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The Supreme Court Thursday reserved its verdict on a petition for cancellation of 2G licences illegally granted in 2008 after it was told considerations of ‘chaos’ and ‘loss’ of foreign investments if the licences were quashed could not outweigh the concerns over national security.

The posituion was made clear to the apex court bench of Justice G.S. Singhvi and Justice A.K. Ganguly on its poser after the telecom operators submitted that the cancellation of 2G licences would create chaos in the telecom sector and would adversely affect the foreign direct investment in the country.

The court was hearing a petition filed by Janata Party president Subramanian Swamy.

The judges referred to the pleadings by the telecom operators that the ‘courts should not interfere in the economic matters of the government’.

Responding to the court’s poser, senior counsel Prashant Bhushan told the court that the cancellation of 2G licences will be a ‘setback for those (foreign investors) who think that the resources of this country are for loot and through corruption they can make a quick buck’.

He said there were other ‘investors who don’t venture in Indian market for the fear of corruption’.

Bhushan, who appeared for the Centre for Public Interest Litigation (CPIL), said that by the cancellation of 2G licences given in 2008 ‘the court will be sending out a message that it will be possible to do an honest business in the country at a future date’.

Dealing with apprehension of chaos sounded by the telecom operators, the senior counsel said all the telecom operators that were provided licences in January 2008 held just 10 percent of the total subscribers’ base.

He said that under the existing mobile portability regime, these subscribers could easily switch over to the other service providers.

Justice Ganguly expressed his apprehensions on the optimism of Bhushan, and said, ‘Unless there is general improvement in governance, sending one signal (by way of judgment) here or there will not work.’

Justice Singhvi said: ‘The change will not come about unless educated and enlightened section of the society decide that they will adopt the path that is honest.’

He said that a ‘vast majority of people are honest and are concerned about corruption’.

Bhushan said: ‘Whether it will lead to transformation or not can be left for the future. But it will certainly tell the manner in which business can be carried out in this country.’

He said that one never knows which is that thing (including a judgment) that will trigger change in the country.

Going into the 2G spectrum scam, Justice Ganguly said: ‘Here it is not done by a private negotiation. Here it is done in a peculiar public way (by the department of telecommunications).’

Petitioner Swamy has sought cancellation of 2G licences granted in January 2008 in an unreasonable and arbitrary manner and the failure of telecom operators in meeting their roll-out obligations.

Concluding his arguments, Swamy said where was the question of chaos or loss? The allocation of 2G licences was patiently ‘unreasonable and arbitrary’ and in public interest and national security these licences should be cancelled.

Attorney General G. Vahanvati told the court that the policy of ‘first come first serve’ was enunciated Jan 21, 2001 in the guidelines in the grant of licence for basic services.

The policy was adopted in 2003. He said this policy was never referred to the Telecom Regulatory Authority of India (TRAI).

The attorney general told the court that the TRAI said in 2007 that the service providers who are having more spectrum than their usage should be asked to surrender the additional spectrum in a specified timeframe. Hoarding of scarce resource like spectrum should be viewed very seriously and in case of non-vacation, a heavy penalty should be imposed on the service providers.

The court was told that the TRAI chairman issued a letter making a ‘clarification’ that what has been said on excess spectrum with the telecom operators by the TRAI was not a recommendation but is only a conclusion for the analysis that certain beneficiaries of spectrum were not utilising it as envisaged.

The attorney general said this in response to queries by the court asked Wednesday.

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