IN THE COURT OF O. P. SAINI: SPL. JUDGE, CBI (04) (2G Spectrum Cases), NEW DELHI. CC No. 01/14 Case RC No. 22(A)-2011-CBI, ACB, New Delhi CBI Vs. (1) Dayanidhi Maran (A-1); (2) Kalanidhi Maran (A-2); (3) M/s Sun Direct TV (P) Limited (A-5); & (4) M/s South Asia Entertainment Holdings Limited, Mauritius (A-8);
Order: Reserved on: 16.11.2016 Pronounced on: 02.02.2017
Presence/ Appearance: Sh. Anand Grover Sr. Advocate/ Special PP with Sh. K. K. Goel & Sh. A. K. Rao Sr. PPs, IO Dy. SP S. K. Sinha and Inspectors Shyam Prakash & Manoj Kumar for CBI. Sh. Kapil Sibal & Ms. Rebecca John Sr. Advocates with Sh. Maninder Singh, Sh. Anirban Bhattacharya, Sh. Shikher Deep Aggarwal, Sh. Abhishek Gupta and Mr. Chahat Chawla Advocates for accused Kalanithi Maran; Dr. Abhishek Manu Singhvi & Sh. R. S. Cheema Sr. Advocates with Sh. Sushil Bajaj, Sh. Sumesh Dhawan, Ms. Vatsala Kak, Ms. Tarannum Cheema and Ms. Tannya Baranwal Advocates for accused Dayanidhi Maran; Sh. Parag Tripathi Sr. Advocate with Sh. Anirban Bhattacharya, Sh. Shikher Deep Aggarwal, Sh. Abhishek Gupta and Sh. Chahat Chawla
CBI Vs. Dayanidhi Maran & others Page 1 of 424 Advocates with Authorized Representative Sh. K. Swaminathan for accused M/s Sun Direct TV (P) Limited (A-5); and Sh. Sidharth Luthra Sr. Advocate with Sh. Neeraj Chaudhari, Sh. Siddharth Aggarwal, Sh. Anuj Berry and Sh. Malak Bhatt Advocates with Authorized Representative Sh. Ajay Sehgal for accused M/s South Asia Entertainment Holdings Limited (A-8).
ORDER ON CHARGE This order shall dispose of the question: As to whether, on the basis of material on record, a prima facie case warranting framing of charge against the accused is made out or not. 2. The brief facts of the case are as under: 3. One Sh. C. Sivasankaran, promoter of Siva group, has been in telecom sector since 1994, when M/s Sterling Cellular Limited, promoted by him, was provided Cellular Mobile Telecom Services (CMTS) licence in Delhi service area. Sh. C. Sivasankaran had the controlling stake in Siva group of companies including the telecom companies, through his family members. He formed a holding company viz. M/s Aircel Tele Ventures Limited (ATVL) in 1997. M/s ATVL had 100% ownership of M/s Aircel Limited operating in Tamil Nadu service area, M/s Aircel Cellular Limited (ACL) operating in Chennai service area and also in M/s Dishnet DSL Limited (later on M/s Dishnet Wireless Limited).
CBI Vs. Dayanidhi Maran & others Page 2 of 424 M/s Aircel Limited launched its operations in Tamil Nadu service area in April, 1999. In the year 2003, M/s ATVL also acquired M/s Aircel Cellular Limited held by joint venture of RPG (RP Goenka group) and Vodafone (UK), which was the service provider in Chennai telecom circle. 4. Sh. C. Sivasankaran wanted to expand his GSM mobile business from these two service areas to other service areas through his company M/s Dishnet DSL Limited. Accordingly, M/s Dishnet DSL Limited applied to DoT for grant of Unified Access Service Licences (UASLs) on 05.03.2004 in eight service areas, that is, Assam, North-East, West Bengal, Bihar, Orissa, MP, Himachal Pradesh and J&K. The DoT issued Letters of Intent (LOI) on 6th April, 2004 for these eight service areas. The company submitted compliance to the LOIs on 20.04.2004 for seven service areas. For the remaining service area of Madhya Pradesh, the company sought some additional time. This company also applied for grant of UASLs for two more service areas, that is, UP (West) and UP (East), on 21.04.2004. The proposal for extension of time to comply with LOI for MP service area and issuance of LOI for grant of new UASLs for UP(E) and UP(W) service areas were de-linked from the signing of licences for seven service areas and these seven licences were executed on 12.05.2004. This company, that is, Dishnet Wireless Limited, also applied for grant of four UAS licences in Punjab, Haryana,
CBI Vs. Dayanidhi Maran & others Page 3 of 424 Kerala and Kolkata service areas on 01.03.2005. 5. In May, 2004, there was change of Government at Centre and Sh. Dayanidhi Maran took over as Minister of Communications and Information Technology (MOC&IT) on 26.05.2004. Sh. Dayanidhi Maran worked as MOC&IT, Government of India, New Delhi, during the period from 26.05.2004 to 17.05.2007. Late Dr. J. S. Sarma worked as Additional Secretary (Telecom) between October 2003 and November 2004. He again joined DoT as Special Secretary on 04.06.2005 and took over as Secretary (Telecom) on 01.07.2005 and held the office till 16.07.2006. 6. Sh. Kalanithi Maran, brother of Sh. Dayanidhi Maran and promoter of M/s Sun TV Networks Limited, Chennai, which is a broadcasting company, distributing and telecasting different TV channels in different languages since 2000, also promoted another company in the name of M/s Sun Direct TV (P) Limited in the month of February, 2005 to provide Direct to Home broadcasting service in India. 7. Sh. Ralph Marshall was Director of M/s Maxis Communications Bhd., Malaysia, and M/s Astro All Asia Networks Plc. UK. Sh. T. Ananda Krishnan was having the majority shareholding in both companies. 8. In December 2005, these three companies were allegedly sold to Maxis Communications of Malaysia. It is alleged that the sale of these companies held by Sh. C. Sivasankaran to M/s Maxis Communications (through its subsidiary M/s Global Communications and a joint venture
CBI Vs. Dayanidhi Maran & others Page 4 of 424 company named M/s Deccan Digital Networks (P) Limited formed between Indian partner M/s Sindya Securities and M/s Global Communications) was with the intervention of Sh. Dayanidhi Maran and his brother Sh. Kalanithi Maran. 9. It is alleged that Sh. Dayanidhi Maran, the then MOC&IT, in abuse of his official position, deliberately delayed grant of UAS licences in seven service areas and other approvals/ permissions on various issues pending before Department of Telecommunications (DoT) related to Aircel Tele Ventures Limited on frivolous grounds with an intent to force its exit from telecom business by constricting its business environment. 10. It is alleged that after the change of ownership, the applications for issuance of licences and other requests/ approvals pending since long before the DoT were smoothly acceded to and after such transfer undue favour was given to these companies, for which alleged illegal gratification was paid through the companies of Sh. Kalanithi Maran. 11. The details of delay in grant of LOIs, UAS Licences and other approvals, acquisition of telecom companies of Sh. C. Sivasankaran by Maxis Communications, Malaysia, smooth approvals, post-acquisition by Maxis Communication and payment and receipt of bribe are as under: A. Allegations relating to delay 12. It is alleged that the grant of LOIs, extension of time in MP service area and various other regulatory approvals of M/s Aircel Limited, M/s Dishnet DSL Limited and M/s Aircel Cellular Limited were delayed on frivolous grounds. The details
CBI Vs. Dayanidhi Maran & others Page 5 of 424 of such delays are given as under: (i) Delay in grant of LOIs for award of UASL in UP(E) and UP(W) and grant of extension of time of signing licence agreements in MP service area to M/s Dishnet DSL Limited 13. It is alleged that DoT had issued LOI for Unified Access Service Licence (UASL) for eight telecom service areas including Madhya Pradesh in favour of M/s Dishnet DSL Limited (a Siva group company) on 06.04.2004. UAS licence agreements in respect of seven service areas were executed on 12.05.2004. However, licence agreement in respect of Madhya Pradesh service area was not executed. 14. It is further alleged that M/s Dishnet DSL Limited submitted a letter dated 20.04.2004 requesting for extension of time by 90 days from 20.04.2004 required to fulfill the formalities of bank guarantee to sign the licence agreement in Madhya Pradesh service area. This application was processed in file No. 20-231/2003-BS-III (Vol. III). 15. It is further alleged that M/s Dishnet DSL Limited submitted applications dated 21.04.2004 for grant of UAS Licences for UP (East) and UP (West) service areas. These applications were also processed in file No. 20-231/2003-BS- III (Vol. III). DoT officials examined the applications and recommended for approval for issue of LOI to M/s Dishnet DSL Limited for award of UASL in respect of UP (E) and UP (W) service areas and for grant of extension of time by 90 days for signing the licence agreements in respect of MP service area. Sh. Nripendra Misra, Secretary, DoT concurred with the
CBI Vs. Dayanidhi Maran & others Page 6 of 424 proposal and marked the file to Sh. Dayanidhi Maran, the then MOC&IT, for approval on 13.07.2004. In spite of the unanimous recommendations, Sh. Dayanidhi Maran, instead of according approval, raised objections and sought clarification through his PS Sh. K. Sanjay Murthy on 26.08.2004. 16. It is further alleged that M/s Bharti Airtel Limited and M/s Reliance Infocomm Limited had submitted applications dated 15.04.2004 and 24.06.2004 respectively for grant of UAS licence for Assam and J&K service areas, which were approved by accused Sh. Dayanidhi Maran, the then MOC&IT, on 22.06.2004 without raising queries and, as such, the queries raised by accused Sh. Dayanidhi Maran on the proposal of M/s Dishnet DSL Limited for grant of licences in UP (E) and UP (W) and grant of extension of time for signing of UAS licence agreement were with dishonest intention and against the DoT guidelines.
