SPL. JUDGE, CBI (04) (2G Spectrum Cases), NEW DELHI. CC ...

IN THE COURT OF O. P. SAINI: SPL. JUDGE, CBI (04)(2G Spectrum Cases), NEW DELHI.

CC No. 01/14

Case RC No. 22(A)-2011-CBI, ACB, New Delhi

CBI Vs. (1) Dayanidhi Maran (A-1); (2) Kalanidhi Maran (A-2); (3) M/s Sun Direct TV (P) Limited (A-5); & (4) M/s South Asia Entertainment Holdings Limited,

Mauritius (A-8);

Order:Reserved on: 16.11.2016Pronounced on: 02.02.2017

Presence/ Appearance:

Sh. Anand Grover Sr. Advocate/ Special PP

with Sh. K. K. Goel & Sh. A. K. Rao Sr. PPs, IO Dy.

SP S. K. Sinha and Inspectors Shyam Prakash &

Manoj Kumar for CBI.

Sh. Kapil Sibal & Ms. Rebecca John Sr.

Advocates with Sh. Maninder Singh, Sh. Anirban

Bhattacharya, Sh. Shikher Deep Aggarwal, Sh.

Abhishek Gupta and Mr. Chahat Chawla Advocates

for accused Kalanithi Maran;

Dr. Abhishek Manu Singhvi & Sh. R. S.

Cheema Sr. Advocates with Sh. Sushil Bajaj, Sh.

Sumesh Dhawan, Ms. Vatsala Kak, Ms. Tarannum

Cheema and Ms. Tannya Baranwal Advocates for

accused Dayanidhi Maran;

Sh. Parag Tripathi Sr. Advocate with Sh.

Anirban Bhattacharya, Sh. Shikher Deep Aggarwal,

Sh. Abhishek Gupta and Sh. Chahat Chawla

CBI Vs. Dayanidhi Maran & others of 424

Advocates with Authorized Representative Sh. K.

Swaminathan for accused M/s Sun Direct TV (P)

Limited (A-5); and

Sh. Sidharth Luthra Sr. Advocate with Sh.

Neeraj Chaudhari, Sh. Siddharth Aggarwal, Sh. Anuj

Berry and Sh. Malak Bhatt Advocates with

Authorized Representative Sh. Ajay Sehgal for

accused M/s South Asia Entertainment Holdings

Limited (A-8).

ORDER ON CHARGE

This order shall dispose of the question: As to

whether, on the basis of material on record, a prima facie case

warranting framing of charge against the accused is made out

or not.

2. The brief facts of the case are as under:

3. One Sh. C. Sivasankaran, promoter of Siva group,

has been in telecom sector since 1994, when M/s Sterling

Cellular Limited, promoted by him, was provided Cellular

Mobile Telecom Services (CMTS) licence in Delhi service area.

Sh. C. Sivasankaran had the controlling stake in Siva group of

companies including the telecom companies, through his family

members. He formed a holding company viz. M/s Aircel Tele

Ventures Limited (ATVL) in 1997. M/s ATVL had 100%

ownership of M/s Aircel Limited operating in Tamil Nadu

service area, M/s Aircel Cellular Limited (ACL) operating in

Chennai service area and also in M/s Dishnet DSL Limited

(later on M/s Dishnet Wireless Limited).


M/s Aircel Limited launched its operations in Tamil Nadu

service area in April, 1999.

In the year 2003, M/s ATVL also acquired M/s Aircel

Cellular Limited held by joint venture of RPG (RP Goenka

group) and Vodafone (UK), which was the service provider in

Chennai telecom circle.

4. Sh. C. Sivasankaran wanted to expand his GSM

mobile business from these two service areas to other service

areas through his company M/s Dishnet DSL Limited.

Accordingly, M/s Dishnet DSL Limited applied to DoT for grant

of Unified Access Service Licences (UASLs) on 05.03.2004 in

eight service areas, that is, Assam, North-East, West Bengal,

Bihar, Orissa, MP, Himachal Pradesh and J&K. The DoT issued

Letters of Intent (LOI) on 6th April, 2004 for these eight service

areas. The company submitted compliance to the LOIs on

20.04.2004 for seven service areas.

For the remaining service area of Madhya Pradesh, the

company sought some additional time.

This company also applied for grant of UASLs for two

more service areas, that is, UP (West) and UP (East), on

21.04.2004.

The proposal for extension of time to comply with LOI for

MP service area and issuance of LOI for grant of new UASLs for

UP(E) and UP(W) service areas were de-linked from the signing

of licences for seven service areas and these seven licences were

executed on 12.05.2004.

This company, that is, Dishnet Wireless Limited, also

applied for grant of four UAS licences in Punjab, Haryana,


Kerala and Kolkata service areas on 01.03.2005.

5. In May, 2004, there was change of Government at

Centre and Sh. Dayanidhi Maran took over as Minister of

Communications and Information Technology (MOC&IT) on

26.05.2004. Sh. Dayanidhi Maran worked as MOC&IT,

Government of India, New Delhi, during the period from

26.05.2004 to 17.05.2007.

Late Dr. J. S. Sarma worked as Additional Secretary

(Telecom) between October 2003 and November 2004. He

again joined DoT as Special Secretary on 04.06.2005 and took

over as Secretary (Telecom) on 01.07.2005 and held the office

till 16.07.2006.

6. Sh. Kalanithi Maran, brother of Sh. Dayanidhi

Maran and promoter of M/s Sun TV Networks Limited,

Chennai, which is a broadcasting company, distributing and

telecasting different TV channels in different languages since

2000, also promoted another company in the name of M/s Sun

Direct TV (P) Limited in the month of February, 2005 to

provide Direct to Home broadcasting service in India.

7. Sh. Ralph Marshall was Director of M/s Maxis

Communications Bhd., Malaysia, and M/s Astro All Asia

Networks Plc. UK. Sh. T. Ananda Krishnan was having the

majority shareholding in both companies.

8. In December 2005, these three companies were

allegedly sold to Maxis Communications of Malaysia. It is

alleged that the sale of these companies held by Sh. C.

Sivasankaran to M/s Maxis Communications (through its

subsidiary M/s Global Communications and a joint venture


company named M/s Deccan Digital Networks (P) Limited

formed between Indian partner M/s Sindya Securities and M/s

Global Communications) was with the intervention of Sh.

Dayanidhi Maran and his brother Sh. Kalanithi Maran.

9. It is alleged that Sh. Dayanidhi Maran, the then

MOC&IT, in abuse of his official position, deliberately delayed

grant of UAS licences in seven service areas and other

approvals/ permissions on various issues pending before

Department of Telecommunications (DoT) related to Aircel

Tele Ventures Limited on frivolous grounds with an intent to

force its exit from telecom business by constricting its business

environment.

10. It is alleged that after the change of ownership, the

applications for issuance of licences and other requests/

approvals pending since long before the DoT were smoothly

acceded to and after such transfer undue favour was given to

these companies, for which alleged illegal gratification was paid

through the companies of Sh. Kalanithi Maran.

11. The details of delay in grant of LOIs, UAS Licences

and other approvals, acquisition of telecom companies of Sh. C.

Sivasankaran by Maxis Communications, Malaysia, smooth

approvals, post-acquisition by Maxis Communication and

payment and receipt of bribe are as under:

A. Allegations relating to delay

12. It is alleged that the grant of LOIs, extension of time

in MP service area and various other regulatory approvals of

M/s Aircel Limited, M/s Dishnet DSL Limited and M/s Aircel

Cellular Limited were delayed on frivolous grounds. The details


of such delays are given as under:

(i) Delay in grant of LOIs for award of UASL in UP(E) and

UP(W) and grant of extension of time of signing licence

agreements in MP service area to M/s Dishnet DSL

Limited

13. It is alleged that DoT had issued LOI for Unified

Access Service Licence (UASL) for eight telecom service areas

including Madhya Pradesh in favour of M/s Dishnet DSL

Limited (a Siva group company) on 06.04.2004. UAS licence

agreements in respect of seven service areas were executed on

12.05.2004. However, licence agreement in respect of Madhya

Pradesh service area was not executed.

14. It is further alleged that M/s Dishnet DSL Limited

submitted a letter dated 20.04.2004 requesting for extension of

time by 90 days from 20.04.2004 required to fulfill the

formalities of bank guarantee to sign the licence agreement in

Madhya Pradesh service area. This application was processed in

file No. 20-231/2003-BS-III (Vol. III).


submitted applications dated 21.04.2004 for grant of UAS

Licences for UP (East) and UP (West) service areas. These

applications were also processed in file No. 20-231/2003-BS-

III (Vol. III). DoT officials examined the applications and

recommended for approval for issue of LOI to M/s Dishnet DSL

Limited for award of UASL in respect of UP (E) and UP (W)

service areas and for grant of extension of time by 90 days for

signing the licence agreements in respect of MP service area.

Sh. Nripendra Misra, Secretary, DoT concurred with the


proposal and marked the file to Sh. Dayanidhi Maran, the then

MOC&IT, for approval on 13.07.2004. In spite of the

unanimous recommendations, Sh. Dayanidhi Maran, instead of

according approval, raised objections and sought clarification

through his PS Sh. K. Sanjay Murthy on 26.08.2004.

16. It is further alleged that M/s Bharti Airtel Limited

and M/s Reliance Infocomm Limited had submitted

applications dated 15.04.2004 and 24.06.2004 respectively for

grant of UAS licence for Assam and J&K service areas, which

were approved by accused Sh. Dayanidhi Maran, the then

MOC&IT, on 22.06.2004 without raising queries and, as such,

the queries raised by accused Sh. Dayanidhi Maran on the

proposal of M/s Dishnet DSL Limited for grant of licences in

UP (E) and UP (W) and grant of extension of time for signing of

UAS licence agreement were with dishonest intention and

against the DoT guidelines.

(ii) Delay in grant of approval for change in equity of M/s

Aircel Limited and taking on record name change of

Srinivas Computers Limited.

17. It is alleged that M/s Aircel Limited (a Siva group

company) was having a CMTS licence in Tamil Nadu service

area in 2004. M/s Aircel Limited applied for approval for

change in equity structure consequent upon sale/ transfer of

shares of M/s Aircel Digilink Limited (ADIL) vide request letter

dated 28/29 June 2004. This application was processed in file

No. 842-325/2000-VAS.

18. It is further alleged that M/s Aircel Limited also


sent letters dated 21.06.2004 and 22.06.2004 to DoT for

change of name of the promoter namely from Srinivas

Computers Limited to M/s Aircel Televentures Limited. M/s

Srinivas Computers Limited was having 100% equity shares in

M/s Aircel Limited and 79.24% in M/s Aircel Cellular Limited.

Copies of above referred letters were also processed in the

above referred file. The applications were examined by DoT

officials till Secretary (T) and all recommended for approval of

the proposals of the company to Sh. Dayanidhi Maran. When

the file reached the Minister on 27.08.2004, he instead of

approving the unanimous recommendations returned the file to

Secretary (T) through his PS Sh. K. Sanjay Murthy on

15.09.2004 mentioning that there are many inter related issues

between mergers and acquisitions, licensing, FDI and FII

investments in holding companies and their sister concerns. An

overall view on issues arising in such cases needs to be taken

before a decision can be taken. All the inter-related issues

mentioned above pertaining to the case being dealt in the below

mentioned files be examined and a consolidated note

submitted:

(i) F. No. 842-21/2001-VAS (Vol. III)

(ii) F. No. 842-325/2000-VAS

(iii) F. No. 808-26/2003-VAS (Vol. I)

(iv) F. No. 20-231/2003-BS-III

19. It is further alleged that accused Dayanidhi Maran

dishonestly directed that this consolidated note be put up by

(Late) Dr. J. S. Sarma, the then Additional Secretary (T). It is

further alleged that Additional Secretary (T) was not in the


chain of officers through whom the file of Licensing Division

had to move. Accused (Late) Dr. J. S. Sarma in connivance with

accused Sh. Dayanidhi Maran put up a note, as desired by him,

on 30.11.2004 (after a gap of about 75 days). He, contrary to the

recommendations of the Licensing Division officers and the

Secretary (T), recommended that before granting the UAS

licenses to M/s Dishnet DSL Limited, DoT may await the

decision on TDSAT on the issue of vigilance cases and penalties

imposed by DoT on Dishnet. Consequently, as per the

directions of Secretary (T), a legal opinion on the comments of

accused Dr. J. S. Sarma was obtained from Sh. O. P. Nahar,

Legal Advisor (T), on 11.01.2005 who, inter alia, opined that

DoT had withdrawn its own letter of imposition of penalty so

M/s Dishnet DSL Limited cannot be faulted on this count and

denial of LOIs/ licence will not withstand legal scrutiny.

20. In view of the above referred legal opinion dated

11.01.2005, DoT officials again recommended for taking on

record the change of name of promoter from M/s Srinivas

Computers Limited to M/s Aircel Televentures Limited and also

recommended that the transfer of 100% equity of M/s Aircel

Limited to M/s Aircel Digilink India Limited may be taken on

record as all the licence conditions and other guidelines in this

regard are being made. Sh. N. Misra, Secretary (T), concurred

with the recommendation and sent the file for approval to

accused Sh. Dayanidhi Maran on 24.01.2005.

21. Despite such legal opinion dated 11.01.2005,

accused Sh. Dayanidhi Maran dishonestly did not grant the

approval, and instead returned the file through his PS Sh. K.


Sanjay Murthy on 03.03.2005 mentioning that reports on

mergers and acquisitions were awaited. It is further alleged that

no such report on mergers and acquisitions was awaited at that

point of time. A report on the subject had already been

submitted by accused (Late) Dr. J. S. Sarma on 30.11.2004.

After having the legal opinion, there was no good reason for not

granting the approvals sought by M/s Aircel Limited (a Siva

group company). It was a clear manifestation of the dishonest

intention and abuse of the official position by the accused Sh.

Dayanidhi Maran.

(iii) Change of name from M/s Dishnet DSL Limited to M/s

Dishnet Wireless Limited

22. It is alleged that M/s Dishnet DSL Limited applied

for change in name of the company from M/s Dishnet DSL

Limited to M/s Dishnet Wireless Limited 21.07.2004. The

application was processed in file No. 20-225/04/Genl.-

Mts./Dishnet/BS-III. The DoT officials recommended to take

on record the change in name. Sh. Nripendra Misra, Secretary

(T), concurred and sent the file to accused Sh. Dayanidhi Maran

for approval on 01.10.2004 who dishonestly did not grant

approval and send the file to accused (Late) Dr. J. S. Sarma,

Additional Secretary (T), through his PS Sh. K. Sanjay Murthy

stating that “The issues pertaining to this case are similar to

the issues being examined for preparation of a consolidated

note bringing out the interrelated issues between mergers and

acquisitions, licensing, FDI and FII investment in holding

companies and their sister concerns. The issues arising from

this case may also be incorporated in the consolidated note


being prepared.”

23. Accused (Late) Dr. J. S. Sarma as discussed above

had prepared a note on 30.11.2004 and on the same date he

marked the file to Secretary (T)/ MOC&IT. Instead of

approving the simple request of taking on record the change of

name of company (approval had already been there from ROC),

Sh. Dayanidhi Maran dishonestly sent this file, alongwith three

other files pertaining to M/s Dishnet DSL Limited on

03.03.2005 to Secretary (T) for re-examination if there was

undue haste in processing the case earlier.

(iv) Delay in grant of UASL for Punjab, Haryana, Kerala and

Kolkata

24. It is alleged that M/s Dishnet Wireless Limited had

applied for grant of UASL for Punjab, Haryana, Kerala and

Kolkata service areas on 1 st March 2005. These applications

were processed in file No. 20-231/2005-BS-III. Sh. A. R.

Devarajan, AD (BS-III), put up a note on 09.03.2005

recommending for issue of LOI in favour of M/s Dishnet

Wireless Limited for the said four service areas. After some

clarifications regarding foreign equity pattern, the request for

grant of UASLs in the four service areas was kept pending

because of the mala fide direction of accused Sh. Dayanidhi

Maran to link show cause notices and advisories to the grant of

UASLs. This direction was conveyed through Sh. Nripendra

Misra in file No. 20-231/2003-BS-III (Vol. III) on 30.03.2005.

(v) Delay in Spectrum Allocation to M/s Dishnet DSL

Limited in Bihar Telecom Circle

25. It is alleged that prior to 31.01.2005, cases for


frequency assignments were being approved by Joint Wireless

Advisor/ Deputy Wireless Advisor. However, accused Sh.

Dayanidhi Maran directed that cases related to frequency

assignments for telecom service providers and terrestrial

broadcasting and uplinking of satellite TV channels should be

submitted to him for approval through Member (T) and

Secretary (T). Accordingly, a note dated 31.01.2005 was issued

under the signature of Sh. Nripendra Misra, the then Secretary

(T), in this regard. Accused Sh. Dayanidhi Maran later on

directed that the cases related to frequency assignments should

be submitted via Member (T) to accused (Late) Dr. J. S. Sarma,

Special Secretary (T), for approval. Accordingly, a note dated

16.06.2005 was issued under the signature of accused (Late)

Dr. J. S. Sarma, Special Secretary (T) modifying the orders

dated 31.01.2005 issued under the signature of Sh. Nripendra

Misra.


submitted application dated 24.05.2004 for allocation of GSM

spectrum in Bihar service area. This application was processed

in file No. L-14047/02/2004-NTG. DoT officials including

Wireless Advisor and Member (T) recommended for

earmarking 4.4+4.4 MHz spectrum in all 37 districts in Bihar to

M/s Dishnet DSL Limited and the file was sent to accused Late

Dr. J. S. Sarma, who was competent to approve the allotment of

startup spectrum on 17.06.2005. Accused Late Dr. J. S. Sarma,

in connivance with Sh. Dayanidhi Maran, did not approve the

proposal and sent back the file to Sh. P. K. Garg, the then

Wireless Advisor on 28.06.2005 mentioning that there was


another file on the same subject and also directed to put up a

consolidated note. DoT officials including Wireless Advisor and

Member (T) again recommended for earmarking of initial

4.4+4.4 MHz spectrum in 1800 MHz to M/s Dishnet DSL

Limited and sent the file to accused (Late) Dr. J. S. Sarma, by

then he was promoted to the rank of Secretary (T) on

13.07.2005. Accused (Late) Dr. J. S. Sarma instead of according

approval raised frivolous query with regard to the stage of

network planning and again sent back the file to Sh. P. K. Garg,

Wireless Advisor, on 26.07.2005. It is further alleged that

accused (Late) Dr. J. S. Sarma instructed Sh. P. K. Garg to get

the complete information about network planning and

identification of sites etc. and then put up the file again to him

(Dr. J. S. Sarma) only when the former would call for the same.

Accused (Late) Dr. J. S. Sarma called for the file only in January

2006 when Sh. C. Sivasankaran sold the company to M/s Maxis

Communications Bhd., Malaysia and the file was approved on

03.02.2006.

(vi) Delay in allocation of additional spectrum to M/s Aircel

Cellular Limited in Chennai metro

27. It is alleged that M/s Aircel Cellular Limited sent a

letter dated 11.07.2005 to Sh. P. K. Garg, Wireless Advisor,

intimating that their VLR subscriber base has crossed 5 lacs

and requested for allotment of 1.8 MHz + 1.8 MHz of

contiguous band for both uplink and downlink communication

in the GSM 1800 MHz band. This letter was processed in file

No. L-14043/3/2005-NTG with unanimous positive

recommendations of officials of WPC wing of DoT. The file was


sent to Sh. P. K. Garg, Wireless Advisor, on 23.07.2005.

28. It is further alleged that Sh. P. K. Garg kept the said

file pending with him at the verbal instructions of accused

(Late) Dr. J. S. Sarma. Eventually, the additional spectrum to

M/s Aircel Cellular Limited was allocated by accused Late Dr. J.

S. Sarma, the then Secretary (T), on 19.01.2006, that is, after

sale of M/s Aircel Cellular Limited to M/s Maxis

Communications Bhd., Malaysia.

(vii) Representations submitted by the company

29. It is alleged that various issues of M/s Dishnet DSL

Limited were pending with DoT. Hence, M/s Dishnet DSL

Limited submitted two representations dated 17.08.2005 and

30.09.2005 to Dr. J. S. Sarma, Chairman, Telecom Commission

& Secretary (T), seeking redressal of the representations. These

representations were processed in file No. 20-231/2005-BS-III.

Accused Late Dr. J. S. Sarma, the then Secretary (T), marked

the file to Sh. Yashwant Bhave, the then Additional Secretary

(T), for comments on 15.09.2005 who offered his comments on

05.06.2006, that is, after a gap of about 216 days. The

statement of Sh. Yashwant Bhave has been got recorded under

Section 164 CrPC before the Magistrate in which he has

categorically stated that he held the file with him on the oral

directions of accused (Late) Dr. J. S. Sarma.

(viii) Delay in grant of approval to (a) change of name from

RPG Cellular Services Limited to Aircel Cellular Limited;

(b) to approve the purchase of 20.76% shareholding of

foreign partner namely M/s Siva Cellular Holdings

Limited in Aircel Televentures Limited by Aircel


Televentures Limited to make it 100% Indian company;

(c) taking on record the name change from Srinivas

Computers Limited to Aircel Televentures Limited.

30. It is alleged that M/s Aircel Cellular Limited made a

request vide letter dated 26.02.2004 to DoT for taking on

record the change of name from RPG Cellular Services Limited

to M/s Aircel Cellular Limited. The applicant enclosed a copy of

fresh certificate of incorporation consequent upon change of

name issued by Registrar of Companies, Chennai, on

23.01.2004.

31. M/s Aircel Cellular Limited submitted an

application dated 21.06.2004 to DoT mentioning that Sterling

Infotech Group (SIG) holds 100% stake in Aircel Cellular

Limited as under:

(a) 79.24% of the shares of ACL is held by Aircel Televentures

Limited

(b) 20.76% of the shares of ACL is held by Siva Cellular

Holdings Limited, formerly Airtouch International

(Mauritius) Limited

32. The applicant further mentioned that ATVL is

buying the entire 20.76% of ACL's equity held by SCHL and for

which ATVL had already obtained the approval from Reserve

Bank of India. It further mentions that ATVL now holds 100%

of the equity share capital of ACL. The applicant requested DoT

to take note of it and update the records accordingly.

33. M/s Aircel Televentures Limited submitted an

application dated 21.06.2004 to DoT mentioning that the name

of Srinivas Computers Limited has been changed to Aircel


Televentures Limited w.e.f 28.04.2004. A copy of fresh

certificate of incorporation dated 28.04.2004 issued by ROC,

Chennai, was also enclosed with the application. The applicant

requested for taking on record the name change from Srinivas

Computers Limited to Aircel Televentures Limited. M/s Aircel

Cellular submitted an application dated 28.06.2004 to DoT

requesting for approval for change of equity in Aircel Cellular

Limited. M/s Aircel Digilink India Limited (ADIL) was the

proposed equity holder.

34. The above referred request letters were examined in

file No. 842-21/01-VAS-III by the DoT officers and the file was

sent to Sh. Dayanidhi Maran on 14.01.2005 with unanimous

recommendation for approval of the aforesaid proposals.

However, accused Sh. Dayanidhi Maran dishonestly did not

grant approval and the file was returned on 03.03.2005 by Sh.

K. Sanjay Murthy, PS to MOC&IT, to Secretary (T) with the

remark that reports on mergers and acquisitions are awaited. It

is further alleged that M/s Aircel Cellular Limited vide its letter

dated 07.03.2005 informed the DoT that they are withdrawing

the application for change of shareholding pattern with

immediate effect.

35. The aforesaid requests were again processed and

submitted for approval and the file was sent to accused (Late)

Dr. J. S. Sarma, the then Secretary (T), on 06.09.2005 for

approval, who raised certain queries on 20.09.2005, which

were complied with by the DoT officers and the file was again

put up to him on 01.10.2005. Accused (Late) Dr. J. S. Sarma

desired a discussion with Sh. R. N. Prabhakar, the then Advisor


(P), and after having discussion directed to prepare a brief

consolidated note which was complied with and the file was

again put up to him through Advisor (P) on 09.11.2005. Then,

accused (Late) Dr. J. S. Sarma approved the above referred

three recommendations on 10.11.2005. The delay caused in

giving the approvals to the aforesaid proposals is a clear

manifestation of the conspiracy hatched by the accused

persons.

(ix) Delay in provisioning of POIs by BSNL to M/s Dishnet

DSL Limited

36. It is alleged that provisioning of Point of

Interconnects (POIs) by BSNL to M/s Dishnet DSL Limited was

delayed for a period of three to seven months in Himachal

Pradesh (7 months), NE-I (3 months) and Orissa (3 months)

service areas due to an email dated 06.05.2005 of Sh. Mahipal

Singh, joint DDG (Regulation 1), BSNL Corporate Office, New

Delhi. Sh. Mahipal Singh and Sh. K. S. Guliani, the then DDG,

took plea that the aforesaid email dated 06.05.2005 was sent at

the advice of Sh. A. K. Sinha, the then CMD, BSNL. There is no

such written instruction on the file from Sh. A. K. Sinha, who

denied having given any such instructions to Sh. K. S. Guliani,

orally or in writing. However, the statements of Sh. Mahipal

Singh and Sh. K. S. Guliani have been got recorded under

Section 164 CrPC before the Magistrate. Both Sh. K. S. Guliani

and Sh. Mahipal Singh have stated before the Magistrate that

the instructions to withhold the POIs of M/s Dishnet Wireless

Limited were issued at the instance of Sh. A. K. Sinha, the then

CMD, BSNL, as Sh. Dayanidhi Maran would be furious if


provisioning of POIs to M/s Dishnet DSL Limited is done.

37. However, there is no documentary evidence to

prove the allegation that email dated 06.05.2005 was sent to

the field offices of BSNL which led to delay in POI connection to

M/s Dishnet DSL Limited at the instance of Sh. A. K. Sinha.

Files being called by the Minister

38. It is further alleged that accused Sh. Dayanidhi

Maran verbally called for the files of M/s Dishnet DSL Limited

in which LOIs for eight service areas for grant of UAS Licence

were approved and the file for change of name of the company,

for perusal through his PS on 21.12.2004. Accordingly, the

following files were sent to accused Sh. Dayanidhi Maran

through Sh. Nripendra Misra, the then Secretary (T), on

24.12.2004:

(i) F. No. 20-231/2003-BS-III (containing the grant of LOIs for eight initial circles to M/s Dishnet

DSL Limited)(ii) F. No. 20-231/2003-BS-III/Pt(iii) F. No. 20-225/04-Genl Mts/Dishnet/BS-III

(containing the application of M/s Dishnet DSL Limited for taking on record the name change)

39. These files remained with accused Sh. Dayanidhi

Maran till 30.03.2005 and thereafter he dishonestly linked the

grant of UAS licence to the show cause notices/ advisory letters

issued to M/s Dishnet DSL Limited or its group companies.

40. It is further alleged that on the date of linking the

issuance of UAS licence with show cause notices/ advisories,

accused Sh. Dayanidhi Maran was aware of the fact that Sh. O.

P. Nahar, the then Legal Advisor (T), had already given a legal


opinion dated 11.01.2005 in the matter which stipulated that

the defaults in one licence could not hamper grant of other

licences.

Case of Essar Spacetel (P) Limited

41. It is further alleged that M/s Essar Spacetel (P)

Limited filed applications for grant of UAS Licences for Assam,

Bihar, Orissa, HP, J&K, North-East and Madhya Pradesh

service areas in the month of December 2004. These

applications were being processed in file No. 20-231/2004-BS-

III (Vol. 4). These applications were thoroughly examined by

DoT officials and were found in order. Sh. B. Sivaramakrishnan,

Member (P), also examined the case and on 01.07.2005

reported that in case of another company namely M/s Dishnet

Wireless Limited the LOI of new licences have not been given

on account of similar reasons. He opined that issuance of LOI

for UASL should not be linked with the violations in other

agreements. He recommended that a view may be that the LOI

need not be held up in such cases wherein parallel action is

already going on the erring companies with regard to licence

conditions violations and actions will necessarily be taken as

per the final decisions that will be arrived at. This view was in

consonance with the legal opinion dated 11.01.2005 of Sh. O. P.

Nahar, LA (T), obtained in the matter of M/s Dishnet DSL

Limited. Sh. B. Sivaramakrishnan, Member (P), marked his

note to accused (Late) Dr. J. S. Sarma, Secretary (T), who

desired a discussion. Accordingly, a discussion took place in the

chamber of accused (Late) Dr. J. S. Sarma on 22.07.2005 which


was also attended by Sh. P. K. Mittal, DDG (BS). During

discussion, the case of M/s Dishnet DSL Limited was also

referred to and the legal advice dated 11.01.2005 of Sh. O. P.

Nahar was apprised to accused (Late) Dr. J. S. Sarma. However,

accused (Late) Dr. J. S. Sarma dishonestly did not concur with

the view of Sh. B. Sivaramakrishnan, Member (P), and directed

to have the details of all show cause notices/ advisory letters

issued to sister concerns of applicant company and nature of

default. This direction of accused (Late) Dr. J. S. Sarma was

recorded by Sh. P. K. Mittal, DDG (BS), on 25.07.2005 and VAS

cell was directed to do the needful in the matter.

42. The direction of accused (Late) Dr. J. S. Sarma was

with dishonest intention and in connivance with accused

Dayanidhi Maran, since if he would have concurred with the

view of Sh. B. Sivaramakrishnan, Member (P), for the issuance

of LOI to M/s Essar Spacetel (P) Limited, it would have positive

impact on the pending applications for UASL of M/s Dishnet

DSL Limited.

Guidelines for Unified Access Service Licence: Non-

compliance

43. It is alleged that a guideline for Unified Access

Services Licence was issued vide order No. 808-26/2003-VAS

dated 11.11.2003. This guideline does not stipulate linking show

cause notices or advisory issued to the applicant company or its

sister concern or its associates from the processing of grant of

any further UAS licences in other service areas or processing of

any request such as change of name etc. It is further alleged

that the format of basic service licence application was adopted


for processing of application of grant of new UAS licence. The

time limit prescribed for processing of application of basic

services was inherently adopted. The guideline for grant of

Basic Services was issued by DoT on 25.01.2001 with the

approval of the then MOC&IT. As per clause 12 of the said

guideline dated 25.01.2001, the application was to be decided

so far as practicable, within 15 days of the submission of the

application and the applicant company should be informed

accordingly.

44. The guideline dated 11.11.2003 for grant of UASL

was revised with the approval of accused Sh. Dayanidhi Maran

on 13.12.2005. It also does not stipulate linking show cause

notices or advisory issued to the applicant company or its sister

concern or its associates from the processing of grant of any

further UAS licenses in other service areas or processing of any

request such as change of name etc. On the other hand, such

applications were to be decided within 30 days of the

submission of the application as far as practicable. It is alleged

that accused Sh. Dayanidhi Maran and accused Late Dr. J. S.

Sarma dishonestly and fraudulently violated the guidelines for

issuance of UAS Licences.

B. Allegations relating to transfer/ acquisition of

companies by Maxis

Constricted business environment and pressure to sell

45. It is alleged that no regulatory approvals for various

issues of M/s Aircel Limited/ M/s Dishnet DSL Limited were

forthcoming from DoT which led to constricting the business


environment for Siva group of companies. Besides, accused

Dayanidhi Maran and his brother accused Sh. Kalanithi Maran

also put pressure on Sh. C. Sivasankaran to exit from telecom

business completely.

Contact by Standard Chartered Bank and negotiations

46. It is alleged that the Standard Chartered Bank (SCB)

had been assisting M/s Maxis Communications Bhd., Malaysia

to acquire telecom business in India since middle of 2004. It is

further alleged that M/s Maxis Communications Bhd., Malaysia

was interested to look at an acquisition of M/s Aircel Limited.

M/s Maxis Communications Bhd., Malaysia in consultation

with SCB prepared a draft offer for M/s Aircel Limited. SCB

contacted and discussed the offer with Sh. C. Sivasankaran,

promoter of Siva Group. SCB got the feedback from Sh. C.

Sivasankaran through an e-mail dated 17.10.2005. The key

points of the feedback were as under:-

(a) Needs a discussion with Ralph Marshall of Maxis to

ascertain whether the blessings has been received for

regulatory approvals.

(b) Valuation expectation of US$850 million enterprise

value.

47. From the said email, it is apparent that Sh. C.

Sivasankaran had a concern with regard to regulatory

approvals. Sh. C. Sivasankaran met accused Sh. Ralph Marshall

of Maxis in Kuala Lumpur on 04.11.2005. Accused Sh. Ralph

Marshall conveyed to Sh. C. Sivasankaran that he had full

support of accused Sh. Dayanidhi Maran and it is in his interest


to 100% stake in the company to M/s Maxis Communications

Berhad. Sh. C. Sivasankaran mentioned that he had no desire to

sell more than 74% stake and that is also the law of India that

no foreign company can buy more than 74% stake in Indian

telecom company. Sh. C. Sivasankaran also spoke to promoter

and owner of M/s Maxis Communications Bhd., Malaysia,

namely Sh. T. Ananda Krishnan who also mentioned on pone

that he was very close to accused Sh. Dayanidhi Maran and his

brother Sh. Kalanithi Maran, and advised Sh. C. Sivasankaran

to follow the instructions of accused Sh. Augustus Ralph

Marshall and Maran brothers.

48. Thereafter, negotiations between M/s Maxis

Communications Bhd., Malaysia and M/s Aircel Limited stated

taking place. Sh. V. Srinivasan of Siva group sent an email

dated 10.11.2005 to Sh. Ralph Marshall. It reads as under:

'We will transfer the available licences and frequency

spectrum on an “as is where is basis” on closing. We will have

no obligations to procure the balance licences of frequency

spectrum. For the avoidance of doubt, we have clarified that

obtaining regulatory approvals is the Buyer's responsibility.'

49. It is further alleged that Siva group did not want to

take the responsibility of obtaining regulatory approvals as

accused Sh. Dayanidhi Maran had choked the business

environment for Siva group of companies.

Intervention by Maran brothers

50. It is alleged that accused Sh. Kalanithi Maran called

Sh. C. Sivasankaran to his office in Chennai on 12.11.2005. This


Aircel Televentures Limited

Aircel Limited

meeting was organized by accused Sh. Ralph Marshall. Accused

Sh. Kalanithi Maran asked Sh. C. Sivasankaran to sell 100%

stake in M/s Aircel Limited to M/s Maxis Communications

Bhd., Malaysia. Sh. C. Sivasankaran pleaded mentioning about

the government rules and also it was in his interest to keep 26%

equity so that he could participate in the growth of the

company. Sh. Kalanithi Maran said that M/s Maxis

Communications Bhd., Malaysia, would find the Indian partner

who would hold 26% stake. During the meeting on 12.11.2005,

accused Sh. Kalanithi Maran also mentioned that his brother

Sh. Dayanidhi Maran will call him. Later in the evening, Sh. C.

Sivasakaran received a call on his mobile phone from Sh.

Dayanidhi Maran, who told him in no uncertain terms that he

had no choice but to sell 100% stake in M/s Aircel Limited, M/s

Aircel Cellular Limited and M/s Dishnet Wireless Limited to

M/s Maxis Communications Bhd., Malaysia as nothing else

would meet with his approval.

Structure of companies to be sold

51. The structure of telecom companies of Sh.

Sivasankaran at the time of their proposed acquisition/

acquisition by M/s Maxis Communications Bhd. was as under:

100%

100% 100%


Aircel Cellular Limited Dishnet Wireless Limited

Negotiations with Ralph Marshall and signing of agreements

52. It is further alleged that on the same day, that is,

12.11.2005, in the evening Sh. C. Sivasankaran met accused Sh.

Augustus Ralph Marshall at Club Lounge of Taj Coromandel

Hotel, Chennai. During the meeting, accused Sh. Augustus

Ralph Marshall confirmed that the sale had to be for 100%

equity stake in Aircel Limited, Aircel Cellular Limited and

Dishnet Wireless Limited and Maxis would on their own

identify an Indian partner to hold 26% equity. It is further

alleged that on 16.11.2005, accused Sh. Ralph Marshall of Maxis

sent four final offers to Sh. C. Sivasankaran and asked him to

choose one from them. The final offers were as under:

Parameters (US $ m)

Final offerA

Final offerB

Final offerC

Final offerD

Upfront BuyerInvestment

Money paid toseller

520 800 900 800

Money intocompany

280 280 - -

Totalinvestment

800 1080 900 800

Other paymentsto Buyer toSeller

Call/Putoptions, ifexercised

Upside sharing - Free Warrants

% Buyerownership aftertransaction

74% 100% 100% 100%

% Sellerownership aftertransaction

26% 0% 0% 0%


53. Sh. Srinivasan vide an email dated 18.11.2005 to

SCB confirmed the acceptance of offer B and also forwarded a

draft of the Share Purchase Agreement.

54. It is further alleged that the agreement for sale of

100% equity of M/s Aircel Televentures Limited (ATVL) in M/s

Aircel Limited was signed with M/s Maxis Communications

Bhd., Malaysia on 26.12.2005 in Kuala Lumpur, Malaysia. The

agreement came to be effective from 30.12.2005. Sh. V.

Srinivasan signed the said agreement on behalf of ATVL and

accused Sh. Ralph Marshall signed on behalf of M/s Maxis

Communications Bhd., Malaysia.

At the time of signing the agreements in Kuala Lumpur,

M/s Maxis Communications Bhd., Malaysia informed Sh. C.

Sivasankaran that 26% equity of M/s Aircel Limited would be

held by M/s Sindya Securities and Investments (P) Limited, a

company owned and controlled by Ms. Suneeta Reddy and her

husband Sh. Dwarkanath Reddy of Apollo group.

Investment made by M/s Maxis Communications Bhd.,

Malaysia

55. It is alleged that M/s Global Communications

Services Holdings Limited (GCSHL), Mauritius, (a 100%

subsidiary of M/s Maxis) had subscribed to 26% equity in M/s

Aircel Limited on 5th January 2006 under automatic route for a

consideration of US$ 280 million into the company. It is

further alleged that upon receipt of FIPB approval, M/s GCSHL

directly acquired further 39% equity stake in M/s Aircel

Limited on 21.03.2006 from ATVL by paying consideration of


US$ 422 million (Rs. 1881.02 crore) to ATVL.

56. It is further alleged that M/s Deccan Digital

Networks (P) Limited, which was a joint venture between M/s

GCSHL, Mauritius, and M/s Sindya Securities and Investments

(P) Limited (the Indian partner of M/s Maxis Communications

Bhd., Malaysia) acquired 35% equity stake in M/s Aircel

Limited on 21.03.2006 by paying a consideration of US$ 378

million (Rs. 1684.89 crore) to ATVL. The funding of the

investment by M/s Deccan Digital Networks (P) Limited in M/s

Aircel Limited is given below:

i) M/s GCSPL- US$ 2.57 million (towards 25.714 % equity

shares in M/s Deccan Digital Networks (P) Limited,

which indirectly gives 8.999% equity stake in M/s Aircel

Limited

ii) M/s Sindya Securities & Investments (P) Limited- US$

7.43 million (towards 74.286% equity shares in M/s

Deccan Digital Networks (P) Limited, which indirectly

gives 26.001% equity stake in M/s Aircel Limited

iii) M/s South Asia Communication (P) Limited (a 100%

subsidiary of M/s GCSHL, Mauritius)- US$ 368 million

(towards subscription of non-convertible redeemable

preference shares in M/s Deccan Digital Networks (P)

Limited

This structure provides M/s GCSHL, Mauritius, an equity

share of 73.999% in M/s Aircel Limited and an economic

interest of 99.3% in M/s Aircel Limited.

57. It is further alleged that FIPB approval was granted

on 13.03.2006 by the then Finance Minister and a letter dated


20.03.2006 was sent to M/s Aircel Limited conveying the

approvals of the Government to M/s Global Communications

Services Holdings Limited, Mauritius. It is further alleged that

Finance Minister was competent to accord approval on project

proposals up to Rs. 600 crore and beyond that it requires the

approval of Cabinet Committee on Economic Affairs (CCEA). In

the instant case, the approval for FDI of 800 million USD was

sought. Hence, CCEA was competent to grant approval.

However, it was not obtained. It is further alleged that M/s

Aircel Cellular Limited and M/s Dishnet Wireless Limited (both

wholly owned subsidiaries of M/s Aircel Limited) was also

granted confirmatory FIPB approval taking note of the

aggregate FDI of 73.99% in Aircel Cellular Limited and in

Dishnet Wireless Limited. The approval was conveyed by letter

dated 20.10.2006 of FIPB unit, Department of Economic

Affairs, New Delhi.

C. Allegations relating to smooth approvals

58. It is alleged that after execution of the agreement for

sale, there was change of attitude of accused (Late) Dr. J. S.

Sarma and accused Sh. Dayanidhi Maran towards the various

pending applications for UAS licences and other proposals of

the companies and regulatory approvals were acceded to

thereafter. The details thereof are as under:

(i) De-linking of show cause notices

59. It is alleged that accused (Late) Dr. J. S. Sarma, the

then Secretary (T), took steps for delinking show cause notices

from the processing the applications for grant of new licence at


the end of December, 2005, that is, after the negotiations for

sale of M/s Aircel Limited to M/s Maxis Communications Bhd.,

was concluded. It is further alleged that as per oral directions of

accused (Late) Dr. J. S. Sarma, a proposal for delinking show

cause notices from the processing of applications of grant of

new licence was initiated on 27.12.2005 by Sh. R. K. Gupta,

ADG (BS-III) in file No. 20-231/2005/BS-III/Vol. II. He

prepared a self contained note explaining different pending

applications of different companies and reasons of pendency,

the legal opinion suggesting that linking of licences with show

cause notices will not withstand legal scrutiny.

60. It is also alleged that accused (Late) Dr. J. S. Sarma

directed to have a discussion which took place on 13.01.2006. It

was chaired by Secretary, (DoT), and attended by other DoT

officials. It was felt that processing of application for grant of

new licences should be delinked from show cause notices or

explanation called for or any other advisory issued to that

company or any other sister/ group company in respect of any

other licence. Accordingly, Sh. P. K. Mittal put up a note on

19.01.2006. Thereafter, the said note was seen and signed by

other DoT officials including accused (Late) Dr. J. S. Sarma,

Secretary (T). The said file containing the proposal for

delinking was sent to accused Sh. Dayanidhi Maran on

27.01.2006. It remained pending till 16.05.2006 when Sh.

Dayanidhi Maran approved the proposal for delinking the

process of UASL from the show cause notices. It is further

alleged that M/s Maxis Communications Bhd., Malaysia,

obtained FIPB approval on 20.03.2006 and accused Sh. T.


Ananda Krishnan and other officials of M/s Maxis

Communications Bhd., visited Chennai and inspected the office

of M/s Aircel Limited on 30.01.2006.

61. It is further alleged that the decision to delink the

processing of application for grant of new licences from show

cause notices or explanation called for or any other advisory

issued to that company or any other sister/ group company in

respect of any other licence was taken on the strength of legal

opinion dated 11.01.2005 of Sh. O. P. Nahar, the then LA (T).

This legal opinion dated 11.01.2005 was already brought to the

notice of accused Sh. Dayanidhi Maran on 24.01.2005, which

was dishonestly and fraudulently ignored by accused Sh.

Dayanidhi Maran in order to delay the grant of UAS Licences to

M/s Dishnet DSL Limited. It is further alleged that accused Sh.

Dayanidhi Maran granted approvals for UAS Licences to M/s

Dishnet DSL Limited in seven service areas and other pending

issues after its acquisition by M/s Maxis Communications Bhd.,

Malaysia. The details are as under:

(ii) Approval granted for issue of LOI to M/s Dishnet

Wireless Limited after acquisition by M/s Maxis

Communications Bhd.

62. It is alleged that M/s Dishnet Wireless Limited and

M/s Aircel Cellular Limited obtained confirmatory FIPB

approval on 20.10.2006. Thereafter, Sh. R. K. Gupta, the then

ADG (AS-I), initiated a note on 08.11.2006 in file No. 20-

231/2003-BS-III (Vol III) mentioning that on 16.05.2006, the

then MOC&IT has approved the issue of delinking from the

show cause notices for explanation called for or any other


advisory issued to the applicant company or any other sister/

group company in respect of any other licence. He

recommended for approval for issue of LOI to M/s Dishnet

Wireless Limited for award of UASL in respect of Punjab,

Haryana, Kerala, Kolkata, UP(E) and UP(W). He also

recommended for amendment to the LOI issued on 20.04.2004

to M/s Dishnet in respect of MP.

63. The file was sent to accused Sh. Dayanidhi Maran

for approval by the then Secretary (T) on 21.11.2006 and the

approval was granted on 22.11.2006.

(iii) Approval granted for taking on record for change of name

from M/s Dishnet DSL Limited to Dishnet Wireless

Limited

64. It is alleged that Sh. S. A. Malik, AD (BS-III),

initiated a note on 29.06.2006 in file No. 20-225/04-Genl Mts/

Dishnet/BS-III mentioning that M/s Dishnet DSL Limited has

changed its name to M/s Dishnet Wireless Limited. He further

mentioned that the issue of change of name is long pending

because it got linked with issue of new UAS licences where an

overall view on the inter-related issues between merger and

acquisition, licensing, FDI and FII investment in holding

companies and their sister concerns was to be taken. He further

mentioned that AS (T) returned all the linked files for further

necessary action on 05.06.2006. He recommended that the

change of name of M/s Dishnet DSL Limited to M/s Dishnet

Wireless Limited may be taken on record. The file was sent to

accused late Dr. J. S. Sarma, who approved the same on

30.06.2006.


(iv) Approval granted to take on record change of name of the

promoter (of M/s Aircel Limited) M/s Srinivas

Computers Limited to M/s Aircel Televentures Limited

65. It is alleged that Sh. A. K. Dhar, ADG (VAS-I),

initiated a note dated 03.11.2005 in file No. 842-325/2000-

VAS mentioning that M/s Aircel Televentures Limited,

promoter of M/s Aircel Limited had applied for change of name

of the promoter, M/s Srinivas Computers Limited to M/s Aircel

Televentures Limited. The Registrar of Companies, Chennai,

had issued the certificate on 28.04.2004 and the company

intimated this change by letter dated 21/22.06.2004. He also

mentioned that the company had also requested for transfer of

its entire 100% equity to M/s Aircel Digilink India Limited.

However, subsequently the company withdrew its application

for transfer of its 100% equity to M/s Aircel Digilink India

Limited.

66. The file was sent to accused (Late) Dr. J. S. Sarma

on 09.11.2005, who approved the proposal of change of name of

the promoter from M/s Srinivas Computers Limited to M/s

Aircel Televentures Limited on 10.11.2005.

(v) Allocation of startup spectrum to M/s Dishnet DSL

Limited in Bihar telecom service

67. It is alleged that accused (Late) Dr. J. S. Sarma, the

then Secretary (T), called for the file No. L-14047/02/2004-

NTG of WPC wing in the month of January, 2006 wherein the

application dated 24.05.2004 of M/s Dishnet DSL Limited for

allocation of GSM spectrum in Bihar service area was

processed. Accordingly, the file was put up to him by Wireless


Advisor on 02.02.2006 and the approval for allotment of initial

4.4 + 4.4 MHz of GSM spectrum in 1800 MHz band to M/s

Dishnet Wireless Limited in Bihar service area was granted on

03.02.2006.

(vi) Allocation of additional spectrum to M/s Aircel Cellular

Limited in Chennai metro

68. It is alleged that accused (Late) Dr. J. S. Sarma also

called for the file No. L-14043/3/2005-NTG of WPC wing in the

month of January, 2006 wherein the application dated

11.07.2005 of M/s Aircel Cellular Limited for allocation of

additional spectrum in Chennai metro was processed.

Accordingly, the file was put up to him by Wireless Advisor on

17.01.2006 and the approval for allotment of additional 1.8 +

1.8 MHz spectrum in 1800 MHz GSM band to M/s Aircel

Cellular Limited for Chennai metro was granted on 18.01.2006.

(vii) No query/ objection was raised by Sh. D. Maran, the then

MOC&IT, to the proposal of foreign investment of M/s

Global Communication Services Holdings Limited,

Mauritius, in M/s Aircel Limited

69. It is alleged that Sh. Ram Sharan, Under Secretary,

Foreign Investment Promotion Board, Department of

Economic Affairs, Ministry of Finance, New Delhi, forwarded a

copy of the above referred application filed by Sh. Sumesh

Sawhney to Sh. N. P. Singh, Deputy Director General, DoT,

Sanchar Bhawan, New Delhi, vide office memorandum No.

35/FC/2006 dated 01.02.2006 for comments. It was processed

in file No. 12-7/06-IP of DoT. Sh. Yashwant Bhave, the then

Additional Secretary (T), recommended that the proposal may


be supported and sent the file to accused Dr. J. S. Sarma on

04.03.2006, who also supported the proposal and sent the file

to accused Sh. Dayanidhi Maran for approval. No query was

raised by accused Sh. Dayanidhi Maran in the matter. Sh. K.

Sanjay Murthy, the then PS to MOC&IT, conveyed the approval

of Sh. Dayanidhi Maran to Dr. J. S. Sarma on 06.03.2006.


Maran, the then MOC&IT, had raised queries to the proposals

of M/s Aircel Limited, when it was in the hands of Sh. C.

Sivasankaran, for change in equity in the month of August,

2004 and had also ignored the legal opinion dated 11.01.2005

in the month of March, 2005. It reflects that accused Dayanidhi

Maran acted dishonestly at that time.

(viii)Dilution of Terms of Reference (ToRs)

71. It is alleged that in the month of November, 2005, the

Hon'ble Prime Minister approved, in principle, the constitution

of Group of Ministers for looking into the entire gamut of

allocation of spectrum to mobile operators. The Planning

Commission was requested to suggest detailed Term of

Reference (ToR) for the proposed GoM. The Planning

Commission sought the inputs from (Late) Dr. J. S. Sarma for

the ToR of GoM at the earliest. Sh. Paran Kumar Garg, the then

Wireless Advisor, DoT, proposed a draft ToR for GoM on

09.01.2006, which included spectrum pricing policy and

spectrum allocation policy. It is also alleged that Planning

Commission forwarded a draft ToR to (Late) Dr. J. S. Sarma on

10.01.2006 which also included spectrum pricing policy and

spectrum allocation policy. However, accused Sh. Dayanidhi


Maran did not agree with the draft ToR prepared by Sh. Pawan

Kumar Garg. He dishonestly excluded spectrum pricing policy

and spectrum allocation policy from ToR and (Late) Dr. J. S

Sarma forwarded the ToR as approved by accused Sh.

Dayanidhi Maran to PMO on 10.01.2006.

72. It is alleged that PMO approved the ToRs on

spectrum related issues on 14.02.2006, which included

spectrum pricing policy. However, it did not include spectrum

allocation policy. The Cabinet Secretariat constituted the GoM

on 23.02.2006. Accused Dayanidhi Maran sent a DO letter

dated 28.02.2006 to the Prime Minister citing reference of his

meeting with the PM on 01.02.2006 and mentioned that the

GoM as constituted had much wider ToR, some of which

impinge upon the work normally to be carried out by DoT. He

requested to modify the ToR as suggested by him and also

enclosed a copy of the draft ToR which was already forwarded

to PMO by (Late) Dr. J. S. Sarma on 10.01.2006. The said

proposed ToR of DoT did not include spectrum pricing policy.


Maran again addressed a DO letter dated 16.11.2006 to the

Prime Minister requesting for revision of ToR as prepared by

DoT. The ToRs as proposed by accused Sh. Dayanidhi Maran

were approved by PMO. Hence, it is evident that accused Sh.

Dayanidhi Maran dishonestly advised PMO to exclude the

spectrum pricing from the ToRs in order to benefit M/s Maxis

Communications Bhd., Malaysia, who had by then acquired

M/s Aircel Limited, M/s Dishnet DSL Limited and M/s Aircel

Cellular Limited. It is alleged that in the relevant time period,


few applications for grant of new licences and spectrum of said

companies were pending at DoT as elaborated in this report.

D. Allegations relating to payment of bribe

74. It is alleged that M/s Astro All Asia Networks Plc.,

UK, through its wholly owned subsidiaries, subscribed to equity

shares of M/s Sun Direct TV (P) Limited at premium and equity

shares of M/s South Asia FM Limited at par. These two

companies were promoted by accused Sh. Kalanithi Maran. It is

further alleged that illegal gratification in the garb of share

premium of M/s Sun Direct TV (P) Limited was received by Sh.

Dayanidhi Maran through his brother Kalanithi Maran

(promoter of M/s Sun Direct TV (P) Limited), the detail thereof

is given as under:

(i) FIPB approval to M/s Sun Direct TV (P) Limited

75. M/s Sun Direct TV (P) Limited was incorporated at

Chennai on 16.02.2005. Sh. Dayanidhi Maran, the then

MOC&IT, and Sh. Kalanithi Maran are real brothers. M/s Sun

Direct TV (P) Limited was promoted by accused Sh. Kalanithi

Maran and his wife Smt. Kavery Kalanithi.

76. M/s Sun Direct TV was granted DTH licence for

DTH services in India by Ministry of Information and

Broadcasting on 28.08.2006. M/s Sun Direct TV (P) Limited

was granted Wireless Operating Licence by DoT on 21.06.2007

which was subsequently amended on 29.11.2007 and the MPVT

test report was issued by Network Operational Control Centre

(NOCC) which was received in DoT on 11.12.2007. Now

onwards, M/s Sun Direct TV (P) Limited was in a position to


launch its services on 11.12.2007.

77. It is further alleged that M/s Sun Direct TV (P)

Limited submitted an application dated 13.12.2006 to the

Chairman, FIPB, New Delhi, for approval of issuance of equity

shares as foreign direct investment to M/s South Asia

Entertainment Holdings Limited (SAEHL), Mauritius,

constituting up to 20% of the total issued, subscribed and paid

up capital of the company, from time to time, by getting an

investment of approx. US$ 150 million (Rs. 675 crore). In the

application, accused Sh. Kalanithi Maran disclosed that M/s

South Asia Entertainment Holdings Limited, a company

incorporated in Mauritius, is a wholly owned subsidiary of

Astro Overseas Limited, which, in turn, is a wholly owned

subsidiary of Astro All Asia Networks, Plc (AAAN). It is also

disclosed that AAAN was incorporated in England and Wales

and is registered as a foreign company in Malaysia. The

following facts have also been disclosed/ incorporated in the

above referred application dated 13.12.2006 and its enclosures

by accused Sh. Kalanithi Maran, Chairman of M/s Sun Direct

TV (P) Limited:

(a) The AAAN group of companies spends more than US$

160 million on content annually and has formed several joint

ventures with leading Indian content players, including

Sun TV, UTV and NDTV, to create vernacular content for

initial broadcast on its regional platforms, and eventually

for global export. The AAAN group of companies is also

the leading aggregator of interactive content for a host of

new media and communications devices, including 3G


video streaming services, mobile TV channels as well as

numerous interactive TV programmes.

(b) AAAN is a public-listed company with the Usaha Tegas

group and the Malaysian Government's investment arm,

Khazanah Nasional, as its principal shareholders.

(c) Accused Sh. Ralph Marshall is also Executive Director of

Tanjong Public Limited Company which is involved in

power generation, gaming and leisure; Non-Executive

Director of Maxis Communications Bhd., and Executive

Director of Usaha Tegas Sdn. Bhd., which has significant

interests in the aforesaid companies.

(d) Accused T. Ananda Krishnanwas having 42.49% indirect

shareholding in Astro. Besides, he was also holding shares

of Astro through Pan Ocean, EABNS, PBS, HVL and SIL.

78. It is further alleged that the proposal of M/s Sun

Direct TV (P) Limited was considered by the FIPB in its

meeting held on 12.01.2007. FIPB recommended the proposal

for consideration and approval of the then Finance Minister

and also for submitting the proposal for consideration of

Cabinet Committee on Economic Affairs (CCEA) as the foreign

investment in flow exceeds Rs. 600 crore. The CCEA

considered the FDI proposals in the meeting held on

22.02.2007 and approved the proposal of foreign investment in

M/s Sun Direct TV (P) Limited, Chennai. Accordingly, approval

letter to M/s Sun Direct TV (P) Limited was issued vide letter

dated 02.03.2007 under the signature of Sh. D. K. Singh, the

then Director (FIPB).

(ii) Investment in M/s Sun Direct TV (P) Limited by M/s


SAEHL

79. It is further alleged that shareholders agreement

and share subscription agreement were executed by and

among M/s SAEHL, Mauritius, and accused Sh. Kalanithi

Maran and Smt. Kavery Kalanithi and M/s Sun Direct TV (P)

Limited on 05.04.2007. The said agreements have been signed

by accused Sh. Kalanithi Maran on behalf of M/s Sun Direct TV

(P) Limited and in individual capacity too. Smt. Kavery

Kalanithi has signed the said agreements in individual capacity

and Sh. Raghvendra Madhav has signed on behalf of M/s South

Asia Entertainment Holdings Limited, Mauritius.

80. As per shareholders' agreement, (clause C, page 3),

M/s Sun Direct TV (P) Limited had an authorized share capital

of 200,000,000 shares of which 150,000,000 are issued and

fully paid up. As on the date of agreement, M/s Sun Direct TV

(P) Limited was wholly owned by Maran group in the following

proportions:

S. No. Shareholder Shareholding % of Share Capital

1 KaveryKalanithi

123,000,000 82%

2 Kalanithi Maran 27,000,000 18%

Total 150,000,000

81. As per the said agreement (clause F, page 4),

SAEHL and the Maran group agreed that the authorized share

capital of M/s Sun Direct TV (P) Limited shall comprise of

380,000,000 shares. SAEHL also agreed to subscribe to and

M/s Sun Direct TV (P) Limited agreed to issue and allot to

SAEHL 69,000,000 shares at a subscription price of Rs.


79.57/- per share and for an aggregate amount equivalent to Rs.

5,490,000,000/-. Accused Sh. Kalanithi Maran also agreed to

subscribe to and M/s Sun Direct TV (P) Limited has agreed to

issue and allot to accused Sh. Kalanithi Maran, 15,146,341

shares at a subscription price of Rs. 10/- per share and for an

aggregate amount equivalent to Rs. 151,463,410/-. As per the

said agreement (clause D, page 3), M/s Sun Direct TV (P)

Limited was granted a DTH licence by the Ministry of

Information and Broadcasting, Government of India, to prove

DTH services in India.

82. It is further alleged that share subscription

agreement was executed by and among accused Sh. Kalanithi

Maran and Smt. Kavery Kalanithi and South Asia

Entertainment Holdings Limited and M/s Sun Direct TV (P)

Limited on 05.04.2007. The board of directors of SAEHL had

on 01.12.2006 approved the subscription of an equity stake of

20% in M/s Sun Direct TV (P) Limited to (i) participate for a

joint venture for the provision of Direct-to-home digital

satellite pay-television services in India and (ii) authorize

accused Sh. Ralph Marshall, or Sh. Grant Ferguson and Azran

Osman-Rani (authorized persons) to negotiate, finalize and

execute the share holders agreement, investment agreement

and all other documents.

83. The details of investment made by SAEHL and the

allotment of shares by M/s Sun Direct TV (P) Limited in favour

of SAEHL till 30.09.2011 are as under:

Date Amount Received (inRs.)

No. of SharesAllotted

10.12.2007 315,71,32,309 3,96,77,420


02.04.2008 117,00,30,302 1,47,04,415

31.07.2008 87,28,99,689 1,09,70,211

30.09.2008 29,00,53,020 36,45,256

05.12.2009 49,99,99,999 62,83,775

19.04.2010 24,99,99,926 31,41,887

07.07.2011 5,00,00,000 6,28,377

TOTAL 629,01,15,245 7,90,51,341

Opinion/ valuation by M/s ENAM Securities (P) Limited of Sun

Direct TV (P) Limited at the instance of Astro All Asia Network

84. It is alleged that M/s ENAM Securities (P) Limited,

a registered merchant banker with SEBI, executed an

engagement letter dated 07.05.2007 with M/s Astro All Asia

Networks Plc to offer professional services as advisors to M/s

South Asia Entertainment Holdings Limited through its

holding company M/s Astro All Asia Networks Plc. M/s ENAM

Securities (P) Limited was engaged by accused company M/s

Astro All Asia Networks Plc. after the execution of shareholders

agreement and share subscription agreement dated 05.04.2007

by and among M/s SAEHL, Mauritius, and accused Sh.

Kalanithi Maran and Smt. Kavery Kalanithi and M/s Sun Direct

TV (P) Limited. The scope of engagement was to provide an

expert opinion giving a fairness certification to the board of

directors of M/s Astro All Asia Networks Plc. on its proposed

investment in M/s Sun Direct TV (P) Limited in accordance

with customary practice as to the fairness, from a financial

point of view of the subscription price to be paid pursuant to

the DTH venture, in a form suitable for inclusion into Astro's

circular to its shareholders in compliance with requirements of

Bursa Securities, Malaysia Bhd. (Malaysian Stock Exchange).

85. ENAM's report specifies that they have based their


opinion on the business plan and had not made any

independent verification of the same. It has also been

mentioned in the report that this opinion was not intended to

form the basis of any investment decision by Astro and does not

purport to contain all the information that may be necessary or

desirable to evaluate the proposed joint venture. This opinion

was addressed strictly to the board of directors of Astro and was

provided for the purpose of fulfilling the listing requirements of

the Malaysian Stock Exchange. It revealed that no valuation of

M/s Sun Direct TV (P) Limited was carried out prior to entry

into the share subscription agreement and shareholder's

agreement, both dated 05.04.2007. It is further alleged that the

share premium price of M/s Sun Direct TV (P) Limited was

decided by accused Sh. Ralph Marshall and accused Sh.

Kalanithi Maran.

(iii) Valuation of M/s Sun Direct TV (P) Limited by Bank of

Baroda at the instance of CBI

86. During investigation, M/s BOB Capital Markets

Limited, a SEBI registered category-I merchant banker was

engaged by CBI vide engagement letter dated 06.08.2013 in

order to advise the correct valuation of the shares of M/s Sun

Direct TV (P) Limited as on 01.04.2007 as well as examine the

correctness of the business plan, financial projections etc. of the

business of M/s Sun Direct TV (P) Limited.

87. M/s BOB Capital Markets Limited has furnished a

report bearing No. BCML/17/MB/2013/653 dated 02.09.2013.

It has considered Discounted Cash Flow (DCF) Method to value

the business of the company which was yet to launch the


services at the relevant date, that is, 01.04.2007. It has opined

that the equity valuation of M/s Sun Direct TV (P) Limited as

on 01.04.2007 in connection with the transaction on post

money basis works out to Rs. 18,338 million (Rs. 1,833.8 crore)

after considering the equity investment as per share

subscription agreement and business plan and the pre money

value of the company comes to Rs. 1,284.80 and the price of

equity comes to Rs. 53.15 per share.

88. On the other hand, as per the share subscription

agreement dated 05.04.2007, the post money value of the

company, that is, M/s Sun Direct TV (P) Limited was taken as

Rs. 2,745 crore and SAEHL subscribed equity shares at a price

of Rs. 79.57 per share. For the purpose of ready reference, the

details are tabulated as under:

Pre moneyvalue of SunDirect TV (P)Limited as on01.04.2007

Post moneyvalue of SunDirect TV (P)Limited as on01.04.2007

Price of equityof Sun Direct TV(P) Limited ason 01.04.2007

As per sharesubscriptionagreementdated05.04.2007

Rs. 2,196 crore Rs. 2,745 crore Rs. 79.57 per share

As per valuationreport of BOBCapital MarketsLimited

Rs. 1,284.80 crore Rs. 1,833.8 crore Rs. 53.15 per share

Conclusion from the reports by CBI

89. From the above, it is evident that the investment

made by M/s Astro All Asia Networks Plc., UK, through M/s

SAEHL, Mauritius, in M/s Sun Direct TV (P) Limited was not a

purely business driven investment but was illegal gratification


in the nature of quid pro quo in lieu of approvals granted by

accused Sh. Dayanidhi Maran to M/s Maxis Communications

Bhd., Malaysia, and M/s Aircel Limited, M/s Dishnet Wireless

Limited and M/s Aircel Cellular Limited and that at least a

portion of the premium of Rs. 26.42 per share was unjustified/

overvalued which was paid by M/s SAEHL, Mauritius, to M/s

Sun Direct TV (P) Limited in the garb of equity subscription. As

per share subscription agreement dated 05.04.2007, SAEHL

agreed to subscribe to 69,000,000 equity shares at a price of

Rs. 79.57/-.

Details of allotment of shares of Sun Direct TV (P) Limited to

SAHEL

90. The details of allotment of equity shares of M/s Sun

Direct TV (P) Limited to SAEHL are as under:

S.No.

Name ofthe

Allottee

No. ofsharesallotted

Price pershare

Total Amount Date ofboardmeeting

1 SAEHL 3,96,77,420 Rs. 79.57 Rs. 315,71,32,309/- 10.12.2007

2 SAEHL 1,47,04,415 Rs. 79.57 Rs. 117,00,30,302/- 02.04.2008

3 SAEHL 1,09,70,211 Rs. 79.57 Rs. 87,28,99,689/- 31.07.2008

4 SAEHL 36,45,256 Rs. 79.57 Rs. 29,00,53,020/- 30.09.2008

5 SAEHL 62,83,775 Rs. 79.57 Rs. 49,99,99,977/- 05.12.2009

6 SAEHL 31,41,887 Rs. 79.57 Rs. 24,99,99,949/- 19.04.2010

7,84,22,964

Valuation of Tata Sky by CBI: A comparison

91. During investigation documents were collected

regarding valuation of M/s Tata Sky Limited which was also in

the same business as M/s Sun Direct TV (P) Limited. It is


alleged that M/s Tata Sky Limited, formerly known as M/s

Space TV Limited, was incorporated on 09.01.2001 at Mumbai

to provide Direct-to-Home (DTH) satellite subscription

television service to TV viewers across India. It commenced its

commercial operations from 15.08.2006. During 2006-07, M/s

Tamasek Capital (P) Limited (an investing company of

Singapore) entered into a negotiation with M/s Tata Sky

Limited for subscription of its equity shares. In this context, the

valuation of shares of M/s Tata Sky Limited as on 31.12.2006

was carried out in order to examine the proposal of issuing

equity shares to new investor. The valuer submitted a valuation

report dated 09.03.2007. The value per share of M/s Tata Sky

Limited as per Discounted Cash Flow (DCF) method came to

Rs. 26.04. The value for equity shareholders of M/s Tata Sky

Limited came to Rs. 10319.92 million (Rs. 1031.992 crore). It is

pre money valuation.

92. It is further alleged that M/s Tamasek Capital (P)

Limited (an investing company of Singapore) subscribed to

5,14,80,000 equity shares at a price of Rs. 30/- per share. M/s

Baytree (FII) was the investing company which infused a total

sum of Rs. 154.44 crore in M/s Tata Sky Limited in order to

own 10% of the increased share capital. NDDS, in order to

maintain 20% shareholding in M/s Tata Sky Limited,

subscribed to 1,28,70,000 equity shares at a price of Rs. 30/-

per share in the month of May 2007. The total equity shares in

M/s Tata Sky Limited after subscription as stated above by

Tamasek and NDDS, came to 51,48,00,000. Hence, the post

money valuation of the company based on Rs. 30/- per share


came to Rs. 1544.4 crore.

Conclusion by CBI

93. Considering the valuation report submitted by M/s

BOB Capital (P) Limited and the valuation of M/s Tata Sky

Limited, the overvalued share premium as decided by the

accused persons namely Sh. Ralph Marshall and Sh. Kalanithi

Maran is in the nature of quid pro quo.

(iv) Investment in M/s South Asia FM Limited, Chennai

(promoted by accused Sh. Kalanithi Maran) by M/s Astro

All Asia Networks Plc., UK

94. It is alleged that M/s South Asia Software

Technologies Limited, Mauritius (a subsidiary of M/s Astro All

Asia Networks Plc.) invested a sum of Rs. 116,67,36,080/-

(approx) in M/s Max Flexi Services (P) Limited, Hyderabad,

during the period from December, 2006 to December, 2010.

M/s Max Flexi Services (P) Limited further invested a sum of

Rs. 103,05,79,000/- (approx) in M/s A. H. Multisoft (P)

Limited, Hyderabad, (100% subsidiary of M/s Max Flexi

Services (P) Limited) during the same period. It is further

alleged that M/s A. H. Multisoft (P) Limited, Hyderabad,

invested a sum of Rs. 96,78,49,000/- (approx) in M/s South

Asia FM Limited, Chennai (a subsidiary of M/s Sun Direct TV

Network Limited, promoted by Sh. Kalanithi Maran) during the

period from February, 2007 to December 2010.

95. It is further alleged that M/s South Asia Multimedia

Technologies Limited (a subsidiary of M/s Astro All Asia

Networks Plc.) invested a sum of Rs. 82,93,58,030/- (approx)


in M/s South Asia FM Limited (a subsidiary of M/s Sun TV

Network Limited, promoted by Sh. Kalanithi Maran) towards

equity subscription during 2007-2010. It is further alleged that

M/s South Asia Multimedia Technologies Limited (a subsidiary

of M/s Astro All Asia Networks Plc.) also purchased equity

shares of M/s South Asia FM Limited (a subsidiary of Sun TV

Networks Limited, promoted by Sh. Kalanithi Maran) from M/s

A. H. Multisoft (P) Limited for a sum of Rs. 13,83,62,960/-

(approx.).

96. From the above, it is evident that M/s Astro All Asia

Networks Plc., UK, invested a total sum of Rs. 1,93,54,41,980/-

(approx) in M/s South Asia FM Limited towards subscription of

its shares at par value, that is, Rs. 10/- per share, during the

period from 20.02.2007 to 20.12.2010. The details are as

under:

S.No.

Company Amount (inRs.)

Nature ofInvestment

No. ofequitysharessubscribed

1. South AsiaMultimediaTechnologies Ltd.

50,07,19,630/- Subscription ofEquity shares

5,00,71,963

2. A. H. Multisoft Ltd. 50,07,19,620/- Subscription ofEquity shares

5,00,71,962

3. A. H. Multisoft Ltd. 46,70,01,370/- Subscription ofcompulsoryconvertiblepreference shares

4,67,00,137

4. South AsiaMultimediaTechnologies Ltd.

46,70,01,360/- Subscription ofcompulsorilyconvertiblepreference shares

4,67,00,136

Total 1,93,54,41,980/-

Conclusion by CBI


97. It is also alleged that the investment made by M/s

Astro All Asia Networks Plc., UK, through its subsidiaries

namely M/s South Asia Software Technologies Limited,

Mauritius, and M/s South Asia Multimedia Technologies

Limited, in M/s South Asia FM Limited, was also not a purely

business driven investment but was illegal gratification in the

nature of quid pro quo in lieu of approvals granted by accused

Sh. Dayanidhi Maran, the then MOC&IT, to M/s Maxis

Communications Bhd., Malaysia and the companies acquired

by it, that is, M/s Aircel Limited, M/s Dishnet Wireless Limited

and M/s Aircel Celullar Limited.

98. It is alleged that the above facts and circumstances

have thus established that accused persons viz., Sh. Dayanidhi

Maran, the then MOC&IT, Sh. Kalanithi Maran, Sh. Ralph

Marshall, Sh. T. Ananda Krishnan, M/s Sun Direct TV (P)

Limited, M/s Astro All Asia Networks Plc., UK, M/s Maxis

Communications Bhd., Malaysia, M/s South Asia

Entertainment Holdings Limited, Malaysia, and Late Dr. J. S.

Sarma, entered into a criminal conspiracy during the period

from July/ August 2004 to September 2008 and in pursuance

of the said criminal conspiracy accused Sh. Dayanidhi Maran,

the then MOC&IT, and accused (Late) Dr. J. S. Sarma, the then

Additional Secretary/ Special Secretary/ Secretary (T), in abuse

of their official positions, deliberately delayed the grant of

licences in seven service areas and other approvals/

permissions on various issues pending before DoT related to

Siva group companies (M/s Aircel Limited, M/s Aircel Cellular

Limited and M/s Dishnet DSL Limited) on frivolous grounds


with an intent to force its exit from telecom business by

constricting its business environment. It is further established

that the sale of telecom companies held by Sh. C. Sivasankaran

to M/s Maxis Communications Bhd., Malaysia, through its

wholly owned subsidiary M/s Global Communication Services

Holdings Limited, Mauritius, and M/s Deccan Digital Networks

(P) Limited, was also with the intervention of accused Sh.

Dayanidhi Maran and accused Sh. Kalanithi Maran. After the

change of ownership, the applications for issuance of licences

and other requests/ approvals pending since long before the

DoT were acceded to, for which illegal gratification was paid by

M/s Astro All Asia Networks Plc., UK (a related party of M/s

Maxis Communications Bhd., Malaysia) to M/s Sun Direct TV

(P) Limited, in the garb of purchase of its shares at a premium

of Rs. 69.57 per share through its subsidiary M/s South Asia

Entertainment Holdings Limited. Accused Sh. Dayanidhi

Maran accepted an illegal gratification of Rs. 549,03,30,000/-

as quid pro quo through his brother Sh. Kalanithi Maran in the

garb of overvalued share premium invested in M/s Sun Direct

TV (P) Limited by M/s South Asia Entertainment Holdings

Limited, Mauritius (a wholly owned subsidiary of M/s Astro All

Asia Networks Plc., UK). Accused Sh. Dayanidhi Maran also

accepted an illegal gratification of Rs. 193,54,41,980/- as quid

pro quo through his brother accused Sh. Kalanithi Maran in the

garb of subscription of equity shares in M/s South Asia FM

Limited by M/s South Asia Software Technologies Limited,

Mauritius, and by M/s South Asia Multimedia Technologies

Limited, Mauritius (both subsidiaries of M/s All Asia Networks


Plc, UK).

99. Accused (Late) Dr. J. S. Sarma has since expired on

28.02.2014 at Hyderabad. Hence, no action against him.

100. It is further alleged that the aforesaid facts and

circumstances constitute commission of offences punishable

under Section 120-B IPC read with Sections 7, 12 & Section

13(2) read with 13(1)(d) of Prevention of Corruption (PC) Act,

1988, against accused persons, viz. Sh. Dayanidhi Maran, Sh.

Kalanithi Maran, Sh. Augustus Ralph Marshall, Sh. T. Ananda

Krishnan, M/s Sun Direct TV (P) Limited, M/s Astro All Asia

Networks Plc., UK, M/s Maxis Communications Bhd., Malaysia,

and M/s South Asia Entertainment Holdings Limited,

Mauritius.

101. Further following substantive offences are also

made out:

(a) Sh. Dayanidhi Maran, the then MOC&IT- the offence

punishable under Section 7 and 13(2) read with 13(1)(d)

of PC Act, 1988;

(b) Sh. Kalanithi Maran, Sh. Ralph Marshall, M/s Sun Direct

TV (P) Limited, Chennai, M/s Astro All Asia Networks

Plc., UK, and M/s South Asia Entertainment Holdings

Limited, Mauritius, for the offence punishable under Section

12 of PC Act, 1988.

102. Hence, this case.

103. I have heard the arguments at the bar in great detail

and have carefully gone through the record.

Both the parties have argued the matter for more than a

month beginning from 08.10.2016 to 16.11.2016. My attention


has been invited in great detail to the voluminous files,

statements of witnesses, minute books and other material on

record by the parties. Apart from that, my attention has also

been invited to the relevant legal provisions as well as to a large

number of case law. I have carefully gone through the same.

Parties have also filed detailed written submissions on

record, copies of which were supplied to each other.

104. Let me take note of the law relating to charge.

105. In an authority reported as Union of India Vs.

Prafulla Kumar Samal and Another, (1979) 3 SCC 4,

Hon'ble Supreme Court while dealing with the question of

charge observed in para 10 as under:

“Thus, on a consideration of the authoritiesmentioned above, the following principles emerge:(1) That the Judge while considering the question of

framing the charges under Section 227 of theCode has the undoubted power to sift and weighthe evidence for the limited purpose of finding outwhether or not a prima facie case against theaccused has been made out:

(2) Where the materials placed before the Courtdisclose grave suspicion against the accusedwhich has not been properly explained the Courtwill be fully justified in framing a charge andproceeding with the trial.

(3) The test to determine a prima facie case wouldnaturally depend upon the facts of each case andit is difficult to lay down a rule of universalapplication. By and large however if two views areequally possible and the Judge is satisfied that theevidence produced before him while giving rise tosome suspicion but not grave suspicion againstthe accused, he will be fully within his right todischarge the accused.

(4) That in exercising his jurisdiction under Section227 of the Code the Judge which under the


present Code is a senior and experienced Judgecannot act merely as a Post Office or a mouth-piece of the prosecution, but has to consider thebroad possibilities of the case, the total effect ofthe evidence and the documents produced beforethe Court, and the basic infirmities appearing inthe case and so on. This however does not meanthat the Judge should make a roving enquiry intothe pros and cons of the matter and weigh theevidence as if he was conducting a trial.”

106. Let me make a brief survey of law relating to

conspiracy.

