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CWG
Scam
G Scam
"If we cannot make India corruption-free, then the vision of making the nation develop by 2020 would remain as a dream." - Dr. A.P.J.Abdul Kalam
PCA - INTRODUCTION
Corruption
Adversely affects the Economic, Social & Cultural Structure PCA - Came into force on 9th September, 1988.
SECTION 2: DEFINITIONS
Public Duty
It means a duty that is done for the benefit of the State, the public or the community at a large.
State would mean: a) A corporation established by or under a Central, Provincial or State Act. b) An authority or a body owned controlled or aided by the Government Company as defined in Sec. 617 of the Companies Act, 1956.
Public Servant
a)
Any person who is paid by the government or local authority or remunerated by way of fees or commission for the performance of or is in the service Any Judge or any person authorized by a court of justice to perform any duty, in connection with the administration of justice or any arbitrator
b)
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c) Any person who holds an office result to which he is empowered to prepare, publish maintain or revise an electoral roll or to conduct an election or part of an election d) Any person who is the president, secretary or other office bearer of a registered co-operative society engaged in agriculture, industry, trade or banking, receiving or having received any financial aid from the Central or State Government or any authority or body owned
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e) Any person who is a chairman, member or employee of any service commission or Board or a member of any selection committee appointed by such Commission or Board f) Any person who is the Vice-Chancellor or member of any governing body, professor, reader or lecturer of any University and any person whose services have been availed of by a University.
g) An office-bearer or an employee of an educational, scientific, social, cultural or other institution receiving or having received any financial assistance from the Central or State government or local or other public authority.
Sec 7: Public servant taking gratification other than legal remuneration in respect of an official act Sec 8: Taking gratification, in order, by corrupt or illegal means, to influence public servant Sec 9: Taking gratification, for exercise of personal influence with public servant
Sec 10: Punishment for abetment by public servant of offences defined in section 8 or 9
Imprisonment (6 months to 5 yrs) Liable for fine
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Sec 11: Public servant obtaining valuable thing, without consideration from person concerned in proceeding or business transacted by such public servant Sec 12: Punishment for abetment of offences defined in section 7 or 11
Imprisonment (6 months to 5 yrs) Liable for fine
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If a police officer no below the rank of an Inspector of Police is authorized by the State Government in this behalf by general or special order, he may investigate such offence without the order of a Metropolitan Magistrate or Magistrate of First class or make arrest therefore without a warrant.
CWG BACKGROUND
International, multi-sport event involving athletes from the Commonwealth of Nations. A sporting competition bringing together the members of the British Empire was first proposed in 1891 First Games were held in 1930 in Canada. Name was changed from British empire games to British Empire and Commonwealth Games in 1954, to British Commonwealth Games in 1970 and assumed the current name of the Commonwealth Games in 1978.
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The Games are overseen by the Commonwealth Games Federation (CGF), which also controls the sporting programme and selects the host cities. A host city is selected for each edition and eighteen cities in seven countries have hosted the event. Although there are 54 members of the Commonwealth of Nations, 71 teams participate in the Commonwealth Games as a number of British overseas territories, Crown dependencies, and island states compete under their own flag.
The two principal bids for the 2010 Commonwealth Games were from Delhi, India and Hamilton, Ontario, Canada. A ballot was held in November 2003 at the CWG Federation General Assembly in Montego Bay, Jamaica. Delhi bid won by a margin of 46 votes to 22, confirming India's first successful bid for the Games. India's bid motto was - New Frontiers and Friendships. India shifted the balance in its favor in the second round of voting with a promise that it would provide US$100,000 to each participating country, along with air tickets, boarding, lodging and transport. The successful 2003 Afro-Asian Games in Hyderabad showed India had the resources, infrastructure and technical know-how to stage a big sporting event.
KEY STAKEHOLDERS
i. Commonwealth Games Federation (CGF): ii. Indian Olympic Association (IOA): iii. Organising Committee (OC): iv. Government of Delhi: Delhi Development Authority (DDA) Delhi Police v. Government of India: It is committed to ensure adequate funds for the conduct of the Games to the OC. Ministry of Home Affairs Ministry of External Affairs Ministry of Youth Affairs and Sports Ministry of Commerce and Industry Sports Authority of India
BUDGET
The initial total budget estimated by the Indian Olympic Association in 2003 for hosting the Games was 1,620 crore (US$328.54 million). In 2010, however, the official total budget soon escalated to an estimated 11,500 crore (US$2.33 billion), a figure which excluded non-sports-related infrastructure development in the city like airports, roads and other structures. This made the 2010 Commonwealth Games the most expensive Commonwealth Games ever, being larger than the previous games in Melbourne 2006.
BUSINESS TODAY MAGAZINE ESTIMATED THAT THE GAMES COST 60,000 CRORE (US$12.17 BILLION).
COST
That is 114 times more than the estimated original price tag of the Games, and four times what the government spends on the National Rural Health Mission every year.