(ii) Delay in grant of approval for change in equity of M/s Aircel Limited and taking on record name change of Srinivas Computers Limited. 17. It is alleged that M/s Aircel Limited (a Siva group company) was having a CMTS licence in Tamil Nadu service area in 2004. M/s Aircel Limited applied for approval for change in equity structure consequent upon sale/ transfer of shares of M/s Aircel Digilink Limited (ADIL) vide request letter dated 28/29 June 2004. This application was processed in file No. 842-325/2000-VAS. 18. It is further alleged that M/s Aircel Limited also
CBI Vs. Dayanidhi Maran & others Page 7 of 424 sent letters dated 21.06.2004 and 22.06.2004 to DoT for change of name of the promoter namely from Srinivas Computers Limited to M/s Aircel Televentures Limited. M/s Srinivas Computers Limited was having 100% equity shares in M/s Aircel Limited and 79.24% in M/s Aircel Cellular Limited. Copies of above referred letters were also processed in the above referred file. The applications were examined by DoT officials till Secretary (T) and all recommended for approval of the proposals of the company to Sh. Dayanidhi Maran. When the file reached the Minister on 27.08.2004, he instead of approving the unanimous recommendations returned the file to Secretary (T) through his PS Sh. K. Sanjay Murthy on 15.09.2004 mentioning that there are many inter related issues between mergers and acquisitions, licensing, FDI and FII investments in holding companies and their sister concerns. An overall view on issues arising in such cases needs to be taken before a decision can be taken. All the inter-related issues mentioned above pertaining to the case being dealt in the below mentioned files be examined and a consolidated note submitted: (i) F. No. 842-21/2001-VAS (Vol. III) (ii) F. No. 842-325/2000-VAS (iii) F. No. 808-26/2003-VAS (Vol. I) (iv) F. No. 20-231/2003-BS-III 19. It is further alleged that accused Dayanidhi Maran dishonestly directed that this consolidated note be put up by (Late) Dr. J. S. Sarma, the then Additional Secretary (T). It is further alleged that Additional Secretary (T) was not in the
CBI Vs. Dayanidhi Maran & others Page 8 of 424 chain of officers through whom the file of Licensing Division had to move. Accused (Late) Dr. J. S. Sarma in connivance with accused Sh. Dayanidhi Maran put up a note, as desired by him, on 30.11.2004 (after a gap of about 75 days). He, contrary to the recommendations of the Licensing Division officers and the Secretary (T), recommended that before granting the UAS licenses to M/s Dishnet DSL Limited, DoT may await the decision on TDSAT on the issue of vigilance cases and penalties imposed by DoT on Dishnet. Consequently, as per the directions of Secretary (T), a legal opinion on the comments of accused Dr. J. S. Sarma was obtained from Sh. O. P. Nahar, Legal Advisor (T), on 11.01.2005 who, inter alia, opined that DoT had withdrawn its own letter of imposition of penalty so M/s Dishnet DSL Limited cannot be faulted on this count and denial of LOIs/ licence will not withstand legal scrutiny. 20. In view of the above referred legal opinion dated 11.01.2005, DoT officials again recommended for taking on record the change of name of promoter from M/s Srinivas Computers Limited to M/s Aircel Televentures Limited and also recommended that the transfer of 100% equity of M/s Aircel Limited to M/s Aircel Digilink India Limited may be taken on record as all the licence conditions and other guidelines in this regard are being made. Sh. N. Misra, Secretary (T), concurred with the recommendation and sent the file for approval to accused Sh. Dayanidhi Maran on 24.01.2005. 21. Despite such legal opinion dated 11.01.2005, accused Sh. Dayanidhi Maran dishonestly did not grant the approval, and instead returned the file through his PS Sh. K.
CBI Vs. Dayanidhi Maran & others Page 9 of 424 Sanjay Murthy on 03.03.2005 mentioning that reports on mergers and acquisitions were awaited. It is further alleged that no such report on mergers and acquisitions was awaited at that point of time. A report on the subject had already been submitted by accused (Late) Dr. J. S. Sarma on 30.11.2004. After having the legal opinion, there was no good reason for not granting the approvals sought by M/s Aircel Limited (a Siva group company). It was a clear manifestation of the dishonest intention and abuse of the official position by the accused Sh. Dayanidhi Maran. (iii) Change of name from M/s Dishnet DSL Limited to M/s Dishnet Wireless Limited 22. It is alleged that M/s Dishnet DSL Limited applied for change in name of the company from M/s Dishnet DSL Limited to M/s Dishnet Wireless Limited 21.07.2004. The application was processed in file No. 20-225/04/Genl.- Mts./Dishnet/BS-III. The DoT officials recommended to take on record the change in name. Sh. Nripendra Misra, Secretary (T), concurred and sent the file to accused Sh. Dayanidhi Maran for approval on 01.10.2004 who dishonestly did not grant approval and send the file to accused (Late) Dr. J. S. Sarma, Additional Secretary (T), through his PS Sh. K. Sanjay Murthy stating that “The issues pertaining to this case are similar to the issues being examined for preparation of a consolidated note bringing out the interrelated issues between mergers and acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns. The issues arising from this case may also be incorporated in the consolidated note
CBI Vs. Dayanidhi Maran & others Page 10 of 424 being prepared.” 23. Accused (Late) Dr. J. S. Sarma as discussed above had prepared a note on 30.11.2004 and on the same date he marked the file to Secretary (T)/ MOC&IT. Instead of approving the simple request of taking on record the change of name of company (approval had already been there from ROC), Sh. Dayanidhi Maran dishonestly sent this file, alongwith three other files pertaining to M/s Dishnet DSL Limited on 03.03.2005 to Secretary (T) for re-examination if there was undue haste in processing the case earlier. (iv) Delay in grant of UASL for Punjab, Haryana, Kerala and Kolkata 24. It is alleged that M/s Dishnet Wireless Limited had applied for grant of UASL for Punjab, Haryana, Kerala and Kolkata service areas on 1 st March 2005. These applications were processed in file No. 20-231/2005-BS-III. Sh. A. R. Devarajan, AD (BS-III), put up a note on 09.03.2005 recommending for issue of LOI in favour of M/s Dishnet Wireless Limited for the said four service areas. After some clarifications regarding foreign equity pattern, the request for grant of UASLs in the four service areas was kept pending because of the mala fide direction of accused Sh. Dayanidhi Maran to link show cause notices and advisories to the grant of UASLs. This direction was conveyed through Sh. Nripendra Misra in file No. 20-231/2003-BS-III (Vol. III) on 30.03.2005. (v) Delay in Spectrum Allocation to M/s Dishnet DSL Limited in Bihar Telecom Circle 25. It is alleged that prior to 31.01.2005, cases for
CBI Vs. Dayanidhi Maran & others Page 11 of 424 frequency assignments were being approved by Joint Wireless Advisor/ Deputy Wireless Advisor. However, accused Sh. Dayanidhi Maran directed that cases related to frequency assignments for telecom service providers and terrestrial broadcasting and uplinking of satellite TV channels should be submitted to him for approval through Member (T) and Secretary (T). Accordingly, a note dated 31.01.2005 was issued under the signature of Sh. Nripendra Misra, the then Secretary (T), in this regard. Accused Sh. Dayanidhi Maran later on directed that the cases related to frequency assignments should be submitted via Member (T) to accused (Late) Dr. J. S. Sarma, Special Secretary (T), for approval. Accordingly, a note dated 16.06.2005 was issued under the signature of accused (Late) Dr. J. S. Sarma, Special Secretary (T) modifying the orders dated 31.01.2005 issued under the signature of Sh. Nripendra Misra. 26. It is further alleged that M/s Dishnet DSL Limited submitted application dated 24.05.2004 for allocation of GSM spectrum in Bihar service area. This application was processed in file No. L-14047/02/2004-NTG. DoT officials including Wireless Advisor and Member (T) recommended for earmarking 4.4+4.4 MHz spectrum in all 37 districts in Bihar to M/s Dishnet DSL Limited and the file was sent to accused Late Dr. J. S. Sarma, who was competent to approve the allotment of startup spectrum on 17.06.2005. Accused Late Dr. J. S. Sarma, in connivance with Sh. Dayanidhi Maran, did not approve the proposal and sent back the file to Sh. P. K. Garg, the then Wireless Advisor on 28.06.2005 mentioning that there was