107. In an authority reported as Kehar Singh and

others Vs. State (Delhi Administration) (1998) 3 SCC

609, it was observed by the Hon'ble Supreme Court in

paragraphs 275 and 276 as under:-

“275. Generally a conspiracy is hatched in secrecyand it may be difficult to adduce direct evidence ofthe same. The prosecution will often rely onevidence of acts of various parties to infer that theywere done in reference to their common intention.The prosecution will also more often rely uponcircumstantial evidence. The conspiracy can beundoubtedly proved by such evidence direct orcircumstantial. But the court must enquire whetherthe two persons are independently pursuing thesame end or they have come together in the pursuitof the unlawful object. The former does not renderthem conspirators but the latter does. It is,however, essential that the offence of conspiracyrequires some kind of physical manifestation ofagreement. The express agreement, however, neednot be proved. Nor actual meeting of two persons isnecessary. Nor it is necessary to prove the actualwords of communication. The evidence as totransmission of thoughts sharing the unlawfuldesign may be sufficient. Gerald Orchard of


University of Canterbury, New Zealand explains thelimited nature of this proposition :

Although it is not in doubt that the offencerequires some physical manifestation of agreement,it is important to note the limited nature of thisproposition. The law does not require that the act ofagreement take any particular form and the fact ofagreement may be communicated by words orconduct. Thus, it has been said that it is unnecessaryto prove that the parties ''actually came together andagreed in terms'' to pursue the unlawful object :there need never have been an express verbalagreement, it being sufficient that there was ''a tacitunderstanding between conspirators as to whatshould be done''.276. I share this opinion, but hasten to add that therelative acts or conduct of the parties must beconscientious and clear to mark their concurrenceas to what should be done. The concurrence cannotbe inferred by a group of irrelevant facts artfullyarranged so as to give an appearance of coherence.The innocuous, innocent or inadvertent events andincidents should not enter the judicial verdict. Wemust thus be strictly on our guard.”

108. In an another authority reported as State Vs.

Nalini and others (1999) 5 SCC 253, it was observed by the

Hon'ble Supreme Court in paragraph 583 as under:-

“Some of the broad principles governing the law ofconspiracy may be summarized though, as the nameimplies, a summary cannot be exhaustive of theprinciples.

1. Under Section 120-A IPC offence of criminalconspiracy is committed when two or more personsagree to do or cause to be done an illegal act or legalact by illegal means. When it is a legal act by illegalmeans overt act is necessary. Offence of criminalconspiracy is an exception to the general law whereintent alone does not constitute crime. It is


intention to commit crime and joining hands withpersons having the same intention. Not only theintention but there has to be agreement to carry outthe object of the intention, which is an offence. Thequestion for consideration in a case is did all theaccused have the intention and did they agree thatthe crime be committed. It would not be enough forthe offence of conspiracy when some of the accusemerely entertained a wish, howsoever, it may be,that offence be committed.

2. Acts subsequent to the achieving of the object ofconspiracy may tend to prove that a particularaccused was party to the conspiracy. Once theobject of conspiracy has been achieved, anysubsequent act, which may be unlawful, would notmake the accused a part of the conspiracy like givingshelter to an absconder.

3. Conspiracy is hatched in private or secrecy. It israrely possible to establish a conspiracy by directevidence. Usually, both the existence of theconspiracy and its objects have to be inferred fromthe circumstances and the conduct of the accused.

4. Conspirators may for example, be enrolled in achain – A enrolling B, B enrolling C, and so on; andall will be members of a single conspiracy if they sointend and agree, even though each member knowsonly the person who enrolled him and the personwhom he enrols. There may be a kind of umbrella-spoke enrolment, where a single person at thecentre does the enrolling and all the other membersare unknown to each other, though they know thatthere are to be other members. These are theoriesand in practice it may be difficult to tell whichconspiracy in a particular case falls into whichcategory. It may however, even overlap. But thenthere has to be present mutual interest. Personsmay be members of single conspiracy even thougheach is ignorant of the identity of many others whomay have diverse roles to play. It is not a part of the


crime of conspiracy that all the conspirators need toagree to play the same or an active role.

5. When two or more persons agree to commit acrime of conspiracy, then regardless of making orconsidering any plans for its commission, anddespite the fact that no step is taken by any suchperson to carry out their common purpose, a crimeis committed by each and every one who joins in theagreement. There has thus to be two conspiratorsand there may be more than that. To prove thecharge of conspiracy it is not necessary thatintended crime was committed or not. If committedit may further help prosecution to prove the chargeof conspiracy.

6. It is not necessary that all conspirators shouldagree to the common purpose at the same time.They may join with other conspirators at any timebefore the consummation of the intended objective,and all are equally responsible. What part eachconspirator is to play may not be known to everyoneor the fact as to when a conspirator joined theconspiracy and when he left.

7. A charge of conspiracy may prejudice the accusedbecause it forces them into a joint trial and the courtmay consider the entire mass of evidence againstvery accused. Prosecution has to produce evidencenot only to show that each of the accused hasknowledge of the object of conspiracy but also of theagreement. In the charge of conspiracy the courthas to guard itself against the danger of unfairnessto the accused. Introduction of evidence againstsome may result in the conviction of all which is tobe avoided. By means of evidence in conspiracy,which is otherwise inadmissible in the trial of anyother substantive offence prosecution tries toimplicate the accused not only in the conspiracyitself but also in the substantive crime of the allegedconspirators. There is always difficulty in tracingthe precise contribution of each member of the


conspiracy but then there has to be cogent andconvincing evidence against each one of the accusedcharged with the offence of conspiracy. As observedby Judge Learned Hand ''this distinction isimportant today when many prosecutors seek tosweep within the dragnet of conspiracy all thosewho have been associated in any degree whateverwith the main offenders''.

8. As stated above it is the unlawful agreement andnot its accomplishment, which is the gist or essenceof the crime of conspiracy. Offence of criminalconspiracy is complete even though there is noagreement as to the means by which the purpose isto be accomplished. It is the unlawful agreementwhich is the gravamen of the crime of conspiracy.The unlawful agreement which amounts to aconspiracy need not be formal or express, but maybe inherent in and inferred from the circumstances,especially declarations, acts and conduct of theconspirators. The agreement need not be enteredinto by all the parties to it at the same time, but maybe reached by successive actions evidencing theirjoining of the conspiracy.

9. It has been said that a criminal conspiracy is apartnership in crime, and that there is in eachconspiracy a joint or mutual agency for theprosecution of a common plan. Thus, if two or morepersons enter into a conspiracy, any act done by anyof them pursuant to the agreement is, incontemplation of law, the act of each of them andthey are jointly responsible therefor. This meansthat everything said, written or done by any of theconspirators in execution or furtherance of thecommon purpose is deemed to have been said, doneor written by each of them. And this jointresponsibility extends not only to what is done byany of the conspirators pursuant to the originalagreement but also to collateral acts incidental toand growing out of the original purpose. Aconspirator is not responsible, however, for acts


done by a co-conspirator after termination of theconspiracy. The joinder of a conspiracy by a newmember does not create a new conspiracy nor doesit change the status of the other conspirators, andthe mere fact that conspirators individually or ingroups perform different tasks to a common enddoes not split up a conspiracy into several differentconspiracies.

10. A man join a conspiracy by word or by deed.However, criminal responsibility for a conspiracyrequires more than a merely passive attitudetowards an existing conspiracy. One who commitsan overt act with knowledge of the conspiracy isguilty. And one who tacitly consents to the object ofa conspiracy and goes along with other conspirators,actually standing by while the others put theconspiracy into effect, is guilty though he intends totake no active part in the crime.”

109. I may add that I have carefully gone through the

case law cited at the bar, but this has not been noted in the

order as the instant case is capable of being disposed of on the

facts alone without reference to any case law.

A. Issues relating to delay

110. It is submitted by Sh. Anand Grover, learned Sr.

Advocate/ Spl. PP for CBI, that Sh. Dayanidhi Maran was

MOC&IT from 26.05.2004 to 17.05.2007. It is further

submitted by him that Aircel Limited was having a telecom

licence for Tamil Nadu service are and Aircel Cellular Limited

was having a licence for Chennai service area. It is further

submitted that Dishnet DSL Limited was granted seven telecom

licences on 12.05.2004. It is further submitted that LOIs for


these seven service areas as well as for MP service area were

issued on 06.04.2005. It is further submitted by him that in

due course, it also applied for UASL in UP (E) and UP (W)

service areas. It further applied for four licences in Punjab,

Haryana, Kerala and Kolkata service areas. It is his case that the

company had also applied for initial spectrum of 4.4+4.4 MHz

in Bihar service area. It is further submitted that the company

had also applied for additional spectrum beyond 6.2 MHz in

Chennai service area. It is further submitted that the Aircel

Limited and Aircel Cellular Limited had also applied for other

regulatory approvals relating to transfer of equity to Aircel

Digilink India Limited in Tamil Nadu and Chennai service areas

and also relating to change of name of promoter Srinivas

Computers Limited to Aircel Televentures Limited. It is further

submitted that Dishnet DSL Limited had also applied for

change of its name to Dishnet Wireless Limited. It is further

submitted that company had also applied for provisioning of

POIs in several service areas.

111. It is further submitted by him that all these

regulatory approvals were not deliberately granted by Sh.

Dayanidhi Maran in conspiracy with Dr. J. S. Sarma, who

worked in different capacities in the DoT like Additional

Secretary, Special Secretary and Secretary (T). It is further

submitted that even the various representations made by the

company to the DoT were not considered. It is repeatedly

submitted by him that these regulatory approvals were

deliberately withheld/ delayed by Sh. Dayanidhi Maran on one

pretext or the other to force the exit of the aforesaid three


companies belonging to Siva group of Sh. C. Sivasankaran from

telecom sector. It is further submitted that this was part of a

conspiracy hatched by Sh. Ralph Marshall and T. Ananda

Krishnan of Maxis, Malaysia, and Sh. Dayanidhi Maran and Dr.

J. S. Sarma, to force Sh. C. Sivasankaran to sell the three

companies to Maxis of Malaysia. It is repeatedly submitted by

him that these delays were deliberate and conspiratorial in

nature. It is submitted that perusal of the material on record

indicates that queries put by Sh. Dayanidhi Maran or by Dr. J.

S. Sarma, acting at the instance of Sh. Dayanidhi Maran, were

outlandish and frivolous, carrying no meaning at all. It is

repeatedly submitted by him that there is enough material on

record to indicate dishonest and guilty intention of the accused

persons. It is repeatedly submitted by the learned Spl. PP that

there is enough material on record warranting framing of

charge against the accused.

112. On the other hand, it is submitted by Sh. Kapil

Sibbal, Dr. Abhishek Manu Singhvi, Sh. R. S. Cheema, Sh.

Parag Tripathi, Sh. Sidharath Luthra, Ms. Rebecca John, all

learned Sr. Advocates for the defence that the delay in these

regulatory approvals cannot be attributed either to Sh.

Dayanidhi Maran or to Dr. J. S. Sarma acting at the instance of

Sh. Dayanidhi Maran. It is their case that these files suffered

from various objections from the very beginning. None of the

files were query-free files. It is further submitted that whatever

questions were put by the Minister were well justified flowing

from the material on the file and conduct of the companies. It is

their case that there is no material on the file to indicate any


conspiracy by the Minister or anyone else.

113. It has been repeatedly emphasized by the learned

legal luminaries that there is nothing on the file to indicate any

wrong doing by the Minister, what to talk of a conspiracy. It is

repeatedly submitted by them that there is nothing against the

Minister in these voluminous files. It is their case that by no

stretch of imagination these queries put by the Minister can be

termed as frivolous. It is repeatedly submitted by the learned

Sr. Advocates for the defence that there is no material on record

warranting framing of charge against the accused and all of

them deserve to be discharged.

114. Both the parties have extensively read out the files

and the statements of the witnesses at the bar for days together

in order to emphasize their point of view.

115. Let me deal with each issue separately.

I. Delay in grant of LOIs for award of UASL in

UP(E) and UP(W) and grant of extension of time of

signing licence agreements in MP service area to M/s

Dishnet DSL Limited (D-2)


Advocate/ Spl. PP for the CBI, that the case of extension of time

for compliance of LOI for MP service area and grant of LOIs for

UASL in UP(E) and UP(W) was quite simple and could have

been approved by the Minister without any hindrance, but he

put questions which were not only out of context but totally

frivolous. It is repeatedly submitted by him that there was no

reason for him to put these questions. It is further submitted by


him that unnecessary questions relating to merger and

acquisition, FDI etc., were put by Sh. Dayanidhi Maran to delay

the matter. My attention has been invited to the questions

recorded at 17/N in file D-2 as well as at 35/N in file D-40. It is

submitted by the learned Spl. PP that putting of these frivolous

questions shows dishonest intention of Sh. Dayanidhi Maran to

force the exit of Siva group from the telecom sector. It is

submitted by him that no frivolous question was put in case of

Bharti Cellular and Reliance Infocom. It is further submitted

that the case of Essar Spacetel was invoked for sounding to be

even-handed by the Minister. It is further submitted that the

Minister had no reason to put the frivolous questions.

117. On the other hand, learned counsel for the defence

have forcefully submitted that the questions pre-dated the

Minister. These questions were already raised by the various

officers in different forms. Their emphasis is that the questions

were relevant and the Minister was duty bound to put them. It

is repeatedly submitted by the learned Sr. Advocates for the

defence that the applications suffered from numerous

deficiencies and LOIs could not have been granted to the

company. It is repeatedly submitted that the record and

reputation of the company was very bad as it was involved in

grey market and had also sold its ISP licence without

permission of DoT. It is repeatedly submitted that the financial

capacity of the company was doubtful from the day one and it

deserved no licence at all, what to talk of additional licences for

UP(E), UP(W) etc.

118. Both parties have invited my attention to the


relevant note sheets in the file as well as the statements of

various witnesses in great detail for days together.

119. For better appreciation of the arguments of the

learned legal luminaries, the relevant files are required to be

read in their full spectrum. Accordingly, I proceed to examine

the relevant file in detail relating to the instant issue(s).

Issue of eight LOIs to Dishnet DSL Limited

120. Initially, Dishnet DSL Limited, an existing internet

service provider holding all India licence, applied for grant of

UASL in eight service areas, that is, Assam, Bihar, Himachal

Pradesh, J&K, Madhya Pradesh, North East, Orissa and West

Bengal on 05.03.2004, 36/C (D-38). These applications were

processed on 09.03.2004 in file D-38, at 9/N and the LOIs

were approved to be issued on 05.04.2004 at 13/N.

Accordingly, LOIs for eight service areas were issued, including

MP, on 06.04.2004.

121. Licence agreements were required to be signed

within 15 days of the issue of LOIs. However, the company

failed to do so. Not only the company failed to sign licence

agreements for seven service areas, it even failed to comply with

LOI for MP service area. This was a violation of clause 2 of LOI.

122. The LOIs issued on 06.04.2004 for eight service

areas, including LOI for MP service area, page 61 (D-38)

contains clause 2, which reads as under:

“A copy of the prescribed licence agreement formatis enclosed with this LOI. The License Agreement, inthe prescribed format, shall be signed only aftercompliance of the following, within a period of 15


days from the date of receipt of this Letter of Intent,failing which the same shall stand cancelled withoutany further reference:- (i) Payment of entry fee of Rs. 17.4501 crores for thesaid service area;(ii) Submission of bank guarantees (PBG and FBG)of the value of Rs. 10 crores and Rs. 25 crores;(iii) In respect of all licences granted under Section 4of Indian Telegraph Act (including Indian WirelessTelegraphy Act, 1933) to you or any of yourpromoter(s)/ partner(s) or associate(s)/ sisterconcern(s) you are required to furnish the followingbefore signing the licence agreement:(a) No dues certificate;(b).....................(c) ….................”

Failure to comply with LOIs: Opening of new file D-2

123. As noted above, the LOIs were issued on

06.04.2004, which were to be complied with within 15 days.

However, the company failed to do so and consequently

requested for extension of time for complying with the LOI for

MP service area and also for signing of licence agreement in the

remaining seven service areas.

Though the company failed to sign the licence agreements

in the seven service areas and failed to comply with LOI for MP

service area, it had the audacity to apply for two more licences

in UP (E) and UP (W) service areas on 21.04.2004.

The issues of extension of time of the LOI for Madhya

Pradesh service area and request for extension of time to sign

licence agreements for seven service areas and the issue of LOIs

for grant of UASL for UP (E) and UP (W) by Dishnet were dealt

with in file D-2. All three issues were mixed up and taken


together.

124. For better appreciation of facts, the various note

sheets are extracted as under:

125. The first note sheet dated 26.04.2004 was recorded

by Sh. A. R. Devarajan, AD (BS-III), as under:

“Subject:1. Request for extension of time of

LOI for Madhya Pradesh by 90days for signing of the LicenceAgreement.

2. Request for Extension of time tosign the Licence Agreement forSeven service areas. M/sDishnet has submitted theEntry Fee, PBG and FBGs forthese Seven Service areas.

3. Issue of LOI for grant of UnifiedAccess Licence for UP (East) & UP(West) service area to M/sDishnet DSL Ltd.

1. PUC is the letter dated 20-4-2004 receivedfrom Ms. Dishnet DSL Ltd. requesting for extensionof time by 90 days from 20-4-2004, required tofulfill the formalities of Bank guarantees to sign theLicence Agreement in Madhya Pradesh service area.The LOI was issued on 6-4-2004.

2. PUC is a letter dt. 20-4-2004 received fromMs. Dishnet DSL Ltd. requesting for extension oftime for signing the Licence Agreement for sevencircles viz. Bihar, Assam, West Bengal, Orissa, NorthEast, Himachal Pradesh and Jammu & Kashmir.Since the LOI was issued on 6-4-2004 the time limitof 15 days lapses on 20-4-2004. He has submittedthe Entry Fee, FBG and PBG for signing of theLicence Agreement, but could not be signed because


some documents/formalities were not complete andit was not possible to sign the Licence on 20/4/2004because he has submitted the documents on20/4/2004 at 5:00 PM. In view of the above thetime may be granted for 1 month keeping theeffective date as 20-4-2004.

3. Applications have been received from M/sDishnet DSL Ltd. for grant of Unified Access ServiceLicence for UP East & UP West service areas. Theapplication in original is placed below for readyreference.

4. M/s Dishnet DSL Ltd., an Internet serviceprovider holding all India Category A License. Itssister concerns holding CMTS License in TamilNadu and Chennai.

5. M/s Dishnet DSL Ltd. has applied in theformat earlier prescribed for making application forbasic service licence. A processing fee of Rs.15,000/- per licence application has also beenfurnished. This format has been accepted for issuingearlier LOIs for UASL.

6. A check has been carried out with reference tothese applications for issue of letter of intent forgrant of UASL. Individual checklist in respect ofthese two applications are placed at 23 & 23/A. Asper these checklists, the applications are in orderand LOI can be issued.

7. It is intimated that, 8 LOI have already beenissued to M/s Dishnet DSL Ltd.

8. In view of the above, the case is submitted forapproval, for issue of Letter Of Intent (LOI) to M/sDishnet DSL Ltd. for award of Unified AccessService Licence (UASL) in respect of UP (E) and UP(W) service areas as per the Draft format of LOIsplaced at 24/c & 25/c and authorizing Director(BSIII) for signing the Licence Agreement after


fulfilling the conditions stipulated in the LOIs.Submitted for kind perusal and approval as in

Para 1, Para 2 and Para 8 please.”

126. Thus, all three requests were recommended for

approval and the file was marked upward.

Questions about funding of the company and extension of time

127. Thereafter, file reached Sh. H. P. Mishra, DDG (LF),

who recorded note sheet dated 05.05.2004, questioning the

funding aspect of the company, as under:

“As discussed, while the revenue projection etc.,even the Co's roll-out plans seem to be reasonable,the aspects of funding and esp. of the D/E ratio of1:1 projected at P.P 5 and 5A don't seem to be veryexplicit, particularly in the context of eight moreUAS licences applications by the Co. Please examineand put up.”

128. He marked the file to Director (LF), who recorded

note dated 06.05.2004 as under:

“Sub: 1. Extension of LOI 2. New UASL Dishnet DSL

Pre notes kindly refer.1. DoT has not prescribed any specific debtequity ratio and is normally a business decision ofthe company. In this instant case company has laiddown substantial requirement of funds. Therefore, itmay have to be examined with reference to thefollowing- aggregate fund requirement. The stateddebt equity ratio vis-a-vis the present equity base.2. Secondly, no guidelines as such exist forextension of LOI. The proposal for new UASL mayperhaps be kept on hold, till the licence agreementsfor already approved service areas are signed. It may


be noted that they have not submitted the entry feefor MP even after 1 month from date of LOI.3. Refer para 2 at 1/N. While the documents req.were received on 20.04.2004, it is not clear why thelicence agreements are not yet signed for 7 areas,and also why 1 month time is required.4. It is better to process the cases of the sameentity in the same file for easy reference.

Submitted please.”

129. He marked the file to Sh. H. P. Mishra, DDG (LF),

who again recorded a note dated 11.05.2004, as under:

“1. Above notes refer.2. As regards point “1” above, the two casespresented in this file both state the D/E ratio as 1:1.The present paid up equity is under Rs. 30 crores(the authorized being Rs. 75 cr) and thus at presentthe Co. can't take debt more than Rs. 30 crores if itwants to maintain D/E ratio of 1:1. And yet thebusiness plans of the Co. (Annex VIII) for these twoapplications above envisage a funding of Rs. 526.4crores. If we add up this item for all the nine (9)licences, the mismatch is apparently great. While itcan be argued that the investment would be spreadout over a period of time, it still needs to beharmonious with facts. It's also seen that the totalDepn. shown in the two applications over a nine-year period is at Rs. 3386 Mn & Rs. 3696 Mnrespectively. This seems to be project specific,otherwise the totals would have been the same. BSBranch may, therefore, like to take a total look atthese applications for new licences via-a-vis thenetwork roll-out mandated under UASL guidelinesand the data presented by the co.3. I agree with Dir (LF/II)'s observations at sl.2,3, and 4 on prepage.”

130. It is, thus, clear that Director (LF) and DDG (LF)

were in agreement about the questionable funding arrangement


of the company and regarding there being no guideline for

extension of LOI and also for extending time for signing the

seven licence agreements. The debt equity ratio of the company

was also not prudent and acceptable.

De-linking of signing of licence agreements for seven service

areas

131. After recording the abovesaid observations, the file

was marked to P. K. Mittal, DDG (BS), who recorded note dated

11.05.2004, asking for de-linking of issue of signing of licence

agreements for seven service areas from the other two issues, as

under:

“Let us delink the cases. Pl. process for approval ofitem (ii) for which entry fee has been paid.”

132. It is, thus, clear that without answering the queries

of Director (LF) and DDG (LF), Sh. P. K. Mittal, DDG (BS)

directed the de-linking of issues. No reason has been given

133. In response to the aforesaid note of Sh. P. K. Mittal,

Sh. Govind Singhal, Director (BS-III), recorded the following

note dated 11.05.2004:

“Subject: Request for Extension of time tosign the Licence Agreement for SevenService areas. M/s Dishnet has submittedthe Entry Fee, PBG and FBGs for these Seven

Service areas.

As desired case is again put up for approval asbelow

PUC is a letter dt. 20-4-2004 received fromMs. Dishnet DSL Ltd. requesting for extension of


time for signing the Licence Agreement for sevencircles viz. Bihar, Assam, West Bengal, Orissa, NorthEast, Himachal Pradesh and Jammu & Kashmir.Since the LOI were issued on 6-4-2004 the timelimit of 15 days lapsed on 20-4-2004. M/s DishnetDSL Ltd had submitted the Entry Fee, FBG and PBGfor signing of the Licence Agreement on the last dayi.e. 20/4/2004 at 5:00 P.M. The documents requireexamination verification & correction by the LOIholder, if any. In the instant, corrections in FBGwere carried out by the LOI holder.

M/s Dishnet DSL had asked for extension forsigning Licence Agreement for seven days & keepingin view the processing time, it was proposed thatextension of time for one month may be given. Asper information received from the DDG (LF)regarding no dues certificate which is placed in thefile. The LOI holder as ISP Licensee is to pay LicenceFee of Re.1/- for 2002-03 & 2003-04. DDG (LF)may kindly see whether this statement may be takenas a no dues for signing of the Licence Agreement.

In view of the above the extension of time maybe granted for 1 month keeping the effective date as21-4-2004.

Submitted for kind perusal and approval asabove please.”

134. Thus, the officer clearly records that the company is

to pay licence fee for its ISP licence for the years 2002-03 and

2003-04.

135. He marked the file to Sh. P. K. Mittal who recorded

the following note dated 11.05.2004:

“Spoken to DDG (LF) on 11.05.2004. As perinformation received from DDG (LF), it was decidedin a meeting taken by M(P) and attended by DDG(LF) & Director (LF), that FBG equivalent todisputed amount may be taken. Accordingly, the


Licensee had submitted FBG. However, LOI holderis to submit Rs. 2/- as Licence Fee for 2002-04.

Other issues raised will be submittedseparately.

'A' on prepage is submitted for approval pl.”

136. It was approved by the Secretary (T) on 12.05.2004.

Thus, time was extended for licence agreements for seven

service areas without any reason or guideline, though the

company even had not cleared its dues for ISP licence, which

was a small amount of Rs. 2/-.

137. As per statement of Sh. P. K. Mittal dated

16.07.2012, page 3, after the announcement of UASL guidelines

dated 11.11.2003, applications for fresh UAS licences were to be

accepted in the format and manner of basic service licence

application. Clause 12 of guidelines dated 25.01.2001 relating to

Basic Services also reads as under:

“The application shall be decided, so far aspracticable, within 15 days of the submission of theapplication and the applicant company shall beinformed accordingly. In case the applicant is foundto be eligible for grant of licence for basic service,the applicant shall be required to deposit Entry Feeand submit Bank Guarantees / other documents andsign the licence agreement within a period of threemonths from the date of issue of the letter failingwhich the offer of grant of licence shall standwithdrawn at the expiry of permitted period.”

138. This clause also speaks about withdrawal of LOI if

licence agreement is not signed within the specified period. A

bare perusal of the record would reveal that there is no

provision for extending the time even for compliance to LOI or


for signing the licence agreement yet time was extended by de-

linking the issue of signing of licence agreement vide order

dated 12.05.2004 at 5/N (D-2).

139. Consequent thereto, UAS Licence agreements were

executed in respect of seven service areas on 12.05.2004 itself.

140. The question is: Why the time was extended for

signing the licences? Further the question is: Why the

department was recommending extension of time for

compliance of LOI relating to MP service area? It is clear from

the record that there are no guidelines in this regard. On the

contrary the guidelines referred to above are clear that

compliance has to be made within the specified period failing

which LOI shall be withdrawn without any further reference.

141. The question is: Why the provision regarding

compliance of LOI are so rigid? Why there is no provision for

extension of time in the guidelines? There is no discretionary

power with anyone. Why? It is because telecommunication is

lifeline of a country and this clause is aimed at ensuring that

only serious players with adequate financial means should

venture to enter the field. Non-serious players should not be

allowed to enter in such a serious field of national activity,

which requires huge capital outlay and should be shut out at the

very beginning. It is thus, apparent that the company was not

capable of complying with the LOI for MP service area and

signing of licence agreements in seven service areas in the very

first instance itself. Its funding was also in doubt as noted by

DDG (LF) Sh. H. P. Mishra.

142. It is, thus, clear that the extension of time for


signing licence agreement was not as per the laid-down

guidelines. It was rather in violation of guidelines and

conditions of LOI.

Issue of extension of LOIs for MP service area and licence for

UP (E) and UP (W): Questions about financial capacity of

company

143. Thereafter, the remaining aforesaid two issues still

survived, that is, extension of time for MP service area and

issue of licence for UP (E) and UP (W) service areas.

144. Sh. Govind Singhal, Director (BS-III), again

recorded a note dated 17.05.2004, recommending both, that is,

extension of time for complying with LOI for MP service area

and grant of licence in UP (E) and UP (W) service areas to

Dishnet DSL Limited and marked the file to DDG (BS) Sh. P. K.

Mittal, who marked the file to DDG (LF).

DDG (LF) again recorded on 19.05.2004 as under:

“Pls. check up reg. financial aspects of theapplication as well as of the applicant.”

145. He marked the file to Director (LF-II), who

recorded a note dated 20.05.2004, pages 7/N and 8/N, as

under:

“Comments of DDG (LF) at 6/N kindly refers.1. The co. has signed 7 licences, while MP is yetto be signed (although appd) and the co. has appliedfor 2 more Cat B licences- UPE, UPW.

Earlier, when the first eight cases (including MP)→

was processed, it was stated by LF Branch, that thefunding requirement, as per the business plan of theco. is substantial (nearly Rs. 1500 cr) against a paid


up equity of Rs. 29.7 crores, and that such a scenariomay require examination in view of the fact that newaccess service licence are now issued, as approvedby the Minister on a first-come-first serve basis. The issue of Debt/Equity ratio is linked to theissue pointed earlier by LF Branch. It is also noted that, while conditions governing→

grant of licence talks about requirement of networthand paid up equity, it is silent on the aspect offunding, D/E ratio etc. which are also importantfinancial indicators. Perhaps, it was earlier felt thatthe two conditions of networth and paid up equityare sufficient to have serious players in theframework of competitive bidding, which is not thecase now after introduction of UASL regime.

We are of the view that the issues pointed out→

may require examination and disposal in thechanged scenario.

2. In the instant case, it is noticed that thecombined networth have gone up by almost Rs. 200cr, with that of Dishnet alone almost doubling. Thismean that the company must have bookedexceptional profits in a span of 1 month (29/2/04 –to – 31/3/04), as the paid up equity continues to beat Rs. 29.7 cr. It may be decided, whether thisnecessitate a closer look.

3. Thirdly, the co. has applied for a total 10licences (some in Cat B & rest in C). The conditionfor 4th cellular requires a minimum paid up equityfor that many licences. It may have to be examined,whether the paid up equity is sufficient, vis-a-viscondition laid down in the guidelines.


146. He marked the file to DDG (LF) Sh. H. P. Mishra,

who recorded note dated 21.05.2004, page 8/N, as under:

“1. Above notes refer. I don't think liberalization


can be equated with laissez faire. So long aslicensing is resorted to, and the applicantcompanies are asked to furnish certain backgrounddata/ documents, it is automatically implied thatthese will receive some scrutiny so as to satisfy theLicensor (the “Central Govt”) that the applicant is fitfor grant of licence in practical, probabilistic terms.2. Member (P) may also kindly see.”

147. Perusal of the note sheet reveals that officers are

repeatedly questioning the financial fitness of the company to

undertake telecom projects.

148. On 24.05.2004, when file reached Sh. P. K. Mittal,

he asked for linking up of file wherein seven licences were

approved, that is, file D-38.

149. In due course the file reached Sh. Sukhbir Singh,

Director (BS-III), who recorded a note dated 25.05.2004, page

9/N, as under:

“ Ref: Notes on 7/N.It is clarified that the issue of Debt Equity

Ratio was raised by LF Branch while considering theapplication for grant of additional licence to M/sDISHNET DSL Ltd. and not at the time ofprocessing of grant of seven licence for UASL servicein various service areas initially.

2. Irrespective of the above fact, it is pointed outthat initially during Cellular Service/ Basic ServiceLicence the external commercial borrowing which isa part of ability to raise fund was linked to equityratio. It was specified that the commercialinternational borrowing by licensee shall not bemore than double the foreign equity of the licensee.This was acting as an impediment and hindrance forraising the funds and later on which was changed to50% of the project cost and the same is beingfollowed at present as per RBI/Ministry of Finance.


It is also pointed out that ECB approvals upto US$50 Million comes under automatic route whichmeans that corporate can raise the loan without anyapproval from the Government. ECB limit for thetelecom project is 50% of the total project costincluding licence fee. Copy of the ECBs guidelines isplaced at F/A.

3. Therefore, keeping in view the above, it maynot be desirable to prescribe Debt Equity Ratio. It isworthwhile to point out that even in the tripartiteagreement no such provision has been stipulated. Itshould be left to the best judgement of the lender todecide about the re-payment capacity andcapabilities of the borrower. Therefore, it is felt thatthis condition is not desirable and should not beinsisted upon as has been the practice so far whilegranting Unified Access Service Licence (UASL)/Basic Service/NLD/ILD Licence.

4. As regards Paid Up Equity is concerned, thenorms are very clear and the applicant company inquestion fulfills the condition of minimum paid upcapital. Further, it is not desirable to ask for reasonsfor increase in the networth in the instant case.

With above observations, it is suggested thatthe proposal in Para 7 of 6/N may be considered forapproval.”

150. It is clear from the perusal of note of Sh. Sukhbir

Singh that he is blaming the LF branch for not raising the

questions when seven licences were processed. He also dubbed

the other questions raised by the LF branch officers as “not

desirable”, without answering the same properly and

recommends the proposal.

151. File again reached Sh. H. P. Mishra, DDG (LF), who

recorded note dated 02.06.2004, page 10/N, as under:


“Reference notes on preceding page. The file waspresumably sent to us to scrutinize the application.If so, the discrepancy noticed between the capitalstructure (comprising, inter-alia of debt & equity) ofthe company and its project financing plans asdisclosed by the company was rightly pointed out.This was earlier also covered in our notes dated22.3.04 (Paras 5,8,10 of N. 10-11; F/D) withoutreferring to D/E ratio.

2. The comments of BS Branch at para 2 aboveare not relevant to the discussion at hand. So are theobservations at para 3 above, since nowhere has theLF Branch talked about the need to prescribe anydebt equity ratio.

3. As regards the views of BS Branch in para 4above, Member (P) may kindly decide the matter asdeemed fit. We have merely pointed out (para 2 at7/N) that the combined Net Worth of the companyand its promoter company has undergone a suddenand large increase in just one month. It may bedecided whether this merits a closer look since: (a) there is no supporting document to explain this,and (b) additional NW is actually needed foradditional licenses.”

152. Thus, the two branches, that is, LF and BS, are at

loggerheads about financial plan of the company. BS branch

asking LF branch as to why these issues were not raised earlier.

The LF branch reminding that they raised the issues as early as

22.03.2004 (D-38), when eight LOIs were approved including

for MP service area. It appears that on account of the past

conduct of the company, the officers of Licence Finance Branch

were subjecting the company to strict scrutiny, which is not

palatable to the BS branch.

153. Thereafter, a letter was sent to the company seeking


certain clarifications as indicated by note sheet at page 11/N

and after some note sheets Sh. P. K. Mittal recorded on

21.06.2004, at page 12/N, as under:

“The case to be put up for approval of CompetentAuthority for grant of LOI. The views of LF andissue, so far not addressed & indicated may also becovered in the note.”

154. On this Sh. A. R. Devarajan, AD (BS), again

recorded a note dated 23.06.2004, page 13/N, mentioning the

background of the case and recorded in paragraphs 7 to 9 as

under:

“....................................................................................................................................................................7. There are two cases which are being underprocess since 26.4.2004.

(i) In my opinion the Issue at subject -1, approval may be accorded for the extension of time because LOI has

already been given to M/s Dishnetand this is a separate issue.

(ii) The issue in subject-2 is being dealtsince long.

8. For issue LOIs for the UP(E) and UP(W)service areas LF section has raised some issue,which can be seen in previous note-sheets. In briefthe issues are

a) The noting of the Director (LF-II) on N/s3 Para 1 he says that “DOT has not prescribed any specific Debt Equity Ratio and is normally a business decision of the Company. In this instant case Company has laid down subsequentia Also it is submitted that

noting of Director (LF-II) in Para (a)above itself says that DOT has notprescribed any specific Debt EquityRatio and is normally a business decision of


the Company l requirement of funds. Therefore,itmay have to be examined with reference to thefollowing aggregate fund requirement, the statedDebt Equity Ratio vis-a-vis the present equity base.”

It is submitted that 8 LOIs were issued to M/s Dishnet Ltd. out of which licences for 7 serviceareas have already been signed except MadhyaPradesh Service area. At the time of issue of the 8 LOIs this issue of Debt Equity Ratio was not raised by the LF Section. Also it is submitted that noting of Director (LF-

II) in Para (a) above itself says that DOThas not prescribed any specific Debt EquityRatio and is normally a businessdecision of the Company. Therefore, thisissue requires a decision whether LOI may beissued for UP(E) & UP(W).

b) The noting of the Director (LF-II) on N/s7 Para 2 says that “The increase in the networth of the Company within a short span of time requires a closure look.

M/s Dishnet DSL was asked to submit the reason of increase of the networth. The reply isfound satisfactory by DDG (LF) on N/s 11.

9. If the issue raised in Para 8(a) does notrequire further discussion and found satisfactoryfor issue of the LOI then the case is submitted forapproval, for issue of Letter Of Intent (LOI) to M/sDishnet DSL Ltd. for award of Unified AccessService Licence (UASL) in respect of UP (E) and UP(W) service areas as per the Draft format of LOIsplaced at 30 & 31/c and authorizing Director (BSIII)for signing the Licence Agreement after fulfilling theconditions stipulated in the LOIs. The case is alsosubmitted for approval of extension by 90 days ofLOI of Madhya Pradesh Service Area.”

155. Thereafter the file reached in due course to Sh. H. P.


Mishra, DDG (LF), who recorded a note dated 29.06.2004,

page 14/N, to the following effect:

“The matter was discussed with M(P) yesterdayevening when DDG (BS) was also present. The basicpoint of LF Branch can be summarized below. “Thefunding plans submitted by the co. – the tenapplications for new UASL's have all shown D/Eratio as 1:1. Considering the facts that (a) the auth.equity of the co. is 75 cr, (b) subscribed/ paid upequity is below Rs. 30 crores, (c) the projectsfunding requirement is shown by the co. as over Rs.2110 crores (as per data av. with us), and (d) thecompany has given year wise interest & depreciationprovisions that have to correlate with extantframework of prevailing rates, it's not clear how thefunding requirements would be met keeping theD/E ratio at 1:1 (as indicated by the co.)”. BS Br. mayconsider getting this aspect clarified appropriately.”

156. Thus, the capacity of the company to raise funds for

telecom projects proposed to be undertaken by it is in serious

doubt and is being questioned again and again.

157. Thereafter, a letter was again issued to the company

seeking certain clarifications and the company provided the

same. Thereafter, in the light of clarifications, Director (LF) Sh.

P. K. Sinha recorded the following note dated 01.07.2004, page

15/N:

“As per the letter of DDSL placed at 69/c, DDSL isin the process of tying up with Banks & FIs for debtas also would infuse addition equity from othersources (after increasing the auth. capital) tomaintain the debt equity ratio as 1:1. Since thefunding plans are internal decision of the company,we perhaps may have to accept the statements intheir said letter.

Submitted for consideration pls.”


158. Thus, the two officers were made to give up their

earlier stand and made to accept that funding plan are internal

decisions of the company. It is apparent that company could

not furnish any acceptable clarification.

159. He marked the file to DDG (LF) Sh. H. P. Mishra,

who recorded the following note on 05.07.2004:

“1. Discussed with D (LF) and DDG (BS).2. We may take the statement made by thecompany on record and process the case forapproval by the competent authority.”

160. On recording this note, he marked the file to DDG

(BS) Sh. P. K. Mittal. Thus, all issues raised by the LF branch

are ignored without any valid reason, though the LF branch was

right in putting these questions as business plan of the

company is an essential part of a telecom project.

161. In the end, note sheet dated 08.07.2004, 16/N, was

recorded by Sh. A. R. Devarajan, AD (BS-III), seeking approval

for both issues, that is, extension of time for LOI for MP service

area by 90 days and issue of grant of UAS licence for UP (E)

and UP (W) to the following effect:

“Subject:1. Request for extension of time of the LOIfor Madhya Pradesh by 90 days for signingof the Licence Agreement.2. Issue of LOI for grant of Unified Access

Licence for UP (East) & UP (West)service area to M/s. Dishnet DSL Ltd.

PUC is a letter dated 20.4.2004 received from M/s.Dishnet DSL Ltd. requesting for extension of timeby 90 days from 20.4.2004 to sign the Licence


Agreement in Madhya Pradesh Service area. TheLOI was issued on 6.4.2004.

Applications have been received from M/s.Dishnet DSL Ltd. for grant of Unified Access ServiceLicences for Uttar Pradesh (East) & Uttar Pradesh(West) service areas placed below for readyreference.


3. M/s. Dishnet DSL Ltd. has applied in theformat earlier prescribed for making application forbasic service licence. A processing fee of Rs.15,000/-per licence application has also been furnished. Thisformat has been accepted for issuing earlier LOIs forUASL.

4. A check has been carried out with reference tothe applications for issue of letter of intent for grantof UASL and the check list is placed at 23/c. As perthe check lists, the applications are in order and LOIcan be issued.

5. Licensing Finance raised queries on 2/n,3/n,4/n,7/n & 8/n on Net Worth, Debt Equity Ratioand Source of Funds for their projects to costaround Rs.1500 Crores. Clarifications received fromthe Company are placed at 67/c & 69/c . ThereafterLicensing Finance (LF) has given their consent forissuing of the LOIs at 15/N.

6. In view of the above, the case is submitted forapproval, for issue of Letter Of Intent (LOI) to M/sDishnet DSL Ltd. for award to Unified AccessService Licence (UASL) in respect of UP(East) &UP(West) Service Areas as per the Draft format ofLOIs placed at 30/c & 31/c and authorizingDirector (BSIII) for signing the Licence Agreementafter fulfilling the conditions stipulated in the LOIs.


7. Grant of extension of time by 90 days forsigning the Licence Agreement for Madhya PradeshService area.

Submitted for kind consideration andapproval please.”

162. Sh. A. R. Devarajan records that LF branch had

raised certain queries in response to which clarifications were

received from the company and the LF branch had given its

consent to the issue of LOIs.

163. Thus, after taking note of the statement of the

company regarding its financial position, including funding

plans at its face value, officials at all levels agreed to approve

the aforesaid two requests of the company. This was agreed to

by Secretary (T) also on 13.07.2004 and the file was marked to

the MOC&IT Sh. Dayanidhi Maran. The objections regarding

financial capacity of the company were not dealt with in an

objective manner and were brushed aside on the specious

ground that these are internal decision of the company.

Reaching of file to the office of MOC&IT and its return

therefrom

164. As per note sheet at 16/N, the file was marked by

the Secretary (T) to MOC&IT on 13.07.2004 and it reached its

office on the same day.

165. However, the file was returned by the office of the

Minister on 26.08.2004 with the following remarks recorded by

Sh. K. Sanjay Murthy, PS to the Minister, at 17/N (D-2):


“From pre-pageI have been directed to seek the below

clarifications :

a) The financial/equity between M/s. Dishnet DSL Ltd. and its sister concerns holding

licence elsewhere, particularly in Tamil Naduand Chennai.

b) To please verify the status of the newspaper reports regarding sale of M/s. Dishnet DSL Ltd. or any of its sister concerns to any other company.

c) To also verify whether M/s. Dishnet DSL Ltd. or any of its sister concerns granted licences inother service areas were later sold to another licensee/entity.

d) It is recalled that the company has violated certain licence conditions entailing specific penalty being imposed on it. The legal implications to this case may please be examined and reported.”

166. The file was marked to the Secretary (T), who

marked it downward. Thereafter, letters were issued to

different branches on 09.09.2004 asking for information on the

aforesaid issues. Thereafter, the file is silent till 13.12.2004.

Observations in D-40

167. File D-40 relates to change of name of the company

from Srinivas Computers Limited to Aircel Televentures

Limited and also change of equity structure of Aircel Limited on

transfer of shareholding from Srinivas Computers Limited to

Aircel Digilink Limited. This file was also returned by the


Minister and Sh. K. Sanjay Murthy, PS to MOC&IT, had

recorded the following note on 15.09.2004, 35/N, while

returning the file:

“I have been directed to convey the following:

There are many inter-related issues betweenmergers & acquisitions, licensing, FDI and FIIinvestment in holding companies and their sisterconcerns. An overall view on issues arising in suchcases needs to be taken before a decision can betaken. All the inter-related issues mentioned abovepertaining to the case being dealt in the belowmentioned files be examined and a consolidatedNote submitted:-

(i) F. No. 842-21/2001-VAS (Vol. III)- (D-30)

(ii) F. No. 842-325/2000-VAS- (D-40)(iii) F. No. 808-26/2003-VAS (Vol. I)- (D-

45)(iv) F. No. 20-231/2003-BS-III- (D-2)

2. AS (T) may prepare the note and submit thesame through Secretary (T). The above mentionedfiles are placed below.”

168. On recording this note, the file was marked to

Secretary (T) Sh. Nripendra Mishra, who recorded the following

note dated 15.09.2004 itself:

“My recommendation are available on the file.AS(T) pls. comply with the orders of MOC&IT andsubmit it to MOC&IT for superior orders.”

169. After recording this note, he marked the file (D-40)

to AS (T).

AS (T) Dr. J. S. Sarma gave his comments in D-40 at


36/N to 38/N on 30.11.2004, which is noted as under:

Report of Dr. J. S. Sarma

170. In terms of the order dated 15.09.2004 recorded by

the Minister, Dr. J. S. Sarma, Addl. Secretary (T) gave his

report dated 30.11.2004 to the following effect at 36/N to 38/N

(D-40) and marked the file to Secretary (T):

“Kind attention is invited to the notes on pre-pageas well as the note of PS to MOC&IT on the file 20-25/04/Genl. Mts/Dishnet placed below.

There had been certain inter-related issues betweenmergers & acquisitions, licensing, FDI and FIIinvestment in holding companies and their sisterconcerns in the cases pertaining Aircel Ltd., AircelCellular Ltd., Dishnet DSL Ltd.; the licenseecompanies and their promoter companies. Theseissues are analyzed, company-wise, as under:-

1. M/s Aircel Ltd: (earlier known as M/s SrinivasCellcom Ltd.)

M/s Srinivas Cellcom Ltd. was incorporated on12.12.1994. The company was granted licence forCMTS for Tamil Nadu Circle on 22.05.1998. Thecompany changed its name from M/s SrinivasCellcom Ltd. to M/s Aircel Ltd. on 28.10.99.

100% share of Aircel Ltd. is with SrinivasComputers Ltd. The name of the company has beenchanged to M/s Aircel Televentures Ltd.

Shares of M/s Srinivas Computers Ltd. are held byM/s Sterling Infotech Ltd. (99.998%).

The promoter company of Aircel Ld. i.e. AircelTeleventures Ltd. has proposed to sell the shares ofAircel Ltd. (1800 million shares) to Aircel Digilinks


India Ltd., a company promoted by Hutch Group.With this transaction, the ownership of Aircel Ltd.will be transferred from Sterling Infotech Ltd. toHutch Group.

The present FDI policy permits 49% FDI in thelicence company and another 24.99% through theinvestment company making a total of 73.99%(direct + indirect). Further, as per the policy,investment company setup for making investmentin the licensee company must ensure thatmanagement control of the company must rest inIndian hands.

From the flow chart at Flag 'X', it is noted thatAircel Digilinks India Ld. has a very complex equitystructure. Companies like Telecom InvestmentIndia Ltd. (TIIL), UMTL Holdings Ltd., UshaMartin Telematics Ltd., etc. are investmentcompanies set-up for making investment in telecomsector. However, instead of investing directly in thelicensee company, they have pyramiding structureand have potential to induct foreign equity in thelicensee company much beyond 73.99%. Even atpresent, of the investment company Usha MartinTelematics has indirect and direct foreign equity of86.73%.

In file no. 842-325/2000-VAS, it has beenrecommended to allow change in the equitystructure thereby change in the ownership.However, the equity structure of the newmanagement is so complex that it is difficult tobelieve that management control will remain withIndian shareholders. Perhaps, Aircel Digilinks IndiaLtd. may have to simplify its equity structure so thatdirect and indirect FDI do not cross the prescribedlimits. Till this is done, the request of the companymay be kept in abeyance.

2. M/s Aircel Cellular Ltd: (earlier known asRPG Cellular Services Ltd.)


RPG Cellular Services Ltd. was issued licence tooperate CMTS in Chennai in 1994. 49% foreignequity of the company was held by AirTouch(Mauritius).

M/s Srinivas Computers Ltd. subsequentlypurchased the foreign and Indian holding of RPGCellular Service Ltd. and changed its name to AircelCellular Ltd.

Certain doubts have been raised on acquisition offoreign equity from AirTouch (Mauritius) to SivaCellular Holding Ltd. (Mauritius) and thereaftertransfer to Srinivas Computers, as such transactionwere carried out without the knowledge of DoT.

The company has now applied for change in name ofthe company from RPG Cellular Services Ltd. toAircel Cellular Ltd., Change in its ownership originalIndian promoters and foreign promoters to SrinivasComputers Ltd. (now called Aircel TeleventuresLtd.)

The company has further applied for transfer of100% shares held by Srinivas Computes Ltd. toAircel Digilinks India Ltd., a Hutch Group company.This proposal is not recommended on the groundsthat promoters of the new management also holdsubstantial equity another company HutchisonEassr South Ltd. who also hold the licence for sameservice in the same service area i.e. Chennai.

3. M/s Dishnet DSL Ltd:

M/s Dishnet DSL Ltd. has been promoted bySterling Infotech Ltd. (79.11%), and three foreign /OCB companies. The company is holding all IndiaInternet Licence and is in operation. They have alsobeen issued LoIs for UASL.

As per the information available, there are five


vigilance cases against the company with regard toprovision of Internet Service and DoT had imposedpenalties total amounting to about Rs.2.27 crore.The company has not paid the penalties and filedcases in TDSAT.

From the above, it is noted that M/s SterlingInfotech has promoted all the three companies. It isholding equity shares of 79.11% of Dishnet DSLdirectly whereas 100% shares of Aircel Ltd. andAircel Cellular Ltd. through Srinivas Computers Ltd.(or Aircel Televentures Ltd.). The Company is nowproposed to sell its holding in Aircel Ltd. and AircelCellular Ltd. to Aircel Digilinks India Ltd. (Hutch).While there request to cell the equity of AircelCellular Ltd. cannot be considered as per the licenceconditions, before considering the other case,perhaps, we may ask the Aircel Digilinks India Ltd.to ensure that FDI policy is not violated andrestructure its equity in line with declared policy ofthe Government.

Before granting the UASL licences to Dishnet, wemay await for the decision of TDSAT on the issue ofvigilance cases and penalties imposed by DoT onthis company.”

171. On giving his report, Dr. J. S. Sarma marked the file

to Secretary (T) Sh. Nripendra Mishra, who asked the DDG

(BS) to put up the legal status on the comments of AS (T).

Report of Sh. O. P. Nahar, LA(T)

172. Accordingly, matter went to LA(T) Sh. O. P. Nahar,

whose opinion dated 11.01.2005 (42-43/N, D-40) is as under:

“This is a reference on three aspects with regard totwo companies.

Firstly M/s Dishnet DSL Ltd. whose majority


shareholding is held by M/s Sterling Infotech Ltd.applied for certain UASL license whereafter fewLOIs are issued or are in process of issuance. In themeantime some vigilance cases against this internetservice provider arose and DOT purported toimpose penalty of Rs. 2.27 crore by issuing letter dt.25.08.2004. Thereupon the company challengedthis imposition of penalty before, TDSAT whenPetition is allowed after withdrawal of DOT'saforesaid letter dt. 25.08.2004 whereby penalty wassought to be imposed. This withdrawal by DOT ismade for the reasons that an opportunity forhearing before imposition of penalty was not given.Presently the Show Cause Notice proposingimposition of penalty is in the process of issuance.

In this regard it may be stated that there is nopending litigation as on today. Moreoverapproaching a court / tribunal is a normally enjoyedlegal right, hence, this equity fact cannot disqualifythe intending licensee from getting LOIs or license.Moreover the DOT withdrew of its own the letter ofimposition of penalty so M/s Dishnet DSL Ltd.cannot be faulted on this count and denial ofLOIs/license will not withstand legal scrutiny till thecompany is not blacklisted for already committedmajor malpractices in accordance withadministrative instruction, if any, after holding afull fledged enquiry and affording fair opportunityof hearing (M/s Erusian Equipment & ChemicalsLtd. vs State of West Bengal, AIR 1975 SC 266).

The Second question referred relates to the patternof equity holding especially the foreign equity. It isbrought out at 34-36/N that direct foreign equity isbelow 49 per cent but indirect foreign equity is24.99 per cent through foreign investmentcompanies. There is no restriction against indirectforeign equity which can be raised to any level butwith a condition that management remains inIndian hands. This is so provided in theAmendment to License Agreement dated


29.01.2001 (as at Clause (ix) (d) Flag 'X') of LicenseAgreement modified pursuant to New TelecomPolicy 1999. Hence no objection to indirect foreigninvestment to whatsoever level can be takenespecially where DOT does not know the contraryfacts about non-existence of management in Indianhands.

The third aspect for consideration is that 79.11 percent equity of Dishnet DSL Ltd. is held by SterlingInfotech Ltd. There can be no objection by licensorto this equity holding. Further M/s SterlingInfotech Ltd. is also controlling 100 per cent equityof Aircel Ltd. and Aircel Cellular Ltd. through itssubsidiary Srinivas Computers Ltd. (presentlyknown as Aircel Televentures Ltd.). It may beadded here that Aircel Televentures Ltd. has soughtsale permission of its 100 per cent equity holding inAircel Ltd. to Aircel Digilink India Ltd. whose 100%equity is further held by Hutchinson East Ltd. whois also holder of license for Calcutta. The equity ofCalcutta licensee i.e. Hutchinson East Ltd. is furtherdistributed amongst three companies i.e. (1) AsianTelecom (2) Essar Teleholdings (3) UshamartinTelematics. And further the equity of UshamartinTelematics is held by other four companies whoseequity pattern needs no discussion but is some whatdepicts cross holding. Any objection to this equitypattern or of cross holding various companiescannot be taken by DOT. This for the businessworld to manage and not an unusual happening tohave cross holdings.

With regard to complicated nature of equity holdingno objection can be taken by licensor because suchadverse notice is not provided in the LicenseAgreement. Hence there is no locus standi i.e. legalstanding to object either to indirect foreign equity ofany percentage or to complicated nature of equityholding of licensee. Moreover after 5 years from theeffective date of License Agreement there is norestriction against transfer / sale of equity except


that competition cannot be compromised.

The copy of this note is placed on two files i.e. (1) F.No. 842-325/2000-VAS and (2) F. No. 20-231/2004-BS.III.”

173. Thus, the comments of AS(T) Dr. J. S. Sarma did

not reach the Minister directly, as desired by him and were sent

to Legal Advisor for his opinion thereon. The views of Dr. J. S.

Sarma appears to be administratively correct, whereas the

views of the Legal Advisor are narrow and too legalistic. A

licensor has every right to ask for all information, which it was

asking in other cases also and has right to be cautious when an

existing defaulter applies for a fresh licence. However, the Legal

Advisor was resorting to a very narrow legal interpretation.

Impact and observations in D-2

174. On the aforesaid directions of Secretary (T)

regarding seeking of legal opinion on the report/ comments of

AS (T), a note was also initiated in file D-2 by Sh. A. R.

Devarajan, AD (BS-III), at pages 19/N and 20/N to seek legal

opinion, as the file D-2 was also covered in the note dated

15.09.2004 of Sh. K. Sanjay Murthy, as extracted above. The

instant file reached Sh. P. K. Mittal and he marked it to LA (T).

175. However, vide note dated 17.12.2004, recorded on

the right margin by Sh. A. R. Devarajan on the oral instructions

of Sh. P. K. Mittal, DDG (BS), the file was withdrawn from legal

section.

Requisition of files D-2, D-38 and D-41 by the Minister


176. On the instant file being withdrawn from legal

section, the file was marked to Director (BS-III). Sh. Sukhbir

Singh, Director (BS-III), recorded a note dated 21.12.2004, at

21/N (D-2), to the following effect:

“As desired the case files of M/s Dishnet DSL Ltd. inwhich the LOIs for 8 service areas for grant of UASlicences were approved are placed below. The casefile for change of name of the company is also placedbelow.

1. F.No.20-231/2003-BS.III- (D-2)2. F.No.20-231/2003-BS.III/Pt.- (D-38)3. F.No.20-225/04-

GenlMts/Dishnet/BS.III-(D-41)

2. The note of Additional Secretary (T) is placedat p.77-c to 80/c.


177. After the note, the file was marked to DDG (BS) Sh.

P. K. Mittal and ultimately the file reached Secretary (T), who

marked the file to the Minister on 24.12.2004. Thus, files D-2,

D-38 and D-41 reached the Minister on 24.12.2004.

It is to be noted that the Minister had asked for a note of

AS(T) to be submitted through Secretary (T) vide order dated

15.09.2004 at 35/N in file D-40. This note should have reached

the Minister independently, but was submitted to the Minister

through the aforesaid note of 21.12.2004 alongwith other files.

There is every possibility of the note escaping the attention of

the Minister.

Pendency of the files with the Minister and return thereof:


Question of haste

178. However, the instant file remained with the office of

the Minister and was returned to the Secretary (T) on

03.03.2005 alongwith other files as ordered by Sh. K. Sanjay

Murthy, PS to the MOC&IT, in the following terms in D-41 at

7/N:

“I have been asked to request Secretary (T) to re-examine if there has been undue haste in processingthe case. The following files are enclosed :-

1. F.No.20-231/2003-BS-III (Vol.III)- (D-2)

2. F.No.20-231/2003-BS-III- (D-46) (D-592 main case)

3. F.No.20-231/2003-BS-III- (Pt.)- (D-38)4. F.No.20-225/04-GnlBTS/Dishnet/BS-

III - (D-41)”

Thus, the Minister was suspicious of the activities of his

predecessor, perhaps rightly as the questions relating to the

financial capacity of the company were not properly dealt with

when eight LOIs were approved to be issued to Dishnet DSL

Limited in 05.04.2004 in file D-38.

179. Thereafter, Secretary (T) discussed the matter with

MOC&IT on 30.03.2005 and recorded a note at 21/N (D-2),

which is as under:

“Discussed with MOC&IT. These files are returnedwith the directions that the Dir. should ascertain allthe show cause notices/advisory letters issued to theabove company or companies belonging to thegroup and the nature of defaults before any view istaken. It may be submitted to my successor.”

180. Thereafter, from 06.05.2005 till 02.03.2006, 22/N


to 27/N, the file remained under process in the department on

the points raised by the Secretary in note dated 30.03.2005, on

the following four issues:

(1) Request for extension of time of the LOI for MP service

area under UAS by 90 days for signing of the licence

agreement;

(2) Issue of LOI for grant of UAS for UP(E) and UP(W)

service areas to Dishnet DSL Limited;

(3) Request for taking on record change of name of the

company from Dishnet DSL Limited to Dishnet Wireless

Limited; and

(4) Issue of fresh LOI for Punjab, Haryana, Kerala and

Kolkata service areas for Dishnet Wireless Limited for

Unified Access Services.

181. On 28.06.2005, the issue of change of equity by

sister concerns, that is, Aircel Limited and Aircel Cellular

Limited, was also introduced by Sh. P. K. Mittal at 24/N, in the

instant file.

182. Therefore, all six issues were being dealt with in this

file. However, on withdrawal of application for change of

equity, this issue was closed on 14.07.2005 in the instant file.

183. Thereafter, on 10.02.2006, at 27/N, it is recorded

that a policy decision has been submitted regarding grey

market issues. Thereafter, there is no development except

marking of the file here and there on this page itself. It is also

recorded on 02.03.2006 that note sheet of part file No. 20-

231/2004-BSIII pt. is enclosed as 28/N.

184. This note sheet of 02.01.2006, at 28/N, of the


aforesaid part file deals with the issue of LOI for grant of UASL

in Madhya Pradesh, Punjab, Haryana, Kerala, Kolkata, UP (E)

and UP(W) service areas to Dishnet DSL Limited and

information is sought as per latest UASL guidelines.

185. Thus, the pending applications were to be dealt with

as per the latest guidelines. The company gave some

information and that was processed at 29/N.

Entry of Maxis

186. When the above information was being processed in

note sheet dated 06.03.2006, 30/N, the fact that Maxis

Communication Berhad will be holding about 73.99% of Aircel

Limited was taken on record with the fact that the proposal for

investment is listed before FIPB for approval in its meeting on

07.03.2006. Thereafter, the file remained under process on

account of new development, that is, on account of Maxis

holding 73.99% of the equity and related issues from 30/N to

38/N.

187. Finally, note sheet dated 13.11.2006 was recorded

by Sh. R. K. Gupta, ADG (AS-I) at pages 39/N to 41/N taking on

record all the developments including FIPB approval and the

file was marked upward and the matter was finally approved by

the Minister on 22.11.2006 at 42/N, relating to issue of LOI for

grant of UASL for Punjab, Haryana, Kerala, Kolkata, UP(E) and

UP(W) service areas and amendment of LOI for Madhya

Pradesh service area.

188. The aforesaid note sheets clearly explain the process

through which the instant file passed before final approval was


granted by Sh. Dayanidhi Maran on 22.11.2006. The

observations made by different officers at different levels and

time are also clear, more particularly about financial capacity of

the company, that is, Dishnet DSL Limited, and its involvement

in grey market and transfer of ISP licence without permission

from the department, as mentioned at 33/N in detail, is as

under:

“....................................................................................................................................................................(ii) LR has intimated that following are the casesunder process in LR Wing.

(a) Show Cause Notice for imposing penaltyamounting Rs.2,36,88,522 and submittingadditional bank guarantee of Rs.3.20 crore becauseof grey market activities by its subscribers. Finalorder under issue after according personal hearingbefore Member (P).(b) Show Cause Notice for termination of licencefor violation of clause 10 regarding Transfer ofLicence is under issue. Approval of MOC receivedon 28th March, 2005.(c) 6 nos. of new cases have been reported forinvolvement of its subscribers in grey marketrecently (on 10th March, 2005). The cases are beingprocessed.......................................................................................................................................................................(iv) VAS has mentioned on Note Sheet No. 26/Nthat the extracts of file no.843-325/2000-VAS(Pt)having remarks of Secretary (T) for information andfurther necessary action of BS Cell. In the remarksSecretary (T) has mentioned that please examinethe matter afresh in the light of notices issued to thecompany in some of the ISPs related irregularities.…..................................................................................................................................”


Thus, the record of the company is not very impressive.

Observations in file D-38: File in which eight LOIs were

granted

189. Vide note sheet dated 24.05.2004 at 8/N, Sh. P. K.

Mittal had directed that file, wherein seven applications were

approved be linked up with this file. This file is D-38.

190. Since this file, that is, D-38, was also ordered to be

linked up, it is relevant to extract the required note sheets from

this file also for better understanding of the case, which are as

under:

191. As per D-38, eight applications, 36/C, were received

in DoT on 05.03.2004 and were processed for the first time on

09.03.2004 at 9/N, recommending the issue of licences. DDG

(BS) agreed to the same on 10.03.2004 and marked the file to

DDG (LF).

192. The file reached Director (LF-II), who recorded note

dated 22.03.2004, 10/N, to the following effect:

“Pre notes kindly refers.1. That new UASL licenses will be allotted as perthe financial (entry fee, PBG, FBG, Net worth andpaid up equity) and other conditions of 4 th cellularlicensees and with reference to the guidelines issuedfor migration, on a continuous and first come firstserve basis, have earlier been clarified by BS branch.Accordingly, new UAS licenses have been issuedwith the approval of Hon'ble MOC&IT in file no.842-441/2003-VAS (pt).

2. Dishnet DSL, an existing ISP (Category A-AllIndia) licensee has applied for 8 Unified AccessService License-2 category B (West Bengal includingA&N and MP) and 6 category C (Assam, Bihar,


Himachal, J&K, NE and Orissa) licenses. They haveindicated certain amount of foreign equity, in thesubscribed equity, for which they will need tosubmit documents in accordance with items 9 and10 of the application proforma.

3. The applicant is an ISP and they are payinglicense fee @ Re. 1 per year as stipulated. The twosister concerns M/s Aircel and M/s Aircel CellularLimited are cellular licensees in Tamil Nadu andChennai. They are paying quarterly 1 fees regularly.The FBGs are maintained and regularly reviewed byCCAs. The PBGs of Aircell Cellular (RPG) is alreadydue for renewal and they have been intimated forsubmission of renewed BG.

4. Since Dishnet is an existing ISP licensee andits stated sister concerns– Aircell Ltd and AircellCellular Limited– being cellular licensees, it mayhave to be examined whether these licensees havebeen discharging the operational obligations to thesatisfaction of the licensor. Secondly, it is presumedthat BS Branch has found the details of experienceand network roll out plan acceptable.

5. On the other hand, it is not stated how muchis the shareholding of the promoter in thecompanies– Aircel Limited and Aircell CellularLimited, but it is possible that the net worth ofSterling Infotech Ltd have been taken into accountfor purpose the cellular licenses of the sisterconcerns. Therefore, the requirement of net worthwill need to be examined with reference to thesecellular licenses. In isolation however, the net worthas disclosed by the company, by self-certificationfulfills the conditions of net worth. On this issue DirBS III has clarified that as per present policy the networth is to be looked at in isolation and restrictionexist in terms of allotment of license in the sameservice area.

6. The format of LOI has been seen by the LA(T)


on earlier occasions.

7. We may obtain the comments on 4& 5 above

8. In addition the following observations aremade. For Assam alone the funding requirement isshown as Rs 88 crores, thus the total fundingrequirement would be substantial for 8 circles. Onthe other hand the authorized capital is Rs 75 crore,the paid up equity being even lesser at Rs. 29.7crores. The net worth, including that of promoters isindicated as Rs. 400 crores. As such, the conditionsof net worth and equity for CMTS were prescribedduring tendering process, which were perhapsincluded to ensure that operators with capacity todeliver required quantum and quality of servicecomes to the market.

10. In addition, the entire net worth of thepromoter is taken for purpose of net worth underthe existing guidelines. However, it may have to beexplored, while the promoter has a restricted shareholding in the applicant, how appropriate it will beconsider the entire net worth for purpose of grant oflicense.

Now that DoT is issuing the access serviceslicenses on a first come first served basis– the aboveissues may require examination. These have beendiscussed with Dir BS III.


193. He marked the note to DDG (LF), who agreed to it.

Perusal of the note reveals that operational capability of the

company as well as its financial capacity was questioned in the

very beginning itself. The file was marked the file to DDG (BS),

who, in turn, marked the file to Director (BS-III).

194. Director (BS-III) Sh. Govind Singhal recorded note


dated 23.03.2004, page 12/N, which is as under:

“Reference notes on page 10-11/N.

2. It is clarified that M/s Dishnet DSL applicantcompany is different from M/s Aircel and AircelCellular Ltd. holding cellular licence in Tamilnaduand Chennai respectively. With reference to para 4on p.10/N, it is clarified that tender for 4th cellularlicence clearly stipulated that the bidding companyshould have telecom experience. In this respect, thebidder company becomes applicant company and isan ISP licensee and therefore, has fulfilled theconditions. The roll out plans indicated by thecompany are as per the terms and conditions of thelicence to be issued. As regards discharging theoperational obligations by the sister concerns viz.Aircel Ltd. and Aircel Cellular Ltd., it is clarified thatthis is neither a condition nor the practice toexamine it at the stage of considering for grant oflicence. Further, condition 3(iii) of the LOI takescare of the unfulfilled roll out obligations.

3. As already clarified that while considering thetotal requirement of networth, the licences held bythe applicant company is to be considered. In thiscase, the applicant company is not holding anyUnified Access Service/Basic Service/Cellularservice licence. Accordingly, total required networthfor the 8 licences comes to Rs. 280 crores and as perthe certificate given on the basis of unauditedresults by the Company Secretary, the networth ofthe company and its promoter is Rs. 400 crores. Thecertificate of the company secretary in respect ofnetworth and paid up capital is accepted. The sameprinciple has been followed in respect of licencesgranted in 2001 and prior to this case. As regardsobservations in para 8 for capability of raising thefunds, it is felt that the same may be left theFinanciers/banks and the company itself as for suchcircles (except J&K, NE and Assam), after repeatedbidding, the department failed to invite any


prospective service provider prior to issue ofguidelines for UASL. As regards para 10, it is not asper the existing guidelines/tender conditions for 4th

cellular.


195. In due course the file reached Sh. P. K. Mittal, DDG

(BS), who agreed to the grant of licences on 23.03.2004 and

marked the file upward. On 24.03.2004, he discussed the

matter with senior officers and asked for a self-contained note.

On 25.03.2004, Sh. Govind Singhal, Director (BS-III), recorded

the following self-contained note, page 13/N:

“Subject: Issue of LOI for grant of UnifiedAccess Services Licence for Assam,Bihar, Himachal Pradesh,Jammu & Kashmir, MadhyaPradesh, North East, Orissa andWest Bengal including Andamon,

Nicobar service areas to M/s. Dishnet DSL Ltd.

Applications have been received from M/s.Dishnet DSL Ltd. for grant of Unified Access ServiceLicences for Assam, Bihar, Himachal Pradesh,Jammu & Kashmir, Madhya Pradesh, North East,Orissa and West Bengal including Andamon,Nicobar service areas. Since all the applications aresimilar one of the original application is placedbelow for ready reference.


3. M/s. Dishnet DSL Ltd. has applied in theformat earlier prescribed for making application for


basic service licence. A processing fee of Rs.15,000/-per licence application has also been furnished. Thisformat has been accepted for issuing earlier LOIs forUASL.

4. A check has been carried out with reference tothese applications for issue of letter of intent forgrant of UASL. Individual check list in respect ofthese eight applications are placed at 37 to 44/c. Asper these check lists, the applications are in orderand LOI can be issued.

5. Licensing Finance raised some queries on N/S10 and the same have been replied on N/S12.Thereafter Licensing Finance (LF) had givenconsent for issuing of the LOIs on 12/N.

6. In view of the above, the case is submitted forapproval, for issue of Letter Of Intent (LOI) to M/sDishnet DSL Ltd. for award of Unified AccessService Licence (UASL) in respect of Assam, Bihar,Himachal Pradesh, Jammu & Kashmir, MadhyaPradesh, North East, Orissa and West BengalService Areas as per the Draft format of LOIs placedat 45-76/c and authorizing Director (BSIII) forsigning the Licence Agreement after fulfilling theconditions stipulated in the LOIs.

Submitted for kind consideration and approvalplease.”

196. On the same day, Sh. P. K. Mittal agreed to the same

and marked the file upward and in due course the LOIs were

approved to be issued by the then Minister on 05.04.2004.

197. PW 8 Sh. P. K. Mittal, in his statement dated

21.02.2012, at pages 2 and 3, has stated about these licences.

198. From the perusal of the aforesaid record in D-38, it

is clear that questions were being raised about the discharge of


operational obligations by the company to the satisfaction of

the licensor regarding its ISP licence as well as about its

financial capacity to undertake the telecom project from the

very beginning itself, as is clear from note sheet dated

22.03.2004. However, these objections were brushed aside

stating that capacity to raise the fund may be left to the

financiers, banks and the company itself as some circles failed

to attract any prospective service provider and the LOIs were

approved to be issued on 05.04.2004. But this does not appear

to be a valid ground in view of the guidelines and the contents

of the proforma of application for UASL.

199. A perusal of note sheets would show that there were

serious doubts about the capacity of the company to undertake

the telecom projects.

Guidelines and proforma of application for UASL

200. Let me take note of the guidelines and the proforma

for issue of UASL to understand the relevance of the questions

put by various officers.

201. Clauses 8 and 10 of the guidelines dated 25.01.2001

read as under:

“8. The promoters of applicant company shallhave a combined net-worth of amount indicated inAnnex-I. The net-worth of only those promotersshall be counted who have at least 10% equity stakein the total equity of the company. Here networthshall mean as the sum total, in Indian Rupees, ofpaid up equity capital and free reserves of qualifiedpromoters. While counting Net-worth the foreigncurrency shall be converted into Indian Rupees atthe prevalent rate on the date of the application as


indicated by the Reserve Bank of India.

10. The applicant company shall also submitbusiness plan along with its funding arrangementfor financing the project in each Circle separately.”

202. It is interesting to note that the proforma prescribed

by the guidelines take note of every minute detail.

203. Initially, the applications were being submitted in

the format prescribed for basic services, issued with guidelines

dated 25.01.2001. The format of the application contains

sixteen clauses and the clauses 7, 8, 12, 13, 14 and 15 are as

under:

“7. Promoters/Partners in the Company:(details of equity holdings)S. No. Name of Promoter/ Indian/ Equity Networth

Partner Foreign %age

------- ------------------------- ---------- ------- --------------- ------------------------- ---------- ------- --------------- ------------------------- ---------- ------- --------

(Total foreign equity participation (s), if any, uptothe extent of 49%, including NRI equity, bothrepatriable and non-repatriable, is allowed.Complete break-up of 100% of equity must begiven.)

8. Paid up capital (proof to be attached)…..................................................................................................................................................................

12. List of Telecom Service Licence (s) held by thecompany and its allies/sister concerns/partners, ifany, and their present status. (Attach separate sheet,if required)

(i)


-----------------------------------------------------(ii)-----------------------------------------------------(iii)-----------------------------------------------------(iv)-----------------------------------------------------

13. List out experience of Promoters/Partners:S.No. Name of Promoter/Partner

Experience------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14. Network Rollout Plan

Year % of Total SDCAs proposed % coverage of uneconomic/to be covered Remote Area SDCAs

1st _______________________________________________

2nd _______________________________________________

3rd _______________________________________________

4th _______________________________________________

5th _______________________________________________

6th _______________________________________________

7th _______________________________________________

15. Details of business plan along with thefunding arrangement for financing the project.….......................................................................................................................................................”

204. The proforma of checklist, as available on 37/c

onwards of Dishnet in D-38, also contains the following clauses

2, 3, 4, 10, 11 and 13.

“CHECKLIST FOR APPLICATION FOR UNIFIED ACCESS

SERVICES LICENSE


Name of the Company: M/s Dishnet DSL Ltd.

Service Area applied for: West Bengal

S.No.

PARTICULARS STATUS REMARKS

– – – –

2. Details of equity structure Submitted Available in theApplication

3. Proof of net worth Submitted Annexure-II

4. Proof of paid up capital Submitted Annexure-III

– – – –

10. Network roll out plan As perAnnexure-VII

As per Annexure-VII

11. Details of business planalong with fundingarrangements

Submitted Annexure-VIII

– – – –

13. List of Telecom ServiceLicenses held by thecompany

Submitted Annexure-V

New Guidelines dated 14.12.2005

205. Thereafter, new guidelines were issued on

14.12.2005, consequent to change of FDI policy and a new

proforma was also issued for filing up applications for Unified

Access Services Licence. Clauses 7, 8, 13 and 14 are as under:

7.(a) Details of Promoters/Partners/ Shareholder inthe Company: The promoters to be indicated

S. No. Name of Promoter/ Indian/ Equity NetworthPartner/ Shareholder Foreign %age

------- ------------------------- ---------- ------- --------

(Complete break-up of 100% of equity must begiven. Equity holding upto 5% of the total equityshared among various shareholder can be clubbedbut Indian and Foreign equity must be separate.)(b) Equity details

Indian ----------------------------------------Foreign ----------------------------------------Total


(Certificate from Company Secretary to be attached)

(c) The applicant is required to disclose the statusof such foreign holding and certify that the foreigninvestment is within the ceiling of 74%.(Certificate from Company Secretary to be attached)

8. Details of the Cellular and Unified accesslicence in the name of the applicant company andNetworth required for the Licence

No. ofCellular/UASlicence in categoryA service area

No. of Cellular/ UAS licencein category B service area

No. of Cellular/ UASlicence in category Cservice area

A B C

A * 100=P B* 50=Q C* 30=R

Total = P+Q+R

13. List of Telecom Service Licence (s) held by thecompany and its allies/ sister concerns/partners, ifany, and their present status. (Attach separate sheet,if required)

Type of the Licence Name of the Status WhetherAnd Service area CompanyOperative/surrendered/Terminated

--------------- --------- ----------------(Type of the Licence means Basic/ Cellular/ UASL/Paging/NLD/ILD/IP-II licences etc. details of allthe Licences held by Allies/Sister concerns/Partners or legal entities with 10% or more commonequities must be shown separately.

14. Details of business plan along with thefunding arrangement for financing the project.”

Regarding procedure of issue of LOI and UASL

206. In his statement dated 21.02.2012, PW 8 Sh. P. K.


Mittal, states about the procedure of grant of UAS licences at

pages 1 and 2 as under:

“....................................................................................................................................................................While processing the applications, the proposal wasto be initiated by the Asstt. Director and he used toput up the same to the Director and then it was putup to me. I used to further submit to DDG(Licensing Financing) and then it was to besubmitted to Member (Production). The Member(Production) used to forward to Secretary, DOTafter financial concurrence from Member (Finance).Thereafter the Secretary, DOT with hisrecommendations used to submit the file to theMinister of Communications and InformationTechnology (MOC & IT) for his approval. If at anystage any shortcomings/ deficiencies noticed in theproposal, the same was to be highlighted and gotrectified. Without rectification of such deficiencies,the proposal for issuance of License cannot beapproved. I would like to add here that at everystage from its initiation it was required to beensured that the stipulated terms and conditionsare fulfilled.

Consequent upon approval of the MOC & IT, aLetter of Intent (LOI) is issued to the applicant tofulfill certain conditions such as payment of entryfee, submission of Performance Bank Guarantee(PBG) and Financial Bank Guarantee (FBG) and nodues certificate in respect of dues payable to theDOT for other licenses already issued to theapplicant company and its sister concerns. Theseconditions have to be fulfilled within a stipulatedperiod of 15 Days. On the request of the applicantcompany, the extension of one-two months forfulfilling the required conditions are granted by theSecretary DOT / MOC & IT. After fulfilling therequired conditions the License Agreement isexecuted. Having executed the License Agreement,the Licensee becomes eligible to apply for thespectrum eg. 4.4 MHz in Global System Mobile


(GSM) band. Then the Licensee can roll- outservice.…..........................................................................................................................”

207. A bare perusal of the aforesaid guidelines and

proforma would reveal that an applicant for a telecom licence

will have to satisfy the licensor about its financial capacity as

well as business plan, that is, how would it fund and execute the

project. It cannot be left entirely to a bare statement of an

applicant company.

208. Thus, the financial capacity of the company to

undertake the project was in doubt from the very beginning. It

was further compounded by the fact that it failed to comply

with LOI for MP service area and also to sign licence

agreements in seven service areas in prescribed time.

Development in D-2

209. Funding aspect was all the more important in the

instant case (D-2) when it was recorded on 29.06.2004 that the

authorized capital of the company is Rs. 75 crore and paid-up

equity/ capital is below Rs. 30 crore and the funding

requirement was shown as over Rs. 2110 crore and a question

was raised as to how funding requirement would be met.