Eight years ago when India won the bet, the official cost estimate was Rs 1,800 crore. Now the official figure is Rs 10,000 crore while it is actually believed to be Rs 60,000 crore plus unofficially
generate cash for the games & overcome facing a cash crunch
increase in taxes
reduction in subsidies
Government officials claim that sponsorships will help ensure record revenues, and at least recover the money spent on the Games (excluding public infrastructure).
Sr.no 1 2 3 4 5 6 7 8 9 10
11
Various Aspects Stadium facilities CWG Village Parking facilities Opening & Closing ceremony Beautification of Streets Rent for CWG HQ Metro expansions Airport modernization A power plant in Bawana Hospitality expenses 1. Travel grant for all athletes 2. Free accommodation CWG village & free trip to Taj & luxury Buses & cars Others TOTAL Revenue Model 1. Sponsorship 2. Broadcast rights 3. Licensing 4. Ticket sales
Investment 4,429 crores 1,038 crores 473 crores 800 crores 344 crores 175 crores 16887 crores 5400 crores 35000 crores 48 crores 2225 crores
67,089 crores
450 crores 299.7 crores 59.99 crores 29.97 crores 893.66 crores
The game proceeded safely with no glitches. India gave her best performance with 101 medals.
Next day after the Games, the Indian government formed a special investigation committee.
A panel set up by the government to look into the corruption charges. Headed by former Comptroller and Auditor General, VK Shunglu, it has the mandate to review every transaction The special panel appointed by the government will probe the financial bungling and administrative lapses. The Comptroller and Auditor. General (CAG) is looking into financial misappropriation Enforcement Directorate (ED) is probing the routing of funds, which have been traced to tax havens like Mauritius.
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The Central Bureau of Investigation (CBI) will be examining tenders issued for various Games related projects, which are already under scrutiny after exposes on items being bought at absurdly inflated rates.
The Central Vigilance Commission (CVC) is looking into allegations of corruption in all infrastructure projects like the stadia and Games' venues.
ALLEGATIONS
1. It is estimated that the expenditure bills have been inflated by 30%
2. The Income Tax department is scrutinizing financial documents relating to the broadcast rights for the CWG following charges of tax evasion. 3. The Central Vigilance Commission is examining 11 major project tenders which were awarded at artificially hiked rates causing a loss of over Rs.500 crore. 4. The Enforcement Directorate is looking into a case of alleged violation for foreign exchange regulations related to the Queen Baton Relay in London.
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5. Emaar-MGF is in the dock for alleged irregularities in the construction of
the CWG Village in Delhi. The Rs.183 crore bank guarantee furnished by Commonwealth Games village builder Emaar-MGF was ordered to be confiscated on charges of irregularities. A Rs. 760 crore bail out package given by Delhi Development Authority(DDA) for Emaar-MGF also came under the scanner.
6. The CWG Organizing Committee head office being burglarized several times to steal or destruct the data which is being probed. 7. CVC has initiated an inquiry into an alleged recruitment scam in the Commonwealth Games Organizing Committee (OC) following complaints that it showed ghost employees on its muster rolls and violated norms while inducting people. A total of 2,100 people were shown as having worked between May 2009 and November 2010 in different capacities and together drew salary running into several crores.
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8. Kalmadi delayed catering contract in CWG which inflated the budget by more than Rs 20 cr. 9. The CVC has found alleged financial and administrative irregularities in over 30 Commonwealth Games projects in the national capital and overlays deals by the Organizing Committee for the mega-sporting event.
10. CBI registered the fourth FIR in connection with the overlays contracts given out to four firms. The total value of these contracts was over Rs 600 crore.
OVERLAY SCAM
Rs.3,750.
Rs 9.75 lakh each
Rs 9,379
Rs 4 lakh
CAG REPORT
Kalmadi deliberately delayed CWG contracts. CWG D.G. colluded with vendors & awarded favourable contracts. Collusion between OC officials and vendors. Vendors 'Colluded to form a cartel Corruption in Marketing
EXAMPLES
Vendors: 'Though Nusli with annual turnover of Rs 418,27cr was eligible for bidding for maximum 3 clusters, but OC allowed them to bid for 7 at the instance of VK Verma, Dir Gen. Reason for this has not been recorded in any of the documents. Marketing: OC's revenue generation targets were by then far behind schedule and expenditure had already gone up manifold, liability for which was ultimately borne by GoI'.
The CBI registered cases against six officials of CWG Organising Committee and two private firms for extending undue favours while appointing official Master Licensee for merchandising and retailing during the games. Firms involved were : Compact Disc India Limited (CDIL) and its group arm Premier Branch Private Limited (PBPL)
EXAMPLE CONTINUED
PBPL submitted an offer of Rs 5.20 crore for acquiring all the rights of master licensee for merchandising. Two cheques amounting to Rs 3.5 crore but the same were dishonoured by the bank and as such the OC did not receive any amount from the private company. Accusation that PBPL used CWG brand to earn huge profits, but did not pay anything.