CBI Vs. Dayanidhi Maran & others Page 12 of 424 another file on the same subject and also directed to put up a consolidated note. DoT officials including Wireless Advisor and Member (T) again recommended for earmarking of initial 4.4+4.4 MHz spectrum in 1800 MHz to M/s Dishnet DSL Limited and sent the file to accused (Late) Dr. J. S. Sarma, by then he was promoted to the rank of Secretary (T) on 13.07.2005. Accused (Late) Dr. J. S. Sarma instead of according approval raised frivolous query with regard to the stage of network planning and again sent back the file to Sh. P. K. Garg, Wireless Advisor, on 26.07.2005. It is further alleged that accused (Late) Dr. J. S. Sarma instructed Sh. P. K. Garg to get the complete information about network planning and identification of sites etc. and then put up the file again to him (Dr. J. S. Sarma) only when the former would call for the same. Accused (Late) Dr. J. S. Sarma called for the file only in January 2006 when Sh. C. Sivasankaran sold the company to M/s Maxis Communications Bhd., Malaysia and the file was approved on 03.02.2006. (vi) Delay in allocation of additional spectrum to M/s Aircel Cellular Limited in Chennai metro 27. It is alleged that M/s Aircel Cellular Limited sent a letter dated 11.07.2005 to Sh. P. K. Garg, Wireless Advisor, intimating that their VLR subscriber base has crossed 5 lacs and requested for allotment of 1.8 MHz + 1.8 MHz of contiguous band for both uplink and downlink communication in the GSM 1800 MHz band. This letter was processed in file No. L-14043/3/2005-NTG with unanimous positive recommendations of officials of WPC wing of DoT. The file was
CBI Vs. Dayanidhi Maran & others Page 13 of 424 sent to Sh. P. K. Garg, Wireless Advisor, on 23.07.2005. 28. It is further alleged that Sh. P. K. Garg kept the said file pending with him at the verbal instructions of accused (Late) Dr. J. S. Sarma. Eventually, the additional spectrum to M/s Aircel Cellular Limited was allocated by accused Late Dr. J. S. Sarma, the then Secretary (T), on 19.01.2006, that is, after sale of M/s Aircel Cellular Limited to M/s Maxis Communications Bhd., Malaysia. (vii) Representations submitted by the company 29. It is alleged that various issues of M/s Dishnet DSL Limited were pending with DoT. Hence, M/s Dishnet DSL Limited submitted two representations dated 17.08.2005 and 30.09.2005 to Dr. J. S. Sarma, Chairman, Telecom Commission & Secretary (T), seeking redressal of the representations. These representations were processed in file No. 20-231/2005-BS-III. Accused Late Dr. J. S. Sarma, the then Secretary (T), marked the file to Sh. Yashwant Bhave, the then Additional Secretary (T), for comments on 15.09.2005 who offered his comments on 05.06.2006, that is, after a gap of about 216 days. The statement of Sh. Yashwant Bhave has been got recorded under Section 164 CrPC before the Magistrate in which he has categorically stated that he held the file with him on the oral directions of accused (Late) Dr. J. S. Sarma. (viii) Delay in grant of approval to (a) change of name from RPG Cellular Services Limited to Aircel Cellular Limited; (b) to approve the purchase of 20.76% shareholding of foreign partner namely M/s Siva Cellular Holdings Limited in Aircel Televentures Limited by Aircel
CBI Vs. Dayanidhi Maran & others Page 14 of 424 Televentures Limited to make it 100% Indian company; (c) taking on record the name change from Srinivas Computers Limited to Aircel Televentures Limited. 30. It is alleged that M/s Aircel Cellular Limited made a request vide letter dated 26.02.2004 to DoT for taking on record the change of name from RPG Cellular Services Limited to M/s Aircel Cellular Limited. The applicant enclosed a copy of fresh certificate of incorporation consequent upon change of name issued by Registrar of Companies, Chennai, on 23.01.2004. 31. M/s Aircel Cellular Limited submitted an application dated 21.06.2004 to DoT mentioning that Sterling Infotech Group (SIG) holds 100% stake in Aircel Cellular Limited as under: (a) 79.24% of the shares of ACL is held by Aircel Televentures Limited (b) 20.76% of the shares of ACL is held by Siva Cellular Holdings Limited, formerly Airtouch International (Mauritius) Limited 32. The applicant further mentioned that ATVL is buying the entire 20.76% of ACL's equity held by SCHL and for which ATVL had already obtained the approval from Reserve Bank of India. It further mentions that ATVL now holds 100% of the equity share capital of ACL. The applicant requested DoT to take note of it and update the records accordingly. 33. M/s Aircel Televentures Limited submitted an application dated 21.06.2004 to DoT mentioning that the name of Srinivas Computers Limited has been changed to Aircel
CBI Vs. Dayanidhi Maran & others Page 15 of 424 Televentures Limited w.e.f 28.04.2004. A copy of fresh certificate of incorporation dated 28.04.2004 issued by ROC, Chennai, was also enclosed with the application. The applicant requested for taking on record the name change from Srinivas Computers Limited to Aircel Televentures Limited. M/s Aircel Cellular submitted an application dated 28.06.2004 to DoT requesting for approval for change of equity in Aircel Cellular Limited. M/s Aircel Digilink India Limited (ADIL) was the proposed equity holder. 34. The above referred request letters were examined in file No. 842-21/01-VAS-III by the DoT officers and the file was sent to Sh. Dayanidhi Maran on 14.01.2005 with unanimous recommendation for approval of the aforesaid proposals. However, accused Sh. Dayanidhi Maran dishonestly did not grant approval and the file was returned on 03.03.2005 by Sh. K. Sanjay Murthy, PS to MOC&IT, to Secretary (T) with the remark that reports on mergers and acquisitions are awaited. It is further alleged that M/s Aircel Cellular Limited vide its letter dated 07.03.2005 informed the DoT that they are withdrawing the application for change of shareholding pattern with immediate effect. 35. The aforesaid requests were again processed and submitted for approval and the file was sent to accused (Late) Dr. J. S. Sarma, the then Secretary (T), on 06.09.2005 for approval, who raised certain queries on 20.09.2005, which were complied with by the DoT officers and the file was again put up to him on 01.10.2005. Accused (Late) Dr. J. S. Sarma desired a discussion with Sh. R. N. Prabhakar, the then Advisor
CBI Vs. Dayanidhi Maran & others Page 16 of 424 (P), and after having discussion directed to prepare a brief consolidated note which was complied with and the file was again put up to him through Advisor (P) on 09.11.2005. Then, accused (Late) Dr. J. S. Sarma approved the above referred three recommendations on 10.11.2005. The delay caused in giving the approvals to the aforesaid proposals is a clear manifestation of the conspiracy hatched by the accused persons. (ix) Delay in provisioning of POIs by BSNL to M/s Dishnet DSL Limited 36. It is alleged that provisioning of Point of Interconnects (POIs) by BSNL to M/s Dishnet DSL Limited was delayed for a period of three to seven months in Himachal Pradesh (7 months), NE-I (3 months) and Orissa (3 months) service areas due to an email dated 06.05.2005 of Sh. Mahipal Singh, joint DDG (Regulation 1), BSNL Corporate Office, New Delhi. Sh. Mahipal Singh and Sh. K. S. Guliani, the then DDG, took plea that the aforesaid email dated 06.05.2005 was sent at the advice of Sh. A. K. Sinha, the then CMD, BSNL. There is no such written instruction on the file from Sh. A. K. Sinha, who denied having given any such instructions to Sh. K. S. Guliani, orally or in writing. However, the statements of Sh. Mahipal Singh and Sh. K. S. Guliani have been got recorded under Section 164 CrPC before the Magistrate. Both Sh. K. S. Guliani and Sh. Mahipal Singh have stated before the Magistrate that the instructions to withhold the POIs of M/s Dishnet Wireless Limited were issued at the instance of Sh. A. K. Sinha, the then CMD, BSNL, as Sh. Dayanidhi Maran would be furious if
CBI Vs. Dayanidhi Maran & others Page 17 of 424 provisioning of POIs to M/s Dishnet DSL Limited is done. 37. However, there is no documentary evidence to prove the allegation that email dated 06.05.2005 was sent to the field offices of BSNL which led to delay in POI connection to M/s Dishnet DSL Limited at the instance of Sh. A. K. Sinha.
Files being called by the Minister 38. It is further alleged that accused Sh. Dayanidhi Maran verbally called for the files of M/s Dishnet DSL Limited in which LOIs for eight service areas for grant of UAS Licence were approved and the file for change of name of the company, for perusal through his PS on 21.12.2004. Accordingly, the following files were sent to accused Sh. Dayanidhi Maran through Sh. Nripendra Misra, the then Secretary (T), on 24.12.2004: (i) F. No. 20-231/2003-BS-III (containing the grant of LOIs for eight initial circles to M/s Dishnet DSL Limited) (ii) F. No. 20-231/2003-BS-III/Pt (iii) F. No. 20-225/04-Genl Mts/Dishnet/BS-III (containing the application of M/s Dishnet DSL Limited for taking on record the name change) 39. These files remained with accused Sh. Dayanidhi Maran till 30.03.2005 and thereafter he dishonestly linked the grant of UAS licence to the show cause notices/ advisory letters issued to M/s Dishnet DSL Limited or its group companies. 40. It is further alleged that on the date of linking the issuance of UAS licence with show cause notices/ advisories, accused Sh. Dayanidhi Maran was aware of the fact that Sh. O. P. Nahar, the then Legal Advisor (T), had already given a legal
CBI Vs. Dayanidhi Maran & others Page 18 of 424 opinion dated 11.01.2005 in the matter which stipulated that the defaults in one licence could not hamper grant of other licences.