210. PW 8 Sh. P. K. Mittal has stated in his statement

dated 28.11.2011 as to how there were serious issues regarding

the debt equity ratio of the company, sudden increase in the net

worth of the company without any supporting documents, and

as to how the funding requirement of Rs. 2100 crore would be


met keeping the debt equity ratio as 1:1 as indicated by the

company with authorized capital of the company as Rs. 75 crore

and subscribed and paid-up capital below Rs. 30 crore. Some

clarifications were sought from the company. He has also stated

about the doubts raised about the financial capacity of the

company from 05.05.2004 onward when process for issue of

eight LOIs was initiated in D-38.

211. Perusal of the note sheets recorded in the file from

05.05.2004 to 29.06.2004 indicate that the department

entertained serious doubts about the financial capacity of the

company to execute the telecom licences. However, after receipt

of its clarifications, it was suddenly recorded by Sh. P. K. Sinha

on 01.07.2004 as under:

“As per the letter of DDSL placed at 69/C, DDSL isin the process of tying up with banks & FIs for debtas also would infuse additional equity from othersources (after increasing the authorized capital) tomaintain the debt equity ratio as 1:1. Since thefunding plans are internal decision of the companywe perhaps may have to accept the statements in thesaid letter.

Submitted for consideration please.”

212. He marked the file to DDG (LF). Thereafter, DDG

(LF) Sh. H. P. Mishra, who recorded that “we may take

statement made by the company on record and process the case

for approval by the competent authority.”

213. Thereafter, on these lines a note sheet for approval

dated 08.07.2004 was recorded by Sh. A. R. Devarajan for

grant of licence to Dishnet for UP (E) and UP (W) service areas

and also for extension of time for LOI for Madhya Pradesh.


Everybody concurred with that and thereafter, file was marked

to the Minister on 13.07.2004, brushing aside all objections.

214. From the perusal of the two files, that is, D-38 and

D-2, it is clear that:

(a) Questions were being raised from the very beginning

about the discharge of operational obligations by the

sister concerns of the company regarding earlier licences

to the satisfaction of licensor as the companies were

involved in grey market;

(b) The financial capacity to undertake the telecom projects

was suspect from the very beginning;

(c) The company had not paid licence fee regarding ISP

licence for two years, though it was a small amount;

(d) Extension of time for signing licence agreements for seven

service areas was contrary to guidelines and conditions of

LOI; and

(e) Company failed to comply with the LOI for MP service

area within the prescribed period and was seeking

extension of the same, though there was no guidelines for

extending the same.

215. The perusal of record would reveal that the opinion

of Dr. J. S. Sarma was administratively correct, whereas that of

Legal Advisor was too legalistic.

Issue of Licence to Bharti Cellular (D-46)

216. The application of Bharti Televenture Limited for

LOI in Assam service area was processed at note sheets 14/N to

21/N. The grant of LOI was approved on 23.04.2004 at 14/N.


However, later on, that LOI was withdrawn and the company

filed a fresh application for issue of UASL for Assam service

area. The application was processed and the note sheet dated

31.05.2004, at 21/N, recorded by Sh. Govind Singhal, Director

(BS-III), is the relevant note sheet. Following this note sheet,

the LOI was approved to be issued by Sh. Dayanidhi Maran on

22.06.2004. It reads as under:

“Subject:1. Withdrawal of the application for

Licence in Assam Service area byM/s Bharti Cellular Limited.

2. Issue of LOI for grant of UnifiedAccess Services Licence for Assamservice area to M/s. Bharti Tele-ventures Ltd.

Note sheet No. 15 -20/N may kindly be seen.Brief is as below:

M/s Bharti Cellular Limited applied for thegrant of the Licence in the Assam service area. Theapplication was processed and approved by Hon'bleMOC&IT on N/s 14/N.

2. M/s Bharti Cellular limited has requested forwithdrawal of the same application which is placedat 98/c.

3. M/s. Bharti Tele-ventures Ltd. has submittedan application for grant of Unified Access ServiceLicences for Assam service area. The application inoriginal is placed 97/c for ready reference.

4. M/s Bharti Tele-ventures Ltd., is the promoterof various Access service providers holding variousCellular Licences and Unified Access Licences. Itssister concerns holding CMTS License in TamilNadu and Chennai.


5. M/s. Bharti Tele-ventures Ltd. has applied inthe format earlier prescribed for making applicationfor basic service licence. A processing fee of Rs.15,000/- per licence application has also beenfurnished. This format has been accepted for issuingearlier LOIs for UASL.

6. M/s Bharti has submitted a copy of foreignagreement. A check has been carried out withreference to the application for issue of letter ofintent for grant of UASL. Individual checklist inrespect of Assam application is placed at 95/c. Asper checklist, the application is in order and LOI canbe issued.

7. LOI has been modified as suggested by DDG(LF) on N/s -16.

8. In view of the above, the case is submitted forapproval pls for the withdrawal of the application bythe M/s Bharti Cellular Limited and also for issue ofLetter of Intent (LOI) to M/s Bharti Tele-venturesLtd. for award of Unified Access Service Licence(UASL) in respect of Assam Service Area as per theDraft format of LOI placed at 94/c and authorizingDirector (BS-III) for signing the Licence Agreementafter fulfilling the conditions stipulated in the LOIs.”

217. The proposal in the aforesaid note sheet was agreed

to by DDG (BS) Sh. P. K. Mittal, DDG (LF), Member (P) and

Member (F) and also Secretary (T) on 18.06.2004. The file was

marked to the Minister and he approved it on 22.06.2004.

218. A perusal of the case reveals that no objection was

raised by anyone to the grant of LOI to this company. The only

objection was regarding a copy of a foreign agreement. That

was placed on record by the company as noted in clause 6

above. Thereafter, the proposal was approved by the Minister.


There is no objection from any quarter to the grant of LOI.

219. PW 8 Sh. P. K. Mittal has stated about this in his

statement dated 21.02.2012 at pages 4 and 5. He does not

mention that there were any issues with this application.

Hence, this case cannot be used as an example to question the

questions raised by the Minister in the case of Dishnet DSL as

noted above.

220. The defence has rightly raised the argument that it

is a query-free file and no objection could have been raised by

the Minister even if he wanted to.

Issue of Reliance Infocom (D-46)

221. The issue of grant of LOI to Reliance Infocom

Limited for J&K service area was processed at 24/N in D-46.

222. It is interesting to extract from file D-46, page 24/N,

wherein issue of LOI for grant of UASL for J&K service area to

Reliance Infocom Limited was processed. The note sheet

recorded by Sh. Govind Singhal, Director (BS-III), dated

10.08.2004, reads as under:

“Subject: Issue of LOI for grant of UnifiedAccess Services Licence for J&K Service Areato M/s. Reliance Infocomm Ltd.

History: M/s Reliance Infocomm Ltd. has earlierapplied for UASL for J&K Service Area on29.12.2003. LOI was issued on 12.01.2004. Furtherthe Company had requested for extension of time, 3times till 27/5/2004. Company had approachedextension for the 4th time for 6 months which wasnot agreed to. The company was advised to applyafresh.


2. Applications have been received from M/s.Reliance Infocom Ltd. on 24.6.2004 for grant ofUnified Access Service Licences for J&K servicearea. The application in original is placed below forready reference.

3. M/s Reliance Infocomm Ltd., an Accessservice provider holding various Unified AccessLicences, and other licences also.

4. M/s. Reliance Infocomm Ltd. has applied inthe format earlier prescribed for making applicationfor basic service licence. A processing fee of Rs.15,000/- per licence application has also beenfurnished. This format has been accepted for issuingearlier LOIs for UASL.

5. A check has been carried out with reference tothe application for issue of letter of intent for grantof UASL. Individual check list in respect of J&Kapplication is placed at 111/c. As per check list, theapplication is in order.

6. In view of the above, the case is submitted forapproval, for issue of Letter of Intent (LOI) to M/sReliance Infocomm Ltd. for award of Unified AccessService Licence (UASL) in respect of J&K ServiceArea as per the Draft format of LOI placed at 120/cand authorizing Director (BSIII) for signing theLicence Agreement after fulfilling the conditionsstipulated in the LOIs.

Submitted for kind consideration and approvalas above please.”

223. A bare perusal of the note sheet 24/N makes it clear

that there was no objection from any quarter to the grant of

LOI. The Secretary (T) recommended it on 13.08.2004 and the

Minister approved on 20.08.2004.

224. Again, it was a case where no objection was raised


from any quarter and the Minister was also not in a position to

raise any question. Hence, it cannot be used as an instance to

advance the case that the Minister deliberately raised questions

in the case of Dishnet DSL Limited, but not in other cases.

225. The proposal was put up by Sh. Govind Singhal on

10.08.2004 and was agreed to by Sh. P. K. Mittal, DDG (BS), on

the same day, by Sh. H. P. Mishra, DDG (LF) on 11.08.2004, by

Member (T) on 12.08.2004, and was recommended by

Secretary (T) on 13.08.2004 and was approved by the Minister

on 22.08.2004.

226. PW 8 Sh. P. K. Mittal in his statement dated

21.02.2012 at pages 5 and 6 has stated about this. He does not

say that there was any serious issue with this application.

227. Thus, this file also does not advance the case of the

prosecution as it was also a query-free file.

Regarding delay

228. PW 15 Sh. Govind Singhal in his statement dated

03.09.2013, at page 5, states as under:

“.....................................................................................................................................................................On being asked, I state that BS section hadrecommended for the issuance of LOI for UP(E),UP(W), Punjab, Haryana, Kolkata and Kerala andextension of time limit of LOI by 90 days forMadhya Pradesh in respect of M/s Dishnet DSL Ltd.(new name Dishnet Wireless Ltd.). The legal opiniondated 11.01.2005 of Sh. O.P. Nahar, LA was veryclear and was in favour of M/s Dishnet DSL Ltd.This legal opinion was also placed in VAS cell fileno.842-325/2000-VAS. The legal opinion which wasplaced in VAS file was made available to the office of


MoC&IT. The approval was delayed due to theinstructions conveyed by Sh. Nripendra Misra, thethen Secretary(T) on 30.03.2005 in BS section fileno. 20-231/ 2003- BS-III (Vol.III) (D-2). Theseinstructions had linked the issuance of UASL toshow cause notices/advisory letters issued to thecompany. Sh. B. Shiva Ramakrishnan, the thenMember(P) had also passed an instruction on08.04.2005 in file no.20-231/2004-BS-III.….................................................................................................................................................”

Regarding the events recorded in D-2, note of Minister and

legal opinion

229. PW 8 Sh. P. K. Mittal, DDG (BS), has narrated

about the noting in file D-2, in his statement dated 28.11.2011

from pages 1 to 17. Regarding the return of file from the office

of Minister, he states as under on pages 12 to 16:

“.....................................................................................................................................................................Onbeing asked I state that the said file was received inthe O/o Shri Dayanidhi Maran, the then MoC &ITon 13.07.2004 itself.

In spite of the unanimous recommendation from thedealing officers to the Secretary (T) for issuance ofLOI for award of UASLs for UP (E) and UP (W) andextension of LOI for MP circles, Sh. DayanidhiMaran, the then, MOC & IT instead of accordingapproval, raised objections and sought clarificationthrough his PS, Sh. K. Sanjay Murthy on 26-08-2004 (17-N) which are reproduced herein below:-

“I have been directed to seek the belowclarifications:

a) The financial/ equity between M/s.Dishnet DSL Ltd. and its sister concerns holding


licence elsewhere, particularly in Tamil Nadu andChennai.

b) To please verify the status of thenewspaper reports regarding sale of M/s. DishnetDSL Ltd. or any of its sister concerns to any othercompany.

c) To also verify whether M/s. Dishnet DSLLtd. or any of its sister concerns granted licences inother service areas were later sold to anotherlicensee/ entity.

d) It is recalled that the company has violatedcertain licence conditions entailing specific penaltybeing imposed on it. The legal implications to thiscase may please be examined and reported”

This file was received back after 44 days from theoffice of MOC & IT. Sh. K. Sanjay Murthy, PSmarked the file to Secretary Sh. Nripendra Misrawho in turn marked the file to Member (P) Sh. B.Sivaramakrishna on the same day i.e. 26-08-2004and this note was marked to dealing officer Sh. A.R.Devrajan on 27-08-2004 duly routed throughmyself and Sh. Govind Singhal, Director (BS-III). Irecall that Sh. K. Sanjay Murthy when he signed theaforesaid note dated 26-08-2004 on behalf of MOC& IT, told me that Sh. Dayanidhi Maran the thenMOC & IT was very furious with the officers of theDOT for recommending the case of M/s DishnetDSL for grant of UASL for UP (E) and UP (W) andextension of LOI for MP circles and wanted toinitiate action against such DOT officials.

In compliance to the aforesaid instructions of theMOC & IT, Sh. Govind Singhal, Director (BS-III)issued a letter dated 08-09-2004 to M/s DishnetDSL Ltd. requesting to intimate the details such as(i) Financial / equity between M/s Dishnet DSL Ltd.and its sister concerns holding License elsewherespecially in Tamilnadu and Chennai (ii) any sale ofthe company out of its sister concern which held


Licenses in other Service Area. (iii) Whether anyviolation of term & conditions had occurred andconsequently incurred penalties by the company orits sister concerns (at page 19-C in file no. 20-231/2004-BS-III). Simultaneously Sh. Singhal alsosent UO notes to Sr. DDG (VAS), Wireless Advisor,DDG (LF) and DDG (LR) requesting to provide theaforesaid information available with them, so thatthe matter could be submitted to MOC & IT. (at pageno. 16).

With regard to the queries raised by the Minister, Iwould like to clarify that the issue regarding sellingof License granted to its sister concern was in thecontext of newspaper reports indicating that M/sAircel had sold its equity to ESSAR (erstwhileHutch, now known as Vodafone). As regards theviolation of License conditions are concerned, it waswith reference to sale of broadband business toVSNL and misuse of internet connection bysubscriber of M/s Dishnet DSL Ltd. for gray marketcalls whereby long distance call were converted intolocal calls resulting loss to the exchequer. It is worthwhile to mention that no such queries were raised inrespect of M/s Reliance and Bharti for grantingLOIs for UASL during the same period. Moreover,no such queries were raised for granting UASLs forseven circles to the same company during the stintof earlier Minister i.e. Mr. Arun Shourie. As suchthese queries raised are not on sound footing whichappear to be on frivolous / out of context grounds.

While the information was being collected forgiving reply to the aforesaid queries of the Minister,another note was received from Sh. DayanidhiMaran the then MOC & IT through his PS, Sh. K.Sanjay Murthy on 15-09-2004 which is placed at 11-C in file no. 20-231/2004-BS-III (D-3) (original inD-40, at 35/N). As per this note the said PS to MOC& IT conveyed to Secretary (T) Sh. Nripendra Misrawhich is reproduced below:-


“There are many inter-related issues betweenmergers and acquisitions, licensing, FDI and FIIinvestment in holding companies and their sisterconcerns. An overall view on issues arising in suchcases needs to be taken before a decision can betaken. All the inter-related issues mentioned abovepertaining to the case being dealt in the belowmentioned files be examined and a consolidatedNote submitted:- 1. F. No. 842-21/2001-VAS (Vol. III)(it containsthe application for change of equity in M/s AircelCellular Ltd.)2. F. No. 842-325/2000-VAS (it contains theapplication for change of equity in M/s Aircel Ltd.)3. F. No. 808-26/2003-VAS (Vol. I) (it containsGoM on telecom matters i.e. D-591 in charge-sheetof RC 45(A)/2009-DLI)4. F. No. 20-231/2003-BS-III (it contains theapplication of M/s Dishnet DSL Ltd. for UASL forUP(E), UP(W) and application for extension of LOIfor MP)

AS (T) may prepare the note and submit the samethrough Secretary (T). The above mentioned filesare placed below”

Sh. K. Sanjay Murthy marked this note to Secretary(T) i.e. Sh. Nripendra Misra on 15.09.2004. On thisSh. Misra recorded his observations dated 15-09-2004 which is reproduced herein below:-

“My recommendation are available on the file. AS(T) pl comply with the order of MOC & IT andsubmit to MOC & IT for superior orders”

The original of the above note-sheets are availablein file No. 842-325/2000-VAS which has now beenshown to me.

I recall that Sh. Nripendra Misra mentioned to methat he had already given his recommendation forgranting necessary approval by the Minister forvarious proposals including grant of UASLs to M/s


Dishnet DSL Ltd for UP (E) and UP (W) and equityrestructuring for M/s Aircel and Aircel Cellular Ltd.in Tamilnadu and Chennai. He further mentionedthat he was upset with these remarks as it amountedto scrutinizing the recommendation of superiorofficers by junior officers in the same department.Secretary being Head of the Office has the fullresponsibility to make recommendation to theMinister. I would like to add that Dr. J.S. Sarma, thethen Additional Secretary to whom these files weremarked by the PS to the Minister, was not at allconcerned with the process of grant of UASL.

Dr. J.S. Sharma submitted the detailed note on 30-11-2004 which is placed at 12-C to 13-C in file no.842-325/2000-VAS (Photocopy of the same isavailable in file No. 20-231/2004-BS-III). Thecomments of Dr. J.S. Sarma on three issues innutshell are as under:-

1. M/s Aircel Ltd:- ”……..In file no. 842-325/2000-VAS, it has been recommended to allowchange in the equity structure thereby change inthe ownership. However, the equity structure of thenew management is so complex that it is difficult tobelieve that management control will remain withIndian shareholders. Perhaps, Aircel DigilinksIndia Ltd. may have to simplify its equity structureso that direct and indirect FDI do not cross theprescribed limits. Till this is done, the request of thecompany may be kept in abeyance.”

2. M/s Aircel Cellular Ltd:- “…..The companyhas further applied for transfer of 100% sharesheld by Srinivas Computers Ltd. to Aircel DigilinksIndia Ltd., a Hutch Group company. This proposalis not recommended on the grounds that promotersof the new management also hold substantialequity in another company Hutchison Essar SouthLtd. who also hold the license for same service inthe same service area i.e. Chennai.”

3. M/s Dishnet DSL Ltd:- “……..As per the


information available, there are five vigilancecases against the company with regard toprovision of Internet Service and DOT and imposedpenalties total amounting to about Rs. 2.27 crore.The company has not paid the penalties and filedcases in TDSAT.

………Before granting the UASL Licenses to Dishnet,we may await for the decision of TDSAT on theissue of vigilance cases and penalties imposed byDOT on this company”

Dr. J.S. Sarma, Additional Secretary submitted hisnote dated 30.11.2004 to Secretary, DOT. On thisSh. Nripendra Misra, Secretary directed me to putup the legal status on the comments of AdditionalSecretary (T). I would like to mention that with thecomments of AS (T) Dr. J.S. Sarma, the process ofgrant of UASL to Dishnet DSL for UP (E) and UP(W) and extension of LOI for MP was furtherhampered for uncalled grounds. However being thecomments of the Sr. Officer I could not raise myobservations. Dr. J.S. Sarma, Additional Secretarywas relieved, hereafter, and repatriated to StateCadre.”

Regarding the case of Essar Spacetel (D-44)

230. This issue was dealt with in file D-44. PW 8 Sh. P. K.

Mittal has narrated the events in this file in his statements

dated 28.05.2012 and 30.05.2012. Amongst other things, he

has stated on page 2 of his statement dated 30.05.2012 as

under:

“.....................................................................................................................................................................Sh. B. Sivaramakrishanan, Member (P) sought anappointment with Secretary (T) for discussion andthe appointment was received for 22.07.2005 at05:30 PM. Accordingly, a discussion took place inthe chamber of Dr. J.S. Sarma, Secretary (T) on


22.07.2005 which was attended by Sh. B.Sivaramakrishnan, Member (P), Sh. R.N.Prabhakar, Advisor (P) and myself. In the saidmeeting, Dr. J.S. Sarma, Secretary (T) desired tohave the details of all show cause notices/advisoryletters issued to sister concerns of applicantcompany and nature of default.On being asked I state that it was already on recordthat the sister concern of the applicant company wasin default for SLD and its network was used for greymarket telephony by its subscriber.However, in view of direction given by Dr. J.S.Sarma, Secretary (T) in the meeting held on22.07.2005, I requested DDG (VAS) to indicate allshow cause notices/advisory letters issued to sisterconcern of the applicant company. In this way theapplication for UASL of M/s Essar Spacetel Pvt. Ltd.was linked to violations by its sister concerns inanother licenses, before granting LOI for the license.….......................................................................................................................................”

231. He further states in his statement dated 16.07.2012

at page 2 as under:

“.....................................................................................................................................................................On being asked I state that the guidelines did notprovide for linking of any show cause notice oradvisory issued to the applicant company or itssister concern or its associates from the process ofgranting any further UASL in other services areas orprocessing any request such as change of name ofthat company. Accordingly this was never linked upfrom the process of processing the application forgrant of UASL for any other licence such as CMTS,Basic, NLD, ILD etc.…....................................................................................................................................”

232. It is the case of the prosecution that the queries


were raised in the case of Spacetel by the Minister so as to

sound to be even handed in all cases. However, the case of

Dishnet DSL is entirely different as it was being questioned on

several counts while allegations against Essar Spacetel related

only to involvement in grey market. Moreover, there is no harm

in putting such a defaulting licencee to higher scrutiny when it

asks for further licence.

233. Perusal of the aforesaid material reveals that the

cases of Bharti Cellular and Reliance Infocom also do not serve

the cause of the prosecution as both of them were query-free

files, whereas the case of the Dishnet DSL was under question

from the very beginning particularly regarding its financial

capacity to undertake the telecom projects.

234. Sh. P. K. Mittal himself admits in his statement as

extracted above dated 21.02.2012, that if at any stage any

shortcomings are noticed in the proposal the same were to be

highlighted and got rectified. He further states that without

rectification of deficiencies, the proposal for issuance of licence

cannot be approved. Contrary to this, the business plan of

Dishnet DSL was not examined but it was left at the sweet will

of the company. The company has to explain its business plan

and financial worth to the Licensor and it must feel satisfied

about the financial capacity of the company to undertake the

projects. But these factors were not properly examined in the

case of Dishnet DSL as noted above, in the very beginning itself

in file D-38 and thereafter also.

235. As far as the case of notices, advisory letters issued

to sister concerns are concerned, the same are also required to


be examined, otherwise what is the use of asking their details in

the application proforma. These issues may not receive deeper

legal consideration but at least the proposal of the company

must receive some serious scrutiny as to its capacity to

undertake the telecom projects. Granting fresh licences to an

existing licencee, who is a defaulter in some respects, may dent

the image of the Licensor in the public eyes. The illegalities

committed by the sister concerns of the applicant company

cannot be totally ignored, though they may not warrant refusal

of licence to the company. Totally ignoring them may bring bad

name to the DoT. Those violations are detailed below.

Sale of ISP licence without permission of DoT: Conduct of the

Minister

236. Furthermore, as per file D-29, Dishnet Wireless

Limited was an ISP licencee with service area all India. It sold

its ISP licence to Videsh Sanchar Nigam Limited without

seeking prior permission from the DoT and this amounted to a

substantive violation.

237. This shows Dishnet Wireless Limited in very poor

light.

238. Furthermore, a proposal was put by the department

on 01.02.2005 at 3/N (D-29) narrating the facts to show cause

the company. The two companies, that is, Dishnet Wireless

Limited and M/s Track Online Net India (P) Limited had sold

their broadband business to Videsh Sanchar Nigam Limited,

another ISP licencee, without permission of the DoT and this

amounts to violation of licence agreements. Accordingly, a


proposal was put up in para 3 as under:

“In view of the above, it is proposed to issue showcause termination notice to Dishnet WirelessLimited, Track Online India (P) Limited and M/sVidesh Sanchal Nigam Limited for default underclause 10.1 of Schedule C part II of ISP licenceagreement for violation of clause 10 (as amended) ofthe licence agreement as per the drafts placedbelow.”

239. This proposal was initiated on 01.02.2005 and

reached the Minister Sh. Dayanidhi Maran on 10.02.2005. On

10.02.2005 itself he recorded “Pls discuss”. Thereafter, the

matter was discussed and was approved by the Minister on

24.03.2005 and the file was marked to the Secretary on the

same day. This shows that the Minister was not very active in

clearing the file as he sat on this file also for 42 days, even when

action was to be taken against the company.

A show cause notice was issued to the company finally on

10.06.2005. This shows that the department was not very

efficient either in granting licence or in taking action for

violation of licence.

240. Again on receipt of reply from Dishnet and VSNL

and the same were considered by the department for a long

time and finally on 17.01.2006, a note was put up by DDG (LR)

that the explanation given by the companies may be accepted

and the show cause notices may be withdrawn. This was agreed

to by all officials including the Secretary on 26.01.2006 and the

file was marked to the Minister Sh. Dayanidhi Maran. However,

the file was returned on 14.05.2006 with the remarks “MOC&IT

could not see”.


241. Again this shows that the Minister was not very

keen in performing his duties as he sat on this file for about

four months. The file was again processed and was marked to

the Minister on 15.06.2006 at 23/N (D-29). It was finally

approved by the Minister on 05.07.2006, that is, the Minister

again sat on the file for 20 days.

Allegations against the company of involvement in grey market

242. In file D-63, at 4/c, Minister Sh. Dayanidhi Maran

had approved a policy for taking action against ISP indulging in

grey market activities on 14.07.2004.

243. In this regard, at page 69/C (D-2), there is a list of

defaults committed by Dishnet. Six cases of misuse of internet

lease line were reported against the company during the period

March 2002 to May 2004 and a show cause notice for

imposition of penalty of Rs. 2,36,88,522/- was issued to the

company. Then there was allegation of sale of broadband ISP

business by it to VSNL. Then, 26 cases were reported against it

for misuse of their internet lease line.

244. Proceedings were started against the company for

termination of its ISP licences and imposition of penalty. The

recovery of loss from the company was approved by the

Minister on 20.08.2004 at 20/N (D-28).

However, later on an opportunity of hearing was decided

to be given to the company and a show cause notice was

required to be issued before imposing the penalty. The show

cause notice was approved by Sh. Dayanidhi Maran on

17.12.2004 at 22/N (D-28). This shows the company in very


poor light. A government department cannot and should not sit

idle taking recourse to strict legal interpretations when a

defaulter of one licence, applies for another one. It must at least

put it to higher scrutiny or else take steps to amend the

guidelines to prevent such defaulter from securing further

licences.

Change of partner without permission of DoT

245. Even otherwise, earlier also the company Aircel

Limited came under adverse notice in 2000 also when it sought

approval for change of equity consequent to replacement of

10% equity partner M/s Century Telephone Enterprises Inc.,

USA, foreign partner, by another foreign partner namely

Cellunet India Limited, Mauritius. This was done without prior

approval of DoT and the then deputy Legal Advisor Sh. V. K.

Bhatia, recorded at 6/N (D-40), inter alia, as under, in para 6:

“6. It is intriguing that while condition 10 of thelicencee agreement stipulates prior written consentof the licensor for any change in the composition ofthe licence, in this case, as per the papers madeavailable to legal cell, the licencee is approachingthe licensor after having got the necessaryagreement. Prima-facie, the condition of the licenceagreement appears to have been not complied withby the licence.”

246. Though subsequently this was allowed by recording

that let the company avail some flexibility allowed by the

Cabinet in its meeting held on 08.08.2000 without giving any

valid reason.

247. In view of the above discussion as well as the


detailed facts recorded and extracted above, almost all of which

are self explanatory, I am satisfied that the questions put by the

Minister can, by no stretch of imagination, be called frivolous.

More so, when the applicant company's credentials suffer from

various deficiencies.

**********

VIII.Delay in grant of approval to (a) change of namefrom RPG Cellular Services Limited to AircelCellular Limited; (b) to approve the purchase of20.76% shareholding of foreign partner namelyM/s Siva Cellular Holdings Limited in AircelTeleventures Limited by Aircel Televentures Limitedto make it 100% Indian company; (c) taking onrecord the name change from Srinivas

Computers Limited to Aircel TeleventuresLimited (D-30).

&II. Delay in Approval for change in equity of Aircel

Limited and taking on record name change ofSrinivas Computers Limited in Tamil Nadu servicearea (D- 40)


Advocate/ Spl. PP, that Aircel Cellular Limited was having a

telecom licence for Chennai service area and Aircel Limited was

having a licence for Tamil Nadu service area. It is submitted

that Aircel Cellular Limited applied for change of name from

RPG Cellular Services Limited to Aircel Cellular Limited and for

approval for purchase of 20.76% shareholding of Aircel Cellular

Limited by Aircel Televentures Limited, formerly Srinivas

Computers Limited, from Siva Cellular Holding Limited,

Mauritius, formerly Airtouch International Limited, Mauritius,


and also for taking on record change of name from Srinivas

Computers Limited to Aircel Televentures Limited in Chennai

service area. The officials recommended the same unanimously

but Sh. Dayanidhi Maran did not approve the same by putting

frivolous questions. It is further submitted that Aircel Limited

applied for approval of change in the equity structure on sale of

its shares held by Aircel Televentures Limited to Aircel Digilink

Limited and also for change of name of Srinivas Computers

Limited to Aircel Limited in Tamil Nadu service area, but the

same was also not approved by Sh. Dayanidhi Maran by putting

frivolous questions. My attention has been invited to the

questions put by the Minister to emphasize that there is no

merit in those questions. My attention has been invited to the

various note sheets in the file as well as statements of witnesses

to emphasize that the questions were meaningless, out of

context and totally frivolous, showing dishonest intention of Sh.

Dayanidhi Maran

249. On the other hand, learned Sr. Advocates for the

defence have submitted that the questions put by the Minister

were quite relevant, to the point and necessitated by the facts

on the file. It is their case that the questions were needed to be

asked and the Minister asked them rightly.

250. These issues pertain to Chennai and Tamil Nadu

service areas.

251. Both shall be discussed together as the approval for

change in equity structure consequent to sale/ transfer of

shares of Aircel Limited and Aircel Cellular Limited to Aircel

Digilink Limited is common in both the service areas.


Issues relating to Chennai service area (D-30)

252. The issues relating to Chennai service area, are as

follows:

(a) change of name from RPG Cellular Services Limited to

Aircel Cellular Limited;

(b) to approve the purchase of 20.76% shareholding of foreign

partner namely M/s Siva Cellular Holdings Limited in Aircel

Limited by Aircel Televentures Limited to make it 100% Indian

company; and

(c) taking on record the name change from Srinivas Computers

Limited to Aircel Televentures Limited.

253. These issues were dealt with in file D-30.

254. The licence for CMTS in Chennai service area was

signed by RPG Cellular Services Limited on 30.11.1994.

255. Subsequently, in 2004, Srinivas Computers Limited

purchased 68.84% equity shares from from RPG Cellular

Investment Holding (P) Limited and 10.40% equity from

Cellfone Limited, Mauritius, thus acquiring 79.24% of the

equity of the licencee company. The remaining equity of

20.76% was held by Airtouch International, Mauritius.

The sale of 68.84% shares held by RPG Cellular

Investment Holding (P) Limited and 10.40% shares held by

Cellfone Limited, Mauritius, in RPG Cellular Services Limited

to Srinivas Computers Limited was approved by DoT on

18.12.2003, 11/N (D-30).

256. Thus, in the eyes of DoT, the licencee company

formally came under the control of Sh. C. Sivasankaran on


18.12.2003.

257. Vide letter dated 26.02.2004, 16/c (D-30), Aircel

Cellular Limited informed DoT that the name of the company

RPG Cellular Services Limited had been changed to Aircel

Cellular Limited, effective from 23.01.2004, and prayed that it

may be taken on record. This letter was processed at 12/N (D-

30) and a note sheet dated 12.03.2004 was recorded by Sh. S.

C. Chaudhary, ADG (VAS-I), in the following terms:

“PUC (16/C) is a letter dated 3.3.04 for change inthe name of the licensee company for CMTSChennai Metro Service Area from M/s RPG CellularServices Limited to Aircel Cellular Limited.

2. The company in its letter has stated that nameof the company has been changed from M/s RPGCellular Services Limited to Aircel Cellular Limitedand have requested to take this on record. Thelicensee has enclosed the copy of amended FreshCertificate of Incorporation consequent to thechange of name.

3. The above change of name of the company isto be taken on record by carrying out suitablemodifications to this effect in the LicenseAgreement.

4. Legal Advisor in the case of change of name ofa company had opined that the change of name forthe company can be equated with the name of anatural person and once notified the new namecontinues. After change of name, the old entitycontinues and enters into the new name. Thecontinuity of the same entity permits all rights,privileges and liabilities (extract from file no. 311-58/95-VAS is placed at 17/C).

5. It may please be noted that in case of changeof name all the BGs against the said License also


need to be amended with the new name.

6. We may not have any objection to the changein name of the company from M/s RPG CellularServices Limited to Aircel Cellular Limited in viewof earlier legal advise subject to the condition thatthe company shall provide modified BankGuarantees / Fresh Bank Guarantees in lieu of oldBGs for the said License.

7. Accordingly a draft letter is put up forapproval please. (18/C).

DFA please.”

258. It was agreed to by various officers in the hierarchy

and was formally approved by the Secretary (T) on 17.03.2004,

12/N, and the DoT informed the company about it vide letter

dated 19.03.2004, 18/c, asking it to comply with the necessary

formalities like furnishing of amended bank guarantees etc.

259. In response to this letter, the company vide letter

dated 22.06.2004, 24/c, wrote to the DoT that it has complied

with the necessary formalities regarding furnishing of fresh

bank guarantees etc., incorporating the new/ changed name.

Accordingly, a formal amendment in the licence agreement

dated 20.10.1995 was required to be issued by the DoT.

260. Thereafter, Aircel Televentures Limited wrote

letters dated 21.06.2004 and 22.06.2004, 25/c & 26/c, to DoT

informing it that name of Srinivas Computers Limited has been

changed to Aircel Televentures Limited w.e.f 28.04.2004. It

was also intimated that Aircel Televentures Limited hold 100%

of Aircel Limited, operating CMTS licence in Tamil Nadu

service area and it also holds 79.24% in Aircel Cellular Limited,

holding licence in Chennai metro service area. It was requested


to take the changed name on record. Both service areas, that is,

Tamil Nadu and Chennai metro, are mentioned.

261. Further, vide letter dated 21.06.2004, 27/c, Aircel

Cellular Limited also informed the DoT that 20.76% of its

shares were held by Siva Cellular Holdings Limited (SCHL),

formerly Airtouch International (Mauritius) Limited have now

been purchased by ATVL and it now held 100% equity share

capital of ACL. It requested DoT to take it on record.

262. Furthermore, vide letter dated 28.06.2004, 28/c,

Aircel Cellular Limited informed DoT that at present Aircel

Televentures Limited holds its 100% shareholding. It further

informed that Aircel Televentures Limited (ATVL) wishes to

transfer its 100% equity to Aircel Digilink Limited (ADIL). For

this it sought the approval of DoT.

263. These four issues were processed in D-30 at 13/N in

the note sheet recorded by Sh. P. V. S. R. C. Murthy, AD (VAS-

III) on 08.07.2004 to the following effect:

“Subject: (i) Change of name of M/s RPG Cellular Services Limited to Aircel

Cellular Limited(ii) Change of name of M/s Srinivas

Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited

(iii) Change in equity structure of M/s Aircel Cellular Limited

PUC-I at P.24/C is a letter from M/s AircelCellular Limited requesting issue of formalamendment to Licence Agreement No. 842-23/93-TM dated 20.10.1995 for Chennai Metro ServiceArea, incorporating changed name. The company


has confirmed that it has furnished BankGuarantees in accordance with DOT letter dated 18th

March 2004 (P.18/C). Earlier, change of name ofM/s RPG Cellular Services Limited to M/s AircelCellular Limited was permitted vide P.18/C subjectto furnishing of fresh Bank Guarantees in thechanged name i.e. M/s Aircel Cellular Limited.

2. Since the company has complied therequirement as conveyed to it vide P.18/C, a formalamendment to Licence Agreement No. 842-23/93-TM dated 20.10.1995 for Chennai Metro ServiceArea, incorporating changed name i.e. M/s AircelCellular Limited is required to be issued.Accordingly, a draft amendment order is put upbelow at P.30/C for consideration please.

3. PUC-II & III at P.25/C & P.26/C are lettersfrom M/s Aircel Televentures Limited (promoters ofM/s Aircel Cellular Limited formerly RPG CellularServices Limited & M/s Aircel Limited) informingchange of its name from M/s Srinivas ComputersLimited. The company has enclosed resolution of itsBoard and fresh certificate of incorporation fromRegistrar of Companies.

4. As per our records, the equity structure of M/sAircel Cellular Limited is as follows:

Shareholders'Name

Indian/Foreign

No. of sharesheld

Total paid-up capital

% holding

SrinivasComputers Ltd

Indian 79.24%

AirtouchInternational

(Mauritius) Ltd.

Foreign 20.76%

Total 49,000,000 490,000,000

100%

5. In view of the above, we may take on recordthe changed name as conveyed by M/s AircelTeleventures Limited since this a case of change ofname of a promoter. With this change, the revised


equity structure of M/s Aircell Cellular Limited willbe as below:

Shareholders'Name

Indian/Foreign

No. of sharesheld


% holding

AircelTeleventures Ltd

Indian 79.24%

AirtouchInternational

(Mauritius) Ltd.

Foreign 20.76%

Total 49,000,000 490,000,000

100%

6. PUC-IV at P.27/C is a letter from M/s AircelCellular Limited informing purchase of its 20.76%shares by Aircel Televentures Limited from M/s SivaCellular Holdings Limited [formerly AirtouchInternational (Mauritius) Limited]. Since, thistransfer of shares is from a foreign promoter to anIndian promoter, the company has enclosed theapproval of RBI for this transaction. The companyhas also enclosed the copy of Certificate ofIncorporation on change of Name of its foreignpromoter from Airtouch International (Mauritius)Limited to Siva Cellular Holdings Limited. With thistransaction the revised equity structure of thecompany M/s Aircel Celular Ltd would be as below:

Shareholder'sName

Indian/Foreign

No. of sharesheld


%holding

Aircel TeleventuresLimited (ATVL)

Indian 49,000,000 490,000,000

100%

7. PUC-V at P.28/C is a letter from M/s AircelCellular Limited, who is holding a CMTS Licence inChennai Metro Telecom Circle Service Area, seekingapproval for change in equity structure consequentupon sale/ transfer of shares to M/s Aircel DigilinkIndia Limited (ADIL).…....................................................................................................................................................................10. Equity structure after proposed sale/ transferof shares as intimated by the company M/s Aircel


Cellular Limited will be as below:

Shareholders'Name

Indian/Foreign

No. of sharesheld


% holding

Aircel DigilinkIndia Limited

(ADIL)

Indian 490,000,000

490,000,000

100%

(from pre-page)…....................................................................................................................................................................12. In Chennai Metro service area, the otherCMTS/ UAS licensees are:

Sl. No. Licensee Company Type of Licenses

1. Hutchison Essar South Ltd. CMTS

2. Bharat Sanchar Nigam Ltd. CMTS

3. Bharti Cellular Ltd. UASL

4. Reliance Infocomm Ltd. UASL

5. Tata Teleservices Limited UASL

12.1 Shareholding patterns of these Licensees areplaced at P.31/C to P.35/C

12.2 The present equity structure of ADIL is asbelow:

Shareholders'Name

Indian/Foreign

No. ofshares

Paid-upEquity

Capital (Rs.)

%Holdin

g

HutchisonTelecom East

Limited

Indian 10,10,89,995 101,08,99,950 99.99

Sandip Das &Hutchison

Telecom EastLimited

Indian 1 10 -

SankaraNarayanan &

HutchisonTelecom East

Limited

Indian 1 10 -


Rajiv Sawhney &Hutchison

Telecom EastLimited

Indian 1 10 -

Neha Sharma &Hutchison

Telecom EastLimited

Indian 1 10 -

Sundeep Kathuria& Hutchison East

Limited

Indian 1 10 -

Swisscom Foreign 1 10 -

TOTAL 10,11,00,000

101,10,00,000

100.00

12.3. From the above and P.31/C to P.35/C, it isobserved that though M/s Hutchison Essar SouthLtd. (HESL), which is an associate company of M/sAircel Digilink India Limited, is already operating inChennai Metro Service Area, there is no commonshare holder having 10% or more equity in HESL &ADIL and any other company in the same servicearea.

13. PUC-VI at P.29/C is a letter dated 30th June2004 from M/s Aircel Digilink India Limitedconfirming no dues payable by ADIL to DOTtowards license fees and WPC fees for Haryana,Rajasthan and UP (East) service areas. However, wemay confirm the same from LF Cell.

14. In view of the above, from the licensing pointof view as per the present policy, the proposal fortransfer of 100% equity of ATVL to ADIL seems to bein order. However, comments of BS Cell, PIP Celland LF Cell may please be sought in the matterbefore processing the case further.


264. The arrangement of the issues in the note speaks for

itself. The issue of transfer of equity, which is the most serious


issue, has been listed in the last. Similarly, the issue of purchase

of 20.76% shares from Siva Cellular Holding Limited, which is

also a bit controversial has been listed in the middle. It appears

that this arrangement has been done so that the serious issues

escape the scrutiny/ attention of senior officers/ Minister.

265. Thereafter, the file was marked upward and

everybody agreed with the four proposals upto the level of DDG

(LF).

266. However, Sr. DDG vide note dated 28.07.2004

asked for a consolidated note to be put up before the competent

authority. Accordingly on 29.07.2004, Sh. A. S. Verma,

Director (VAS-II), put up a consolidated note at 19/N

recommending the proposal to the following effect:


Cellular Limited.(ii) Change of name of M/s Srinivas

Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited


The case of change of name of M/s RPGCellular Services Limited to Aircel Cellular Limited,Change of name of M/s Srinivas Computers Limited(promoters of M/s RPG Cellular Services Limited &M/s Aircel Limited) to Aircel Televentures Limitedand Change in equity structure of M/s AircelCellular Limited has been examined by VAS Cell,PIP Cell, BS Cell and LF Cell. Notes at 13/Nonwards may kindly be seen. There appears to be noproblem with the proposed transaction of equity.Also, as per noting of LF Cell, there is no any


outstanding dues against the company.

2. Equity structure after proposed sale/ transferof shares as intimated by the company will be asbelow.

Shareholders'Name

Indian/Foreign

No. of sharesheld


% holding


(ADIL)

Indian 490,000,000

490,000,000

100%

3. In view of the notings from 13/N, the case issubmitted for approval of(i) Amendment to the Licence Agreement No.

842-23/93-TM dated 20.10.1995 for Chennai Metro Service Area, incorporating changed name i.e. M/s Aircel Cellular Limited as per draft amendment order at P.30/C;

(ii) To take on record the changed name of M/s Srinivas Computers Limited (promoters of

M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited;

(iii) The proposed change of equity structure as indicated in para 2 above.


267. It may be noted that here the issue of purchase of

20.76% shares by Aircel Televentures Limited is missing.

268. This proposal was agreed to by Sr. DDG (VAS) and

Member (P) and the file was marked to Secretary (T) on

03.08.2004.

269. However, on 06.08.2004 it was recorded by Sr.

DDG (VAS) that matter was discussed with Secretary (T) on

05.08.2004 where DDG (BS) was also present. He called for

further equity structure of the various units involved and

marked the file to Director (VAS-II). Thereafter, certain


clarifications were sought from the company.

270. Thereafter, a note was put up on 23.08.2004, page

20/N, by Sh. A. S. Verma, Director (VAS-II), recommending

change of name of RPG Cellular Services Limited to Aircel

Celluar Service Limited and change of name of Srinivas

Computers Limited to Aircel Televenture Limited but

questioning the change in the equity structure of Aircel Cellular

Limited as it would violate substantial equity clause. The note is

to the following effect:


Cellular Limited.(ii) Change of name of M/s Srinivas

Computers Limited (promoters of M/s RPG Cellular Services Limited& M/s Aircel Limited) to Aircel Televentures Limited


The case of change of name of M/s RPGCellular Services Limited to Aircel Cellular Limitedwas approved by Chairman (TC) on 17.03.2004subject to the condition that the company shallprovide modified/ fresh Bank Guarantees in lieu ofold BGs for the said Licence. Notings in this regardat 12/N may please be seen. The company hasfulfilled the above condition and therefore it isproposed to issue formal amendment to LicenceAgreement incorporating the changed name (AircelCellular Limited in place of RPG Cellular ServicesLtd.). Accordingly, a draft amendment (P.30/C) maykindly be approved.

2. Change of name of M/s Srinivas ComputersLimited (promoters of M/s RPG Cellular ServicesLimited & M/s Aircel Limited) to Aircel


Televentures Limited is a case of name change of apromoter of the Licensee company. The requiredcertificate from Registrar of Companies indicatingthe changed name has been furnished by thecompany. We have to take this on our record againstthe Licensee Company's promoter(s). Approval mayplease be given to take on record the above statedchanged name.

3. Change in equity structure of M/s AircelCellular Limited has been re-examined in the lightof discussions of Sr. DDG (VAS), DDG (BS) andSecretary (T) on 5 th August 2004 after obtaining theequity structure of various companies involved. Theequity structure of various companies involved wascalled for vide letter at P.37/C. The same has beensupplied by these companies and are placed belowat P.39/C to P.42/C. From the perusal of the equitystructure of these companies, it has been observedthat there is no common shareholding having 10%or more equity in HESL & ADIL and any othercompany in the same service area if we look at theequity structure of the licensee companies.However, on further scrutiny of the equity structureof the promoter(s) of the Licensee Company, it hasbeen observed that there are substantial stakes ofM/s Essar Teleholdings Limited in the companiesM/s Hutchison Telecom East Limited (33.52%) andM/s Hutchison Essar Telecom Limited (49.03%).M/s Hutchison Telecom East Limited is a promoterof M/s Aircel Digilink India Limited, which is theproposed buyer of 100% stakes of Aircel CellularLimited, having 99.99% stake. M/s Hutchison EssarTelecom Limited is a promoter of M/s HutchisonEssar South Limited, one of the Licensee in ChennaiMetro Service area, having 50.815% stake.

4. In view of the above, the case needs to beexamined specifically from the angle of companylaws and the CMTS licence agreement clause 1.4 (ii)wherein it has been mentioned that “No singlecompany/ legal person, either directly or through


its associates, shall have substantial equity holdingin more than one licensee company in the sameservice area for the same service. 'Substantialequity' herein will mean an 'an equity of 10% ormore'. A promoter company cannot have stakes inmore than one licensee company for the sameservice area.(from pre-page)

5. Comments of PIP Cell is required in the abovematter (para 4 above) indicating whether thepresent proposal of transfer of 100% equity of M/sAircel Cellular Limited from M/s AircelTeleventures Limited to M/s Aircel Digilink IndiaLimited is violative of condition 1.4(ii) of CMTSLicence Agreement?”

271. Thus, the Secretary (T) Sh. Nripendra Mishra

thwarted the illegal sale of Aircel Cellular Limited to ADIL.

272. Thereafter, on 27.08.2004 Sh. N. P. Singh, Director

(IP) recorded the following note on 22/N & 23/N:

“Kindly refer to note from page 19/N ante.

VAS cell has referred this file for comments ofPIP Cell in respect of para 4 of their note on page20/N indicating whether the present proposal oftransfer of 100% equity of M/s Aircel CellularLimited from M/s Aircel Televentures Limited toM/s Aircel Digilink India Ltd. is violative ofcondition 1.4 (ii) of CMTS License Agreement.

On perusal of equity structure of AircelCellular Ltd and M/s Hutchison Essar South Ltd.,(details placed at Flag 'X' and Flag 'Y' respectively),both holding licence for operating cellular mobiletelephone service in Chennai, it is seen that thesecompanies have common promoter/ ultimatebeneficiary having more than 10% equity holding inboth the licensee companies. M/s Hutchison


Telecom Hong Kong through its various direct andindirect subsidiaries like Asian TelecommunicationInvestment (Mauritius) Ltd, Al-Amin (Mauritius),Mobilvest (Mauritius), Prime Metal (Mauritius),Euro-Pacific (Mauritius) etc. is holding over 55% inboth the companies, with complex equitystructuring but ensuring that FDI policy is notviolated. Similarly, Essar Group through EssarTeleholding and Essar Shipping is also holding morethan 10% equity in both the companies. In additionto these two groups, Kotak Mahindra is also havingtheir interest in both the companies, though therepro-rata share capital may be less than 10%.

The relevant clause 1.4(ii) of CMTS LicenseAgreement is reproduced as under:-

“No single company/legal person,either directly or through its associates, shallhave substantial equity holding in more than one

Licensee Company in the same service areafor the same service. 'Substantial equity' hereinwill mean 'an equity of 10% or more'. A promoter

company cannot have stakes in more thanone Licensee Company for the same service area”.

The aforesaid clause was introduced with anobjective to ensure that competition is maintainedfor the ultimate benefit of the consumers of theservice and initially when only two licensees weregranted for providing CMTS in a service area.Subsequently, after NTP 99, BSNL was allowed toprovide CMTS service and fourth license was alsoissued (to M/s Hutchison Essar South Ltd) forChennai. In addition to the above, RelianceInfocomm and Tata Teleservices have also beengranted Unified Access Service License. Therefore,at present there are in total six licensee companieswho can provide mobile telephone service inChennai service area.

DoT has also issued guidelines for merger oflicenses in a service area with inter-alia permits


merger of licenses subject to condition that there areatleast three operators in that service area for thatservice consequent upon such mergers. UASL is alsocounted for cellular services while deciding thenumber of operators in a given service area.

From the above, it may kindly be seen that sofar as clause 1.4 (ii) of the License Agreement isconcerned, there is a violation as both the promotersi.e. Hutchison Telecom, Hong Kong and EssarGroup directly or through associates (subsidiaries)have more than 10% equity in both Aircel CellularLtd and Hutchison Essar South Ltd, both holdingCMTS license for Chennai. However, keeping inview of the latest prevailing guidelines, whichensures competition with the presence of at leastthree operators in a service area for a service, theproposal could be considered provided that thepromoters of both the companies give anundertaking that both the entities i.e. Aircel CellularLtd. and Hutchison Essar South Ltd. would bemerged after following due procedures under theCompanies Act in a reasonable time frame.

Perhaps there is a need to amend clause 1.4 (ii)of the License Agreement in line with the presentpolicy of the government on ensuring competition (aminimum of three operators in a service area for aservice) as allowed under the guidelines of merger oflicenses.

Submitted pl.”

273. The file was marked to Sh. R. N. Prabhakar, Sr.

DDG (VAS). Sr. DDG (VAS) recorded the following note on

27.08.2004, 24/N-25/N (D-30):

“Reference notes at prep-pages:(a) The case of change of name of M/s RPG

Cellular Service Limited to Aircel Cellular Limited was approved by Secretary (T) on 17.03.2004 (12/N) subject to the condition


that the company shall provide modified/fresh Bank Guarantees in lieu of old BGs for the said

Licence. The company furnished themodified/ fresh Bank Guarantees on 02.04.2004 inlieu of old BGs for the said Licence and informed

this cell on 22.06.2004 (24/C). A formal amendment to Licence agreementincorporating the changed name is required tobe issued as per draft amendment (P.30/C). The same may please be approved.

(b) Change of name of M/s Srinivas Computers Limited, one of the promoter(s) of M/s Aircel Cellular Limited, to M/s Aircel Televentures Limited, which is to be taken on record as the same has been approved by the Registrar of Companies on 28.04.2004 as per fresh certificate of incorporation issued by him (25/C Annexure II). This may also be approved.

(c) M/s Srinivas Computers Limited, Chennaihave purchased 20.76% (total) shareholding of

foreign partner M/s Siva Cellular HoldingsLtd. [Formerly Airtouch Internal (Mauritius) Ltd.]

with the approval of Reserve Bank of India issued on 07.04.2004 (27/C Annexure I). The company has also enclosed the copy of Certificate of Incorporation of change of Nameof its foreign promoter from Airtouch International (Mauritius) Limited to Siva Cellular Holdings Limited. With this transaction the revised equity structure of the company M/s Aircell Cellular Ltd. would be as below:

ShareholdersName

Indian/Foreign

No. of sharesheld


% holding


AircelTeleventures

Limited (ATVL)[Formerly M/s

SrinivasComputers

Limited {(b)above}]

Indian 490,000,000

490,000,000

100%

As per licence conditions [43/C para (viii)], the company is supposed to take prior approval of Licensor whenever any existing partner acquires foreign partner's shareholding. While the company has informed the licensor on 21.06.2004 (27/C) and have requested to take a note of it. As the company has taken RBI approval and afterpurchase of foreign share holding, 100% holding will be with Aircel Televentures Ltd. (formerly M/s Srinivas Computers Limited), we may approve the above transaction with a warning to the company that they must follow the terms and conditions of licence agreement.accordingly, draft letter placed at 44/C may please be approved.

(d) Aircel Cellular Limited (formerly RPG CellularServices Ltd.) have applied for subsequent change of equity structure on proposed acquisition of 100% stakes of the company from M/s Aircel Televentures Limited (ATVL) by M/s Aircel Digilink India Limited (28/C dated 28.06.2004). This has been examined indetail with respect to clause 9 of amendment at 43/C relating to equity in more than one licensee company in the same service area for same service. It has been observed that there

is a substantial stake of one its promoters namely, “Essar Teleholdings Limited” in M/s Hutchison Essar South Limited (49.03%) and M/s Aircel Digilink India Limited (33.52%). DDG (PIP) have examined it from the foreign holding aspect also (22/N & 23/N) and have stated that there is a violation of licence


conditions.

Thus, the proposed acquisition of equity by M/s Aircel Digilink India Limited would be violative of clause 9 of amendment of the licence agreement (43/C) relating to equity in more than one licensee company in the same service area for same service. Therefore, the change of equity structure of Aircel Cellular Limited from Aircel Televentures Ltd. to AircelDigilink India Ltd. cannot be permitted. Accordingly a reply to M/s Aircel Cellular Limited intimating that their request of

change of equity structure cannot be acceded tois proposed to be sent as per draft placed below

at 45/C.

(Full details of the case are at 13/N onwards)”

274. Here again, the issue of purchase of 20.76% shares

by Aircel Televentures Limited was introduced and it was

recorded by the Sr. DDG that it was done without approval of

DoT and a warning be given to the company.

275. After recording the note, the file was marked to

Member (P) who recorded the note dated 31.08.2004 at 26/N

to the following effect:

“Ref. Notes on pre-pages.

2. The equity structure of M/s Hutchison EssarSouth Limited is at 41/c. This is one of the cellularcompanies operating in Chennai metro service area.

3. The equity structure of M/s Aircel DigilinkIndia Limited is at 42/c and the company hassought permission for acquiring 100% stake of M/sAircel Cellular Limited from its promoter M/s AircelTeleventures Limited. M/s Aircel Cellular Limited isanother cellular operator for Chennai metro service


area.

4. From the holdings of M/s Hutchison EssarSouth Limited and M/s Aircel Cellular Limited, it isnoticeable that M/s Essar Teleholdings Limited has49.03% holdings in M/s Hutchison Essar TelecomLimited which would make it to 25% of weightedholding in M/s Hutchison Essar South Limited and33.52% holdings in M/s Aircel Cellular Limited.

5. Therefore, it is not possible to support thecurrent proposal for change of equity structure, as itwill amount to violation Clause 9 of amendment ofthe licence agreement as 'indicated in the note at25/N.

6. We may, hence, agree to all the suggestions ofthe VAS Wing given at 24/N and 25/N (a,b,c&d).”

Marking of the file to the Minister and return thereof

276. After recording the note the file was marked to

Secretary (T) on the same day.

Secretary (T) discussed the matter with Sr. DDG (VAS),

DDG (BS) and DDG (PIP) and on 06.09.2004 marked the file

to the Minister for approval of para 5 of the note of Member

(P).

277. It may be noted that Member (P) vide para 6 of his

note recommended four proposals as contained in the note of

Sr. DDG (VAS) at points a, b, c, and d, pages 24/N and 25/N.

However, the Secretary (T) discussed the matter with Member

(P), Sr. DDG (VAS), DDG (BS) and DDG (PIP) and

recommended only para 5 for approval to the Minister. The

para 5 pertains to rejection of proposal for change in equity

structure of Aircel Cellular Limited. The Secretary did not


recommend three other proposals.

278. However, vide order dated 15.09.2004 (49/c), the

file was returned from the office of Minister as per direction of

the Minister recorded by Sh. K. Sanjay Murthy in D-40 at 35/N,

which reads as under:


There are many inter-related issues betweenmergers & acquisitions, licensing, FDI and FIIinvestment in holding companies and their sisterconcerns. An overall view on issues arising in suchcases needs to be taken before a decision can betaken. All the inter-related issues mentioned abovepertaining to the case being dealt in the belowmentioned files be examined and a consolidatedNote submitted:-

(i) F. No. 842-21/2001-VAS (Vol. III)(ii) F. No. 842-325/2000-VAS(iii) F. No. 808-26/2003-VAS (Vol. I)(iv) F. No. 20-231/2003-BS-III


279. This fact was noted in the instant file at 26/N on

14.12.2004 and the file was marked to ADG (VAS-I).

280. Thereafter, ADG (VAS-I), recorded note dated

17.12.2004, 27/N, which reads as under:

“Reference notes on pre-page'A' The case for permitting change of name byamending licence agreement was put up forapproval and a draft letter for the same is placed at30/C.

The same may kindly be approved.'B' The case of change of equity structure was


examined and approval was sought and it wasproposed to intimate the company as per draft letterat 44/c. The same may also be kindly approved.'C' With regard to change of equity structureconsequent upon 100% acquisition by AircelDigilink India Ltd the case was examined in detailand it was recommended that it is in violations ofclause 9 of amendment dated 25.09.2001 of thelicence agreement, as such this change was not to bepermitted and accordingly the co. will be informedas per draft letter at 45/c. The same may kindly beapproved.


281. He marked the file to Director (VAS-II). Director

(VAS-II), recorded a note of the same date at 28/N, which reads

as under:

“Ref. notes at pre-pages:This file was put up for approval of proposals

contained in para marked 'A', 'B' & 'C' at 27/N. Thisfile alongwith other files were referred to AS(T) forexamination of inter-related issues regardingmerger and acquisition. The remarks of AS(T) isavailable at 49/C, wherein he has mentioned statusof this case and no further remarks has been given.

In view of the above, it is proposed thatproposals contained in para marked 'A', 'B' & 'C' at27/N alongwith draft letters at 30/c, 44/c and 45/cmay kindly be approved.


282. Thus, the file was again processed at 27/N and 28/N

taking note of the report of Additional Secretary (T) at 28/N.

283. On 11.01.2005, Sh. R. N. Prabhakar, Sr. DDG (VAS),

recorded the following note at 29/N:

“Subject: Change in name & Equity structure of M/sRPG Cellular Services Ltd., Chennai.


M/s RPG Cellular Services Ltd., a Cellular Mobilelicensee of Chennai Telecom Service area hadapplied for following changes in their cellular mobilelicense:

(a) Change of name of the company from M/sRPG Cellular Services Ltd. to Aircel Cellular Ltd.(16/C) and it was approved by the competentauthority on 17.3.2004 (12/N). The company wasinformed that your request for change of name hasbeen provisionally approved and kindly submitmodified Bank Guarantee / Fresh Guarantee. Finalamendment shall be issued on receipt of modifiedBank Guarantee (18/C). The company informed on22.6.04 that they have submitted the revised BankGuarantees on 5.4.2004 (24/C). Accordingly, thedraft amendment letter (30/C & para 'a' at 24/N)was put up for approval.

(b) Purchase of 20.76% shareholding of foreignpartners, M/s Siva Cellular Holdings Ltd. by M/sSrinivas Computers Ltd. The approval from ReserveBank of India has been given on 7.4.2004 (enclosurewith 27/C). With this purchase, the 100% shares ofM/s RPG Cellular Limited (name changed to AircelCellular Ltd.) get acquired by M/s SrinivasComputers Ltd. (Para 'C' at 24/N). The companyinformed this on 21.6.04 (27/C).

(c) Change of name of the promoter, M/s SrinivasComputers Limited to M/s Aircel Televentures Ltd.issued by the Registrar of Companies Tamilnadu,Chennai on 28.4.04 (enclosure with 25/c) (para “b”at 24/N) and company intimated for this change byletter dated 21/22.6.2004 (25/C & 26/C).

(d) The company have applied for transfer of100% equity structure from M/s Aircel TeleventuresLtd. to M/s Aircel Digilink India Ltd. (28/C & para'd' at 24/N).


The above cases were examined and proposal wasput up for accepting the proposals mentioned at (a)to (c) above and rejecting the proposal at (d) aboveas per details at P. 24/N and 25/N. In regard toproposal at 'b' above, it was felt that prior approvalof the licensor is required for any change in equitystructure of the company even after lock-in period offive years as per amendment letter no. 842-47/2000-VAS/Vol.IV dt. 29.1.2001 para (viii). Thecopy of the relevant amendment is placed at 43/C.However, in a similar case of M/s Escotel MobileCommunications Ltd. legal advice was sought and asper legal advice (copy at 51/C), no prior permissionis required for change in equity structure after thelock-in period of five years. As such the proposal at'b' above can be taken on record.

In regard to this whole case, certain information wasdesired by the PS to Hon'ble MOC&IT office and AS(T) was asked to examine these aspects (49/C). AS(T) has given its report and it is placed as enclosureto 49/C. In regard to this particular case, AS (T) hasgiven the brief details of the case in Item 2 and theseare as per details submitted by VAS Cell. No newissue has been stated by him. In view of this, thecase is put up again with the remarks that theproposals at 'a' to 'c' above can be taken on recordand accordingly draft letters at 30/C, 52/C are putup for approval. The proposal at 'd' above cannot beaccepted and accordingly draft letter placed at 53/cmay be approved.”

284. Thereafter, Member (P) recorded note dated

13.01.2005, 30/N, to the following effect:

“The case concerns four portions.

The first portion is regarding change of nameof the company from M/s. RPG Cellular ServicesLtd. to Aircel Cellular Ltd. This was agreed to by thecompetent authority and the draft amendment was


put up for approval as per (a) of P.29/N.

2. The second portion is regarding approval ofshare holding of foreign partners, i.e. purchase ofequity share holding of 20.76% of M/s. Siva Cellularholding Ltd. by M/s. Srinivas Computers Ltd. andthe same has already been approved by ReserveBank of India as cited at (b) of p.29/N. (In fact onlyinformation is required to be submitted to us as it isbeyond lock in period).

3. The third portion is regarding change of nameof the promoter M/s Srinivas Computers Ltd. toM/s. Aircel Televentures Ltd. issued by the Registrarof Companies which was intimated to us on22.6.2004 as per (c) of p.29/N.4. The fourth portion is regarding transfer of100% equity structure from M/s. Aircel TeleventuresLtd. to M/s. Aircel Digilink India Ltd. cited at (d) onp.29/N.

5. The proposal as regards 4 above had comeback from Hon'ble MOC&IT suggesting forreexamination of the same along with note atp.49/c. Subsequently it was seen that there are nospecific further inputs from AS(T).

6. As the things stand now, the proposals asitems 1,2,3 above are required to be approved byChairman (TC) as the same had not been accordedvide 24/N-26/N.

7. As regards our proposal of not supporting thechange of equity structure at item(4), the same hadbeen forwarded by Chairman(TC) to Hon'bleMOC&IT and this is, perhaps, required to beresubmitted to MOC&IT for final approval pl.”

285. After recording the note, the file was marked to

Secretary (T) who asked for confirmation and approval of para

6 and 7 of the note of Member (P) and marked the file to the


Minister on 14.01.2005.

286. However, the file was again returned from the office

of Minister vide order dated 03.03.2005 recorded by Sh. K.

Sanjay Murthy at 31/N, to the following effect:

“File Nos. 842-325/2000-VAS (D-40) and 842-21/2001-VAS (D-30) are returned as reports onmergers and acquisitions are awaited.”

287. It is the case of the prosecution that this note is

totally false as no report on merger and acquisition was

awaited. Sh. P. K. Mittal has also so stated in his statement.

However, vide order dated 15.09.2004 in D-40, Minister had

asked for a note of AS(T) on the issue mentioned in the note as

already extracted. However, this note was not directly and

independently sent to the Minister, but was sent as a part of

other voluminous record. In such a situation, there is every

possibility of the note escaping the attention of the Minister

and the Minister recording that reports on merger and

acquisition are still awaited. I do not find anything mala fide in

this.

Withdrawal of application for change of equity structure

288. In the meanwhile company wrote a letter dated

07.03.2005 (54/c) withdrawing the application for change of

equity structure on transfer of equity of Aircel Cellular Limited

held by Aircel Televenture Limited to Aircel Digilink India

Limited. In the light of this development, the file was processed

again and various note sheets were recorded and clarifications

were sought. The proposal was recommended at all levels and


following note sheet dated 03.11.2005 was recorded by Sh. A. K.

Dhar, ADG (VAS-I) to the following effect at 38 & 39/N:

“Subject: Change of name & Equitystructure of M/s RPG CellularServices Limited and change of nameof their promoter M/s SrinivasComputers Ltd.

M/s. RPG Cellular Services Ltd., a Cellular MobileTelephone Service (CMTS) licensee of ChennaiTelecom Service area had applied for followingchanges:

(i) Change of name of the company from M/s. RPG Cellular Services Ltd. to Aircel Cellular Ltd. (16/C) and it was approved by the competent authority on 17.03.2004 (12/N). The company was informed that the request for change of name has been provisionally approved. The company was asked to submit modified Bank Guarantee/ Fresh Guarantee inthe new name of the company as per requirement of the Licence Agreement. it was also stated that Final amendment shall be issued on receipt of modified Bank Guarantee (18/C). The company informed on 22.06.2004that they have submitted the revised Bank Guarantees on 05.04.2004 (24/C). Accordingly, the draft amendment letter (30/C& para 'a' at 24/N) was put up for approval.

(ii) Purchase of 20.76% shareholding of foreign partners M/s. Siva Cellular Holdings Ltd. by M/s. Srinivas Computers Ltd. The company obtained necessary approval from Reserve Bank of India on 07.04.2004 (enclosures with 27/C). With this purchase, the 100% shares of M/s. RPG Cellular Limited (name changed to Aircel Cellular Ltd.) gets acquired by M/s. Srinivas Computers Ltd. (Para 'c' at 24/N).

The company informed this on 21.06.2004 (27/C).


(iii) Change of name of the promoter, M/s.Srinivas Computers Limited to M/s. AircelTeleventures Ltd. issued by the Registrar ofCompanies Tamilnadu, Chennai on28.04.2004 (enclosure with 25/C) (para 'b' at24/N) and company intimated for this change byletter dated 21/22.06.2004 (25/C & 26/C).

The above cases were examined and proposal wasput up for accepting the proposals mentioned at (i)to (iii) above as per details at 13/N onwards.

In addition to the above, the company had alsorequested for transfer of its entire 100% equity toM/s Aircel Digilink India Limited (28/C). This casewas also examined along-with above mentionedcases (notes from 13/N onward may kindly be seen).However, subsequently the company withdrew itsapplication for transfer of its entire 100% equity toM/s Aircel Digilink India Limited (54/C, 32/N).

(from pre-page)In view of above, the proposals (i) to (iii) above fortaking on record the changed name of M/s RPGCellular Services Limited to M/s Aircel CellularLimited, Change in shareholding of the companythereby 100% stake held by M/s Srinivas ComputersLtd., change of name of the promoter [of M/s AircelCellular Limited (Formerly M/s RPG CellularServices Limited)] M/s. Srinivas Computers Ltd. toM/s Aircel Televentures Limited and DFAs 30/C,52/C may kindly be approved.”

289. The file was marked upward and was approved by

the Secretary on 10.11.2005.

290. Regarding the proceedings conducted in file D-30,

about the aforesaid issues, PW 8 Sh. P. K. Mittal has narrated

the events in detail in his statement dated 20.04.2012. It is


relevant to extract his statement from pages 4 onwards, which

is as under:

“From perusal of the above referred shareholdingpattern of M/s ADIL and M/s HESL, on the face ofit, there was no common shareholding of more than10% in M/s HESL and M/s ADIL.

On being asked I state that Sh. A. S. Verma, the thenDirector (VAS-II) vide 19/N recommended forproposed change of equity structure of M/s AircelCellular Ltd. on 29.07.2004 and marked the file toSh. R. N. Prabhakar, the then Sr. DDG (VAS) whoalso recommended the same and marked the file toMember (P) on 01.08.2004. Sh. B. V.Shivaramakrishnan, the then Member (P) alsoconcurred with the said recommendation andsigned the note-sheet on 03.08.2004 and sent thefile to Sh. Nripendra Misra, the then Secretary (T).

On being asked I state that thereafter a discussiontook place on 05.08.2004 in the Chamber of Sh.Nripendra Misra, the then Secretary (T) which wasattended by Sh. R. N. Prabhakar, the then Sr. DDG(VAS) and myself. As per the instruction of the thenSecretary (T), a letter was sent to the followingcompanies seeking equity structure of thecompanies and their promoters:-

(i) M/s Aircel Cellular Ltd.

(ii) M/s Hutchison Essar South Ltd. and

(iii) M/s Aircel Digilink India Ltd.

…..................................................................................................................................................................The case was re-examined in the context of thedetailed structure of these companies and it wasnoted by Sh. A.S. Verma the then Director (VAS-II)that M/s Essar Teleholdings Ltd. is having 33.52%in M/s Hutchison Telecom East Ltd. and 49.03% in


M/s Hutchison Essar Telecom Ltd. M/s HutchisonTelecom East Ltd. is a promoter of M/s ADIL whicha proposed buyer of ACL, a licensee in ChennaiMetro Circle area. M/s Hutchison Essar TelecomLtd. is a promoter of M/s Hutchison Essar SouthLtd. another licensee in Chennai Metro Circle area.He submitted the case for further examinationspecifically from substantial equity point of viewand marked the file to DDG (PIP) on 23.08.2004.Sh. N. P. Singh, the then Director (IP) examined thecase and put up a note on 27.08.2004 vide 22-23/Nof the said file. He noted that so far as clause 1.4 (II)the License Agreement is concerned, there is aviolation as both the promoters i.e. M/s HutchisonTelecom, Hong Kong and M/s Essar Group directlyor through Associates (Subsidiaries) have more than10% equity in both Aircel Cellular Ltd. and M/sHESL, both CMTS licensee after the acquisition.

......................................................................................

................................................................................Therefore, the change of equity structure of ACLfrom Aircel Televentures Ltd. to ADIL can not bepermitted. He marked the file to Member (P) Sh. B.V. Shivaramakrishnan. Sh. B. V.Shivaramakrishnan, the then Member (P) noted on31.08.2004 that it is not possible to support thecurrent proposal for change of equity structure as itwill amount to violation of clause 9 of amendmentof the License Agreement and marked the file toSecretary (T). Sh. Nripendra Misra the thenSecretary (T) directed to have a discussion on06.09.2004 and to be attended by Member (P), Sr.DDG (VAS), DDG (VS) and DDG (PIP). Sh.Nripendra Misra marked the file to MoC&IT on06.09.2004 for approving the proposal that it is notpossible to support the current proposal for changeof equity structure as it will amount to violation ofclause 9 of amendment of the License Agreement.The said file was received along with other file fromthe office of MoC&IT vide a note, copy of which isplaced at 419/C of the said file. As per the directions


of MoC&IT, as communicated by his PS Sh. K.Sanjaymurthy dated 15.09.2004, it was desired thatAST may prepare a note and submit the same toSecretary (T) on the cases in the following file:-

1. 842-21/2001/VAS (Vol. III)

2. 842-325/2000-VAS- the file being referred above.

3. 808-26/2003-VAS (Vol. I)

4. 20-231/2003-BS-IIIThe Secretary observed on the above note as under:-“My recommendations are available on the file. ASTplease comply with the orders of MoC&IT andsubmit it to MoC&IT for superior orders.”

Thus, Additional Secretary (T) submitted a reportdated 30.11.2004 which is available at 420/C to422/C. He also mentioned in his report that hisproposal is not recommended on the ground thatpromoters of new management also hold substantialequity in another company HESL who also hold thelicense for the same service area for the sameservice. Sh. R. N. Prabhakar processed the caseagain on 11.01.2005 vide 29/N along with threeother proposals relating to change of name ofpromoters, purchase of 20.76% shares of foreignpartners and change of name of company from RPGCellular Services Ltd. to Aircel Cellular Ltd. Hesubmitted the case to Member (Production) whonoted on 13.01.2005 (inadvertently mentioned as13.01.2004) that our proposal of note supporting thechange of equity has been forwarded by Chairman(TC) to Hon’ble MoC&IT and this is, perhapsrequired to be resubmitted to MoC&IT for finalapproval. He also submitted the case for formalapproval of Chairman (TC) for three abovementioned items. Sh. Nripendra Misra, the thenChairman (TC) marked the file to MoC&IT on14.01.2004 for confirmation and approval ofproposal submitted by Member (Production). The


said file was returned from the office of MoC&IT bySh. K. Sanjaymurthy, PS to MoC&IT on 03.03.2005vide note at 31/N of the said file stating that this fileis returned as reports on merger and acquisition areawaited.

On being asked I state that, no report on merger andacquisition was awaited. The report on the subjectwas already submitted by Dr. J.S. Sarma, the thenAS(T).

On 07.03.2005, Sh. V. Srinivasan, the then Directorfor Aircel Cellular Ltd. submitted a letter to Director(VAS) withdrawing their application forshareholding with immediate effect. It was statedthat till date they had not received approval fromDoT and the receipt of approval from DoT was animportant requisite for consummation of theproposed transaction, Aircel Televentures Ltd. andAircel Digilink India Ltd. have now terminated thePurchase Agreement. On being asked I clarified thatsince the applicant had withdrawn the applicationfor the change of share holding pattern the case forthe same was not processed further.

On being asked I state that M/s Aircel Ltd. (havingCMTS license for ROTM) and M/s Aircel CellularLtd. (having CMTS license for Chennai Metro) werethe 100% subsidiary of M/s Aircel Televentures Ltd.

M/s ADIL had submitted the following twoapplications:-

1. Application dated 28.06.2004 for approval forchange of equity in Aircel Cellular Ltd.

2. Application dated 28.06.2004 for approval forchange of equity in Aircel Ltd.

…..........................................................................................................................”

291. PW 10 Sh. R. N. Prabhakar has also stated about the


movement of the two files, that is, D-30 and D-40, in his

statement 26.12.2011, in which he has not stated anything

specific except narrating the note sheets. However, in his

statement dated 29.08.2013 he has narrated entire sequence of

events as under:

“.....................................................................................................................................................................In fact, M/s Aircel Cellular Ltd. had requested forapproval for change of equity in Aircel Cellular Ltd.M/s Aircel Digilink India Ltd. (ADIL) was theproposed equity holder. The said request wasprocessed by DoT officials and the same is availablein the note sheet. Sh. A.S. Verma, the thenDirector(VAS-II) vide 19/N recommended forproposed change of equity structure of M/s AircelCellular Ltd. on 29.07.2004 and marked the file tome. I also concurred with the recommendation ofSh. A.S. Verma and marked the file to Member(P)on 01.08.2004 who in turn marked the file toSecretary(T) on 03.08.2004.

A discussion took place on 05.08.2004 in thechamber of Sh. Nripendra Misra, the thenSecretary(T) which was attended by Sh. V.Sivaramakrishnan, the then Member(P), Sh. P.K.Mittal, the then DDG(BS) and myself. Duringdiscussion, Sh. N.Misra, Secretary(T) directed toseek the equity structure of the following companiesand their promoters:1. M/s Aircel Cellular Ltd., 2. M/s Hutchison Essar South Ltd. and3. M/s Aircel Digilink India Ltd.

Accordingly, a letter dated 11.08.2004 which isavailable at 450/C of the above referred file, wassent under the signature of Sh. A.S. Verma, the thenDirector(VAS-II). The replies were received and thecase was re-examined in the context of the detailedequity structure of this company. Sh. A.S. Vermaexamined the case and put up a note on 23.08.2004which was marked to DDG(PIP).


Sh. N.P. Singh, the then Director(IP)examined the case and put up a note on 27.08.2004vide 22-23/N of the said file and marked it to Sh.Vijay Kumar, the then DDG(PIP) who signed thenote sheet on 27.08.2004 and marked the file to me.I thoroughly examined the proposal and prepared anote vide 24-25/N. I found that the proposedacquisition of the equity by M/s ADIL would beviolating of clause 9 of amendment of the LicenceAgreement relating to equity in more than onelicencing company in the same service area for thesame service. Therefore, the change of equitystructure of M/s Aircel Cellular Ltd. from AircelTeleventures Ltd. to ADIL cannot be permitted. Imarked the file to Member(P) who on 31.08.2004noted that it was not possible to support the currentproposal for change of equity structure as it willamount to violation of clause 9 of amendment of theLicence Agreement and marked the file toSecretary(T). Sh. Nripendra Misra, Secretary(T)directed to have a discussion with Mebmber(P), Sr.DDG(VAS), DDG(BS) and DDG(PIP) andaccordingly a discussion took place on 06.09.2004.Sh. Nripendra Misra, the then Secretary(T) markedthe file to Sh. Dayanidhi Maran, the then MoC&ITon 06.09.2004 for approving the proposal that it isnot possible to support the current proposal forchange of equity structure as it will amount tovaluation of clause 9 of amendment of the LicenceAgreement. The file was received in the office ofMoC&IT on 06.09.2004 itself. The approval asrecommended by the then Secretary(T) was notgranted. In fact, the above referred file alongwithother files were sent back to Secretary(T) by Sh. K.Sanjay Murthy, the then PS to MoC&IT on15.09.2004 stating that AS(T) may prepare a noteand submit the same through Secretary(T).

