New Delhi: The affordable billing of one paise per second could not have become a reality had government auctioned 2G licenses as suggested by CAG, Swan Telecom on Thursday told a Delhi court and sought discharge on saying the ‘hypothetical’ loss of Rs 1.76 lakh crore cannot be a ground for its prosecution.

"The act of causing possible and hypothetical loss of Rs 1.76 lakh crore to the state exchequer, which the government is denying, cannot be a ground for criminal prosecution of a company."

"Such issues are policy decisions and the government has to frame policies by keeping in mind the social upliftment of its people and revenue generation and if government would have gone for auction of licenses, then the billing of one paise per second could not have become a reality," Amit Desai, counsel for Swan, now Etisalat DB, told CBI Judge O P Saini.

The courts should not interfere with the policies of the government. The policy can be bad but cannot be "criminal" as the state has to ensure the welfare of citizens besides revenue generation, he contended.

Desai, arguing for the firm which is also an accused besides its promoter Shahid Usman Balwa and director Vinod Goenka, said "the company, being a juristic person, did not commit any criminal act. At best, CBI could have used it for identifying Balwa and Goenka."

"The company on its own did not commit any criminal act and the charge sheet does not specify any such acts," he said. The counsel, who may continue with his arguments tomorrow as well, said the Telecom Regulatory Authority of India (TRAI) is a "specialist" body on the issue and the government did the right thing by following its guidelines.

"The CAG, being an auditor, is an advisory body which accounted notional and presumptive loss which cannot be relied for criminal prosecution."

Desai sought discharge of Swan Telecom, accused of hatching a conspiracy with others, including former Telecom Minister A Raja, and defrauding the exchequer, saying the whole case is based on CAG's computation of "notional loss".

He hailed present Telecom Minister Kapil Sibal for his recent statement that the government did not incur any loss and said "it hit the root of CBI's case."

Classic example of CAG and TRAI battle

Desai termed the 2G case as a "classic" example of a battle between CAG and TRAI.

CAG's findings that had the government auctioned 2G license it would not have lost Rs 1.76 lakh crore is all "presumption" and CBI cannot find fault with the government policy by using the CAG report, Desai said.

"It was not within the purview of CBI to decide on the correctness of the CAG report or the TRAI recommendations. It is outside the domain of CBI to say that CAG is right. The courts also cannot fault the process adopted by various government departments," he said.

The decisions on pricing of 2G licenses and non-revision of entry fee of Rs 1659 crore for new players were taken by the government in pursuance of TRAI recommendations, Desai said.

Neither CBI nor the courts have got any right to find fault with policy decisions of the government as it would infringe on basic principle of separation of powers among the executive, the legislature and the judiciary, he said and cited various case laws in support of his arguments.

"The government would come to standstill if CBI is allowed to investigate such issues where major players try to influence the government's economic policies," he said and cited lobbying by companies ahead of annual budget presentation.

The CAG report was "just a matter of perception" as it said the government needed to revise the entry fees for telecom companies.

On the contrary, TRAI opined there was no need for revising entry fee to provide a "level-playing field to existing and new players' without burdening consumers, he said. By that standard, the then chairman of TRAI should also be made a co-conspirator in the case for recommending non-revision of fees, he said.

Seeking discharge from the case, Desai said mere omission in framing or following guidelines cannot be termed as criminal acts.

The company did not violate any provision of the IPC or the Constitution warranting prosecution, he said, adding the government has been saying "continuously and persistently" in Parliament and outside that no "wrongful" loss has been caused to it.

Desai is now likely to deal with first-come-first-served policy which allegedly caused chaos during distribution of LoIs at Sanchar Bhawan on January 10, 2008.

Panel raps DoT for telcos' failure

A Parliamentary panel has pulled up the telecom ministry for its failure to ensure compliance of obligations for rolling out of services by new operators despite getting scarce spectrum at a reasonable price.

The Parliamentary Standing Committee on Information Technology have noted that 120 new telecom licences of 2G spectrum were issued at a very reasonable price, even then the licencees have failed to meet the roll-out obligations.

The new operators were supposed to roll out at least 10 per cent of services within 52 weeks of getting licences.

The committee strongly disapproved the inaction of the Department of Telecom (DoT which made the default of more than 52 weeks a gainful position for new operators.

It also found that there was a lot of confusion with regard to the number of licencees who could not meet the roll-out obligations and to whom the show-cause notices should have been issued.

The committee said it failed to understand the inaction on the part of DoT with regard to cancellation of as many as 74 licences as recommended by the regulator Trai for not meeting roll-out obligations.