Case of Essar Spacetel (P) Limited 41. It is further alleged that M/s Essar Spacetel (P) Limited filed applications for grant of UAS Licences for Assam, Bihar, Orissa, HP, J&K, North-East and Madhya Pradesh service areas in the month of December 2004. These applications were being processed in file No. 20-231/2004-BS- III (Vol. 4). These applications were thoroughly examined by DoT officials and were found in order. Sh. B. Sivaramakrishnan, Member (P), also examined the case and on 01.07.2005 reported that in case of another company namely M/s Dishnet Wireless Limited the LOI of new licences have not been given on account of similar reasons. He opined that issuance of LOI for UASL should not be linked with the violations in other agreements. He recommended that a view may be that the LOI need not be held up in such cases wherein parallel action is already going on the erring companies with regard to licence conditions violations and actions will necessarily be taken as per the final decisions that will be arrived at. This view was in consonance with the legal opinion dated 11.01.2005 of Sh. O. P. Nahar, LA (T), obtained in the matter of M/s Dishnet DSL Limited. Sh. B. Sivaramakrishnan, Member (P), marked his note to accused (Late) Dr. J. S. Sarma, Secretary (T), who desired a discussion. Accordingly, a discussion took place in the chamber of accused (Late) Dr. J. S. Sarma on 22.07.2005 which
CBI Vs. Dayanidhi Maran & others Page 19 of 424 was also attended by Sh. P. K. Mittal, DDG (BS). During discussion, the case of M/s Dishnet DSL Limited was also referred to and the legal advice dated 11.01.2005 of Sh. O. P. Nahar was apprised to accused (Late) Dr. J. S. Sarma. However, accused (Late) Dr. J. S. Sarma dishonestly did not concur with the view of Sh. B. Sivaramakrishnan, Member (P), and directed to have the details of all show cause notices/ advisory letters issued to sister concerns of applicant company and nature of default. This direction of accused (Late) Dr. J. S. Sarma was recorded by Sh. P. K. Mittal, DDG (BS), on 25.07.2005 and VAS cell was directed to do the needful in the matter. 42. The direction of accused (Late) Dr. J. S. Sarma was with dishonest intention and in connivance with accused Dayanidhi Maran, since if he would have concurred with the view of Sh. B. Sivaramakrishnan, Member (P), for the issuance of LOI to M/s Essar Spacetel (P) Limited, it would have positive impact on the pending applications for UASL of M/s Dishnet DSL Limited. Guidelines for Unified Access Service Licence: Non- compliance 43. It is alleged that a guideline for Unified Access Services Licence was issued vide order No. 808-26/2003-VAS dated 11.11.2003. This guideline does not stipulate linking show cause notices or advisory issued to the applicant company or its sister concern or its associates from the processing of grant of any further UAS licences in other service areas or processing of any request such as change of name etc. It is further alleged that the format of basic service licence application was adopted
CBI Vs. Dayanidhi Maran & others Page 20 of 424 for processing of application of grant of new UAS licence. The time limit prescribed for processing of application of basic services was inherently adopted. The guideline for grant of Basic Services was issued by DoT on 25.01.2001 with the approval of the then MOC&IT. As per clause 12 of the said guideline dated 25.01.2001, the application was to be decided so far as practicable, within 15 days of the submission of the application and the applicant company should be informed accordingly. 44. The guideline dated 11.11.2003 for grant of UASL was revised with the approval of accused Sh. Dayanidhi Maran on 13.12.2005. It also does not stipulate linking show cause notices or advisory issued to the applicant company or its sister concern or its associates from the processing of grant of any further UAS licenses in other service areas or processing of any request such as change of name etc. On the other hand, such applications were to be decided within 30 days of the submission of the application as far as practicable. It is alleged that accused Sh. Dayanidhi Maran and accused Late Dr. J. S. Sarma dishonestly and fraudulently violated the guidelines for issuance of UAS Licences.
B. Allegations relating to transfer/ acquisition of companies by Maxis Constricted business environment and pressure to sell 45. It is alleged that no regulatory approvals for various issues of M/s Aircel Limited/ M/s Dishnet DSL Limited were forthcoming from DoT which led to constricting the business
CBI Vs. Dayanidhi Maran & others Page 21 of 424 environment for Siva group of companies. Besides, accused Dayanidhi Maran and his brother accused Sh. Kalanithi Maran also put pressure on Sh. C. Sivasankaran to exit from telecom business completely.
Contact by Standard Chartered Bank and negotiations 46. It is alleged that the Standard Chartered Bank (SCB) had been assisting M/s Maxis Communications Bhd., Malaysia to acquire telecom business in India since middle of 2004. It is further alleged that M/s Maxis Communications Bhd., Malaysia was interested to look at an acquisition of M/s Aircel Limited. M/s Maxis Communications Bhd., Malaysia in consultation with SCB prepared a draft offer for M/s Aircel Limited. SCB contacted and discussed the offer with Sh. C. Sivasankaran, promoter of Siva Group. SCB got the feedback from Sh. C. Sivasankaran through an e-mail dated 17.10.2005. The key points of the feedback were as under:- (a) Needs a discussion with Ralph Marshall of Maxis to ascertain whether the blessings has been received for regulatory approvals. (b) Valuation expectation of US$850 million enterprise value. 47. From the said email, it is apparent that Sh. C. Sivasankaran had a concern with regard to regulatory approvals. Sh. C. Sivasankaran met accused Sh. Ralph Marshall of Maxis in Kuala Lumpur on 04.11.2005. Accused Sh. Ralph Marshall conveyed to Sh. C. Sivasankaran that he had full support of accused Sh. Dayanidhi Maran and it is in his interest
CBI Vs. Dayanidhi Maran & others Page 22 of 424 to 100% stake in the company to M/s Maxis Communications Berhad. Sh. C. Sivasankaran mentioned that he had no desire to sell more than 74% stake and that is also the law of India that no foreign company can buy more than 74% stake in Indian telecom company. Sh. C. Sivasankaran also spoke to promoter and owner of M/s Maxis Communications Bhd., Malaysia, namely Sh. T. Ananda Krishnan who also mentioned on pone that he was very close to accused Sh. Dayanidhi Maran and his brother Sh. Kalanithi Maran, and advised Sh. C. Sivasankaran to follow the instructions of accused Sh. Augustus Ralph Marshall and Maran brothers. 48. Thereafter, negotiations between M/s Maxis Communications Bhd., Malaysia and M/s Aircel Limited stated taking place. Sh. V. Srinivasan of Siva group sent an email dated 10.11.2005 to Sh. Ralph Marshall. It reads as under: 'We will transfer the available licences and frequency spectrum on an “as is where is basis” on closing. We will have no obligations to procure the balance licences of frequency spectrum. For the avoidance of doubt, we have clarified that obtaining regulatory approvals is the Buyer's responsibility.' 49. It is further alleged that Siva group did not want to take the responsibility of obtaining regulatory approvals as accused Sh. Dayanidhi Maran had choked the business environment for Siva group of companies.
Intervention by Maran brothers 50. It is alleged that accused Sh. Kalanithi Maran called Sh. C. Sivasankaran to his office in Chennai on 12.11.2005. This
CBI Vs. Dayanidhi Maran & others Page 23 of 424 meeting was organized by accused Sh. Ralph Marshall. Accused Sh. Kalanithi Maran asked Sh. C. Sivasankaran to sell 100% stake in M/s Aircel Limited to M/s Maxis Communications Bhd., Malaysia. Sh. C. Sivasankaran pleaded mentioning about the government rules and also it was in his interest to keep 26% equity so that he could participate in the growth of the company. Sh. Kalanithi Maran said that M/s Maxis Communications Bhd., Malaysia, would find the Indian partner who would hold 26% stake. During the meeting on 12.11.2005, accused Sh. Kalanithi Maran also mentioned that his brother Sh. Dayanidhi Maran will call him. Later in the evening, Sh. C. Sivasakaran received a call on his mobile phone from Sh. Dayanidhi Maran, who told him in no uncertain terms that he had no choice but to sell 100% stake in M/s Aircel Limited, M/s Aircel Cellular Limited and M/s Dishnet Wireless Limited to M/s Maxis Communications Bhd., Malaysia as nothing else would meet with his approval.
Structure of companies to be sold 51. The structure of telecom companies of Sh. Sivasankaran at the time of their proposed acquisition/ acquisition by M/s Maxis Communications Bhd. was as under:
Aircel Televentures Limited
100%
Aircel Limited
100% 100%
CBI Vs. Dayanidhi Maran & others Page 24 of 424 Aircel Cellular Limited Dishnet Wireless Limited
Negotiations with Ralph Marshall and signing of agreements 52. It is further alleged that on the same day, that is, 12.11.2005, in the evening Sh. C. Sivasankaran met accused Sh. Augustus Ralph Marshall at Club Lounge of Taj Coromandel Hotel, Chennai. During the meeting, accused Sh. Augustus Ralph Marshall confirmed that the sale had to be for 100% equity stake in Aircel Limited, Aircel Cellular Limited and Dishnet Wireless Limited and Maxis would on their own identify an Indian partner to hold 26% equity. It is further alleged that on 16.11.2005, accused Sh. Ralph Marshall of Maxis sent four final offers to Sh. C. Sivasankaran and asked him to choose one from them. The final offers were as under:
Parameters Final offer Final offer Final offer Final offer (US $ m) A B C D Upfront Buyer Investment Money paid to 520 800 900 800 seller Money into 280 280 - - company Total 800 1080 900 800 investment Other payments Call/Put Upside sharing - Free Warrants to Buyer to options, if Seller exercised % Buyer 74% 100% 100% 100% ownership after transaction % Seller 26% 0% 0% 0% ownership after transaction
CBI Vs. Dayanidhi Maran & others Page 25 of 424 53. Sh. Srinivasan vide an email dated 18.11.2005 to SCB confirmed the acceptance of offer B and also forwarded a draft of the Share Purchase Agreement. 54. It is further alleged that the agreement for sale of 100% equity of M/s Aircel Televentures Limited (ATVL) in M/s Aircel Limited was signed with M/s Maxis Communications Bhd., Malaysia on 26.12.2005 in Kuala Lumpur, Malaysia. The agreement came to be effective from 30.12.2005. Sh. V. Srinivasan signed the said agreement on behalf of ATVL and accused Sh. Ralph Marshall signed on behalf of M/s Maxis Communications Bhd., Malaysia. At the time of signing the agreements in Kuala Lumpur, M/s Maxis Communications Bhd., Malaysia informed Sh. C. Sivasankaran that 26% equity of M/s Aircel Limited would be held by M/s Sindya Securities and Investments (P) Limited, a company owned and controlled by Ms. Suneeta Reddy and her husband Sh. Dwarkanath Reddy of Apollo group.
