A day after facing searching questions from Supreme Court, the CBI on Friday defended the government's decision not to cancel Letters of Intent (LoIs) in the 2G spectrum allocation issued to the telecom companies now under the scanner.
In an additional note submitted in the apex court on Friday, the CBI justified its decision on the ground that any cancellation would lead to spate of litigations.
The agency cited 2 judgements of the apex court to claim that once rights were created by issuing LoIs, it is not open to cancellation.
"This being so the statement that no rights were created for the allottee on Jan 10, 2008 is legally unsound it may not be correct to state that after receiving the amount of Rs 1,600 crore for each licence and fulfilling the other conditions in the LOI, the licences would still be open to cancellation. In such an event the allottee would have taken recourse to the courts of law," the agency said.
The CBI's response comes against the backdrop of yesterday's questions posed by the bench as to why the government did not cancel the LoIs for three years even after then Telecom Minister Raja went ahead with the 'first cum first served' policy ignoring Prime Minister Manmohan Singh's suggestions for auctioning the scarce resource.
This was also the submission of the CPIL that there was ample time between the issuance of LOIi and actual grant of licences.
On Thursday the bench had asked Additional Solicitor General Harin Rawal as to why the then Telecom Minister did not agree with the Prime Minister for auctioning the 'scarce' spectrum and went ahead with issuing Letters of Intent (LoIs).
"No timely action was taken to prevent the situation which has arisen today and the matter reached the courts," the bench had observed.
The bench also referred to the scheduled Telecom Commission meeting of Janaury 9, 2008 which was postponed to January 15 and on January 10, Raja issued 122 LoIs for the 2G spectrum without following the policy of auction.
"At this stage you could have avoided entire exercise by taking a decision this way or that way. What prevented the government to take a step for all these three years," the bench asked and said "LoIs in itself does not create a right and government should have taken a step."
"Three years from September-October 2008 when complaints in writing were made including to the CVC about the seriousness of the issue, couldn't steps have been taken to put an end," it further said.
According to the CBI the LoIs identified the circles for which 2G services were to be rolled out by the allottees pursuant to the LoIs.
They also provided that licences would follow once certain conditions were fulfilled. The agency added that except Shyam and Swan Telecom who fulfilled the conditions on October 11 2008, all other LoI holders fulfilled the conditions on January 10, 2008 itself.