Infirmities in 2G scam verdict

Amritananda Chakravorty and Mihir Samson

Special CBI judge O.P. Saini acquitted all the accused in the 2G spectrum allocation scam cases. The accused included A Raja, then Telecom Minister, K. Kanimozhi, daughter of M. Karunanidhi of the DMK, Shahid Balwa, Sanjay Chandra, Reliance Telecom and Gautam Doshi, amongst others. An accompanying case had Ravi Ruia, Anshuman Ruia and Essar Group companies as accused. The scam pertained to the allocation of telecom licences arbitrarily, in a manner which the accused companies were allegedly favoured. The main allegations included manipulation of administrative procedures, policy and law in order to allow ineligible companies to obtain licences. The investigation had also shown that Rs. 200 crore had been paid as illegal gratification.
The Centre for PIL had filed a petition seeking a court-monitored investigation into the 2G scam by the CBI, which was granted by Supreme Court in December 2010 (Centre for PIL & Ors vs Union Of India & Ors, C.A. 10660 of 2010, order dated 16.12.2010). The court not only monitored the investigation, but set up a special court for the trial and also appointed a special public prosecutor, U.U. Lalit, then Senior Advocate. Lalit was elevated as Supreme Court judge in 2014, after the evidence in the two main cases was almost complete. Subsequently, Senior Advocate Anand Grover was appointed as the Special Public Prosecutor by the Supreme Court.
The judgement suffers from a number of serious legal infirmities. It ignores the realities of government functioning and on this basis proceeds to disbelieve crucial evidence adduced by the prosecution. For example, the court found that the evidence of some junior officers that A. Raja had passed on oral instructions through his private secretary could not be believed because they were not recorded in the file. It is well known that corrupt senior officers and ministers act through oral instructions, none of which are allowed on file. To insist that persons will be held responsible only if the illegal instructions are in writing has the effect of giving the green signal to massive corruption in the government. Additionally, the court has focused on technicalities when addressing the movement of Rs. 200 crore from a company owned by Shahid Balwa, who had obtained a telecom licence through another company, to a DMK mouth piece, Kalignar TV, eventually rejecting the prosecution evidence in this regard as well.
The judgment, which has en masse rejected important prosecution evidence on legally tenuous principles, strikes a body blow to the anti-corruption movement in the country. The CBI and Enforcement Directorate, soon after the pronouncement of the judgment, have stated that they will appeal against the judgment in the Delhi High Court. [CBI v A Raja and Ors, Complaint Case No. 01 of 2011, dated 21.12.2017]
Major decisions:
i. Supreme Court overturns NCLAT judgment on operational creditors: The Supreme Court has answered two important questions pertaining to the Insolvency and Bankruptcy Code, determining the status of the certificate under Section 9(3)(c) and a demand notice of an unpaid operational debt issued by a lawyer on behalf of the operational creditor. The NCLT and NCLAT have on various occasions held that the operational creditor has to mandatorily get a banker’s certificate that it did not receive the defaulted amount after the notice. Further, it had been held if the notice under section 8 had not been issued by an authorised representative of the company itself, it will be void. The Supreme Court, in the present judgment, held that the submission of a banker’s certificate was not mandatory, but directory. On the point of lawyer issuing notice, the Bench observed that Section 8 of the Code talks of the operational creditor “delivering” the demand notice and not “issuing” it. It was, therefore, obvious, the Bench concluded, that such notice could be made by an authorised agent only. The forms in the Code require the person serving demand notice to “state position with or in relation to the operational creditor” and the Supreme Court found that this was a very wide expression, which specifically includes a position, which, is outside or indirectly related to the operational creditor, including a lawyer [Macquarie v Shilpi Cable Technologies, Civil Appeal No. 15135, order dated 15.12.2017].

ii. Notice issued on PIL to include farmers in OBC: The Supreme Court has issued a notice on a PIL to the Centre, Gujarat Government and the National Commission for Backward Classes, praying that ‘farmers’ should be included in the category of OBC. It also challenges an Office Memorandum issued by the Centre and the Gujarat Government, which increased the income slab for OBC from Rs 6 to Rs 8 lakh arguing that the same was without any basis. It also calls for the Court to lay down guidelines for determining the income limits to guide the government in the future [Rajeshkumar Patel v Union of India, Writ Petition (Civil) 1177/2017, order dated 15.12.2017]. (IPA/To be continued)

Wednesday, 3 January, 2018