Investment made by M/s Maxis Communications Bhd., Malaysia 55. It is alleged that M/s Global Communications Services Holdings Limited (GCSHL), Mauritius, (a 100% subsidiary of M/s Maxis) had subscribed to 26% equity in M/s Aircel Limited on 5th January 2006 under automatic route for a consideration of US$ 280 million into the company. It is further alleged that upon receipt of FIPB approval, M/s GCSHL directly acquired further 39% equity stake in M/s Aircel Limited on 21.03.2006 from ATVL by paying consideration of
CBI Vs. Dayanidhi Maran & others Page 26 of 424 US$ 422 million (Rs. 1881.02 crore) to ATVL. 56. It is further alleged that M/s Deccan Digital Networks (P) Limited, which was a joint venture between M/s GCSHL, Mauritius, and M/s Sindya Securities and Investments (P) Limited (the Indian partner of M/s Maxis Communications Bhd., Malaysia) acquired 35% equity stake in M/s Aircel Limited on 21.03.2006 by paying a consideration of US$ 378 million (Rs. 1684.89 crore) to ATVL. The funding of the investment by M/s Deccan Digital Networks (P) Limited in M/s Aircel Limited is given below: i) M/s GCSPL- US$ 2.57 million (towards 25.714 % equity shares in M/s Deccan Digital Networks (P) Limited, which indirectly gives 8.999% equity stake in M/s Aircel Limited ii) M/s Sindya Securities & Investments (P) Limited- US$ 7.43 million (towards 74.286% equity shares in M/s Deccan Digital Networks (P) Limited, which indirectly gives 26.001% equity stake in M/s Aircel Limited iii) M/s South Asia Communication (P) Limited (a 100% subsidiary of M/s GCSHL, Mauritius)- US$ 368 million (towards subscription of non-convertible redeemable preference shares in M/s Deccan Digital Networks (P) Limited This structure provides M/s GCSHL, Mauritius, an equity share of 73.999% in M/s Aircel Limited and an economic interest of 99.3% in M/s Aircel Limited. 57. It is further alleged that FIPB approval was granted on 13.03.2006 by the then Finance Minister and a letter dated
CBI Vs. Dayanidhi Maran & others Page 27 of 424 20.03.2006 was sent to M/s Aircel Limited conveying the approvals of the Government to M/s Global Communications Services Holdings Limited, Mauritius. It is further alleged that Finance Minister was competent to accord approval on project proposals up to Rs. 600 crore and beyond that it requires the approval of Cabinet Committee on Economic Affairs (CCEA). In the instant case, the approval for FDI of 800 million USD was sought. Hence, CCEA was competent to grant approval. However, it was not obtained. It is further alleged that M/s Aircel Cellular Limited and M/s Dishnet Wireless Limited (both wholly owned subsidiaries of M/s Aircel Limited) was also granted confirmatory FIPB approval taking note of the aggregate FDI of 73.99% in Aircel Cellular Limited and in Dishnet Wireless Limited. The approval was conveyed by letter dated 20.10.2006 of FIPB unit, Department of Economic Affairs, New Delhi.
C. Allegations relating to smooth approvals 58. It is alleged that after execution of the agreement for sale, there was change of attitude of accused (Late) Dr. J. S. Sarma and accused Sh. Dayanidhi Maran towards the various pending applications for UAS licences and other proposals of the companies and regulatory approvals were acceded to thereafter. The details thereof are as under: (i) De-linking of show cause notices 59. It is alleged that accused (Late) Dr. J. S. Sarma, the then Secretary (T), took steps for delinking show cause notices from the processing the applications for grant of new licence at
CBI Vs. Dayanidhi Maran & others Page 28 of 424 the end of December, 2005, that is, after the negotiations for sale of M/s Aircel Limited to M/s Maxis Communications Bhd., was concluded. It is further alleged that as per oral directions of accused (Late) Dr. J. S. Sarma, a proposal for delinking show cause notices from the processing of applications of grant of new licence was initiated on 27.12.2005 by Sh. R. K. Gupta, ADG (BS-III) in file No. 20-231/2005/BS-III/Vol. II. He prepared a self contained note explaining different pending applications of different companies and reasons of pendency, the legal opinion suggesting that linking of licences with show cause notices will not withstand legal scrutiny. 60. It is also alleged that accused (Late) Dr. J. S. Sarma directed to have a discussion which took place on 13.01.2006. It was chaired by Secretary, (DoT), and attended by other DoT officials. It was felt that processing of application for grant of new licences should be delinked from show cause notices or explanation called for or any other advisory issued to that company or any other sister/ group company in respect of any other licence. Accordingly, Sh. P. K. Mittal put up a note on 19.01.2006. Thereafter, the said note was seen and signed by other DoT officials including accused (Late) Dr. J. S. Sarma, Secretary (T). The said file containing the proposal for delinking was sent to accused Sh. Dayanidhi Maran on 27.01.2006. It remained pending till 16.05.2006 when Sh. Dayanidhi Maran approved the proposal for delinking the process of UASL from the show cause notices. It is further alleged that M/s Maxis Communications Bhd., Malaysia, obtained FIPB approval on 20.03.2006 and accused Sh. T.
CBI Vs. Dayanidhi Maran & others Page 29 of 424 Ananda Krishnan and other officials of M/s Maxis Communications Bhd., visited Chennai and inspected the office of M/s Aircel Limited on 30.01.2006. 61. It is further alleged that the decision to delink the processing of application for grant of new licences from show cause notices or explanation called for or any other advisory issued to that company or any other sister/ group company in respect of any other licence was taken on the strength of legal opinion dated 11.01.2005 of Sh. O. P. Nahar, the then LA (T). This legal opinion dated 11.01.2005 was already brought to the notice of accused Sh. Dayanidhi Maran on 24.01.2005, which was dishonestly and fraudulently ignored by accused Sh. Dayanidhi Maran in order to delay the grant of UAS Licences to M/s Dishnet DSL Limited. It is further alleged that accused Sh. Dayanidhi Maran granted approvals for UAS Licences to M/s Dishnet DSL Limited in seven service areas and other pending issues after its acquisition by M/s Maxis Communications Bhd., Malaysia. The details are as under: (ii) Approval granted for issue of LOI to M/s Dishnet Wireless Limited after acquisition by M/s Maxis Communications Bhd. 62. It is alleged that M/s Dishnet Wireless Limited and M/s Aircel Cellular Limited obtained confirmatory FIPB approval on 20.10.2006. Thereafter, Sh. R. K. Gupta, the then ADG (AS-I), initiated a note on 08.11.2006 in file No. 20- 231/2003-BS-III (Vol III) mentioning that on 16.05.2006, the then MOC&IT has approved the issue of delinking from the show cause notices for explanation called for or any other
CBI Vs. Dayanidhi Maran & others Page 30 of 424 advisory issued to the applicant company or any other sister/ group company in respect of any other licence. He recommended for approval for issue of LOI to M/s Dishnet Wireless Limited for award of UASL in respect of Punjab, Haryana, Kerala, Kolkata, UP(E) and UP(W). He also recommended for amendment to the LOI issued on 20.04.2004 to M/s Dishnet in respect of MP. 63. The file was sent to accused Sh. Dayanidhi Maran for approval by the then Secretary (T) on 21.11.2006 and the approval was granted on 22.11.2006. (iii) Approval granted for taking on record for change of name from M/s Dishnet DSL Limited to Dishnet Wireless Limited 64. It is alleged that Sh. S. A. Malik, AD (BS-III), initiated a note on 29.06.2006 in file No. 20-225/04-Genl Mts/ Dishnet/BS-III mentioning that M/s Dishnet DSL Limited has changed its name to M/s Dishnet Wireless Limited. He further mentioned that the issue of change of name is long pending because it got linked with issue of new UAS licences where an overall view on the inter-related issues between merger and acquisition, licensing, FDI and FII investment in holding companies and their sister concerns was to be taken. He further mentioned that AS (T) returned all the linked files for further necessary action on 05.06.2006. He recommended that the change of name of M/s Dishnet DSL Limited to M/s Dishnet Wireless Limited may be taken on record. The file was sent to accused late Dr. J. S. Sarma, who approved the same on 30.06.2006.