Ex-treasurer M Jayachandran, who is lodged in Tihar jail, has slapped a Rs five-crore defamation suit in the Delhi High Court against the OC for allegedly tarnishing his image. Jayachandran is an accused in the Timing-Scoring- Result (TSR) scam that has led to a loss of over Rs 95 crore to the exchequer. The CBI has accused him of manipulating the minutes of OC's Finance Committee to justify the alleged forgery in the award of TSR contract.
IMPACTS OF IRREGULARITIES
Infrastructure Issues
SOCIO-ECONOMIC IMPACT
Prominent experts called the games a drain on public funds. Nearly 40,000 people were displaced.
ORGANIZATIONAL FAILURE
CVC released a report showing irregularities in 14 CWG projects. Saw extremely poor ticket sales, with all venues halfempty. The CWG projects were to be completed by the end of 2009, which was not really the case.
INFRASTRUCTURE ISSUES
On 21 September, 2010, a overhead bridge collapsed put the entire event in jeopardy.
4 out of 5 accommodation towers in the Games village were unfinished. Dengue outbreak caused fear in the minds of athletes.
The lawn bowling tracks to be used during the Games had been built at around Rs 1.36 crore when it could had been done at just Rs 27 lakh.
BROKEN ROADS
There were a number of teenagers between the ages of 14 and 16 who worked at these places, obviously lured by an adult salary.
DYNAMISM INVOLVED
From the perspective of purchasing process, the following control issues are apparent:
Improper and inadequate vendor selection and evaluation procedures were followed. Conflict of interest was not disclosed while signing contracts with related parties. Tenders were not given to bidders quoting lowest price of the product. Vendors did not deliver the contracted quality and quantity as per the delivery schedule.
Purchase contracts signed with varying rates for the same product; Prices over-inflated in some contracts;
An independent evaluation of contracts by risk managers may have prevented misappropriation of funds. A periodic audit by government agencies could have highlighted these issues at an earlier stage Consultants Event Knowledge Services, Fast Track Sales Ltd, Sports Marketing And Management (SMAM) and AM Films are supposed to have received undue benefits Legal Requirements to place report in parliament
CONSEQUENCES
Unique opportunity lost Take a look at our neighbors Beijing Olympics Looting of pride of our nation; leaving us to shambles Indias position degraded in global list of corruption India perceived as more corrupt after CWG scam 87th out of 178 countries surveyed A marginal decline in India's integrity score to 3.3 in 2010 from 3.5 in 2007 and 3.4 in 2008 and 2009
SUGGESTIONS
The contagious disease of scams demands perfect healing and a thorough clean-up
Implementation of The Santhanam Committee recommendations
While nobody will officially say this, we all know why costs have bloated and stadiums are collapsing. Officials and politicians make money on bribes from contractors, who win bids at the lowest price and then earn super profits by compromising on quality. Then they make more money citing over-runs and repairs. Material suppliers hoard construction materials and make a killing as we desperately race to the deadline.
But nobody will be indicted or arrested or tried. That is the way it works too many important people are making too much money.
2G SCAM
2G SPECTRUM
122 telecom licenses with 2G spectrum awarded in Jan08 at 2001 rates (Rs 1,685 crore) ignoring current market value In Feb07, Hutch sold its 67% equity to Vodafone at Rs 75,000 cr signalling substantial increase in spectrum value (Even if 15% of this is considered to be spectrum value, then it is Rs 11,250 cr per pan-India license)
In Nov07, S-TEL offered Rs 6,000 cr for pan-India license; in December 2007, it increased the offer to Rs 13,752 crore
Private companies sold their equities to foreign telecom companies at very high prices Companies that had pan-India licenses was valued at about Rs 10,000 cr Difference in these figures
is per pan-India license loss to the Government and gain to private companies.
- Shyam Telecom: Sold 74% to Sistema of Russia (MTS brand) - Unitech: Sold 67% to Telenor of Norway (Uninor brand) - Swan Telecom: Sold DB Group about 45% to Etisalat, UAE (Cheers brand) and 5% to Genex, Chennai - Tata Teleservice: Sold 26% to NTT of Japan (DoCoMo brand)
Ensured that spectrum is allocated to certain companies First, Reliance Communication wanted entry into GSM segment. The company applied for fresh license through Swan, and also applied for dual-technology permission. In October 2007, Mr Raja allowed dual technology. But it appears that Reliance gave away the control of Swan to DB Group (Shahid Balwa), who was close to Mr Raja. The advantage with this company (Swan) was that it had already applied for licenses in March 2007. Second, Essar Group (Ruias brother) also applied for a license under Loop Telecom through her sister Ms Kiran Khaitan. Ms Khiatan spent Rs 100,000 to create Loop Telecom and the balance money of Rs 1,700 crore came from Ruias. They could not have applied for license as they already had operation through Vodafone-Essar company in which they had 33% equity stake. This major illegality was ignored by Raja.
