IN THE COURT OF O. P. SAINI: SPL. JUDGE, CBI (04) (2G SPECTRUM CASES), NEW DELHI 1. CC No: 01(B)/11 2. Case RC No: 45 (A) 2009, CBI, ACB, New Delhi. 3. Title: CBI Vs. (1) Ravi Kant Ruia (A-1); (2) Anshuman Ruia (A-2); (3) I. P. Khaitan (A-3); (4) Smt. Kiran Khaitan (A-4); (5) Vikash Saraf (A-5); (6) M/s Loop Telecom Limited (A-6); (7) M/s Loop Mobile India Limited (A-7); and (8) M/s Essar Teleholdings Limited (A-8). 4. Date of Institution : 12.12.2011 5. Date of Commencement of Final Arguments : 01.04.2015 6. Date of Conclusion of Final Arguments : 24.04.2017 7. Date of Reserving Order : 05.12.2017 8. Date of Pronouncement : 21.12.2017 Presence/ Appearance: Sh. Anand Grover Sr. Advocate/ Spl. PP with Sh. K. K. Goel & Sh. A. K. Rao Sr. PPs, Ms. Sonia Mathur Advocate, Sh. Nikhil Borwankar; Sh. Mihir Samson & Ms. Chitralekha Das Junior Counsel and Inspector Manoj Kumar for CBI. CBI Vs. Ravi Kant Ruia and others Page 1 of 526 Sh. Harish Salve Sr. Advocate with Ms. Neeha Nagpal Advocate for accused M/s Essar Teleholdings Limited (A-8); Dr. Abhishek Manu Singhvi Sr. Advocate with Sh. Mahesh Aggarwal, Ms. Neeha Nagpal and Ms. Smriti Sinha Advocates for accused Ravi Kant Ruia (A-1) and Anshuman Ruia (A-2); Sh. Dayan Krishnan Sr. Advocate with Sh. Arshdeep Singh Khurana Advocate for accused I. P. Khaitan (A-3), Ms. Kiran Khaitan (A-4) and M/s Loop Telecom Limited (A-6); Sh. S. V. Raju Sr. Advocate with Sh. Sanjay Abbot and Sh. Raghav Shankar Advocates for accused Vikash Saraf (A-5); and Ms. Ishita Srivastava Advocate on behalf of Official Liquidator for accused Loop Mobile (India) Limited (A-7). JUDGMENT: The brief facts of the case are that on 21.10.2009, the CBI registered an FIR vide RC DAI 2009 A 0045 against unknown officials of Department of Telecommunications (DoT), Govt. of India, unknown private persons/companies and others for the offence punishable under Section 120-B IPC read with Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 (PC Act), on allegations of criminal conspiracy and criminal misconduct, in respect of allotment of Letters of Intent CBI Vs. Ravi Kant Ruia and others Page 2 of 526 (LOI), Unified Access Services (UAS) Licenses and spectrum by the DoT. Investigation of the case was taken up and charge sheet dated 02.04.2011 and First supplementary charge-sheet dated 25.04.2011 were filed before this Court. 2. During the period such investigation was in progress an SLP (Civil) Appeal no. 24873/2010 was filed by CPIL & Others before Hon'ble Supreme Court of India, in which Hon'ble Supreme Court of India granted leave vide an order dated 16.12.2010 and decided to monitor the investigation of this case. Vide the aforesaid order dated 16.12.2010, Hon'ble Supreme Court of India also directed that:- ªThe CBI shall conduct thorough investigation into various issues highlighted in the report of the Central Vigilance Commission, which was forwarded to the Director, CBI vide letter dated 12.10.2009 and the report of the CAG, who have prima facie found serious irregularities in the grant of licenses to 122 applicants, majority of whom are said to be ineligible, the blatant violation of the terms and conditions of licenses and huge loss to the public exchequer running into several thousand crore. The CBI should also probe how licenses were granted to large number of ineligible applicants and who was responsible for the same and why the TRAI and the DoT did not take action against those licensees who sold their stakes/equities for many thousand crore and also against those who failed to fulfill roll-out obligations and comply with other conditions of license.º 3. The eligibility of all the companies which were allocated LOI on 10.01.2008 by the DoT was also investigated CBI Vs. Ravi Kant Ruia and others Page 3 of 526 by CBI and during investigation allegations came to notice that M/s Loop Telecom Ltd, which had applied for UAS licenses in 21 Telecom circles in September 2007 was a front company of M/s Essar Group. M/s Loop Mobile India Ltd. had been operating a UAS license since 2005 in the Mumbai Service Area. It was alleged that M/s Essar Group which already had a stake of 33% in M/s Vodafone Essar Ltd., a telecom operator in all the 22 telecom circles, was controlling substantial stake in the aforesaid two companies in violation of the UAS guidelines dated 14.12.2005 and UAS license agreements signed by M/s Vodafone Essar Ltd. with DoT. It was further alleged that the accused persons belonging to M/s Loop Telecom Ltd. / M/s Loop Mobile India Ltd and Essar Group of companies, fraudulently suppressed the facts of association of the two Loop companies with M/s Essar Group of companies while applying for new licenses to DoT, in order that DoT considers these companies as entities which are not substantially controlled by Essar Group or are associates of Essar Group. The said accused persons, therefore, dishonestly or fraudulently got the 21 new UAS licenses and continue to operate the Mumbai License of Loop in contravention of the applicable guidelines. 