CBI Vs. Dayanidhi Maran & others Page 31 of 424 (iv) Approval granted to take on record change of name of the promoter (of M/s Aircel Limited) M/s Srinivas Computers Limited to M/s Aircel Televentures Limited 65. It is alleged that Sh. A. K. Dhar, ADG (VAS-I), initiated a note dated 03.11.2005 in file No. 842-325/2000- VAS mentioning that M/s Aircel Televentures Limited, promoter of M/s Aircel Limited had applied for change of name of the promoter, M/s Srinivas Computers Limited to M/s Aircel Televentures Limited. The Registrar of Companies, Chennai, had issued the certificate on 28.04.2004 and the company intimated this change by letter dated 21/22.06.2004. He also mentioned that the company had also requested for transfer of its entire 100% equity to M/s Aircel Digilink India Limited. However, subsequently the company withdrew its application for transfer of its 100% equity to M/s Aircel Digilink India Limited. 66. The file was sent to accused (Late) Dr. J. S. Sarma on 09.11.2005, who approved the proposal of change of name of the promoter from M/s Srinivas Computers Limited to M/s Aircel Televentures Limited on 10.11.2005. (v) Allocation of startup spectrum to M/s Dishnet DSL Limited in Bihar telecom service 67. It is alleged that accused (Late) Dr. J. S. Sarma, the then Secretary (T), called for the file No. L-14047/02/2004- NTG of WPC wing in the month of January, 2006 wherein the application dated 24.05.2004 of M/s Dishnet DSL Limited for allocation of GSM spectrum in Bihar service area was processed. Accordingly, the file was put up to him by Wireless
CBI Vs. Dayanidhi Maran & others Page 32 of 424 Advisor on 02.02.2006 and the approval for allotment of initial 4.4 + 4.4 MHz of GSM spectrum in 1800 MHz band to M/s Dishnet Wireless Limited in Bihar service area was granted on 03.02.2006. (vi) Allocation of additional spectrum to M/s Aircel Cellular Limited in Chennai metro 68. It is alleged that accused (Late) Dr. J. S. Sarma also called for the file No. L-14043/3/2005-NTG of WPC wing in the month of January, 2006 wherein the application dated 11.07.2005 of M/s Aircel Cellular Limited for allocation of additional spectrum in Chennai metro was processed. Accordingly, the file was put up to him by Wireless Advisor on 17.01.2006 and the approval for allotment of additional 1.8 + 1.8 MHz spectrum in 1800 MHz GSM band to M/s Aircel Cellular Limited for Chennai metro was granted on 18.01.2006. (vii) No query/ objection was raised by Sh. D. Maran, the then MOC&IT, to the proposal of foreign investment of M/s Global Communication Services Holdings Limited, Mauritius, in M/s Aircel Limited 69. It is alleged that Sh. Ram Sharan, Under Secretary, Foreign Investment Promotion Board, Department of Economic Affairs, Ministry of Finance, New Delhi, forwarded a copy of the above referred application filed by Sh. Sumesh Sawhney to Sh. N. P. Singh, Deputy Director General, DoT, Sanchar Bhawan, New Delhi, vide office memorandum No. 35/FC/2006 dated 01.02.2006 for comments. It was processed in file No. 12-7/06-IP of DoT. Sh. Yashwant Bhave, the then Additional Secretary (T), recommended that the proposal may
CBI Vs. Dayanidhi Maran & others Page 33 of 424 be supported and sent the file to accused Dr. J. S. Sarma on 04.03.2006, who also supported the proposal and sent the file to accused Sh. Dayanidhi Maran for approval. No query was raised by accused Sh. Dayanidhi Maran in the matter. Sh. K. Sanjay Murthy, the then PS to MOC&IT, conveyed the approval of Sh. Dayanidhi Maran to Dr. J. S. Sarma on 06.03.2006. 70. It is further alleged that accused Sh. Dayanidhi Maran, the then MOC&IT, had raised queries to the proposals of M/s Aircel Limited, when it was in the hands of Sh. C. Sivasankaran, for change in equity in the month of August, 2004 and had also ignored the legal opinion dated 11.01.2005 in the month of March, 2005. It reflects that accused Dayanidhi Maran acted dishonestly at that time. (viii)Dilution of Terms of Reference (ToRs) 71. It is alleged that in the month of November, 2005, the Hon'ble Prime Minister approved, in principle, the constitution of Group of Ministers for looking into the entire gamut of allocation of spectrum to mobile operators. The Planning Commission was requested to suggest detailed Term of Reference (ToR) for the proposed GoM. The Planning Commission sought the inputs from (Late) Dr. J. S. Sarma for the ToR of GoM at the earliest. Sh. Paran Kumar Garg, the then Wireless Advisor, DoT, proposed a draft ToR for GoM on 09.01.2006, which included spectrum pricing policy and spectrum allocation policy. It is also alleged that Planning Commission forwarded a draft ToR to (Late) Dr. J. S. Sarma on 10.01.2006 which also included spectrum pricing policy and spectrum allocation policy. However, accused Sh. Dayanidhi
CBI Vs. Dayanidhi Maran & others Page 34 of 424 Maran did not agree with the draft ToR prepared by Sh. Pawan Kumar Garg. He dishonestly excluded spectrum pricing policy and spectrum allocation policy from ToR and (Late) Dr. J. S Sarma forwarded the ToR as approved by accused Sh. Dayanidhi Maran to PMO on 10.01.2006. 72. It is alleged that PMO approved the ToRs on spectrum related issues on 14.02.2006, which included spectrum pricing policy. However, it did not include spectrum allocation policy. The Cabinet Secretariat constituted the GoM on 23.02.2006. Accused Dayanidhi Maran sent a DO letter dated 28.02.2006 to the Prime Minister citing reference of his meeting with the PM on 01.02.2006 and mentioned that the GoM as constituted had much wider ToR, some of which impinge upon the work normally to be carried out by DoT. He requested to modify the ToR as suggested by him and also enclosed a copy of the draft ToR which was already forwarded to PMO by (Late) Dr. J. S. Sarma on 10.01.2006. The said proposed ToR of DoT did not include spectrum pricing policy. 73. It is further alleged that accused Sh. Dayanidhi Maran again addressed a DO letter dated 16.11.2006 to the Prime Minister requesting for revision of ToR as prepared by DoT. The ToRs as proposed by accused Sh. Dayanidhi Maran were approved by PMO. Hence, it is evident that accused Sh. Dayanidhi Maran dishonestly advised PMO to exclude the spectrum pricing from the ToRs in order to benefit M/s Maxis Communications Bhd., Malaysia, who had by then acquired M/s Aircel Limited, M/s Dishnet DSL Limited and M/s Aircel Cellular Limited. It is alleged that in the relevant time period,
CBI Vs. Dayanidhi Maran & others Page 35 of 424 few applications for grant of new licences and spectrum of said companies were pending at DoT as elaborated in this report.
D. Allegations relating to payment of bribe 74. It is alleged that M/s Astro All Asia Networks Plc., UK, through its wholly owned subsidiaries, subscribed to equity shares of M/s Sun Direct TV (P) Limited at premium and equity shares of M/s South Asia FM Limited at par. These two companies were promoted by accused Sh. Kalanithi Maran. It is further alleged that illegal gratification in the garb of share premium of M/s Sun Direct TV (P) Limited was received by Sh. Dayanidhi Maran through his brother Kalanithi Maran (promoter of M/s Sun Direct TV (P) Limited), the detail thereof is given as under: (i) FIPB approval to M/s Sun Direct TV (P) Limited 75. M/s Sun Direct TV (P) Limited was incorporated at Chennai on 16.02.2005. Sh. Dayanidhi Maran, the then MOC&IT, and Sh. Kalanithi Maran are real brothers. M/s Sun Direct TV (P) Limited was promoted by accused Sh. Kalanithi Maran and his wife Smt. Kavery Kalanithi. 76. M/s Sun Direct TV was granted DTH licence for DTH services in India by Ministry of Information and Broadcasting on 28.08.2006. M/s Sun Direct TV (P) Limited was granted Wireless Operating Licence by DoT on 21.06.2007 which was subsequently amended on 29.11.2007 and the MPVT test report was issued by Network Operational Control Centre (NOCC) which was received in DoT on 11.12.2007. Now onwards, M/s Sun Direct TV (P) Limited was in a position to
CBI Vs. Dayanidhi Maran & others Page 36 of 424 launch its services on 11.12.2007. 77. It is further alleged that M/s Sun Direct TV (P) Limited submitted an application dated 13.12.2006 to the Chairman, FIPB, New Delhi, for approval of issuance of equity shares as foreign direct investment to M/s South Asia Entertainment Holdings Limited (SAEHL), Mauritius, constituting up to 20% of the total issued, subscribed and paid up capital of the company, from time to time, by getting an investment of approx. US$ 150 million (Rs. 675 crore). In the application, accused Sh. Kalanithi Maran disclosed that M/s South Asia Entertainment Holdings Limited, a company incorporated in Mauritius, is a wholly owned subsidiary of Astro Overseas Limited, which, in turn, is a wholly owned subsidiary of Astro All Asia Networks, Plc (AAAN). It is also disclosed that AAAN was incorporated in England and Wales and is registered as a foreign company in Malaysia. The following facts have also been disclosed/ incorporated in the above referred application dated 13.12.2006 and its enclosures by accused Sh. Kalanithi Maran, Chairman of M/s Sun Direct TV (P) Limited: (a) The AAAN group of companies spends more than US$ 160 million on content annually and has formed several joint ventures with leading Indian content players, including Sun TV, UTV and NDTV, to create vernacular content for initial broadcast on its regional platforms, and eventually for global export. The AAAN group of companies is also the leading aggregator of interactive content for a host of new media and communications devices, including 3G
CBI Vs. Dayanidhi Maran & others Page 37 of 424 video streaming services, mobile TV channels as well as numerous interactive TV programmes. (b) AAAN is a public-listed company with the Usaha Tegas group and the Malaysian Government's investment arm, Khazanah Nasional, as its principal shareholders. (c) Accused Sh. Ralph Marshall is also Executive Director of Tanjong Public Limited Company which is involved in power generation, gaming and leisure; Non-Executive Director of Maxis Communications Bhd., and Executive Director of Usaha Tegas Sdn. Bhd., which has significant interests in the aforesaid companies. (d) Accused T. Ananda Krishnanwas having 42.49% indirect shareholding in Astro. Besides, he was also holding shares of Astro through Pan Ocean, EABNS, PBS, HVL and SIL. 78. It is further alleged that the proposal of M/s Sun Direct TV (P) Limited was considered by the FIPB in its meeting held on 12.01.2007. FIPB recommended the proposal for consideration and approval of the then Finance Minister and also for submitting the proposal for consideration of Cabinet Committee on Economic Affairs (CCEA) as the foreign investment in flow exceeds Rs. 600 crore. The CCEA considered the FDI proposals in the meeting held on 22.02.2007 and approved the proposal of foreign investment in M/s Sun Direct TV (P) Limited, Chennai. Accordingly, approval letter to M/s Sun Direct TV (P) Limited was issued vide letter dated 02.03.2007 under the signature of Sh. D. K. Singh, the then Director (FIPB). (ii) Investment in M/s Sun Direct TV (P) Limited by M/s
CBI Vs. Dayanidhi Maran & others Page 38 of 424 SAEHL 79. It is further alleged that shareholders agreement and share subscription agreement were executed by and among M/s SAEHL, Mauritius, and accused Sh. Kalanithi Maran and Smt. Kavery Kalanithi and M/s Sun Direct TV (P) Limited on 05.04.2007. The said agreements have been signed by accused Sh. Kalanithi Maran on behalf of M/s Sun Direct TV (P) Limited and in individual capacity too. Smt. Kavery Kalanithi has signed the said agreements in individual capacity and Sh. Raghvendra Madhav has signed on behalf of M/s South Asia Entertainment Holdings Limited, Mauritius. 80. As per shareholders' agreement, (clause C, page 3), M/s Sun Direct TV (P) Limited had an authorized share capital of 200,000,000 shares of which 150,000,000 are issued and fully paid up. As on the date of agreement, M/s Sun Direct TV (P) Limited was wholly owned by Maran group in the following proportions:
S. No. Shareholder Shareholding % of Share Capital 1 Kavery 123,000,000 82% Kalanithi 2 Kalanithi Maran 27,000,000 18% Total 150,000,000
81. As per the said agreement (clause F, page 4), SAEHL and the Maran group agreed that the authorized share capital of M/s Sun Direct TV (P) Limited shall comprise of 380,000,000 shares. SAEHL also agreed to subscribe to and M/s Sun Direct TV (P) Limited agreed to issue and allot to SAEHL 69,000,000 shares at a subscription price of Rs.