On 25.09.2007 he declared the cut-off date for receiving applications as 01.10.2007 This was to ensure that after his favourite companies have submitted the applications, the window is closed shortly But as on Oct 1, 2007, 575 applications were received Then Mr Raja sought advice of Ministry of Law. The ministry replied that the matter should be referred to GoM. Mr Raja protested on this. He wrote to Mr Pranab Mukherjee and the PM Within his ministry, two senior officers had objected to his approach. Mr Raja waited for their retirement on December 31, 2007 He brought in his favourite officer (Mr Siddhartha Behura as Secretary DoT). Thereafter, he got PMs nod on Jan3, 2008.
On January 10, 2008, he issued first Press Release on DoTs web site stating that the applications of only those have been considered who had applied till 25.09.2007. This way he preponed the cut-off date to suit his favourite companies. Thereafter, he put up another Press Release at about 2:45pm on the same day disclosing a list of shortlisted companies and asking them to come between 3:30 to 4:30 PM to collect the LOIs. He also said that whosoever complies with the conditions of LOIs first (that means deposit of Rs 1,658 crore by draft, Bank Guarantees worth several hundred crores separate for each service areas), will be issued spectrum first. So, his friends knew about these conditions. They kept their drafts and guarantees ready one day in advance and were first to comply with LOI condition and were first to get spectrum. This way even the FCFS policy was altered; earlier it used to be date of application and everyone used to be given 15 days time for compliance; Mr Raja even changed the FCFS policy to date of compliance of LOIs. Later, the CAG found that out of 122 licenses, 85 did not meet eligibility criteria.
OBJECTIVE :
NTP-1994 recognized that private sector was required to bridge the large resource gap.
Providing telephone on demand Provision of world-class services at reasonable prices Universal availability of basic telecom services to all villages.
TRAI recommended (Aug07) that no cap be placed DoT issued 122 new licences to 17 companies in 2008 and spectrum was allotted to all operators except for four in Delhi service area (Dec09).
35 licenses were permitted to use dual spectrum and allocated spectrum in 2007-08
a licensee using one technology may be permitted on request, usage of alternative technology and thus allocation of dual spectrum. However, such a licensee must pay the same amount of fee which has been paid by the existing licenses using the alternative technology or which would be paid by the new licensee going to use that technology
Set up in March 1997 Its mandate included making recommendations on the following:
According to TRAI ACT, 1997 TRAI was to regulate telecom services, Original Act of 1997 was amended by the TRAI (Amendment) Act 2000. The new Act provided for the establishment of two separate bodies Thus, TRAI as a regulator has only an advisory role in the policy matters.
need and timing for introduction of new service providers. terms and conditions of the licences to be given to service providers and efficient management of the available spectrum.
Telecom Dispute Settlement and Appellate Tribunal (TDSAT) TRAI for regulatory functions.
TRAI in October 2003, while recommending Unified Services Licensing, had proposed to submit a separate report regarding spectrum allocation and pricing. Based on these inputs, Cabinet, in its decision of 31 October 2003 while charting the course to the UAS and US licencing regime had also approved the following:
adequate spectrum would be made available for unimpeded growth of Telecom services for which WPC wing of the DoT and Ministry of Defence(MoD) should coordinate; MoF will provide MoD adequate budget DoT and MoF would finalise pricing formula for spectrum
Spectrum pricing issue was to be decided in consultation with MoF. However, when a GoM was constituted in Feb06, its Terms of Reference (ToR) were modified to keep the issue of spectrum pricing outside its purview Though MoF insisted for its inclusion in the ToR for the GoM, DoT maintained that 'spectrum pricing was within the normal work carried out by them'. Thus, without the contribution of MoF, new licences continued to be issued along with the spectrum DoT kept applications for UAS licence pending since Mar06 on the grounds of non-availability of spectrum, though a decision to get the spectrum vacated from MoD was taken way back in 2003
Again in Aug07, TRAI observed that entry fee as it existed in 2001 was now not a realistic price. It observed that value of spectrum was not correctly reflected and recommended again for de-linking of spectrum from licence. Right from August 2003 MoF had been recommending greater orientation in spectrum allocation, keeping efficiency and optimal utilization considerations in mind, through auction to users, who are willing to pay the maximum fee
Directions of the Union Cabinet (Oct03) and absence of requisite clarity in the recommendations of TRAI and decision of the Union Cabinet, prudent principles of governance would have required DoT to engage in further inter-ministerial discussions particularly with the MoF. The fact that this was not done despite repeated advices from MoF does give scope for creation of doubt, on the validity of the decision taken to fix the entry fee for new licenses at 2001 levels
TIME LINE
May 16, 2007: A Raja Becomes Telecom Minister Aug, 2007: Process of allotment of 2G spectrum for telecom along with Universal Access Service (UAS) Licences initiated by the Department of Telecommunications (DoT) Oct 11, 2007: DoT gets 575 applications for mobile licenses Nov 2, 2007: The Prime Minister writes to Raja directing him to ensure allotment of 2G spectrum in a fair and transparent manner and to ensure that licence fee was properly revised. Raja writes back to the Prime Minister rejecting many of his recommendations Nov 22, 2007: Finance Ministry writes to DoT raising concerns over the procedure adopted by it. Demand for review rejected
