The Supreme Court today made it clear that the CAG report cannot be the only basis for cancellation of allocation of the 2G Spectrum and said all government decisions, including regularisation of the licences of erring telecom companies, would be scrutinised by it.
It said that any decision taken by the centre on the 2G spectrum would be subject to the outcome of the petitions pending before it.
"Everything they (government) do after the filing of the petitions is subject to the outcome of the petitions," a bench comprising Justices G S Singhvi and A K Ganguly said.
"We do not know what they are doing. But if they do, it is subject to the outcome of our order," the bench said.
The remarks of the bench came on the plea by an NGO Centre for Public Interest Litigation (CPIL), which was seeking a direction to the government for restraining it from regularising the license of the telecom companies which failed to meet the roll-out obligations.
The NGO's counsel Prashant Bhushan said that the government was regularising the licenses of the companies by imposing penalties on the companies.
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The bench further said, "If the licenses are going to be cancelled, it cannot be cancelled only on the basis of the CAG report."
Senior advocates Harish Salve, Abhisekh Manu Singvi, Soli Sorabjee and others appearing for various telecom companies, contended that CAG report, which had estimated a presumptive loss of Rs 1.76 lakh crore to the exchequer in allocation, has been the basis for the cancellation of 2G spectrum.
They said it has already been pointed out by the government that there could be a host of errors in the computation of loss by the CAG.
Attorney General G E Vahanvati said that the issue of regularisation of licences was pending before TDSAT and he sought three weeks to respond to the issue so that everything can be brought before the bench in clear terms.
Bhushan pressed for urgent interim orders to be passed restraining the government from regularising the licences by imposing penalties against the companies which failed to meet the roll out obligation.
The court was hearing two petitions filed by CPIL and Janata Party chief Subramanian Swamy seeking cancellation of the licenses of 2G spectrum allotted during the tenure of former Telecom Minister A Raja on the ground that there were large scale irregularities on the allocation.
The CPIL has also filed separate application against the government policy of regularising the licences on payment of penalties by the companies.
During the hearing, Bhushan submitted that the CPIL has raised five grounds for cancellation of the licenses of 2G spectrum.
He said the spectrum were allocated without auction at the price prevailing in 2001 and the cut-off date was advanced which resulted in the elimination of two-third applicants.
Further, 85 out of 122 entities were ineligible operators and 69 of them failed to meet their roll-out obligations, Bhushan added.
The bench said all these factors will be considered at the time of hearing.