CBI Vs. Dayanidhi Maran & others Page 39 of 424 79.57/- per share and for an aggregate amount equivalent to Rs. 5,490,000,000/-. Accused Sh. Kalanithi Maran also agreed to subscribe to and M/s Sun Direct TV (P) Limited has agreed to issue and allot to accused Sh. Kalanithi Maran, 15,146,341 shares at a subscription price of Rs. 10/- per share and for an aggregate amount equivalent to Rs. 151,463,410/-. As per the said agreement (clause D, page 3), M/s Sun Direct TV (P) Limited was granted a DTH licence by the Ministry of Information and Broadcasting, Government of India, to prove DTH services in India. 82. It is further alleged that share subscription agreement was executed by and among accused Sh. Kalanithi Maran and Smt. Kavery Kalanithi and South Asia Entertainment Holdings Limited and M/s Sun Direct TV (P) Limited on 05.04.2007. The board of directors of SAEHL had on 01.12.2006 approved the subscription of an equity stake of 20% in M/s Sun Direct TV (P) Limited to (i) participate for a joint venture for the provision of Direct-to-home digital satellite pay-television services in India and (ii) authorize accused Sh. Ralph Marshall, or Sh. Grant Ferguson and Azran Osman-Rani (authorized persons) to negotiate, finalize and execute the share holders agreement, investment agreement and all other documents. 83. The details of investment made by SAEHL and the allotment of shares by M/s Sun Direct TV (P) Limited in favour of SAEHL till 30.09.2011 are as under:
Date Amount Received (in No. of Shares Rs.) Allotted 10.12.2007 315,71,32,309 3,96,77,420
CBI Vs. Dayanidhi Maran & others Page 40 of 424 02.04.2008 117,00,30,302 1,47,04,415 31.07.2008 87,28,99,689 1,09,70,211 30.09.2008 29,00,53,020 36,45,256 05.12.2009 49,99,99,999 62,83,775 19.04.2010 24,99,99,926 31,41,887 07.07.2011 5,00,00,000 6,28,377 TOTAL 629,01,15,245 7,90,51,341 Opinion/ valuation by M/s ENAM Securities (P) Limited of Sun Direct TV (P) Limited at the instance of Astro All Asia Network 84. It is alleged that M/s ENAM Securities (P) Limited, a registered merchant banker with SEBI, executed an engagement letter dated 07.05.2007 with M/s Astro All Asia Networks Plc to offer professional services as advisors to M/s South Asia Entertainment Holdings Limited through its holding company M/s Astro All Asia Networks Plc. M/s ENAM Securities (P) Limited was engaged by accused company M/s Astro All Asia Networks Plc. after the execution of shareholders agreement and share subscription agreement dated 05.04.2007 by and among M/s SAEHL, Mauritius, and accused Sh. Kalanithi Maran and Smt. Kavery Kalanithi and M/s Sun Direct TV (P) Limited. The scope of engagement was to provide an expert opinion giving a fairness certification to the board of directors of M/s Astro All Asia Networks Plc. on its proposed investment in M/s Sun Direct TV (P) Limited in accordance with customary practice as to the fairness, from a financial point of view of the subscription price to be paid pursuant to the DTH venture, in a form suitable for inclusion into Astro's circular to its shareholders in compliance with requirements of Bursa Securities, Malaysia Bhd. (Malaysian Stock Exchange). 85. ENAM's report specifies that they have based their
CBI Vs. Dayanidhi Maran & others Page 41 of 424 opinion on the business plan and had not made any independent verification of the same. It has also been mentioned in the report that this opinion was not intended to form the basis of any investment decision by Astro and does not purport to contain all the information that may be necessary or desirable to evaluate the proposed joint venture. This opinion was addressed strictly to the board of directors of Astro and was provided for the purpose of fulfilling the listing requirements of the Malaysian Stock Exchange. It revealed that no valuation of M/s Sun Direct TV (P) Limited was carried out prior to entry into the share subscription agreement and shareholder's agreement, both dated 05.04.2007. It is further alleged that the share premium price of M/s Sun Direct TV (P) Limited was decided by accused Sh. Ralph Marshall and accused Sh. Kalanithi Maran. (iii) Valuation of M/s Sun Direct TV (P) Limited by Bank of Baroda at the instance of CBI 86. During investigation, M/s BOB Capital Markets Limited, a SEBI registered category-I merchant banker was engaged by CBI vide engagement letter dated 06.08.2013 in order to advise the correct valuation of the shares of M/s Sun Direct TV (P) Limited as on 01.04.2007 as well as examine the correctness of the business plan, financial projections etc. of the business of M/s Sun Direct TV (P) Limited. 87. M/s BOB Capital Markets Limited has furnished a report bearing No. BCML/17/MB/2013/653 dated 02.09.2013. It has considered Discounted Cash Flow (DCF) Method to value the business of the company which was yet to launch the
CBI Vs. Dayanidhi Maran & others Page 42 of 424 services at the relevant date, that is, 01.04.2007. It has opined that the equity valuation of M/s Sun Direct TV (P) Limited as on 01.04.2007 in connection with the transaction on post money basis works out to Rs. 18,338 million (Rs. 1,833.8 crore) after considering the equity investment as per share subscription agreement and business plan and the pre money value of the company comes to Rs. 1,284.80 and the price of equity comes to Rs. 53.15 per share. 88. On the other hand, as per the share subscription agreement dated 05.04.2007, the post money value of the company, that is, M/s Sun Direct TV (P) Limited was taken as Rs. 2,745 crore and SAEHL subscribed equity shares at a price of Rs. 79.57 per share. For the purpose of ready reference, the details are tabulated as under:
Pre money Post money Price of equity value of Sun value of Sun of Sun Direct TV Direct TV (P) Direct TV (P) (P) Limited as Limited as on Limited as on on 01.04.2007 01.04.2007 01.04.2007 As per share Rs. 2,196 crore Rs. 2,745 crore Rs. 79.57 per share subscription agreement dated 05.04.2007 As per valuation Rs. 1,284.80 crore Rs. 1,833.8 crore Rs. 53.15 per share report of BOB Capital Markets Limited
Conclusion from the reports by CBI 89. From the above, it is evident that the investment made by M/s Astro All Asia Networks Plc., UK, through M/s SAEHL, Mauritius, in M/s Sun Direct TV (P) Limited was not a purely business driven investment but was illegal gratification
CBI Vs. Dayanidhi Maran & others Page 43 of 424 in the nature of quid pro quo in lieu of approvals granted by accused Sh. Dayanidhi Maran to M/s Maxis Communications Bhd., Malaysia, and M/s Aircel Limited, M/s Dishnet Wireless Limited and M/s Aircel Cellular Limited and that at least a portion of the premium of Rs. 26.42 per share was unjustified/ overvalued which was paid by M/s SAEHL, Mauritius, to M/s Sun Direct TV (P) Limited in the garb of equity subscription. As per share subscription agreement dated 05.04.2007, SAEHL agreed to subscribe to 69,000,000 equity shares at a price of Rs. 79.57/-.
Details of allotment of shares of Sun Direct TV (P) Limited to SAHEL 90. The details of allotment of equity shares of M/s Sun Direct TV (P) Limited to SAEHL are as under:
S. Name of No. of Price per Total Amount Date of No. the shares share board Allottee allotted meeting 1 SAEHL 3,96,77,420 Rs. 79.57 Rs. 315,71,32,309/- 10.12.2007 2 SAEHL 1,47,04,415 Rs. 79.57 Rs. 117,00,30,302/- 02.04.200 8 3 SAEHL 1,09,70,211 Rs. 79.57 Rs. 87,28,99,689/- 31.07.2008 4 SAEHL 36,45,256 Rs. 79.57 Rs. 29,00,53,020/- 30.09.200 8 5 SAEHL 62,83,775 Rs. 79.57 Rs. 49,99,99,977/- 05.12.2009 6 SAEHL 31,41,887 Rs. 79.57 Rs. 24,99,99,949/- 19.04.2010 7,84,22,964
Valuation of Tata Sky by CBI: A comparison 91. During investigation documents were collected regarding valuation of M/s Tata Sky Limited which was also in the same business as M/s Sun Direct TV (P) Limited. It is
CBI Vs. Dayanidhi Maran & others Page 44 of 424 alleged that M/s Tata Sky Limited, formerly known as M/s Space TV Limited, was incorporated on 09.01.2001 at Mumbai to provide Direct-to-Home (DTH) satellite subscription television service to TV viewers across India. It commenced its commercial operations from 15.08.2006. During 2006-07, M/s Tamasek Capital (P) Limited (an investing company of Singapore) entered into a negotiation with M/s Tata Sky Limited for subscription of its equity shares. In this context, the valuation of shares of M/s Tata Sky Limited as on 31.12.2006 was carried out in order to examine the proposal of issuing equity shares to new investor. The valuer submitted a valuation report dated 09.03.2007. The value per share of M/s Tata Sky Limited as per Discounted Cash Flow (DCF) method came to Rs. 26.04. The value for equity shareholders of M/s Tata Sky Limited came to Rs. 10319.92 million (Rs. 1031.992 crore). It is pre money valuation. 92. It is further alleged that M/s Tamasek Capital (P) Limited (an investing company of Singapore) subscribed to 5,14,80,000 equity shares at a price of Rs. 30/- per share. M/s Baytree (FII) was the investing company which infused a total sum of Rs. 154.44 crore in M/s Tata Sky Limited in order to own 10% of the increased share capital. NDDS, in order to maintain 20% shareholding in M/s Tata Sky Limited, subscribed to 1,28,70,000 equity shares at a price of Rs. 30/- per share in the month of May 2007. The total equity shares in M/s Tata Sky Limited after subscription as stated above by Tamasek and NDDS, came to 51,48,00,000. Hence, the post money valuation of the company based on Rs. 30/- per share
CBI Vs. Dayanidhi Maran & others Page 45 of 424 came to Rs. 1544.4 crore.