Jan 10, 2008: DoT decides to issue licences on first-come-first-serve basis, preponing the cut-off date to September 25, from October 1, 2007. Later on the same day, DoT posted an announcement on its website saying those who apply between 3.30 pm and 4.30 pm would be issued licences in accordance with the said policy May 4, 2009: An NGO Telecom Watchdog files complaint to the Central Vigilance Commission (CVC) on the illegalities in the spectrum allocation to Loop Telecom May 19, 2009: Another complaint was filed to the CVC by Arun Agarwal, highlighting grant of spectrum to Swan Telecom at throwaway prices 2009: CVC directs CBI to investigate these irregularities in allocation of 2G spectrum Oct 21, 2009: Irregularities in spectrum allocation. CBI searches DoT office
Oct 23, 2009: CBI raids DoT offices over spectrum row Nov 16, 2009: CBI seeks details of tapped conversation of corporate lobbyist Niira Radia to find out involvement of middlemen in the grant of spectrum to telecom companies
Aug 18, 2010: HC refuses to direct the Prime Minister to decide on a complaint by Janata Party chief Swamy seeking sanction to prosecute Raja for his involvement in 2G scam
Sept 13, 2010: SC asks government, Raja to reply within 10 days to three petitions filed by CPIL and others alleging there was aRs 70,000 crore scam in the grant of telecom licences in 2008 Oct 8, 2010: SC asks government to respond to CAG report about the scam
Nov 10, 2010: CAG submits report on 2G spectrum to government stating loss of Rs 1.76 lakh crore to exchequer Nov 11, 2010: DoT files affidavit in SC saying CAG did not have the authority to question the policy decision as per which licence were issued to new players in 2008 Nov 14, 2010: A Raja resigns as Telecom Minister Nov 22, 2010: CBI tells SC it will file charge sheet in the case within three months Nov 25, 2010: SC ticks off CBI for not questioning Raja. Nov 29, 2010: CBI files status report on 2G spectrum scam probe
Nov 30, 2010: SC questions CVC P J Thomass moral right to supervise CBIs probe into 2G spectrum scam as he himself was Telecom Secretary at that point of time Dec 1, 2010: Raja questions CAG findings in the SC.
Dec 14, 2010: Another PIL in SC seeking cancellation of new telecom licences and 2G spectrum allocated during Rajas tenure. Dec 15, 2010: Swamy files petition in a Delhi court seeking his inclusion as a public prosecutor in 2G spectrum case
Feb 10, 2011: SC asks the CBI to bring under its scanner corporate houses which were beneficiaries of the 2G spectrum. Feb 17, 2011: Raja Sent To Tihar Jail under Judicial Custody Mar 1, 2011: CBI tells SC that 63 persons are under scanner. Mar 14, 2011: The Delhi High Court sets up special court to deal exclusively with 2G cases.
Mar 29, 2011: SC permits CBI to file charge sheet on April 2 instead of March 31.
Apr 25, 2011: CBI files charge sheet and court issues summons to Kanimozhi, Sharad Kumar and Karim Morani taking cognizance of the charge sheet
May 6, 2011: Kanimozhi and Sharad Kumar appear before court and file bail pleas while Morani sought exemption from appearance on medical ground May 7, 2011: Special CBI Court reserves order on Kanimozhi and Sharad Kumars bail applications Opposes bail plea of Shahid Balwa, Chandolia May 20, 2011: Special CBI Court rejects bail pleas of Kanimozhi and Sharad Kumar and orders their forthwith arrest saying that there was a possibility of witnesses being influenced considering the magnitude of the crime July 25, 2011: Arguments on Charge begins. Raja seeks to make Prime Minister and former finance minister P Chidambaram as witness.
Aug 26, 2011: Special CBI court allows Subramanian Swamy to argue his own case (mainly to address the possible loop holes in CBI investigation of the case) Sept 15, 2011: Swamy pleads before special CBI court that P Chidambaram should be made co-accused Sept 22, 2011: CBI defends Chidambaram in SC, blames DoT for all wrongs. Sept 26, 2011: CBI moves plea for framing fresh charge for criminal breach of trust against Raja, Chandolia and Behura Oct 10, 2011: The Supreme Court reserves order against Subramanian Swamys plea for a probe into Home Minister Chidambarams role in the 2G scam
Nov 3, 2011: Special CBI court dismisses bail pleas of all the 8 applicants (including Kanimozhi) Nov 8, 2011: Special CBI court orders CBI to give copy of file on sale of equity by telecom companies (for investigating P Chidambaram's involvement) to Swamy Nov 9, 2011: Delhi HC refuses to grant interim bail to Karim Morani on health grounds wondering Why everybody falls sick once he is in custody? Nov 11, 2011: Trial of the 17 accused begins in Patiala House special CBI court Nov 14, 2011: : UPA govt moves SC seeking to restrain Dr Subramanian Swamy from making public allegations against the UPA leadership Nov 22, 2011: The Special CBI court shifts the trial to the Tihar Jail complex following a Delhi high court order Nov 23, 2011: SC grants bail to 5 corporate executives
Gaps in implementation of policy led to a situation, when on the one hand allocation of spectrum was not delinked from licences and on the other hand applications for new licences continued to be received by the DoT without framing guidelines for UASL
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This largely opaque and uncertain delivery system coupled with fast paced growth in the telecom sector during the decade led to heavy rush of companies to the sector
After issuing 51 new licences under UAS regime since 2004, and keeping 53 applications pending from January 2006, DoT sought recommendation from TRAI in April 2007 on the issue of limiting the number of access providers in each service area. TRAI, in its report of 28 August 2007 recommended 'no cap' on the number of licences.
