New Delhi: The Telecom Ministry could have gone in for auction of 2G spectrum licenses had the then Finance Minister P Chidambaram insisted on this, according to a Finance Ministry document submitted to the Supreme Court on Wednesday.

CVC gets more 2G spectrum related complaints, forwards to CBI

The March 25, 2011 office memorandum by the Finance Ministry headed by Pranab Mukherjee sent to the Prime Minister's Office (PMO) also suggested that Chidambaram and the jailed former telecom minister A Raja had jointly determined the price for the 2G spectrum in 2008.

The document was filed by Janata party leader Subramanian Swamy before a bench of justices G S Singhvi and A K Ganguly.

The coverning note of the memorandum sent by a Finance Ministry official DR P G S Rao to the PMO said it was seen by Mukherjee.

Swamy, who has sought probe against Chidambaram for his alleged culpability in the price fixation of the spectrum, has contended that CBI was only holding Raja for the loss of revenue to the exchequer in the spectrum allocation.

Swamy contended that there were four meetings on the issue of price fixation for the spectrum in which Chidambaram and Raja sat with the Prime Minister in the final meeting.

The document placed by Swamy stated that a note was sent by the then Finance Minister (Chidambaram) to the Prime Minister on January 15, 2008 in which auction of spectrum was argued but only with the reference to spectrum beyond the 'start up' spectrum.

Further, it said that in a subsequent meeting on January 30, 2008 between Chidambaram and Raja, it was noted by the then Finance Minister that "he was for now not seeking to revisit the current regimes for entry fee or revenue shares".

The note also ruled out the option of auctioning spectrum for various reasons.

The allegations in the 2G spectrum scam was that the licenses were sold at throwaway prices on a first-come-first-serve basis based on 2001 price causing a loss to the exchequer instead of them being auctioned.

The document said though Finance Secretary had suggested to go for auction for initial spectrum of 4.4 MHz in early February 2008, "the DoT was not keen to do the same since it had said that it will disturb the level playing field and the present Letter of Intent (LoI) holders who had already paid entry fee were likely to go for litigation".

It said that DoT opined that 4.4 MHz (radio wave for 2G) was a part of licence agreement and initial entry fee for licence may be construed as the defacto price of initial spectrum.

"DoT could have invoked clause 5.1 of the UAS license for cancelling licenses in case MoF(Finance Ministry) had stuck to the stand of auctioning the 4.4 MHz spectrum. Perhaps some litigations would have arisen as a consequence," it said.

The document of the Finance Ministry also noted further meetings were held between Chidambaram and Raja on May 29, 2008 and June, 12, 2008.

"Subsequently in the meeting held under the Chair of the Prime Minister on July 4, 2008 (as recorded in the note of the then Finance Secretary dated July 6, 2008,), the then Finance Minister (Chidambaram) and Minister of Telecommunications (Raja) agreed to the proposals on enhancement of spectrum usage charges and pricing of spectrum based on indexing the base prise (Rs 266 crore per MHz) and compounding using SBI PLR from existing allottees of spectrum beyond 6.2 MHz.

However, the issue of revision of entry fee was not discussed in the meeting," the document said.

The document noted that the former Finance Minister recommended an auction mechanism for future allocation of spectrum (beyond the "start up" spectrum) with the spectrum allocations having been made in the past to be treated as a closed chapter. The recommendation was in the context of spectrum usage charges and not with regard to the entry fee.

SC questions TRAI's finding

Telecom regulator TRAI's report purportedly assessing zero loss in 2G spectrum allocation during the tenure of former Telecom Minister A Raja on Wednesday came under sharp criticism of the Supreme Court which questioned the functioning of the autonomous body.

"We are really surprised over the communication. It was created as an autonomous regulator. It is a serious debatable issue what they have done and stated in recent days," a bench of justices G S Singhvi and A K Ganguly said while indirectly referring to the Telecom Regulatory Authority of India report.

CBI also expressed concern over the findings of TRAI and said it has not accepted the report.

"I agree that it is a matter of concern. We have not accepted the report. Anybody (accused in the scam) can take advantage of it," senior advocate K K Venugopal, appearing for the agency submitted.

The bench also said "everything should have been left to the court to decide. We have not made any observation so that nobody is prejudiced."

"We will reserve our observation on this but this has surprised us," the bench said.

The bench also expressed surprise over the difference in computation between CBI and CAG on the loss to public exchequer due to irregularities in spectrum allocation during Raja's tenure.

"CBI's estimate on loss is substantially lower than the presumptive loss given by CAG. CBI came out with a concrete figure that has been contested," the bench said.

CAG in its report has said there was a presumtive loss of Rs 1.76 lakh crore but CBI in its charge sheet calculated the loss to Rs 30,984 crore.

The bench also remarked on the use of term "alleged" with the scam.

"Some people still call alleged 2G scam," the bench said.

Venugopal then replied "I call it 2G scam as the charge sheet has been filed in the case".

The court made the remarks during the hearing of Janata Party President Subramanian Swamy's plea seeking a CBI probe against Home Minister P Chidambaram for his alleged culpability in 2G scam.

Swamy alleged Chidambaram as the then Finance Minister was party to a conspiracy with Raja in deciding the price for spectrum, which was contested by CBI and the Centre.

CBI and the Centre opposed Swamy's plea saying it is beyond the Supreme Court's jurisdiction to decide as the probe into the multi-crore scam was complete and only the trial court can entertain such a petition.