New Delhi: The Supreme Court on Thursday delivered a blow to the telecom industry by cancelling all licenses issued post January 2008, all in relation to the multi-crore 2G scam.
122 licenses have been cancelled out of which 21 belongs to Videocon, Uninor holds 22, Idea 9, Tata Teleservices 3, Swan Telecom 13 and Loop 21. Penalties have also been slapped on Uninor, Swan Telecom and Tata Tele of Rs 5 crore each, and Rs 50 lakh on Loop, S-Tel, Allianz and Sistema Shyam.
Reacting to the verdict, HP Ranina, corporate tax lawyer, said that this decision will shake up the whole of corporate India, not only telecom companies. "What will happen now is that everybody who is going to come in India to invest is going to have to be serious players and be wary of any such type of agreements," he explained.
Lawyer Majid Menon agrees, saying that those companies who were not even involved in the scam will have to suffer. "It results in miscarriage of justice because even those companies who did not depart from rules and regulations will get monetarily impacted by this abrupt cancellation," he explained.
On the other hand, Supreme Court lawyer Ram Jethmalani believes that the SC should have refrained from this move these findings are not relevant in the criminal court. "It's a very doubtful decision that Court proceeds to cancel the licenses of people," he said. However, now that the matter has been decided, he says that this could lead to further litigation and applications are bound to be reviewed.
Chidambaram case deferred to Trial Court
Another development is that the SC has deferred the Chidambaram case to a Trial Court which will take the decision on Saturday. So there is still no clarity on whether he will be charged as a co-accused or even about his role.
Ranina says that this verdict will now put Chidambaram on tenterhooks because it means that there is something to wait for on Saturday, when the Trial Court takes up the case. Memon hopes this verdict does not "serve as a warning" to the Trial Court and that they act independently and examine the correctness of the allegations. "We have no hesitation in expecting that the exercise for quest of truth which is taken by the trial judge would continue unperturbed," he said.
Commenting on the decision itself, Memon says that since it is a verdict from the highest court it has to respected and followed.
More than anything else, Jethmalani says that the political implication of his is that the current government will have to resign and not continue even for a day.
The verdict goes on to say that telecom regulator TRAI will make new guidelines for the fresh issue of new licenses in two months. The government is also awaiting this decision and will take its next move only after TRAI releases its recommendations.
Sources tell CNBC-TV18 that the government still maintains that there was nothing wrong with their policy, and that only implementation was flawed. Therefore, this time round they will ensure complete transparency in the issue process.
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