CONTD...
Despite the TRAI's recommendation, on 24 September 2007 DoT issued a Press Release stating that applications for issue of licences would be accepted only up to 01.10.2007. This press notification signalled the possibility of an impending cap in the number of licences to be awarded, which led to a sudden spurt in applications
ADVICE OF THE HON'BLE MINISTER OF LAW AND JUSTICE WAS IGNORED BY DOT
It is necessary that the whole issue is first considered by an Empowered Group of Ministers (EGoM) and in that process legal opinion of the Attorney General can be obtained
Treated as out of context by the MOC&IT and a reference to EGoM was deliberately avoided.
The Government of India (Transaction of Business) Rules, 1961 stipulates that when the subject of a case concerns more than one department, no decision be taken or order issued until all such departments have concurred, or, failing such concurrence, a decision thereon has been taken by or under the authority of the Cabinet
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DoT justified its actions on the ground that the reference was made to the Ministry of Law and Justice and that their advice was discussed in the Department and the existing policy for grant of UAS licences was approved by the MoC& IT as any change could have led to litigation and not sustainable under law
It will be unfair, discriminatory, arbitrary and capricious to auction spectrum to new applicants as it will not give the level playing field.
These applicants had advance information about the issue of this notification by the DoT which enabled them to take appropriate advance action to draw the DDs and prepare other relevant documents for complying with the LoI conditions in spite of the changed time limit for compliance from 15 days to about half a day.
MoC&IT arbitrarily decided to issue Letter of Intents to all applicants, who had submitted their applications between March 2006 and 25 September 2007 thereby depriving the applicants, who had submitted their applications earlier, of their seniority and resultant claim to get the LoIs first.
85 out of 122 licenses issued in 2008 were found to be issued to Companies which did not satisfy the basic eligibility conditions and had suppressed facts, disclosed incomplete information and submitted fictitious documents for getting UAS licenses and thereby access to spectrum.
THE ENTIRE PROCESS OF ALLOTMENT OF UAS LICENSES IN JANUARY 2008 LACKED TRANSPARENCY AND APPEARED
TO HAVE BEEN DONE WITH THE OBJECTIVE OF FAVOURING A FEW FIRMS OVER OTHERS.
FINANCIAL IMPACT
Whether the entry fee was expected to reflect the value of the spectrum at all?
The 2003 Cabinet decision intended to make the UAS licence only an instrument to enter the business of providing cellular and other telecom services irrespective of the technology used for the purpose Companies could obtain spectrum of required type by paying its price through auction or any other arrangement decided by an independent regulator to be set up for spectrum pricing and management
Since no price discovery of spectrum was attempted for 2G spectrum separately, the entry fee discovered in 2001 is mainly the price of spectrum that came with UAS licence.
If the price offered by S Tel Ltd which he proposed to revise upwards in case of any counter bids, is used as indicator of market valuation of 6.2 MHz of 2G spectrum at that time, value in respect of all 122 new licences and 35 licences under dual technology after discounting the receivables of the future years work out to ` 65,909 crore as against ` 12,386 crore collected by the DoT.
If price is calculated at 3G rates which can also be taken as one of the indicators for assessing the value of 2G spectrum allocated to UAS licensees in 2008, the total difference in value worked out to ` 1,39,652 crore .
Three companies viz. Swan Telecom, S Tel and Unitech were new entrants in the telecom sector. The fact that these operators could draw huge foreign investments, even before establishing a foothold in the Indian telecom market would suggest that acquiring UASL and with it, allotment of 4.4 MHz of GSM spectrum for roll out, was the main factor which attracted the foreign investment. A comparison of foreign equity attracted by the new entrants in the Indian telecom market would reveal that the cost of a pan India licence could be a value between ` 7758 crore to ` 9100 crore. However, the DoT issued pan India licences at ` 1658 crore.
