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On 17 FEBRUARY 2011
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Table of Contents
Facts in the case ................................................................................................... 3 Allegation against the goverment ................................................................... 3 Judgement ........................................................................................................ 4 Conclusion ............................................................................................................ 5 Appendix ............................................................................................................... 6 References .......................................................................................................... 8

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2G spectrum case
Facts in the case:
Union of telecom ministry announced the policy decision to allocate spectrum through license to advance the spread of telecom services across the nation. It was an Offer legally made by the government. They received lots of application from different companies. After discussion, the ministry decided a method to evaluate the applicants for the allocation of spectrum. Telecom

Ministry chose the process of auctions and enabled the fair determination of allocation of spectrum for 3G services. The issue arose when U-Talk a NGO challenged the auction process followed by the government in the Supreme Court. The Government notified suspension all the issued licenses (2G and 3G) till they are legally clarified upon this issue from the Supreme Court. ISpeak (Telecom service provider who secured license for Bangalore circle) challenged this notification by Government in Karnataka High Court, asking for compensation for the incurred losses. Allegation against the government: The raging controversy of political parties, a writ petition demanding for cancellation of both rounds of spectrum allocations and restoration of the integrity of the process has been filed by UTALK and is pending before the Supreme Court. So the telecom ministry has issued notification of suspending all 2G & 3G services-based licenses till such time there is legal clarity through final orders from the Supreme Court. This is an agreement between companies and government, which is Consensus ad idem (parties agree in the same sense and at the same time). It fulfills all the essential elements of valid contract under the Indian contract act, 1872. In this case the contract between parties cannot be challengeable under law. So the union ministry can not suspend the licenses by notification with out any valid reason. Allegation against the government was not proved in the court. So with out any conformation of the court, they have given notice to suspend the license for spectrum. The company iSpeak have invested huge amount of money for the spectrum, so this suspension of license cause the companys growth in terms of money. It is an act of government, which is against their contract between
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parties. The government has mentioned emergency reason for suspension of license, which is not explained clearly. So it cant be considered as Contingent contract. If the allegations proved against the government in the court of law, then the contact would be made misrepresentation. It is voidable contract under the section 2(i) of contract act, 1872.This section says any contract is obtained by coercion, undue influence, misrepresentation or fraud, which is voidable .

Judgment:
In this case facts and figures are very clear about the contract between parties, which is agreed by both parties. Suddenly the act of suspension of license is against the contract by the government. It affected the companys growth in terms of money directly. Suspension of

spectrum license is breach of contract. So the union ministry of telecom is responsible to pay Compensation for loss of iSpeak Company. According to the iSpeak , the act done by the government is unconstitutional. It is against the human rights of Article 21 of the Indian constitution. The Constitution of India provides Fundamental Rights under Chapter III. These rights are guaranteed by the constitution. One of these rights is provided under Article 21(fully stated in Appendix) which reads as follows (relevant to our case): No person/entity shall be deprived of his/its life or personal liberty except according to procedure established by law. The object of the fundamental right under Article 21 is to prevent encroachment upon personal liberty and deprivation of life except according to procedure established by law. It clearly means that this fundamental right has been provided against state only. The state cannot be defined in a restricted sense. It includes Government Departments, Legislature, Administration, Local Authorities exercising statutory powers and so on so forth, but it does not include non-statutory or private bodies having no statutory powers. For example: company, autonomous body and others. The main object of Article 21 is that before a person is deprived of his life or personal liberty by the State, the procedure established by law must be strictly followed.

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Conclusion:
Hence referring to the above stated facts, following conclusions are made: 1. The private entity Ispeak and the Government Telecom authority entered into the contract abiding by the principals mentioned under Indian contract act 1872. 2. The Government is challenged by the NGO U-Talk (third party) about the fairness of the auction process. This allegation by third party does not have any direct impact on the contract formed between Government and iSpeak. 3. The personnel liberty of private entity iSpeak is deprived by the Government by suspending all the 2G and 3G service based license till the Government gains a legal clarity from the judgment of Supreme Court. This is clearly against the Fundamental Rights under Chapter III Article 21 as stated above. 4. Hence the private entity iSpeak should be compensated against the incurred losses due to suspension of license by the union ministry of telecom.

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APPENDICES: Appendix 1:
Article 21. Protection of Life and Personal Liberty: No person shall be deprived of his life or personal liberty except according to procedure established by law. Though the phraseology of Article 21 starts with negative word but the word No has been used in relation to the word deprived. The object of the fundamental right under Article 21 is to prevent encroachment upon personal liberty and deprivation of life except according to procedure established by law. It clearly means that this fundamental right has been provided against state only. If an act of private individual amounts to encroachment upon the personal liberty or deprivation of life of other person, such violation would not fall under the parameters set for the Article 21. In such a case the remedy for aggrieved person would be either under Article 226 of the constitution or under general law. But, where an act of private individual supported by the state infringes the personal liberty or life of another person, the act will certainly come under the ambit of Article 21. Article 21 of the Constitution deals with prevention of encroachment upon personal liberty or deprivation of life of a person. The state cannot be defined in a restricted sense. It includes Government Departments, Legislature, Administration, Local Authorities exercising statutory powers and so on so forth, but it does not include non-statutory or private bodies having no statutory powers. For example: company, autonomous body and others. Therefore, the fundamental right guaranteed under Article 21 relates only to the acts of State or acts under the authority of the State which is not according to procedure

established by law. The main object of Article 21 is that before a person is deprived of his life or personal liberty by the State, the procedure established by law must be strictly followed. Right to Life means the right to lead meaningful, complete and dignified life. It does not have restricted meaning. It is something more than surviving or animal existence. The meaning of the

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word life cannot be narrowed down and it will be available not only to every citizen of the country. As far as Personal Liberty is concerned, it means freedom from physical restraint of the person by personal incarceration or otherwise and it includes all the varieties of rights other than those provided under Article 19 of the Constitution. Procedure established by Law means the law enacted by the State. Deprived has also wide range of meaning under the Constitution. These ingredients are the soul of this provision. The fundamental right under Article 21 is one of the most important rights provided under the Constitution which has been described as heart of fundamental rights by the Apex Court.

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REFERENCES:

http://en.wikipedia.org/wiki/Indian_Contract_Act_1872 http://www.tax4india.com/indian-laws/business-commercial-law/contract-law/contract-law.html http://www.dateyvs.com/gener03.htm http://www.legalserviceindia.com/articles/art222.htm

Sources:
Business Law including Company Law by S.S. Gulshan and G.K. Kapoor.

Mythili Rajkumar (1011182)

Prathibha Kodavaty (1011265)