Sh. Nripendra Misra, the then Secretary(T)marked the file to Dr. J.S. Sarma, AS(T) on15.09.2004 itself. Sh. J.S. Sarma, the then AS(T)offered his comments on 30.11.2004 and marked thefile to Secretary(T) who directed Sh. P.K. Mittal, the


then DDG(BS) to put up the legal status on thecomments of AS(T) on 03.12.2004. The DDG(BS)discussed the case with Legal Advisor, DoT on08.12.2004. And LA desired a Self Contained Noteto be prepared for his advice. The DDG(BS) sent thefile to me on 10.12.2004 and I marked the same toDirector(VAS-II) on 14.12.2004 for preparing a SelfContained Note as desired by LA.

A copy of the note sheet through which theabove referred file was sent to AS(T) is also placed inthe above referred file at 419/C to 423/C. Sh. A.S.Verma, the then Director(VAS-II) marked the file toADG(VAS-I) who prepared a note dated 17.12.2004and marked the file to Director(VAS-II). Sh. A.S.Verma, the then Director(VAS-II) recommended asunder on 17.12.2004 and marked the file to me:

(a) To approve the change of name fromRPG Cellular Services Ltd. to Aircel Cellular Ltd.,

(b) To approve the purchase of 20.76% shareholding of foreign partner namely M/s Siva CellularHoldings Ltd. by M/s Srinivas Computers Ltd. and1. The transfer of 100% equity structure fromM/s Aircel Televentures Ltd. to M/s Aircel DigilinkIndia Ltd. may not be approved.

I also examined the matter and recommendedas under on 11.01.2005:

(a) To approve the change of name fromRPG Cellular Services Ltd. to Aircel Cellular Ltd.(Aircel Cellular Ltd. was having CMTS Licence inChennai Metro Service Area),

(b) To approve the purchase of 20.76% shareholding of foreign partner namely M/s Siva CellularHoldings Ltd.(formerly Airtouch International(Mauritius) Ltd.) in Aircel Televentures Ltd. byAircel Televentures Ltd. to make it 100% IndianCompany and(c) Change of name of M/s Srinivas ComputersLtd. to M/s Aircel Televentures Ltd.(i) The transfer of 100% equity structure fromM/s Aircel Televentures Ltd. to M/s Aircel DigilinkIndia Ltd. may not be approved.


On being asked, it is clarified that M/s RPGCellular Services Ltd. was having CMTS Licence inChennai Metro Service Area. ROC, Chennai hadapproved the change of name from RPG CellularServices Ltd. to M/s Aircel Cellular Ltd. TheLicencee made a request vide letter dated26.02.2004(available at 519/C) for taking on recordthe change of name from RPG Cellular Services Ltd.to M/s Aircel Cellular Ltd. was made .

The share holding pattern of M/s Aircel CellurLtd. was as under:(i) 79.24% equity was held by Srinivas ComputersLtd.(Indian Company),(ii) 20.76% equity was held by AirtouchInternational (Mauritius) Ltd.(foreign company).

The Licencee made a request vide letter dated21.06.2004(available at 487/C) for taking on recordpurchase of above referred 20.76% foreign equity byM/s Aircel Televentures Ltd.(formerly SrinivasComputers Ltd.) after obtaining approval fromReserve Bank of India.

M/s Aircel Televentures Ltd. vide its letterdated 21.06.2004 (available at 493/C) requested fortaking on record the name change from SrinivasComputers Ltd. to Aircel Televentures Ltd.

I marked the file to Member(P) on 11.01.2005.The Member(P) then marked the file toChairman(TC) on 13.01.2005(inadvertently typed as13.01.2004). Sh. Nripendra Misra, Chairman(TC)then sent the file to MoC&IT on 14.01.2005 forapproval of the above four(a to d) recommendations.

On being asked, I state that the approval wasnot granted and the file was returned on 03.03.2005by Sh. K. Sanjay Murthy, PS to MoC&IT toSecretary(T) with the remark that reports onmergers and acquisition are awaited.

M/s Aircel Cellular Ltd. vide its letter dated07.03.2005(available at 414/C) informed the DoTthat they are withdrawing the application for changeof share holding pattern with immediate effect. Thisdevelopment was brought to the notice of Sh.Nripendra Misra, the then Secretary(T).


On being asked, I state that meanwhile thelegal opinion dated 11.01.2005 was already receivedin another file in which the transfer of 100% equityof M/s Aircel Ltd. for Tamil Nadu service area wasbeing processed.

ADG(VAS) again put up a note dated25.04.2005 (inadvertently mentioned as25.04.2004) to Director(VAS-II) recommending forapproval of the above referred threerecommendations. Sh. A.S. Verma, the thenDirector(VAS-II) concurred with therecommendation and marked the file for approval toDDG(VAS) on 24.05.2005. Here it is pertinent tostate that by this time I was promoted to the rank ofAdvisor(P) and Sh. P.K. Mittal was having thecharge of VAS cell as DDG(VAS).

Sh. P.K. Mittal enquired about merger andacquisition and sought specific comment on thatfrom Director(VAS-II) who marked the file toAD(VAS-I). AD(VAS-I) put up a note on 30.08.2005mentioning that the company vide letter dated17.03.2005 has withdrawn the application formerger and acquisition of that company from AircelTeleventures Ltd. to ADIL. I perused the said notedated 30.08.2005 and there is no mention of areport awaited on merger and acquisition. AD(VAS-I) also recommended for approval of threerecommendations i.e. to take on record the changeof name from M/s RPG Cellular Services Ltd. to M/sAircel Cellular Ltd. to grant approval for purchase of20.76% share holding of foreign partner(M/s SivaCellular Holdings Ltd.) by M/s Srinivas ComputersLtd. and to take on record the change of name of thepromoter namely M/s Srinivas Computers Ltd. toATVL. The file was marked to Director(VAS) whoconcurred with the recommendation and markedthe file to DDG(VAS) who in turn marked it to me. Iendorsed the recommendation and marked the fileto Member(P) and Secretary(T) for approval.

By this time, Dr. J.S. Sarma had joind DoT asSecretary(T) who raised certain queries with regardto the file on 20.09.2005 which was complied with


and the file was again put up to him by me on01.10.2005. Dr. J.S. Sarma, Secretary(T) desired adiscussion with me and after having discussiondirected to prepare a brief consolidated note whichwas complied with and the file was again put up tohim through me on 09.11.2005. Dr. J.S. Sarma,Secretary(T) approved the above referred threerecommendations on 10.11.2005.”

292. PW 14 Sh. B. Siva Ramakrishnan, Member (P), and

PW 78 Sh. A. S. Verma, Director (VAS-II), have also stated

about this file in their statements dated 28.10.2013 and

27.04.2012 respectively, but have not said anything specific

except narrating the note sheets.

293. It is interesting to note as to what Sh. C.

Sivasankaran, PW 34, has to say about the sale of Aircel

Limited, a licencee in Tamil Nadu service area, and Aircel

Cellular Limited, a licencee in Chennai service area, to Aircel

Digilink India Limited. He states in his statement dated

23.03.2012, pages 3 to 5 as under:

“.....................................................................................................................................................................On being asked, I state that at this time, the stagewas set in India for a revolution in mobiletelephony. With Siva Group’s success in Chennaiand RoTN circles, we felt confident to ride therevolution in mobile telephony and were planningfor a pan India presence. Consequently, M/sDishnet DSL Limited applied on 05.03.2004 toDepartment of Telecommunications, New Delhi(DoT) for grant of UASLs in respect of eight serviceareas namely, Assam, Bihar, Himachal Pradesh,North East, Orissa, Jammu & Kashmir, West Bengaland Madhya Pradesh telecom circles. The Letters ofIntent (LOI) in respect of these eight telecom circleswere issued by DoT on 06.04.2004. Further, the


UASLs in respect of above seven telecom circlesexcept Madhya Pradesh telecom circle were issuedon 12.05.2004. Thus, DOT issued licenses for all thesaid seven circles within two months of our applyingfor the same. As regards Madhya Pradesh circle,M/s Dishnet DSL Ltd. had requested DoT forextension of time of 90 days to comply therequirements of the LOI including arrangingrequired bank guarantee and entry fee. On21.04.2004, M/s Dishnet DSL Ltd. applied to DoTfor grant of UASLs for two more telecom circles, viz.UP East and UP West. On being asked I state that having applied for all thelicenses, the Siva Group was conscious of arrangingadequate finance to roll out and operationalize thenew circles. Siva Group had estimated a totalinvestment of about Rs. 2,100 crores for thispurpose, which was planned to be serviced by acombination of debt and equity in the ratio of 1:1. Atthis juncture sometime in June 2004, I decided todivest the holdings of Siva Group in M/s Aircel Ltd.and M/s Aircel Cellular Ltd. in order to raise fundsto roll-out the new circles. On being asked I state that I directed Sh. VSrinivasan the Chief Executive Officer of DishnetDSL Ltd., to search for prospective buyers for thetelecom business in Chennai and RoTN circles.Meanwhile, Sh. V Srinivasan informed me thatHutchison Essar group (now known as VodafoneEssar group) controlled by Lika Shing of HutchisonWhampoa, Hong Kong, had contacted him and theyhad expressed their interest to acquire 100% stakeof both M/s Aircel Ltd. and M/s Aircel Cellular Ltd.I then made the decision to sell 100% stake of bothM/s Aircel Ltd and M/s Aircel Cellular Ltd. toHutchison Essar group and asked the Siva Groupteam to negotiate and close the transaction withHutchison Essar Group. I was subsequentlyinformed by Sh. V Srinivasan that on 19th June2004, an agreement was executed between ATVLand M/s Aircel Digilink India Ltd. (ADIL), aHutchison Essar group company in which the said


buyer had agreed to pay a total consideration of Rs.1,200 crores to ATVL to buy 100% of Aircel Ltd. andAircel Cellular Ltd. Sh. V Srinivasan also informedthat M/s Aircel Digilink India Limited had made adown payment of Rs. 100 crores on the same date asper the terms of the said agreement.On being asked I state that Sh. V Srinivasan had alsoinformed me that the proposed sale mentionedabove necessitated the approval of DoT for changeof equity in M/s Aircel Cellular Ltd. and M/s AircelLtd. for which necessary applications were alreadysubmitted in this regard to the DoT. He had alsoinformed that the entire team of seller and buyeri.e. ATVL and ADIL were rigorously pursuing thematter with DoT in order to obtain the necessaryapproval so that the divestment could be completedbut the approval was however not forthcoming.Sometime during the months of November 2004and December 2004, Sh. V Srinivasan informed methat he had a meeting in Mumbai with Mr. AsimGhosh, Chief Executive Officer of Hutchison Essargroup, with regard to the pending deal. Sh. VSrinivasan informed that during that meeting, Mr.Asim Ghosh had told him the following:

that he along with Mr. Ravi Kant Ruia,shareholder of Hutchison Essar group, had met withShri. Dayanidhi Maran, the then MOC&IT,

that during the said meeting Sh. DayanidhiMaran had advised Mr. Asim Ghosh and Mr. RaviKant Ruia not to approach the MOC&IT seekingapproval for buying Aircel Ltd. and Aircel CellularLtd.

that Sh. Dayanidhi Maran also told them “youcome to me for any approvals but not for this, forgetthis, only over my dead body will I give thisapproval”. On being asked I state that upon hearing what hadtranspired during the meeting between Mr. AsimGhosh and Mr. Ravi Kant Ruia with Sh. DayanidhiMaran, the then MOC&IT, I was shocked. It wasalready more than 6 months since the agreements


for sale of Aircel Ltd and Aircel Cellular Ltd. wereexecuted but we were unable to complete the deal. Idecided to wait for some more time in hope ofgetting the approval but the approvals never came.and finally having apprehensions in getting theapproval of the minister after being aware of suchremarks, I instructed Sh. V. Srinivasan to terminatethe deal with ADIL. Sh. V. Srinivasan subsequentlyinformed me that ATVL and ADIL had executedagreements to terminate the deal for sale of AircelLtd and Aircel Cellular Ltd to ADIL and that ATVLhad also repaid the down payment of Rs. 100 crorestaken, to ADIL. On being asked I state that, it is apparent that I wasforced to terminate the deal as the application toDoT by Aircel Ltd. and Aircel Cellular Ltd. forchange in equity structure was not forthcoming formore than 8 months, especially after I learned aboutthe real intentions of Shri. Dayanidhi Maran, thethen MOC&IT, from Sh. V Srinivasan as told to himby Shri Asim Ghosh of Hutchison Essar Group, theprospective buyer.…........................................................................................................................”

294. On page 11, he further states:

“.....................................................................................................................................................................On being asked I state that as I have submitted rightin the beginning, in line with sound business policyadopted by any business house, Siva Group wasalways intending to bolster the finances of thetelecom business by debt as well as equity and waslooking for equity investors. After it became clearthat the DoT under Shri Dayanidhi Maran is notgoing to approve the request for change inshareholding in Aircel Ltd. for the proposed deal tosell 100% of Aircel Ltd. and Aircel Cellular Ltd. toADIL, we had no choice but to rescind the saleagreement entered into with ADIL in March 2005.…...................................................................................


.........................................”

295. Perusal of the file reveals that the processing of four

issues started on 08.07.2004 at 13/N to 16/N in D-30.

Thereafter, the processing of these four issues continued till

06.09.2005, when the Secretary (T) marked the file to MOC&IT

for approval of para 5 of the note of Member (P) dated

31.08.2004 (D-30), already extracted above, which pertained to

rejection of change of equity structure of Aircel Cellular Limited

on transfer of its 100% stake to Aircel Digilink India Limited.

The remaining three issues were not marked to the Minister. So

what was recommended to the Minister was rejection of

transfer of equity to ADIL.

296. However, this file was returned alongwith other files

vide order dated 15.09.2004, at 35/N in D-40, already

extracted above, copy of which is available at 49/C of D-30.

Thus, the Minister did not approve the rejection of sale or

transfer of equity to ADIL. The grievance of Sh. C. Sivasankara,

as noted above, is that the Minister was not approving the sale/

transfer of equity of Aircel Cellular Limited, held by Aircel

Televentures Limited, to ADIL. However, the department was

recommending its rejection and rather the Minister was not

approving it. The statement of Sh. C. Sivasankaran is thus,

totally contrary to record. It is enough to knock out the

prosecution case.

297. As per directions contained at 35/N in D-40, note of

Additional Secretary (T) was obtained and in that light the file

was processed again from 27/N onwards. On 14.01.2005,


Secretary (T) marked the file to the Minister for confirmation

and approval of para 6 and 7 of the note of Member (P) dated

13.01.2005, already extracted. It may be noted that para 6

pertained to the three items regarding change of name of

company from RPG Cellular Limited to Aircel Cellular Limited,

purchase of 20.76% shareholding of foreign partner and change

of name of promoter Srinivas Computers Limited to Aircel

Televentures Limited and para 7 pertained to change of equity

structure of Aircel Cellular Limited. The prayer was for

approval of three issues and rejection of the fourth issue, that

is, change of equity structure.

298. However, the file was returned by the Minister

again on 03.03.2005 vide order at 31/N on the ground that

reports on mergers and acquisitions are awaited. The case of

the prosecution is that the file was returned dishonestly by the

Minister as no reports on mergers and acquisitions was

awaited. Sh. P. K. Mittal and Sh. R. N. Prabhakar also say that

no such reports were awaited. Sh. R. N. Prabhakar further says

that when Sh. P. K. Mittal asked for a comment on 25.05.2005

at 35/N regarding report on merger and acquisition, AD (VAS-

I), put up a note dated 30.08.2005, in which no such report is

mentioned. What is the truth of this statement?

299. However, when the file (D-30) was processed again

at 24/N by ADG (VAS-I), he did not mention anything about

comments of Dr. J. S. Sarma. However, Director (VAS-I), noted

in this note sheet at 28/N, inter alia, that this file alongwith

other files was referred to AS (T) for examination for inter-

related issues regarding merger and acquisition. He further


records that the remarks of AS(T) is available at 49/c wherein

he has mentioned status of the case and no further remarks

have been given. Thereafter, Sh. R. N. Prabhakar, Sr. DDG

(VAS), recorded his note at 29/N, and in the last paragraph he

records that in regard to this particular case, AS (T) has given

the brief details of the case in item 2 and these are as per details

submitted VAS cell and no new issue has been submitted by

him. Similarly, Member (P) also recorded in para 5 that there

was no specific input from AS(T).

300. As noted earlier, the report/ comments of Dr. J. S.

Sarma were not put to the Minister in the form of report as

directed by him, but were made part of the voluminous file, in

which multiple issues were being processed. A fleeting

reference was made in the note sheets of the comments of Dr. J.

S. Sarma. When the Minister had specifically asked for the

comments, the comments should have gone to the Minister in

original and not as part of some other record. The Minister was

thus, right in recording that report on merger and acquisition is

awaited.

301. Not only this, the department was pushing for

illegal transfer of Aircel Cellular Limited to Aircel Digilink

Limited and it stopped only with the intervention of Secretary

(T) Sh. Nripendra Mishra. The company also came in adverse

notice for purchasing 20.6% shares of foreign partner Siva

Cellular Holding Limited, formerly Airtouch International

Mauritius Limited, without permission of the department and

the Sr. DDG Sh. R. N. Prabhakar advised to warn the company

for this, but this was not followed on account of suspect legal


advice.

***********

Issues relating to Tamil Nadu service area

302. Let me now take the two issues relating to Tamil

Nadu service area, that is, approval for change in equity of

Aircel Limited and taking on record name change of Srinivas

Computers Limited. The issues were dealt with in file D-40.

303. Aircel Limited, earlier known as Srinivas Cellcom

Limited, was granted a CMTS licence for Tamil Nadu service

area on 22.05.1998. The Aircel Limited was held 51% by

Srinivas Computers Limited and 10% shares were held by

Cellunet of India Limited and 39% were held by Asia Tech

(Mauritius) Limited, both foreign companies. The 49% shares

of these two companies were purchased by Srinivas Computers

Limited, the Indian shareholder and this was approved by the

DoT on 06.03.2002 at 15/N (D-40). Thus, the 100%

shareholding of Aircel Limited was to be held by Srinivas

Computers Limited.

304. Aircel Limited wrote a letter dated 28.06.2004 (D-

40, page 22/c) to DoT seeking approval for change in equity

structure consequent to sale/ transfer of shares to Aircel

Digilink India Limited for Tamil Nadu service area. This letter

was processed in file D-40 at 23/N and the following note sheet

dated 08.07.2004 was recorded by Sh. C. J. Kaujalgi, Asstt.

Director (VAS-I):

“Subject: Change in equity structure of M/s AircelLimited.PUC at P. 22/C is a request from M/s Aircel Limited, who


is holding a CMTS Licence in Tamilnadu Telecom CircleService Area, seeking approval for change in equitystructure consequent up on sale / transfer of shares toM/s Aircel Digilink India Limited (ADIL).

2. As per our records, the equity structure of M/sAircel Limited is as follows: P – 12/c & P – 21/c may beseen.

Shareholders'Name

Indian /Foreign

No. of sharesheld

Total paid-upcapital

%holding

AircelTeleventures

Limited(ATVL)

Indian 1800,000,000 18,000,000,000 100%

*Formerly Srinivas Computers Ltd. name changebeing processed.…..................................................................................................................................................................

5. Equity structure after proposed sale / transferof shares as intimated by the company will be asbelow.

Shareholders'Name

Indian /Foreign

No. of sharesheld


%holding

AircelDigilink India

Limited(ADIL)

Indian 1800,000,000 18,000,000,000

100%

…..................................................................................................................................................................

7. In Tamilnadu service area, the other CMTS /UAS licensees are:

Sl. No. Licensee Company Type of Licence

1 BPL Mobile Cellular Ltd. CMTS

2 Bharat Sanchar Nigam Ltd. CMTS

3 Bharti Cellular Ltd. UASL


4 Reliance Infocomm Ltd. UASL

5 Tata Teleservices Limited UASL

7.1 Shareholding pattern of these Licensees areplaced at P. 23/C to P. 27/C.

7.2 The present equity structure of ADIL is asbelow:

Shareholder(s)

Name

Indian /Foreign

No. of Shares Paid-upEquity Capital

(Rs.)

%Holdin

g

HutchisonTelecom

EastLimited

Indian 10,10,89,995 101,08,99,950 99.99

Sandip Das& Hutchison

TelecomEast

Limited

Indian 1 10 -

SankaraNarayanan

& HutchisonTelecom

EastLimited

Indian 1 10 -

RajivSawhney &HutchisonTelecom

EastLimited

Indian 1 10 -

NehaSharma &HutchisonTelecom

EastLimited

Indian 1 10 -

SundeepKathuria &HutchisonTelecom

EastLimited

Indian 1 10 -

Swisscom Foreign 10,000 1,00,000 0.01


Total 10,11,00,000 101,10,00,000

100.00

7.3 From the above and P. 23/C to P. 27/C, it maybe seen that there is no any common share holderhaving 10% or more equity in two companies in thesame service area.8. In view of the above, from the licensing pointof view, the proposal for transfer of 100% equity ofATVL to ADIL seems to be in order. However,comments of BS Cell, PIP Cell and LF Cell mayplease by sought in the matter before processing thecase further.


305. Thereafter, certain other note sheets were recorded

during the processing of the file pertaining to no dues and

tripartite agreement signed between DoT, Aircel and IDBI. In

the process, everything was found to be in order and note

sheets after note sheets were recorded from 23/N to 28/N till

23.08.2004 recommending approval of the proposal and the

file was marked to Sr. DDG (VAS). However, on 25.08.2004,

Sr. DDG (VAS) asked for a consolidated note as per discussion

on the matter.

Issue of name change

306. However, on 25.08.2004, a new issue regarding

change of name of Srinivas Computers Limited (Promoter of

Aircel Limited) to Aircel Televentures Limited was also added

to the file. For dealing with the two issues, that is, change of

name of Srinivas Computers Limited to Aircel Televentures

Limited and for change in equity structure of Aircel Limited, a

fresh note sheet was recorded on 25.08.2004 by Sh. A. S.


Verma, Director (VAS-II) at 31/N to 33/N to the following

effect:

“Subject: (i) Change of name of M/s Srinivas Computers Limited (promoter M/sAircel Limited) to Aircel Televentures Limited

(ii) Change in equity structure of M/s Aircel Limited.

PUC at P. 21/C is a letter from M/s AircelTeleventures Limited informing change of its namefrom M/s Srinivas Computers Limited. M/sSrinivas Computers Limited is the promoter of M/sAircel Limited, who is a CMTS Licensee inTamilnadu Telecom Circle Service Area, and as perour records (P. 12/C) holds 100% equity of thelicensee company. The company has requested totake note of the changed name and has enclosedcopy of resolution of its Board and fresh certificateof incorporation from Registrar of Companies. Theoriginal letter is placed in File No. 842-21/2001-VAS(Vol. III).

2. The change of name of a promoter has nobearing on the CMTS Licence Agreement and thereappears to be no problem in taking on record thechanged name in view of Board resolution and freshcertificate of incorporation from Registrar ofCompanies as submitted by the company.Therefore, it is proposed that approval may kindlybe accorded for taking on record the changed nameof M/s Srinivas Computers Limited as M/s AircelTeleventures Limited.

3. PUC at P. 22/C is a request from M/s AircelLimited, who is holding a CMTS Licence inTamilnadu Telecom Circle Service Area, seekingapproval for change in equity structure consequentup on sale / transfer of its equity to M/s AircelDigilink India Limited (ADIL).


4. As per our records (P. 12/C), the equitystructure of M/s Aircel Limited is as follows:

Shareholders'Name

Indian /Foreign

No. of sharesheld


%holding

SrinivasComputers

Limited

Indian 1800,000,000

18,000,000,000

100%

5. If we take on record the changed name of M/sSrinivas Computers Limited as M/s AircelTeleventures Limited as proposed in para 2 above,the equity structure of M/s Aircel Limited would beas follows.

Shareholders'Name

Indian /

Foreign

No. of sharesheld


%holding

AircelTeleventures

Limited(ATVL)

Indian 1800,000,000

18,000,000,000

100%

…..................................................................................................................................................................

8. Equity structure after proposed sale / transferof shares as intimated by the company will be asbelow.

Shareholders'Name

Indian /

Foreign

No. of sharesheld


%holding


(ADIL)

Indian 1800,000,000

18,000,000,000

100%

…..................................................................................................................................................................10. In Tamilnadu service area, the other CMTS /UAS licensees are:


Sl. No. Licensee Company Type ofLicence

1 BPL Mobile Cellular Ltd. (23/c) CMTS

2 Bharat Sanchar Nigam Ltd. (24/c) CMTS

3 Bharti Cellular Ltd. (25/c) UASL

4 Reliance Infocomm Ltd. (26/c) UASL

5 Tata Teleservices Limited (27/c) UASL

10.1 Shareholding pattern of these Licensees areplaced at P. 23/C to P. 27/C.

10.2 The present equity structure of ADIL is as below:

Shareholder(s)

Name

Indian /Foreign

No. ofShares

Paid-upEquity

Capital (Rs.)

%Holdin

g

HutchisonTelecom

East Limited

Indian 10,10,89,995 101,08,99,950 99.99

Sandip Das& Hutchison

TelecomEast Limited

Indian 1 10 -

SankaraNarayanan

& HutchisonTelecom

East Limited

Indian 1 10 -

RajivSawhney &HutchisonTelecom

East Limited

Indian 1 10 -

NehaSharma &HutchisonTelecom

East Limited

Indian 1 10 -

SundeepKathuria &HutchisonTelecom

East Limited

Indian 1 10 -

Swisscom Foreign 10,000 1,00,000 0.01


Total 10,11,00,000

101,10,00,000

100.00

10.3 From the above and P. 23/C to P. 27/C, it maybe seen that there is no any common share holderhaving 10% or more equity in two companies in thesame service area.

11. The case of change in equity structure of M/sAircel Limited has been re-examined in the light ofdiscussions of Sr. DDG (VAS), DDG (BS) andSecretary (T) on 5 th August 2004 in the similar caseof M/s Aircel Cellular Limited. The equity structureof various companies involved was called for videletter at P. 33/C. The same has been supplied bythese companies and the copies are placed below atP. 34/C to P. 37/C. From the perusal of the detailedequity structure of ADIL vis-a-vis other operatorslisted in para 10 at 30/N also, it has been observedthat either we look at the equity structure of thelicensee companies or the equity structure of theirpromoter(s), there is no common shareholdinghaving 10% or more equity in any two companies inthe same service area for CMTS / UASL. In view ofthe above and notes at 21/N onwards, there appearsto be no problem with the proposed transaction ofequity.

12. Final equity structure after proposed sale /transfer of shares as intimated by the company willbe as below.

Shareholders'Name

Indian /Foreign

No. of sharesheld


%holding

AircelDigilink India

Limited(ADIL)

Indian 1800,000,000

18,000,000,000

100%

13. Change of equity structure as proposed by thecompany and mentioned in para 12 above maykindly be approved.


14. Submitted for approval of proposal in para 2at 29/N and para 13 above.”

307. The file was marked upward and reached Secretary

(T), as mentioned below.

Re-examination of the issue in the light of Aircel Cellular case

308. It is clear from this note sheet, particularly para 11,

that the issue was re-examined in the light of discussion with

the Secretary (T) in view of the development in the related case

of M/s Aircel Cellular Limited for Chennai service area being

processed in D-30.

309. Thereafter, file reached Sh. R. N. Prabhakar, Sr.

DDG (VAS), who also recorded the note dated 26.08.2004 at

34/N recommending both the proposals.

310. After recording the note he marked the file to

Member (P). Member (P) agreed with the same on 27.08.2004

and marked the file to the Secretary (T), who also agreed to the

proposal on 27.08.2004 itself and marked the file to the

Minister.

Reaching of the file to the Minister and return thereof

311. However, the Minister returned the instant file (D-

40) along with other files vide order dated 15.09.2004, 35/N,

recorded by his Private Secretary Sh. K. Sanjay Murthy to the

following effect:


There are many inter-related issues between


mergers & acquisitions, licensing, FDI and FIIinvestment in holding companies and their sisterconcerns. An overall view on issues arising in suchcases needs to be taken before a decision can betaken. All the inter-related issues mentioned abovepertaining to the case being dealt in the belowmentioned files be examined and a consolidatedNote submitted:-

(i) F. No. 842-21/2001-VAS (Vol. III)(ii) F. No. 842-325/2000-VAS(iii) F. No. 808-26/2003-VAS (Vol. I)(iv) F. No. 20-231/2003-BS-III


312. The file was marked to Secretary (T) who recorded

his note dated 15.09.2004 to the following effect and marked

the file to Addl. Secretary (T) at 35/N:

“My recommendations are available on the file. AS(T) pl. comply with the orders of MOC&IT andsubmit it to MOC&IT for superior orders.”

Report of Dr. J. S. Sarma

313. In terms of the order dated 15.09.2004 recorded by

the Minister, Dr. J. S. Sarma, Addl. Secretary (T) gave his

report dated 30.11.2004, as already noted above.

Legal opinion on the report of Dr. J. S. Sarma

314. However, Secretary (T) asked for legal status on the

comments of AS (T) vide order dated 03.12.2004, 38/N (D-40).

Thereafter, the file was processed at 39/N to 41/N (D-40) and

sent to LA (T) on 18.12.2004. LA (T) Sh. O. P. Nahar gave his


legal opinion on 11.01.2005 (42-43/N, D-40) as already noted

above.

Re-processing of the file in the light of legal opinion and return

from the office of Minister

315. After receipt of legal opinion, the file was processed

again recommending the approval of two issues and the

proposal was approved upto the level of Secretary. Secretary (T)

marked the file to the Minister on 24.01.2005.

316. However, the file was again returned by the

Minister on 03.03.2005, vide note of Sh. K. Sanjay Murthy, PS

to MOC&IT, at 47/N, by recording as under:

“File Nos. 842-325/2000-VAS and 842-21/2001-VAS are returned as reports on mergers andacquisitions are awaited.”

317. As earlier noted above, the note of Dr. J. S. Sarma

was not put to the Minister directly and independently and it

might have escaped the attention of the Minister. Hence, the

Minister was right in recording that reports on mergers and

acquisitions are awaited. Furthermore, Sh. K. Sanjay Murthy

has stated in his statement dated 05.12.2011 that this note was

not received in the office of Minister. This further fortifies the

stand of the Minister.

Withdrawal of application for transfer of equity

318. The file was processed again in the light of letter

dated 07.03.2005, 41/C, written by Aircel Limited for

withdrawal of the application for transfer of its equity to Aircel


Digilink India Limited in Tamil Nadu service area. Accordingly,

the file was recommended to be returned to the VAS cell and

the file was marked to Secretary (T) on 21.03.2005, 48/N.

319. However, on 30.03.2005 Secretary (T) recorded a

note as under at 48/N:

“Pl. link it with the main file. The file has been recdfrom MOC&IT office on 03.03.2005. Pl. examinethe matter afresh also in the light of notes issued tothe company in some of the ISP relatedirregularities.”

320. He marked the file downward to Advisor (P). The

file reached Sr. DDG (VAS), who recorded on 31.03.2005 that

action will be taken as per the directions of Secretary (T), 49/N.

Issue of name change

321. Now, after the withdrawal of application for transfer

of equity, the only issue regarding change of name of promoters

of Aircel Limited from Srinivas Computers Limited to Aircel

Televentures Limited survived and this issue was processed at

50/N and 51/N. The first note on 50/N was recorded on

25.04.2005, but the file was marked downward till 25.05.2005.

Thereafter, there is no movement in the file, without assigning

any reason.

322. However, suddenly, on 03.11.2005 a note was put

up by Sh. A. K. Dhar, ADG (VAS-I). The note reads as under:

“Subject: Change of name of promoter ofM/s Aircel Limited from M/s SrinivasComputers Ltd. to M/s Aircel TeleventuresLtd.

M/s Aircel Televentures Ltd. promoter of M/s Aircel


Limited, a Cellular Mobile Telephone Service(CMTS) licensee of Tamilnadu Telecom CircleService area had applied for following changes:

Change of name of the promoter, M/s Srinivas Computers Limited to M/s Aircel Televentures Ltd. issued by the Registrar of Companies Tamilnadu, Chennai on 28.04.2004 and company intimated for this change by letter dated 21/22.06.2004 (21/C).

In addition to the above, the company had alsorequested for transfer of its entire 100% equity toM/s Aircel Digilink India Limited (22/C). This casewas also examined along-with above mentionedcase (21/N onwards may kindly be seen). However,subsequently the company withdrew its applicationfor transfer of its entire 100% equity to M/s AircelDigilink India Limited (41/C, 46/N).

In view of above, the proposal of change of name ofthe promoter [of M/s Aircel Limited] M/s SrinivasComputers Ltd. to M/s Aircel Televentures Limitedand DFA 42/C may kindly be approved.”

323. This was agreed to by other officials also and was

approved by Secretary (T) on 10.11.2005.

324. Perusal of the note sheet dated 25.08.2004, para 11,

reveals that this issue was linked up with the issue of transfer of

equity of Aircel Cellular Limited to Aircel Digilink India Limited

in Chennai service area. The Additional Secretary had noted

that Aircel Digilink India Limited had a complex equity

structure. He further noted that due to this complex equity

structure the management control may not remain with Indian

hands. He recommended that company be asked to simplify its


equity structure.

325. If the department does not understand the equity

structure of a company, it is fully within its right to ask the

company to simplify it or at least explain it to the department to

ensure that it conforms to the rules and guidelines. There can

be no quarrel with this proposition. I find this position being

explained by the companies in all the files and the department

insisting on it repeatedly. This is clear at least from perusal of

files D-4 and D-41, where details of equity structures of the

company were repeatedly sought. As such, it cannot be said that

these observations of the Additional Secretary were out of

context aimed at delaying the matter.

326. Furthermore, when the company withdrew its

application for transfer of equity to Aircel Digilink India

Limited as noted at 48/N, thereafter, the issue became very

simple and was approved by the Secretary on 10.11.2005. After

withdrawal of the applications, the first note sheet is dated

25.04.2005 at 50/N. Thereafter, the file was marked upward

and downward till 25.05.2005.

327. Suddenly, the file was taken up by Sh. A. K. Dhar,

ADG, on 03.11.2005 and a note sheet for approval of change of

name of promoter Srinivas Computers Limited to Aircel

Televentures Limited was recorded. There is no explanation in

the file as to why the file remained pending from 25.05.2005 till

03.11.2005. Sh. A. K. Dhar has not been examined as a witness.

There is no material on the file to attribute this delay to the

Minister or Secretary.

328. Thus, the delay in grant of approval for Tamil Nadu


service area was due to the fact that the issue got linked with

the Chennai service area and also the fact that the equity

structure of Aircel Digilink India Limited and its promoters was

not clear to the department. In this regard, I find that the

observations of Dr. J. S. Sarma in his report were

administratively correct, whereas the opinion of Legal Advisor

is suspect and is too legalistic. Not only this, his observation

about the indirect foreign equity is contrary to the FDI policy,

where he states that there is no restriction against indirect

foreign equity which can be raised at any level. A licensor has

every right to ask for clarification regarding equity structure of

a licencee company and its promoters and as noted above, the

DoT was repeatedly doing it in many cases. There can be

nothing wrong in this. This is all the more so when behaviour of

the company is not normal and repeatedly invited adverse

notice for its activities.

329. Thus, the file was returned by the Minister correctly

as it got linked with D-30, wherein issue of Chennai service

areas was being dealt with. Thus, in the two files there is

nothing wrong in Minister asking the question when the

company was selling one licence in violation of competition

clause and the department was pushing for it, though later on

the Secretary (T) prevented it. The sale of two licences in

Chennai service area and Tamil Nadu service area was the main

issue and the remaining other issues were petty in nature.

Moreover, as per statement of Sh. K. Sanjay Murthy, the note of

Dr. J. S. Sarma never reached the office of the Minister. The act

of the Minister, thus, cannot be termed to be mala fide, though


he may be dilatory in the performance of his duties.

*********

III. Change of name from Dishnet DSL Limited to

Dishnet Wireless Limited (D-41).


Advocate/ Spl. PP, for the CBI that even a matter as small as

name of change was not approved by the Minister in the regular

course of his duties. He deliberately delayed it to harass the

company with the objective to force the exit of companies of

Siva group out of telecom business. He has very eloquently

argued that this shows the deep conspiratorial mind of accused

Dayanidhi Maran, who was not willing to do even the smallest

of the job of the company.

331. On the other hand, the case of the defence is that

the Minister had no role in it and the instant file was linked to

the other file by the officials.

332. Both parties have extensively read out the file(s) as

well as the relevant statements at the bar to emphasize their

respective point of view.

333. In order to appreciate the facts correctly, let me take

note of the note sheets recorded in the file and the relevant

statements.

334. Dishnet DSL Limited, which was having UAS

licences in seven service areas, wrote to DoT vide letter

21.07.2004 for taking on record change in the name of the

company from Dishnet DSL Limited to Dishnet Wireless


Limited. The company also recorded in the letter that it

confirms that there is no change in the shareholding and equity

pattern continues to be unchanged and it was given in the letter

in tabular manner, indicating no change in the shareholder's

name and their holdings, percentage-wise.

335. This issue was processed in file D-41 and the first

note sheet was recorded by Sh. A. R. Devarajan, AD (BS-III), on

23.07.2004, to the following effect:

“PUC is a letter dated 21.07.2004 from M/s. DishnetDSL Ltd. at 1/c.

M/s. Dishnet DSL Ltd. have changed theirname of the company to M/s. Dishnet Wireless Ltd.and approval from the Registrar of companies isplaced at 2/c. As per para 1.5 of the generalconditions in Unified Access Service License, it isstated as “Change in name of the Licensee companyshall be permitted in accordance with the provisionsunder the Indian Companies Act 1956”

Because M/s. Dishnet DSL Ltd. has submitteda fresh Certified copy of the Registrar of Companies,therefore the change in name from M/s. DishnetDSL Ltd to M/s. Dishnet Wireless Ltd., may beapproved to be taken on record. Draft to M/s. Dishnet DSL Ltd. is placed at 3/c.

Submitted for perusal and approval as aboveplease.”

336. In this process, the file reached Sh. P. K. Mittal, who

asked for details of licences and also asked for putting up

amendment to licence agreement vide his note dated

26.07.2004 at 1/N.

337. On the same date, that is, on 26.07.2004, Sh.


Govind Singhal, Director (BS-III), recorded a note to the

following effect:

“PUC is a letter dated 21.07.2004 from M/s. DishnetDSL Ltd. at 1/c.

M/s. Dishnet DSL Ltd. have changed theirname of the company to M/s. Dishnet Wireless Ltd.and approval from the Registrar of Companies isplaced at 2/c. As per para 1.5 of the generalconditions in Unified Access Service License, it isstated as “Change in name of the Licensee Companyshall be permitted in accordance with the provisionsunder the Indian Companies Act 1956”

Because M/s. Dishnet DSL Ltd. has submitteda Fresh Certified copy of the Registrar ofCompanies, therefore the change in name from M/sDishnet DSL Ltd. to M/s Dishnet Wireless Ltd., maybe approved to be taken on record.

Draft to M/s. Dishnet DSL Ltd. is placed at3/c.


338. Thereafter, in the course of processing Sh. P. K.

Mittal sought detail of equity of partners and promoters directly

or indirectly vide note dated 06.08.2004, 2/N.

339. Thereafter, certain information was sought from the

company and company submitted the desired information and

again a note dated 24.08.2004 was recorded by Sh. Govind

Singhal, Director (BS-III), 4/N, to the following effect:

“As per the direction on N/s – 1, the desiredinformation was called for from M/s Dishnet DSLLimited.

M/s Dishnet DSL Limited has submitted the


information, which are placed at 7/c. The % interestof each promoter/ Partner has been submitted inthe statement.

M/s. Dishnet DSL Ltd. have changed theirname of the company to M/s. Dishnet Wireless Ltd.and approval from the Registrar of Companies isplaced at 2/c. As per para 1.5 of the generalconditions in Unified Access Service License, it isstate as “Change in name of the Licensee Companyshall be permitted in accordance with the provisionsunder the Indian Companies Act 1956”

Because M/s Dishnet DSL Ltd. has submitteda Fresh Certified copy of the Registrar ofCompanies, therefore the change in name from M/sDishnet DSL Ltd to M/s Dishnet Wireless Ltd., maybe approved to be taken on record.

Draft to M/s Dishnet DSL Ltd. is placed at 3/c.


340. And the file was marked to Sh. P. K. Mittal, who

recorded “Please link with other file”.” As per statement of Sh.

P. K. Mittal dated 01.12.2011, page 12, this file was D-38 in

which seven licences were initially given.

341. The perusal of the file this far shows that when the

file reached Sh. P. K. Mittal, on 26.07.2004, he asked for details

of licences and also asked for amendment to licence agreement.

The file was reprocessed and when it reached him, he, on

06.08.2004, again asked for details of equity of promoters and

partners directly or indirectly. The file was reprocessed after

seeking information from the company and when the file

reached him, he again asked for linking of the file with other


file. I may note that in the processing of the file this far, there

was no interference from any other authority, but at every

stage, Sh. P. K. Mittal is putting something new, though the

proposals are submitted for approval by Sh. A. R. Devarajan

and Sh. Govind Singhal.

342. Thereon, the file was linked to other file (D-38) on

the initiative of Sh. P. K. Mittal as noted above. The name

change was recommended by all officials, including Secretary

(T) on 01.10.2004 and he marked the file to the Minister.

However, in his statement dated 01.12.2011, he blames this

linking on the Minister.

Marking of the file to the Minister and return thereof

343. The file reached the Minister on 01.10.2004 itself.

However, the same was returned by the office of Minister on

07.10.2004 with the following directions at page 6/N and the

file was marked to the Secretary (T):

“I am directed to convey the following:

The issues pertaining to this case are similar tothe issues being examined for preparation of aconsolidated note bringing out the inter-relatedissues between mergers and acquisitions, licensing,FDI and FII investment in holding companies andtheir sister concerns. The issues arising from thiscase may also be incorporated in the consolidatednote being prepared.”

344. The PS of the Minister marked the file to Secretary

(T), but he was on tour and the file was marked to Additional

Secretary (T). Additional Secretary (T) Dr. J. S. Sarma again


marked the file to the Secretary (T)/ MOC&IT on 30.11.2004,

recording that “General note was placed in file No. 842-

21/2000/VAS (Vol.III)”, referring to his report dated

30.11.2004. However, as per statement of Sh. K. Sanjay Murthy

dated 05.12.2011, page 7, this was not received in the office of

the Minister.

345. I may note that the report of Dr. J. S. Sarma has

already been referred to above. It is not clear from the perusal

of the file as to when the file reached the office of the Minister.

346. However, the file was again returned by the office of

Minister on 03.03.2005 with the following directions:

“I have been asked to request Secretary (T) to re-examine if there has been undue haste in processingthe case. The following files are enclosed :-

1. F.No.20-231/2003-BS-III (Vol.III)- (D-2)

2. F.No.20-231/2003-BS-III- (D-46)3. F.No.20-231/2003-BS-III (Pt.)- (D-38)4. F.No.20-225/04-GnlBTS/Dishnet/BS-

III”

347. The file was marked to Secretary (T). However,

thereafter, there is no movement recorded in the file for a long

time. Though the Minister had asked for examining if there was

undue haste in processing the case, but there are no remarks on

the file either of the Secretary or any other officer regarding

undue haste in processing the files mentioned in note dated

03.03.2005, referred to above.

348. It may be noted that the agreement for sale of 100%

equity of Aircel Televentures Limited to Maxis group was

executed on 26.12.2005 and was to be effective from


30.12.2005.

349. However, without making any comment on the

issue of haste, all of a sudden a note sheet dated 29.06.2006

was recorded by Sh. S. A. Malik, AD (BS-III), to the following

effect:

“Subject: Name change by M/s. Dishnet DSLLimited

1. PUC was a letter dated 21.7.2004 from M/s.Dishnet DSL Ltd. at 1/c. M/s Dishnet DSL Ltd. havechanged their name of the company to M/s DishnetWireless Ltd. Fresh Certificate of Incorporation ofthe Registrar of Companies is placed at 2/c.

2. M/s. Dishnet DSL Ltd. was issued UASlicences for Jammu and Kashmir, Assam, NorthEast, West Bengal, Orissa, Bihar & HimachalPradesh service areas. M/s. Dishnet DSL Ltd. hasalso applied for grant of UAS Licences in respect ofMadhya Pradesh, UP(East) & UP(West).

3. As per Para 1.5 of the general conditions inUnified Access Service Licence, it is state as “Changein name of the Licensee Company shall be permittedin accordance with the provisions under the IndianCompanies Act 1956”.

4. This issue of change of name is long pendingbecause it got linked with issue of new UAS Licenceswhere an overall view on the interrelated issuesbetween merge and acquisition, licensing, FDI andFII investment in holding companies and their sistercompanies was to be taken. On 05.06.2006, AS (T)returned back all the linked files for furthernecessary action.

5. As directed the case is reprocessed again. Atthe time of Licence, share holding pattern of M/s.Dishnet DSL Limited was as follows:


Sl.No.

Name of Promoter/ shareholders Indian/Foreign

Percent ofEquity held

Net worth(Crores ofRupees)

1. M/s Sterling Infotech ltd. Indian 79.11 220

2. M/s Siva Limited, Bermuda Foreign

9.71 -

3. M/s WestgroveInternational HoldingLimited, Mauritius

Foreign

6.71 -

4. M/s IQ InvestmentsLimited, Mauritius

Foreign

4.22 -

5. Individuals Indian 0.25 -

6. Meanwhile, the share holding pattern of M/s.Dishnet Wireless Limited kept on changing and thecompany intimated it vide letter dated 27.07.2005,05.01.2006 19.01.2006 and 22.05.2006. The casewas processed in File No. 20-.225/2004-Dishnet/BS-III(Pt.). Original file is linked herewith.

7. As per the letter dated 22.05.2006, M/s.Dishnet Wireless Limited has submitted revisedequity structure and affidavit confirming the Indianand Foreign equity in Dishnet Wireless Limited aswell as the copy of the FIPB Approval of AircelLimited which is holding company of M/s DishnetWireless Limited as per the details below:

(A) Details of share holding pattern of M/s.Dishnet Wireless Limited:

S.No.

Name of the Shareholder Category No. ofshares held

% toshare

holding

1. Mr. R. Chinnakkannan Resident Indian 1 ---

2. Mr. A. Subramanian Resident Indian 1 ---

3. Mr. K. V. P. Baskaran Resident Indian 1 ---

4. Aircel Limited Indian Company 29,798,124 100.00

5. Senthil Trade andBusiness Links Private

Limited

Indian Company 1 ---

6. Hi-tech HousingProjects Private Limited



7. Karthik Shelters PrivateLimited


TOTAL 29,798,130 100.00

(B) Details of Indian/ Foreign Equity held in M/s.Dishnet Wireless Limited

Equity Percentage

Indian 26.01%

Foreign-Direct -

Foreign-Indirect 73.99%

Total Equity 100.00%

8. In view of above facts, draft for taking onrecord of the change in name in respect of the UASLlicences issued for Jammu and Kashmir, Assam,North East, West Bengal, Orissa, Bihar & HimachalPradesh service areas and pending applications forgrant of UASL in respect of Madhya Pradesh,UP(East) & UP(West), is placed at 80/C for kindconsideration and approval please.”

350. The file was marked to all concerned upward and

was approved by Secretary (T) on 30.06.2006.

351. Now the question is: When the Secretary (T) himself

was competent to approve it, why did he mark the file to the

Minister in the first instance? There is nothing on the file or in

any statement to suggest that the Minister had asked for the

file. When the file went to the Minister, it was returned by Sh.

K. Sanjay Murthy, PS to the Minister, linking it with other

issues, of course, as per the directions of the Minister.

352. In file D-2, the issues relating to financial capacity

of the company and its involvement in grey market was

involved. The violation of clause 1.4(iii) of licence agreement is

related to merger and acquisition. In files D-30 and D-40 issue


related to violation of this clause was involved. Once the file

reached the Minister, it got linked up with these files, not on the

initiative of the Minister, but on the initiative of Sh. P. K. Mittal

vide note dated 27.08.2004 at 4/N.

353. After the issue of change of equity structure was not

there on account of withdrawal of applications by Aircel

Cellular Limited vide its application dated 07.03.2005 (54/C,

D-30), the issue of violation of merger and acquisition no

longer survived and thereafter the file was again put up by Sh.

S. A. Malik, AD (BS-III), vide note dated 26.09.2005, giving all

the details and requesting for approval of taking of change of

name of the company on record. The same was approved by the

Secretary (T) on 30.06.2006.

354. The note dated 29.06.2006 was recorded by Sh. S.

A. Malik, AD (BS-III). The note does not mention that it was

recorded either at the initiative of the Minister or the then

Secretary (T) Dr. J. S. Sarma. There is no indication in the file

as to where it was from 03.03.2005 to 29.06.2006. Sh. S. A.

Malik has not been examined as a witness.

355. However, PW 15 Sh. Govind Singhal states in his

statement dated 25.09.2013 that this file was with Sh.

Yashwant Bhave till 05.06.2006. However, Sh. Yashwant Bhave

does not say so and his statement is only about file D-4. He

repeatedly refers to this file alone.

356. While dealing with this file the Minister suspected

that licences were granted to the company in haste and asked

the Secretary to examine it. However, there is no report of any

such examination by anyone.


357. Let me take note of relevant statements in this

regard.


25.09.2013 narrates the events relating to this file, as under:

“I am as above. Now I have been shown one originalfile of DoT bearing no. 20-225/04-Genl-Mts/Dishnet/BS-III and state that Sh. D.V.S. Rajan,Authorised Signatory of M/s Dishnet Wireless Ltd.submitted a letter dated 21.07.2004 addressed tome i.e. Director (BS-III), DoT, New Delhi statingthat the name of company has changed fromDishnet DSL Ltd. to Dishnet Wireless Ltd. Anattested photo copy of fresh certificate ofincorporation consequent on change of name dated02.06.2004 issued by Registrar of Companies,Chennai was also enclosed with the said letter dated21.07.2004. I marked the said letter to A.R.Devarajan, the then AD (BS-III) who put up the saidletter in the above referred file on 23.07.2004recommending for approval for taking on record thename change. He marked the file to me. I in turnmarked the file to Sh. P.K. Mittal, the then DDG(BS) who sought the details of licences issued in thename of M/s Dishnet DSL Ltd. On 26.07.2004, I putup a draft letter addressed to M/s Dishnet DSL Ltd.conveying that the change of name of M/s DishnetDSL Ltd. to M/s Dishnet Wireless Ltd. has beennoted and taken on record in respect of 7 licencesviz. West Bengal, Assam, Bihar, Himachal Pradesh,J&K, North-East and Orissa and marked the file toDDG (BS) Sh. P.K. Mittal for approval who in turnmarked the file to Member (P) on 28.07.2004.Member (P) also concurred with therecommendation and signed the notesheet on28.07.2004 and the file was sent to Sh. N.Misra, thethen Secretary (T) who sought a discussion with Sh.P.K. Mittal, DDG (BS).

Sh. P.K. Mittal, DDG(BS) marked the file tome on 06.08.2004 after noting as under:

“Discussed on 05.08.2004. Let us have details


of equity of partners & promoters directly orindirectly.”

I sent a letter dated 11.08.2004 to M/sDishnet DSL Ltd. seeking the details of promoter,shareholders or any legal entity of area ofshareholders/promoters which are related directlyor indirectly and also the type of each equitywhether it is foreign, Indian, financial institutionsand non-financial institutions. A copy of the saidletter is available in the above referred file. Here it isclarified that in the said letter, it is inadvertentlymentioned that ‘with reference to your letter dated21.08.2004’. It should have been 21.07.2004 inplace of 21.08.2004.

The reply was received from M/s Dishnet DSLLtd. and I again put up the file to Sh. P.K. Mittal,DDG (BS) on 24.08.2004 recommending forapproval for taking on record the name change.However, on perusal of the file, I find that the saidreply is not available in the above referred file.

On 27.08.2004, Sh. P.K. Mittal directed me as

under:“Pl link with other file.”On being asked, I state that file no, 20-

231/2003-BS-III (D-38) was the other file whichwas referred to by Sh. P.K. Mittal. On being asked, Istate that the said file contained the approval ofcompetent authority for issuance of LOI to M/sDishnet DSL Ltd. for award of Unified AccessService Licence in respect of 8 service areas. On being asked, I state that Sh. A.R. Devajaran, AD,BS-III placed the file no. 20-231/2003-BS-III in fileno. 20-225/04-Genl Mts./Dishnet/BS-III and putup the same to me for approval for taking on recordthe name change. I marked the file to Sh. P.K.Mittal, DDG(BS) on 27.09.2004 who concurredwith the recommendation and marked the file to Sh.H.P. Mishra, DDG(LF) who also signed thenotesheet and sent the file to Sh. ShivaRamakrishnan, Member (P). Member (P) alsoconcurred and signed the notesheet on 01.10.2004


and sent the file to Sh. N. Misra, Secretary (T). Sh.Nripendra Misra also concurred with the proposaland sent the file to Sh. Dayanidhi Maran, the thenMoC&IT for approval on 01.10.2004. The approvalwas not granted and the file was sent to Dr. J.S.Sarma, the then AS (T) by Sh. K. Sanjay Murthy, thethen PS to MoC&IT on 07.10.2004 stating that theissues pertaining to this case are similar to theissues being examined for preparation of aconsolidated note bringing out the inter-relatedissues between mergers and acquisitions, licensing,FDI, FII investment in holding companies and theirsister concerns.

On being asked, I state that Dr. J.S. Sarma, thethen AS (T) was directed by the then MoC&IT toprepare a consolidated note on the subject. Thisdirection was conveyed by PS to MoC&IT toSecretary (T) on 15.09.2004 in another file bearingno. 842-325/2000-VAS.

Dr. J.S. Sarma, the then AS (T) offered hiscomments on 30.11.2004 in DoT file no. 842-325/2000-VAS and sent this file i.e. 20-225/04-Genl Mts/Dishnet/BS-III to Secretary (T).

On being asked, I state that the file i.e.20-225/04-Genl. Mts/Dishnet/BS-III was again calledby Sh. Dayanidhi Maran, the then MoC&IT and thesame alongwith other files were made available toMoC&IT on 24.12.2004 (21/N of file no. 20-231/2003-BS-III (Vol.III)). Again this file i.e. 20-225/04-Genl. Mts./Dishnet/BS-III alongwith otherfiles were sent back to Sh. P.K. Mittal, DDG(BS) bySh. Nripendra Misra, the then Secretary (T) on30.03.2005. It was then submitted to Dr. J.S.Sarma, the then Secretary (T) on 24.08.2005 (vide7/N of file no. 20-231/2005-BS-III) for seekingguidelines. Dr. J.S. Sarma, the then Secretary (T)marked the file to Sh. Yashwant Bhave, the thenAdditional Secretary (T) on 15.09.2005 and the filei.e. 20-225/04-Genl Mts/ Dishnet/BS-III alongwithother files remained pending with Sh. YashwantBhave, the then AS (T) till 05.06.2006.

On being asked, I state that Sh. S.A. Malik, AD


(BS-III) then initiated a note on 29.06.2006recommending for taking on record the change inname which was concurred by Sh. R.K. Gupta, ADG(BS-III), by me, by Sh. P.K. Mittal, DDG (BS) and bySh. A.K. Sawhney, Member (P). The file was sent toDr. J.S. Sarma, the then Secretary (T) on30.06.2006 and the approval was granted on thesame date by Dr. J.S. Sarma, the then Secretary(T).”

359. Sh. Govind Singhal does not attribute any motive to

anyone as far as delay in name change is concerned. He has just

narrated the facts as they occur on the file.

360. Sh. P. K. Mittal in his statement dated 01.12.2011 at

pages 11 and 12, regarding name change, states as under:

“.....................................................................................................................................................................Now, I have been one original file of DoT bearingNo. 20-225/04/Genl Mts/Dishnet/BS-III (MR. II,Memo 47, Sl. No. 2) and state that Sh. D.V.S. Rajan,authorized signatory of M/s Dishnet DSL applied forchange in name of the company from M/s DishnetDSL Ltd. to M/s Dishnet Wireless Ltd. on 21-07-2004 (vide 84-C of file no. 20-225/04/GenlMts/Dishnet/BS-III). Copy of fresh certificate ofincorporation consequent to change of name issuedby Vasantha Kumar Ail, Assistant Registrar ofCompanies, Tamilnadu, Chennai was alsosubmitted. Sh. A.R. Devrajan, Assistant Director(BS-III) (vide 1-N in file no. 20-225/04/GenlMts/Dishnet/BS-III) submitted a noterecommending to take change name from M/sDishnet DSL Ltd. to M/s Dishnet Wireless Ltd. to beapproved to be taken on record. Shri A. R. Devrajan,AD (BS-III) also put-up a draft letter addressed toM/s Dishnet DSL Limited informing that the changeof name of M/s Dishnet DSL Limited to M/sDishnet Wireless Ltd. has been noted and taken onrecord for the 7 licences.


He marked the file to Sh. Govind Singhal, Director(BS-III) who marked it to me on 26-07-2004. Idirected, Sh. Govind Singhal, Director (BS-III) onthe same day i.e. 26-07-2004 that details of Licensesto be provided and to be put-up as amendment tolicense agreement (Vide 1-N of file no. 20-225/04/Genl Mts/Dishnet/BS-III) Sh. GovindSinghal, Director (BS-III) submitted the case forapproving to take on record the change in name ofM/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd.(vide 2-N in file no. 20-225/04/GenlMts/Dishnet/BS-III) on 26-07-2004. Irecommended the same for approval on 28-07-2004and marked the file to Member (P) Sh. B.Sivaramakrishna. He marked the file on the sameday i.e. 28-07-2004 to Secretary (T) Sh. NripendraMisra. Secretary (T). On 28.07.2004 Sh. NripendraMisra directed me to discuss. Matter was discussedwith him on 05-08-2004 and as per direction,details of equity of partner and promoters directlyand indirectly were called for on 11-08-2004 by Sh.Govind Singhal, Director (BS-II) (vide 81-C in fileno. 20-225/04/Genl Mts/Dishnet/BS-III). Case wasagain processed on 24-08-2004 by Sh. GovindSinghal, Director (BS-III) recommending to take onrecord change of name. I asked him to link withother file on 27-08-2004 (vide 4-N). The other fileno. 20-231/2003-BS-III which was under processwas received and linked by Sh. A.R. Devrajan,Assistant Director (BS-III) on 24-09-2004 (vide 5-Nin file no. 20-225/04/Genl Mts/Dishnet/BS-III).This is the file where original licences for 7 circlearea were approved. Sh. Govind Singhal marked the file to me on 27-09-2004 recommending to take on record change inname to M/s Dishnet DSL Ltd. to M/s DishnetWireless Ltd. I marked the file on the same day i.e.27-09-2004 to DDG (LF) Sh. H.P. Mishra afterputting my signature as a token of concurrence withthe proposal. Sh. H.P. Mishra marked the file toMember (P), Sh B. Sivaramakrishna on 30-09-2004after putting his signature as a token of concurrence


with the proposal, Member (P) marked the file toSecretary (T) Sh. Nripendra Misra on 01-10-2004who marked it to MOC & IT on the same day i.e. 01-10-2004 after putting his signature in token ofhaving concurred with the proposal, althoughpreviously such cases were being approved bySecretary (T) himself. The said file was sent to ShriDayanidhi Maran, the then MoC & IT on01.10.2004. The approval for name change was notgranted. The file was marked to Additional Secretary, Dr. J.S.Sarma on 07-10-2004 (vide 6-N of file no. 20-225/04/Genl Mts/Dishnet/BS-III) by Sh. K. SanjayMurthy, PS to MOC & IT on the direction of MOC &IT Sh. Dayanidhi Maran stating that “The issuespertaining to this case are similar to the issuesbeing examined for preparation of a consolidatednote bringing out the interrelated issues betweenmergers and acquisitions, licensing, FDI and FIIinvestment in holding companies and their sisterconcerns. The issues arising from this case mayalso be incorporated in the consolidated note beingprepared”

I would like to state that with these direction therequest for taking change of name from M/s DishnetDSL Ltd. to M/s Dishnet Wireless Ltd. on recordwas linked to other issues regarding extension ofLOI for MP circle by 90 days and grant of new LOIsfor UASL for UP (E) and UP (W). …...........................................................................................................................................”

361. He further states at page 14 in his statement

01.12.2011 as under:

“.....................................................................................................................................................................Onbeing asked it is clarified that the issue of takingchange of name on record is not at all connected to


FDI policy, merger and acquisition policy etc. Inspite of this, it was connected with these issues asenvisaged from the note dated 07-10-2004 of PSMOC & IT Sh. K. Sanjay Murthy on the direction ofMOC & IT Sh. Dayanidhi Maran (vide 6-N on file no.20-225/04/Genl Mts/Dishnet/BS-III). Thus it tookapproximately two years to take name change onrecord. On being asked I clarify that there are nosuch instances in respect of other Service Providerwhich took such a long time for taking the namechange on record.”

362. Thus, Sh. P. K. Mittal states that the question of

approval of name change was not connected with the question

of merger etc., but he himself linked the instant file with D-38,

in which eight LOIs were approved and in which Minister

suspected haste in grant of LOIs and UAS licences.

363. PW 2 Sh. Nripendra Mishra, the then Secretary (T),

has stated in his statement dated 23.08.2013 at page 2 as

under:

“.....................................................................................................................................................................Now I have been shown one original file of DoTbearing no.842-21/01-VAS(Vol.-III MR-II Memo 46Sl. No.1) and state that Sh. R.N. Prabhakar, Sr.DDG(VAS) vide 29/N of the file had recommendedfor approval of the following:(i) To take on record the change of name of thecompany from M/s RPG Cellular Ltd. to M/s AircelCellular Ltd.(ii) To take on record the shareholding of foreignpartners i.e. purchase of equity shareholding of20.76% of M/s Siva Cellular Holding Ltd. by M/sSrinivas Computers Ltd.(iii) To take on record the change of name of thepromoter M/s Srinivas Computers Ltd. M/s AircelTeleventures Ltd.


Sh. R.N. Prabhakar had also recommended thattransfer of 100% equity structure from M/s AircelTeleventures Ltd. to M/s Aircel Digilink India Ltd.may not be approved. He marked the file to Member(Production) on 11.01.2005 who in turn marked thefile to me on 13.01.2005(inadvertently typed as13.01.2004).On being asked, I state that I was competent toaccord approval for the above mentioned 3recommendations. Yet I sent the file to Sh.Dayanidhi Maran, the then MoC&IT forconfirmation and approval of the above stated 4proposals on 14.01.2005.The file was sent back to me by Sh. K. SanjayMurthy, PS to MoC&IT on 03.03.2005 stating thatreports on merger and acquisition are awaited. Therecommendations were not acceded to at that pointof time by the then MoC&IT.”

364. Though the statement of Sh. Nripendra Mishra does

not pertain to this file, but it is indicative of the fact that

Secretary (T) was competent to grant approval for change of

name of the company. Perusal of the file D-30 reveals that he

has done so in case of RPG Cellular Services Limited at 12/N

when he approved the same on 17.03.2004.

365. None of the three witnesses have explained as to

why the file was sent to the Minister when the Secretary himself

was competent to accord approval for name change. There is no

evidence that the Minister had himself asked for the file or that

he had created an atmosphere in the Ministry where the

officials below him were rendered totally ineffective in the

discharge of their official functions. There is a contradictory

version as to where the file was from 03.03.2005 to


29.06.2006, as the file is silent on this point, but Sh. Govind

Singhal states that file was with Sh. Yashwant Bhave till

05.06.2006, though Sh. Yashwant Bhave has not been

examined on this point.

In such a situation, one is left with no material to say,

even prima facie, that the delay in the instant file could be

attributed to the Minister alone, that too for mala fide reasons.

More so, it was Sh. P. K. Mittal who linked the instant file to file

D-38. More so, Sh. Dayanidhi Maran was suspecting haste in

the matters of Siva group. This suspicion is indicative of the fact

that he did not suffer from any guilty intention but was

suspicious of the actions of his predecessor and wanted them to

be examined in all details.

366. Once the earlier promoter/ management was not

there, many of the issues did not survive and subsequent

approval cannot be called a smooth approval, but it is an

approval in the natural course. There is no material on the file

to call the approval on 30.06.2006 to be so smooth as to arouse

suspicion as the agreement for sale, as noted above, was to be

effective from 30.12.2005, but the approval was given on

30.06.2006 by the Secretary (T) Dr. J. S. Sarma.

IV. Grant of UASL in Punjab, Haryana, Kerala and

Kolkata service areas (D-4)

367. It is submitted by Sh. Anand Grover that the

company had applied for four UAS licence on 01.03.2005.

However, Sh. Dayanidhi Maran deliberately delayed them also

on the pretext of linking them to show cause notices issued to


the company relating to violation of ISP licence. It is repeatedly

submitted by him that the Minister was determined not to grant

any regulatory approval to the company including issuance of

fresh LOIs.

368. On the other hand, the learned defence counsel have

submitted that the file never reached the Minister and he had

no role at all either in the processing of this file or in its alleged

delay.

369. Learned counsel for both the parties have read out

the file as well as the statements at the bar extensively to

support their point of view.

370. Let me examine the issue in detail.

371. Dishnet Wireless Limited had applied for UAS

licences in Punjab, Haryana, Kerala and Kolkata vide

application dated 01.03.2005. These applications were

processed in D-4 vide note dated 09.03.2005, recorded by Sh.

A. R. Devarajan, AD (BS-III) to the following effect:

“Subject: Issue of LOI for grant of Unified AccessServices License for Punjab, Haryana, Keralaand Kolkata service areas to M/s. DishnetWireless Ltd.

M/s Dishnet Wireless Limited has appliedfor grant of new UASL for Punjab, Haryana,Kerala and Kolkata service areas, all the four (4)original applications are placed below for readyreference.

2. M/s. Dishnet Wireless Limited has applied in the format earlier prescribed for making application for basic service licence. A processing fee of Rs. 15,000 for each licence application has been furnished and has been


sent to LF section.

3. A preliminary check has been carried out with reference to these applications for issue of letter of intent for grant of licence. The check list in respect of the four (4) applications are placed at 29/c to 32/c. As per this check list, the applications are in order and LOI can be issued.

4. M/s. Dishnet Wireless Limited is the newname of M/s. Dishnet DSL Ltd.

5. The company has declared its networth andthe Promoters networth as follows.

i) Audited networth as 367.09 Cr on 31.03.2004(ii) Unaudited increase in 88.24 Cr earnings

Total 455.34 CrUnaudited Networth ofthe Promoter as on 31st January 2005 182.89 Cr

So total networth of the Applicant and Promoter is 638.23 crores. From the number

of Licences issued (and pending issue) in the name of M/s. Dishnet DSL Ltd., and the present applications for 4 licences from M/s. Dishnet Wireless Ltd.. the prescribed networthworks out to 630 crores. The declared networth satisfies the requirement. (See calculation in Check List). LF section may

see the above point please.

6. In view of the above, we may grant UASL to M/s. Dishnet Wireless Limited for the above said FOUR service areas and the Draft format of LOI is placed at 33/c to 44/c for approval please.



372. The file was marked to Sh. P. K. Mittal, who posed

the following question: “Is shareholding pattern directly or

indirectly provided?” on 10.03.2005 and marked the file to

Director (BS-III).

373. Thereafter, reply was sought from the company and

on information being supplied by it, it was recorded by Sh.

Govind Singhal on 17.03.2005

“M/s Dishnet has submitted the details of equitypattern directly and indirectly. The same is placed inthe file.

The same may be checked whether it meetsout the latest FDI policy decision or not so that thecase may be processed.”

374. After recording this note, he marked the file to DDG

(BS), who recorded on 18.03.2005 as under:

“May also see for advice.”

And marked the file to Sr. DDG (VAS). Sr. DDG (VAS)

recorded on the same date as under:

“Case to be processed as per guidelines in this regard.”

375. After noting this, he marked the file again to DDG

(BS) Sh. P. K. Mittal, who recorded on 21.03.2005 as under:

“Is non-resident individual same as non-residentIndian? Please clarify.”

376. He marked the file to DDG (PIP), who recorded to

the following effect:

“ 'Individual', cannot be substituted for 'Indian' ”

377. He again marked the file to DDG (BS) Sh. P. K.


Mittal, who recorded as under:

“Please ask clarification”

378. On recording this, Sh. P. K. Mittal marked the file to

Director (BS-III). In response to this, a letter was written to the

company and clarification was sought from it on 23.03.2005

and on receipt of response of the company, Sh. Govind Singhal

recorded the following note sheet dated 29.03.2005, page N/S

3:

● “M/s Dishnet Wireless Limited has clarified that“all the Resident Individuals and the Non-Resident Individual mentioned in their repliesare Indian Citizens Only”.

● The above clarification was sought as perdecision on N/S-2 marked 'A'.

● The case is being submitted to check thatwhether the applicant meet out the latest FDIpolicy for allotment of licence or not?

● 46/c, 49/c and 50/c may be referred.”

379. On recording this note, he marked the file to DDG

(BS) Sh. P. K. Mittal, who, in turn, marked the file to DDG

(PIP), who recorded the following note on 30.03.2005 at N/S 3

asking for a committee to examine the issue:

“Latest FDI policy is yet to be notified, however, acopy of the relevant portion of conditions proposed& appd by Cabinet while enhancing FDI from 49%to 74% was sent to BS Cell also. The details can beexamined by the Committee of DDG (PIP), DDG(BS) & Sr. DDG (VAS). The direct & indirect equitystructure may be placed before the Committee pl.”

380. He again marked the file to Sh. P. K. Mittal, who, in

turn, marked the file to Director (BS-III). Thereafter, a date for


the meeting of DDG (PIP), DDG (BS) and Sr. DDG (VAS) was

fixed on 29.04.2005.

381. Accordingly, a meeting was held and a note sheet

was recorded on 04.08.2005 by Sh. Govind Singhal to the

following effect:

“The minutes of the above meeting were sent toDDG (PIP) for signature, but the same has not cometo this office. An draft copy of the minutes is placedwith the file for signature pls.”

382. The file was marked to Director (BS). Thereafter, in

due course the file reached DDG (BS) Sh. P. K. Mittal, DDG

(PIP) and DDG (VAS), who all appended their signatures. The

signature of DDG (VAS) bears the date of 09.08.2005. He again

marked the file to DDG (PIP), who appended his signature on

11.08.2005 itself and again marked the file to DDG (BS) Sh. P.

K. Mittal on the same date. Sh. P. K. Mittal appended his

signatures on 11.08.2005 and marked the file to Director (BS-

III).

383. Thereafter, there is no movement in the file on the

issue of four licences in Punjab, Haryana, Kerala and Kolkata

service areas.

The file falls silent on this issue on the aforesaid date of

11.08.2005.

384. However, in his statement dated 08.10.2012, page

2, PW 8 Sh. P. K. Mittal states as under:

“On being asked I state that at that point the revisedFDI policy was under approval of the cabinet but notnotified. So any action at that point of time which isnot in conformity of the upcoming guidelines, wasnot desirable. Therefore, it was directed to ask


shareholding pattern of the applicant company interms of direct and indirect holding. M/s Dishnetsubmitted the details of the equity pattern whichwas put up by Sh. Govind Singhal on 17.03.2005 tome. I marked the file to Sh. Prabhakar, Sr. DDG(VAS) for advice. He directed the case to beprocessed as per the prevailing guidelines. On beingasked I further state that the equity holdingsubmitted by M/s Dishnet DSL Wireless Ltd. hasindicated status as the resident individuals witheconomic interest of approximately 68% so it wasessential to know whether individual is same asIndian so as to treat the equity accordingly. I soughtthe clarification from Sh. Vijay Kumar, the thenDDG (PIP). He clarified that individual cannot besubstituted for Indian on 21.03.2005 vide notes on2/N. Accordingly, a clarification was sought fromM/s Dishnet. M/s Dishnet replied that all theresident individuals and non resident individualsmentioned in their replies are Indian citizens only.Case was further submitted to check whether theapplicant meet out the latest FDI policy forallotment of licence or not as during that periodcabinet was also approved the FDI policy which wasin the knowledge of the department but althoughnot notified. Sh. Vijay Kumar the then DDG (PIP)suggested that the details can be examined by theCommittee of DDG (PIP), DDG (BS) and Sr. DDG(VAS) vide his note dated 30.03.2005 on NS-III onthe said file.At the same time in another file i.e. DoT file bearingNo.20-231/2003-BS-III (Vol.III) marked as D-589,Sh. Nripendra Misra, the then Secretary (T)discussed with Hon’ble MoC&IT and directed that“Discussed with MoC&IT. These files are returnedwith the directions that the div. should ascertain allthe show cause notices/advisory letters issued tothe above company or companies belonging to thegroup and the nature of defaults before any view istaken. It may be submitted to my successor.”

The above orders cannot be applied to a particular


case but has to be applied to the company as awhole and all other pending applications to ensurelevel playing field and similar treatment for all theapplications.

Hence, the application for the above referred fourservice areas got linked with the show cause noticesissued to the companies. This issue was resolved inMay, 2006 when delinking was approved by thethen MoC&IT.

On being asked I state that the original file bearingNo.20-231/2005-BS-III containing the applicationsfor the above referred four services areas was neverput up before the then MoC&IT.”

385. He was examined again on this point as PW 8 on

this point on 01.12.2011, page 10, and states as under:

“Now, I have been shown one original file of DoTbearing No. 20-231/2005-BS-III and state that M/sDishnet Wireless Ltd. had applied for grant of newUASL for Punjab, Haryana, Kerala and Kolkataservice areas. The said applications were processand checked by Shri A.R. Devarajan who put up anote on 09.03.2005 recommending for issue of LOIin favour of M/s Dishnet Wireless Limited for thesaid four service areas. He marked the file to ShriGovind Singhal, Director (BS-III) who signed thenote-sheet on 09.03.2005 and marked it to me. Inoted as under:-

“Is share holding pattern directly or indirectlyprovided.”I marked the file to Shri Govind Singhal, Director(BS-III) on 10.03.2005. Accordingly, a letter wassent to M/s Dishnet DSL Limited requesting toprovide the said information on 11.03.2005. Thereply of M/s Dishnet DSL Limited was receivedwhich is placed at 35/C. The said reply wasambiguous. Hence, one another letter was M/sDishnet DSL Limited on 23.03.2005 under the


signature of Shri Govind Singhal, Director (BS-III).It was asked to clarify whether this ResidentIndividual is Indian citizen or any other entity. AlsoNon-Resident Individual may be clarified. Wereceived a clarification on 28.03.2005 which isplaced at 42/C stating that the Resident-Individualand Non-resident Individual are Indian citizen only.A Cabinet Decision was taken which was yet to benotified regarding change in foreign equity patternin Telecom Sector. Accordingly, a meeting was heldon 29.04.2005 with the concerned section with DDG(PIP), DDG (VAS) and myself. Minutes of themeeting are placed at 15/C. However, I would liketo clarify that during the intervening perioddirection of the then MoC & IT Shri DayanidhiMaran was received linking Show Cause Notices andAdvisories to the grant of UASL. It was conveyedthrough Shri Nripendra Misra, the then Secretary(T) in file No. 20-231/2003-BS-III (Vol. III) at21/N.”

386. However, the aforesaid direction was passed by Sh.

Nripendra Mishra, Secretary (T), on 30.03.2005 in file D-2. Sh.

Nripendra Mishra in his statement dated 23.08.2013 states as

under:

“.....................................................................................................................................................................Now I have been shown a copy of DoT file bearingno.20-231/2003-BS-III(Vol.-III) Marked as D-589,I state that on 30.03.2005, I had a discussion withSh. Dayanidhi Maran, the then MoC&IT in thematter of grant of UASL for UP(E) and UP(W) andgrant of extension of time limit for 90 days forsigning LOI for MP circle in respect of M/s DishnetDSL Ltd. As I stated earlier, the legal opinion dated11.01.2005 of Sh. O.P. Nahar, Legal Advisor wasalready on record and the same was made availableto the then MoC&IT in the above referred file ofVAS. The directions given by the Minister on the


following files alongwith file no.20-231/2003-BS-III(Vol.III) was that the div. should ascertain all theshow cause notice/advisory letters issued to theabove company or companies belonging to thegroup and the nature of defaults before any view istaken. This was recorded by me on 30.03.2005 andwas further stated by me that it should be put up tomy successor.1. F. No.20-231/2003-BS-III2. F. No.20-231-2003-BS-III/Pt,3. F.No.20-225-04-Genl.Mts./Dishnet/BS-IIIOn question about the information sought by theMinister, it was clarified that these information werenot considered necessary at the time of makingrecommendation for grant of licence.….................................................................................................................................”

387. The four applications were processed for the first

time on 09.03.2005, as noted above. As already noted, Sh.

Govind Singhal had recorded a note on 29.03.2005 at N/3 and

had marked the file to Sh. P. K. Mittal on 30.03.2005. Sh. P. K.

Mittal marked the file on the same day to DDG (PIP), who had

recorded a note as already extracted above regarding FDI

policy. After recording this note, he had marked the file on the

same day to Sh. P. K. Mittal, who appended his signatures on

31.03.2005 and marked the file to Director (BS-III). Thereafter,

the processing of file continued till 11.08.2005, whereafter the

file fell silent as there are no further entries in the file on this

issue.

388. Sh. P. K. Mittal states that the processing of the file

stopped as it got linked with other files on account of the note

of Sh. Nripendra Mishra recorded in file D-2 on 30.03.2005.

However, if this was true, the processing of file should have


been stopped on 30.03.2005 itself or at least on the very next

day, that is, on 31.03.2005, on which date also Sh. P. K. Mittal

appended his signature on the file and marked the file to

Director (BS-III).

389. As such, the statement of Sh. P. K. Mittal that the

processing of the file stopped due to the note dated 30.03.2005

of Sh. Nripendra Mishra is entirely contrary to the record. He

himself says that this file never reached the Minister. As per

record, this file also never reached the Secretary (T). Sh.

Nripendra Mishra does not say anything about this file in his

four statements. Accordingly, this delay cannot be attributed to

the Minister.

