evaluated the answer books, he ceases to have any interest in the evaluation done by him. He does not have any copy-right or proprietary right, or confidentiality right in regard to the evaluation. Therefore it cannot be said that the examining body holds the evaluated answer books in a fiduciary relationship, qua the examiner. Therefore, held that an examining body does not hold the evaluated answerbooks in a fiduciary relationship. Not being information available to an examining body in its fiduciary relationship, the exemption under Section 8(1)(e) is not available to the examining bodies with reference to evaluated answer-books. As no other exemption under Section 8 is available in respect of evaluated answer books, the examining bodies will have to permit inspection sought by the examinees.

Answer To Q4.

Q) If the examinee is entitled to inspection of the evaluated answer books or seek certified copies thereof, whether such right is subject to any limitations, conditions or safeguards? Ans) When an examining body engages the services of an examiner to evaluate the answer-books, the examining body expects the examiner not to disclose the information regarding evaluation to anyone other than the examining body. Similarly the examiner also expects that his name and particulars would not be disclosed to the candidates whose answer-books are evaluated by him. In the event of such information being made known, a disgruntled examinee who is not

191

satisfied with the evaluation of the answer books, may act to the prejudice of the examiner by attempting to endanger his physical safety.

Further, any apprehension on the part of the examiner that there may be danger to his physical safety, if his identity becomes known to the examinees, may come in the way of effective discharge of his duties. The above applies not only to the examiner, but also to the scrutinizer, co-coordinator, and head-examiner who deal with the answer book. The answer book usually contains not only the signature and code number of the examiner, but also the signatures and code number of the scrutinizer / co-coordinator / head examiner. The information as to the names or particulars of the examiners / co-coordinators / scrutinizers / head examiners are therefore exempted from disclosure under Section 8(1)(g) of RTI Act, on the ground that if such information is disclosed, it may endanger their physical safety.

Therefore, if the examinees are to be given access to evaluated answer-books either by permitting inspection or by granting certified copies, such access will have to be given only to that part of the answer-book which does not contain any information or signature of the examiners / co-coordinators / scrutinizers / head examiners, exempted from disclosure under Section 8(1)(g) of RTI Act. Those portions of the answer-books which contain information regarding the examiners / co-coordinators / scrutinizers / head examiners or which may disclose their identity with reference to signature or initials shall have to be removed, covered, or otherwise severed from the non-exempted part of the answer-books, under Section 10 of RTI Act.

The right to access information does not extend beyond the period during which the examining body is expected to retain the answer-books. In the case of CBSE, the answer-books are required to be maintained for a period of three months and thereafter they are liable to be disposed of/destroyed. Some other examining bodies are required to keep the answer-books for a period of six months. The fact that right to information is available in regard to answer-books does not mean that answer-books will have to be maintained for any longer period than required under the rules and regulations of the public authority. The obligation under the RTI Act is to make available or give access to existing information or information which is
192

expected to be preserved or maintained. If the rules and regulations governing the functioning of the respective public authority require preservation of the information for only a limited period, the applicant for information will be entitled to such information only if he seeks the information when it is available with the public authority. For example, with reference to answer-books, if an examinee makes an application to CBSE for inspection or grant of certified copies beyond three months (or six months or such other period prescribed for preservation of the records in regard to other examining bodies) from the date of declaration of results, the application could be rejected on the ground that such information is not available. The power of the Information Commission under Section 19(8) of the RTI Act to require a public authority to take any such steps as may be necessary to secure compliance with the provision of the Act, does not include a power to direct the public authority to preserve the information, for any period larger than what is provided under the rules and regulations of the public authority.

On behalf of the Respondents / examinees, it was contended that having regard to Sub-section (3) of Section 8 of RTI Act, there is an implied duty on the part of every public authority to maintain the information for a minimum period of twenty years and make it available whenever an application was made in that behalf. This contention is based on a complete misreading and misunderstanding of Section 8(3). The said Sub-section nowhere provides that records or information have to be maintained for a period of twenty years. The period for which any particular records or information has to be maintained would depend upon the relevant statutory rule or regulation of the public authority relating to the preservation of records. Section 8(3) provides that information relating to any occurrence, event or matters which has taken place and occurred or happened twenty years before the date on which any request is made under Section 6, shall be provided to any person making a request. This means that where any information required to be maintained and preserved for a period beyond twenty years under the rules of the public authority, is exempted from disclosure under any of the provisions of Section 8(1) of RTI Act, then, notwithstanding such exemption, access to such information shall have to be provided by disclosure thereof, after a period of twenty years except where they relate to information falling under Clauses (a), (c) and (i) of Section 8(1). In other
193

words, Section 8(3) provides that any protection against disclosure that may be available, under Clauses (b), (d) to (h) and (j) of Section 8(1) will cease to be available after twenty years in regard to records which are required to be preserved for more than twenty years. Where any record or information is required to be destroyed under the rules and regulations of a public authority prior to twenty years, Section 8(3) will not prevent destruction in accordance with the Rules. Section 8(3)of RTI Act is not therefore a provision requiring all 'information' to be preserved and maintained for twenty years or more, nor does it override any rules or regulations governing the period for which the record, document or information is required to be preserved by any public authority.