CONCLUSIONS
The entire process of allocation of UAS licences lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner
The DoT did not follow its own guidelines on eligibility conditions, arbitrarily changed the cutoff date for receipt of applications post facto and altered the conditions of the FCFS procedure at crucial junctures without valid reasons, which gave unfair advantage to certain companies over others. The Department of Telecommunications also did not do the requisite due diligence in the examination of the applications submitted for the UAS licenses, leading to the grant of 85 out of 122 UAS licences to ineligible applicants. Dual Technology was also introduced by the DoT in October 2007 in a hasty and arbitrary manner and in-principle approval was given to 3 operators on a day prior to the announcement of the policy, which gave the perception of discrimination against other players in the field
The entire process of allocation of 2G spectrum raises serious concern about the systems of governance in the Department of Telecommunications which need to be thoroughly reviewed and revamped. To ensure that such lapses do not occur in any Ministry or Department of the Government, there is an imperative need to fix responsibility and enforce accountability
RTI - INTRODUCTION
Enacted for citizens to secure access to information under the control of Public Authorities in order to promote transparency and accountability in the working of any public authority. Law was passed by Parliament on 15 June 2005. Came fully into force on 13 October 2005
Failure of Freedom Of Information Act,2002 Severe criticism
Public Authorities are required to: Reply within 30 days Computerize their records Pro-actively publish certain categories of information
SCOPE
Act covers the whole of India except Jammu and Kashmir J & K J & K Right to Information Act Applicable to all constitutional authorities, including the executive, legislature and judiciary; any institution or body established or constituted by an act of Parliament or a state legislature. Private bodies are not within the Act's ambit directly
RTI
Includes access to information which is held by or under the control of any public authority and includes the right to inspect the work, document, records, taking notes, extracts or certified copies of documents / records and certified samples of the materials and obtaining information which is also stored in electronic form.
The Act empowers every citizen to:
Ask any questions from the Government or seek any information. Take copies of any governmental documents. Inspect any governmental documents. Inspect any Governmental works. Take samples of materials of any Governmental work.
PROCESS
All authorities covered must appoint their Public Information Officer (PIO). Person must submit a request to the PIO for information in writing.
TIME LIMITS
The Act specifies time limits for replying to the request: If the request has been made to the PIO, the reply is to be given within 30 days of receipt. If the request has been made to an APIO, the reply is to be given within 35 days of receipt. If the PIO transfers the request to another public authority, the time allowed to reply is 30 days but computed from the day after it is received by the PIO of the transferee authority. Information concerning corruption and Human Rights violations by scheduled Security agencies (those listed in the Second Schedule to the Act) is to be provided within 45 days but with the prior approval of the Central Information Commission. However, if life or liberty of any person is involved, the PIO is expected to reply within 48 hours.
CHARGES
If applicant is a Below Poverty Card holder, then no fee shall apply. (For Central Depts., Yr: 2006)
EXCLUDED AUTHORITIES
Central Intelligence and Security agencies specified in the Second Schedule like
Directorate General of Income Tax (Investigation) RAW CBI CID Directorate of Revenue Intelligence Central Economic Intelligence Bureau Narcotics Control Bureau Aviation Research Centre Special Frontier Force, BSF, CRPF, ITBP, CISF, NSG Agencies specified by the State Governments through a Notification will also be excluded.
EXCLUDED INFORMATION
The following is exempt from disclosure (Section: 8)
Information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, "strategic, scientific or economic" interests of the State, relation with foreign State or lead to incitement of an offense; Information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court; Information, the disclosure of which would cause a breach of privilege of Parliament or the State Legislature;
CONTD
Information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information; Information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information; Information received in confidence from foreign Government;
Information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes;
CONTD
Information which would impede the process of investigation or apprehension or prosecution of offenders; Cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers; Information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual (but it is also provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied by this exemption); Notwithstanding any of the exemptions listed above, a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests. (NB: This provision is qualified by the proviso to sub-section 11(1) of the Act which exempts disclosure of "trade or commercial secrets protected by law" under this clause when read along with 8(1)(d))
CASE STUDY:
BRIEF
Decided On: 09.08.2011 Appellants: Central Board of Secondary Education and Anr. Vs Respondent: Aditya Bandopadhyay and Ors.
THE CASE
Aditya appeared for the Secondary School Examination, 2008 conducted by the CBSE. When he got the mark sheet he was disappointed with his marks. He thought that he had done well in the examination but his answer-books were not properly valued and that improper valuation had resulted in low marks. Therefore he made an application for inspection and re-evaluation of his answerbooks.
CBSE rejected the said request. The reasons for rejection were:
Information sought was exempted under Section 8(1)(e) of RTI Act since CBSE shared fiduciary relationship with its evaluators and maintain confidentiality of both manner and method of evaluation. The Examination Bye-laws of the Board provided that no candidate shall claim or is entitled to re-evaluation of his answers or disclosure or inspection of answer book(s) or other documents. The larger public interest does not warrant the disclosure of such information sought.
