SC lifts stay, allows government to finalise spectrum auction results

New Delhi: The Supreme Court on Thursday lifted its embargo and allowed the government to finalise the result of the just-concluded biggest and "fiercest" auction for telecom spectrum, fetching a whopping revenue of Rs 1.09 lakh crore.

The apex court said the finalisation of the auction was subject to the outcome of matters pending before it, in which the legality of the "design of the notice inviting tender (NIT)" for the spectrum has been challenged by major telecom players including Bharti Hexacom Ltd and Reliance Telecom Ltd.

However, a bench comprising Justices Dipak Misra and P K Pant said it was "inclined" to modify its February 26 order by which it had allowed the scheduled commencement of auction from March 4, with the condition that "the same shall not be finalised without the leave of this Court".

"We are inclined to modify our order and give Union of India the liberty to finalise the auction and proceed further. All the successful bidders have to be instructed (by the government) that the auction on finalisation will be subject to the outcome of cases (before it)," the bench said.

The order allowing government to finalise the auction result would immediately lead to upfront payment of over Rs 28,000 crore in state exchequer by the successful bidders.

It said government would ask all the successful bidders to implead themselves as party in the matter in the apex court after information about the auction, which concluded on Wednesday, is made public.

"Needless to say that they (successful bidders) are under obligation as per the law for impleadment, as any order is likely to affect them.

"The impleaded parties shall file their respective affidavits stating their stand in the affidavits," the bench said while posting the matter for hearing on April 16, when several other issues questioning the legality of the auction process would be examined.

The apex court on February 26 had allowed the government to go ahead with the auction of spectrum of bands 800, 900, 1800 and 2100 for all states, which according to Attorney

General Mukul Rohatgi witnessed a "fiercest" auction fetching a revenue of Rs 1.09 lakh crore.

Rohatgi said if the order of stay was not modified, the Centre would face difficulties in collecting earnest money of Rs 28,000 crore by March 31 emerging from the auction, in which the successful bidders have to deposit the amount within 10 days.

The Centre submitted that the fact that the auction was a stupendous success showed that the design of NIT has been workable and sustainable in law.

However, this submission by Rohatgi was opposed by Reliance Telecom's senior advocate P Chidambaram, who said that "the competitive bidding was not really competitive but compulsive bidding for our survival".

The bench noted the submission of Chidambaram and another senior advocate Gopal Jain, appearing for the other telecom firm, that the amount to be collected by the government from the auction was "incorrect" and "the entire design of NIT is gloriously faulty".

The Attorney General sought permission for the government to finalise the auction saying that the "world is watching us and give me liberty to finalise the auction.

Chidambaram opposed the plea on the ground that the telecom companies have challenged the design of NIT.

"This is pasting the envelope inch by inch towards their goal," he said referring to the submission of the Centre, and contended that "we are attacking the design of NIT and if the design of auction goes, nobody will get the licence".

However, the bench said "we cannot block so much of money" and observed that its February 26 order cannot be kept alive and is required to be modified.

Rohatgi said the issue of auction of spectrum has come to the apex court with dispute arising in north-east circle and now one of the players, Bharti, has bought 8.8 MHz spectrum.

Chidamabram drew the attention of the bench that the Centre should not be given the liberty at this stage to disclose the identities of the successful bidders, which was accepted by Rohatgi.

The government had on January 9 issued notice inviting applications for auction.

The issue of auction had first come to the apex court after the Centre had filed an appeal against the interim order of the Tripura High Court allowing telecom firms Bharti Hexacom Ltd and Reliance Telecom Ltd to submit two separate bids for a total of 8.8 MHz spectrum in the north-east circle.

The apex court had stayed the proceedings before various High Courts and decided to hear on priority basis a batch of petitions raising various issues against the tender conditions for the auction of 2G and 3G spectrum.

The apex court had transferred the petitions filed by private telecom operators from High Courts of Allahabad, Karnataka and Delhi to itself.

The Attorney General had submitted that the High Courts should not interfere in an "informed policy decision" on the auction of air waves having bearing on government revenues.