390. A bare perusal of note sheets reveals as to what type

of insignificant questions were being asked from the company

and the file was kept pending by the officials at their own end

from 09.03.2005 to 11.08.2005. There is no intervention in the

processing of file either from Secretary Dr. J. S. Sarma or the

Minister Sh. Dayanidhi Maran. As noted in the statement of Sh.

P. K. Mittal, the file was pending due to FDI policy to be

announced by the Government and perusal of the file also

indicates this. However, in his oral statements his shifts the

blame to the directions of Sh. Nripendra Mishra, dated

30.03.2005. The pendency of the file due to FDI policy is also

reinforced by the noting at 28/N, dated 02.01.2006 in D-2,

wherein information was asked from the company as per latest

UASL Guidelines.

391. As earlier noted above, if it was so, the processing of

file should have been stopped on 30.03.2005 itself or at least


the very next day, but the processing of file continued till

11.08.2005 at 4/N. The delay on this count is not attributable to

the accused persons at all.

It is clear that the statement of Sh. P. K. Mittal attributing

delay to the note dated 30.03.2005 of Sh. Nripendra Mishra is

contrary to record. Hence, this delay cannot be attributed to the

Minister or Dr. J. S. Sarma.

392. Accordingly, this circumstance cannot be read

against the accused at all.

***************

V. Delay in allocation of start-up spectrum in Bihar

service area to Dishnet (D-35)


Advocate/ Spl. PP, that Dishnet applied for allocation of

spectrum in Bihar service area vide letter dated 24.05.2004.

This was being processed and Wireless Advisor and Member

(T) recommended allocation of spectrum to it and the file

reached Dr. J. S. Sarma on 17.06.2005. It is submitted that

instead of approving the file, he asked for another connected

file and for a consolidated note. It is further submitted that

when the file was submitted again through a consolidated note

and it reached Dr. J. S. Sarma on 26.07.2005, he again did not

approve the file and asked a frivolous question as to the stage of

network planning of the company and sent the file back. It is

further submitted that he also orally instructed WA Sh. P. K.

Garg to put up the file only when he asked for it. It is submitted

by him that these actions on the part of Dr. J. S. Sarma show


that he deliberately delayed the allocation of spectrum to

Dishnet DSL Limited in Bihar service area in order to constrict

its business environment. He has read out the relevant parts of

the file as well as relevant statements at the bar to emphasize

his point of view that the queries put were irrelevant and

frivolous and Dr. J. S. Sarma deliberately delayed the allocation

of spectrum.

394. On the other hand, learned defence counsel have

submitted that the queries put by Dr. J. S. Sarma were relevant

and by no stretch of imagination can be termed as frivolous. It

is further submitted that the oral statement of Wireless Advisor

Sh. P. K. Garg is of no value even prima facie as the same is

contrary to record and he himself was responsible for delaying

the file. It is submitted that when Dr. J. S. Sarma was giving

directions in writing, there was no occasion for him to give oral

directions to Wireless Advisor. The relevant note sheets and

statements have been read out at the bar.

395. Let me take note of the relevant note sheets as

recorded in the file.

396. On getting UAS licences, Dishnet applied for

allocation of frequency in all seven service areas, including

Bihar.

397. The request of Dishnet DSL Limited for allocation of

spectrum in the seven service areas, that is, Bihar, Orissa, West

Bengal, HP, Assam, North-East and J&K, was being dealt with

in D-68 (Main case), which file is referred to by the witnesses in

their statements, but is not part of record of the instant case as

per the list of documents attached to the charge sheet.


398. Thus, the request of Dishnet DSL Limited for

allocation of spectrum in Bihar service area was also dealt with

in this file (D-68), when a proposal was put up on 07.02.2005

for allocation of spectrum to this company in 16 districts of

Bihar service area. The proposal was agreed to up to the level of

Secretary, who marked the file to MOC&IT on 08.02.2005.

However, the file was returned on 28.06.2005 with the

observation that this was discussed and position was asked

with respect to the other districts of Bihar. It appears from the

file that though the Secretary marked the file to the MOC&IT,

but it was returned under the signature of Dr. J. S. Sarma.

Thereafter, there is no movement in the file in this regard,

except discussion about the query raised by AS(T) Sh. Yashwant

Bhave on 17.10.2005 at 8/N in file D-4, already extracted. This

discussion continued till 02.11.2005 at 25/N. The note sheets in

both the files, that is, D-68 and D-4, are similar.

399. However, the request for allotment of spectrum in

Bihar service area was also being dealt with in file D-35 vide

letter dated 24.05.2004, page 96. This was processed vide note

dated 26.05.2004, recorded by Sh. M. C. Pandey, Engineer. As

such, this file was also opened on the same subject for

assignment of spectrum to Dishnet.

400. Incidentally, one more file D-6 was opened on

16.07.2004 on the request of Dishnet for frequency allocation

in Assam and North-East service areas. Not only this, one more

file D-34 was opened on 03.03.2006 for allocation of initial

spectrum to Dishnet DSL Limited in HP service area.


Coordination of spectrum for Bihar service area

401. In due course, DoT wrote letters to JCES for

earmarking of the spectrum in the seven service areas. Perusal

of file D-35 reveals that the coordination of spectrum for Bihar

service area to Dishnet was received in DoT and was taken on

record on 09.06.2005 vide note sheet recorded as under at 7/N:

“S. Nos. 12I & 13IS. No. 14 (R) (copy of letter from M/s Dishnet toWA)S. No 15 (R)

PUC is received from M/s JCES regarding co-ordination of spectrum in 1800 MHz Band for Biharstate district wise. As the request for spectrum inBihar for various districts in 1800 MHz is alreadypending for M/s Dishnet, placed on S.No. 14 (R).We may consider their request.


402. Thereafter, the file was marked upward and file

reached Joint Wireless Advisor on 10.06.2005, who asked for a

self-contained note and marked the file to Deputy Wireless

Advisor.

403. In response to that, Sh. B. Gunasekar, Deputy

Wireless Advisor, recorded a note date 10.06.2005 at 8/N as

under:

“Case relates to earmarking of GSM Spectrum in1800 MHz to M/s Dishnet DSL Ltd. in 37 districtsof Bihar telecom service area. M/s Dishnet DSL Ltd.had earlier requested for 6.2 MHz bandwidth in 900MHz band for rollout of UASL service in Bihartelecom service area. The case was taken up withJCES, Ministry of Defence for release of 4.4+4.4MHz spectrum in 900 MHz band out of remaining4.8+4.8 MHz held by them.2. JCES, Ministry of Defence have clarified that no


further spectrum in 900 MHz band can be releasedby them, as the remaining 4.8+4.8 MHz spectrumin this band is being used by them.3. JCES was requested to coordinate spectrum in1800 MHz band. M/s Dishnet DSL also requested toearmark GSM spectrum in 1800 MHz band to rollout and launch UASL service to meet licenseobligations.4. JCES have now coordinated spectrum in 1800MHz band for 37 districts in Bihar telecom servicearea. In 6 districts (Gaya, Jehanabad, Lakhisarai,Muzaffarpur, Samastipur and Vaisali) out of 37districts, spectrum will be confirmed after trials. Forthe remaining 18 districts of Bihar, the case isalready under submission. With this coordination,we may earmark 4.4+4.4 MHz in all 37 districts ofBihar. However districts of Jharkhand, which is alsopart of Bihar telecom service area are not covered inthe coordination.Draft earmarking letter is placed below forconsideration please.”

404. He marked the file upward to Joint Wireless

Advisor, Wireless Advisor and Member (T). They all agreed to

the aforesaid note and Member (T) marked the file to Special

Secretary (T) Dr. J. S. Sarma on 17.06.2005. The file reached

Special Secretary Dr. J. S. Sarma, who recorded on 28.06.2005

that:

“There was another file on the same subject. Pleaseput up a consolidated note.”

405. In fact, Dr. J. S. Sarma was asking for file D-68,

which is clear from the following note sheets. Moreover, he had

returned the file D-68 on the same day, as noted above.

406. The instant file was marked by Dr. J. S. Sarma to

Wireless Advisor, who, in turn, marked the file to Assistant


Wireless Advisor as Joint Wireless Advisor and Deputy

Wireless Advisor were on leave.

407. In response to the note of Special Secretary, Sh. D.

Jha, Assistant Wireless Advisor, to whom the file was marked,

recorded a note dated 04.07.2005 at page 10/N as under:

“With reference to minutes of Secretary (T) onprepage:

Case relates to initial earmarking of 4.4 + 4.4 MHz GSM spectrum in 1800 MHz Band for UASL services in Bihar Telecom Service Area to M/s Dishnet DSL Limited.

2. The service provider applied for GSM Spectrum vide his application dated 24.05.2004 in 900 MHz band. As per the license agreement signed between DOT and the service provider initial 4.4 + 4.4 MHz GSM spectrum (900/1800MHz band) can be allotted, subject to availability. The case was pursued with JCES, but they could not coordinate spectrum in 900 MHz beyond 20.2+20.2 MHz, already coordinated and in use by other service providers. Then the request was made for coordination in 1800 MHz band. M/s Dishnet DSL also requested GSM spectrum in 1800 MHz band to roll out their network.

3. JCES vide their letter no. IDS/1128/2/JCES dated 18.01.2005 had earlier coordinated 10+10 MHz in 16 districts of Bihar state under Bihar licenced service area, which was processed in F. No. L-14047/02/2004-NTG (Pt.). They have now coordinated 5/10MHz in 1800 MHz band for all 37 districts of Bihar state. Both the cases have now been merged for consolidated approval of initial earmarkingin all the districts of Bihar state.

3.1 In 6 districts (Gaya, Jehanabad, Lakhisarai, Muzaffarpur, Samastipur and


Vaishali) out of 37 districts spectrum will be confirmed after trials. With this coordination, we may earmark 4.4+4.4 MHz in all 37 districts of Bihar state. However, 18 districts

of Jharkhand state, which is also part of Bihar licenced service area are not covered in the coordination.

4. The case is submitted for kind consideration and approval of the competent authority for earmarking of initial 4.4 + 4.4 MHz GSM Spectrum in 1800 MHz Band as per co-ordination received from JCES and as per terms of service licence granted to them.

408. Paragraph 3 of this note indicates that the file asked

by Dr. J. S. Sarma was D-68. Thus, D-68 was relevant file in

which coordination and allocation of spectrum to Dishnet in all

seven service areas, that is, Bihar, Orissa, West Bengal, HP

Assam, North-East and J&K service areas was being dealt with

and this file was opened on 23.06.2004. In note sheet dated

07.02.2005 at 23/N, spectrum was recommended to be

allocated to Dishnet in sixteen districts of Bihar, but the file was

returned asking about the status in the remaining districts on

28.06.2005 at 23/N by Dr. J. S. Sarma himself.

Instant file was returned by Dr. J. S. Sarma on

28.06.2005 itself asking for another file. As noted above, this

file was D-68. As such, this query can, by no stretch of

imagination, be called a frivolous query. When two parallel files

were there and the same were put up on the same day, Dr. J. S.

Sarma was right in asking for another file and for a

consolidated note.

409. The aforesaid consolidated note dated 04.07.2005


recommending allocation of spectrum to Dishnet in Bihar

service area was agreed to by Deputy Wireless Advisor and

Joint Wireless Advisor and Wireless Advisor. This was agreed

to by Member (T) also and he marked the file to Secretary (T)

Dr. J. S. Sarma on 13.07.2005.

410. When the file reached him, Dr. J. S. Sarma again

asked a question as under on 26.07.2005:

“What is the stage of network planning? Have theyidentified sites even?”

411. He marked the file to Wireless Advisor. On this

note, PW 9 Sh. P. K. Garg appended a yellow slip on 10/N

putting a query:

“Regarding sites we may check with SACFA if theyhave applied for site clearance in Bihar. If yes, howmany?”

412. And he marked the file to Joint Wireless Advisor.

However, on the yellow slip itself it is recorded by Deputy

Wireless Advisor on 29.07.2005 as under:

“Checked with SACFA, no case as on date.”

413. Thereafter, information was sought from Dishnet

vide note dated 02.08.2005 at 11/N.

414. On the basis of the information received from

Dishnet, the following note was recorded by Sh. D. Jha on

16.08.2005 at 12/N (D-35):

“As directed by Chairman (TC) on page-10/n ante,the clarifications were obtained from M/s Dishnetand is placed below.

M/s Dishnet has stated that they have


completed network planning for the GSM networkto be deployed in Bihar telecom service area basedon the coverage plan of cities and towns proposed tobe covered by them. A detailed planning for thebackbone connectivity along with the highways forthe network has also been completed.

2. M/s Dishnet has stated that they haveidentified locations for Main Switching Centers(MSCs) and Base Switching Centers (BSCs) at Patnaand Ranchi in Bihar.

3. Further, they have stated that their plan foracquisition of BTS sites and placement of purchaseorders for the infrastructure and equipments arepending due to firm assignment of frequencies. Theyhave requested for early assignment of GSM spotfrequencies.

4. In this context, it is mentioned that now theGSM Spectrum 4.4 + 4.4 MHz in 1800 MHz bandfor whole of Bihar telecom service area includingJharkhand, under Bihar telecom service area, areavailable, for initial earmarking as per licensingcondition.

The case is submitted please.”

415. On recording this note, the file was marked upward

and the file reached Wireless Advisor Sh. P. K. Garg, who

recorded on 21.08.2005:

“Whether the DSL had applied for SACFA clearancefor any site in Bihar and Jharkhand areas.”

416. Sh. P. K. Garg marked the file downward. The file

reached Sh. Ashok Kumar, JW(F), Incharge, SACFA group, who

recorded on 24.08.2005 as under:

“Reference note above. It is stated that till date M/sDishnet Wireless Limited has not applied for sittingclearance in Bihar and Jharkhand areas.”


Reaching of file to the Wireless Advisor, custody of file and

approval

417. The file reached the Wireless Advisor on

24.08.2005 itself.

418. Thereafter, there is no movement on the file till

13.01.2006. On this date, Sh. D. Jha recorded at 13/N as under:

“From pre-page.As desired with ref. to the notes on pre-page,

the case is resubmitted for kind considerationplease.”

419. He marked the file upward and the file was marked

to the Wireless Advisor on the same date. Again, there is silence

in the file till 01.02.2006.

420. On 01.02.2006, Sh. P. K. Garg, Wireless Advisor

recorded the following note at 14/N:

“The case relates to allotment of initial GSMspectrum to M/s Dishnet Wireless Ltd. for BiharTelecom service area, which includes Jharkhand,under their UASL.

Recently, JCES, MOD, had coordinated GSMspectrum in 1800 MHz band for various Districts ofBihar, including Jharkhand. The service providerhas also informed that he has firm plans for rollingout the network.

It is, therefore, proposed that we may allot theinitial 4.4 + 4.4 MHz of GSM spectrum in the 1800MHz band, to M/s Dishnet Wireless Ltd. for BiharTelecom service area, which includes Jharkhand.

For kind consideration.”

421. This note was approved by Secretary (T) on

03.02.2006.

422. Now the question is: Whether the query put up by


the Secretary is frivolous?

423. PW 99 Sh. M. K. Rao, Deputy Wireless Advisor,

states that after allocation of spectrum, licencee has to

approach SACFA secretariat for site clearance (mast height/ full

site clearance). As per this statement, SACFA clearance is to be

sought after allocation of spectrum. If this statement is to be

believed, the query regarding SACFA was not required.

Allocation of spectrum in H.P. service area (D-34)

424. The case of the prosecution is that Dr. J. S. Sarma

did not ask any question about SACFA clearance in HP service

area, but this frivolous query was asked only in Bihar service

area to delay the allocation of spectrum to Dishnet DSL

Limited.

425. In this regard, Sh. D. Jha, in his statement dated

06.11.2012, speaks about allocation of spectrum in Himachal

Pradesh service area by referring to file D-34. He states that

allocation of 4.4+4.4 MHz spectrum for Himachal Pradesh

service area was approved by Dr. J. S. Sarma on 10.03.2006

and no such query was asked. His statement dated 06.11.2012,

page 2, is as under:

“....................................................................................................................................................................No undue delay was caused in allocation of start-upspectrum to M/s Dishnet Wireless Ltd. in HimachalPradesh service area. From the above referred file,it is clear that no irrelevant query like SACFAclearance, networks details etc. was asked fromDishnet Wireless Ltd. in this case.”

426. The implication of this statement is that after


transfer of Dishnet DSL Limited to Maxis, no such query was

put, but when Dishnet DSL Limited was with Siva group, this

frivolous query was put regarding Bihar service area.

427. However, it is instructive to extract the note sheet

dated 09.03.2006, recorded by Sh. P. K. Garg, Wireless

Advisor, at 4/N (D-34) as under:

“The case relates to allotment of initial GSMspectrum to M/s Dishnet Wireless Ltd. for telecomservice area of H. P. under their Unified AccessService Licence.

Recently, JCES, MOD, had coordinated additionalGSM spectrum in 1800 MHz band for variousdistricts of H. P. The service provider has informedthat they have firm plans for rolling out thenetwork.

A minor harmonization adjustment is required forspectrum already earmarked in GSM 1800 MHzband to M/s Escorts Telecom Ltd. in the area, sothat both the service providers can be earmarkedcontiguous GSM 1800 MHz spectrum to ensure itsefficient utilisation. This has been discussed withrepresentatives of M/s Escorts Telecom Ltd. andthey have agreed for the same.

Now, it is proposed to allot the initial 4.4 + 4.4 MHzof GSM spectrum in the 1800 MHz GSM band, toM/s Dishnet Wireless Ltd. for H. P. telecom servicearea.

For kind consideration,”

428. The perusal of the note sheet reveals that the

company itself had informed the DoT that they had firm plans

for rolling out the network. In such a situation, where was the


question of putting the query.

429. However, Sh. P. K. Garg in his statement states that

SACFA clearance/ network planning was not required to be

asked at the time of allocation of spectrum.

430. But the above note sheets contradict his oral

statement. If it is not required, why did he record in para 2 that

service providers had informed that they had firm plans for

rolling out the network. More so, this is in the case of H.P.

service area in which allocation was made subsequently on

10.03.2006. The oral statement of Sh. P. K. Garg is also

contradicted and falsified by his note dated 01.02.2006 at 14/N

(D-35), wherein also he records that service provider has

informed that it has firm plans for rolling out the network. If it

is not required, why Sh. P. K. Garg is so recording? These two

instances indicate that information about roll out plan is

needed, regarding which question was put by Dr. J. S. Sarma.

Regarding SACFA clearance: Statement of P. K. Garg, Wireless

Advisor

431. It is instructive to take note of statement of PW 9

Sh. P. K. Garg in this regard, who has stated in his statement

dated 02.12.2011 at page 5 as under:

“In this regard I would like to clarify that in view ofthe direction of the Special Secretary (T) Dr. J. S.Sarma, the aforesaid query was raised. Moreover, Iwould like to explain that earlier the ServiceProviders could apply for SACFA site clearance onlyafter allotment of initial spectrum. However,subsequently a change was made and during thisperiod i.e. 2005-2006, the Service Providers couldapply for initial spectrum and simultaneously could


apply for clearance of sites by SACFA as per theirnetwork planning. There was no application of theapplicant pending in respect of site clearance inSACFA as per the note of Sh. Gunasekar, DWA (V)on the slip on 29.07.2005 affixed on the note sheet(10N).”

432. However, in his statement dated 24.05.2012, at page

20, Sh. P. K. Garg states as under:

“.....................................................................................................................................................................Before providing initial spectrum to the telecomservice providers, SACFA (Standing AdvisoryCommittee on Frequency Allocation) clearance isnot mandatory since 2003-04. When a serviceprovider is allocated spectrum and frequencyassignment letter is issued to it, as per theconditions provided in the frequency assignment,applicant has to approach SACFA Secretariat for siteclearance (Mast height/Full site clearance). …..............................................................................................................................”

433. The query regarding status of network planning was

raised by Dr. J. S. Sarma on 26.07.2005 at 10/N. From the

above statements, it is not clear as to when the policy was

started that service provider could apply for SACFA clearance

only after allocation of initial spectrum, as Sh. P. K. Garg states

that the policy got changed in the year 2005-06 and in the

latter statement, in the year 2003-04. Sh. P. K. Garg further

compounds the statement by stating in his statement dated

02.12.2011 that to the best of his memory, such information

regarding network planning and acquisition of sites was

generally not asked from service providers at the time of initial

GSM spectrum. As such, he is not sure of anything and


contradicts the official record prepared by he himself.

434. Similarly, PW 67 Sh. R. J. S. Kushvaha has also

stated in his statement dated 18.11.2011, page 6, that network

planning and acquisition of sites were not mandatory for grant

of initial spectrum and such information was not being sought

from other service providers, but he does not state since when

the policy was changed. If the policy was changed in 2005-06

and one does not know the date and month of the change of

policy regarding SACFA clearance, how can Dr. J. S. Sarma is

faulted for this query.

435. However, the relevant provisions regarding SACFA

clearance and identification of sites are contained in the licence

agreement, a copy of which is available in D-5, pages 4 to 86,

which read as under:

“43. Frequency Authorization

43.1 A separate specific authorization andlicence (hereinafter called WPC licence) shall berequired from the WPC wing of the Department ofTelecommunications, Ministry of Communicationspermitting utilization of appropriate frequencies /band for the establishment and possession andoperation of Wireless element of the TelecomService under the Licence Agreement of UnifiedAccess Service under specified terms and conditionsincluding payment for said authorization & WPClicence. Such grant of authorization & WPC licencewill be governed by normal rules, procedures andguidelines and will be subject to completion ofnecessary formalities therein.43.2 For this purpose, a separate applicationshall be made to the “Wireless Advisor to theGovernment of India, WPC Wing, Department ofTelecommunications, Ministry of Communications,Sanchar Bhawan, New Delhi-110 001” in a


prescribed application form available from WPCWing.43.3 Site clearance in respect of fixed stationsand its antenna mast shall be obtained from theWPC Wing for which the applicant shall separatelyapply to the Secretary, Standing AdvisoryCommittee on Frequency Allocations (SACFA) WPCWing in a prescribed application form, to thefollowing address:

The Secretary (SACFA), WPC Wing,Ministry of Communications,Department of Telecommunications,Sanchar Bhawan,New Delhi-110 001.

EXPLANATION: SACFA is the apex body inthe Ministry of Communications for consideringmatters regarding coordination for frequencyallocations and other related issues / matters.(Siting clearance refers to the agreement of majorwireless users for location of proposed fixed antennafrom the point of view of compatibility with otherradio systems and aviation hazard. It requires interdepartmental coordination and is an involvedprocess). Normally the siting clearance proceduremay take two to six months depending on the natureof the installation and the height of the antenna /masts.....................................................................................................................................................43.9 For use of space segment and setting upand operationalisation of Earth Station etc.,LICENSEE shall directly coordinate with and obtainclearance from Network Operations and ControlCentre (NOCC), apart from obtaining SACFAclearance and clearance from other authorities.”

436. The aforesaid provisions do not make it clear as to

when SACFA clearance is to be obtained, that is, before

allocation of spectrum, simultaneously with the allocation of


spectrum or after the allocation of spectrum.

437. The case of PW 9 Sh. P. K. Garg and PW 67 Sh. R. J.

S. Kushvaha is that SACFA clearance and identification of sites

is not required at the time of initial spectrum. PW 9 Sh. P. K.

Garg further states in his statement dated 24.05.2012 at page

20 that SACFA clearance is not mandatory since 2003-2004 for

initial spectrum. PW 67 Sh. R. J. S. Kushvaha, Joint Wireless

Advisor, also stated in his statement dated 18.11.2011, page 6,

that information regarding network planning and sites was not

mandatory for initial spectrum. However, when the query was

put up by the Secretary, none of them brought this to his notice.

Sh. Ashok Kumar, Incharge, SACFA, has not been examined as

a witness.

438. However, in statement dated 21.11.2011, PW 67 Sh.

R. J. S. Kushvaha, based on file D-6, page 6/N, while referring

to allocation of spectrum to Dishnet in different service areas

and problems faced in Bihar and Orissa service areas, states as

under:

“Further, at page No. 6/N of file No. L-14042/30/2004-NTG, a note has been put up by Sh.Dinesh Jha on 06.05.2005 regarding the processingof cases for allotment of spectrum to M/s DishnetWireless Ltd. in seven Telecom Service Areas andproviding details of spectrum earmarked in eachtelecom service area. He has also submitted a tablein which he has provided details in respect of servicearea date of earmarking of frequencies forMicrowave Access, Microwave Backbone and GSMFrequency. The table available on page 6/N of thefile is reproduced as below:


S.No.

Circle MicrowaveAccess (Date

ofEarmarking)

MicrowaveBackbone(Date of

Earmarking)

FrequencyBand

Date ofEarmarking

1. Assam 18.08.2004 28.02.2005 900 MHz 22.07.2004

2. North East 23.08.2004 09.03.2005 900 MHz 22.07.2004

3. Jammu andKashmir

23.08.2004 03.12.2004 900 MHz 01.09.2004

4. HimachalPradesh

23.08.2004 17.01.2005 - Yet to be allotted

5. WestBengal

23.08.2004 23.12.2004 1800MHz

15.12.2004

6. Orissa 23.08.2004 03.01.2005 1800MHz

24.12.2004

7. Bihar 18.08.2004 23.02.2005 Proposed in 1800 MHz

Case has been submitted

This chart indicates that till that time the spectrumwas already allotted in the service areas namelyAssam, North-East, Jammu & Kashmir, WestBengal and Orissa. It is mentioned in the chart thatthe case for allotment of spectrum for Bihar hadbeen submitted for kind consideration of competentauthority. As far as Himachal Pradesh is concernedno coordination had been received from JSES inspite of several reminders issued from our side.

Further in para 2 of this note, the reason has beengiven why allotment of GSM Spectrum in 900 MHzfor Bihar and Orissa could not be met.

The file was submitted to the then DWA (V), Sh. G.K. Agarwal, who marked the file to me on06.05.2005. I marked the file to the then WA, Sh.P. K. Garg on the same day i.e. 06.05.2005.

Wireless Advisor Sh. P. K. Garg has written on thefile:-

“There was another similar letter to MOC&ITwherein we have provided similar comments toMember (P), after showing to Member (T). In this


case also we may provide similar information toMember (P) or send a reply regarding spectrumand SACFA issues. Our preference would be secondalternative. For kind perusal.”

He has signed the note on 10.05.2005 and markedthe file to the then Member (T), who further markedthe file to the then Member (P) on 11.05.2005.”

439. As per the aforesaid statement, the note was put up

on 06.05.2005 by Sh. D. Jha and in this note sheet, the issues

of SACFA were involved. This date is prior to the date on which

Dr. J. S. Sarma asked the status of network planning on

26.07.2005, which led to the enquiry about SACFA clearance

etc. This also indicates that there were at least some issues

related to SACFA clearances.

Role and responsibility of Wireless Advisor

440. PW 9 Sh. P. K. Garg, Wireless Advisor, in his

statement dated 02.12.2011, page 1, states as under:

“.................................................................................While working as Wireless Advisor, DOT my dutiesand responsibilities were to formulate the policiesrelating to spectrum, with the approval ofcompetent authority i.e. MOC & IT throughSecretary (T) and then to implement such spectrumpolicies in letter and spirit. I was required to havecoordination of frequencies with existing/ earlierusers for allotment of spectrum to telecom serviceproviders and grant of Wireless Licenses.….......................................................................”

441. He further states at pages 6 and 7 as under:

“On 24-08-2005, the information received fromSACFA Group i.e. M/s Dishnet DSL Ltd. had not


applied for site clearance in Bihar and Jharkhandarea till that date i.e. 24-08-2005 (Page 12/N). Sh.D. Singaravelu DWA (P) submitted the file to JWA(F) Sh. Ashok Kumar on 24-08-2005. Sh. AshokKumar JWA (F) marked the file to me on the sameday i.e. 24-08-2005, as evident from the note at12/N.

On 13-01-2006 Sh. D. Jha, AWA (V) re-submitted the file for kind consideration (13/N).The DWA (V), Sh. Kushwaha, JWA (N) signed intoken of having again recommended to approve forallotment of spectrum for Bihar telecom service areaincluding Jharkhand. On this I gave my remarksdated 01-02-2006 which are reproduced hereinbelow:-

“The case relates to allotment of initial GSMspectrum to M/s Dishnet Wireless Ltd. for BiharTelecom service area, which includes Jharkhand,under their UASL.

Recently, JCES, MOD, had coordinated GSMspectrum in 1800 MHz band for various Districtsfor Bihar, including Jharkhand. The serviceprovider has also informed that he has firm plansfor rolling out the network.

It is, therefore, proposed that we may allotthe initial 4.4 + 4.4 MHz of GSM spectrum in the1800 MHz band, to M/s Dishnet Wireless Ltd. forBihar Telecom service area, which includesJharkhand.

For kind consideration”

Then I marked the file to Secretary (T), Dr.J.S. Sarma who was earlier Special Secretary. Dr.J.S. Sarma signed it on 03-02-2006 in token ofhaving approved the same. Thereafter, the letterdated 07-02-2006 under the signature of Sh. D. Jha,AWA (V) was issued to M/s Dishnet Wireless Ltd.


conveying earmarking of initial spectrum 4.4 + 4.4MHz in 1800 MHz GSM band for Unified AccessServices in Bihar Telecom Service Area (page no.16/N and 174/C). Accordingly the aforesaidspectrum was allotted on 07-02-2006. On being asked I clarify that the informationregarding network planning and sites beingacquired was not required for grant of initialspectrum. Further to the best of my memory suchinformation was generally not asked from otherService Providers at the time of grant of initial GSMspectrum.

From the above, it is evident that the co-ordination of spectrum in the matter of allotment ofspectrum for Bihar circle from the JCES wasreceived on 08-06-2005 by WPC Wing and wasreceived on 21-07-2005 for Jharkhand (part ofBihar telecom circle). In spite of it the spectrum wasallotted on 07-02-2006. Hence an undue delaytook place in the allotment of initial spectrum forBihar Telecom Circle to M/s Dishnet DSL Ltd.

To the best of my memory, it is clarified thatDr. J. S. Sarma had asked me after sending the fileto me on 26-07-2005, to get the completeinformation about network planning andidentification of site etc. and then put up the file tohim only when he will call for the same. Dr. J. S.Sarma called for the file in the month of January,2006 and accordingly the file was put up by theWPC Wing as per my direction on 13.01.2006 and Igave my remarks on 01-02-2006, recommending toaccord approval for allotment of spectrum for BiharTelecom Area. From the above it is evident that the JCES hadconveyed coordination on 08-06-2005 (page no. 161& 162) and on 21-07-2005 (page no. 163) in respectof Bihar and Jharkhand respectively. However, inmy note dated 01.02.2006, the word 'recently' wasmentioned by me inadvertently, whereas, thecoordination was received about 6 months back, notrecently. On being asked about the reason for delay in


allotment of spectrum to Dishnet DSL Limited forBihar circle, I explain that the file speaks volumesabout the fact that the officers of the WPC wingincluding myself had tried our best to get thespectrum allotment approved in time. Due to thequeries raised by Dr. J. S. Sarma, Secretary (T)which were not required (particularly dated 26-07-2005), the delay in approval and allotment wascaused. Moreover, I reiterate that to the best of mymemory Dr. J. S. Sarma, the then Secretary (T) hadasked me to put up the file when he would ask me todo so.”

442. He further states in his statement dated 29.12.2011,

at page 2, as under:

“.....................................................................................................................................................................From the above, it is apparent that the said fileremained pending with me during the period from25.8.2005 to 31.12.2005 (127 days). In this contextit is stated that to the best of my memory, Dr. J.S.Sarma the then Secretary (T) had asked me aftersending the file to me on 26-07-2005, to get thecomplete information about network planning andidentification of site etc. and then put up the file tohim only when he would call for the same. I alsostate that I had no intention of delaying the case ascan be seen from the fact that the case wassubmitted for approval thrice earlier - on14.06.2005, 16.06.2005 and 06.07.2005, but wasreturned with queries first by Shri K.L. Jain, thethen Member (T), and then by Dr. J.S. Sarma, thethen Special Secretary (T) who subsequently becameSecretary (T). As per my memory, Dr. J. S. Sarmahad called for the file in the month of January, 2006and accordingly the file was put up by Shri D. Jha,Assistant Wireless Advisor (V) as per my directionon 13.01.2006 and I gave my remarks on 01-02-2006, recommending to accord approval forallotment of spectrum for Bihar Telecom Service


Area.”

443. It is clear from the aforesaid statement that he was

responsible for formation of policy relating to spectrum with

the approval of the Minister. It is a highly responsible position

in the Government of India. But he is not sure of anything and

he changed his statement thrice regarding SACFA issues, as

already noted above. Neither he remembers the correct position

nor the year when the policy regarding SACFA clearance was

changed. He sat on the file for 127 days and thereafter, orally

blames the Dr. J. S. Sarma for that. Dr. J. S. Sarma passed his

directions twice, that is, on 28.06.2005 and 26.07.2005, on

both occasions in writing. In such a situation, it was incumbent

on Sh. P. K. Garg to record his views in writing. Sh. D. Jha and

Sh. R. J. S. Kushvaha have stated that they do not know as to

where the file was from 24.08.2005 to 31.12.2005, when the file

was marked downward by the Wireless Advisor. Sh. P. K. Garg

admits that the file was with him, but he kept the file with him

on the asking of Dr. J. S. Sarma. This statement is quite

contrary to the record.

Authorities competent to allocate spectrum

444. In his statement dated 09.05.2012, pages 3 and 4,

Sh. P. K. Garg states about authorities, who were at different

times competent to grant spectrum and how they kept

changing, which reads as under:

“.....................................................................................................................................................................On being asked I state that till end of January 2005,


Joint Wireless Advisors of WPC Wing, DoT were thecompetent authority for approval of allotment ofinitial as well as additional spectrum as per policy,guidelines and criteria.Now I have been shown a copy of order dated31.01.2005 issued under the signature of Sh.Nripendra Misra, the then Secretary (T) andChairman (TC) which states as under:-“MOC&IT has directed that the following type ofcases should be submitted to him via Member (T) /Secretary (Telecom), for approval.(i) Frequency assignment for telecom serviceprovider while granting license.(ii) Frequency for terrestrial broadcasting anduplinking of satellite TV channels.Please ensure compliance and issue suitableinstructions to various levels in the WirelessDivision for compliance.”The said order dated 31.01.2005 was marked to meas the then Wireless Advisor and copy thereof wasalso endorsed to Member (F), Member (S), Member(T), Member (P) and AS (T).I noted the said order on 02.02.2005 {on the copyreceived from Member (T)} and further marked it toSh. Ashok Kumar, the then JWA (F).Prior to 31.01.2005, as stated above, Joint WirelessAdvisor was competent to approve the allotment ofspectrum/additional spectrum to different serviceproviders. After 31.01.2005, the then MOC&ITbecame the competent authority to approve theallotment of spectrum/additional spectrum.Although in the above referred order dated31.01.2005, the specific mention of allocation ofadditional spectrum is not there, yet it was beingapproved by the then MOC&IT.Now I have been shown a copy of order dated16.06.2005 issued under the signature of Dr. J. S.Sarma, the then Special Secretary (T) which statesthat the following types of cases should besubmitted via Member (T) to the Special Secretaryfor approval:- (i) Frequency assignment for telecom service


provider while granting license.(ii) Frequency for terrestrial broadcasting anduplinking of satellite TV channels.The said order dated 16.06.2005 was marked to meas Wireless Advisor. I noted the said order on16.06.2005 itself and marked it to my subordinates.Dr. J. S. Sarma was regularized as Secretary (T) inJuly, 2005 and no Special Secretary was posted inhis place. Hence, all the cases pertaining tofrequency assignment for telecom service providerswere being sent to him as the then Secretary (T) forapproval.”

445. The mere change of authority for allocation of

spectrum does not by itself indicate anything. Amongst other

things he states that Dr. J. S. Sarma was authorized by Sh.

Dayanidhi Maran to allocate spectrum. In the absence of any

other incriminating material, authorizing an officer to do a

particular act by itself does not indicate any criminal intent.

Recording name of authority at whose instance note sheet

recorded

446. Dr. J. S. Sarma, when he was Special Secretary (T),

asked for another file and also for a consolidated note on

28.06.2005, at 9/N (D-35). Similarly, he asked for status of

network planning on 26.07.2005, when he was Secretary (T) at

10/N. In response to both the queries, notes dated 04.07.2005

and 16.08.2005 at 10/N and 12/N respectively were recorded

by Assistant Wireless Advisor. Both the notes clearly record

that these were recorded at the instance of noting of Secretary

(T). This indicates that wherever Dr. J. S. Sarma directed

anything to be done, it was clearly recorded in the file. These


two instances are enough to indicate this.

447. However, wherever the notes were recorded, which

apparently were dilatory in nature, nothing of this sort was

noted in the file and only in the oral statements, the delay is

being attributed to the Secretary (T) Dr. J. S. Sarma. The oral

statements are thus, contradictory to the record available in the

file as wherever Dr. J. S. Sarma asked for any information, the

note recorded in response to that indicates it that it was being

recorded on the asking of the Secretary (T)/ Chairman (TC).

The delay is, thus, also attributed to the oral instructions of Dr.

J. S. Sarma, for which there is no written record.

448. Let me take note of the official procedure in this

regard.

Oral instructions vis-a-vis written record

449. Sh. P. K. Garg has introduced the plea of oral

instructions by Dr. J. S. Sarma for delaying the file. Let me take

a look as to what the Manual of Office Procedure issued by the

Ministry of Personnel, Public Grievances and Pensions says on

this point.

450. Clauses 36 to 39 deal with oral instructions issued

by superior officers or Ministers. It is relevant to extract them

as under:

“36. Oral discussions -

(1) All points emerging from discussions(including telephonic discussions) between two ormore officers of the same department or fromdiscussions between officers of differentdepartments, and the conclusions reached will berecorded on the relevant file by the officer


authorising action.

(2) All discussions/instructions/decisions whichthe officer recording them considers to be importantenough for the purpose, should be got confirmed byall those who have participated in or are responsiblefor them. This is particularly desirable in caseswhere the policy of the government is not clear orwhere some important deviation from theprescribed policy is involved or where two or morelevel differ on significant issues or the decisionitself, though agreed up to by all concerned, is animportant one.”

“37. Oral instructions by higher officers -(1) Where an officer is giving direction (includingtelephonic direction) for taking action in any case inrespect of matters on which he or his subordinatehas powers to decide, he shall ordinarily do so inwriting. If, however, the circumstances of the caseare such that there is no time for giving theinstructions in writing, he should follow it up by awritten confirmation at his earliest.

(2) An officer shall, in the performance of hisofficial duties, or in the exercise of the powersconferred on him, act in his best judgement exceptwhen he is acting under instructions of an officialsuperior. In the latter case, he shall obtain thedirections in writing wherever practicable beforecarrying out the instructions, and where it is notpossible to do so, he shall obtain writtenconfirmation of the directions as soon thereafter aspossible. If the Officer giving the instructions is nothis immediate superior but one higher to the latterin the hierarchy, he shall bring such instructions tothe notice of his immediate superior at the earliest.”

“38. Oral orders on behalf of or from Minister -(1) Whenever a member of the personal staff of aMinister communicates to any officer an oral orderon behalf of the Minister, it shall be confirmed by


him in writing immediately thereafter.

(2) If any officer receives oral instructions fromthe Minister or from his personal staff and theorders are in accordance with the norms, rules,regulations or procedures they should be brought tothe notice of the Secretary (or the head of thedepartment where the officer concerned is workingin or under a non-secretariat organisation).

(3) If any Officer receives oral instructions fromthe Minister or from his personal staff and theorders are not in accordance with the norms, rules,regulations or procedures, he should seek furtherclear orders from the Secretary (or the head of thedepartment in case he is working in or under a non-secretariat organisation) about the line of action tobe taken, stating clearly that the oral instructionsare not in accordance with the rules, regulations,norms or procedures.

(4) In rare and urgent cases when the Minister ison tour/ is sick and his approval has to be taken ontelephone the decision of the Minister can beconveyed by his Private Secretary. In such cases,confirmation will be obtained on file when theMinister returns to Headquarter/ rejoins.”

“39. Confirmation of oral instructions-

(1) If an officer seeks confirmation of oralinstructions given by his superior, the latter shouldconfirm it in writing whenever such confirmation issought.

(2) Receipt of communications from juniorOfficers seeking confirmation of oral instructionsshould be acknowledged by the senior officers ortheir personal staff, or the personal staff of theMinister, as the case may be.”


451. Thus, rule 37 clearly states that oral instructions be

put in writing at the earliest possible time after taking of the

action following oral instructions. Sh. P. K. Garg who was

Wireless Advisor and was in the rank of Joint Secretary/

Additional Secretary to the Government of India was supposed

to follow the official procedure. He is the custodian of the

spectrum and was holding a highly sensitive and responsible

post. He himself was remiss in performing his duties, but is

blaming others in violation of official procedure by making oral

statements, which are wholly contrary to official record.

452. The Wireless Advisor was duty bound to record the

instructions in writing, but he failed in performing his duties

and is now blaming others, contrary to official record. However,

in his further statements, which would be discussed while

dealing with allocation of additional spectrum in Chennai

service area in D-37, he states that the files of all service

providers were kept pending, indicating that there was no

hostile discrimination against Dishnet DSL Limited.

453. However, the prime question is: Whether the query

put up by Dr. J. S. Sarma regarding network planning was

frivolous? If so, why? The above discussion indicates that the

question of network planning was not frivolous, though there

may be difference of opinion as to whether it was required to be

put up or not. Sh. P. K. Garg is wavering on this point and

contradicts official record. Licence agreement, the relevant part

of which has been extracted above, does not indicate as to when

such query is required to be put, though SACFA clearance is

mandatory for mobile network to avoid interference in the


communication provided by two service providers. Written

record as extracted above indicates that some issues of SACFA

clearance were certainly there.

454. Accordingly, I do not find anything wrong or

incriminating on the part of Dr. J. S. Sarma in this regard.

*****************

VI. Delay in allocation of additional spectrum to

Aircel Cellular Limited in Chennai Metro Service

Area (D-37)


Advocate/ Spl. PP, that Aircel Cellular Limited had applied for

additional spectrum of 1.8+1.8 MHz beyond 6.2+6.2 MHz in

Chennai metro service area on 11.07.2005, when it had become

eligible for that having crossed its subscriber base of 5 lac. It is

further submitted that when the file was put to Dr. J. S. Sarma

on 23.07.2005 recommending the allocation of additional

spectrum to Aircel Cellular Limited, Dr. J. S. Sarma asked the

Wireless Advisor to keep the file with him and put it up only

when asked by him. It is further submitted by him that this

delay was conspiratorial.


submitted that there is no material on the file to indicate that

Dr. J. S. Sarma had directed the Wireless Advisor to keep the

file with him. It is further submitted that even otherwise there

was doubt about the eligibility of the company. It is repeatedly

submitted that there is no material on record to suggest that Dr.

Sarma was responsible for this.


457. Let me examine the issue in the light of the file as

well as the statements on record.

(A) First attempt to seek additional spectrum beyond 6.2

MHz: Data found false

458. The issue of grant of additional spectrum beyond

6.2+6.2 MHz to Aircel Cellular Limited in Chennai service are

was dealt with in file D-37. This file was opened on 16.02.2005

by the note of Junior Wireless Officer, who recorded as under:

“PUC is received from M/s Aircel regardingallocation of additional 1.8 MHz GSM spectrum in900 MHz GSM band for providing CMTS inChennai. Submitted please.”

459. Thereafter, on the same day, another note sheet was

recorded by Sh. M. C. Pandey, Engineer, regarding spectrum

being coordinated in 1800 MHz band by JCES and asking the

applicant if it was willing for spectrum in that band, to the

following effect:

“M/s Aircel Cellular Ltd, Chennai has requested foradditional GSM spectrum in Chennai Metro servicearea after reaching subscriber base of 5 lakh. It isrequested to allocate additional 1.8+1.8 MHz in 900MHz band beyond already earmarked 6.2+6.2 MHz.JCES have coordinated spectrum in 1800 MHzband.

We may advice the operator if spectrum in1800 MHz band is acceptable, the same may beconsidered.

Dft letter for approval pls.”The file was marked upward.

460. On 30.03.2005, a request was received from Bharti


also and the following note sheet was recorded:

“Request received in 1800 MHz band.Application for additional GSM requirement of1.8+1.8 MHz at Chennai metro from M/s Bharti.”

461. The file was marked upward and on 08.04.2005,

the following note sheet was recorded:

“It may pls. be informed if the case of M/s Bhartiand M/s Aircel who fulfill the requisite criteria foradditional spectrum is to be processed now.

File was pending due to Chennai (BSNLcase).”

462. The file was marked upward to Assistant Wireless

Advisor.

463. Thereafter, note was recorded on 30.05.2005, 2/N,

by the Assistant Wireless Advisor Sh. D. Jha to the following

effect:

“Request letter from M/s Aircell Cellular Ltd. forrequirement of additional spectrum 1.8+1.8 MHzbeyond 6.2+6.2 MHz already allocated in 900 MHz.2. M/s Aircell is the only service provider whohas crossed 5.0 lakhs subscriber base in ChennaiMetro service area (COAI statistics April 05). M/sBharti has subscriber base of 4,68,310/- only. Wemay agree to the request of M/s Aircell. 3. The co-ordination letter from JCES is placedbelow for Chennai Metro.4. Draft earmarking letter for assignment of1.8+1.8 MHz additional GSM spectrum for ChennaiMetro for Aircell Cellular Ltd. is placed below forconsideration.”

464. It may be noted that his note was recorded by Sh. D.

Jha after delay of 52 days without assigning any reason for the


delay.

465. The file reached Wireless Advisor who recorded on

03.06.2005, 2/N & 3/N, as under, asking for information about

active users (VLR):

“Recently on another file it was requested that wemay obtain information regarding the active users(VLR) and peak traffic etc. on weekly basis from allservice providers. Hence, we may obtain thisinformation for processing these current cases also.”

466. Thereafter, information was sought from the

company and on receipt of information the following note sheet

was recorded on 14.06.2005, at 4/N:

“Vide 'PUC' M/s Aircel Cellular Ltd. Chennai, havesubmitted information regarding subscriber &Traffic detail for the first week of June 2005 asgiven below in Chennai Metro Service area:

i) Subscriber in HLR 6,98.740ii) Subscriber in VLR 4,68,218iii) Total No. of BTS 354iv) BTS equipped capacity

(Theoretical Erl.) 21,201v) BTS Equipped capacity 15901

(Effective Erl.)vi) Busy Hour Traffic (Erl.) 17,545

Submitted pls.”

467. The file was marked upward and on 16.06.2006 the

following note sheet was recorded by the Deputy Wireless

Advisor on 4/N and 5/N

“Reference notes above.Also kindly refer W.A's note on pages 2-3/ante.

We my consider the case of M/s Aircel CellularLtd., Chennai for their requirement of additionalspectrum of 1.8+1.8 MHz in 1800 MHz band beyond6.2+6.2 MHz already earmarked in 900 MHz band.


(Sl. No. 4-R).

2. JCES have co-ordinated the spectrum in 1800MHz band vide letter dated 04/2/05 & is placed.

3. As directed, M/s Aircel have provided thedesired information on subscribers/ Trafficparticulars for the week ending 05 th June 2005 inChennai Metro Service Area. Moreover as per COAIstatistics M/s Aircel have more than 5 lakhssubscribers as on 30 th April 2005 [i.e. 5,46,478 asper telecom Live June 2005 issue]

Draft placed for earmarking of additionalspectrum of 1.8+1.8 MHz in 1800 MHz band.

For kind consideration pl.”

468. The file reached Wireless Advisor who recorded on

19.06.2005 as under:

“Their subscriber No. in VLR, which indicates thenumber of active subscribers is below 5 lakh. Wemay enquire the highest number of subscribers intheir VLR, during last 2 months.”

469. In due course another note sheet dated 27.06.2005

was recorded at 6/N as under:

“M/s Aircel Cellular Ltd. has given their VLRsubscriber base in Chennai Metro for April 05 andMay 2005. The VLR figure for April 2005 is 427615 andthat for May 2005 is 466510. VLR subscriber base inthe metro for the week 30.5.2005 to 5.06.2005 wasearlier intimated as 468218.

Submitted for information pls.”

470. Thereafter, the file was marked upward to the

Assistant Wireless Advisor, who recorded on 28.06.2005, as


under:

“M/s Aircel has provided VLR for April & May 2005for Chennai metro. They have to wait till it reached5.0 lacs in the service area.

May kindly be seen for information”

471. The file reached Wireless Advisor, who approved it

and marked the file further for conveying the information to the

company and it was conveyed vide letter dated 28.06.2005,

page 58 (D-37) that additional spectrum will be considered

when its VLR subscriber base reached 5 lac.

472. Perusal of the file reveals that there was an

unexplained delay of 52 days on the part of Sh. D. Jha, when he

recorded the note dated 30.05.2005, after the file was marked

to him on 08.04.2005. Furthermore, the company was seeking

additional spectrum beyond 6.2 +6.2 MHz on incorrect data,

that is, active subscribers base and officials of DoT were helping

it by putting a note that it has reached subscriber base of 5 lac

and the note sheet dated 30.05.2005 recorded by Sh. D. Jha

clearly mentions that Aircel has crossed 5 lac subscriber base in

Chennai. This claim was subsequently found to be false.

473. Strangely the note sheet dated 16.02.2005 does not

quote the date of the letter written by Aircel. However, this

letter is dated 28.10.2004, photocopy of which is available at

page 4 of the file. The statement of P. K. Garg dated 23.03.2012

in this regard is quite interesting, which is extracted as under:

“In continuation of my previous statement dated29.12.2011, I further stated that today I have beenshown one file of DoT, WPC Wing, bearing No.L-14043/3/2005-NTG (PE 1/2011, MR-II, Memo-I, Sl.5) (D-37) and state that the said file contains the


details with regard to allotment of additional GSMspectrum to service providers in Chennai metrocircle.

On being asked, I state that M/s Aircel Cellular Ltd.vide its letter 28.10.2004 requested WPC Wing,DoT, New Delhi for allocation of additional 1.8 MHzGSM spectrum in the 900 MHz GSM band (i.e.890-915 MHz paired with 935-960 MHz) for providingCMTS in Chennai metro circle. A copy of the saidrequest letter is available at C/4 to C/11 of the saidfile. Although, the said request letter is dated28.10.2004, the copy thereof was made available toWPC Wing on 28.01.2005. The initial dated28.01.2005 of Sh. D. Jha, the then AWA (V) isavailable on the said request letter. However, thesaid request letter dated 28.10.2004 of M/s AircelCellular Ltd. was processed in the above referred fileby the then Junior Wireless Officer on 16.02.2005and thereafter Sh. M.C. Pande, the then Engineer,further processed the said request mentioning thatM/s Aircel Cellular Ltd., Chennai have requested foradditional GSM spectrum in Chennai metro servicearea after reaching subscriber base of 5 lacs. Sh.M.C. Pande recommended for allocation ofadditional 1.8+1.8 MHz in 900 MHz band beyondalready earmarked (allotted) 6.2+6.2 MHz. Sh.Pande also pointed out that JCES had coordinatedspectrum in 1800 MHz band whereas the requestwas for 900 MHz band. Sh. M.C. Pande proposed toenquire from M/s Aircel Cellular Ltd. if spectrum in1800 MHz band was acceptable. He marked the fileto Sh. D. Jha, the then AWA (V) on 16.02.2005itself. Here it is clarified that M/s Aircel CellularLtd. was initially allotted startup spectrum i.e. 4.4MHz only in 900 MHz band in the month ofNovember, 1995 and subsequently in the month ofMarch, 2000, additional spectrum 1.8 MHz in 900Mhz band was allotted to M/s Aircel Cellular Ltd.for Chennai metro circle. Initially the startupspectrum of 4.4 MHz only was being allotted andsubsequently, in September, 2001 the startup


spectrum upto 6.2 MHz was permitted to beallotted.

A letter dated 22.02.2005 was sent to M/s AircelCellular Ltd., Chennai informing that the GSMspectrum in 900 MHz band was not available andthe request for additional GSM spectrum may beconsidered in 1800 MHz band only. M/s AircelCellular Ltd. was also advised to apply for additionalspectrum in 1800 MHz band. A copy of the saidletter is available at C/19.

Accordingly, M/s Aircel Cellular Ltd. vide its letterdated 28.02.2005 informed WPC Wing of DoT, NewDelhi about their acceptance of the proposedallotment of additional spectrum in 1800 MHzband. The said service provider further requestedfor allotment of 1.8 MHz+1.8MHz of contiguousband for both uplink and downlink communicationin the 1800 MHz band. The said letter dated28.02.2005 of M/s Aircel Cellular Ltd. is availableat C/21. M/s Aircel Cellular Ltd. sent one reminderdated 23.03.2005 to WPC Wing, DoT, New Delhiwhich was received by me on 23.03.2005. I markedthe said letter to Sh. R.J.S. Kushwaha, the then JWA(N) who in turn marked the said letter to Sh. D. Jha,the then AWA (V) on 23.03.2005 itself.

Meanwhile, one request letter dated 24.03.2005 ofM/s Bharti Cellular Ltd. was received by Sh. D. Jha,the then AWA (V) on 31.03.2005 who put up thesaid letter of M/s Bharti along with letter dated28.02.2005 and 23.03.2005 of M/s Aircel CellularLtd. in the above referred file on 31.03.2005 but,inadvertently it appears Sh. D. Jha has put the dateas 30.03.2005 in place of 31.03.2005. The said filewas marked to Sh. M.C. Pande, the then Engineer(V) by Sh. D. Jha. Sh. M.C. Pande noted on the notesheet if the case of M/s Bharti and M/s AircelCellular Ltd., who fulfilled the requisite criteria foradditional spectrum, was to be processed then. Sh.M.C. Pande marked the file to Sh. D. Jha AWA (V)


on 08.04.2005.”

474. From the perusal of the statement, it is clear that

the company had made the request vide letter dated 28.10.2004

and a copy of it was sent to WPC Wing on 28.01.2005 and the

WPC Wing processed it for the first time on 16.02.2005. This

shows the way in which DoT was working. Sh. P. K. Garg does

not say that the Minister Sh. Dayanidhi Maran or anyone else

was interfering in the processing of the request of the company.

Furthermore, as noted above, the DoT was processing the letter

on wrong basis. The company was seeking spectrum on the

ground that its subscriber base in September 2004 was 4.4 lac

and Airtel's subscriber base was 4.38 lac. The company had a

grievance that a company which had lesser subscriber base was

granted additional spectrum, so its case may also be

considered. The company explained that they are as eligible as

Airtel, but the department processed it on the ground that the

company had crossed the 5 lac subscriber base. This is totally

contrary to the record and reflects adversely on the working of

the DoT.

475. This is clear from the letter itself, the relevant part

of which is extracted as under:

“Sub: Request for allocation ofadditional 1.8 MHz GSM Spectrum in the900 MHz GSM band (i.e. 890 – 915 MHz

paired with 935 – 960 MHz) forproviding CMTS in Chennai.

Ref: Our Letter dated September 16th, 2004on the above subject.


Dear Sir,

Reference is made to our letter dated September 16th

on the above subject.

We have made our formal application for additional1.8 MHz GSM Spectrum and have been waiting forallocation from your good office.

As of COAI data on Cellular Subscribers as on 30 th

September, our subscriber base is 4.43 lacs and ournext competitor in Chennai, M/s Airtel's Subscriberbase is 4.38 lacs.

Wherein we have found that you have allocatedadditional spectrum in 900 MHz to M/s AirtelChennai (the copies of our Regular Drive TestResults are attached with ARFCN details). Atpresent, M/s Airtel Chennai is using 8 MHzSpectrum.

Since we have more subscriber base than M/s Airtelin Chennai, we request you to allocate the 1.8 MHzspectrum to us, as allotted by you to M/s AirtelChennai.

We are as eligible as M/s Airtel to get this 1.8 MHzSpectrum allotted. Hence we request you to allotthe 1.8 MHz spectrum to us.

The ARFCN used by M/s Airtel Chennai in this 1.8MHz are ARFCN – 91, 92, 93, 94, 95, 96, 97, 98 &101. WE request you to allot a contiguous band of1.8 MHz like this.

Thanking you,

Yours Faithfully,For Aircel Cellular Limited”

476. The perusal of file this far also shows that whenever


DoT wished to allocate spectrum, they would allocate and

whenever they wished to stop it, they would stop it by putting

all type of queries. For example, Sh. D. Jha recommended for

approval of additional spectrum on the ground that the

company had crossed 5 lac subscriber base, but Sh. P. K. Garg

prevented it by putting a query regarding VLR. This part of the

file has been taken note of and discussed just to show the

strange ways of working of DoT, where nothing is certain and

delay and stalling are a normal feature of its working. Things

can be stalled by putting any query and can also be expedited by

putting no query depending upon the whims of the officer

concerned.

(B) Second attempt and Approval by Secretary (T)

477. Thereafter, in response to the letter of DoT dated

28.06.2005, referred to above, company again wrote a letter

dated 11.07.2005, page 61 (D-37), stating that it has crossed the

5 lac mark of VLR and asking for allocation of additional

spectrum of 1.8 MHz. This letter was processed at 7/N and the

following note sheet dated 13.07.2005 was recorded by the

Assistant Wireless Advisor recommending the allocation:

“Reference to our letter dated 28.06.2005 (S.No.11), M/s Aircel Cellular Ltd Chennai has intimatedthat their VLR in Chennai Metro service area hasnow crossed 5.0 lakhs subscriber base.

It has been checked that frequency 1.8+1.8MHz is available in 1800 MHz band after co-ordination from JCES. The earmarking to M/sHutch of 6.2+6.2 MHz in 1800 MHz has also beenchecked.

We may earmark 1.8+1.8 MHz spectrum (in


1800 MHz band) to M/s Aircell for Chennai Metrobeyond 6.2+6.2 MHz as per draft placed below.

For kind consideration please.”

478. In due course, the file was marked to Wireless

Advisor on 23.07.2005. Thereafter, the file is silent as there is

no movement in the file.

479. However, the file remained with Wireless Advisor

till 31.12.2005. On 31.12.2005, he recorded on a white sheet

stapled at 7/N to the following effect.

“Let us wait for the decision of higher authorities onthe note regarding spectrum availability.”

480. On recording the aforesaid note, Wireless Advisor

marked the file to Joint Wireless Advisor/ Assistant Wireless

Advisor. Joint Wireless Advisor signed the white sheet on

03.01.2006.

481. Thereafter, on 13.01.2006, Assistant Wireless

Advisor, recorded at 8/N as under:

“As desired, with reference to the notes on pre-pagethe case is resubmitted for kind considerationplease.”

482. The file was marked to Deputy Wireless Advisor and

Joint Wireless Advisor. The Joint Wireless Advisor Sh. R. J. S.

Kushvaha marked the file to Wireless Advisor on 13.01.2006.

483. On 17.01.2006, Wireless Advisor Sh. P. K. Garg

recorded a note sheet at 9/N as under:

“The case relates to request from M/s AircellCellular Ltd., for additional GSM spectrum beyond6.2+6.2 MHz in Chennai service area, after crossingthe subscriber base of 5 Lakh.


M/s Aircell Cellular Ltd. have reached asubscriber base of 6.54 Lakh in Chennai in endDecember 2005, as per COAI figures. Thus, theymeet the criteria (5 Lakh subscribers) for getting 1.8MHz of additional GSM spectrum, beyond 6.2+6.2MHz. The coordinated spectrum in 1800 MHz GSMband is available in Chennai.

Hence, it is proposed that we may allot 1.8 +1.8 MHz spectrum in 1800 MHz GSM band (out ofthe available spectrum) to M/s Aircell Cellular Ltd.for Chennai.

For kind consideration.”

484. He marked the file to Secretary (T), who approved

the same on 18.01.2006 at 9/N.

485. This time no question was asked from the company

and Sh. D. Jha straightway recommended the case on

13.07.2005 at 7/N and everybody agreed with that. However,

WA Sh. P. K. Garg sat on the file from 23.07.2005 to

31.12.2005. No written explanation is there in the file as to why

the file remained with him for such a long time, but the

allegation is that Sh. P. K. Garg sat on the file on the oral

instructions of Dr. J. S. Sarma.

486. Let me take a look on the statement of Sh. P. K.

Garg in this regard. Sh. P. K. Garg states in his statement dated

08.05.2012, page 4, as under:

“.................................................................................…...............................................................................On being asked I state that M/s Aircel Cellular Ltd.sent a letter dated 11.07.2005 to me intimating thattheir VLR subscriber base has crossed 5 lacs andrequested for allotment of 1.8 MHz + 1.8 MHz ofcontiguous band for both uplink and downlinkcommunication in the GSM 1800 MHz band. Thesaid letter is available at C/61 of the above referred


file. I marked the said letter to DWA (V) on12.07.2005, who in turn marked the letter to AWA(V) on the same day.Sh. D. Jha, the then AWA (V) put up the said letterdated 11.07.2005 of M/s Aircel Cellular Ltd. in theabove referred file on 13.07.2005 recommending forearmarking 1.8 + 1.8 MHz spectrum to AircelCellular Ltd. for Chennai metro circle beyond 6.2 +6.2 MHz. Sh. D. Jha marked the file to Sh. B.Gunasekar, the then DWA (V) who signed thenotesheet on 15.07.2005 and marked the same toSh. R.J.S. Kushwaha, the then JWA (N) who in turnmarked the file to me on 23.07.2005.On being asked I state that I kept the said file alongwith other files pertaining to spectrum allocation,pending with me at the verbal instructions of Dr. J.S. Sarma, the then Secretary (T). I kept waiting forinstructions from Secretary (T). …........................................................................................................................”

487. Thus, he orally blames Dr. J. S. Sarma, the then

Secretary (T), for asking him to keep the file with him till

further instructions, but he qualifies it by saying that files of

other service providers were also kept pending. He does not

talk of any adverse discrimination against Dishnet DSL

Limited.

488. Sh. P. K. Garg further states in his statement dated

09.05.2012, pages 1 and 2, as under:

“..................................................................................Today I have been shown one original file of WPCWing of DoT bearing No. L-14043/3/2005-NTG (PE1/2011, MR-II, Memo-I, Sl. 5) and state that Istapled one white sheet on 7/N of the above referredfile wherein it was mentioned that 'let us wait for thedecision of higher authorities on the note regardingspectrum availability.' I signed the said notesheet on


31.12.2005 which was also signed by Sh. R. J. S.Kushwaha, the then JWA (N) on 03.01.2006.Similar observation was also passed by me on otherpending cases at that time.

Here I would like to clarify that Dr. J. S.Sarma, the then Secretary (T) had instructed me tohold the cases for allotment of spectrum/additionalspectrum till further orders. This instruction wasgiven in the month of July/August, 2007 and wasapplicable to all service providers.

On being asked I state that in the first half ofJanuary, 2006, Dr. J. S. Sarma, the then Secretary(T) instructed me to process the pending cases forallotment of spectrum/ additional spectrum todifferent service providers. Accordingly, I directedthe concerned official of WPC Wing to process/resubmit the pending cases.

Sh. D. Jha, the then AWA (V) resubmitted theabove referred file on 13.01.2006 for considerationand marked it to Sh. B. Gunasekar, DWA (V) who inturn marked the file to Sh. R. J. S. Kushwaha, thethen JWA (N) on the same day and the file was sentto me by Sh. R. J. S. Kushwaha on 13.01.2006.

I examined the case and noted that M/s AircelCellular Ltd. had reached a subscriber base of 6.54lac in Chennai in end December, 2005 as per COAIfigures. I proposed that 1.8 + 1.8 MHz additionalspectrum in 1800 MHz GSM band may be allottedto M/s Aircel Cellular Ltd. for Chennai. I marked mynote dated 17.01.2006 to Secretary (T) whoapproved the same on 18.01.2006 and sent back thefile to me.…................................................................................................................................”

489. Here again he blames Dr. J. S. Sarma for asking him

to hold the cases for allotment of spectrum and additional

spectrum till further orders and this was applicable to all

service providers. He also adds that when the files were


processed, the order was also applicable to all service providers.

Repeatedly the witness says that there was no adverse/ hostile

discrimination against Aircel Cellular Limited.

Criteria for allocation of spectrum beyond 6.2 MHz and

processing of file

490. In this regard, PW 9 Sh. P. K. Garg states in his

statement dated 24.05.2012, page 22, as under:

“I have also been shown a copy of order No. L-14041/06/2000-NTG dated 01.02.2002 issued bySh. R. K. Srivastava, Engineer (Memo-69, Sl. No. 3).On perusal of the said order, I state that this orderwas issued for allocation for additional radiofrequency spectrum to the cellular mobile telephoneservice providers. Vide this order, it was decided toassign additional spectrum up to 1.8 + 1.8 MHz tothe CMTS operators (beyond 6.2 MHz). Thisorder speaks that any service provider havingcustomer base of more than 4 lakhs or more couldapply for additional spectrum but would beallocated additional spectrum only when itscustomer base reaches 5 lakhs or more. It is alsomentioned in the order that the additional spectrumwill be assigned in 1800 MHz band. This order alsostates that further additional spectrum upto 10+10MHz per operator in a service area could also beconsidered. Such additional allocation could beconsidered only after a suitable subscriber base, asmay be prescribed, is reached.”

491. Furthermore, Sh. D. Jha in his statement dated

17.11.2011, page 6, states as under:

“.....................................................................................................................................................................I marked the file to Engineer (V) Sh. M.C. Pandey on30.03.2005. Engineer (V) in his note in the file hasindicated on 08.04.2005 that whether the case for


additional spectrum for M/s Aircel and anotherservice provider M/s Bharti should be processedwho fulfill the requisite criteria for additionalspectrum. It is indicated that the file was pendingdue to Chennai (BSNL Case). At that time the casefor additional spectrum for BSNL in Chennai Metrowas under the examination of the Higher Authority(ies) and its outcome was essential to take a view forthe allotment of such additional spectrum. The casewas processed by me on 30.05.2005 for earmarkingof additional spectrum to M/s Aircel Cellular Ltd. inChennai Metro. On the basis of claim of M/s Aircelvide there letter dated 10.05.2005 it is mentioned inthe file that as per COAI Statistics April 05. M/sAircel was the only service provider who has crossed05 lakh subscriber base (HLR) in Chennai MetroService area which was the criteria for claimingadditional 1.8 + 1.8 MHz over and above allotted6.2 + 6.2 MHz at that time. The file was approvedby the then DWA (V) Sh. G.K. Aggarwal and markedto Wireless Advisor who wrote on the file on03.06.2005 “Recently on another file, it wasrequested that we may obtain information regardingthe active users (VLR) and peak traffic etc. onweekly basis from all service providers, hence wemay obtain this information for processing thesecurrent cases also…..............................................................................................................................................”

492. It is clear from the note sheets as well as statement

of Sh. D. Jha that since both Bharti and Aircel fulfilled the

requisite criteria and a direction was sought by Sh. M. C.

Pandey as to how the file would be processed. He also states

that at that time case of additional spectrum for BSNL was

under examination of higher authorities. However, in the note,

he does not disclose as to or on whose direction he had initiated

the note and what was the direction of higher authorities


regarding allocation of additional spectrum.

493. However, from Deputy Wireless Advisor to Wireless

Advisor, all of them kept processing the file and making one

remark after the another as extracted above. Finally, Wireless

Advisor also recorded on a white slip on 31.12.2005 that:

“Let us wait for the decision of higher authorities onthe note regarding spectrum availability.”

494. As such, it is apparent that things were not clear in

the department. Sh. D. Jha sat on the file for 52 days without

any explanation, though he states orally that matter was

pending due to BSNL case.

495. Wireless Advisor sat on file from 23.07.2005 to

31.12.2005, for full 161 days. In the file, there is no direction

recorded by Dr. J. S. Sarma or the Minister. The file was

processed by the officers of WPC Wing on their own. None of

the note sheets, extracted above in detail, state as to on whose

instance any particular note sheet is being recorded. In such a

situation, it is reasonable to presume that the officers were

recording the note sheets on their own initiative in their usual

course of business, sometime expediting the file and sometime

delaying or stalling the same. Furthermore, as already noted

above, there was no hostile discrimination against Aircel

Cellular Limited and the files of all service providers were kept

on hold.

496. Not only this, the oral statement of Sh. P. K. Garg is

contrary to written record available in the file. In such a

situation, I do not find anything incriminating which can put

the blame on Dr. J. S. Sarma alone in this regard, more so,


when there was no hostile discrimination against Aircel Cellular

Limited, as cases of all service providers were put on hold.

497. The delay allegedly started w.e.f 23.07.2005.

Wireless Advisor Sh. P. K. Garg states in his statement that he

kept this file alongwith files of other service providers on the

oral instructions of Dr. J. S. Sarma, but he has not noted this

fact anywhere in the file. The statement, as such, is contrary to

the written record. Furthermore, in his note sheet dated

13.01.2006, Sh. D. Jha recorded the note beginning with “As

desired.....”, but he does not state as to who desired the note to

be put up. Similarly, Sh. P. K. Garg in his note dated 17.01.2006

does not state as to why did he choose to record this note on

this particular date itself by sitting over the file for a long time.

Sh. D. Jha in his statement dated 17.11.2011, page 7, speaks

about his note dated 13.01.2006, but does not say as to on

whose instance he resubmitted the file. Thus, Sh. P. K. Garg has

introduced the name of Dr. J. S. Sarma in oral statement for

delaying the file, though the written record says that it was he

who was responsible for the delay. Furthermore, such delays

are not unknown in the DoT as the letter dated 28.10.2004 was

processed on 16.02.2005 and thereafter, Sh. D. Jha sat on the

file for 52 days.

498. Furthermore, Wireless Advisor Sh. P. K. Garg does

not say that he withheld the file of Dishnet alone. He states in

his two statements dated 08.05.2012 as well as 09.05.2012,

both extracted above that he withheld this file alongwith the

file of other service providers for allocation of additional

spectrum. He does not talk about any discrimination against


Dishnet. This is contrary to the case of prosecution that only the

file of Dishnet was being deliberately delayed to choke and

constrict its business environment. It strikes at the root of the

prosecution case that the target was Sh. C. Sivasankaran.

********

VII. Representations (D-4)


Advocate/ Spl. PP, that fed up with various delays caused by the

DoT at the instance of Sh. Dayanidhi Maran and Dr. J. S.

Sarma, the Siva group made several representations, but these

were never considered or heeded. It is repeatedly submitted

that these representations were not considered by the officials

at the instance of Sh. Dayanidhi Maran and Dr. J. S. Sarma as

both were in conspiracy and wanted to force the exit of Siva

group of companies from the telecom sector. My attention has

been invited to the files in which these representations were

dealt with as well as the statements of witnesses to emphasize

that the DoT was not attending to the grievances of these

companies, so that their business environment was choked.


submitted that these representations never reached Sh.

Dayanidhi Maran and he had no role in this regard. My

attention has been invited to the relevant files and statements

in great detail.

501. Let me take note of the material on record in this

regard.

502. Dishnet had submitted a representation dated


17.08.2005 to Secretary (T) Dr. J. S. Sarma. It was processed in

file D-4 at 5/N and a detailed note was recorded by Sh. Govind

Singhal, Director (BS-III) on 24.08.2005. One more

representation dated 30.09.2005 is also available in the file.

503. The note dated 24.08.2005 contains the whole

history of issues of the company pending with the DoT and the

development in the department on these issues. This is a

lengthy note, but for proper understanding of the issue, entire

note is extracted, which is as under:

“1. PUC is a letter from M/s Dishnet Wireless Ltd.(old name M/s Dishnet DSL Ltd.) dated 17th August2005. They have mentioned that a presentation wasgiven to Secretary (T) on 8/8/2005. They havementioned in the letter various issues pending withDOT.

2. Issues are related to WPC, LR & BS Cell asbelow:

S. No. Issue Name ofSection to

whom related

1 Licence for Madhya Pradesh, UP (E) andUP (W)

BS

2 Licence for Kolkata, Punjab, Kerala &Haryana

BS

3 Point of Interconnect (POI) from BSNL forthe ongoing GSM project at Jammu &Kashmir, North-East, Assam, WestBengal, Orissa, Bihar and HimachalPradesh Circles

BS

4 --- ---

5 Wireless Frequencies for Bihar &Himachal Pradesh

WPC

6 --- ---


7 --- ---

8 WiMax Frequency Spectrum for ISPbusiness division

WPC

9 Application for permission to provide IP-VPN Services

LR

10 --- LR

11 --- LR

12 Amendments of name change in the UASLLicences

BS

3 They have requested for resolving theabove issue by:a) Immediate execution of LicenceAgreements for MP, UP (East & West),Kolkata, PB, HR and Kerala TelecomCircle

BS

b) Appropriate directions to BSNL toprovide POI across all the Seven LicencedCircles as required by the Company

BS/BSNL

c) Immediate allocation of frequency forBihar and HP Circles WPC as required bythe company.

WPC

d) Immediate allocation of frequency forISP Division as required by the Company

WPC

e) Immediate permission to provide IPVPN services and amendment of ISPLicence

LR

f) Immediate amendment of name inUASL Licences

BS

4. The letter has been sent to WPC & LR Sectionfor dealing with the issues related to their section.

5. As desired the comments on the issues whichare pending in BS Cell are as below:

1. M/s Dishnet DSL Ltd. had applied forthe grant of Unified Access ServiceLicences for 8 service areas, which areAssam, Bihar, Himachal Pradesh,Jammu & Kashmir, Madhya Pradesh,North East, Orissa and West Bengal on5 th March, 2004. The approval of


Hon'ble MOC&IT was received forissuance of 8 LOIs to M/s Dishnet DSLLtd. on 5 th April, 2004 on Note SheetNo. 13 of File No. 20-231/2003-BS-III(Vol. I)

2. LOI were issued on 6-4-2004. M/sDishnet DSL Ltd. submitted therequired document as per the LOI to theBS Cell on 20-04-2004 that was the lastday to submit the required documents.M/s Dishnet DSL Ltd. submitted theentry fee etc. for seven service areasexcept Madhya Pradesh. In case ofMadhya Pradesh M/s Dishnet DSLLimited requested for the extension ofLOI by three months.

3. M/s Dishnet DSL Limited applied forUP (East) and UP (West) service areaalso on 21 st April, 2004. The case forextension of Madhya Pradesh LOI, Thecase for issue of LOI for Up (East) andUP (West) service area and the case fortaking the approval for signing of thelicence agreement after 15 days from theissuance of LOI was put up combindlyon 26.04.2004 vide Note Sheet no. 1 FileNo. 20-231/2003-BS-III/Vol. III (Vol.2).

4. As per the direction on Note Sheet No.4/N of the same file, the case wasdelinked for the service area for whichthe entry fee has been paid, therefore,the case was processed on 11 th May,2004 at Note Sheet no. 5/N and theSecretary (Telecom) gave the approvalfor signing of the licence agreementafter 15 days from the issue of LOI atNote Sheet No. 5/N.

5. The other two cases i.e. extension of theLOI of Madhya Pradesh by 90 days andissue of LOI for UP (East) and UP(West) service area were processed on


17th May, 2004 vide Note Sheet No. 6/Nof File No. 20-231/2003-BS-III/Vol. III(Vol. 2). The case was underconsideration from Note Sheet no. 6/Nupto 16/N. On 13 July 2004 Secretary(T) forwarded the file to Hon'ble MOC &IT for consideration and approval videNote Sheet No. 16/N. PS to Hon'bleMOC&IT directed to seek theclarifications as mentioned on N/S No.17/N.

6. A letter was issued to the applicantcompany asking for the information ofits sister concern holding the licences. AUO note was forwarded to Sr. DDG(VAS), DDG (LF), DDG (LR) andWireless Advisor in respect of the PS toMOC & IT notings on 17/N. The UONote was issued on 8th September 2004vide Note Sheet No. 18/N (Vol-2).

7. On 27 th August, 2004 Hon'ble MOC&IThad desired the cae file of M/s DishnetDSL Ltd. in which the Letter of Intentfor 8 service areas were issued. Thesame information was conveyed toHon'ble MOC&IT vide Note Sheet No.23/N on 27th August, 2004 (Vol-1).

8. PS to Hon'ble MOC&IT forwarded allthe case of BS Cell and VS Cell toAdditional Secretary (T) for thepreparation of note on 15 th September,2004. Additional Secretary (T) gave hisopinion on 30-11-2004 and forward toSecretary (T). The Secretary (T) askedto take the legal status on the commentsof the AS (T) (Vol-3). On 13 th December,2004, the case was forward to LegalAdvisor for legal opinion on thecomments of the AS (T) vide Note SheetNo. 19/N and 20/N (Vol-3).

9. On 17th December, 2004, the file waswithdrawn from the Legal Advisor as per


the direction to submit all the file relatedto M/s Dishnet DSL Ltd. to Hon'bleMOC&IT. All the files were put up to theHon'ble MOC & IT on 21st December,2004 vide Note Sheet No. 21/N (Vol-3).

10. The case for legal opinion was againsubmitted on 22 nd December, 2004 andthe legal opinion is available on 21 and22/N. Secretary (T) has mentioned onthe Note Sheet 21/N on 30 March, 2004(Vol-2) that the case was discussed withHon'ble MOC&IT and these files arebeing returned with the direction thatthe division should ascertain all theshow cause notices / advisory letterissued to the above company orcompanies belonging to the Group andthe nature of defaults before any view istaken. It may be submitted to mysuccessor. As per the direction ofSecretary (T), a UO Note was issued toDDG (VAS), DDG (LR), DDG (LF) andWireless Advisor for giving theircomments.