At this juncture, it is necessary to clear some misconceptions about the RTI Act. The RTI Act provides access to all information that is available and existing. This is clear from a combined reading of Section 3 and the definitions of 'information' and 'right to information' under Clauses (f) and (j) of Section 2 of the Act. If a public authority has any information in the form of data or analyzed data, or abstracts, or statistics, an applicant may access such information, subject to the exemptions in Section 8 of the Act. But where the information sought is not a part of the record of a public authority, and where such information is not required to be maintained under any law or the rules or regulations of the public authority, the Act does not cast an obligation upon the public authority, to collect or collate such non-available information and then furnish it to an applicant. A public authority is also not required to furnish information which require drawing of inferences and/or making of assumptions. It is also not required to provide 'advice' or 'opinion' to an applicant, nor required to obtain and furnish any 'opinion' or 'advice' to an applicant. The reference to 'opinion' or 'advice' in the definition of 'information' in Section 2(f) of the Act, only refers to such material available in the records of the public authority. Many public authorities have, as a public relation exercise, provide advice, guidance and opinion to the citizens. But that is purely voluntary and should not be confused with any obligation under the RTI Act.

Section 19(8) of RTI Act has entrusted the Central / State Information Commissions, with the power to require any public authority to take any such
194

steps as may be necessary to secure the compliance with the provisions of the Act. Apart from the generality of the said power, Clause (a) of Section 19(8) refers to six specific powers, to implement the provision of the Act.

Sub-clause (i) empowers a Commission to require the public authority to provide access to information if so requested in a particular 'form' (that is either as a document, micro film, compact disc, pen drive, etc.). This is to secure compliance with Section 7(9) of the Act.

Sub-clause (ii) empowers a Commission to require the public authority to appoint a Central Public Information Officer or State Public Information Officer. This is to secure compliance with Section 5 of the Act.

Sub-clause (iii) empowers the Commission to require a public authority to publish certain information or categories of information. This is to secure compliance with Section 4(1) and (2) of RTI Act.

Sub-clause (iv) empowers a Commission to require a public authority to make necessary changes to its practices relating to the maintenance, management and destruction of the records. This is to secure compliance with Clause (a) of Section 4(1) of the Act.

Sub-clause (v) empowers a Commission to require the public authority to increase the training for its officials on the right to information. This is to secure compliance with Sections 5, 6 and 7 of the Act.

Sub-clause (vi) empowers a Commission to require the public authority to provide annual reports in regard to the compliance with Clause (b) of Section 4(1). This is to ensure compliance with the provisions of Clause (b) of Section 4(1) of the Act. The power under Section 19(8) of the Act however does not extend to requiring a public authority to take any steps which are not required or contemplated to secure compliance with the provisions of the Act or to issue directions beyond the provisions of the Act. The power under Section 19(8) of the Act is intended to be used by the Commissions to ensure compliance with the Act, in particular ensure
195

that every public authority maintains its records duly catalogued and indexed in the manner and in the form which facilitates the right to information and ensure that the records are computerized, as required under Clause (a) of Section 4(1) of the Act; and to ensure that the information enumerated in Clauses (b) and (c) of Sections 4(1) of the Act are published and disseminated, and are periodically updated as provided in subsections (3) and (4) of Section 4 of the Act. If the 'information' enumerated in Clause (b) of Section 4(1) of the Act are effectively disseminated (by publications in print and on websites and other effective means), apart from providing transparency and accountability, citizens will be able to access relevant information and avoid unnecessary applications for information under the Act.

The right to information is a cherished right. Information and right to information are intended to be formidable tools in the hands of responsible citizens to fight corruption and to bring in transparency and accountability. The provisions of RTI Act should be enforced strictly and all efforts should be made to bring to light the necessary information under Clause (b) of Section 4(1) of the Act which relates to securing transparency and accountability in the working of public authorities and in discouraging corruption. But in regard to other information,(that is information other than those enumerated in Section 4(1)(b) and (c) of the Act), equal importance and emphasis are given to other public interests (like confidentiality of sensitive information, fidelity and fiduciary relationships, efficient operation of governments, etc.).

Indiscriminate and impractical demands or directions under RTI Act for disclosure of all and sundry information (unrelated to transparency and accountability in the functioning of public authorities and eradication of corruption) would be counterproductive as it will adversely affect the efficiency of the administration and result in the executive getting bogged down with the non-productive work of collecting and furnishing information. The Act should not be allowed to be misused or abused, to become a tool to obstruct the national development and integration, or to destroy the peace, tranquility and harmony among its citizens. Nor should it be converted into a tool of oppression or intimidation of honest officials striving to do their duty. The nation does not want a scenario where 75% of the staff of public
196

authorities spends 75% of their time in collecting and furnishing information to applicants instead of discharging their regular duties. The threat of penalties under the RTI Act and the pressure of the authorities under the RTI Act should not lead to employees of a public authorities prioritizing 'information furnishing', at the cost of their normal and regular duties.

Conclusion - Judgment
In view of the foregoing, the order of the High Court directing the examining bodies to permit examinees to have inspection of their answer books is affirmed, subject to the clarifications regarding the scope of the RTI Act and the safeguards and conditions subject to which 'information' should be furnished. The appeals are disposed of accordingly.

197