For a declaration that the action of CBSE in excluding the provision of reevaluation of answer-sheets, in regard to the examinations held by it was illegal, unreasonable and violative of the provisions of the Constitution of India; For a direction to CBSE to appoint an independent examiner for reevaluating his answer-books and issue a fresh marks card on the basis of re-evaluation; For a direction to CBSE to produce his answer-books in regard to the 2008 Secondary School Examination so that they could be properly reviewed and fresh marks card can be issued with re-evaluation marks; For quashing the communication of CBSE dated 12.7.2008 and for a direction to produce the answer-books into court for inspection by the first Respondent. The Respondent contended that Section 8(1)(e) of Right to Information Act, 2005 ('RTI Act' for short) relied upon by CBSE was not applicable and relied upon the provisions of the RTI Act to claim inspection.
CBSES DEFENSE
CBSE resisted the petition. It contended that as per its Bye-laws, re-evaluation and inspection of answer-books were impermissible and what was permissible was only verification of marks. Bye Law No. 61. Verification of marks obtained by a Candidate in a subject
i.
The verification will be restricted to checking whether all the answer's have been evaluated and that there has been no mistake in the totaling of marks for each question in that subject and that the marks have been transferred correctly on the title page of the answer book and to the award list and whether the supplementary answer book(s) attached with the answer book mentioned by the candidate are intact. No revaluation of the answer book or supplementary answer book(s) shall be done.
CONTD
ii) Such an application must be made by the candidate within 21 days from the date of the declaration of result for Main Examination and 15 days for Compartment Examination.
(iii) All such applications must be accompanied by payment of fee as prescribed by the Board from time to time.
(iv) No candidate shall claim, or be entitled to, revaluation of his/her answers or disclosure or inspection of the answer book(s) or other documents. (vi) In no case the verification of marks shall be done in the presence of the candidate or anyone else on his/her behalf, nor will the answer books be shown to him/her or his/her representative.
(vii) Verification of marks obtained by a candidate will be done by the officials appointed by or with the approval of the Chairman.
(viii) The marks, on verification will be revised upward or downward, as per the actual marks obtained by the candidate in his/her answer book.
CONTD
Bye Law No. 62. Maintenance of Answer Books The answer books shall be maintained for a period of three months and shall thereafter be disposed of in the manner as decided by the Chairman from time to time.
QUESTIONS TO BE CONSIDERED
1)
Whether an examinee's right to information under the RTI Act includes a right to inspect his evaluated answer books in a public examination or taking certified copies thereof? Whether the decisions of this Court in Maharashtra State Board of Secondary Education [MANU/SC/0055/1984 : 1984 (4) SCC 27] and other cases referred to above, in any way affect or interfere with the right of an examinee seeking inspection of his answer books or seeking certified copies thereof? Whether an examining body holds the evaluated answer books "in a fiduciary relationship" and consequently has no obligation to give inspection of the evaluated answer books under Section 8(1)(e) of RTI Act? If the examinee is entitled to inspection of the evaluated answer books or seek certified copies thereof, whether such right is subject to any limitations, conditions or safeguards?
2)
3)
4)
ANSWER 1)
Held: The evaluated answer-book is also an 'information' under the RTI Act.
Having regarded to Section 3, the citizens have the right to access to all information held by or under the control of any public authority except those excluded or exempted under the Act. The evaluated answer sheets were not found exempted under Sections 8, 9 & 24.
ANSWER 2)
Held: The High Court has rightly denied the prayer for reevaluation of answer-books sought by the candidates in view of the bar contained in the rules and regulations of the examining bodies.
The decision of this Court in Maharashtra State Board (supra) and the subsequent decisions following the same, will not affect or interfere with the right of the examinee seeking inspection of answer-books or taking certified copies thereof.
ANSWER 3)
relationship as: A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship.
Fiduciary relationships - such as trustee-beneficiary, guardianward, agent-principal, and attorney-client - require the highest duty of care. Fiduciary relationships usually arise in one of four situations:
(i) When one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (ii) When one person assumes control and responsibility over another, (iii) When one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (iv) When there is a specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer.
Held: It cannot therefore be said that the examining body is in a fiduciary relationship either with reference to the examinee who participates in the examination and whose answer-books are evaluated by the examining body.
That an examining body does not hold the evaluated answer-books in a fiduciary relationship. Not being information available to an examining body in its fiduciary relationship, the exemption under Section 8(1)(e) is not available to the examining bodies with reference to evaluated answer-books. As no other exemption under Section 8 is available in respect of evaluated answer books, the examining bodies will have to permit inspection sought by the examinees.
ANSWER 4)
Held: The right to access information does not extend beyond the period during which the examining body is expected to retain the answer-books.
Indiscriminate and impractical demands or directions under RTI Act for disclosure of all and sundry information (unrelated to transparency and accountability in the functioning of public authorities and eradication of corruption) would be counter-productive.
The threat of penalties under the RTI Act and the pressure of the authorities under the RTI Act should not lead to employees of a public authorities prioritizing 'information furnishing', at the cost of their normal and regular duties.
JUDGMENT
In view of the foregoing, the order of the High Court directing the examining bodies to permit examinees to have inspection of their answer books is affirmed, subject to the clarifications regarding the scope of the RTI Act and the safeguards and conditions subject to which 'information' should be furnished. The appeals are disposed of accordingly.