11. With the above remarks a letter wasissued to DDG (LF), DDG (LR), DDG(VAS) and Wireless Advisor for givingthe comments as above. The reply ofDDG (LF), DDG (VAS), Wireless Advisorand DDG (LR) have been received andthe comments are as follows: a. LF Cell has intimated that the LFBranch has not issued any Show CauseNotice / Advisory Letters to M/s DishnetDSL Ltd.b. LR has intimated that followingare the cases under process in LR Wing:(i) Show Cause Notice for imposingpenalty amounting Rs.2,36,88,522 andsubmitting additional bank guarantee ofRs.3.20 crores because of grey marketactivities by its subscribers. Final order


under issue after according personalhearing before Member (P).(ii) Show Cause Notice for terminationof licence for violation of clause 10regarding Transfer of Licence is underissue. Approval of MOC received on 28 th

March, 2005.(iii) 6 nos. of new cases have beenreported for involvement of itssubscribers in grey market recently (on10 th March, 2005). The cases are beingprocessed.c. Wireless Advisor has intimatedthat no Show Cause Notices/AdvisoryLetters have been issue to the Company.d. VAS has mentioned on Note SheetNo. 26/N that the extracts of file no.843-325/2000-VAS (Pt) having remarkof Secretary (T) for information andfurther necessary action of BS Cell. Inthe remarks Secretary (T) hasmentioned that please examine thematter afresh in the light of noticesissued to the company in some of theISPs related irregularities.Case is submitted for further

guidelines.”

504. Sh. Govind Singhal marked the file to Sh. P. K.

Mittal, who endorsed the note to Advisor (P) on the same date,

that is, 24.08.2005. Advisor (P) endorsed it on 31.08.2005 to

Member (P) and Member (P) marked it to Secretary (T) on

01.09.2005.

505. Secretary (T) Dr. J. S. Sarma recorded on

15.09.2005, page 7/N, as under:

“AS(T) to go through and comment.”


506. The file went to Additional Secretary (T) Sh.

Yashwant Bhave, who recorded on 19.09.2005 as under:

“I would like to discuss with DDG (BS). Is the natureof irregularities such as to warrant stringent actionregarding further examination?”

507. After recording the aforesaid note, he marked the

file to DDG (BS). Sh. P. K. Mittal, DDG (BS), sought time for

discussion from AS (T) and recorded a note in this regard:

“May kindly indicate time and date for discussion atthe convenience of AS (T).”

508. He marked the file to PS to AS (T). AS (T) Sh

Yashwant Bhave discussed the matter with Sh. P. K. Mittal on

17.10.2005 and recorded a note as under:

“Discussed. WA may kindly indicate if any spectrumhas been given/ allocated to M/s Dishnet and if sowhat is the status of those applications.”

509. After recording the note, he marked the file to

Wireless Advisor (WA) Sh. P. K. Garg. Sh. P. K. Garg marked

the file to Deputy Wireless Advisor Sh. D. Jha, who recorded a

note on 31.10.2005 at page 9/N as under:

“With reference to minutes of AS (T) on prepage:

1. GSM spectrum:

1.1 Case for allotment of initial 4.4+4.4 MHzGSM frequencies in 1800 MHz band in BiharTelecom Service area is under processing. Asregards, HP Telecom service area, coordination ofspectrum has, so far, not been received from JCESand same is being pursued.


2. Spectrum for ISP network

Status i.r.o. The applications received from M/sDishnet Wireless Ltd. for frequency assignment in2.5 GHz, 3.3 GHz and 5.7 GHz bands for ISP is asfollows:

2.1 M/s Dishnet Wireless Ltd. was requested forstatus of conversion of decision letters alreadyissued by WPC Wing, into operating licences. Replyis awaited.

2.2 Cases pertaining frequency assignment in 3.3GHz and 5 GHz have been examined and arepending for further processing for want ofinformation from the applicant regardingconversion of decision letters into operatinglicences.”

510. After this note, the file reached the Wireless

Advisor. He marked this file to AS (T) on 02.11.2005. It is of

some interest in the files D-35 and D-37 also in which allocation

of initial spectrum to Dishnet in Bihar service areas and

allocation of additional spectrum to Aircel Cellular Limited in

Chennai service area were also dealt with. Here, AS (T) Sh.

Yashwant Bhave had sought a report from Sh. P. K. Garg and

Sh. P. K. Garg marked the file to Sh. D. Jha and Sh. D. Jha put

up his aforesaid note dated 31.10.2005. The file was marked by

Sh. P. K. Garg to Sh. Yashwant Bhave on

31.10.2005/02.11.2005 at 9/N (D-4). Thus, Sh. P. K. Garg had

full opportunity to record the status of these two files, that is,

D-35 and D-37, as both the files were with him as D-35 was

marked to him on 24.08.2005 and remained with him till


31.12.2005 and file D-37 was marked to him on 23.07.2005 and

remained with him till 31.12.2005. So, both the files were with

him but he did not record anything about Dr. Sarma asking him

to retain the two files. It is also of interest that the direction of

AS(T) Sh. Yashwant Bhave was recorded at the top of note sheet

by Sh. D. Jha. This indicates that whenever directions came

from an authority, it was duly recorded. This nullifies the stance

in oral statements.

511. Thereafter, the file is silent till 05.06.2006.

512. However, at 10/N Sh. Yashwant Bhave, AS (T)

recorded note on 05.06.2006, as under:

“This has reference to Secretary (T)'s remark on7/N. I am submitting my comments after discussingthe case in detail with DDG (LR), DDG (BS) andWireless Adviser from different points of view asindicated in the above note. As far as the issue oflicences are concerned, from page 5 it is clear thatLOIs for 8 Service Areas (Assam, Bihar, HimachalPradesh, Jammu & Kashmir, Madhya Pradesh,North East, Orissa and West Bengal) have beenissued on 06.04.2004.

All LOIs (except Madhya Pradesh) wereconverted into licence agreements. M/s Dishnet hasfurther applied for licences in respect of otherservice areas of UP (East), UP (West), Kolkata,Punjab, Kerala and Haryana and extension forMadhya Pradesh. M/s Dishnet had some violation ofterms and conditions of licences for which showcause notices were issued. They had requested thatissue of new licences as well as validity of LOI incase of Madhya Pradesh may not be linked withshow cause notices.

The issues pending with different Branches inDOT have been examined in the above notes. It


appears that there are some show cause notices fromthe LR Branch issued to the company after the legalopinion dated 11.01.2005. The aspect to bedeliberated upon is whether new licences/LOIs canbe granted during the pendency of issue of showcase notices or litigations.

This was discussed at different times withDDG (LR), DDG (BS) as well as WA. I nowunderstand the Hon'ble MOC & IT has approved thedelinking of show cause notice in the grant of LOIs,etc. The file is, therefore, returned for appropriateaction.”

513. Sh. Yashwant Bhave has also recorded that this note

has been recorded with reference to Secretary (T)'s remarks.

This again means that wherever the directions were given, the

same were given in writing and were duly acknowledged by the

officials to whom directions were given. Further, perusal of the

note reveals lack of interest by Sh. Yashwant Bhave in the work

assigned to him in writing by superior officer. The reading of

the note reveals that his attitude was lackadaisical, with no

interest in the assigned work.

514. On recording this note, he (Yashwant Bhave)

marked the file to DDG (BS) Sh. P. K. Mittal, who appended his

signature on the file on 05.06.2006 itself and marked the file to

Director (BS-III). On the same date, Director (BS-III) marked

the file to DDG (BS-III).

515. Thereafter, there is absolutely no movement in the

file and the file stops at this.

516. PW 3 Sh. Yashwant Bhave in his statement dated

13.01.2012, pages 2 and 3, inter alia, states as under:


“On being asked I state that the said file remainedpending with me since 02.11.2005 till 05.06.2006.

No other file with regard to UASL was markedto me earlier, the subject was not allotted to me.Hence, I state that I did not have detailed domainknowledge in the procedure of issue of licences orspectrum etc. I was not dealing with the matter oflicences or spectrum allocation. However, Dr. J. S.Sarma, the then Secretary (T) had indicated that theissuance of UASL has been linked with the showcause notices issued as desired by Shri DayanidhiMaran, the then MoC & IT and that it was not yetdecided if show cause notices could be delinked togrant of new UASL.

I examined the matter as directed by Dr. J. S.Sarma, the then Secretary (T) summarising theposition and also mentioning that the aspect to bethen deliberated was whether new licences/ LOIscan be granted during the pendency of show causenotices or litigations. I have also mentioned thatthese issues and aspects were discussed at differenttimes. My understanding based on the discussionwas that Shri Dayanidhi Maran, Hon'ble MoC & IThad recently approved the delinking of show causenotices in grant of LOIs etc.

On being asked I state that I could not offermy comments as desired by Dr. J. S. Sarma, the thenSecretary (T) vide his note dated 05.09.2005 as Iwas asked by Dr. J. S. Sarma to keep the file with metill a decision is taken in the matter of delinking theshow cause notices to grant of new UASL.

In the first week of June, 2006 I was conveyedby DoT officials either by DDG (LR) or DDG (BS) orWA that the Hon'ble MOC&IT had delinked theshow cause notices in the grant of LOIs. However,the file in which the decision for delinking the showcause notice with grant of UASL was taken wasnever put up through me. Accordingly, I offered my


comments on 05.06.2006 recommending for takingappropriate action in the matter in the light of thefact that the issue of delinking of show cause noticesfrom grant of fresh licences was decided by ShriDayanidhi Maran, Hon'ble MoC & IT. I marked thefile to DDG (BS) Sh. P. K. Mittal on 05.06.2006.This note is available at 10/N of the said file.”

517. Furthermore, in his further statement dated

26.08.2013, recorded after more than one and a half year of his

earlier statement dated 13.01.2012, Sh. Yashwant Bhave states

as under:

“I had discussed the matter with Dr. J. S. Sarma, thethen Secretary (T) in the matter. He had informedme that the issuance of UASL has been linked withthe show cause notices issued as desired by Sh.Dayanidhi Maran, the then MoC&IT. He alsoapprised me of the fact that the then MoC&IT didnot want to clear the files pertaining to M/s DishnetDSL Ltd. unless a policy decision on the issue ofdelinking the irregularities of/show cause noticesissued to M/s Dishnet from issuance of freshlicences to it is first taken by him. I was given theimpression that till then there was no need to offercomments in the matter earliest pending the saiddecision and that I should keep the file with me tillthen. I reiterate that grant of licences, theirmonitoring and other actions attendant theretowere never the subject matter allotted to me.

I was in the zone of consideration ofempanelment for Secretary's post and retained thefile with me as desired by the Secretary Dr. J. S.Sarma. On being asked I state that I was brought toDoT at the recommendation of Sh. Nripendra Misra,the then Secretary (T). I state that my predecessorAS (T) Dr. J. S. Sarma was brought as Secretary (T)after retirement of Sh. Nripendra Misra after aperiod of four months as was desired by the then


MoC&IT. However, meanwhile Secretary,Department of Information Technology Mr. BrajeshKumar held additional charge of Secretary (T).”


03.09.2013, at page 5, states about his note dated 24.08.2005,

extracted above, as under:

“....................................................................................................................................................................Now I have been shown one original file of DoTbearing no. 20-231/2005-BS-III(Vol.IV) and statethat M/s Dishnet Wireless Ltd. had submitted fourapplications for grant of UASL for Punjab, Haryana,Kerala and Kolkata Service areas and the same wasprocessed by Sh. A.R. Devarajan, AD(BS-III) on09.03.2005. He recommended for grant of UASLand marked the file to me. The applications wereexamined at different level in DoT. Meanwhile M/sDishnet Wireless Ltd. sent a representation dated17.08.2005 to Dr. J.S. Sarma, Secretary(T). The saidrepresentation was marked to me by Sh. P.K. Mittal,DDG(BS) on 23.08.2005. I examined the saidrepresentation and put up a note on 24.08.2005giving a comprehensive note on different pendingissues/approval of M/s Dishnet Wireless Ltd. forfurther guidance. At para 7 of my note dated24.08.2005, I mentioned that on 27.08.2004, theMoC&IT had desired the case file of M/s DishnetDSL Ltd. in which the LOI for 8 service areas wereissued. At para 8, I mention that PS to MoC&ITforwarded all the cases of BS cell and VAS cell toAS(T) for preparation of note on 15.09.2004. AS(T)gave his opinion on 30.11.2004. Secretary(T) askedto take legal status on the comments of AS(T). On13.12.2004, the case was forwarded to Legal Adviserfor legal opinion on the comments of AS(T). All thefiles were again put up to MoC&IT on 21.12.2004after withdrawing the files from LA. The case forlegal opinion was again submitted on 22.12.2004and the legal opinion was received on 11.01.2005.


At para 10, vide 7/N, I have mentioned that on30.03.2005(inadvertently typed as 30.03.2004), thecase was discussed by Secretary(T) with MoC&ITand the files were returned with the direction thatthe division should ascertain all the show causenotices/advisory letters issued to M/s DishnetWireless Ltd. or the companies belonging to thegroup and the nature of the default before any viewis taken. The LR cell has intimated the details of theshow cause notices issued to the company or itssister concern. I marked the file to DDG(BS) who inturn marked the file to Sh. R.N. Prabhakar, the thenAdvisor(P) who in turn marked the file to Sh. B.Shiva Ramakrishnan, the then Member(P). Dr. J.S.Sarma, the then Secretary(T) marked the file to Sh.Yashwant Bhave, the then AS(T) with direction togo through and comment on 15.09.2005. The fileremained pending with AS(T) till 05.06.2006.…...........................................................................................................................”

519. PW 8 Sh. P. K. Mittal has also stated about these

representations in his statement dated 01.12.2011 at pages 3 to

6. He also states that the file remained with Additional

Secretary till 05.06.2006 for about 216 days, when it was

returned by him after recording his observations.

Representations of Sh. V. Srinivasan: D-5

520. Similarly, some representations of Sh. V. Srinivasan

were also dealt with in file D-5, which were processed by Sh. A.

R. Devarajan, AD (BS-III), at 1/N on 28.10.2004 by recording

note sheet, which reads as under:

“Subject: (i) Extension of time for signing License after issue of LOI in respect of Madhya Pradesh service areas.(ii) Issue of LOI for UP (East) & UP


(West) service areas.(iii) M/s. Dishnet DSL Limited had applied for change of name.As directed the following letters are being put up for further action please.PUC are three letters (i), (ii) & (iii) all dated 26.05.2004 received from M/s. Dishnet Wireless Ltd erstwhile Dishnet DSL Ltd.

2. In respect of PUC (i) the Letter of Intent for Madhya Pradesh Telecom circle was issued to M/s. Dishnet DSL Ltd. on 6.4.2004. The company had requested for extension of time for 90 days to sign the licence agreement. At present the company is ready to sign the Licence Agreement.

3. Regarding PUC (ii) application from M/s. Dishnet DSL Ltd was receivedon 21.4.2004 and processed for issue of LOI for Uttar Pradesh (East) and Uttar Pradesh (West).

4. PUC (iii) is in regard to the change of name by M/s. Dishnet DSL Ltd. to M/s. Dishnet Wireless Ltd. Relevant documents were submitted. File also submitted for approval of change of name.

PUC's are submitted please.”

521. The file was marked by Sh. A. R. Devarajan to

Director (BS-III), who, in turn, marked the file to DDG (BS) Sh.

P. K. Mitta, who recorded that the letters are being sent for kind

information please and marked the file to Member (P) and


Member (P) marked the file to Additional Secretary (T) Dr. J. S.

Sarma. Dr. J. S. Sarma recorded on 30.11.2004, “These have

been sent to Secretary (DoT) separately”, and marked the file to

DDG (BS), who marked the file to Director (BS-III), who, in

turn, marked the file to AD (BS-III). Thereafter, the file is silent

and a new issue of liquidated damages to be imposed on the

company was started from 2/N.

522. Sh. P. K. Mittal in his statement dated 11.02.2013

states about various representations as under:

“In continuation to my statement dated 08.10.2012,I further state that today I have been shown oneoriginal file of DoT bearing No.20-225/Dishnet/2004GENL Matters/BS-III (Pt.) andstate that Sh. A.R. Devarajan, the then AD, BS-III,DoT had initiated a note on 28.10.2004. In fact, Sh.V. Srinivasan, CEO and Director of M/s DishnetWireless Ltd. had submitted three representations,all dated 26.10.2004 which were addressed to theChairman, DoT, New Delhi and available at 238, 239and 240/C of the above referred file. However, itappears that Sh. A.R. Devarajan had mentioned thedates of the said three representations as26.05.2004 in place of 26.10.2004 inadvertently.Vide those three letters, Sh. V. Srinivasan hadsought the following:-

(1) Request for extension of time period for LOIissued to Dishnet Wireless Ltd. for Madhya Pradeshtelecom circle.

(2) Request for issuance of LOI for UP(East) &UP(West) telecom circle.

(3) Request for taking on record change of nameof M/s Dishnet DSL Ltd. to Dishnet Wireless Ltd.

Sh. A.R. Devarajan marked the file to Sh. Govind


Singhal, the then Director (BS-III) who in turn sentthe file to me on 28.10.2004. I sent the file to Sh. B.Sivaramakrishna, the then Member Production. Infact, the relevant files in which the above referredthree requests were dealt with and recommended forapproval to the Minister, were already sent to Dr.J.S. Sarma, the then Additional Secretary (T) by thethen MoC&IT office. Therefore, theserepresentations were also sent to Dr. J.S. Sarma, thethen Additional Secretary by Member (P). Theabove referred file was returned to me by Dr. J.S.Sarma, the then Additional Secretary on 30.11.2004with the remark that ‘these have been sent toSecretary, DoT separately’. On being asked I statethat the word ‘these’ in the above referred remarkrefers to the files where the requests of M/s Dishnetwere dealt in three different files which were sent tothe Secretary by Dr. J.S. Sarma, the then AdditionalSecretary. I marked the file to Director BS-III on02.12.2004, who in turn marked it to AD (BS-III) on03.12.2004. It appears that the said threerepresentations all dated 26.10.2004 of M/s DishnetWireless Ltd. were not put up before Secretary (T).

…......................................................................................................................”

523. Perusal of files reveals that Secretary (T) Dr. J. S.

Sarma had asked Sh. Yashwant Bhave in writing on 15.09.2005

to go through the representations and comment. However, he

sat on the file till 05.06.2006 and makes an oral statement that

it was Dr. Sarma who had asked him to keep the file with him

till a decision is taken in the matter of de-linking. However, the

issue de-linking of show cause notices from the grant of new

UAS licence was nowhere in sight at that time as the file (D-43)

for that was opened on 27.12.2005 and approval was finally

granted by the Minister on 16.05.2006. However, Sh. Yashwant


Bhave sat on the file till 05.06.2006. This statement is contrary

to record as well as official procedure already noted above.

Furthermore, it is not clear as to why, when the

representations were being dealt with in D-5, which was opened

on 28.10.2004, further representations from Dishnet Wireless

Limited were interposed on 24.08.2005 in another file D-4, at

5/N, which was initially opened for dealing with UASL

applications of Dishnet for Punjab, Haryana, Kerala and

Kolkata service areas.

524. It is also absurd for an Additional Secretary to be so

scared of Secretary that he would do an illegal act of sitting over

a file for close to nine months, that is, from 15.09.2005 to

05.06.2006, only at his asking. This is further compounded by

the fact that Additional Secretary had been empanelled as

Secretary. This is contrary to the Manual of Office Procedure,

already quoted above. The statement of Sh. Yashwant Bhave is

also contrary to record, as wherever Dr. Sarma gave

instructions, he gave the same in writing only.

525. Furthermore, Sh. P. K. Mittal states in his above

statement that it appears that these representations, all dated

26.10.2004, were never put up before Secretary (T). However,

this statement is also contrary to record as all three

representations bear the number of the office of Chairman (TC)

8391 to 8393. Furthermore, all three representations bear

initials of Secretary (T) Sh. Nripendra Mishra, with date of

“26/10”.

526. However, one thing is clear that these two files were

not put up to the then MOC&IT Sh. Dayanidhi Maran.


527. The perusal of the record reveals that the delay was

on the part of Sh. Yashwant Bhave and not on the part of Dr. J.

S. Sarma. The statement of Sh. Yashwant Bhave is contrary to

record. These representations never reached the Minister.

Conspiracy between Sh. Dayanidhi Maran and Dr. J. S. Sarma

528. It may be noted that PW 1 Sh. K. Sanjay Murthy and

PW 2 Secretary (T) Sh. Nripendra Mishra are the only two

witnesses who interacted with Sh. Dayanidhi Maran. Both of

them have not made any oral statement against Sh. Dayanidhi

Maran, except narrating the record available in the files.

529. There is also no statement on record indicating the

type of relationship between Dr. J. S. Sarma and Sh. Dayanidhi

Maran, except the orders issued by Sh. Dayanidhi Maran

authorizing Dr. J. S. Sarma to allocate spectrum and also to give

his comments on certain issues. There is also statement of Sh.

P. K. Garg indicating the role of Dr. J. S. Sarma in modification

of terms of references (ToRs).

530. The issue is how to infer conspiracy between Sh.

Dayanidhi Maran and Dr. J. S. Sarma? From the aforesaid

material it is difficult to infer any conspiracy between the two.

Simply because Minister is asking a particular officer to

perform certain official acts, one cannot call them conspirators.

531. Furthermore, a perusal of the statement of Sh.

Yashwant Bhave reveals that Dr. J. S. Sarma and Sh. Dayanidhi

Maran were not in conspiracy, which is clear from the following

sentences:

“I had discussed the matter with Dr. J. S. Sarma, the


then Secretary (T) in the matter. He had informedme that the issuance of UASL has been linked withthe show cause notices issued as desired by Sh.Dayanidhi Maran, the then MoC&IT. He alsoapprised me of the fact that the then MoC&IT didnot want to clear the files pertaining to M/s DishnetDSL Ltd. unless a policy decision on the issue ofdelinking the irregularities of/show cause noticesissued to M/s Dishnet from issuance of freshlicences to it is first taken by him.”

532. The case of the prosecution is that Dr. J. S. Sarma

was a conspirator with Sh. Dayanidhi Maran. However, the

statement of Sh. Yashwant Bhave as extracted above goes

against the theory of conspiracy as here the alleged co-

conspirator Dr. J. S. Sarma is not projecting himself to be a

conspirator but is entirely blaming the Minister for linking the

show cause notices to the issuance of new UASL. He further

states that Dr. J. S. Sarma told him that MOC&IT did not want

to clear the file pertaining to Dishnet DSL Limited unless a

policy decision on de-linking is taken. Thus, the alleged

conspirator is not exhibiting the behaviour of a conspirator, but

is fairly and squarely blaming the Minister. Where is the

agreement to do an illegal act or a legal act by illegal means?

Furthermore, Dr. J. S. Sarma does not tell Sh. Yashwant Bhave

that the Minister was trying to delay the issues of Dishnet for

any illegal consideration, but purely for a policy decision on the

issue of de-linking of irregularities of/ show causes notices

issued to Dishnet from issuance of fresh licences. This

statement breaks the theory of conspiracy between the two.


Representations of Sh. C. Sivasankaran

533. Sh. C. Sivasankaran in his statement dated

23.02.2012, at pages 8 to 11, states as under:

“.....................................................................................................................................................................Now, I have been shown a folder (MR II, Memo 41,Sl. No. 1) (at pages 115 to 121) that contains theletters written by me to Sh. Dayanidhi Maran, thethen MOC&IT on 04.04.2005, 03.05.2005 and01.06.2005 in which I had tried to explain to thethen MOC&IT, the various pending issues of mytelecom business with the DoT, WPC & BSNL, witha request to the Hon’ble Minister to release thepending clearances at the earliest. In my letter dated04.04.2005 addressed to Sh. Dayanidhi Maran, thethen MOC&IT, I quote the following issues whichwere brought to the notice of the Hon’ble Ministerby me:“First, consequent to change in the name of thecompany from Dishnet DSL Limited to DishnetWireless Limited, we have made a request foreffecting the change of the name of the company inUASL Licence. This is pending for the last 8months. Such a request is normally cleared at thelowest levels in the administration and instantly.But our request is pending for an unusually long 8months.Second the company was given the Letter of Intentfor M.P circle in April 2004. Despite the fact that asearly as April 20th 2004 the company had written tothe DoT expressing its readiness to fulfill the termsof the LoI and asking for the normal extension of theLoI and for issue of UASL, both requests arepending with the DoT for the last 8 months. Allclarifications required by the DoT have beenfurnished.Third, the application for issuance of LoI and UASLis pending in respect of UP (West) and UP (East)circles for the past 9 months. Whatever clarificationthe DoT wanted has been given.


Fourth, despite that in principle sanction forfrequency was given for the Bihar and HimachalPradesh circles, no spot frequency has been allottedfor the past 9 months. In the case of Orissa, thespot frequency allotted is 1800 MHz against the inprinciple sanction of 900 MHz. Despite allclarifications given by the company, there iscomplete stagnation in the matter. I may add atthis stage that because of the delay in giving thefrequencies the revenue accruals that will yieldrevenues to government have not taken place and tothat extent there is revenue loss to the state.Fifth, our request for provision of points ofinterconnection by BSNL for J&K, HP, Assam,North East, Rest of WB, Orissa and Bihar TelecomCircles, which is normally done for all as a matter ofroutine, were pending since October 2004. Forexample, out of 453 ports required for all thementioned circles, BSNL is yet to raise demandnotes for 362 ports. In J&K even though it hasraised demand notes for 8 ports unusually the BSNLis not accepting the fee for them. Sixth, the issue of UASL license in respect of Kolkatacity circle and for the States of Punjab, Haryana andKerala is pending for the last six weeks.Seventh, also the allocation of WiMax FrequencySpectrum for ISP business division of the companyis pending for the last two months”.In my letter dated 04.04.2005 addressed to Sh.Dayanidhi Maran, the then MOC&IT, I had alsomentioned that I was bringing those unusualoccurrences to the Hon’ble Ministers notice only toshow how there appears to be some unspokenconvergence in the delays and denials with theBSNL too acting in tandem with DoT. Since all thosecircumstances were intriguing for me I did not wantit to remain unreported to the Hon’ble Minister asthe highest functionary of the DoT, and therefore Ihad considered it my duty to bring it to his noticeand accordingly wrote to Sh. Dayanidhi Maran, thethen MOC&IT on the subject through my lettersdated 04.04.2005, 03.05.2005 and 01.06.2005


which was already submitted by Sh. V. Srinivasan.In my letter dated 04.04.2005 addressed to Sh.Dayanidhi Maran, the then MOC&IT, I had alsomentioned that the way the events had moved forthe previous 8 – 9 months had made meapprehensive of the intent of those in decision-making positions, and as I had no way of knowingwhat happened within the system, I was constrainedto seek a hearing from the Hon’ble Minister himselfto submit my side of the case. I had thereforerequested the Hon’ble Minister to give me anappointment so that I can explain all the factsrelating to each of the issues from my side and howthe delay had imposed heavy costs on my group. Ihad also expressed my trust on the Hon’ble Ministerthat he would ensure that the normal treatmentwhich the government gives under the policies andpronouncements will be given to the Siva Group aswell, particularly Dishnet DSL Ltd. (renamed asDishnet Wireless Ltd.) and that justice is done.On being asked I state that I reiterated more or lessthe same issues in my subsequent letters dated03.05.2005 and 01.06.2005 to Sh. DayanidhiMaran, the then MOC&IT, as was done by Sh. V.Srinivasan and Sh. Rohit Chandra in their variouscommunications and presentations to Shri J.S.Sarma, the then Chairman, Telecom Commissionand Secretary, DoT. On being asked I state that to my dismay, neitherdid the DoT under Shri Dayanidhi Maran take anyaction to weaken the freeze/strangulation policybeing exercised by them on the telecom business ofSiva Group nor did the Hon’ble Minister consider itworth his time to grant me an audience which I hadsought repeatedly. On being asked I state that it was becomingincreasingly clear from the analysis of the abovecourse of events that the policy offreeze/strangulation being exercised by the DOT vis-a-vis my telecom business is not an usual case ofbureaucratic red tape but a policy well thought out,commanded and monitored by none other than Shri


Dayanidhi Maran, the then MOC&IT himself.Perplexing and frustrating as it was to me, themotive for such a deliberate negative attitude on thepart of Shri Dayanidhi Maran, the then MOC&ITvis-à-vis my telecom business became even moreclear to me when as mentioned above Sh. V.Srinivasan informed me about his conversation withSh. Asim Ghosh of Hutchison Group.….............................................................................................................”

534. Copies of these representations are contained in D-

80 and D-305. However, there is absolutely no material on

record to indicate that these representations were put up before

Sh. Dayanidhi Maran or even brought to his notice. These

representations are not available in the DoT record, but copies

of the same were supplied to the CBI by the company itself.

535. The statement of Sh. C. Sivasankaran is not

supported by the material on record regarding non-

consideration of his representations by Sh. Dayanidhi Maran.

536. The conclusion is that there is no material to

indicate that Sh. Dayanidhi Maran or Dr. J. S. Sarma were

responsible for delay in considering the representations of Sh.

C. Sivasankaran or Sh. V. Srinivasan or for not considering

them at all.

*********

IX. Provisioning of POIs (D-117 for NE, D-120(i) for

Orissa & D-118(ii) for H.P.)

537. It is submitted by Sh. Anand Grover, learned Spl. PP

for CBI, that provisioning of POIs by BSNL was delayed at the

instance of Sh. Dayanidhi Maran. It is further submitted that it


was also deliberately done to force the exit of Siva group of

companies from the telecom business as it was delayed for a

wholly outlandish reason that the company was not allocated

spectrum. It is submitted that allocation of spectrum was not a

requirement for provisioning of POIs. It is further submitted

that on account of the pressure of Sh. Dayanidhi Maran, which

was being done through Chairman, BSNL, Sh. A. K. Sinha, Sh.

Mahipal Singh, Joint DDG (Regulation), had sent an e-mail

dated 06.05.2005 to various service areas to stop work on

provisioning of POIs as the company had not been allocated

spectrum. It is repeatedly submitted that BSNL officials had no

business to ask such questions and this all was done to delay

the matter at the instance of Sh. Dayanidhi Maran.

538. Learned counsel for the defence have refuted this,

submitting that there is no legally admissible evidence on this

point in the record.

539. Both parties have invited my attention to relevant

files and statements of witnesses to support their point of view.

540. The provisioning of Point of Interconnects (POI) by

BSNL to Dishnet DSL Limited was allegedly delayed for a

period of three to seven months in Himachal Pradesh, North-

East and Orissa telecom service areas. It is alleged that this was

done at the instance of Sh. A. K. Sinha, the then CMD, BSNL,

who was doing it at the behest of Sh. Dayanidhi Maran.

Allocation of spectrum to Dishnet

541. Sh. D. Jha, PW 16, in his statement dated

06.11.2012, states about allocation of spectrum to Dishnet in


various service areas as under:

“.....................................................................................................................................................................Out of the above referred seven applications, start-up spectrum for the following five service areas wereallocated by WPC Wing. The details have beenreflected by me at 6/N of the original file bearingNo.L-14042/30/2004-NTG, which is reproduced asunder:-Sl. No. Circle Frequency band Date of

earmarking

1. Assam 900 MHz 22.07.2004

2. North East 900 MHz 22.07.2004

3. J&K 900 MHz 01.09.2004

4. HimachalPradesh

- Yet to be allotted*

5. West Bengal 1800 MHz 15.12.2004

Orissa 1800 MHz 24.12.2004

Bihar Proposed in1800 MHz

Case has beensubmitted

….............................................................................................................................”

542. Thus, the allegation is that the provisioning of POIs

was delayed in three service areas, that is, Himachal Pradesh,

North-East and Orissa. The spectrum was allocated in North-

East on 22.07.2004 and in Orissa on 24.12.2004.

543. Similarly, spectrum was allocated in HP service area

on 10.03.2006 (4/N, D-34).

Application for POIs

544. The company had filed application(s) for

provisioning of POIs. On receipt of application dated

21.04.2005, which was received in the office of BSNL on

29.04.2005, from Dishnet regarding opening of MSC code for


provisioning of POIs for Orissa service area, file No. 342-

4/05/Regulation (D-120-i) was opened on 02.05.2005. The

letter was treated as urgent.

Plea of non-allocation of spectrum and approval of CMD

545. However, on 02.05.2005, it was recorded by Sh.

Mahipal Singh that Dishnet Wireless Limited had not been

allocated any spectrum for commissioning of its services and

confirmation be obtained from the company in this regard.

546. As per note at 3/N dated 30.06.2005, it is recorded

that Dishnet confirmed vide letters dated 06.05.2005 and

16.05.2005 that it had been allocated spectrum in J&K, Assam,

NE, West Bengal, Orissa, Bihar and H.P.

547. Thereafter, a comprehensive note was recorded by

Sh. Mahipal Singh on 07.07.2005 to the following effect:

“Subject: Provisioning of POIs to M/s DishnetWireless Ltd.

M/s Dishnet Wireless Ltd. (DWL) signedInerconnect Agreements with BSNL on 13th October2004 for services under UASL for the seven serviceareas of Assam, North East, West Bengal, Bihar,Orissa, J&K and Himachal Pradesh. M/s DWL hadobtained POIs at various locations and alsorequested various BSNL field units for opening ofMSC codes.

2. During a meeting in DOT a doubt was raisedwhether M/s DWL has been allotted spectrum. Itwas further deliberated, if M/s DWL has not beenallotted spectrum then whether still BSNL isallotting interconnection resources to M/s DWLalthough other operators are being denied the samedue to scarcity of the same. In this regard, BSNL


requested M/s DWL to confirm whether therequisite spectrum has been allocated to them toascertain whether M/s DWL was in a position tocommission their services so that BSNL cancontinue to allow its scarce interconnect resourceslike E1 ports, infrastructure, leased lines, opening ofthe additional levels in BSNL switches etc. BSNLfield units were requested by this office to givedetails of E1 ports sanctioned & commissioned andother leased line resources given to M/s DWL and toawait further instructions for provisioning ofadditional interconnect resources including POIs toM/s DWL.

3. The information has since been received fromboth M/s DWL as well as the field units of BSNL.BSNL field units of BSNL have already given PoI atvarious locations as well as infrastructure like leasedlines has also been permitted to M/s DWL but atnone of these places the POIs of M/s DWL havebeen commissioned till now. M/s DWL vide theirletters dated 5 th and 16 th May, 2005 has intimatedthat they have been allocated spectrum in each oftheir seven service areas and have also enclosedcopies of these letters from WPC Wing allocatingspectrum to M/s DWL.

4. Now M/s DWL vide their letter dated 9th June2005 (PUC) has informed that M/s DWL has notbeen given all the ports at the POIs as demanded bythem. M/s DWL has also referred to instructions ofDOT to comply with their roll out obligation underUASL license. They have also referred to TRAIDirection dated 7 th June 2005 to provide the POIswithin 90 days of the date of payment for the portcharges. M/s DWL had also requested BSNL videtheir letter dated 31 st May 2005 to instruct theconcerned officers of BSNL to process their PoIdemand. M/s DWL has further requested CMDBSNL for a meeting with their CEO to give theirsubmissions in this regard. It is now proposed toinform the field units to continue to provide PoI to


M/s DWL as per the terms and conditions of theirInterconnect Agreement.


548. This was note passed through DDG (Regulation)

and Director (C&N) and was approved by the Chairman (BSNL)

Sh. A. K. Sinha on 20.07.2005. The approval was for all the

seven service areas, that is, Assam, North-East, West Bengal,

Bihar, Orissa, J&K and HP.

549. It is apparent that though this file was meant for

Orissa service area alone, but all service areas were being dealt

with in it. Vide e-mail dated 06.05.2005, Sh. Mahipal Singh

had asked various service areas to await further instructions for

further provisioning of POIs. It is alleged that he was acting at

the behest of Sh. A. K. Sinha, who was acting at the behest of

Sh. Dayanidhi Maran. However, Sh. Sinha had approved

provisioning of POIs in all service areas on 20.07.2005. As

such, if there was any delay due to conspiracy, it was only from

06.05.2005 to 20.07.2005, which is not large enough to force

the exit of a company from telecom business.

Issue of H.P. and Bihar

550. However, on 02.08.2005, Sh. Mahipal Singh again

recorded a note at 5/N to the following effect that spectrum has

not been allocated in Bihar and Himachal Pradesh:

“As per letter of 16-5-2005 of M/s Dishnet WirelessLtd. the spot frequencies of Bihar & HimachalPradesh are yet to be allocated by WPC. For rest ofservice areas we may advise BSNL field units to


continue to provide interconnection resources toM/s Dishnet Wireless Ltd.

Submitted pl.”

551. Thereafter, on 03.08.2005, Sh. K. S. Gulliani

recorded that Dishnet is requested to confirm allocation of

spectrum for Bihar and H. P. In consequence of this, letters

were written to the company and the file continued to be

processed further regarding these two service areas and the

same was finally approved by Sh. D. P. Singh, DDG

(Regulation), on 13.12.2005 at 9/N for these two service areas

for provisioning of POIs.

552. It is, thus, clear from the perusal of file that Sh. A.

K. Sinha, who is alleged to be acting at the behest of Sh.

Dayanidhi Maran had already approved POIs in all service

areas, but these two officials, that is, Sh. Mahipal Singh and Sh.

K. S. Guliani, were acting on their own and asking for allocation

of spectrum in Bihar and HP service areas, more so, when they

knew that allocation of spectrum is not a condition for

provisioning of POIs.

553. It is of some interest to take note of the statements

of various witnesses in this regard.

554. PW 69 Sh. Mahipal Singh was responsible for this,

and in his statement dated 19.12.2011, page 1, he states as

under:

“....................................................................................................................................................................As a Joint DDG (Regulation I), my duties were tointeract with TRAI, TDSAT and sign Interconnect


Agreements with Private Service providers forestablishment of interconnection with BSNL. Theinterconnect agreements were signed after theapproval of interconnect agreement committeeconsisting of Sr. DDG (MS), Sr. DDG (EFC), DDG(Regulation) & DDG (NM) BSNL and then approvalof Director (C&M) & CMD, BSNL. I was authorisedby the then CMD, BSNL to signed interconnectagreement on behalf of BSNL. I further state that for the purpose of establishinginterconnection between telephone switch of oneservice provider to other service provider ainterconnect agreement is signed between them forthis purpose. …...........................................................................................................................”

555. He further states at page 2 onwards:

“....................................................................................................................................................................Today, you have shown me file no. ENG/10-1188/04 (POI) of Orissa Telecom Circle in respectof provision of POI to M/s Dishnet DSL Ltd. Onbeing shown this file I state that I wrote a letterdated 05/05/2005 to Sh. Sushil Aggarwal, Headprojects, M/s Dishnet Wireless Ltd., Chennairegarding operation of full mobility service in OrissaTelecom Circle mentioning therein that it wasunderstood that spectrum had still not been allottedto M/s Dishnet Wireless Ltd. for commissioning ofits service and in this regard the said company wasrequired to confirm, the copy of same is availableat page 224, marked in pencil. I further state that on06/05/2005, I sent an e-mail to DGMs of Orissa,Assam, West Bengal, J&K, Himachal Pradesh, Biharand North East Telecom Circles of BSNL requestingthem to furnish details of POIs sanctioned andcommissioned and other leased lines resourcesgiven to M/s Dishnet DSL Ltd., it was alsomentioned that further instructions be awaited forfurther provisioning of interconnect resources


including POIs to M/s Dishnet DSL Ltd. The same isavailable at page 216, marked in pencil. Sh. VikramChona, GM, Dishnet Wireless Ltd. sent a letterdated 06/05/2005 addressed to me on 06/05/2005informing therein that Dishnet wireless Ltd. hadalready been allotted spectrum in 1800 MHz GSMBand for unified access in Orissa telecom Circle on24/12/2004. He also enclosed the copy of letterdated 24/12/2004 of WPC Wing addressed toDishnet DSL Ltd., regarding allotment of saidspectrum (at page 226 & 225).

Today, I have been shown the file no. C&M(Regln.)/2004-05/25-109 of Himanchal PradeshTelecom Circle in respect of provision of POI to M/sDishnet DSL Ltd. and state that on 06/05/2005, Isent an e-mail to DGMs of Orissa, Assam, WestBengal, J&K, Himachal Pradesh, Bihar and NorthEast Telecom Circles requesting them to furnishdetails of POIs sanctioned and commissioned andother leased lines resources given to M/s DishnetDSL Ltd. It was also mentioned that furtherinstructions be awaited for further provisioning ofinterconnect resources including POIs to M/sDishnet DSL Ltd., at page 206 marked in pencil andencircled. Sh. B.D. Sharma, AGM (BD & NC), HPCircle, Shimla wrote a letter dated 19/05/2005 tome asking the clarification whether the POIs were tobe commissioned or to be with held in respect ofHimanchal Circle to M/s Dishnet where paymentshad already been received and advice notes issuedat page 205 marked in pencil and encircled. Again,Sh. R.P. Gupta sent a letter to me vide letter dated05/09/2005 requesting to intimate the decisiontaken in the aforesaid matter at page 203, markedin pencil and encircled. Sh. R.P. Gupta, AGM (BD &NC) vide his letter dated 02/12/2005 addressed tome informed that HP Telecom Circle had received aletter dated 01/12/2005 of Sh. A.K. Mittal, DDG(NM), BSNL Corporate Office, New Delhi asking forreasons of delay for providing POIs. He requested toconvey the decision immediately so that they couldreply to DDG (NM) accordingly at page 190 & 191


marked in pencil and encircled. Accordingly, Iissued a letter dated 15/12/2005 addressed to CGMsof Bihar and Himanchal Pradesh referring thatTRAI had issued directions to release POIs within90 days and therefore, it was decided to releasePOIs to M/s DWL in service areas of Bihar andHimanchal Pradesh at page 186 marked in penciland encircled.

I have also been shown file no- 342-4/2005-Regulation maintained at BSNL Corporate Office,New Delhi in respect of opening of MSC Code toM/s Dishnet Wireless Ltd. I was shown letter dated21.04.2005 from Mr. Shushil Agarwal, HeadProjects, Dishnet Wireless Ltd., address to ChiefGeneral Manager, BSNL, Orissa Circle with a copyto D.D.G. Regulation, BSNL Head Quarter, NewDelhi wherein M/s Dishnet Wireless Ltd. hadrequested to open the allocated MSC code in OrissaCircle, copy placed at page 21. This letter wasmarked by the then D.D.G Regulation to me on29.04.2005. The then D.D.G. Regulation, Sh. K.S.Guliani, informed me that CMD, BSNL hadinformed him that a meeting was held in DoT inwhich it was discussed that if M/s Dishnet DSL hasnot been allotted spectrum for all the circles thenwhether still BSNL is allotting inter connectresource to M/s Dishnet DSL Ltd. although otheroperators are being denied the same due to scarcityof the same. The then D.D.G Regulation also gaveverbal direction to me on 29.04.2005 in his officeroom at Corporate office of BSNL, 6 th floor, atStatesman House, Barakhamba Road, New Delhi toconfirm from M/s Dishnet Wireless Ltd., whetherspectrum has been allotted to it by DOT. Accordingly, in the file no- 342-4/2005-Regulation I had processed such notes on02/05/2005 and after approval on 3.05.2005 sent aletter dated 05.05.2005 to Shri. Sushil Agarwal,Head Projects, M/s Dishnet Wireless Ltd. that it isunderstood that spectrum has still not been allottedto M/s Dishnet Wireless Ltd. in Orissa TelecomCircle, for commissioning of its service and asked


him to confirm the same. Sh. Vikram Chona, G.M.,M/s Dishnet Wireless Ltd., intimated vide its letterdated 06.05.2005 addressed to me that spectrumfor Orissa Telecom Circle has been allotted on24.12.2004 copy of the same is placed at page 49.Meanwhile, similar letters were received from M/sDishnet Wireless Ltd. for opening of MSC codes inits other services areas of Assam, West Bengal, J&K,Himachal Pradesh, Bihar and North East TelecomCircles. Accordingly, I wrote a letter dated06.05.2005, to M/s Dishnet Wireless to sendsimilar information of allocation of spectrum forother services area also. The then D.D.G Regulationalso gave verbal direction to me on 06.05.2005 inhis office room at Corporate office of BSNL, 6 th

floor, at Statesman House, Barakhamba Road, NewDelhi that as desired by CMD, BSNL it is required totake status from the fields units regarding thedetails of POIs sanctioned and commissioned andother leased line resources given to M/s DishnetWireless Ltd., and also to intimate the field units toawait for further provisioning of interconnectresources including POIs to M/s Dishnet WirelessLtd. As per these verbal directions of D.D.GRegulation, I sent e-mail on 06.05.2005 to DGMs ofOrissa, Assam, West Bengal, J&K, HimachalPradesh, Bihar and North East Telecom Circlesrequesting them to furnish details of POIssanctioned and commissioned and other leasedlines resources given to M/s Dishnet DSL Ltd., itwas also mentioned that further instructions beawaited for further provisioning of interconnectresources including POIs to M/s Dishnet DSL Ltd.,at page 54. Sh. Vikram Chona, G.M., M/s DishnetWireless Ltd. intimated vide its letter dated16.05.2005 addressed to me that spectrum for WestBengal Circle, Assam Circle, North East Circle and J& K Circle Telecom Circle has also been allotted byDOT and for Bihar and Himachal Pradesh thespectrum / spot frequencies are still beingcoordinated with WPC. Copy of the same is placedat page 52. The letter dated 09.06.2005, was also


seen which was sent from Sh. Vikram Chona,General Manager, Dishnet Wireless addressed toCMD, BSNL copy available at page 96. This letterwas marked by O/O CMD to Director (C&M)without any comment who further marked it toDDG Regulation without any comment and it wasfurther marked to me. The letter dated 31.05.2005from Sh. Vikram Chona, General Manager, DishnetWireless Ltd. addressed to Joint DDG Regulation -1copy placed at page 115. This letter was marked byO/O CMD, BSNL to DDG Regulation and DDGRegulation marked this letter to me. In these lettersdated 31.05.2005 and 09.06.2005, M/s DishnetWireless Ltd., while sharing its problems beingfaced in BSNL field units, requested to instructconcerned official of BSNL to process their POIdemand. After receiving this information from M/sDishnet Wireless Ltd, on 05.05.2005, 16.05.2005and compilation of status reports as called for fromBSNL Circles i.e. West Bengal Circle, Orissa Circleand Himachal Pradesh Circle, in the abovementioned E-mail dated 06.05.2005, I immediatelyput up a comprehensive note dated 07/07/2005that DWL had informed that the spectrum had beenallotted and therefore it was proposed to inform thefield units to continue to provide POI to M/s DWLas per the terms and conditions of theirinterconnect agreement. In this note prepared itwas mentioned that during a meeting in DOT, adoubt was raised whether M/S Dishnet has beenallotted Spectrum. It was further deliberated, if M/SDishnet not been allotted spectrum then whetherstill BSNL is allotting interconnection resources toM/s Dishnet although other operators are beingdenied the same due to scarcity of the same. In thisregard, BSNL requested M/s Dishnet to confirmwhether the requisite spectrum has been allotted tothem to ascertain whether M/s Dishnet was inposition to commission their services so that BSNLcan continue to allow its scarce interconnectresources like E1 ports, infrastructure, leased lines,


opening of the additional levels in BSNL switchesetc. BSNL field units were requested by Regulationbranch BSNL to give details of E1 ports sanctioned& commissioned and other leased line resourcesgiven to M/s Dishnet and to await furtherinstructions for provisioning of additionalinterconnect resources including POIs to M/sDishnet. The information called for had beenreceived from both M/s Dishnet and BSNL fieldunits. M/s Dishnet had already been given POIs atvarious locations as well as infrastructure like leasedlines has been permitted to M/s Dishnet but at noneof these locations the POIs have been commissionedtill then. M/s Dishnet had intimated that that theyhave been allocated spectrum in each of their sevenservice areas. Accordingly, it was proposed toinform the BSNL field units to continue to providePOI to M/s Dishnet as per terms and conditions ofthe Interconnect Agreement. This note wasconcurred by Sh. K.S. Guliani, DDG, Regulation andSh. G.S. Grover, Director BSNL Board and then wasfinally approved by Sh. A.K. Sinha, CMD, BSNL on20/07/2005 (at 4/N).

Accordingly, the field units of BSNL in Orissa,West Bengal Circle, Assam Circle, North East Circle,and J & K Circle were informed on 22 nd August2005, as available at page 135 in the file no- 342-4/2005-Regulation, after taking approval of finaldraft on 19 th Aug 2005 from the then DDGRegulation, to take necessary action for provision ofInterconnect resources to M/s Dishnet as per termsand conditions of Interconnect agreement. Also asper approval of DDG Regulation of 19.08.2005,letter dated 22.08.2005 as available at page 136 wassent to Sh. Vikram Chona G.M M/s DishnetWireless Ltd., to confirm if the spot frequencies hasbeen allotted by WPC for Bihar and HimanchalPradesh Circles. To this M/s Dishnet Wireless in itsletter dated 30.08.2005 from Mr. Sushil Agarwal,Head Projects intimated that the spot frequenciesare still being coordinating by WPC.

On being asked I admit that due to conveying


of instructions for withholding POIs as per the oralorders of DDG (Regulation) Sh. K.S. Guliani inrespect of DWL, the delay had caused in processing/provisioning of POIs to M/s Dishnet in certainlocations as at some location M/s DWL itself wasnot ready for interconnection.Today after perusing copy of text of e-mail availableat page 93, marked in pencil of File No NE-I/op/Dishnet-UAS/04-05, I state that it is thecopy of text of email sent by me on 6th May 2005 toDGM, NE-I circle, BSNL.Telecom Regulatory Authority of India (TRAI) videits direction dated 7th June 2005 to all TelecomService Providers including BSNL directed toprovide POIs within 90 days of the date of paymentfor the port charges. TRAI also issued show causenotices to BSNL for delay in provisioning POIs byBSNL.

Q- Whether such instructions were issuedfor other service providers for withholdingprovisioning of POIs till further instructionswhich had not been allotted the spectrum.Please explain.Ans- No such instructions were given forwithholding provisioning of POIs in respect of otherservice providers during my stint as Jt. DDG(Regulation) at BSNL Corporate Office, New Delhifrom June 2001 to July 2006 since I resigned. Q- Whether it is required to be ascertainedby the field officers while provisioning POIsthat spectrum had been allotted or not to theservice providers. Please explain.Ans- There is no such mention specifically in theInterconnect Agreement. However, for efficientutilization of the POI/ ports it is required that itcarries telephone traffic instead of just lying idle. Infact as per interconnect agreement signed betweenBSNL and service providers M/s Dishnet DSL therewas a provision in clause no 3.2.2 “The UASL shallensure that the interconnect capacities are gottested within 30 days from the date these are made


available by BSNL and these capacities are usedfully within a period of three months from the dateof commissioning. After expiry of six monthsextendible to nine months on request, the demandshall be deemed to have withdrawn if these are notput to full use by UASL’s. BSNL shall have the rightto use these capacities for its consumption”. Copy ofthis clause of the interconnect agreement of M/sDishnet DSL is available at page 299 marked inpencil of File No NE-I/op/Dishnet-UAS/04-05.Q- You replied after perusing abovereferred files that when M/s Dishnet repliedto BSNL that he as has been allottedspectrum in Orissa Circle vide letter dated06.05.2005, received in BSNL Corporateoffice then why instructions for allotment ofPOI was not issued to Orissa Circle BSNL.Ans- Information for status of allotment ofspectrum of balance six circles from M/s Dishnetand details of POIs sanctioned and commissionedand other leased lines resources given to M/sDishnet DSL Ltd. was awaited from six BSNL circleunits. It was required to put up a comprehensivenote for information of status of resources allocatedby BSNL for all seven circles together and seekingapproval of CMD, BSNL for issue of instructions forcommissioning of POIs by BSNL field units asdesired by Sh. A.K. Sinha, the then CMD, BSNL andconveyed to me by Sh. K.S. Guliani, the then, DDG(Regulation).”

556. In his statement dated 26.12.2011, he further states

at page 2 as under:

“...................................................................................................................................................................As I was preparing the drafts to be sent to variousfield offices of BSNL, I realised that the fact thatM/s Dishnet Wireless Limited was not havingspectrum in Bihar and Himachal Pradesh TelecomCircles. Accordingly, on 2.8.2005, vide my noting


at 5/N I brought this fact into the knowledge of ShriK.S. Guliani who asked for draft for approval.Accordingly, I asked Shri Devender Singh to put updraft letters to be sent to different telecom circles ofBSNL and in addition, asked to put up a draft letterto M/s Dishnet asking them about allocation ofspectrum Bihar and Himachal Pradesh TelecomCircles. I discussed the matter Shri K.S. Guliani whoinformed me that we cannot send the file again toCMD, BSNL for approval as he apprehended thatthe file may be held up by CMD, BSNL. Thus, it wasdecided to send letters to the service areas in whichM/s Dishnet Wireless Limited was havingspectrum. Accordingly, letter dated 22.8.2005 wasissued for Orissa, J & K, Assam, West Bengal, andNorth East telecom circles of BSNL informingtherein to continue to provide POIs to M/s DishnetWireless Limited. Another letter was also sent toShri Vikram Chona, GM, M/s Dishnet WirelessLimited to confirm whether Dishnet has beenallotted spectrum in Bihar and Himachal Pradeshservice areas. After two or three days of issuance of thisletter, I received a call from the O/o the thenMoC & IT on my official basic phone. TheOfficer making the call enquired me whydid I issue such letter of M/s DishnetWireless Limited. I informed that I hadissued the letter after due approval of theCMD, BSNL. On this, he shouted that I willspeak to your CMD then and disconnectedthe phone. I shared this with Shri K.S.Guliani, the then DDG (Regulation) on hismobile phone as he was not available in theoffice. He asked me to stay calm and not toworry. After receipt of this call I was underfear as it was not usual for an officer of mylevel to receive a call from Minister’s Office.After this, I did not pursue the matter ofproviding POIs to Dishnet in Bihar andHimachal Pradesh Telecom circles.


….................................................................................................................................................................On receipt of this letter I asked Shri Devender Singhto put up it on file. On my directions Shri DevenderSingh put up the letter on file and initiated a generalnote at 9/N as he was not having the knowledge ofthis issue. He marked the file to me on 12.12.2005.I proposed to release POIs for Bihar and HimachalPradesh service areas to M/s Dishnet WirelessLimited in view of the TRAI Guidelines and showcause notices issued by TRAI to BSNL in the matterof provisioning of POIs. I marked the file to ShriD.P. Singh, the then DDG (Regulation) whoapproved the proposal on 13.12.2005. Accordingly,a letter dated 15.12.2005, was sent to CGMs of Biharand Himachal Pradesh telecom circles to releasePOIs to M/s Dishnet Wireless Limited. …..............................................................................................................................”

557. He further states at page 4 as under:

“....................................................................................................................................................................Q. Initially Regulation Branch of BSNLCorporate office had requested to BSNL fieldunits on 06.05.2005 through e-mail to awaitfurther instructions for further provisioningof POI as it was understood that M/s DishnetWireless was not having spectrum. Then inDecember, 2005, when the spectrum hadstill not been allotted to M/s Dishnet forBihar and Himanchal Circle why approvalwas given to BSNL Circle units for providingPOI for Bihar and Himanchal PradeshCircle.Ans. Initially instructions of 06.05.2005 through e-mail to seven BSNL fields units were issued basedon the verbal instructions of Sh. K.S. Guliani, thethen D.D.G Regulation, BSNL, Corporate office.When I issued letters to five Telecom circles tocontinue to provide POIs to M/s Dishnet Wireless


Ltd., a call from the then Minister’s office came tome and I was asked why had I issued suchdirections. On this, I got afraid and stoppedpursuing the matter of provisioning of POIs to M/sDishnet Wireless Ltd. in Bihar and HimanchalPradesh Service Area.However, meanwhile TRAI issued show cause noticeto BSNL asking for reasons for delay in provisioningof POIs for all Circles and all operators concerned. Itwas at this time that I proposed to allow furtherprovisioning of POI for M/s Dishnet Wireless inBihar and Himanchal Pradesh Circle on 12.12.2005in note sheet 9/N in file No. 342-4/2005-Reglnof BSNL Corporate office New Delhi. Sh. D.P. Singh,the then D.D.G (Regulation) approved the same andaccordingly I had issued the instructions to Biharand Himachal Pradesh Telecom Circles, dated15.12.2005, copy of same is placed at page 152 ofthis file.…............................................................................................................................”

558. The gist of this long statement is that he was acting

on the oral instructions of Sh. K. S. Guliani. However, he has

not recorded these facts in the file. This is violation of official

procedure.

559. PW 84 is Sh. K. S. Guliani, the then DDG

(Regulations), BSNL, who also used to deal with POIs. He

states in his statement dated 05.01.2012 as under:

“...................................................................................................................................................................On being asked I state that some time in the monthof April - May, 2005, the then CMD Sh. A K Sinhacalled me in his chamber at Statesman House,Barakhamba Road, New Delhi and told me thatissue is being raised in DOT that BSNL is providingPOIs to M/s Dishnet who does not have evenspectrum and is not providing POIs to other


operators who are already providing services. Sh. AK Sinha directed me to check the status of spectrumallotted to M/s Dishnet. Accordingly, I directed thethen Joint DDG Sh. Mahipal Singh to get theinformation collected from M/s Dishnet. Thisinformation was being collected in between afterfew days Sh. A K Sinha called me again in his officeand asked me the status of the spectrum allotted toM/s Dishnet. I informed him that information isbeing gathered. Sh. A K Sinha told me that thereare serious complaint against BSNL that BSNL isproviding POIs to M/s Dishnet who even does nothave spectrum and is not in a position to launch theservices. Sh. A K Sinha directed me to withholdfurther provisioning of POIs and other resourceslike lease lines to M/s Dishnet, till the time weverify and take a view on that. I accordingly directed Sh. Mahipal Singh to get theinformation as soon as possible and withholdfurther provisioning of POIs to M/s Dishnet. Sh.Mahipal Singh told me personally that he had sende-mail to M/s Dishnet and field unit of BSNL to getthe information about interconnected resources,already provided to M/s Dishnet as well as thespectrum availability with M/s Dishnet. I further state that after getting the requiredinformation, the whole case alongwith backgroundnote was submitted by the then Joint DDG Sh.Mahipal Singh who mark the file to me as DDG(Reg.), I mentioned in file ‘A’ above for kindconsideration and approval please and marked thefile to Director (C&M) Sh. G S Grover who signed on11.07.2005 and put up the file to the then CMDBSNL Sh. A K Sinha who directly marked the file tome mentioning ‘please discuss’ on 15.07.2005.Today you have shown me file no. 342-4/2005-regln marked as Malkhana CBI/ACB/Delhi PE no.1(A)/2011 MR II Memo VI serial no. 1 page no. 4N, Iidentify signatures of myself, Sh. G S Grover asDirector (C&M) and signature of the then BSNL Sh.A K Sinha on it.I further state that on 20.07.2005 I wrote on the file


at page 4N ‘Discussed. Resubmitted for kindperusal and approval of proposal as at ‘A’ above.CMD approved the proposal on the same day. Imarked the file to the then Joint DDG (Regulation)Sh. Mahipal Singh on 21.07.2005 for necessaryaction as discussed. I further state after perusing page no. 5/N of file no.342-4/2005-regln that Sh. Mahipal Singh, the thenJoint DDG (Regulation) mentioned that “As perletter of 16.05.2005 of M/s Dishnet Wireless Ltd.the spot frequencies of Bihar and Himachal Pradeshare yet to be allocated by WPC. For rest of serviceareas we may advised BSNL field units to continueto provide interconnection resources to M/sDishnet Wireless Ltd. and marked the file to me. Iagreed and directed to put up draft accordingly Sh.Mahipal Singh Put up two drafts, one for M/sDishnet and other for BSNL field units. After somecorrections it was finally approved by myself on19.08.2005. After perusing page no. 7/N of file no 342-4/2005-Regln, I state that on 23.09.2005 Sh. MahipalSingh, the then Joint DDG (Regulation) mentioning“For Himachal Pradesh circle, M/s Dishnet has yetto confirm allotment of spectrum we make awaitthis conformation from M/s Dishnet and submittedthe file to me. I agreed on the same date anddirecting Sh. Mahipal Singh to issue to reminder toM/s Dishnet. After perusing page no. 8/N of file no. 342-4/2005-Regln a note was put up to the then Joint DDG(Regulation) Sh. Mahipal Singh on 18.10.2005 whomarked the file to me as DDG (Regulation). Idirected on 18.10.2005 to Sh. Mahipal Singh toDiscuss the matter but I was transferred beforediscussion. The note which were put up at page8/N are related with requesnt of M/s Dishnet DSLLtd. to provide E1s in Jharkhand Circle and theinformation received from M/s Dishnet WirelessLtd. in response to our letter dated 26.09.2005stating that spot frequencies are still beingcoordinated by WPC for Himachal Pradesh Circle.


Q .1. Whether BSNL, Corporate Office or thefield staff of the concerned telecom circleswere required to ensure the allotment ofspectrum to the service provider beforeprovisioning of POI in the respectivetelecom circles. Please Explain? Ans. Normally, the BSNL Corporate Office andtelecom circles of BSNL was not required to ensurethe allotment of spectrum for provisioning andcommissioning of interconnect resources includingPOI to the service provider because some of theservice provider may like to provide services usingwire line networks only. However, BSNL field staffdo check the preparedness of the operators for rollout of the networks and launch of services beforeproviding POIs to ensure that these are usedjudiciously to protect the commercial interest ofBSNL. There is specific clause in the interconnectagreement which ensures that the service providerhas to use the POIs provided by BSNL fully withinthree months of their commissioning falling whichBSNL reserve the right to withdraw the POIsprovided by BSNL. Therefore, if it is brought to thenotice of BSNL corporate office or its field units thata particular service provider is not be in a positionto launch services due to non-availability ofspectrum or any other network element, BSNL maywithhold provisioning of POIs to such serviceprovider to protect its commercial interest.…...................................................................................................................................”


“....................................................................................................................................................................Q. 5. Has this action of BSNL delayed theprovisioning of services by M/s Dishnet DSLLtd. Ans. No, Even after the clearance was given byBSNL Head Quarter in August 2005 and the POIswere provided by field units immediately wherever


they were technically feasible, M/s Dishnet was notable to provide commercial services to its customerstill October 2005. Further in Himachal and BiharM/s Dishnet DSL Ltd. was not having any spectrumas a result even if POIs were provided by BSNL, itcould not have launched the services. It is further tostate that in all the circles BSNL was the firstoperator to provide POIs to M/s Dishnet DSL Ltd.”

561. He further states in his statement dated 12.01.2012

at page 2 as under:

“.....................................................................................................................................................................When I went to discuss the matter with Sh.A. K. Sinha, the then CMD, BSNL, he askedme “can we delay the POIs for few moredays” . On this I replied in negative and toldhim that “you asked us to check for thespectrum. We have checked it and theyhave spectrum. We should release thisnow.” On this Sh. A. K. Sinha shouted that,“Mantri daantega”. Then, I pleaded withCMD, BSNL that we should not get into thisproblem. On this, he agreed with me. I atthe same time put up the file then and therefor approval of CMD which he accordedimmediately. After this, he informedsomeone over telephone on DOT PAX(internal numbers) that “we have checkedspectrum with Dishnet. We cannot holdPOIs anymore and I am releasing the file.”He made this call in front of me but I cannotascertain to whom he was talking. …....................................................................................................................................”


“.....................................................................................................................................................................


Q4:- When the CMD, BSNL approved theproposal of informing BSNL field units tocontinue to provide POIs to M/s DishnetWireless Ltd. then why Bihar and HimachalPradesh circles were not informed about thesame and why it took nearly a month to issueletters to other BSNL circles?Ans. While the file was submitted for approval ofCMD on 07.07.2005 the fact that M/s Dishnet DSLLtd. does not have spectrum in Bihar and HimachalPradesh was overlooked by Sh. Mahipal Singh, thethen Joint DDG (Regln.-I) inadvertently. Theapproval of the CMD was accorded on the fact thatM/s Dishnet DSL Ltd. is having spectrum in all theseven circles including Himachal Pradesh and Bihar.When the instructions were to be issued to the fieldunits, it was discovered that M/s Dishnet DSL Ltd.does not have spectrum in Himachal Pradesh andBihar and the same was communicated to me by Sh.Mahipal Singh on file. As the approval of CMD,BSNL was in the context of availability of spectrumwith M/s Dishnet DSL Ltd., the instructions wereissued only for the five circles where M/s Dishnethad spectrum and Bihar and Himachal Pradeshcircle were not informed as M/s Dishnet DSL Ltd.did not have spectrum in these two circles. We wereof the opinion that if we will resubmit the file toCMD, BSNL for approval again, the file could bewithheld by him and we could not do anything inthis regard as evident from his earlier instructions.

As we had to decide whether to send the fileagain to CMD, BSNL for approval and what action isto be taken for Bihar and Himachal Pradesh serviceareas, the matter was discussed several timesbetween me and Sh. Mahipal Singh and several draftletters were modified. That’s why, it took us nearlyone month to send letters to other telecom circles.We decided to process the issue of provisioning ofPOIs in Bihar and Himachal Pradesh separately,that’s why the letter to Bihar and Himachal Pradeshcircles could not be sent in time. As soon as BSNLCorporate Office received show cause notice from


TRAI, letters were issued to Bihar and HimachalPradesh telecom circles for releasing of POIs toDishnet DSL Ltd. in accordance to the TRAIguidelines. At this point of time, I was deputed asAdvisor to the Minister of Communications and IT,Trinidad & Tobago through Ministry of ExternalAffairs under ITEC program.”

563. Sh. K. S. Guliani blames Sh. A. K. Sinha for issuing

him oral instructions for withholding further provisioning of

POIs. Sh. K. S. Guliani also did not record the instructions

anywhere. Again, this is contrary to the official procedure.

564. PW 91 is Sh. G. S. Grover, who is Director, C&N,

BSNL, at that time, states in his statement dated 06.01.2012 as

under:

“.....................................................................................................................................................................Today, I have been shown file no. 342-4/2005-Regln (Memo VI, Sl. No. 1). On being shown thesaid file, I state that on 02.05.2005 Sh. MahipalSingh, the then Joint DDG (Regln.-I) put up a notewhich is reproduced below:-“It is understood that spectrum has still not beenallotted to M/s Dishnet for commissioning of itsservices. We may confirm the same from M/sDishnet.”

The said note was put up to Sh. K S Guliani, the thenDDG (Regln.) who approved the same on 3.05.2005.Accordingly, a letter dated 5.05.2005 was sent to Sh.Sushil Aggrawal, Head Projects, M/s DishnetWireless Ltd. by Sh. Mahipal Singh to confirm theallotment of spectrum in Orissa Telecom circle (atpage 46). Further, another letter was also sent on06.05.2005 to Mr. Sushil Aggrawal to confirm theallocation of spectrum in other service areas also (atpage 51). On the same day an e-mail was also sent bySh. Mahipal Singh to various BSNL field officers


mentioning therein that (at page 54) :- “Please refer to the Interconnect Agreement dated12.05.2004 for UASL services of M/s Dishnet Ltd.You are requested to give details of POIs sanctionedand commissioned and other leased line resourcesgiven to M/s Dishnet DSL Ltd. Further instructionsbe kindly awaited for further provisioning ofInterconnect resources including POIs to M/sDishnet DSL Ltd.”

Further, on 6.05.2005, vide its letter Sh. VikramChona, GM, Dishnet Wireless Ltd. informed thatM/s Dishnet Wireless Ltd. has already been allottedspectrum in Orissa Telecom service area (at page59). The said letter received on 9.05.2005 in BSNLCorporate office. In the meanwhile, the BSNL fieldofficials of different Telecom circles informed theBSNL Corporate office about the stage of providingInterconnect resources to M/s Dishnet Wireless Ltd.in their respective Telecom circles (at page 68, 70 &55). On 16.05.2005, Sh. Vikram Chona again wrote aletter to Joint DDG (Regln.), BSNL Corporate officeinforming therein that M/s Dishnet Wireless Ltd.has been allocated spectrum in J&K, Assam, NorthEast and West Bengal service areas while spectrumis being coordinated with WPC wing of DoT forBihar and Himachal Pradesh service areas. He alsoenclosed the earmarking letters issued by WPC wingof DoT for the respective telecom circles (at page 61).Thereafter, on 13.06.2005, a letter was receivedfrom Sh. Vikram Chona, GM, Dishnet Wireless Ltd.which was addressed to CMD. It was mentioned inthe letter that Dishnet has demanded 461 ports butonly 125 ports have been allotted to them and theyrequested to resolve the issue and also requested fora meeting of Sh. V Srinivasan, CEO with the CMD,BSNL for resolving the issues. As the letter wasaddressed to CMD, it came to me and I marked thesame to DDG (Regln.) for further necessary action. Iidentify my signatures on the said letter (at page 77).But on perusal of the file, it is apparent that the said


letter was processed on 07.07.2005 after 21 daysvide a note by Sh. Mahipal Singh mentioning thereinthat M/s Dishnet Wireless Ltd. had informed thatthey are not being given all the ports at the POIs asdemanded by them and they also referred to TRAIdirections dated 07.06.2005 to provide the POIswithin 90 days of payment of port charges. It wasproposed to inform the field units of BSNL tocontinue to provide POIs to M/s Dishnet WirelessLtd. as per the terms and conditions of theirInterconnect Agreement. Sh. K.S. Guliani, the thenDDG (Regln.) signed the said note on 08.07.2005and marked the same to me which I signed on11.07.2005 and marked the file to Sh. A.K. Sinha, thethen CMD, BSNL who put up a note of ‘pleasediscuss’ and marked the file to Sh. K.S. Guliani, thethen DDG (Regln.) on 15.07.2005. Sh. K.S. Gulianidiscussed the matter with CMD and resubmitted thenote for approval of CMD, BSNL on 20.07.2005which was approved by the CMD, BSNL on the sameday. The file was finally marked to Sh. Mahipal Singh, thethen Joint DDG (Regln.-I) for necessary action asdiscussed on 21.07.2005 by Sh. K.S. Guliani (at4/N). Finally, a letter was issued by Sh. MahipalSingh, the then Joint DDG (Regln.) on 22.08.2005,after 31 days to CGMs of Assam, West Bengal,Orissa, J&K and North East Telecom circles in whichit was instructed to take necessary action forprovision of Interconnect resources to M/s DishnetWireless Ltd. as per the terms and conditions ofInterconnect Agreement (at page 135). On the sameday, another letter was sent by Sh. Mahipal Singh toSh. Vikram Chona, GM, Dishnet Wireless Ltd. toconfirm whether spectrum for Bihar and HimachalPradesh Telecom circles has been allocated by WPC(at page 136). On 09.09.2005, a letter was received from Sh. R PGupta, AGM (BD&NC), HP Telecom Circle in thename of Sh. Mahipal Singh requesting therein tointimate the decision taken in the matter ofprovisioning of POIs to M/s Dishnet Wireless Ltd. at


the earliest (at page 137). The matter was dealt after14 days at 7/N on which Sh. Mahipal Singhremarked on 23.09.2005 as under:-“For Himachal Pradesh circle, M/s Dishnet has yetto confirm allotment of spectrum. We may awaitthis confirmation from M/s Dishnet.”The file was marked to Sh. K.S. Guliani, the thenDDG on 23.09.2005 who remarked as under:-“As proposed. Please send reminder to M/sDishnet.”The file was marked to Sh. Mahipal Singh who noted“We may also inform HP circle to await furtherinstructions.” and marked the file to Assistant(Regln.) on 24.09.2005. Accordingly, a letter wassent to Sh. Vikram Chona, GM, Dishnet WirelessLtd. on 26.09.2005 to confirm whether Dishnet hasbeen allotted spectrum for Bihar and HimachalPradesh service areas (at page 139). Vide its letterdated 7.10.2005, Sh. Vikram Chona informed thatthe spot frequencies for Bihar and HimachalPradesh are still being coordinated (at page 140). The file remained with Sh. Mahipal Singh, the thenJoint DDG (Regln.) since 20.10.2005 to 12.12.2005(52 days).On 2.12.2005, Sh. R P Gupta the then AGM(BD&NC), HP Telecom Circle wrote a letter to Sh.Mahipal Singh, Joint DDG (Regln.) informingtherein that HP Telecom Circle has received a letterfrom Sh. A.K. Mittal, DDG (NM) seeking reasons fordelay in provisioning of POIs. The e-mail of Sh.Mahipal Singh dated 06.05.2005, Letter from HPTelecom Circle dated 19.05.2005 and reminderletter from HP Telecom Circle dated 05.09.2005 wasalso enclosed with this letter. The copy of the saidletter was also sent to Sh. A.K. Mittal, DDG (NM) (atpage 145). The said letter was dealt at 9/N and anote was put up by Sh. Mahipal Singh on 12.12.2005which is reproduced as under:-“TRAI has issued direction to release POIs within90 days. SACFA clearance was awaited for M/sDishnet. We may permit release of POIs in balanceservice areas of Bihar and HP. Reference of notes


at pre pages may also be done.”The file was marked to Sh. K.S. Guliani, the thenDDG (Regln.) who opined as under:-“May be cleared in the light of above clearly tellingoperator that SACFA clearance shall be hisresponsibility and then file may be sent toconcerned for information please.” He marked the file to Joint DDG (Regln.) on13.12.2005. Finally, a letter dated 15.12.2005 wassent to CGMs of Bihar and Himachal Pradesh circlewherein it was mentioned that TRAI has issueddirection to release POIs within 90 days. It has beendecided to release POIs to M/s DWL in service areasof Bihar and Himachal Pradesh. The letter wassigned by Sh. Mahipal Singh, the then Joint DDG(Regln.-I) (at page 152).

I identify the signatures of Sh. Mahipal Singh, thethen Joint DDG (Regln.), Sh. A.K. Sinha, the thenCMD, BSNL and Sh. K.S. Guliani, the then DDG(Regln.) as I have seen them signing during thenormal course of my duty. Q.1

Whether BSNL is required to see allocationof spectrum to the service provider beforeproviding POIs? Please explain.Ans.

In general it is not mandatory but in case there isshortage of POIs this can be checked by the BSNLcircle office concerned. Corporate office of BSNL isinvolved only in signing the Interconnect Agreementwith other service providers.”

565. Sh. G. S. Grover blames Sh. Mahipal Singh for the

delay at various levels. He states that the letters dated

16.05.2005 and 13.06.2005 written by Dishnet Wireless

Limited were processed by Sh. Mahipal Singh on 07.07.2005


after 21 days. He states that when the matter reached CMD Sh.

A. K. Sinha, he asked for a discussion on 15.07.2005 and

approved the same on 20.07.2005. He further states that

subsequently Sh. Mahipal Singh conveyed the approval to the

company on 22.07.2005 after delay of 31 days. He again

blames Sh. Mahipal Singh in delaying the matter for HP service

area for fourteen days and again Bihar and HP service areas for

52 days. Thus, he holds Sh. Mahipal Singh responsible for all

the delay at various levels and times.

566. PW 92 Sh. Devendra Singh, Assistant (Regulation),

was also involved in processing the file. He states in his

statement dated 09.01.2012 as under:

“.....................................................................................................................................................................Today, I have been shown file no. 342-4/2005-Regln. (Memo VI, Sl. No. 1). On perusal of thesaid file I state that a letter was received from Sh.Sushil Aggrawal, Head Projects, Dishnet WirelessLtd. on 27.04.2005 in the office of DDG (Regln.)which was marked to Sh. Mahipal Singh, the thenJoint DDG (Regln.) by Sh. K. S. Guliani, the thenDDG (Regln.) (at page 1). Sh. Mahipal Singhmarked the letter to me on 29.04.2005 with theremarks ‘urgent please, put up’ . I accordingly putup the letter in the file vide my note on 1/N andmarked the file to Sh. Mahipal Singh, the then JointDDG (Regln.) who remarked as under:-

“It is understood that spectrum has still notbeen allotted to M/s Dishnet for commissioning ofits services. We may confirm the same from M/sDishnet. Put up DFA.”

The file was marked to me on 02.05.2005 bySh. Mahipal Singh. I accordingly put up a draft letterand marked the file to Sh. Mahipal Singh, the thenJoint DDG (Regln.) on the same day. Sh. MahipalSingh marked the file to Sh. K. S. Guliani on


02.05.2005 who signed the file on 3.05.2005 andmarked the same to Joint DDG (Regln.-I). Sh.Mahipal Singh signed the file on 4.05.2005 andaccordingly a letter was sent to M/s DishnetWireless Ltd. on 05.05.2005 (at page 46).

Here, I would like to mention that I don’t haveany technical knowledge regarding provisioning ofPOIs. I also did not know from where Sh. MahipalSingh got the information regarding unavailabilityof spectrum with M/s Dishnet Wireless Ltd., asmentioned in the above noting of Sh. Mahipal Singh.I would like to clarify that as per the wishes of Sh.Mahipal Singh, I put up the note on 1/N as apparentfrom his remarks on the said letter from M/sDishnet Wireless Ltd.

On 06.05.2005, Sh. Vikram Chona, GeneralManager, M/s Dishnet Wireless Ltd. sent a letter toJoint DDG (Regln.-I) addressing to his query ofspectrum allocation to M/s Dishnet Wireless Ltd. inOrissa Telecom Circle, mentioning therein thatspectrum has been allotted to M/s DWL on24.12.2004 and also enclosed copy of allotmentletter issued by WPC wing of DoT (at page 49). Iaccordingly put up the letter on file at 2/N andproposed as under:-

“Reply received from M/s Dishnet WirelessLtd. may kindly be seen. Since they have sent theinformation regarding OTS, we may request themto send the similar information for other serviceareas also. Submitted Please.”