4. Investigation has been carried out on the allegations that M/s Loop Telecom Ltd., and associated persons including Essar group persons / companies, cheated the DoT, Government of India by concealing the actual stake holders of M/s Loop Telecom Ltd. behind a corporate veil, while applying for and getting 21 new UAS Licenses and got the 21 UAS Licenses and CBI Vs. Ravi Kant Ruia and others Page 4 of 526 valuable spectrum for this company. 5. The UASL Guidelines dated 14.12.2005 were issued by DoT to ensure fair competition in the mobile telephony and thereby bar same entity holding more than one license in the same telecom circle. 6. For finalization of NIT & Tender Document for inviting applications / bids for fourth cellular operator, a meeting was held by the DoT. The officers deliberated upon the clause to be inserted to ensure competition. In this context, in another meeting dated 02.03.2001, DoT decided as below:- ªSubstantial equity holding may be defined as equity of 10% or more. For the purpose of adding clarity with regard to ensuring competition and meaning of substantial equity, Para 1.3 (ii)/ Section IV of Commercial Conditions will be modified as below: ªNo single company/ legal person, either directly or through its associates, shall have substantial equity holding in more than one licensee company in the same service area for the same service. `Substantial equity' herein will mean `an equity of 10% or more'. A promoter company cannot have stakes in more than one licensee company for the same service area.º 7. Accordingly, under Section 4 (Commercial Conditions) of the tender document, following was mentioned at clause 1.3:- ª1.3 The licensee shall also ensure that: (i) Any changes in share holding shall be subject to all necessary statutory requirements. CBI Vs. Ravi Kant Ruia and others Page 5 of 526 (ii) No single company/legal person, either directly or through its associates, shall have substantial equity holding in more than one licensee company in the same service area for the same service. `Substantial equity' herein will mean `an equity of 10% or more'. A promoter company cannot have stakes in more than one licensee company for the same service area. (iii) Management control of the licensee company shall remain in Indian hands.º 8. Later, the aforementioned clause 1.3 also formed part of the license agreement signed by DoT with various Basic Telephony operators in 2001. It also formed clause 1.4 of the license agreement signed by DoT with Cellular Mobile Telephony Service operators subsequently. In the license agreements signed in 2004, this clause was included as clause 1.4. 9. Further, at this time the existing mobile telephony licensees of 1995-97 were also informed by DoT of amendments in their licenses as a consequence to migration to revenue sharing regime of New Telecom Policy 1999 vide letters. Vide these letters, they were informed that the licensees shall forego the right of operating in the regime of limited number of operators after 1.8.1999 and shall operate in a multi-poly regime. In this context, following proviso were also added in para (ix):- ªNotwithstanding anything approved under the Proviso described in (viii) above, the following shall always be complied with and shall never be violated: (a) The statutory prescriptions of any nature including but not limited to the provisions of CBI Vs. Ravi Kant Ruia and others Page 6 of 526 the Monopolies and Restrictive Trade Practice Act ± 1969. (b) No single company / entity shall have any equity in more than one licensee company in the same service area for same service. (c) There shall be cap of 49% on foreign equity. Management control of the licensee company shall remain in Indian Hands.º 10. Similar license condition was subsequently adopted as part of UASL Guidelines dated 14.12.2005 and the Clause 8 of the UASL Guidelines dated 14.12.2005 provided that:- ªNo single company / legal person, either directly or through its associates, shall have substantial equity holding in more than one LICENSEE Company in the same service area for the Access Services namely; Basic, Cellular and Unified Access Service.