I marked the file to Joint DDG (Regln.-I) on6.05.2005 who approved the same on the same day.Accordingly, a letter was sent to M/s DishnetWireless Ltd. on 06.05.2005 (at page 51). Here, Iwould like to clarify that I put up the abovementioned note as per the directions of Sh. MahipalSingh, the then Joint DDG (Regln.-I) who instructedme to put up such note. I further state that Sh.Mahipal Singh himself approved the proposalwithout sending the file to DDG (Regln.) and on thesame day he sent an e-mail through his e-mail ID tothe e-mail IDs of various BSNL Circle Officers (at


) despite the fact that the proposal was forenquiring availability of spectrum from M/s DishnetWireless Ltd. not from the BSNL Circle Officesconcerned. Here, I would like to clarify that the saidproposal should have been approved by DDG(Regln.) instead of Joint DDG (Regln.-I). Thecontents of the said e-mail are as follows:-“Please refer to the Interconnect Agreement dated12.05.2004 for UASL services of M/s Dishnet Ltd.You are requested to give details of POIssanctioned and commissioned and other leased lineresources given to M/s Dishnet DSL Ltd. Furtherinstructions be kindly awaited for furtherprovisioning of Interconnect resources includingPOIs to M/s Dishnet DSL Ltd.”

As per this e-mail, the BSNL circle offices weredirected to await further instruction of the BSNLCorporate office before providing POIs to M/sDishnet Wireless Ltd. ….............................................................................................................................”


“....................................................................................................................................................................Thus, by the end of May, 2005, Sh. Mahipal Singhwas in the receipt of all the information which hedesired vide his e-mail dated 6.05.2005 and letter toM/s DWL dated 06.05.2005.

The file remained with Sh. Mahipal Singh, thethen Joint DDG (Regln.-I) since 6.05.2005 to7.06.2005 (31 days). On 7.06.2005, Sh. MahipalSingh called me and asked me to put the letters ofM/s Dishnet Wireless Ltd. on file. I, accordingly,put up the said letters along with a request forprovisioning of POIs in NE Telecom Circle by M/sDishnet Wireless Ltd. The said letter is notavailable in the file. On this, Sh. Mahipal Singh, thethen Joint DDG (Regln.-I) remarked on 9.06.2005to put up a comprehensive note and marked the fileto me but he did not hand over the said file to me


and the file remained with Sh. Mahipal Singh, thethen Joint DDG (Regln.-I). On 30.06.2005, Sh.Mahipal Singh called me and asked me to put up anote at 3/N which was typed on computer andprinted on a note sheet. As per the directions of Sh.Mahipal Singh, I signed the said note on30.06.2005 and marked the same to Joint DDG(Regln.-I). Here, I would like to clarify that I didnot have computer with me nor did I use computertyped note sheet while I was working as AssistantRegulation. I used to put up notes by hand.

A computer was installed in the room of Sh.Mahipal Singh, the then Joint DDG (Regln.-I) andhe was using the same for writing his note sheets.He generally printed the notes himself and askedme to sign the same. As I was junior to him and Idid not have much knowledge about the technicalaspects of provisioning of POIs, I used to followsuch directions given by him. Generally, Sh.Mahipal Singh kept all the files with him andmarked the same only when some correspondencecame.…...............................................................................................................................”

568. In reference to enquiry by AGM, HP service area

regarding provisioning of POI and the letters written by him on

05.09.2005 and 09.09.2005, Sh. Devendra Singh states

further:

“.....................................................................................................................................................................The said letter was not dealt with at that time butwhen the reminder from HP Telecom Circle came on09.09.2005, I was directed by Sh. Mahipal Singh toput up the same on the file. On the said note Sh.Mahipal Singh remarked as under:-

“For Himachal Pradesh Circle, M/s Dishnethas yet to confirm allotment of spectrum. We mayawait this confirmation from M/s Dishnet.”


The file was marked to Sh. K.S. Guliani, the thenDDG (Regln.) on 23.09.2005 who remarked asunder:-“As proposed. Please send reminder to M/sDishnet.”The file was marked to Sh. Mahipal Singh whomarked the file to me on 24.09.2005. Accordingly, aletter was sent to Sh. Vikram Chona, GM, DishnetWireless Ltd. on 26.09.2005 to confirm whetherDishnet has been allotted spectrum for Bihar andHimachal Pradesh service areas (at page 139). Imarked the file to Sh. Mahipal Singh who againnoted “We may also inform HP circle to awaitfurther instructions.” but did not sign the said noteand marked the file to me. But the said file was nothanded over to me and Sh. Mahipal Singh kept thesaid file with him. Vide its letter dated 7.10.2005,Sh. Vikram Chona, GM, Dishnet Wireless Ltd.informed that the spot frequencies for Bihar andHimachal Pradesh are still being coordinated (atpage 140). The said letter was received in the officeof Joint DDG (Regln.-I) on 14.10.2005. On18.10.2005, Sh. Mahipal Singh, the then Joint DDG(Regln.-I) again called me in his room and asked meto put up the said letter on file. I, accordingly, putup a note at 8/N and marked the file to Sh. MahipalSingh who signed the file and marked it to DDG(Regln.). Sh. K. S. Guliani, the then DDG (Regln.)noted “please discuss” and marked the file to JointDDG (Regln.-I) who signed the file on 20.10.2005and marked the file to me but actually he kept thefile and did not hand over the same to me. The file remained with Sh. Mahipal Singh, the thenJoint DDG (Regln.) since 20.10.2005 to 12.12.2005(52 days). On 02.12.2005, a letter was received from Sh. R. P.Gupta the then AGM (BD&NC), HP Telecom Circlethrough fax. The enclosures of the said lettersreceived through fax are available in the file at pages142 to144 but the covering letter is not available inthe file. The same letter along with its enclosureswas received in the office of Joint DDG (Regln.-I) on


9.12.2005. It was informed in the letter that HPTelecom Circle has received a letter from Sh. A.K.Mittal, DDG (NM) seeking reasons for delay inprovisioning of POIs. The e-mail of Sh. MahipalSingh dated 06.05.2005, Letter from HP TelecomCircle dated 19.05.2005 and reminder letter fromHP Telecom Circle dated 05.09.2005 were alsoenclosed with this letter. The copy of the said letterwas also sent to Sh. A.K. Mittal, DDG (NM) (at page145). On receipt of this letter, Sh. Mahipal Singh calledme on 12.12.2005 and asked me to put up a note onthe file regarding this letter. As I was unaware ofthe developments in the case and the matterdiscussed in the letter, I put up a general note on12.12.2005 at 9/N and marked the file to Joint DDG(Regln.-I). A note was put up by Sh. Mahipal Singhon 12.12.2005 which is reproduced as under:-“TRAI has issued direction to release POIs within90 days. SACFA clearance was awaited for M/sDishnet. We may permit release of POIs in balanceservice areas of Bihar and HP. Reference of notesat pre pages may also be done.”The file was marked to Sh. D. P. Singh, the thenDDG (Regln.) who opined as under:-“May be cleared in the light of above clearly tellingoperator that SACFA clearance shall be hisresponsibility and then file may be sent to concernfor information please.” He marked the file to Joint DDG (Regln.-I) on13.12.2005 who marked the file to me on15.12.2005. I accordingly put up a letter which wassigned by Sh. Mahipal Singh, the then Joint DDG(Regln.-I). Accordingly, the said letter dated15.12.2005 was sent to CGMs of Bihar and HimachalPradesh Circles wherein it was mentioned that TRAIhas issued direction to release POIs within 90 days.It has been decided to release POIs to M/s DWL inservice areas of Bihar and Himachal Pradesh (atpage 152).

I identify the signatures of Sh. Mahipal Singh,the then Joint DDG (Regln.-I), Sh. A.K. Sinha, the


then CMD, BSNL, Sh. D. P. Singh, the then DDG(Regln.) and Sh. K.S. Guliani, the then DDG (Regln.)as I have seen them signing during the normalcourse of my duty. On being further asked I state that my room was infront of the room of Sh. Mahipal Singh, the thenJoint DDG (Regln.-I). Sh. Vikram Chona, GM,Dishnet Wireless Ltd. met several times with JointDDG (Regln.-I) during this period for getting thematter of provisioning of POIs to M/s DishnetWireless Ltd. cleared. During such visits he alsoused to sit in my room while waiting for themeeting. During his visits, he shared with me thathe is being harassed by the indifferent attitude ofSh. Mahipal Singh, the then Joint DDG (Regln.-I). Iused to console him.”

569. Sh. Devendra Singh also blames Sh. Mahipal Singh

for delaying the matter at various stages.

570. Perusal of the statement of Sh. Mahipal singh

reveals that he was acting on the oral instructions of Sh. K. S.

Guliani. Furthermore, the CMD had given his approval for all

the seven service areas on 20.07.2005, but he (Mahipal Singh)

conveyed the instructions only to five service areas, that is,

Orissa, West Bengal, Assam, North-East and J&K, vide letter

dated 22.08.2005, that is, after a gap of more than one month

of the approval. After the approval, he (Mahipal Singh) on his

own recorded on 02.08.2005 that Dishnet has not been

allocated frequencies for Bihar and HP. When allocation of

spectrum was not necessary for providing inter-connect

resources by BSNL, why did he put this question after the

approval of CMD on 20.07.2005?

571. Sh. K. S. Guliani is also making his statement


without any documentary record. He also states that he agreed

with Mahipal Singh regarding his note dated 02.08.2005 at

5/N that spot frequencies for Bihar and HP are yet to allocated

by WPC, so only rest of the five service areas be informed for

providing inter-connect resources. Again if allocation of

spectrum is not necessary, why they were putting this

condition? He further states that even on 23.09.2005. Mahipal

Singh recorded that Dishnet had not been provided spot

frequencies and they should await till Dishnet confirms it.

572. Furthermore, he is quite wavering in his statement

also when he states as under:

“Therefore, if it is brought to the notice of BSNLcorporate office or its field units that a particularservice provider is not be in a position to launchservices due to non-availability of spectrum or anyother network element, BSNL may withholdprovisioning of POIs to such service provider toprotect its commercial interest.”

573. He further states:

“Further in Himachal and Bihar M/s Dishnet DSLLtd. was not having any spectrum as a result even ifPOIs were provided by BSNL, it could not havelaunched the services. It is further to state that in allthe circles BSNL was the first operator to providePOIs to M/s Dishnet DSL Ltd.”

574. Furthermore, Sh. Mahipal Singh and he (K. S.

Guliani) were also acting on their own, when he states as under:

“While the file was submitted for approval of CMDon 07.07.2005 the fact that M/s Dishnet DSL Ltd.does not have spectrum in Bihar and HimachalPradesh was overlooked by Sh. Mahipal Singh, thethen Joint DDG (Regln.-I) inadvertently. The


approval of the CMD was accorded on the fact thatM/s Dishnet DSL Ltd. is having spectrum in all theseven circles including Himachal Pradesh and Bihar.When the instructions were to be issued to the fieldunits, it was discovered that M/s Dishnet DSL Ltd.does not have spectrum in Himachal Pradesh andBihar and the same was communicated to me by Sh.Mahipal Singh on file. As the approval of CMD,BSNL was in the context of availability of spectrumwith M/s Dishnet DSL Ltd., the instructions wereissued only for the five circles where M/s Dishnethad spectrum and Bihar and Himachal Pradeshcircle were not informed as M/s Dishnet DSL Ltd.did not have spectrum in these two circles. We wereof the opinion that if we will resubmit the file toCMD, BSNL for approval again, the file could bewithheld by him and we could not do anything inthis regard as evident from his earlier instructions.”

575. It is apparent that both Sh. Mahipal Singh and Sh.

K. S. Guliani were not only acting on the oral instructions of

CMD, which they say were contrary to the policy, but were also

against the orders of CMD dated 20.07.2005. Any delay after

this date cannot be attributed to any instructions of CMD Sh. A.

K. Sinha.

576. Even otherwise, there is no written record to show

that any instructions were issued to Sh. K. S. Guliani either by

the Minister or Sh. A. K. Sinha.

577. Moreover, on perusal of case diaries, I find that Sh.

Anil Kumar Sinha, the then Chairman-cum-Managing Director,

BSNL, was examined by CBI on 19.04.2012 and his statement

was recorded on the same day. The same is extracted as under:

“I am as above on being asked state that I have doneB.Sc. (Engineering) in the year 1966 from MIT,Muzaffarpur. I qualified Indian Telecom Service


Exam conducted by UPSC in the year 1967 andjoined as Assistant Divisional Engineer (Telegraph)in DoT in the year 1969. Thereafter, I worked invarious capacities in DoT and BSNL. In the year2004, I got selected by Public Enterprise SelectionBoard (PSEB) to the rank of CMD, BSNL andworked in the same capacity till my superannuationin the year 2007. As CMD, BSNL my duty was tolook after the overall control of the corporationwhich includes its operation, maintenance activities,expansion, HRD, finance, liaison with Governmentetc.

Today, I have been shown file No. 342-4/05-Rgln. maintained at the regulation branch of BSNLCorporate Office, New Delhi. On perusal of the saidfile, I state that at 1/N there is a note of Sh. MahipalSingh, the then Jt. DDG (Regln.-1) dated02/05/2005 mentioning therein that it isunderstood that spectrum has still not been allottedto M/s Dishnet for commissioning of its service wemay confirm the same from M/s Dishnet. Thisinformation that M/s Dishnet has still not beenallotted spectrum was not passed on by me. I furtherstate that allocation of spectrum is not at all lookedafter by BSNL while provisioning of POIs to anyservice providers. Spectrum is only required forcommencement of the services by any serviceproviders.

Accordingly, a letter was issued on05/05/2005 by Sh. Mahipal Singh, the then Jt.DDG (Regulation-I) after the approval of Sh. K. S.Guliani, the then DDG (regulation) to M/s DishnetWireless Ltd. to confirm whether they have beenallotted frequency in Orissa Telecom circle (at page46). This matter should have been brought into theknowledge of Director or CMD before issuing suchletter. Thereafter, another e-mail was sent todifferent BSNL field offices by Sh. Mahipal Singh,the then Jt. DDG (Reg-I) on 06/05/2005, directingtherein to await further instructions from BSNL


Corporate office before providing POIs to M/sDishnet (at page 54). Another letter was also issuedto M/s Dishnet Wireless Ltd. on the same day tointimate the allocation of frequency in other serviceareas (at page 51). Here, I would like to say thatthese instructions should not have been issued bythe concerned BSNL officials.

On being asked I state that the matter wasbrought into my knowledge only on 15/07/2005 at4/N when the file came to me. Normally, these typesof files do not come to CMD and are dealt at thelevel of Director/ DDG. As I was not aware of thedevelopments in this case, I discussed the matterwith Sh. K. S. Guliani, the then DDG (Regulation).After the discussion as I became aware of the factsof this case, I immediately approved to continue toprovide POIs to M/s Dishnet on 20/07/2005.Despite my approval, the instructions were issuedby Sh. Mahipal Singh, the then Jt. DDG (Regln.-I)on 22/08/2005. This clarifies that I did not haveany intention to delay the provisioning of POIs toM/s Dishnet but it was Sh. Mahipal Singh whodelayed the issuance of instructions to BSNL fieldoffices to continue to provide POIs to M/s Dishnetand issued instructions after a delay of 38 days. Inthe meanwhile, the file moved between Sh. MahipalSingh, the then Jt. DDG and Sh. K. S. Guliani, thethen DDG only.

Q- What you have to say with regard to theallegation made by Sh. K. S. Guliani, the thenDDG (Regulation) who has categoricallytaken your name, as it was you who haddirected him to check the spectrum of M/sDishnet and further directed him to keep thematter of provisioning of POIs to M/sDishnet pending. Please clarify.Ans- Sh. K. S. Guliani is covering his delay by takingmy name. The matter should have been broughtinto my knowledge by Sh. K. S. Guliani on06/05/2005 itself when the letter and e-mails were


sent to BSNL field offices.

Q- What you have to say on the allegationof Sh. K. S. Guliani, the then DDG(Regulation) that when he intimated you thatthe matter of M/s Dishnet cannot be delayedfurther you uttered “Minister will scold” andasked him to further delay the matter. Ans- I did not delay the matter of provisioning ofPOIs to M/s Dishnet and the allegations made bySh. K. S. Guliani are wrong. I cleared the file on thevery next day when it was put up to me.

Q- Did anyone in DoT directed you to delaythe matter of provisioning of POIs to M/sDishnet Wireless Ltd. as it has not beenallotted spectrum yet. Please clarify.Ans- No one directed me to delay the provisioningof POIs to M/s Dishnet Wireless Ltd. nor did I dothe same.

578. PW 88 Sh. Thaiu Mag, the then DGM, Planning,

NE-1 Telecom Circle; PW 89 Sh. Harish Kumar Verma, the then

General Manager, H. P. Telecom Circle; and PW 94 Ms.

Anupama Sanghi, the then DGM, Marketing and Network,

Orissa Telecom Circle have stated about the delay, if any, in

commissioning the POIs in the three circles.

579. Sh. K. S. Guliani has categorically denied in his

statement in response to question No. 5, quoted above, that

there was any delay in the provisioning of services by Dishnet

DSL Limited on account of action of BSNL in the provisioning

of POIs.

580. Delay or no delay, Sh. Mahipal Singh was acting on

the oral instructions of Sh. K. S. Guliani and he, in turn, was

acting on the oral instructions of Sh. A. K. Sinha, CMD (BSNL).


However, Sh. Sinha has denied having given any oral

instructions to Sh. K. S. Guliani. In such a situation, there is no

legally admissible evidence for attributing the delay to the two

alleged conspirators, that is, Dr. J. S. Sarma or Sh. Dayanidhi

Maran.

581. In view of the above discussion, I find that there is

no legally admissible evidence on record that either the

Minister or Dr. J. S. Sarma were involved in this. Even the

charge sheet admits that there is no documentary evidence to

prove that the e-mail dated 06.05.2005 was sent by Sh.

Mahipal Singh at the instance of Sh. A. K. Sinha. Sh. A. K. Sinha

has also denied having issued any such instructions. Hence, this

circumstance cannot be used against the conspirators. As such,

this circumstance cannot be legally read against the two

conspirators as the link snaps with the denial of Sh. A. K. Sinha.

This is more so when there is absence of any other evidence in

this regard.

582. This case is based on the foundation that Sh.

Dayanidhi Maran and Dr. J. S. Sarma deliberately delayed the

approval relating to aforesaid nine issues relating to issue of

UAS licences in six service areas, that is, UP(E), UP(W),

Punjab, Haryana, Kerala and Kolkata, and other regulatory

approvals as noted and discussed above to force the exit of Siva

group of companies from telecom sector. All the nine

allegations have been found to be without any legal evidence.

There is no legally admissible evidence on record to indicate

any incriminating conduct of the two accused. As such, the very

foundation of the case is knocked out that the delay was meant


to choke the business environment of Siva group of companies.

583. Thus, the case can be disposed of on the basis of

these findings alone as once the very concept of delay is not

accepted, nothing survives in the case. However, the other

points contained in the charge sheet would also be discussed to

find if there is any merit therein also.

B. Acquisition of Aircel by Maxis: Constricted business

environment

584. It is submitted by Sh. Anand Grover, learned Spl.

PP, that on account of delay in regulatory approvals, the

business environment of Siva group of companies was highly

constricted. Apart from that the Standard Chartered Bank had

made unsolicited offer to the group for selling the telecom

business. It is further submitted that Sh. Ralph Marshall, Sh.

Kalanithi Maran and Sh. Dayanidhi Maran also put pressure on

Sh. C. Sivasankaran to sell the companies, though he was

resisting it and wanted to retain at least 26% of the

shareholding. It is repeatedly submitted that finding no

alternative due to the constricted business environment and the

pressure put by the accused persons, Sh. C. Sivasankaran was

left with no option but to sell Aircel Limited to Maxis group. It

is repeatedly submitted by him that this was a forced sale which

was conducted under pressure of Sh. Dayanidhi Maran. He has

argued at length that the sale was not as per the free will of Sh.

C. Sivasankaran but he was forced due to the choked business

environment created by Sh. Dayanidhi Maran and also by the

pressure exerted on him by Sh. Dayanidhi Maran and Sh.


Kalanithi Maran. It is repeatedly submitted by him that by

effecting this sale, Sh. C. Sivasankaran was attempting to get

the best out of a bad situation. My attention has been invited to

the relevant files, e-mails and statements of witnesses in great

detail to emphasize the point.

585. On the other hand, learned counsel for the defence

have argued that the sale was voluntary as Sh. C. Sivasankaran

was getting the price of his choice fixed at US$ 800 million. It is

repeatedly submitted that Sh. Dayanidhi Maran has no role in

the transaction and he is being dragged into it for no reason at

all. My attention has been invited to the relevant documents

and statements to emphasize that the sale was voluntary and

Sh. Dayanidhi Maran had no role in it. It has been repeatedly

argued that Sh. C. Sivasanakaran was already in market to sell

his companies and in such a situation where is the question of

any pressure being put on him. It is repeatedly submitted that

there is no evidence, even prima facie, in this regard.

586. The case of the prosecution is that on account of the

delay in regulatory approvals concerning aforesaid nine issues

of Aircel Limited/ Dishnet Limited, the business environment

of Siva group of companies became very constricted and this led

to the sale of Aircel Limited to Maxis. The allegation is that this

delay was due to conspiracy by Sh. Dayanidhi Maran and Dr. J.

S. Sarma and a part of the conspiracy was that the company be

sold to Maxis alone. It is the case of the prosecution that Sh. C.

Sivasankaran was left with no alternative except to sell the

company to Maxis.

587. However, out of nine issues, as already noted, the


Minister had no role as far as alleged delay relating to grant of

UASL for Punjab, Haryana, Kerala and Kolkata service areas

are concerned as the file D-4 never reached him as it remained

pending due to issues relating to impending FDI policy.

Similarly, the representations were also dealt with in this file

(D-4) and these representations also never reached the

Minister. Sh. Yashwant Bhave has orally stated that he retained

the file till 05.06.2006 on the oral directions of Dr. J. S. Sarma,

but this is contrary to record as Dr. J. S. Sarma always gave the

instructions in writing.

588. The issue relating to delay in provisioning of POIs is

also of no consequence as there is no legally admissible

evidence connecting Sh. Dayanidhi Maran or Dr. J. S. Sarma

with this issue. There is no evidence to show that these three

issues ever reached the Minister or the Minister was in any way

connected with these.

589. As far as issues relating to delay in spectrum

allocation in Bihar service area and delay in allocation of

additional spectrum in Chennai metro service area are

concerned, the same were also not in the notice of the Minister

as per the files. These two files never reached the Minister. The

delay was on the part of the Wireless Advisor who sat on the

two files, but in the oral statement blames Dr. J. S. Sarma for

this, but this is also contrary to record. Furthermore, he says in

his statement dated 09.05.2012, page 1, that Dr. J. S. Sarma

instructed him to hold all cases for allotment of spectrum/

additional spectrum till further orders. He further states that

these instructions were given in the month of July-August


2007. However, this may be read as “July/August 2006” as Dr.

J. S. Sarma held the office of Secretary (T) till 16.07.2006 alone.

In these circumstances there is not much incriminating

evidence against the accused and whatever little oral evidence is

there, it is contrary to official record. Even otherwise a delay of

a few months cannot be constrictive enough as to choke

business environment of a company as the negotiation for sale

of the company started in October 2005 itself. The alleged delay

in allocation of initial spectrum in Bihar service area is alleged

to be from 26.07.2005, when Dr. J. S. Sarma asked a question

about network planning. Similarly, the alleged delay in the

allocation of additional spectrum in Chennai service area is

from 23.07.2005, when the file was marked to Wireless

Advisor. The alleged delay started in these two cases in the last

week of July 2005 and the negotiations for sale were started in

first half of October 2005. This is not an instance of great delay.

As such, these two instances are also of no use for indicating

constriction of business environment of Siva group.

590. As far as delay in grant of approval for change in

equity of Aircel Limited and taking on record name change of

Srinivas Computers Limited in Tamil Nadu service area (D-40)

and issues relating to delay in approval (a) of change of name

from RPG Cellular Services Limited to Aircel Cellular Limited;

(b) to approve the purchase of 20.76% shareholding of foreign

partner namely M/s Siva Cellular Holdings Limited in Aircel

Cellular Limited by Aircel Televentures Limited to make it

100% Indian company; (c) taking on record the name change

from Srinivas Computers Limited to Aircel Televentures


Limited in Chennai service area (D-30), are concerned, the

same remained pending as there was illegality in the sale to

Aircel Digilink India Limited as it was in violation of

competition clause and for Tamil Nadu service area the equity

structure of Aircel Digilink India Limited and its promoters was

not clear to the DoT.

591. Not only this, the grievance of Sh. C. Sivasankaran

in his statement is that he was forced to terminate the deal with

Aircel Digilink India Limited as the approval for sale was not

forthcoming and it was due to the conspiratorial acts of Sh.

Dayanidhi Maran, but the facts are contrary to this. The

officials of DoT had recommended rejection of sale proposal,

but Sh. Dayanidhi Maran sat on the proposal and did not reject

it. Secretary (T) had approved the rejection on 06.09.2004.

Similarly, the equity structure of ADIL was held to be

complicated as far as sale of licence in Tamil Nadu service area

(D-40) was concerned. If Sh. C. Sivasankaran had really wanted

to sell the company, he could have made efforts to explain the

equity structure of ADIL to the DoT and also for asking the

purchaser ADIL to become compliant to the competition clause

by reducing its equity as far as Chennai service area was

concerned. But he took no such steps in this regard and rather

withdrew the applications filed for seeking approval of DoT. In

these circumstances how can it be alleged that the acts of the

department in not permitting the sale led to the constriction of

business environment of Siva group.

592. As far as the next issue relating to delay in change of

name from Dishnet DSL Limited to Dishnet Wireless Limited


(D-41) is concerned, the same was linked with other issues by

Sh. P. K. Mittal on 27.08.2004 and not by the Minister or Dr. J.

S. Sarma. Furthermore, when the Secretary (T) himself was

competent to approve the issue, there was no need for him to

mark the file to the Minister without specifying any reason. As

already noted, there is no material on the file to suggest that the

Minister had asked for the file. When the file reached the

Minister, it got linked with other files, as the Minister was

suspicious that licences were granted to the company in hasty

manner, which doubt of the Minister was not unfounded as the

issues relating to financial capacity of the company were not

dealt with properly when eight LOIs were granted to it in file D-

38. This delay cannot be laid at the door of the Minister. Even if

it is so, there is no material on the file to term it as mala fide.

593. Even otherwise, the issue is so small that it cannot

have any constricting impact on the business environment of

the company. It is not clear as to why a separate file D-41 was

opened for this, when the issue relating to grant of licences in

four service areas of Punjab, Haryana, Kerala and Kolkata was

being dealt with in file D-4 and the issues relating to UP (E) and

UP(W) and extension of time for compliance of LOI in MP

service area were being dealt with in file D-2. Strange are the

ways of DoT as many issues were being dealt with collectively in

files D-30 and D-40 making things very complicated.

594. As far as delay in grant of LOI in UP (E) and UP (W)

and extension of time for signing of licence agreement in MP

service area (D-2) is concerned, the same was also for reasons

which cannot be termed as frivolous or outlandish, as already


noted above.

595. It has already been recorded that the financial

capacity of the company was suspect from day one and it was

also indulging in the grey market activities and sold the ISP

licence without permission of the DoT. The Minister was

suspicious, as already noted above, that the earlier licences

were granted to it in undue haste. This fact is on record in D-41

at 7/N. A suspicious mind cannot be termed as a conspiratorial

mind.

596. In view of the above discussion, it is hard to believe

that the Minister or the Secretary had created a situation by

resorting to delay in approval relating to the aforesaid nine

issues. The basic thrust of the statement of Sh. C. Sivasankaran

is that the sale of licences in Tamil Nadu and Chennai service

areas was not allowed mala fide on account of which he could

not raise requisite finance for his business. But the Minister

could not have allowed that for the reasons already noted.

Other issues relating to change of name etc are very petty.

597. In view of the above discussion, I am satisfied that

there were no issues which were the making of the two accused

which constricted the business environment of Sh. C.

Sivasankaran resulting in the sale of company to Maxis.

598. Furthermore, feeling constricted is highly elastic

and subjective feeling. It is difficult to believe as to when one

would feel constricted enough in a particular situation

compelling him to take a certain course of action.

599. It is further alleged that when the sale was being

negotiated, Siva group wanted the buyers to take responsibility


for obtaining regulatory approvals as Sh. Dayanidhi Maran as

MOC&IT had choked the business environment of its group

companies. How and when one would feel that one's business

environment is choked? Sh. C. Sivasanakaran was in telecom

business since 1994. His company Sterling Cellular Limited was

given a licence for CMTS in Delhi service area in 1994. His

company Aircel Limited was a licencee in Tamil Nadu service

area since 22.05.1998 (1/N, D-40). He had acquired RPG

Cellular Services Limited, which was operating a telecom

licence in Chennai metro service area, in the year 2003 and the

same was approved by the DoT on 18.12.2003 (D-30). These

facts indicate that Sh. C. Sivasankaran was having sufficient

experience in the field of telecom sector. He was no novice in

telecom sector. He is deemed to know the pace at which DoT

works.

600. He was granted licence for seven service areas, in

which spectrum was allocated in six service areas and there is

no allegation in this regard. If one has no grievance against

allocation of spectrum in six service areas, how can a delay of a

few months in one service area can amount to choking of

business environment. Furthermore, the delay in allocation of

start-up spectrum in Bihar service area is attributed to Dr. J. S.

Sarma from 26.07.2005 onwards, whereas delay in allocation of

additional spectrum beyond 6.2 MHz is being attributed to Dr.

J. S. Sarma since 23.07.2005.

601. The case of the prosecution is that the delay started

in these two service areas in the last days of July. Very strangely

Sh. C. Sivasankaran felt frustrated enough to sell his business


and started negotiation in early October 2005 and he valued his

company at US$ 850 million. A delay of about two and a half

months, counted from 26.07.2005, in allocation of initial

spectrum is not of much consequence in telecom business,

which has a long gestation period and is a capital intensive

industry. Similarly, additional spectrum beyond 6.2 MHz may

be needed but a delay of about two and a half months or three

months would not push the owner of the company into such

frustration as to sell his company. It is interesting to quote from

his statement dated 04.09.2013, page 2, which is as under:

“.....................................................................................................................................................................By the third quarter of 2005, the roll out of serviceswas stalled in all 14 but 4 circles. At this stage,sometime in the month of October 2005, Mr. RahulGoswamy who is from the Investment Bankingdivision of SCB in Singapore, called me with aproposal from M/s Maxis Communications Berhad,Malaysia (Maxis) to acquire 100% of Aircel, AircelCellular and Dishnet Wireless. Simultaneously, V.Srinivasan, my CEO, informed me that he had alsoreceived a similar call from Mr. Prahlad Shantigram,who was the head of Investment Banking in Indiafor Standard Chartered Bank (SCB).…..................................................................................................................................”

602. This indicates that he engaged himself in the

negotiations for sale of the companies, frustrated due to delay

of two-three months. Perusal of the various DoT files reveals

that delay in spectrum allocation was usual thing, more so, in

case of additional spectrum.

603. As far as grant of licence in UP (E) and UP(W)


service areas and extension of time for compliance of LOI in

MP service area is concerned, the Minister was suspicious that

the earlier file, in which eight LOIs including MP service area

was granted, was processed in undue haste and he put this on

record and asked for its examination. The financial capacity of

the company was in doubt from the very beginning itself. In

such a situation, how can one claim that his business

environment was choked or for that matter constricted by Sh.

Dayanidhi Maran forcing him to sell his business. It is relevant

to extract from his statement dated 04.09.2013, page 1, which is

as under:

“.....................................................................................................................................................................Sometime in June 2004, I decided to divest theholdings of Siva Group in M/s Aircel Ltd. and M/sAircel Cellular Ltd. in order to raise funds to roll-outthe new circles. Subsequently, in June 2004, anagreement was executed between ATVL and M/sAircel Digilink India Ltd. (ADIL), a Hutchison Essargroup company in which the said buyer had agreedto pay a total consideration of Rs. 1,200 crores toATVL to buy 100% of Aircel and Aircel Cellular. DoTapproval was required for the deal to be completed.Since approval from DoT was not received for morethan eight months, I decided to terminate theagreement to sell Aircel and Aircel Cellular.…............................................................................................................................”

604. This statement makes it clear that he wanted to sell

his companies Aircel Limited and Aircel Cellular Limited ADIL

for raising funds, but permission for the same was not coming

from the DoT. No permission could have been granted by the

DoT as the sale of Aircel Cellular Limited in Chennai service


area was in violation of competition clause and department had

recommended its rejection. In this statement lies his real

grievance which is wholly unfounded and is contrary to record.

As such, there is no material on the file to indicate that the

business environment of Siva group was ever constricted or

choked by the actions of Sh. Dayanidhi Maran. It is a wholly

unfounded allegation.

605. The further allegation is that Sh. Ralph Marshall

and Sh. Dayanidhi Maran pressurized Sh. C. Sivasankaran to

sell his entire stakes in the company. Let me take a look as to

what Sh. C. Sivasankaran states in his statement dated

23.02.2012, pages 14 to 16, relevant parts of which are as

under:

“.....................................................................................................................................................................On being asked I state that by the third quarter of2005, the roll out of services was stalled in all 14 but4 circles. At this stage, sometime in the month ofOctober 2005, Mr. Rahul Goswamy who is from theInvestment Banking division of SCB in Singapore,called me with a proposal from M/s MaxisCommunications Berhad, Malaysia (Maxis) toacquire 100% of Aircel Ltd., Aircel Cellular Ltd. andDishnet Wireless Ltd. Simultaneously, Sh V.Srinivasan informed me that he had also received asimilar call from Mr. Prahlad Shantigram, who wasthe head of Investment Banking in India forStandard Chartered Bank (SCB). On being asked I state that I was aware of the factthat Maxis was a telecom company based inMalaysia and the company was promoted by Sh. T.Ananda Krishnan who was of Sri Lankan tamilorigin.On being asked I state that sometime after thecommencement of Aircel operations in 1999, Sh. T.


Ananda Krishnan, of Maxis met with me in 2002 toobtain my advice of entering the Indiantelecommunication sector. This was the firstmeeting between us. On being asked I state that having received theabove mentioned calls from the SCB officialssometime in October 2005, I then participated in atelephonic conference call organized by SCB on thenext day which call I attended from Chennai. In thesaid telephonic conference call, the otherparticipants were Sh. Rahul Goswamy, Sh. PrahladShantigram from SCB, Sh. V Srinivasan and Sh.Ralph Marshall, Chairman of Maxis. On being asked I state that during the call Sh. RalphMarshall introduced himself as a representative of TAnanda Krishnan, promoter of Maxis. Sh. RalphMarshall conveyed that Maxis was interested in thedeal for acquiring equity stake in ATVL. I explainedto SCB and Maxis officials, the issues being faced byAircel Ltd., Aircel Cellular Ltd. and Dishnet WirelessLtd. with DoT, regarding approvals for UASLs,spectrum, POI, FIPB, etc. which were notforthcoming. On this, Sh. Ralph Marshallresponded, “Don’t worry about that, Maxis will takeresponsibility in this regard” and further added,“you will also hear from the Telecom Minister in thisregard”. On being asked I state in keeping with the efforts ofthe Siva Group to infuse equity for financing panIndia operations, the offer from SCB on behalf ofMaxis was initially taken at its face value. I wasalways confident that if allowed to grow normallythe telecom business would be a company worth US$10 billion is not a too distant future and I wanted toparticipate in that growth. Incidentally, thecompany was valued at US$ 8 billion in 2009. Thus,I always wanted to be having a controlling stake inmy telecom business and negotiations with Maxisinitially started on this note. However, when thenegotiations proceeded further, the hidden agendaof Maxis started unfolding itself when Sh. RalphMarshall and others on behalf of the Maxis started


insisting on 100% sale of Aircel Ltd., Aircel CellularLtd. and Dishnet Wireless Ltd. to Maxis.On being asked I state that subsequent to theconference call, I went to Kuala Lumpur, Malaysiafor a meeting with Sh. Ralph Marshall also of SriLankan origin and a Malaysian national on04.11.2005. In the said meeting we discussedregarding the terms of Maxis’ investment. I alsomade a presentation to Shri Ralph Marshall at themeeting wherein I had mentioned very clearly tohim about my intention to continue holding asignificant stake in my telecom business.….......................................................................................................................................................”


“....................................................................................................................................................................On being asked I state that during the meeting withSh. Ralph Marshall on 04.11.2005 in Kuala Lumpur,Malaysia, Sh. Ralph Marshall had arranged for ShriT. Ananda Krishnan to have a telephonicconversation with me. During the said telephonecall, Shri T. Ananda Krishnan told me the following:

That he (Shri T. Ananda Krishnan) hadalready spoken to the Maran brothers with regard toMaxis’ investment in my telecom business.

That Sh. Dayanidhi Maran, the then MOC&IT,will provide all approvals including the pendingapprovals of Aircel Ltd., Aircel Cellular Ltd. andDishnet DSL Ltd. and also the approval for Maxis’proposed investment in my telecom business.

That I can retain only 26% equity stake in mytelecom business. On being asked I state that after the meeting withShri Ralph Marshall in Kuala Lumpur, Malaysia andthe telephone call with Sh. T. Ananda Krishnan, Ireturned to Chennai, after which thediscussions/negotiations with Maxis continuedthrough emails and telephone conversations.


…..................................................................................................................................”

607. He further states at pages 19 to 25 as under:

“.....................................................................................................................................................................On being asked I state that an overall view of theemail communications mentioned above leads onlyto one conclusion at all stages of negotiations, thatSiva Group always wanted to retain at least 26%stake in the company (as per the new FDI normswhich allowed only 74% share holding by a foreignpartner in a telecom company). On being asked I state that the fact that I and SivaGroup had in fact, become victims of a criminalconspiracy between Sh. Dayanidhi Maran, the thenMOC&IT and his brother Sh. Kalanithi Maran onone hand and Sh. T. Ananda Krishnan and Sh.Ralph Marshal of the Maxis on the other hand,became clear when Maxis started showingconfidence about getting all the stalled/freezedapprovals of Aircel Ltd., Aircel Cellular Ltd. andDishnet Wireless Ltd. from the DOT and gave anundertaking to that effect. They have said so clearlyin the correspondence referred to above. Hopingagainst hope, even at this stage, I felt that if theMaxis could get the freezed approvals through and ifI could have the operations in the new circleslaunched in a normal way, my telecom businesswould be gaining in value very soon and I as anentrepreneur would also get benefitted in theprocess. This was the reason that I insisted to Maxison retaining a stake in the business right till the veryend of the discussions. However, that was not to be.On being asked I state that I was suddenly called fora meeting with Sh. Kalanithi Maran, promoter ofSun TV Group and the brother of Sh. DayanidhiMaran, the then MOC&IT on 12.11.2005 at the SunTV Group headquarters at Anna Arivalayam (whichhas also been the DMK party headquarters) inChennai.


On being asked, I state that this meeting with Sh.Kalanithi Maran on 12.11.2005 was organized by Sh.Ralph Marshall.On being asked I state that on 12th November 2005,around 10:30am to 11:00am in the morning Iinstructed my chauffer, Sh. C.V. Venkatamuni todrive me from my residence situated at 78/81 FirHaven Estate, R.A Puram, Santhome High Road,Chennai – 600 028, to the Sun TV Groupheadquarters at Anna Arivalayam building. On theway to Anna Arivalayam building, I briefly stoppedat our office at Sterling Towers, Anna Salai, Chennaiand informed Sh. V. Srinivasan that I was going toSun TV Group headquarters at Anna Arivalayam tomeet with Sh. Kalanithi Maran. On being asked I state that I subsequently arrived atthe Sun TV Group headquarters at Anna Arivalayambuilding in my Toyota Camry car driven by mychauffer, C.V. Venkatamuni, between 11:00am and11:30am. On being asked I state that upon arriving at AnnaArivalayam building, I got off my vehicle, and I wasreceived by a person at the portico of AnnaArivalayam building who then escorted me to themeeting room located inside the Sun TV group’soffice where I waited briefly to meet with Sh.Kalanithi Maran.On being asked, I state that during the meeting withSh. Kalanithi Maran, he directed me to do thefollowing with respect to the sale of my telecombusiness to Maxis:

That Siva Group had to sell 100% equity inATVL and that too to Maxis only.

Further, that while Maxis would hold 74%, theremaining 26% equity will be held by an IndianPartner which would be arranged by Maxis.

That I would shortly after the discussions withSh Kalanithi Maran, receive a telephone call from ShKalanithi Maran’s brother, Sh Dayanidhi Maran, thethen MOC&IT with the assurance that the deal forsale of Aircel Ltd., Aircel Cellular Ltd. and Dishnet


Wireless Ltd. to Maxis would be cleared/approvedby the then MOC&IT, Sh Dayanidhi Maran.On being asked I state that, immediately after themeeting I went to our office at Sterling Towers,Anna Salai, Chennai, and shared with Sh. V.Srinivasan the above said directions given by Sh.Kalanithi Maran with respect to sale of my telecombusiness to Maxis.On being asked I state that, shortly after my visit toour office in Sterling Towers, Anna Salai, Chennai,according to the script written by the Maranbrothers and Maxis, I did receive a phone call fromShri Dayanidhi Maran, the then MOC&IT himself onthe same day on my mobile phone no.+91 9841491000 in which call Shri Dayanidhi Maran, the thenMOC&IT told me in no uncertain terms that I hadno choice but to sell 100% stake in Aircel Ltd., AircelCellular Ltd. and Dishnet Wireless Ltd. to Maxis asnothing else will meet with his approval.On being asked, I state that on the same day, i.e.12.11.2005, in the evening around 4pm, I along withSh. V. Srinivasan met with Sh. Ralph Marshall andSh. Chan Chee Beng of Maxis at the 6th floor, ClubLounge of the Taj Coromandel Hotel,Nungambakkam High Road, in Chennai. During thesaid meeting, Sh. Ralph Marshall discussed variouschoices available to me about the sale of thecompany but all the choices had one thing incommon, that I had to sell my 100% stake in AircelLtd., Aircel Cellular Ltd. and Dishnet Wireless Ltd.Sh. Ralph Marshal also during conversation clearlystated that this was the desire of Shri DayanidhiMaran, the then MOC&IT. Sh. Ralph Marshall alsoconfirmed to Sh. V. Srinivasan and me thefollowing:

that the sale had to be for 100% equity stake inAircel Ltd., Aircel Cellular Ltd. and Dishnet WirelessLtd.

that Maxis will give me an upside payment for26% stake linked to the increase in valuation ofAircel Ltd., Aircel Cellular Ltd and Dishnet Wireless


Ltd. through an IPO. It meant Siva Group will get26% stake in the increase in the valuation after IPOwithout actually owning the 26% equity in thebusiness.

that Maxis will on their own identify an Indianpartner to hold the 26% equity in the business.On being asked I state that, I agreed to the said offerof upside payment as I knew that I will not get thepending approvals from the MOC&IT if I did notaccede to the said offer from Maxis.

On being asked I state that Sh. Ralph Marshall ofM/s Maxis Communications sent me an email dated16.11.2005, referring to the discussions in Chennaion 12.11.2005 and subsequent telephoneconversations. Also, in this email Sh. RalphMarshall gave me, four final offers (transactionstructures) and asked me to choose from one ofthese offers. The significant features of the fouroptions are as under:

Offer A:o Siva Group to sell 74% stake to Maxis for US$

520 million and retain balance 26% stake in AircelLtd, Aircel Cellular Ltd and Dishnet DSL Ltd. o Maxis to have a call option for 11.2% stake at

US$ 200 Mn.o In case Aircel was not listed within 36 months,

then between 37th and 48th month, Maxis canexercise Call Option for 14.8% stake at equity valuebased on 10 times EV / EBIDTA.o In case Aircel was not listed with 36 months,

then between 37th and 48th month, SVL canexercise Put Option for 14.8% (upto 26% in case calloption for 11.2% has not been exercised by Maxis) atequity value based on 10 times EV / EBIDTA.

Offer B:o Under this offer, SVL was provided an offer to

sell its 100% stake in Aircel for US$ 800 Mn plus anupside amount on 26% stake.o Upside amount payable to SVL will be

calculated based on the increase in the valuation of


the company calculated on the market price ofAircel, 18 months after its listing in the stockexchange(IPO)

Offer C: o Under this offer, SVL was provided an offer to

sell its 100% stake in Aircel for US$ 900 Mn.

Offer D: o Under this offer, SVL was provided an offer to

sell its 100% stake in Aircel for US$ 800 Mn.

In addition to cash of US$ 800 Mn, Maxis alsooffered to provide 15 Mn warrants (approx. 8 %stake of Aircel) that can be exercised by SVL prior toIPO at par value.On being asked I state that all the 4 options given bySh. Ralph Marshall were for me to primarily sell100% of my equity in my telecom business to Maxis.Further, in this email Sh. Ralph Marshall undertookthat Maxis will obtain necessary approvals in Indiaand Malaysia for the transaction. On being asked I state that I never wanted to sell100% of the business. My vision/intention for SivaGroup’s telecom business was always to do fewprivate equity deals then follow it up with an IPO toget additional funds into the company in order tofurther expand the business into one of the leadingtelecom operator with pan India operations. Ialways believed that the business had tremendousgrowth potential and expected the valuation of thebusiness to be about US$ 10 billion by 2008. Beingthe founder and mentor of the business, I alwayswanted to ride this growth and benefit from theincreased valuations, by having majority stake in thecompany at all times. It is only on account of thestrangulation by Sh. Dayanidhi Maran, the thenMOC&IT, by holding all the approvals of Aircel Ltd,Aircel Cellular Ltd. and Dishnet Wireless Ltd andthe coercion by the Maran brothers to sell 100% ofthe business, that I got frustrated and was left withno choice but to do the deal with Maxis. On being asked I state that as the Maran brothershad very clearly communicated to me that I had to


sell 100% equity held by me to Maxis and only thenapprovals will be given by Sh. Dayanidhi Maran, thethen MOC&IT and as Sh. Ralph Marshall had toldme that he would work out a way through which Iwould at least get 26% upside payment in lieu ofeven the 26% equity I was not allowed to retain, Ihad no other option but to choose Offer B. Besides,out of the 4 options given, Offer – B as per whichSiva Group would sell 100% stake in Aircel Ltd,Aircel Cellular Ltd and Dishnet Wireless Ltd. toMaxis for US$ 800 million plus upside payment on26% stake to Siva Group, would fetch me themaximum value under the forced circumstances. On being asked I state that my underlined thoughtin this decision was also the same confidence thatgiven the proper conditions to grow, Aircel Ltd,Aircel Cellular Ltd and Dishnet Wireless Ltd. wouldgain its true well deserved value of around US$ 10billion and I would be able to make up atleast somepart of the huge loss that I had incurred by the saleof my telecom business under coercion to Maxis.On being asked I state that in an ideal situation as inthe case of a normal business negotiation, I wouldhave not agreed to any of the 4 final offers given byMaxis. But, I was pushed to a situation where I hadno other choice but to choose Offer - B. The otheroffers given by Sh. Ralph Marshall would haveanyway not given me an opportunity to get bettervalue due to the following reasons:

Offer A: o While Siva Group was provided an option to

retain 26% in Aircel, the following were thedisadvantages in the offer: There was a risk of Maxis not exercising CallOption for 11.2% for US$ 200 million Moreover, for the balance of 14.8%, call optionwas to be exercised at an equity value based on 10times EV / EBIDTA. In the event Siva Group had exercised Putoption, it was also based on equity value at 10 timesEV / EBIDTA


o Hence, the Offer A and Offer B was similar

offers except that Maxis had the option to exerciseCall Option for 11.2% at US$ 200 million.o There was also a risk of exit being offered to

Siva Group’s stake.

Offer Co Siva Group always believed that it made

commercial sense to retain interest in 26%. It isjustified by the fact that under Offer A, Maxis hadoffered call option for 11.2% stake for US$ 200million.

Offer Do While amount received was similar between

Offer B and Offer D (i.e. US$ 800 million) at thetime of sale of 100%, under Offer B, Siva Group hadan option to realize value for 26% stake in Aircel,while under Offer D, it was for approx. 8% stake.Hence, it was prudent that Siva Group had decidednot to accept Offer D. On being asked I state that after having taken thedecision under the forced circumstances to adoptOffer – B as the preferred offer, I communicated mypreferred choice to Sh. Ralph Marshall of Maxis andSh. Prahlad Shantigram of SCB telephonically.…................................................................................................................................”

608. He further states on page 25 as under:

“.....................................................................................................................................................................On being asked I state that, the agreement for saleof 100% equity of ATVL in Aircel Ltd, Aircel CellularLtd and Dishnet DSL Ltd., was signed with Maxis on22.12.2005 in Kuala Lumpur, Malaysia. Theagreement came to be effective from 30.12.2005. Sh.V. Srinivasan signed the said agreement on behalf ofATVL and Mr. Ralph Marshall signed on behalf ofMaxis. …........................................................................................................................”



“....................................................................................................................................................................On being asked I state that the key element to thisconspiracy by which I was forced to sell my telecombusiness to Maxis at a grossly lower value concernsthe interest of Shri Dayanidhi Maran, the thenMOC&IT and his brother, Sh. Kalanithi Maran,promoter of Sun TV Group. The motive behind theinterest the Maran brothers had personally taken forthe benefit of Maxis at both my cost and the cost ofGovernment of India became clear when Maxis wasallotted the long pending licenses in 14 circles inDecember 2006 and right after that on 05.04.2007,an agreement was signed between Astro All AsiaNetworks Plc., a company belonging to the Maxisgroup and Sun Direct TV Private Limited, acompany promoted by the Maran family, accordingto which Maxis/Astro had agreed to pass on Rs. 600crores to Sun Direct in the form of Astro purchasingshares at a highly inflated value of Rs. 79.57 pershare in Sun Direct whereas the Maran’s hadacquired the same shares at par value of Rs. 10 pershare. As has become very apparent now, this was apayback/quid-pro-quo by Maxis to Shri DayanidhiMaran, the then MOC&IT and his family for thefavors done to them by Shri Dayanidhi Maran bymisusing his office and position as the thenMOC&IT and his brother Sh. Kalanithi Maran, bycoercing me to sell my telecom business to Maxis ata low value. This huge payoff by Maxis to Maran’swas the bedrock on which the conspiracy involvingforced sale of my telecom business to Maxis wasresting. On being asked I summarize as under:1. I never intended to exit my telecom businesscompletely.2. I tried to dilute stake only to the extent of 20%– 22% to private equity players in order to raise thefunds.


3. I also tried to sell Chennai and RoTN licensesto ADIL in order to meet the rollout expenses forother existing and prospective licenses.4. I was coerced to sell my telecom business toM/s Maxis only by Sh. Dayanidhi Maran and hisbrother Sh. Kalanithi Maran.5. I intended to retain at least 26% stake in mytelecom business which was also denied by Sh.Dayanidhi Maran and his brother Sh. KalanithiMaran.6. The regulatory approvals in respect of mytelecom business was not granted by Sh. DayanidhiMaran, the then MOC&IT. It did not allow mycompany to grow which resulted into undervaluation of my telecom business at the time of itsforced sale to Maxis.”

610. He made a further statement on 04.09.2013,

running into five pages, in which he has almost repeated the

above assertions/ allegations.

611. If the above statements are read carefully in the

light of material on record, it would become clear that either

most of the statement is contrary to the record or bragging by

the buyer about his links with the Minister and tough

negotiations on his part (buyer) for purchase of entire business

are being dubbed as indicators of conspiracy and pressure

tactics to sell the entire business. It is more so as the

negotiation continued for about three months and that too in

writing through e-mails and thereafter, only the share

subscription agreement and share purchase agreement, both

dated 30.12.2005, were executed. The statement of Sh. C.

Sivasankaran, as already noted, is either contrary to record or is

based on suspicion. Why? He infers conspiracy because the


buyer showed confidence that he would get the needed

approvals. Why would a buyer buy a business unless he is

reasonably sure of its future course of action. Hence, the

confidence of the buyer cannot be termed as an indicator of

conspiracy. Moreover, as long as the Siva group was promoter

of the three companies, that is, Aircel Limited, Aircel Cellular

Limited and Dishnet DSL Limited, there were several

allegations against these companies as already noted in detail.

Once the management changed, most of them would no longer

survive and this may be the reason for the confidence of the

buyer. He himself says in his statement that he knew that he

will not get the pending approvals. Perhaps he was right

because his financial capacity was suspect from the day one and

there were several other allegations against his company. He

further alleges that it was strangulation of Sh. Dayanidhi Maran

which led him to sell 100% of his business. The record as

discussed above in detail does not support this view. It were his

own mistakes and deficiencies which led to the situation, which

he complains about.

612. I have no hesitation in recording that his statement

is based on speculations, surmises and conjectures and is

totally contrary to the record, as discussed in detail above.

613. It is also interesting to take note of the statement of

PW 121 Sh. Krishan Kumar Bhojane, who is a qualified

Company Secretary, and was Company Secretary to M/s

Dishnet DSL Limited. He states in statement dated 25.10.2013,

pages 1 and 2, as under:

“....................................................................................


................................................................................Now I have been shown original board meetingminutes of M/s Dishnet Wireless Ltd. for the periodfrom 04.03.2004 to 02.11.2007 and also register ofdirectors of M/s Dishnet Wireless Ltd. Afterverification of the original minutes of the boardmeeting held on 06.01.2006 and 21.03.2006 andthe entries in the register of directors, I state that inthe board minutes dated 06.01.2006, the boardinformed that the management team successfullyinked a historic deal with M/s MaxisCommunications Bhd. of Malaysia on 30.12.2005.Pursuant to the arrangement, Maxis and its IndianJoint Venture Company (JVC) would acquire a100% interest in Aircel Ltd. (Aircel). Maxis and JVCwould jointly invest UDS 1.08 billion (RM 4.104billion) to purchase the 100% stake of which USD280 million (RM 1.064 billion) would be injectedinto the company as cash. This implied a pre-moneyequity valuation of USD 800 million (RM 3.040billion) for Aircel.

On completion of the proposed acquisition,Maxis would hold a 65% equity stake in Airceldirectly while the JVC would hold the remaining35%. The JVC would be an Indian company jointlyowned by Maxis and its Indian partner in a ratiothat would give Maxis an overall equity interest inAircel of 74%, the maximum foreign ownershippermitted. Maxis’ Indian partner in the JVC wouldbe the Chennai based Reddy family.

The transaction would be executed in twoindependent stages; the first, a subscription for newequity shares (26% of the expanded capital) and thesecond, the purchase of all of the existing equityshares held by Aircel Televentures Limited (ATVL).The second transaction would be subject toshareholders’ and Malaysian as well as Indianregulatory approvals.

The board took note of the developments. Italso overwhelmingly congratulated Mr. V.Srinivasan, CEO for acting as a catalyst in theprocess and ensuring the completion of the deal


with extraordinary initiative and energy. The Boardnoted that the deal had been completed without theinvolvement of a Merchant Banker in the process,thus reducing the costs involved. The Board alsorecorded its specific appreciation of the efforts takenby Mr. R. Narayankumar, GM-Strategy, Mr. T.L.Guruvijendran, CFO, Mr. T. Sivakumar, GM andCompany Secretary and their team members in ablyassisting Mr. V. Srinivasan, CEO in the process.…...............................................................................................................................”

614. It is further interesting to take note of statement of

PW 62 Sh. A. Subramanian, a qualified Chartered Accountant,

who was Director (Finance) to the Siva group of companies. He

states in his statement dated 07.12.2012, page 5, as under:

“.....................................................................................................................................................................In the board meeting dated 06.01.2006, I attendedthe meeting as Director and Dr. Vijay P. Bhatkar,Chaired the meeting, who was pleased to report thatthe management successfully inked a historic dealon 30/12/2005 with Maxis of Malaysia. Pursuant tothat arrangement, Maxis and its Indian JointVenture Company (JVC) would acquire a 100%interest in Aircel Ltd. Maxis and the JVC wouldjointly invest US$ 1.08 billion to purchase the 100%stake of which US$ 280 million would be injectedinto Aircel Ltd. as cash. This implied a pre moneyequity valuation of US$ 800 million for Aircel Ltd.The board took note of the developments and alsooverwhelmingly congratulated Sh. V.Srinivasan, CEO for acting as a catalyst in theprocess and ensuring the completion of the dealwith extraordinary initiative and energy. The boardalso noted that the deal had been completed withoutthe involvement of the merchant banker in theprocess thus, reducing the cost involved. The boardalso recorded its specific appreciation of the efforts


taken by Sh. R. Narayankumar, GM-Strategy, Sh.T.L. Guruvijendran, CFO, Sh. T. Sivakumar, GM andCompany Secretary and their team Members in ablyassisting Sh. V. Srinivasan, CEO in the process.….................................................................................................................................”

615. How can one ignore this written record. That is why

the oral narrations of Sh. C. Sivasankaran are contrary to

record. Furthermore, it is interesting to take note of statements

of Sh. Prahalad Shantigram, PW 32, and Sh. Rahul Goswamy,

PW 37, in which they have described the entire process, which

lasted for about three months, followed by written agreements

dated 30.12.2005. In the face of such written record and long

negotiations, the oral suspicions do not constitute a ground to

suspect the deal as the one negotiated under pressure, more so,

when the board of the company is congratulating the

negotiators.

616. In brief, there is no ground to presume that the

business environment of Siva group was constricted or choked

enough as to pressurize them into selling its companies to

Maxis and that the subsequent sale was the result of pressure

from any quarter including the Minister or Ralph Marshall.

This allegation is based entirely on the oral statement of Sh. C.

Sivasankaran, as has been deliberately extracted in detail above

to make things clear and understandable. Once the statement of

Sh. C. Sivasankaran is found to be imaginary and contrary to

record, nothing survives under this head.

C. Issues relating to smooth approvals



Advocate/ Spl. PP for CBI, that after sale of the three

companies, that is, Aircel Limited, Aircel Cellular Limited and

Dishnet DSL Limited, to Maxis group, there was change in the

attitude and behaviour of Sh. Dayanidhi Maran and Dr. J. S.

Sarma relating to the issues of three companies. It is further

submitted that as long as the companies remained with Siva

group, the two conspirators were putting every hurdle in their

cases relating to new licences and other regulatory approvals.

However, once the management passed over to the Maxis

group, the two conspirators became very active and every

approval was granted not only smoothly but very quickly. It is

repeatedly submitted by him that this is an indicator of

conspiracy between Sh. Dayanidhi Maran, Dr. J. S. Sarma and

other accused relating to Maxis group. My attention has been

invited to the notings in the various files as well as statements

of witnesses in great detail.

618. On the other hand, it is submitted by learned Sr.

Advocates for the defence that once the management passed

over to the Maxis group, the shortcomings and deficiencies

from which the three companies were suffering were no longer

there and approval became very easy. It is further submitted

that even otherwise there is no instance of any hurried or hasty

approval post transfer to Maxis. It is repeatedly submitted that

whatever Sh. Dayanidhi Maran or Dr. J. S. Sarma did was done

by them in the regular course of official business without any

favour to anyone. My attention has been invited to the various

notings as well as statements of witnesses to emphasize their


point of view.

619. Let me take note of each circumstance.

(i) De-linking of show cause notices (D-43)

620. It is the case of Sh. Anand Grover, learned Spl. PP,

that as long the three companies were with Siva group, Sh.

Dayanidhi Maran linked various violations by the companies to

the issue of new licences, thus, stalling the issue of new

licences. It is submitted that this was a deliberate attempt. It is

further submitted that once the management of the three

companies passed to Maxis group, he immediately ordered de-

linking of the two issues. It is repeatedly submitted that

thereafter, Sh. Dayanidhi Maran and Dr. J. S. Sarma became

very active and this indicates that both were in conspiracy with

the Maxis group.

621. This has been refuted by the learned defence

counsel submitting that the issue of de-linking was processed in

the ordinary course of business by the official of the department

in which Sh. Dayanidhi Maran or Dr. J. S. Sarma had no role. It

is repeatedly submitted that even otherwise Sh. Dayanidhi

Maran was not hyper-active at all, as alleged, but he sat on this

file also for close to four months from 26.01.2006 to

16.05.2006, when the approval was finally granted. It is

repeatedly submitted that where is the active/ smooth

behaviour of Sh. Dayanidhi Maran. It is repeatedly submitted

that he was at his natural self as he always was and there was

no change in his attitude or behaviour.

622. Let me take note of the details as they exist in the


file to find out the reality of the issue.

623. This issue has been dealt with in file D-43. The first

note sheet was recorded by Sh. R. K. Gupta on 27.12.2005 at

1/N to the following effect:

“As directed the summary of the cases pending forissue of Licences are as below.

1. The cases M/s Dishnet DSL Limited wereforwarded to AS(T) by PS to Hon'ble MOC&IT inlast year. The opinion of the AS(T) is Placed at 1/c.As directed by the then Secretary (T), the commentsof Additional Secretary (T) was submitted to LA forLegal opinion on this matter.

2. The opinion of LA is placed at 2/c. Salientpoints of LA opinion are as below:

In Para 2. Moreover the DOT withdrew of itsown letter of imposition of penalty so M/s. DishnetDSL Ltd. cannot be faulted on this count and denialof LOIs/License will not withstand legal scrutiny tillthe company is not blacklisted for alreadycommitted major malpractices in accordance withadministrative instruction, if any, after holding a fullfledged enquiry and affording fair opportunity ofhearing.

In Para 3. Hence no objection to indirectforeign investment to whatsoever level can be takenespecially where DOT does not know the contraryfacts about non-existence of management in Indianhands.

In Para 4. Any objection to this equity pattenor of cross holding various companies can not betaken by DOT. This for the Business World tomanage and not an unusual happening to have crossholdings.

In Para 5. With regard to complicated nature


of equity holding, no objection can be taken byLicensor because such adverse notice is notprovided in the licence agreement.

3. The last noting of Secretary (Telecom) in themonth of March, 2005 is that “the files arereturned with the direction that the divisionshould ascertain all the Show Cause Notices/Advisory Letters issued to the abovecompany or companies belonging to theGroup and the nature of default before anyview is taken”.

4. The cases pending for issuance of the Licencesare summarized and summary is placed at 3/c.

5. The file is submitted for further ordersplease.”

624. The note does not mention as to who directed the

note to be recorded.

625. The file was marked upward and DDG (BS) Sh. P. K.

Mittal recorded on the same date that the case was discussed

with ADG (BS-III) and asked for a detailed self-contained note.

626. Thereafter, again a detailed self-contained note was

put up by Sh. R. K. Gupta on 28.12.2005 at N/2 to N/5, which

incidentally again begins with the words:

“Subject: Pending cases for issue of licencesAs directed, the summary of the cases pending forissue of licences are as below:….................................................................................................................................................................7.”

627. It can be taken that this note was recorded as per

the directions of Sh. P. K. Mittal, as contained in his note dated


27.12.2005.

628. He marked the file to DDG (BS) Sh. P. K. Mittal,

who again recorded a detailed note on 30.12.2005, suggesting

de-linking and many other things. In due course the file

reached Secretary (T), who asked for a discussion on

05.01.2006. Thereafter, the file was marked downward.

629. Again on 19.01.2006, Sh. P. K. Mittal recorded a

detailed note at 7/N and 8/N suggesting de-linking of various

issues to the following effect:

“Sub:Policy regarding grant of licence- issueregarding show cause notices andadvisories.

The details of various applications pending inBS Group as on 31.12.2005 and the reasons thereupon is placed at p.3/c.

2. It was opined in case of M/s Dishnet DSL Ltd.that “before granting of UASL licence to M/sDishnet DSL Ltd., we may await the decision ofTDSAT on the issue of vigilance cases and penaltiesimposed by DoT on this company.”

3. It was also desired to ascertain all the showcauses notices/ advisory letters issued to the abovecompany or companies belong to the group and thenature of default before any view is taken.

3.1 Accordingly, the practice along withobservations indicated in para 2 above was followedwithout discrimination for other companies.

3.2 On the observation in para 2, Legal Advisorhas opined that, “in this regard it may be stated thatthere is no pending litigation as on today. Moreover,the DoT withdrew of it's own letter of imposition ofpenalty so M/s Dishnet DSL Ltd. cannot be faulted


on this count and denial of LOIs/ Licence will notwithstand legal scrutiny till the company is notblacklisted for already committed majormalpractices in accordance with administrativeinstructions, if any, after holding a full fledgedenquiry and affording fair opportunity of hearing.”

4. The matter was discussed in a meeting chairedby Secretary (T) and attended by Member (F),Member (P), Advisor (P), Sr. DDG (LF) and DDG(BS) on 13.1.2006. It was felt that as opined by theLegal Advisor, denial of LOIs/ licences will notwithstand legal scrutiny till the company is blacklisted for already committed major malpractices inaccordance with administrative instructions, if any,after holding a full fledged enquiry and affording afair opportunity of hearing.

4.1 Further, it was felt that if for any majormalpractices any action has be taken then actioncan be taken for that particular licence. For violationof a particular licence, it may not be legally tenableto terminate or suspend various other licences of thesame company or group of companies.

4.2 Processing of responses to variousexplanations/ show cause notices is a continuousprocess.

5. Keeping in view the above, it was felt thatprocessing of application for grant of new licencesshould be de-linked from show cause notices orexplanation call for or any other advisory issued tothat company or any other sister/ group company isrespect of any other licence.

Submitted for kind consideration andapproval please.”

630. In due course the file reached the various officials,

including Secretary (T), who agreed to the note of Sh. P. K.


Mittal on 26.01.2006 and marked the file to the Minister.

631. The Minister finally approved the note on

16.05.2006. In due course, the file reached Sh. P. K. Mittal on

17.05.2006, who marked it to ADG (BS-III) on the same day.

Thereafter, there is no movement in the file.

632. It is interesting to note as to what Sh. R. K. Gupta,

who has been examined as PW 7, says on this point. His

statement is as under:

“................................................................................Now I have been shown one original file no. 20-231/2005/BS-III/ Volume –II (MR-II, Memo 47,Serial No.4 in PE 1/2011) and state that Shri GovindSinghal, the then Director(BS-III) directed me toput up a summary of the cases pending for issue ofUAS Licenses. Accordingly, I put up a note on27.12.2005 in the above referred file. I had referredto the salient points of the opinion of Shri O.P.Nahar, Legal Advisor and the last noting dated30.03.2005 of Shri Nripendra Misra, the thenSecretary (T). I had placed the details of the casespending for issuance of licenses at 3/C of the saidfile. I marked the file to Shri Govind Singhal, thethen Dircector (BS-III) for further orders who inturn marked the file to Shir P.K. Mittal, the thenDDG(BS) on 27.12.2005 itself. Shri P.K Mittaldiscuss the matter with me and instructed toprepare a detailed self contained note. I accordinglyput up note dated 28.12.2005 at 2-4/N detailing thecases pending for issue for licenses. On being asked I state that at that time applicationsof M/s Dishnet DSL Ltd. for grant of UAS licenses inUP (E), UP (W), Punjab, Haryana, Kerala, andKolkata Service Areas were pending. Besides, case ofM/s Dishnet DSL Limited for extension for LOI forgrant of UAS licenses in Madhya Pradesh ServiceArea was also pending. I have also mentioned thereasons for pendency. At that time, LicensingRegulation (LR) Wing of DoT had intimated that the


following show cause notices were under process inrespect of sister concerns of M/s Dishnet DSLLimited.:-1. Show Cause Notice for imposing penaltyamounting Rs. 2,36,88,522/- and submittingadditional bank guarantee of Rs. 3.20 crorebecause of grey market activities by its subscribers.Final order under issue after according personalhearing before Member (P).2. Show cause notice for termination of licensefor violation of clause 10 regarding Transfer ofLicense is under issue. Approval of MOC receivedon 28th March 2005.3. 6 nos. of new cases have been reported forinvolvement of its subscribers in grey marketrecently (on 10th March, 2005). The cases are beingprocessed.

I marked the file to Shri Govind Singhal, the thenDircector (BS-III) on 28.12.2005 for further orderswho in turn marked the file to Shir P.K. Mittal, thethen DDG(BS) on 28.12.2005 itself. Shri P.K Mittal, DDG(BS) put up the file toAdviser(P) vide 5-6/N on 30.12.2005. He hadstated the following vide para 5 at 5/N:-‘The various licensees have been issued Show CauseNotices and their response are processes. It is acontinuous process as complaints keeps on comingand the show cause notices issues. Keeping in viewthe legal advise, a view may have to be takenwhether further processing of these applicationsfor grant of license for any breach or violation ofthat licensee or associate/sister concern is to bedelinked as that breach or violation is to be dealtwith according to the terms and conditions of thatparticular license. Further, if any penalty isimposed and realized that violation/breach getliquidated’.

Shri R.N. Prabhakar, the then Adviser (P) signed thenotesheet on 03.01.2006 and send the file toMember(P)/ Member(F) who also signed the


notesheet on 05.01.2006 and send the file to ShriJ.S. Sarma, the then Secretary (T). Dr. J.S. Sarma,the then Secretary (T) sent back the file on05.01.2006 to Member (P)/Adviser(P)/DDG(BS)with a direction to discuss the matter. Shri P.K. Mittal put up another note dated19.01.2006 vide 7-8/N. He had stated the followingvide para 5 at 8/N:-‘Keeping in view the above, it was felt thatprocessing of application for grant of new licenseshould be de-linked from show cause notices orexplanation call for or any other advisory issued tothat company or any other sister /group companyin respect of any other license.’Senior DDG(LF) signed the said notesheet on19.01.2006, Adviser(P) & Member(P) signed thesaid notesheet on 20.01.2006, Member(F) signedthe said notesheet on 23.01.2006 and Secretary(T)signed the said notesheet on 26.01.2006 and sentthe file to the then MoC&IT.The then MoC&IT approved the above note on16.05.2006.

633. Thus, Sh. R. K. Gupta states that he initiated the

note on the asking of Sh. Govind Singhal.

634. PW 15 Sh. Govind Singhal, the then Director (BS-

III), to whom Sh. R. K. Gupta marked the file, states in his

statement dated 03.09.2013, at page 6, as under:

“....................................................................................................................................................................Now I have been shown one original file of DoTbearing No. 20-231/2005/BS-III/Vol.II and statethat Sh. R. K. Gupta, ADG (BS-III) had put up asummary of the cases pending for issue of UASL andmarked the file to me on 27.12.2005. Then it wasmarked to DDG (BS). DDG (BS) desired to submitthe detailed Self Contained Note. Sh. R. K. Gupta,ADG (BS-III) submitted the detailed note fromnotesheet No. N/2 to N/4 dated 28.12.2005. DDG


(BS) processed the case on 19.01.2006 for delinkingthe issue of show cause notices or explanation calledfor or any other advisory issued to the company orany other sister/ group company from granting thenew licences. Sh. P. K. Mittal, DDG (BS) in hisproposal dated 19.01.2006 has referred to the legalopinion dated 11.01.2005 of Sh. O. P. Nahar, LA. Sh.P. K. Mittal has also mentioned that the matter wasdiscussed in a meeting chaired by Secretary (T) andattended by Member (F), Member (P), Advisor (P),Sr. DDG (LF) and DDG (BS) on 13.01.2006. In thesaid meeting, it was felt that as opined by the LegalAdvisor, denial of LOIs/ Licences will not withstandlegal scrutiny till the company is black listed foralready committed major malpractices inaccordance with the administrative instruction, ifany, after holding a full fledged enquiry andaffording a fair opportunity of hearing. The proposalwas concurred by Sr. DDG (LF), Advisor (P) &Member (P) and Member (F). Dr. J. S. Sarma, thethen Secretary (T) also concurred with the proposaland sent the file to MoC&IT on 27.01.2006. Andapproval was granted by the then MoC&IT on16.05.2006.

From the above, it is evident that the legal input wasalready available on 11.01.2005 and the linking ofissuance of UASL with show cause notices/advisoryletters issued to the applicant company or group ofcompanies, which was conveyed by Sh. NripendraMisra, the then Secretary(T) on 30.03.2005,appears to be reason of delay in issuance of LOI toM/s Dishnet DSL Ltd. in 7 telecom service areasincluding extension of LOI in Madhya Pradesh area.…................................................................................................................”

635. Sh. Govind Singhal does not say that he had asked

Sh. R. K. Gupta to put up the note. He states that Sh. R. K.

Gupta had put up the summary of cases pending for issue of


UASL and marked the file to him (Govind Singal) on

27.12.2005 and he, in turn, marked the file to DDG (BS).

636. It is also relevant to quote PW 8 Sh. P. K. Mittal

from his statement dated 30.05.2012, pages 2 and 3, which is as

under:

“.....................................................................................................................................................................On being asked I state that in the month ofDecember, 2005 it was desired by Secretary tosubmit a note for consideration for taking a view fordelinking the violations for grant of new licenses.Accordingly, a note was submitted in a separate fileNo. 20-231/2005/BSIII/Vol-II on 27.12.2005 by Sh.R. K. Gupta, the then ADG (BS III). The note wasfurther approved on 28.12.2005 by him and on30.12.2005 by me before submitting to Advisor (P)& Member (P) Sh. R. N. Prabhakar. Sh. R. N.Prabhakar submitted the file to Dr. J. S. Sarma, thethen Secretary (T) through Member (F), Secretary(T) desired to have discussion. The matter wasdiscussed in a meeting chaired by Secretary (T) andattended by Sh. A. K. Sahawney the then Member(F), Sh. R. N. Prabhakar, the then Member (P) andAdvisor (P), Smt. Sadhna Dixit, the then Sr. DDG(LF) and myself on 13.01.2006. It was felt that asopined by the Legal Advisor, denial of LOIs/ licenseswill not withstand legal scrutiny till the company isblacklisted for already committed majormalpractices in accordance with administrativeinstructions, if any, after holding a full fledgedenquiry and affording fair opportunity of hearing. Itwas also felt that if for any major malpractices anyaction has to be taken, then action can be taken forthat particular license. For violation of anyparticular license, it may not be legally tenable toterminate or suspend various other licenses of thesame company or group of companies. Processing ofresponses to various explanations/ show causenotices is a continuous process.


Therefore, it was felt that processing ofapplications for grant of new licenses should bedelinked from show cause notices or explanationcall for or any other advisory issue to that companyor any other sister or group company in respect ofany other license. The aforesaid recommendationwas submitted to the then MoC&IT Sh. DayanidhiMaran on 26.01.2006 and was approved on16.05.2006 by him.”

637. In the statement dated 01.12.2011, page 9, he

further states that:

“I would like to add here that as per oral directionsof Dr. J. S. Sarma, the then Secretary DOT, aproposal for delinking Show Cause Notices from theprocessing of applications of grant of new Licensewas initiated on 27.12.2005 by Sh. R. K. Gupta,ADG (BS-III). In fact, Dr. J. S. Sarma, the thenSecretary (T) had orally directed me to put up aproposal for delinking show cause notices. Hence, Iconveyed the directions to Sh. Govind Singhal, thethen Director (BS-III). Accordingly, Sh. R. K. Gupta,ADG (BS-III) prepared a self contained note on thenote-sheet itself explaining different pendingapplications of different companies and reasons ofpendency, the legal opinion suggesting that linkingof licences with Show Cause Notices will notwithstand legal scrutiny. I also summarized thestatus and issues and marked the file to Sh. R. N.Prabhakar the then Advisor (P) and Member (P) on30.12.2005 who in turn marked the same to Shri A.K. Sawhney, Member (F) on 03.01.2006 whofurther marked the same to Dr. J. S. Sarma,Secretary (T) on 05.01.2006. Secretary (T) directedto have a discussion which took place on 13.01.2006which was chaired by Secretary, DOT and attendedby me, Sh. A. K. Sawhney, the then Member(Finance), Sh. R. N. Prabhkar, the then Member (P)as well as Advisor (P) and Mrs. Sadhna Dixit, thethen Sr. DDG (Licensing Finance). It was felt that


processing of application for grant of new licencesshould be delinked from show cause notices orexplanation call for or any other advisory issued tothat company or any other sister/ Group companyin respect of any other licence. Accordingly, I put upa note on 19.01.2006. Thereafter, the said note wasseen and signed by Ms. Sadhna Dixit, Sr. DDG (LF),Sh. R N. Prabhakar, Advisor (P) and Member (P),Sh. A.K. Sawhney, Member (F) and Dr. J. S. Sarma,Secretary (T). The said file containing the proposalfor delinking was sent to the then MoC & IT on27.01.2006. It remained pending till 16.05.2006when Shri Dayanidhi Maran the then MoC & ITapproved the proposal for delinking the process ofUASL from the Show Cause Notices.”

638. Furthermore, in his statement dated 08.10.2012,

pages 3 and 4, Sh. P. K. Mittal states regarding de-linking as

under:

“....................................................................................................................................................................Today I have been shown one original file No.10-21/05-BS-I (Vol.II) (MR-II, Memo-143, Sl. No.2 (i))wherein guidelines for grant of UASL were approvedby Sh. Dayanidhi Maran, the then MoC&IT on13.12.2005 at 3/N. The said guidelines were issuedon 14.12.2005, a copy of which is available at serialNo.427 in KW folder of said file (MR-II, Memo-143,Sl. No.2 (ii)). The said guideline also does notprovide for linking of any show cause notice oradvisory issued to the applicant company or itssister concern or its associates from the process ofgranting any further UASL in other services areas orprocessing any request such as change of name ofthat company. Prior to approval of the saidguidelines on 13.12.2005 by Sh. Dayanidhi Maran,the then MoC&IT, the UASL applications were beingprocessed as per the guidelines approved by Sh.Arun Shourie, the then MoC&IT and issued on11.11.2003. This guideline also does not link any


show cause notice or advisory issued to theapplicant company or its sister concern or itsassociates from the process of granting any furtherUASL in other services areas or processing anyrequest such as change of name of that company.”

639. The perusal of the note sheet dated 27.12.2005 does

not reveal as to on whose direction this note was recorded by

Sh. R. K. Gupta, but in oral statement, he states that he

recorded it on the direction of Sh. Govind Singhal, but Sh.

Govind Singhal is silent on this point and states that Sh. R. K.

Gupta had put up the note. Sh. P. K. Mittal in his statement

dated 01.12.2011 states that Dr. J. S. Sarma orally directed him

to put up a proposal for de-linking, show cause notices from the

processing of applications of grant of new UAS licence. He

further states that he conveyed the directions to Sh. Govind

Singal, but as already noted Sh. Govind Singhal is silent on this

point.

640. Sh. P. K. Mittal states that Dr. J. S. Sarma had orally

directed him to do so, but in the file there is no such mention.

In the oral statement he put the blame on Dr. J. S. Sarma, but

his written note is contrary to this, particularly paras 4 and 4.1

of his note dated 19.01.2006, which for ready reference read as

under:

“4. The matter was discussed in a meeting chairedby Secretary (T) and attended by Member (F),Member (P), Advisor (P), Sr. DDG (LF) and DDG(BS) on 13.1.2006. It was felt that as opined by theLegal Advisor, denial of LOIs/ licences will notwithstand legal scrutiny till the company is blacklisted for already committed major malpractices inaccordance with administrative instructions, if any,


after holding a full fledged enquiry and affording afair opportunity of hearing.

4.1 Further, it was felt that if for any majormalpractices any action has be taken then actioncan be taken for that particular licence. For violationof a particular licence, it may not be legally tenableto terminate or suspend various other licences of thesame company or group of companies.”

641. The written record shows that it was a collective

decision, but in his oral statements Sh. P. K. Mittal puts the

blame on the Secretary alone. This stance of the witness is

contrary to the written record and is violation of official

procedure and guidelines as noted above.

642. Furthermore, the file was marked to the Minister by

the Secretary (T) on 26.01.2006, but he approved the same on

16.05.2006. Thus, he sat on the file for close to four months.

There is no eagerness or hurry exhibited by the Minister here.

643. Furthermore, the processing of file does not reveal

having any ministerial interference.

644. I may note that it may set dangerous precedent to

prosecute public servants on the basis of oral statements which

are contradictory to the official record maintained in the

ordinary course of government business. The de-linking is at

the core of the charge sheet as the case of the prosecution is

that this was done by the Minister to help Maxis, but the file

does not reveal any such thing. The file appears in its entirety to

be the doing of Sh. P. K. Mittal, but when questioned he cast the

blame on the Secretary by making oral statement which is

contrary to the official record and procedure.


645. The case of the prosecution is that the regulatory

approvals of Siva group of companies, that is, Aircel Limited,

Aircel Cellular Limited and Dishnet DSL Limited, were being

delayed deliberately by Sh. Dayanidhi Maran and Dr. J. S.

Sarma, who were in conspiracy with each other, in order to

force its exit from telecom sector. It is further their case that

this regulatory delay forced the exit of the aforesaid companies

as the same were sold by Sh. C. Sivasankaran to the Maxis

group vide agreement dated 30.12.2005. It is further their case

that subsequent to the transfer of the companies to Maxis

group, Sh. Dayanidhi Maran became very active and he de-

linked his earlier objections from the grant of new licences/

approvals to these companies.

646. However, as noted above, file D-43, which deals

with de-linking, does not reveal that the file was initiated at the

initiative of Dr. J. S. Sarma. It may be noted that there is no

material on the file to indicate that the file was initiated on the

initiative of Sh. Dayanidhi Maran. However, Sh. P. K. Mittal has

stated in his oral statement that he has done so at the instance

of Dr. J. S. Sarma and he directed Sh. Govind Singhal to put up

the note, but Sh. Govind Singhal does not say so. Thus, there is

a contradiction amongst the three witnesses about the initiation

of the file. Needless to add, at the cost of repetition, that the

oral statement of Sh. P. K. Mittal is contrary to the file. The file

has the footprints of Sh. P. K. Mittal at every stage of the case,

but whenever he is questioned, he, by making oral statement,

cast the blame on others. The file appears to be the doing of Sh.

P. K. Mittal in its entirety. In this file, three officials, namely,


Sh. R. K. Gupta, Sh. Govind Singhal and Sh. P. K. Mittal, were

mainly involved at the processing stage, while at the final stage

Member (P), Secretary (T) and the Minister were involved. The

file itself does not indicate much role of anyone except that of

Sh. R. K. Gupta, who initiated the file and Sh. P. K. Mittal, who

recorded the two crucial notes dated 30.12.2005 and

19.01.2006. However, by making oral statement, any one of the

six could be held guilty for the issues dealt with and approved

in the file. This is the pitfall of the oral statements when made

contrary to official record. The real offenders can put the

innocent at the risk of prosecution by making oral statements

contrary to official record. I have already noted that in many

files when the directions were passed by the Secretary (T), the

next note sheet was recorded by the official concerned quoting

that the note sheet was being recorded as per the directions of

Secretary (T)/ Chairman (TC), but no such thing appears in this

file.

647. Even if it is assumed that the file was initiated at the

instance of Dr. J. S. Sarma, even then there is no smooth or

hurried approval by Sh. Dayanidhi Maran. The file was marked

by Dr. J. S. Sarma to Sh. Dayanidhi Maran on 26.01.2006, but

he sat on the file for more than four months and approved it on

16.05.2006. This breaks the theory propounded by the

prosecution that after sale of Aircel Limited to Maxis, the

Minister became very active and granted smooth approval.

Sitting over a file for about four months can by no stretch of

imagination be called smooth approval. This also breaks the

theory of conspiracy between Dr. J. S. Sarma and Sh. Dayanidhi


Maran.

648. This ground itself is enough to destroy the entire

theory of conspiracy propounded by the prosecution regarding

smooth approval.

****************

ii. Approval granted for issue of LOI to Dishnet

Wireless Limited after acquisition by Maxis

Communication

649. The allegation is that after the sale of the company

to Maxis, Sh. R. K. Gupta recorded a note on 08.11.2006 (D-2,

39/N to 41/N) recommending issue of LOI to the company in

Punjab, Haryana, Kerala, Kolkata, UP(E) and UP(W) service

areas and amendment to the LOI in MP service area, issued on

20.04.2004. It is further alleged that the file was marked by the

Secretary (T) to the Minister on 21.11.2006 and the same was

approved by him on 22.11.2006. Accordingly, it was smooth

approval post acquisition by Maxis.

650. The fact of Maxis acquiring 73.99% of Aircel

Limited was taken on record in the file D-2 for the first time on

06.03.2006 at 30/N.

651. This instant file, that is, D-2, remained under

processing from 26.04.2004 to 13.07.2004, when it was

marked by the Secretary (T) to the Minister. As noted earlier,

the Minister asked for certain clarifications vide note dated

26.08.2004 at 17/N, which for ready reference are extracted

again as under:

“a) The financial/equity between M/s. Dishnet


DSL Ltd. and its sister concerns holdinglicence elsewhere, particularly in Tamil Naduand Chennai.

b) To please verify the status of the newspaper reports regarding sale of M/s. Dishnet DSL Ltd. or any of its sister concerns to any other company.

c) To also verify whether M/s. Dishnet DSL Ltd. or any of its sister concerns granted licences inother service areas were later sold to another licensee/entity.

d) It is recalled that the company has violated certain licence conditions entailing specific penalty being imposed on it. The legal implications to this case may please be examined and reported.”

652. Thereafter, the file was again sent to the Minister, as

desired by him, per statement of Sh. P. K. Mittal dated

29.11.2011, page 1, and the file was marked to him by Secretary

(T) on 24.12.2004 at 21/N (D-2), but the file was returned with

the note of Secretary (T) dated 30.03.2005, which for ready

reference is extracted as under:


653. As already noted above, the financial capacity of the

company was in question from the very beginning itself.

Furthermore, the company was trying to sell its licence in


violation of the competition clause in the agreement in Chennai

service area to Aircel Digilink India Limited, as noticed in file

D-30.

654. Furthermore, the company was involved in several

violations, as already noted. In such a situation, the questions

raised by the Minister cannot be termed to be outlandish or

frivolous. When the company was involved in so many

violations by being engaged in grey market and also sale of ISP

licence without permission of the department, its applications

should have received some serious or higher scrutiny.

655. The Minister had asked for a note of AS (T) vide

order dated 15.09.2004 at 35/N in D-40. On this, AS (T) Dr. J.

S. Sarma submitted his note dated 30.11.2004 suggesting that

before granting UAS licences to Dishnet, decision of TDSAT

may be awaited.

656. On this, Secretary (T) Sh. Nripendra Mishra asked

for legal opinion on the comments of Dr. J. S. Sarma.

657. Sh. O. P. Nahar, LA (T), submitted his report dated

11.01.2005 (43/N, D-40). In this regard, the opinion of Legal

Advisor is too legalistic. If a company is involved in several

violations pertaining to earlier licences held by it, denial of new

licence is not the only action, which can be taken against it nor

the Minister was calling for it nor the AS(T) had suggested it.

The AS(T) had only suggested that they may await the decision

of TDSAT. Postponing an action on the application of a

company on account of its being involved in grey market

relating to other licence and denying a new licence to it on this

ground are two entirely different things. Nobody had suggested


that applications for new licences be rejected or that the new

licences be denied.

658. The Legal Advisor took it as if the AS(T) had

suggested for denial of licence to the company and gave a very

legalistic report, which is wholly out of context. As already

noted above, when the company was involved in grey market

and was also accused of selling an ISP licence without

permission of DoT and its financial capacity was in doubt from

the very beginning, its applications should have received

higher/ strict scrutiny. The note of Dr. J. S. Sarma makes sense

in the light of the facts of the case.

659. The case of the prosecution is that post-acquisition

by Maxis, when proposal was submitted by Sh. R. K. Gupta on

08.11.2006 and the file was marked upward and reached the

Secretary (T) on 21.11.2006. The Secretary (T) marked the file

to Minister Sh. Dayanidhi Maran, who approved it on the very

next day, that is, 22.11.2006. The allegation is that post-

acquisition, it was a smooth approval with mala fide intention.

660. However, the charge sheet does not say as to what

questions or objections ought to have been raised by the

Minister. How the Minister could have stopped or rejected or

delayed the proposal? What to talk of a reasonable objection,

the charge sheet is silent on this point. In such a situation, the

Minister had no option but to approve it as the earlier

objections ceased to have effect on account of changed

circumstances like change of management from Siva group to

Maxis group, withdrawal of applications for sale of licences to

Digilink as the same was in violation of licence conditions and


the issues about the financial capacity of the company also

vanished with change of management. Hence, this ground does

not carry any value in the eye of law that it was a smooth

approval with mala fide intention.

iii. Approval granted for taking on record change of

name from Dishnet DSL Limited to Dishnet

Wireless Limited

661. The allegation is that note dated 29.06.2006 was

put up by Sh. S. A. Malik, as already noted above, in file D-41 at

8/N, for taking on record change of name of Dishnet DSL

Limited Sh. Dishnet Wireleless Limited in ten service areas,

that is, J&K, Assam, North-East, West Bengal, Orissa, Bihar,

Himachal Pradesh, Madhya Pradesh, UP (E) and UP(W). The

file was marked to Dr. J. S. Sarma on 29.06.2006 and he

approved the same on 30.06.2006. The allegation is that it was

smooth approval after sale of the companies to Maxis.

662. The last entry in this file prior to the note of

29.06.2006 is dated 03.03.2005, by which the Minister had

directed the Secretary (T) to examine if there was undue haste

in processing the files, as contained in D-2, D-46, D-38 and D-

41. However, there is no such report on the file.

663. The agreement of sale of the companies to Maxis

was executed 26.12.2005 and it was to be effective from

30.12.2005.

664. However, the approval was granted by the Secretary

(T) on 30.06.2006, that is, after six months of the sale of the

companies. Moreover, there is no material on the record to


indicate that Sh. S. A. Malik put up the note at the instance of

either Sh. Dayanidhi Maran or Dr. J. S. Sarma so that early

approval can be granted.

665. There is a delay of six months from the date the

agreement of sale became effective, that is, 30.12.2005. How

can an approval granted after six months of the sale of the

company can be called smooth approval. Moreover, by now

earlier objections ceased to be there. It became a query-free file.

Accordingly, I do not find any merit in this point also.

iv. Approval granted to take on record change of

name of promoter (of Aircel Limited), M/s Srinivas

Computers Limited to Aircel Televentures Limited

666. The allegation is that Sh. A. K. Dhar put up a note,

as already noted, on 03.11.2005 in file D-40 at 51/N, seeking

approval for change of name of promoter of Aircel Limited, M/s

Srinivas Computers Limited to M/s Aircel Televentures

Limited. It is alleged that the file was marked to Dr. J. S. Sarma

on 09.11.2005 and he approved the same on 10.11.2005.

667. The allegation in the charge sheet is that after the

execution of agreement for sale of 100% equity of Aircel

Televentures Limited in Aircel Limited was executed, there was

a change in the attitude of the two accused, that is, Dr. J. S.

Sarma and Sh. Dayanidhi Maran, towards various pending

applications of UAS licences and other proposals of Aircel

Limited, Aircel Cellular Limited and Dishnet DSL Limited. It is

alleged that thereafter, regulatory approvals became very

smooth for the companies.


668. However, the agreement of sale was executed on

26.12.2005, which was to be effective from 30.12.2005.

669. The approval in the instant case was granted on

10.11.2005 by Dr. J. S. Sarma much before the sale. This

circumstance is thus contrary to the allegation in the charge

sheet as this happened much before the execution of the

agreement. It strikes at the very root of the charge sheet. There

is no merit in this circumstance also.

v. Allocation of start-up spectrum to Dishnet DSL

Limited in Bihar telecom circle

670. The application dated 24.05.2004 (page 96, D-35)

of Dishnet DSL Limited for allocation of start-up spectrum

4.4+4.4 MHz in Bihar service area was being processed in file

D-35. The allegation is that the file was called by Dr. J. S.

Sarma, the then Secretary (T), in January 2006 and it was put

to him by Wireless Advisor on 02.02.2006 and the same was

approved by him on 03.02.2006.

671. However, the said file was with Wireless Advisor

from 24.08.2005 to 13.01.2006. There is nothing on the file

except the oral statement of Sh. P. K. Garg. This statement is

contrary to the record as contained in the file D-35. There is no

other material on record except oral statement of Sh. P. K.

Garg.

672. This fact has already been discussed in detail while

dealing with delay in the grant of initial spectrum in Bihar

service area. The question put by Dr. J. S. Sarma related to roll

out plan of the company. While recording his note dated


01.02.2006, at 14/N, Wireless Advisor Sh. P. K. Garg had

clearly indicated that the service provider also informed that it

has firm plans for rolling out the network. This indicates that

the query put by Dr. J. S. Sarma was satisfied by the service

provider. This also nullifies the oral statement of Sh. P. K. Garg

that the query about roll out plan put up by Dr. J. S. Sarma was

not justified. Once the query was satisfied or properly

answered, there was no reason to hold up the file. The charge

sheet also does not say as to what question or query could have

been put by Dr. J. S. Sarma. Accordingly, this circumstance also

does not have any merit.

vi. Allocation of additional spectrum to Aircel

Cellular Limited in Chennai Metro

673. As already noted, this issue was dealt with in file D-

37 from 16.02.2005 to 18.01.2006 from 1/N to 9/N.

674. The allegation is based on the fact Dr. J. S. Sarma

called for the file in the month of January 2006 and the same

was put up by the Wireless Advisor on 17.01.2006 and was

approved by the Secretary (T) on 18.01.2006. It is the

contention of the prosecution that it was smooth approval post

transfer of the company to Maxis.

675. As noted earlier, the file was with Wireless Advisor

from 23.07.2005 to 31.12.2005. The statement of the Wireless

Advisor Sh. P. K. Garg is contrary to the record. There is no

other material on the file in this regard, except the oral

statement of Sh. P. K. Garg.

676. Furthermore, on the margin of 7/N, there is a note


in pencil of Sh. R. J. S. Kushvaha dated 18.07.2005, which is as

under:

“WA/ Member (T) & Secretary (T) on tour abroad.”

Thus, the senior officers including Dr. J. S. Sarma

may not be knowing about this file at all, as it reached the

Wireless Advisor when they were abroad, but by oral statement

he is being blamed.

677. Sh. R. J. S. Kushvaha states in his statement dated

21.11.2011 about this as under:

“....................................................................................................................................................................The case has been submitted to the then DWA (V)Sh. B. Gunasekar, who marked the file to me on15.07.2005. I sent the file to the then WA on23.07.2005. I had also mentioned on 18.07.2005 onpage 7/N of note, by pencil, in the side margin of thenot sheet that “WA/Member (T) & Secretary (T) ontour abroad.”

As per diary No. of 1079/JWA (N) dated25.07.2005, this file was sent to WA vide diary No.982/WA/05 dated 25.07.2005. As per diary No.3129/WA/05 dated 31.12.2005 the file was sent tome which was received in my office on 03.01.2006vide diary No. 51/JWA (N) dated 03.01.2006.There was a white paper stapled with the note onpage 7/N mentioning “Let us wait for the decisionof higher authorities on the note regardingspectrum availability” initialed by Sh. P. K. Garg,the then WA. I also put my initial dated 03.01.2006on stapled white paper in lower portion of page 7/N.

The case was resubmitted as desired on 13.01.2006by Sh. Dinesh Jha, the then AWA (V). He markedthe file to the then DWA (V) Sh. Gunasekar, who puthis signature and sent the file to me on 13.01.2006.On the same day i.e. 13.01.2006 I signed and sent


the file to the then WA.

On page 9/N of the note sheet, a case was initiatedby Wireless Adviser himself on 17.01.2006 forallocation of addition GSM spectrum 1.8 + 1.8 MHzin 1800 MHz (out of the available spectrum), to M/sAircel Cellular Ltd. for Chennai Metro mentioningin the note that M/s Aircel Ltd. had reached asubscriber base of 6.54 lakh in Chennai in endDecember 2005 as per COAI figures. Thus, theymeet the criteria (5 lakh subscribers) for getting 1.8MHz of additional GSM spectrum, beyond 6.2+6.2MHz. The proposal by Sh. Garg for allotment of1.8+1.8 MHz spectrum in 1800 MHz GSM band toM/s Aircel Cellular Ltd. for Chennai was approvedon 18.01.2006 by the then Secretary (T) Sh. J. S.Sarma. Accordingly, the earmarking letter for theadditional GSM spectrum to M/s Aircel Cellular Ltd.for Chennai Metro was issued by the then AWA (V)Sh. D. Jha on 20.01.2006.…...........................................................................”

678. Thus, the day the file was marked to the Wireless

Advisor, the three senior officers were not in India and, as such,

the Secretary (T) may not be knowing about this file at all.

Wireless Advisor, by making oral statement contrary to record,

is trying to shift the blame to Secretary (T), though he himself

sat on the file. Once the file was marked to Secretary (T) on

17.01.2006 by the Wireless Advisor, on what ground he could

have withheld the same. The charge sheet is silent on this point.

In the processing of this file in its entirety, there is no

interference either by the Minister or Secretary (T). Once the

file reached Dr. J. S. Sarma, he had no option but to approve it

as it was a query-free file. I do not find any objection recorded

anywhere by anyone, except by Sh. P. K. Garg himself when he


noted on 31.12.2005 that the decision of higher authorities

regarding spectrum availability be awaited. Accordingly, this

approval does not indicate anything incriminatory against the

accused. Accordingly, there is no merit in this circumstance

also.

vii. No query/ objection was raised by Sh. D. Maran,

the then MOC&IT to the proposal of foreign

investment of M/s Global Communication Services

Holdings Limited, Mauritius, in Aircel Limited

(D-39)

679. The proposal for approval of foreign investment of

Global Communication Services Holdings Limited was

processed in D-39. In the first note, it was recorded by Sh. J. B.

Dobhal on 16.02.2006, at 2/N, that FIPB, DEA, has forwarded

the proposal of foreign investment of M/s Global

Communication Services Holdings Limited, Mauritius, seeking

approval for enhancing its direct and indirect investment in

Aircel Limited from 26% to 73.99% and had requested for the

comments of DoT on the proposal. He marked the file to DDG

(IP).

680. This was processed again by Sh. N. P. Singh, DDG

(IP), who supported the proposal vide his note dated

24.02.2006, at 4/N, and marked the file to Joint Secretary (T).

Sh. M. S. Sahu, Joint Secretary (T), also supported the

proposal vide his note dated 01.03.2006 at 6/N and marked the

file to Additional Secretary (T). He (AS (T)) put up a question

regarding management control issues and marked the file again


to Joint Secretary (T)/ DDG (IP). Sh. N. P. Singh, DDG (IP),

again recorded a note on 04.03.2006 at 7/N, clarifying the

issue and seeking support for the proposal and again marked

the file to JS (T), who agreed to the same and marked the file to

AS (T). AS (T) recorded his note on the same day, that is,

04.03.2006, 7/N, supporting the proposal and marked the file

Secretary (T), who also agreed to it on the same day and

marked the file to MOC&IT.

MOC&IT Sh. Dayanidhi Maran granted his approval on

06.03.2006 at 7/N.

A bare perusal of this file shows that it is also a query-

free/ objection-free file. No objections were raised by any

officer at any level from Section Officer to Secretary (T).

681. The case of the prosecution is that no query was

raised by Sh. Dayanidhi Maran, though earlier he was raising

queries when change of equity was sought by Sh. C.

Sivasankaran in the month of August 2004.

682. Now the question is: How anyone can be expected

to put a query in an environment when nothing is faulted or

objected to by anyone from any quarter? It may be noted that

the proposal put forward by Sh. C. Sivasankaran regarding

transfer of equity to Aircel Digilink India Limited was in

violation of licence agreement as far as Chennai service area

was concerned and the equity structure of Aircel Digilink India

Limited was not clear to the department as far as Tamil Nadu

service area was concerned. As such, there is no comparison

between the two issues. The allegation, as such, is wholly

unfounded and baseless. Accordingly, there is no merit in this


also.

viii. Dilution of Terms of Reference (ToRs)

683. The allegation of the prosecution is that in

November 2005, a Group of Ministers (GoM) was constituted

by the Prime Minister for looking into the issues relating to

allocation of spectrum to mobile operators. It is further alleged

that proposed terms of reference (ToRs) of the GoM included

spectrum pricing policy and spectrum allocation policy and this

was approved by the PMO on 14.02.2006. However, Sh.

Dayanidhi Maran wrote DO letter dated 16.11.2006 to the

Prime Minister asking for exclusion of spectrum pricing from

ToRs and this was approved. It is alleged that this was got done

by Sh. Dayanidhi Maran to help Maxis Communication in the

allocation of spectrum.

684. PW 9 Sh. P. K. Garg has stated about constitution of

GoM and its terms of reference in his statement dated

24.05.2012. He states that he had proposed terms of reference

for the GoM, which included spectrum pricing and its

allocation. Planning Commission also suggested inclusion of

spectrum pricing in the terms of reference in its letter dated

10.01.2006. He further states that late Dr. J. S. Sarma wanted

their exclusion. Thereafter, Dayanidhi Maran also wrote a letter

dated 11.01.2006 to the PM. Subsequently, correspondence

continued between PMO, Cabinet Secretariat and DoT.

However, Sh. Dayanidhi Maran again wrote a letter dated

28.02.2006 to the PM. Sh. Dayanidhi Maran again wrote a

letter dated 16.11.2006 to the PM, in which the thrust was on


vacation of spectrum.

685. He further states at page 13 that Ministry of Finance

wanted issue of spectrum pricing to be retained in the ToRs for

the GoM while Sh. Dayanidhi Maran, the then MOC&IT, was

insisting that it was the normal work of DoT and should be

excluded from the ToRs. He further states at page 15 that

spectrum pricing is a dynamic issue depending on number of

factors, hence spectrum pricing is part of day-to-day functions

of WPC.

686. In his statement dated 24.05.2012, running into 26

pages, he has given detailed narration of the constitution of

GoM and its terms of reference. However, it all appears to be

about official correspondence in which MOC&IT, Planning

Commission, Department of Economic Affairs, Ministry of

Finance, Cabinet Secretariat and PMO were involved. In his

entire statement, I do not find anything, which may indicate

anything wrong in the Minister making efforts to have

spectrum pricing policy within his domain on the ground that it

was part of normal work of DoT.

687. There is no material to indicate any mala fide

intention of the Minister in this regard except that he was

making efforts to retain spectrum pricing within his area of

responsibility.

688. However, subsequent to the modification of ToRs,

Minister had allocated the spectrum in Kolkata service area and

additional spectrum beyond 8.8 MHz in Chennai service area.

The same is discussed below to find out if there is any mala fide

by the Minister by giving benefit to Maxis in the allocation of


spectrum.

Kolkata service area (initial spectrum): Post-Maxis

events (D-50)

689. The allocation of initial spectrum to Dishnet

Wireless Limited in Kolkata service are was dealt with in file D-

50 (Main case).

690. Allocation of initial spectrum to Dishnet Wireless

Limited in Kolkata service area was approved to be allocated on

05.04.2007 at 6/N in D-50. The relevant note sheet is dated

04.04.2007 recorded by Sh. D. Jha, which is as under:

“PUC is a request for initial GSM 1800 MHzspectrum of 4.4+4.4 MHz under UASL from M/sDishnet Wireless Ltd. (5th operator) in KolkataMetro telecom service area. Recently they hadsigned UASL Licence Agreement with DOT andapplied for initial spectrum.

2. M/s Dishnet have stated in their recent letterthat they have cellular GSM service in West Bengalbut they do not have GSM spectrum in KolkataMetro. Kolkata being state capital, there is lot ofmovement of subscribers between West Bengal andKolkata. So, M/s Dishnet Wireless Ltd. are unableto provide single rate facility (without roamingcharges) to their customers. Other service providershave their services both in West Bengal and KolkataMetro. Hence, they have requested for earlyallotment of spectrum for Kolkata Metro servicearea.

3. Another request for additional spectrum 2+2MHz beyond 8+8 MHz is also pending i.r.o. M/sBharti Airtel Ltd., vide their application dated04.12.2006. However, due to some ambiguity intheir subscriber data, it is being verified.


3.1 The request of M/s Bharti Airtel Ltd. foradditional spectrum, as per eligibility criteria, willbe considered after verification of their subscriberdata and traffic.

4. The GSM spectrum of 5+5 MHz is available in1800 MHz band for Kolkata Metro area. We mayconsider the request of M/s Dishnet Wireless Ltd.and earmark 4.4+4.4 MHz GSM spectrum in 1800MHz band as per their service licence condition.

Submitted for kind consideration.”

691. He marked the file upward and it was agreed to by

Wireless Advisor and Member (T). The file reached Secretary

(T) Sh. D. S. Mathur, who approved it on 05.04.2007.

692. Four witnesses have been examined on this point,

namely, Sh. D. Jha; Sh. P. K. Garg, Wireless Advisor; Sh. K.

Sridhara, Member (T); and the then Secretary (T) Sh. D. S.

Mathur. The relevant parts of their statements are as under:

693. Sh. D Jha, PW 16, in his statement dated

22.01.2013, at pages 2 and 3, states as under:

“....................................................................................................................................................................M/s Dishnet Wireless Ltd. vide their letter dated03/04/2007 (at page 117) requested WirelessAdvisor to allocate 4.4.+ 4.4 MHz in Kolkata MetroCircle which will facilitate them a single rate acrossWest Bengal and Kolkata Telecom Circle (withoutroaming charges). He actually discussed the matterwith Sh. B. Gunasekhar, the then DWA (V) who thenasked me to put up the file for startup spectrum forM/s Dishnet Wireless Ltd. immediately.Accordingly, on 04/04/2007, I put up the case ofallocating 4.4 +4.4 MHz. initial spectrum to M/sDishnet Wireless Ltd. which was concurred by Sh.


B. Gunashekhar, the then DWA (V), Sh. P.K. Garg,the then WA, Sh. K. Shridhara, Member (T). Sh.D.S. Mathur, the then Secretary (T) while approvingthe case on 05/04/2007 mentioned that it wasdiscussed with Hon’ble MOC & IT.

On being asked I state that I am of the opinion thatsince the case of M/s Bharti Airtel’s claim foradditional spectrum was still under considerationsubject to verification, their interest should beprotected while allocating spectrum to M/s DishnetWireless Ltd. which was not done on that date.

The representatives from TEC and WPC wing jointlyverified the data of Bharti, BSNL and Hutch foradditional spectrum and submitted the report on23/04/2007. The case for allocating additionalcumulative spectrum of 2+2 MHz (0.6+0.6 MHzfrom coordinated spectrum and 1.4+1.4 MHz ontrial basis) to M/s Bharti was put up by me on08/05/2007. The case was approved by DWA (V),JWA (F) and WA. However, the then Member (T)Sh. K. Shridhara returned the case with the remarksplease discuss to WA who discussed the matter on10/05/2007.

In this case, on being asked I am of the opinion thatsince the claim of M/s Bharti was entirely in orderafter the verification of their subscriber and trafficdata, it should have been approved.

On 03/07/2007, the case was again submitted byme for allocating additional spectrum to M/s Bhartiwhich was approved by the then DWA (V), JWA (L),WA, Member (T), Secretary (T). However, the casewas not approved by MoC & IT with comments that“MoC & IT has desired that the file may besubmitted after policy for additional spectrum isreviewed”.

694. PW 9 Sh. Pawan Kumar Garg, Wireless Advisor, in


his statement dated 22.10.2012, page 2, states as under:

“....................................................................................................................................................................On being asked I state that M/s Dishnet WirelessLtd. sent other request letters dated 19.02.2007 and21.03.2007 requesting for allocation of startupspectrum in Kolkata telecom circle. M/s Dishnetagain sent a request letter dated 03.04.2007wherein it was stressed that as a result of servicesnot being available in Kolkata, their subscriberswere not able to avail the facility of single rate(without roaming charges). This request letterdated 03.04.2007 was processed in the abovereferred file by Sh. D. Jha on 04.04.2007. Sh. D.Jha, recommended for allocation of startupspectrum of 4.4+4.4 MHz in 1800 MHz to M/sDishnet Wireless Ltd. in Kolkata metro area. Sh. D.Jha also noted that the request of M/s Bharti AirtelLtd. for allocation of additional spectrum, as pereligibility criteria, would be considered afterverification of their subscriber data and traffic, forwhich there was some ambiguity. He marked the fileto Sh. B. Gunasekar, who signed the notesheet on04.04.2007 and sent the file to me on the same dayas Sh. Kushwaha, the then JWA was on leave. I alsosigned the notesheet and sent the file to Sh. K.Sridhara, the then Member (T), who also signed thenotesheet and sent the file to Sh. D.S. Mathur, thethen Secretary (T). Sh. D.S. Mathur, the thenSecretary (T) approved the allocation of startupspectrum of 4.4 MHz in 1800 MHz in Kolkata metroto M/s Dishnet Wireless Ltd. On 05.04.2007, Sh.Mathur noted that this was discussed with Hon’bleMoC&IT.…................................................................................................................................”

695. Sh. K. Sridhara, PW 56, has stated in his statement

that no undue favour was shown to Dishnet in the matter of

allocation of start-up spectrum in Kolkata metro service area.


The relevant part of his statement is as under:

“....................................................................................................................................................................Now, I state that today I have been shown a copy offile of WPC bearing No.L-14047/16/2006-NTG(marked as D-50) and state that Sh. D. Jha, the thenAssistant Wireless Advisor (V) initiated a note vide2/N on 21.12.2006. M/s Bharti had applied forearmarking of additional spectrum beyond 8+8MHz in Kolkata circle vide letter dated14/17.11.2006. Sh. D. Jha the then AWA, afterexamining the application noted vide note dated04.01.2007 that Bharti had submittedcontradictory figures in respect of traffic data dated01.11.2006.(vide their letter dated 14.11.2006 and04.12.2006). Therefore, it was proposed that TECmay be requested to verify the data physically fromtheir NMS (Network Management System). M/sDishnet Wireless Ltd. had also applied forearmarking of startup spectrum 4.4 MHz in Kolkatametro circle vide letter dated 18/19.12.2006. Sh. D. Jha vide his note dated 04.04.2007, reportedthat due to some ambiguity in the subscriber data ofM/s Bharti Airtel Ltd. the request for allocation ofadditional spectrum 2+2 MHz beyond 8+8 MHz ispending. He recommended for allocation of startupspectrum of 4.4+4.4 MHz in 1800 MHz to M/sDishnet Wireless Ltd. in Kolkata metro area. Hemarked the file to Sh. B. Gunasekar, who signed thenotesheet on 04.04.2007 and sent the file to Sh. P.K. Garg on the same day as Sh. Kushwaha, the thenJWA was on leave. Sh. P. K. Garg also signed thenotesheet and sent the file to me. I considered andconcurred with the recommendation of Sh. D. Jhaand sent the file to Sh. D.S. Mathur, the thenSecretary (T). Sh. D.S. Mathur, the then Secretary(T) approved the allocation of startup spectrum of4.4 MHz in 1800 MHz in Kolkata metro to M/sDishnet Wireless Ltd. On 05.04.2007, Sh. Mathurnoted that this was discussed with Hon’ble MoC&IT.From the above it is evident that no undue favour


was shown to M/s Dishnet Wireless Ltd. in thematter of allocation of start-up spectrum in KolkataMetro circle.”

696. Sh. D. S. Mathur, PW 13, states on this point as

under:

“....................................................................................................................................................................Now, I state that today I have been shown a copy offile of WPC bearing No.L-14047/16/2006-NTG(marked as D-50) and state that Sh. D. Jha, the thenAssistant Wireless Advisor (V) initiated a note vide2/N on 21.12.2006. M/s Bharti had applied forearmarking of additional spectrum beyond 8+8MHz in Kolkata circle vide letter dated14/17.11.2006. Sh. D. Jha the then AWA, afterexamining the application noted vide note dated04.01.2007 that Bharti had submitted contradictoryfigures in respect of traffic data dated 01.11.2006(vide their letter dated 14.11.2006 and 04.12.2006).Therefore, it was proposed that TEC may berequested to verify the data physically from theirNMS (Network Management System). M/s DishnetWireless Ltd. had also applied for earmarking ofstartup spectrum 4.4 MHz in Kolkata metro circlevide letter dated 18/19.12.2006.Sh. D. Jha vide his note dated 04.04.2007, reportedthat due to some ambiguity in the subscriber data ofM/s Bharti Airtel Ltd. the request for allocation ofadditional spectrum 2+2 MHz beyond 8+8 MHz ispending. He recommended for allocation of startupspectrum of 4.4+4.4 MHz in 1800 MHz to M/sDishnet Wireless Ltd. in Kolkata metro area. Here it is clarified that due to ambiguity in thefigures/data submitted by M/s Bharti, the case forallocation of additional spectrum was notconsidered. He marked the file to Sh. B. Gunasekar,who signed the notesheet on 04.04.2007 and sentthe file to Sh. P. K. Garg on the same day as Sh.Kushwaha, the then JWA was on leave. Sh. P. K.


Garg also signed the notesheet and sent the file toSh. K. Sridhara, the then Member (T), whoconsidered and concurred with the recommendationof Sh. D. Jha and sent the file to me. I approved theallocation of startup spectrum of 4.4 MHz in 1800MHz in Kolkata metro to M/s Dishnet Wireless Ltd.on 05.04.2007. In fact, before approving theallocation of startup spectrum to M/s DishnetWireless Ltd., I alongwith Sh. K. Sridhara, Member(T), Sh. P.K. Garg, Wireless Advisor discussed thematter with Sh. Dayanidhi Maran, the thenMoC&IT. Sh. K. Sridhara explained and apprisedthe Minister about the facts of both the applicants.During discussion it was decided to allocate startupspectrum i.e. 4.4+4.4 MHz in 1800 MHz band toDishnet Wireless Ltd. in Kolkata metro telecomservice. Accordingly, I approved the same on05.04.2007 on the file and also noted about thediscussion which took place with the then MoC&IT.….............................................................................................................................................”

697. Perusal of the entire record shows that PW 9 Sh. P.

K. Garg, PW 56 Sh. K. Sridhara and PW 13 Sh. D. S. Mathur

have stated that the spectrum was allocated to Dishnet correctly

on the recommendation of Sh. D. Jha. Sh. K. Sridhara has

specifically stated that no undue favour was shown to Dishnet

Wireless Limited.

698. Only Sh. D. Jha has stated that the interest of Bharti

Airtel Limited should have been protected. He opined that

claim of Bharti was entirely in order. However, this is contrary

to the note sheet recorded by him on 04.04.2007. He had

specifically recorded in para 4 that:

“We may consider the request of Dishnet WirelessLimited and earmark 4.4+4.4 MHz GSM spectrumin 1800 MHz band as per their service licence


condition.”

699. In this allocation of spectrum to Dishnet Wireless

Limited, post-acquisition by Maxis, no mala fide intention can

be attributed to anyone including the Minister.

Grant of additional spectrum beyond 8.8 MHz to Dishnet in

Chennai (D-37)

700. The issue of additional spectrum beyond 8.8 MHz

in Chennai service area was dealt with in file D-37, page 10/N

onwards.

701. The note dated 14.07.2006, 10/N, of Sh. D. Jha,

Assistant Wireless Advisor (V) reads as under:

“The case relates to requests from M/s AircelCellular Ltd. and M/s Bharti for earmarking ofadditional spectrum beyond 8+8 MHz in 1800 MHzband in Chennai Metro. All GSM service providershave 8+8 MHz GSM spectrum earmarked inChennai Metro service area.

2. JCES had coordinated 15+15 MHz spectrumin 1800 MHz band out of which only 1.4+1.4MHz GSM spectrum is available. The status ofspectrum availability in Chennai Metro is placedbelow.

3. Both M/s Aircel Cellular Ltd. and M/sBharti have submitted active subscribers (VLR)data) as well as peak traffic averaged over a month.Both of them are meeting the criteria of activesubscribers as well as peak traffic averaged over amonth. M/s Aircel has average VLR figure 6,00,848for the month of April 2006 whereas M/s Bharti hasVLR figure of 6,30,896 for a month from 12.05.06to 11.06.06. Both have peak traffic meeting thecriteria. It is not clear who has met the criteria firstsince M/s Bharti has not submitted the VLR data for


the month of April 06.

4. In view of the above, the case is submittedfor kind consideration of GSM spectrum earmarkingbetween the two eligible operators.”

702. The file was marked to DWA (T), who recorded note

dated 17.07.2006, 10/N, which is as under:

“1. Out of Spectrum coordinated for Chennai,only 1.4 MHz is available for allocation.2. Both M/s Aircel & M/s Airtel have met thecriteria for allotment beyond 8 MHz.

Submitted for advise.”

703. The file was then marked to JWA Sh. R. J. S.

Kushvaha, who recorded note dated 20.07.2006, 10/N, which is

as under:

“For further direction in the matter, so that casecould be processed accordingly.”

704. Thereafter, the file reached Wireless Advisor Sh. P.

K. Garg, who asked Joint Wireless Advisor to speak to him and

after speaking, he recorded note dated 22.07.2006, 10/N,


“Discussed. We may seek clarification regardingpeak radio traffic V/s peak traffic (switch) fromAircell.”

705. Thereafter, DWA (T) Sh. D. Jha recorded note dated

25.07.2006, 10/N, as under:

“We may seek clarification as per draft placed below.”

706. Thereafter, through proper channel, the file again


reached DWA Sh. D. Jha, who recorded note dated 18.08.2006,

11/N, which reads as under:

“With reference to minutes of WA on prepage theclarification was obtained from M/s Aircell. Theyhave clarified that “Peak Hour Radio Traffic” is thesum of traffic in each cell during its peak hour andas such has stated that peak hour radio trafficshould be taken as total traffic. With thisclarification, they meet the criteria for additionalspectrum.

M/s Bharti has also submitted the VLR andpeak traffic data for the month of March-April 06and meet the criteria.

In view of the above, the case is resubmittedfor consideration please.”

707. The file was marked to JWA Sh. R. J. S. Kushvaha,

who recorded on 25.08.2006, 11/N, as under:

“The clarification provided by M/s Aircel indicatesaverage peak hour traffic as 21,403 and averagepeak hour radio traffic as 24879. It may be recalledthat as per order of 29 March, 2006, peak hourtraffic averaged over a month is required alongwithsubscriber base in VLR.2. Besides requirement of M/s Aircel 'X' above isalso for kind consideration.”

708. Thereafter, the file was marked to Wireless Advisor

Sh. P. K. Garg, who recorded a note dated 29.09.2006, 12/N,


“The case relates to allotment of GSM spectrumbeyond 8 MHz (paired) for M/s Bharti EnterprisesLtd. in Chennai Metro telecom service area.

They have reportedly crossed the activesubscriber base (VLR) of 6 Lakh and peak traffic of24,000 Erlangs, required for allotment of 2 MHz


(paired) spectrum beyond 8 MHz in Chennai Metrotelecom service area.

Incidentally, there was another request fromM/s Aircell, Chennai for additional spectrumbeyond 8 MHz (paired). However, as per theirrecent clarification, their peak traffic, averaged overa month, does not meet the criteria of 24,000Erlangs. Hence, their request can not be acceded toat present.

Coordinated spectrum of 1.4 MHz (paired) in1800 MHz band is available in Chennai area. Hence,the allotment of available 1.4 MHz (paired) in 1800MHz GSM band (beyond 8 MHz paired) to M/sBharti Cellular Ltd is being made for Chennai Metroservice area as per the request of the serviceprovider.

For kind perusal.”

709. Thereafter, file was marked to Member (T), who

recorded note dated 04.10.2006, 12/N, as under:

“As discussed pl. confirm that traffic figures of M/sAirtel also refer to Av TCBH.”

710. The file again reached Assistant Wirless Advisor Sh.

D. Jha, who recorded a note dated 03.11.2006, 13/N, which

reads as under:

“With reference to minutes of Member (T) onprepage:

The clarifications were obtained from M/sBharti Airtel and their reply is placed at S.No.27 (R).They have stated that the subscriber and trafficfigures submitted vide their letters dated13.06.2006 and 11.07.2006 were as per WPC Orderdated 29.03.2006 for allotment of additionalspectrum. However, vide their letter dated


27.10.2006, they have submitted required data forthe month of Sept 2006 and accordingly theirsubscribers (VLR) figures and Peak Traffic inEarlangs (from NMS) (TCBH at 19:00-20:00 Hrs)are respectively 7,57,761 and 28,564 respectively.

2. Meanwhile M/s Aircel has also submitted theirclaim for additional spectrum beyond 8+8 MHz videtheir letter dated 11.10.2006 addressed toChairman, Telecom Commission and Secretary (T).Their subscribers (VLR) figures and Peak Traffic inEarlangs during TCBH are respectively 6,99,064and 26,729 respectively for the month of Sept. 2006.

3. It may be mentioned here that only 1.4+1.4MHz GSM spectrum in 1800 MHz band isavailable in Chennai Metro service area and bothM/s Bharti Airtel and M/s Aircel has 8+8 MHzspectrum assigned in the service area and they meetthe criteria for GSM spectrum upto 10+10 MHz asper their subscriber data of Sept. 2006.

The case is submitted please.”

711. The file again reached JWA Sh. R. J. S. Kushvaha,

who recorded note dated 03.11.2006, 13/N, which reads as

under:

“Adequate spectrum is not available to meet therequirements of both operators. It is for kindconsideration whether available spectrum (i.e.1.4+1.4 MHz) could be divided (say 3 carriers each)between both the operators?”

712. He marked the file upward and when the file

reached Member (T), he asked for a discussion on 07.11.2006

and after discussing the matter, recorded the note dated

08.11.2006, which reads as under:


“Discussed. 'X' proposed above may kindly beapproved.

713. 'X' here refers to note of Sh. R. J. S. Kushvaha

recommending equal division of spectrum.

714. He marked the file to the Secretary (T), who

approved it on 13.11.2006.

715. Thus, the spectrum was recommended to be equally

divided between Bharti and Aircel and the same was approved

by the Secretary.

716. Sh K. Sridhara, PW 56, states in his statement dated

07.11.2012 at page 2 as under:

“....................................................................................................................................................................The above referred letters of M/s Bharti Airtel Ltd.and M/s Aircel Cellular Ltd. were processed in theabove referred file by Sh. D. Jha, the then AWA on03.11.2006. The file was put up to me by Sh. AshokKumar, the then JWA (F) on 07.11.2006. I sentback the file to Sh. P.K. Garg, Wireless Advisordirecting to have a discussion on the subject. Idiscussed the matter with Sh. P.K. Garg. Duringdiscussion I remember that I was informed that1.4+1.4 MHz spectrum in 1800 MHz band isavailable in Chennai Metro and both operators areeligible and they need badly to improve thenetwork, it was decided that we distribute thespectrum of 1.4 equitably between the two operatorsi.e. three carrier each operator. In fact, it wasearlier suggested by Sh. R.N. Kushwaha, the thenJWA (N) on 03.10.2006. I sent the file to Sh. D.S.Mathur, the then Secretary (T) who approved forallocation of three carriers each to both operatorson 13.11.2006. From the above, it is evident that no favourwas shown to M/s Aircel Cellular Ltd. in thematter of grant of additional spectrum


beyond 8 MHz in Chennai Metro Circle.…....................................................................................................................................”

717. Sh. D. S. Mathur, PW 13, states in his statement

dated 06.12.2012 as under:

“...................................................................................................................................................................Now, I have been shown one original file of WPCWing bearing No.L-14043/3/2005-NTG and statethat a copy of order dated 29.03.2006 issued underthe signature of Sh. Sukhpal Singh, AssistantWireless Advisor is available at 2/C of the abovereferred file. This order relates to subscriber basecriteria for allotment of GSM spectrum. This orderis self explanatory. M/s Aircel Cellular Ltd. hadapplied to Wireless Advisor, WPC Wing forallocation of additional spectrum of 2.0 MHzbeyond 8 MHz in GSM 1800 MHz band for use inChennai Metro. The said request letter dated22.04.2006 of M/s ACL was received in WPC Wingon 26.04.2006 and processed in the above referredfile.On the other hand M/s Bharti had also applied toWireless Advisor, WPC Wing for allocation ofadditional spectrum of 2 MHz beyond 8 MHz foruse in Chennai Metro. The said request letter dated13.06.2006 was received in WPC Wing on14.06.2006.Sh. D. Jha, the then Assistant Wireless Advisor (V)examined the above referred two applications andput up a note on 14.07.2006 wherein inter alia hehas recommended/noted as under:-1. JCES had recommended 15+15 MHz spectrumin 1800 MHz band out of which only 1.4+1.4 MHzGSM spectrum is available in Chennai metro.2. Both M/s Aircel Cellular Ltd. and M/s Bhartiare meeting the criteria of active subscribers as wellas peak traffic average over a month.3. M/s Aircel Cellular Ltd. has average VLR


figure 6,00,848 for the month of April, 2006whereas M/s Bharti has VLR figure of 6,30,896 fora month from 12.05.2006 to 11.06.2006.From the above it is evident that M/s Aircel CellularLtd. met the criteria first for allotment of additionalspectrum beyond 8 MHz in Chennai metro servicearea because it had reached the criteria in themonth of April, 2006 whereas M/s Bharti hadreached the criteria subsequently during 12.05.2006to 11.06.2006.It is not clear as to under what circumstances Sh. D.Jha noted that it was not clear who met the criteriafirst. It appears that on the basis of April, 2006data, Aircel Cellular Ltd. had qualified for allotmentof additional spectrum in Chennai metro.On being asked I state that on 29.09.2006, Sh. P. K.Garg, the then WA had recommended for allotmentof 1.4 MHz (paired) in 1800 MHz GSM band(beyond 8 MHz paired) to M/s Bharti Cellular Ltd.for Chennai Metro service area. Here Sh. P.K. Garghad also mentioned that coordinated spectrum for1.4 MHz (paired) in 1800 MHz band is available inChennai area. Hence, in place of 2 MHz (paired),Sh. P. K. Garg recommended for allocation of 1.4MHz (paired) to M/s Bharti Cellular Ltd. in ChennaiMetro. In fact, Sh. P. K. Garg in his note dated29.09.2006 had mentioned that M/s Aircel does notmeet the criteria of their peak traffic, average over amonth. On the other hand he did not mention thesame fact in respect of M/s Airtel. He mentionedabout the peak traffic only.Meanwhile, one another request letter dated11.10.2006 was received from M/s Aircel CellularLtd. requesting for allocation of additional spectrumof 2 MHz beyond 8 MHz in Chennai Metro. On being asked I state that the above referred filewas put up before me for the first time by Sh. K.Sridhara, the then Member (T) on 08.11.2006. Hehad concurred with the recommendation with Sh.Kushwaha, the then JWA (N) who hadrecommended for equal division of availablespectrum among M/s Aircel Cellular Ltd. and M/s


Bharti. The said file remained with me during theperiod from 08.11.2006 to 13.11.2006 when Iapproved the allocation of additional spectrum toM/s Aircel Cellular Ltd. and M/s Bharti asrecommended by Sh. K. Sridhara, the then Member(T).Here it is clarified that I alongwith Sh. K. Sridhara,Member (T) and officers of the WPC namely Sh.Kushwaha had discussed the matter with Sh.Dayanidhi Maran, the then MoC&IT. He wasapprised of the fact that M/s Aircel Cellular Ltd. andM/s Bharti meet the eligibility criteria for allotmentof additional spectrum beyond 8 MHz in Chennaimetro as per the data available for the month ofSeptember, 2006. He concurred with therecommendation of WPC Wing and Member (T)and accordingly I had approved the allocation ofadditional spectrum.On being asked I state that Wireless Advisor wascompetent to grant spectrum to new licencees andadditional spectrum grant cases were through theSecretary (T) brought to the notice of the Ministerof the department. Therefore, this case of equaldivision of spectrum between Bharti Airtel andAircel was brought to the notice of the Minister andafter that approval was recorded on the file by me.This was the understanding in the department sincelong that additional spectrum allocation caseswould be brought to the notice of the Minister.

718. Sh. D. S. Mathur and Sh. K. Sridhara have stated

that spectrum was allocated to both the operators after

discussion and on the recommendation of Sh. R. J. S.

Kushvaha. Sh. K. Sridhara is quite categorical in his statement

to the effect that no undue favour was shown to Aircel Cellular

Limited.

719. Sh. D. S. Mathur has faulted Sh. P. K. Garg on this

point regarding his note dated 20.09.2006 on the ground that


Sh. P. K. Garg had recorded that Aircel does not meet the

criteria of their peak traffic, averaged over a month, but he did

not mention this fact in respect of Airtel. This also indicates as

to how WPC Wing works. It can deny grant of spectrum by

putting any unwarranted question. It also reflects on the

working of Sh. P. K. Garg.

720. Sh. D. Jha, who has been examined as PW 16, in his

four statements has not stated anything on this point. I also

could not find anything in this regard in the statements of Sh.

P. K. Garg and Sh. R. J. S. Kushvaha.

721. From the above material, no mala fide can be

attributed to anyone including the Minister.

722. Hence, there is no material on record to indicate

that the terms of reference were got changed by Sh. Dayanidhi

Maran with mala fide intention to help Maxis.

Post-Maran Events imputed to Maran (D-50)

723. As per charge sheet, accused Dayanidhi Maran was

MOC&IT fro, 26.05.2004 to 17.05.2007.

724. However, it is quite interesting to take a look of the

statement of Sh. D. S. Mathur dated 06.12.2012, page 4, which

reads as under:

“....................................................................................................................................................................On 03.07.2007 Sh. D. Jha, the then AWA (V)initiated a note recommending for earmarking ofadditional spectrum of 0.6+0.6 MHz on regularbasis and 1.4+1.4 MHz on trial basis to M/s Bhartiin Kolkata metro. This proposal was concurred bySh. Kushwaha, JWA, Sh. P. K. Garg, WirelessAdvisor and Sh. K. Sridhara, Member (T). I also


concurred and recommended for the same on05.07.2007 and sent the file to the office ofMoC&IT. However, the proposal was not approvedby Sh. D. Maran, the then MoC&IT and the said filewas returned by the office of MoC&IT to me on14.08.2007 mentioning that 'MoC&IT has desiredthat file may be resubmitted after the policy forallotment of additional spectrum is (not legible)'.

On being asked I state that I do not rememberif the policy for allotment of additional spectrumwas under review/ consideration at that point oftime.”

725. Sh. Dayanidhi Maran ceased to be the Minister on

17.05.2007, but the events of August 2007 are also being

imputed to him.

726. Similarly, PW 16 Sh. D. Jha in his statement dated

22.01.2013, page 3, states as under:

“....................................................................................................................................................................The representatives from TEC and WPC wing jointlyverified the data of Bharti, BSNL and Hutch foradditional spectrum and submitted the report on23/04/2007. The case for allocating additionalcumulative spectrum of 2+2 MHz (0.6+0.6 MHzfrom coordinated spectrum and 1.4+1.4 MHz ontrial basis) to M/s Bharti was put up by me on08/05/2007. The case was approved by DWA (V),JWA (F) and WA. However, the then Member (T)Sh. K. Sridhara returned the case with the remarksplease discuss to WA who discussed the matter on10/05/2007.

In this case, on being asked I am of theopinion that since the claim of M/s Bharti wasentirely in order after the verification of theirsubscriber and traffic data, it should have beenapproved.

On 03/07/2007, the case was again submittedby me for allocating additional spectrum to M/s


Bharti which was approved by the then DWA (V),JWA (L), WA, Member (T), Secretary (T). However,the case was not approved by MoC & IT withcomments that “ MoC &IT has desired that the filemay be submitted after policy for additionalspectrum is reviewed ”.

727. Thus, the two witnesses have been made to say

things against accused when he was no longer in the office.

This file was returned by the then MOC&IT on 14.08.2007. This

shows the anxiety of the investigating officer to somehow

implicate the accused.

728. Thus, the conclusion is that after withdrawal of the

application for transfer of Chennai and Tamil Nadu licence to

Aircel Digilink India Limiter and further post-acquisition of

Aircel Limited by Maxis, the issues had become from simple.

The aforesaid approvals cannot by any stretch of imagination

be considered as smooth or granted for extraneous reasons. The

charge sheet does not mention anywhere as to how these

approvals could have been refused by Sh. Dayanidhi Maran or

Dr. J. S. Sarma, post-acquisition by Maxis, more so, when the

issues raised by the Minister no longer survived for the reasons

already noted above.

D. Receiving of illegal gratification in the garb of share

premium in M/s Sun Direct TV (P) Limited promoted

by Sh. Kalanithi Maran, brother of Sh. Dayanidhi

Maran, the then MOC&IT, from M/s South Asia

Entertainment Holdings Limited, Mauritius, (100%

subsidiary of M/s Astro All Asia Networks of Plc., UK).



Advocate/ Spl. PP, that by delaying the grant of new UAS

licences to Dishnet DSL Limited and withholding various

regulatory approvals to Aircel Limited, Aircel Cellular Limited

and Dishnet DSL Limited, Sh. Dayanidhi Maran forced the exit

of these companies from the telecom sector resulting into the

sale of the companies to Maxis. It is further submitted that

when the companies were sold to Maxis, grant of new licences

and other regulatory approvals were smoothly done by Sh.

Dayanidhi Maran. It is further submitted that as quid pro quo

for these actions of Sh. Dayanidhi Maran, an amount of Rs. 549

crore was invested by Maxis through its subsidiary Astro All

Asia Network in South Asia FM Limited. It is further submitted

that further a sum of Rs. 193 crore was invested through other

subsidiaries, namely, AH Multisoft Limited and South Asia

Multimedia Technologies Limited in South Asia FM Limited. It

is further submitted that Sun Direct TV (P) Limited and South

Asia FM Limited are the companies promoted by Sh. Kalanithi

Maran, who is real brother of Sh. Dayanidhi Maran. It is further

submitted that there was no reason for Maxis to invest in these

two companies, except for the delaying tactics and subsequent

smooth approvals by Sh. Dayanidhi Maran. It is repeatedly

submitted by him that these two investments are nothing but

blatant acts of corruption. My attention has been invited to the

various documents showing the flow of money. My attention

has also been invited to the three valuation reports, that is,

ENAM Securities (P) Limited, BOB Capital Markets Limited

and Tata Sky Limited. It is repeatedly emphasized by him that


there is enough material on the record to indicate that the

alleged investment was nothing but bribe and bribe alone.

730. In the end, he has repeatedly emphasized that there

is enough incriminating material on record warranting framing

of charge against the accused. My attention has been invited to

the relevant case law and legal provisions. It is emphatically

submitted by him that at this stage only a prima facie view is

required to be taken and the case of the prosecution is

presumed to be true.

731. On the other hand, it is submitted by the learned

counsel for defence that there is absolutely no material on

record to indicate that aforesaid investment was in any way

linked to the alleged acts of Sh. Dayanidhi Maran. It is

repeatedly submitted that the case of the prosecution is not

only speculative, but is wholly based on presumptions and

assumptions. It is the case of the defence that there is no legally

admissible evidence on record in this regard. During long

winding arguments, it has been the case of the defence that the

valuation reports cited in support of the investment being a

bribe carry no value in the eyes of law as the same are based on

various assumptions and presumptions, which cannot be legally

proved. It is repeatedly submitted that the three valuation

reports carry no value in the eyes of law and, as such, are

meaningless. My attention has been invited to various

documents, statements and legal provisions for emphasizing

that there is no incriminating material on record warranting

framing of charge. It is repeatedly submitted that the entire

case is just a figment of imagination, simply for the reason that


investment has been made in the companies incorporated by

the brother of Sh. Dayanidhi Maran, the then MOC&IT. It is

repeatedly submitted that since there is no legally admissible

evidence on record, all accused may be discharged.

732. It is the case of the prosecution that Astro Asia

Network, through its wholly owned subsidiaries, subscribed to

equity shares of Sun Direct TV (P) Limited at a premium and

equity shares of South Asia FM Limited at par. It is the case of

the prosecution that these two companies were promoted by

Kalanithi Maran. It is further alleged that in fact illegal

gratification in the garb of share premium of Sun Direct TV (P)

Limited was received by Sh. Dayanidhi Maran through his

brother Sh. Kalanithi Maran on investment being made by

South Asia Entertainment Holdings Limited (SAEHL), a wholly

owned subsidiary of Astro Overseas Limited, which, in turn, is

wholly owned subsidiary of Astro All Asia Network Limited, in

which Sh. T. Ananda Krishnan has an indirect shareholding of

42.49%. It is further alleged that investment made by Astro All

Asia Network, through its subsidiaries, namely, South Asia

Software Technology Limited, Mauritius, and South Asia

Multimedia Technology Limited, in South Asia FM Limited was

also illegal gratification. It is alleged that these illegal

gratifications were in the nature of quid pro quo for approvals

granted by Sh. Dayanidhi Maran to Maxis Communications

during his tenure as MOC&IT, after it acquired Aircel Limited,

Dishnet Wireless Limited and Aircel Cellular Limited.

733. FIPB approval for the investment was granted on

22.02.2007 by the Cabinet Committee on Economic Affairs and


approval letter was issued to Sun Direct TV (P) Limited on

02.03.2007. The Shareholders Agreement (D-316) and Share

Subscription Agreement (D-317) were executed for investment

in Sun Direct TV (P) Limited on 05.04.2007. It is the case of the

prosecution that SAHEL invested Rs. 549 crore in Sun Direct

TV (P) Limited from 10.12.2007 to 30.09.2008.

734. Now the question is: How this investment of Rs. 549

crore can be termed as bribe or illegal gratification meant for

Sh. Dayanidhi Maran? It is the case of the prosecution that no

valuation of Sun Direct TV (P) Limited was conducted prior to

entering into Share Subscription and Shareholders Agreement

dated 05.04.2007. It is their case that such a big deal cannot be

entered into without prior valuation by qualified professionals.

It is further their case that valuation carried out by ENAM

Securities (P) Limited (D-310 to 312) is of no consequence as it

was conducted subsequent to the date of agreements, that is,

05.04.2007. Further, the report itself specified that the opinion

of ENAM is based on business plan of the company and they

did not make any independent verification of the same. Hence,

of no use.

735. It is further case of the prosecution that they got the

valuation of Sun Direct TV (P) Limited conducted during

investigation from BOB Capital Market Limited, a SEBI

registered category-I merchant banker, as on 01.04.2007 and it

gave its report on 02.09.2013. It is the case of the prosecution

that BOB Capital Market Limited in its report opined that post-

money equity valuation of Sun Direct TV (P) Limited as on

01.04.2007 was Rs. 1833.8 crore and pre-money valuation of


the company was Rs. 1284.80 crore and the price of equity

comes to Rs. 53.15 per share. It is their case that on the other

hand, Share Subscription Agreement dated 05.04.2007 (D-316)

had put the post-money valuation of the company at Rs. 2745

crore and price of equity per share at Rs. 79.57.

736. In brief, the case is that post-money value of a share

of Sun Direct TV (P) Limited as on 01.04.2007 was Rs. 79.57,

whereas as per BOB report it was Rs. 53.15. It is their case that

either the entire amount of Rs. 549 crore was bribe as it was not

a purely business driven investment or at least a portion of the

premium of Rs. 26.42 per share was unjustified/ overvalued,

which was paid in the garb of equity subscription.

737. It is further their case that during March 2007,

Tamasek Capital Limited, an investing company of Singapore,

valued the equity shares of M/s Tata Sky Limited, which was

also engaged in the same business as Sun Direct TV (P) Limited

to provide Direct-to-Home services to its subscribers, at Rs.

26.24 per share. It is further their case that Tamasek Capital

Limited subscribed to shares of Tata Sky at a price of Rs. 30 per

share (D-265). M/s Baytree was investing company and it

invested Rs. 154.44 crore in Tata Sky in order to own 10% of the

increased share capital. It is also their case that another

investor NDDS also subscribed to 20% shareholding of Tata

Sky at the price of Rs. 30 per share, in the month of May 2007.

It is their case that, post-money valuation of Tata Sky was Rs.

30 per share.

738. Hence, based on the two valuations, the overvalued

share premium for investment in Sun Direct TV (P) Limited


was quid pro quo.

739. However, it is not clear to the prosecution as to

whether the entire investment made in Sun Direct TV (P)

Limited was illegal gratification or the overvalued share

premium was illegal gratification or at least a portion thereof,

that is, of Rs. 26.42, was illegal gratification. Be that as it may.

740. It may be noted that except these two reports, there

is no other evidence prima facie indicating that the investment

was, in fact, illegal gratification for the approvals granted by Sh.

Dayanidhi Maran during his tenure as MOC&IT.

741. I have carefully gone through the valuation reports

of ENAM Securities (P) Limited, BOB Capital Market Limited

and Tata Sky Limited. These reports are subject to numerous

limitations and qualifications and are based on several

assumptions and presumptions. This is illustrated by the

following portion of report of BOB (D-568):

“STATEMENT OF LIMITING CONDITIONSAFFECTING THE VALUATION RESULTS

Our Report is subject to the scope limitationsdetailed hereinafter.● The Report has been prepared on the

request of Central Bureau of Investigation.The Report may not be disclosed, in wholeor in part, to any third party or used for anypurpose whatsoever other than thoseindicated in the Engagement and Reportitself. The Report is to be read in totality,and not in parts, in conjunction with therelevant documents referred to in thisReport.

● Valuation methodology and results arespecific to the purpose of valuation and theRelevant Date mentioned in the Report and


as per terms of our Engagement. It maynot be valid for any other purpose or as atany other date. A valuation of this natureinvolves consideration of various factorsincluding those impacted by industrytrends prevailing around the Relevant Date.The actual financial results of the Companymay be different from our estimates as ourforecast is specific to the factors prevalentaround the Relevant Date. Further, we alsodo not express any opinion on theachievability of the projections in thefuture.

● The Report does not constitute an audit,due diligence or certification of thefinancial statements of the businessreferred to in this Report. We have reliedon the documents made available by CBI.We have also placed reliance on industryreports sourced by us. We have notchecked or independently verified thecompleteness and/or accuracy of theinformation given by CBI and the industryreports. We have also not had anydiscussions with the Company'smanagement concerning the history andnature of its business, its financialconditions and its future prospects. It mustbe recognized that events of which we haveno actual to constructive knowledgeaffecting the Transaction may have abearing on the valuation worked out by usas contained herein and that we have noobligation to update or to revise or toreaffirm the conclusion of our Report.

● Our scope of work involves giving a Reporton valuation of equity shares of Sun Directas of the Relevant Date and in connectionwith the Transaction. However, we werenot part of any negotiation or decisionmaking at the time of signing of SSAbetween SAEHL, Maran Group and the


Company. For the purpose of this Report,we have assumed that the Company is agoing concern and will continue to be soafter the date of this Report.

● No investigation of the claim to title ofassets of the Company has been made forthe purpose of this Report and theCompany's claim to such rights has beenassumed to be valid. We have not verifiedor examined or reviewed the title of anyproperty or shareholding in any companyduring the course of exercise.

● We take no responsibility for matters oflegal nature. We were not required to carryout a legal due diligence review. It isfurther clarified that, any advice or viewsexpressed or information rendered by usshall be deemed as financial opinion onlyand should not be considered as opinionsregarding legal, accounting, regulatory, taxmatters etc.

● Valuation is not a precise art and theconclusion arrived at will be subjective anddependent on the exercise of individualjudgment.…..........................................................................................................”

(All underlinings by me for supplying emphasis.)

742. The reports of ENAM Securities (P) Limited and

Tata Sky Limited are also subject to similar limitations and

qualifications. A bare perusal of these reports would reveal that

they are based on too many assumptions and presumptions.

These reports assume too much and prove too little. There is

hardly any fact in these reports which can be put to legal proof.

Linguistically these reports are highly hedged in the sense that


they neither affirm nor deny anything. In simple words, in legal

terms, contents of these reports neither mean 'yes' nor 'no'.

There is no firm commitment to any statement of fact

contained in these reports. On the basis of these reports, in the

eyes of law, no definitive view can be taken, even prima facie.

As far as law is concerned, they are of no value. These reports

may be good for economic/ business projections as they are

only indicative in nature. There are no definitive/ quantitative

statements in these reports. These reports do indicate the

estimated price of the shares on the relevant date, but these

prices are only indicative of the price on the relevant date. One

may get only an indication as to whether the shares were

correctly valued or over-valued, but no definitive view. In such

a situation they may offer a guide to the investigator to

investigate the matter further and collect legally admissible

evidence. I have no hesitation in recording that these reports by

themselves do not constitute legal proof, for or against anyone,

even prima facie.

743. Further, Man does not always work rationally. In

market situation, there is no computer like thinking or

precision. Human beings are also influenced by non-economic

considerations.

744. In view of this discussion, I am of the firm opinion

that these reports do not constitute any legally admissible

evidence but can certainly furnish a ground for investigation for

collecting legally admissible evidence.

745. Apart from these reports, as already noted above,

there is no other material on record to indicate that the entire


investment or premium on the shares or even a portion of the

premium was bribe. It remains only a matter of perception or

suspicion and in the absence of legally admissible evidence,

perception or suspicion means nothing in law.

Investment in South Asia FM Limited

746. The case of the prosecution is that South Asia

Software Technologies Limited, a subsidiary of Astro All Asia

Network, through its subsidiaries South Asia Multimedia

Technologies Limited and AH Multisoft Limited, also invested a

sum of Rs. 193.54 crore in South Asia FM Limited from

20.02.2007 to 20.12.2010 for purchasing its equity shares at

par value of Rs. 10 per share. It is their claim that it was not a

business driven investment, but illegal gratification for Sh.

Dayanidhi Maran.

747. However, there is absolutely no material on record

to arrive at such a conclusion. No document has been pointed

out at the bar to arrive at such a conclusion. It is simply an ipsi

dixit of the investigating officer without any factual or legal

basis. However, if an overall view of the prosecution case is

taken, this investment is sought to be linked to the alleged

tactics of delay by Sh. Dayanidhi Maran and subsequent

smooth approvals, as noted above. However, allegations

relating to these have already been found to be incorrect. In

such a situation, it cannot be said that the amount of

investment was an illegal gratification.

748. Furthermore, if the two investments of Rs. 549

crore and Rs.193 crore were not business driven investments,


but were something else, then the question is: How to connect

Sh. Dayanidhi Maran with that? As per allegations in the charge

sheet, both brothers, that is, Sh. Dayanidhi Maran and Sh.

Kalanithi Maran, share economic interests through some of

their companies like Sun Academic (P) Limited, DMS

Entertainment Limited, HFO Entertainment Limited, DK

Enterprises Limited and a partnership firm S.S. Textile, which

is run by wives of both the accused. It is further their case that a

letter dated 19.03.2007 issued by Sh. Ashish Dutta, Under

Secretary, Ministry of I&B, and addressed to Kalanithi Maran,

conveying approval of FIB and CCA was got collected by Sh.

Dayanidhi Maran through his stenographer Sh.

Balasubramanian.

749. It may be noted that Sh. Dayanidhi Maran or his

wife Priya Dayanidhi had no stake in Sun Direct TV (P) Limited

or South Asia FM Limited.

750. However, in the eyes of law, these grounds

themselves are not enough to connect the money received in the

company of Kalanithi Maran to Dayanidhi Maran. The three

simple and ordinary facts that they are real brothers or that

both are shareholders in some companies or that Sh. Dayanidhi

Maran got a letter addressed to his brother Sh. Kalanithi Maran

collected through his stenographer are by themselves not

indicative of any conspiracy between the two on this point.

They may indicate their close association but nothing beyond

that. These may create a perception or a suspicion that the

money received in the company of Sh. Kalanithi Maran was

meant for Sh. Dayanidhi Maran, but perception or suspicion


are not enough for criminal prosecution. The perception or

suspicion is required to be investigated and supported by

legally admissible evidence, which is wholly lacking in this case.

Scared, submissive and obstructive bureaucracy: A threat to

constitutional democracy and rule of law

751. Some comments on the conduct of the senior

officers involved in the processing of the files are not out of

context. In processing file D-2, the role of Sh. P. K. Mittal is writ

large on the face of record. It is he who directed that the issue of

signing of seven licences be de-linked from the issue of

extension of time for compliance of LOI for MP service area and

for grant of LOI for UP(E) and UP(W) service area. Similarly,

the officers of LF branch were questioning the financial

capacity of the company as well as indicating that there is no

guideline for extension of time for LOI, but he was ignoring all

these issues. It is he who ultimately forced the LF branch to give

up the issues relating to the business plan and financial

capacity of the company in the processing of file D-2, but in oral

statement he blames the Minister for putting frivolous

questions. Perhaps the officers of LF branch were submitting

Dishnet DSL Limited to higher scrutiny due to its earlier

adverse track record, as already noted above in detail.

752. Similarly, in the processing of file D-4 relating to

licences in Punjab, Haryana, Kerala and Kolkata service areas,

the footprint of Sh. P. K. Mittal are writ large everywhere. The

type of questions put by him have also been already extracted

above. The perusal of the file reveals that he was putting all sort


of questions like “Is shareholding pattern directly or indirectly

provided”. Again when the file reached him, he put a question

“Is non-resident individual same as non-resident Indian. Pls.

clarify”. When the issues clarified, he again records “Pls. ask

clarification” and accordingly a letter was written to the

company. Thereafter, when the file is further processed, he

introduces the idea that latest FDI is yet to notified etc. The

perusal of the file reveals that the file was pending due to

impending FDI policy. However, in the oral statements, he

blames Sh. Dayanidhi Maran and note dated 30.03.2005 of Sh.

Nripendra Mishra. Similar is his attitude regarding processing

of the representations, which were also dealt with in this file as

well as in file D-5. As per record, the representations of Sh. V.

Srinivasan was brought to the notice of Sh. Nripendra Mishra,

but in oral statement he states that these representations were

not brought to the notice of Secretary (T). The most astonishing

and disturbing part is that the then Additional Secretary (T) Sh.

Yashwant Bhave also blames Dr. J. S. Sarma by making an oral

statement, which is wholly contradictory to the official record.

753. Similarly, in file D-41, as already noted above, the

role of Sh. P. K. Mittal is all pervasive and the type of questions

put by him and his acts have already been noted above. He

himself linked this file with other file, but by resorting to oral

statement, he blames Sh. Dayanidhi Maran for the delay.

754. Similarly, in processing of file D-30 after discussion

with Secretary (T) on 05.08.2004, equity structure of various

companies involved was called for and was supplied by the

companies and this was taken note of in the next note sheet.


However, Dr. J. S. Sarma called for further examination of the

equity structure of the companies to understand it, as the same

was appearing to be complex, his report has been questioned by

the oral statements. At every step, the DoT was repeatedly

asking for equity structure of the companies.

755. As far as issue of de-linking is concerned, which was

dealt with in file D-43, the role of Sh. P. K. Mittal is writ large

on the face of the record. Perusal of the file reveals that he

himself was responsible for this, but by oral statement he

blames Dr. J. S. Sarma for this. In the end, the decision appears

to be result of a joint discussion amongst the senior officers of

the department, but by oral statement, the blame is laid on Dr.

J. S. Sarma. In all these files, it was incumbent upon the officers

to record in the note sheets the instructions of the senior

officers, but nowhere it has been done.

756. Similarly, in the case of allocation of initial

spectrum in Bihar service area, perusal of the file reveals that it

was Wireless Advisor Sh. P. K. Garg who was doing everything,

but by oral statement, wholly blames Dr. J. S. Sarma. Similarly,

in the allocation of additional spectrum beyond 6.2 MHz to

Aircel, which was dealt with in D-37, the record shows that Sh.

P. K. Garg was wholly responsible for everything, but by making

oral statement, he blames Dr. J. S. Sarma.

757. Similarly, as per provisioning of POIs is concerned,

the perusal of file D-121(i) reveals that everything was the doing

of Sh. Mahipal Singh and Sh. K. S. Guliani, but by making oral

statements, they shift the blame on CMD (BSNL) Sh. A. K.

Sinha.


758. A perusal of these files reveals that the concerned

officers were doing all the acts relating to the issues dealt with

therein and were either stalling or expediting the same on their

own initiative, but by making oral statements blame Dr. J. S.

Sarma for the same. Now the question is: If such oral

statements, which do not flow from the record or find

corroboration from anywhere from any circumstance, are given

judicial recognition, what shall be the fate of the rule of law?

These oral statements are in violation of the official rules and

procedures which mandate that instructions of the senior

officials are to be recorded on the file. If such a practice is

allowed, anybody and everybody in the Government can be

made to face prosecution. No Minister or Secretary would

remain safe or for that matter anyone working in the

department. The official record which is deemed to be correct

and true shall loose all importance and wrong doers would have

a hay day as by making oral statement they can accuse anyone

and themselves go scot-free. In the instant case, everyone who

was responsible for any delay, wrong doing or obstructive

questions have been made a witness and has thus, readily and

willingly made an oral statement, fully and wholly contrary to

the official record. This is a dangerous trend and can strike at

the root of rule of law and the constitutional democracy as

wrong doers can gang up against those, who, by the perusal of

record, are innocent.

759. It has been the case of the prosecution that such

oral statements are to be accepted at the face value at the stage

of charge. There can be no dispute about this proposition.


However, this is not a rigid rule and depends upon the facts of

the case. When an oral statement is contrary to official record,

unreasonable as it does not find any support from any quarter

or circumstance, and verges on absurdity, the same can be

ignored and should be ignored to save the innocents from

needless prosecution. Of course, in the instant case, there are so

many other factors to reject the case of the prosecution, as has

been noted above in detail.

760. I have no manner of doubt that these officers were

timid and obstructive at the time of preparation of record as

well as subsequently when making the statement to the CBI,

wherein they readily shifted the blame to others.

761. In contrast to these officers, there is a Secretary Sh.

Nripendra Mishra who performed his duties with due diligence

and confidence and never shied away from recording his views

on the file. The transfer of shares of Aircel Cellular Limited to

Aircel Digilink India Limited was being recommended by lower

level officers, including up to the level of Member (P), which

was in violation of competition clause in the agreement.

However, it stopped when the file reached Sh. Nripendra

Mishra on 05.08.2004. Similarly, in file D-40, when the

Minister asked AS(T) on 15.09.2004 to go through the files and

submit a note, despite the recommendation up to the Secretary

(T), Sh. Nripendra Mishra was forthright in recording his

disapproval by observing in writing that “My recommendations

are available on the file and AS(T) please comply with the

orders of the MOC&IT and submit to MOC&IT for superior

order”. Furthermore, when Dr. J. S. Sarma put up his note, Sh.


Nripendra Mishra was again forthright in asking for legal

opinion on that. Thus, he did not hesitate in expressing his

views and that too in writing.

762. However, he also understood that in constitutional

democracy, the views of the Minister are to be obeyed and

respected and on 30.03.2005, after speaking to the Minister

complying with his orders, he recorded the following note:


763. This note is in consonance with the guidelines and

proforma of application for UASL, as noted and extracted above

in detail. This shows that when an officer wishes to work

independently, he is free to do so. Everywhere, he is recording

his note in writing and quite forthrightly. Furthermore, he did

not make any statement under Section 161 CrPC which is

contrary to official record.

764. On the other hand, the conduct of Sh. Yashwant

Bhave, Sh. P. K. Mittal, Sh. P. K. Garg, Sh. Mahipal Singh and

Sh. K. S. Guliani is totally in violation of official procedures and

rules. It is strange that an Additional Secretary to Government

of India is so scared of his Secretary that he readily agrees to do

an illegal act. When Secretary (T) Sh. Nripendra Mishra himself

was forthright in expressing his views, what prevented these

senior officers from recording their own.

765. In view of the above discussion I am satisfied that


the entire case is based on the misreading of the official files,

contradictory statements of the witnesses as well as

speculations and surmises of Sh. C. Sivasankaran. I have no

hesitation in recording no prima facie case warranting framing

of charge against any of the accused is made out.

766. Accordingly, all accused stand discharged.

767. File be consigned to Record Room. Since most of

the files are official files of DoT, the department is at liberty to

seek their return after time of filing of appeal is over.

Announced in open Court (O. P. Saini)today on February 2, 2017 Spl. Judge/CBI(04)

(2G Spectrum Cases)/ New Delhi


SPL. JUDGE, CBI (04) (2G Spectrum Cases), NEW DELHI. CC ...

Documents

Transcript of SPL. JUDGE, CBI (04) (2G Spectrum Cases), NEW DELHI. CC ...