Conclusion by CBI 93. Considering the valuation report submitted by M/s BOB Capital (P) Limited and the valuation of M/s Tata Sky Limited, the overvalued share premium as decided by the accused persons namely Sh. Ralph Marshall and Sh. Kalanithi Maran is in the nature of quid pro quo. (iv) Investment in M/s South Asia FM Limited, Chennai (promoted by accused Sh. Kalanithi Maran) by M/s Astro All Asia Networks Plc., UK 94. It is alleged that M/s South Asia Software Technologies Limited, Mauritius (a subsidiary of M/s Astro All Asia Networks Plc.) invested a sum of Rs. 116,67,36,080/- (approx) in M/s Max Flexi Services (P) Limited, Hyderabad, during the period from December, 2006 to December, 2010. M/s Max Flexi Services (P) Limited further invested a sum of Rs. 103,05,79,000/- (approx) in M/s A. H. Multisoft (P) Limited, Hyderabad, (100% subsidiary of M/s Max Flexi Services (P) Limited) during the same period. It is further alleged that M/s A. H. Multisoft (P) Limited, Hyderabad, invested a sum of Rs. 96,78,49,000/- (approx) in M/s South Asia FM Limited, Chennai (a subsidiary of M/s Sun Direct TV Network Limited, promoted by Sh. Kalanithi Maran) during the period from February, 2007 to December 2010. 95. It is further alleged that M/s South Asia Multimedia Technologies Limited (a subsidiary of M/s Astro All Asia Networks Plc.) invested a sum of Rs. 82,93,58,030/- (approx)
CBI Vs. Dayanidhi Maran & others Page 46 of 424 in M/s South Asia FM Limited (a subsidiary of M/s Sun TV Network Limited, promoted by Sh. Kalanithi Maran) towards equity subscription during 2007-2010. It is further alleged that M/s South Asia Multimedia Technologies Limited (a subsidiary of M/s Astro All Asia Networks Plc.) also purchased equity shares of M/s South Asia FM Limited (a subsidiary of Sun TV Networks Limited, promoted by Sh. Kalanithi Maran) from M/s A. H. Multisoft (P) Limited for a sum of Rs. 13,83,62,960/- (approx.). 96. From the above, it is evident that M/s Astro All Asia Networks Plc., UK, invested a total sum of Rs. 1,93,54,41,980/- (approx) in M/s South Asia FM Limited towards subscription of its shares at par value, that is, Rs. 10/- per share, during the period from 20.02.2007 to 20.12.2010. The details are as under:
S. Company Amount (in Nature of No. of No. Rs.) Investment equity shares subscribed 1. South Asia 50,07,19,630/- Subscription of 5,00,71,963 Multimedia Equity shares Technologies Ltd. 2. A. H. Multisoft Ltd. 50,07,19,620/- Subscription of 5,00,71,962 Equity shares 3. A. H. Multisoft Ltd. 46,70,01,370/- Subscription of 4,67,00,137 compulsory convertible preference shares 4. South Asia 46,70,01,360/- Subscription of 4,67,00,136 Multimedia compulsorily Technologies Ltd. convertible preference shares Total 1,93,54,41,980/-
Conclusion by CBI
CBI Vs. Dayanidhi Maran & others Page 47 of 424 97. It is also alleged that the investment made by M/s Astro All Asia Networks Plc., UK, through its subsidiaries namely M/s South Asia Software Technologies Limited, Mauritius, and M/s South Asia Multimedia Technologies Limited, in M/s South Asia FM Limited, was also not a purely business driven investment but was illegal gratification in the nature of quid pro quo in lieu of approvals granted by accused Sh. Dayanidhi Maran, the then MOC&IT, to M/s Maxis Communications Bhd., Malaysia and the companies acquired by it, that is, M/s Aircel Limited, M/s Dishnet Wireless Limited and M/s Aircel Celullar Limited. 98. It is alleged that the above facts and circumstances have thus established that accused persons viz., Sh. Dayanidhi Maran, the then MOC&IT, Sh. Kalanithi Maran, Sh. Ralph Marshall, Sh. T. Ananda Krishnan, M/s Sun Direct TV (P) Limited, M/s Astro All Asia Networks Plc., UK, M/s Maxis Communications Bhd., Malaysia, M/s South Asia Entertainment Holdings Limited, Malaysia, and Late Dr. J. S. Sarma, entered into a criminal conspiracy during the period from July/ August 2004 to September 2008 and in pursuance of the said criminal conspiracy accused Sh. Dayanidhi Maran, the then MOC&IT, and accused (Late) Dr. J. S. Sarma, the then Additional Secretary/ Special Secretary/ Secretary (T), in abuse of their official positions, deliberately delayed the grant of licences in seven service areas and other approvals/ permissions on various issues pending before DoT related to Siva group companies (M/s Aircel Limited, M/s Aircel Cellular Limited and M/s Dishnet DSL Limited) on frivolous grounds
CBI Vs. Dayanidhi Maran & others Page 48 of 424 with an intent to force its exit from telecom business by constricting its business environment. It is further established that the sale of telecom companies held by Sh. C. Sivasankaran to M/s Maxis Communications Bhd., Malaysia, through its wholly owned subsidiary M/s Global Communication Services Holdings Limited, Mauritius, and M/s Deccan Digital Networks (P) Limited, was also with the intervention of accused Sh. Dayanidhi Maran and accused Sh. Kalanithi Maran. After the change of ownership, the applications for issuance of licences and other requests/ approvals pending since long before the DoT were acceded to, for which illegal gratification was paid by M/s Astro All Asia Networks Plc., UK (a related party of M/s Maxis Communications Bhd., Malaysia) to M/s Sun Direct TV (P) Limited, in the garb of purchase of its shares at a premium of Rs. 69.57 per share through its subsidiary M/s South Asia Entertainment Holdings Limited. Accused Sh. Dayanidhi Maran accepted an illegal gratification of Rs. 549,03,30,000/- as quid pro quo through his brother Sh. Kalanithi Maran in the garb of overvalued share premium invested in M/s Sun Direct TV (P) Limited by M/s South Asia Entertainment Holdings Limited, Mauritius (a wholly owned subsidiary of M/s Astro All Asia Networks Plc., UK). Accused Sh. Dayanidhi Maran also accepted an illegal gratification of Rs. 193,54,41,980/- as quid pro quo through his brother accused Sh. Kalanithi Maran in the garb of subscription of equity shares in M/s South Asia FM Limited by M/s South Asia Software Technologies Limited, Mauritius, and by M/s South Asia Multimedia Technologies Limited, Mauritius (both subsidiaries of M/s All Asia Networks
CBI Vs. Dayanidhi Maran & others Page 49 of 424 Plc, UK). 99. Accused (Late) Dr. J. S. Sarma has since expired on 28.02.2014 at Hyderabad. Hence, no action against him. 100. It is further alleged that the aforesaid facts and circumstances constitute commission of offences punishable under Section 120-B IPC read with Sections 7, 12 & Section 13(2) read with 13(1)(d) of Prevention of Corruption (PC) Act, 1988, against accused persons, viz. Sh. Dayanidhi Maran, Sh. Kalanithi Maran, Sh. Augustus Ralph Marshall, Sh. T. Ananda Krishnan, M/s Sun Direct TV (P) Limited, M/s Astro All Asia Networks Plc., UK, M/s Maxis Communications Bhd., Malaysia, and M/s South Asia Entertainment Holdings Limited, Mauritius. 101. Further following substantive offences are also made out: (a) Sh. Dayanidhi Maran, the then MOC&IT- the offence punishable under Section 7 and 13(2) read with 13(1)(d) of PC Act, 1988; (b) Sh. Kalanithi Maran, Sh. Ralph Marshall, M/s Sun Direct TV (P) Limited, Chennai, M/s Astro All Asia Networks Plc., UK, and M/s South Asia Entertainment Holdings Limited, Mauritius, for the offence punishable under Section 12 of PC Act, 1988. 102. Hence, this case. 103. I have heard the arguments at the bar in great detail and have carefully gone through the record. Both the parties have argued the matter for more than a month beginning from 08.10.2016 to 16.11.2016. My attention
CBI Vs. Dayanidhi Maran & others Page 50 of 424 has been invited in great detail to the voluminous files, statements of witnesses, minute books and other material on record by the parties. Apart from that, my attention has also been invited to the relevant legal provisions as well as to a large number of case law. I have carefully gone through the same. Parties have also filed detailed written submissions on record, copies of which were supplied to each other. 104. Let me take note of the law relating to charge. 105. In an authority reported as Union of India Vs. Prafulla Kumar Samal and Another, (1979) 3 SCC 4, Hon'ble Supreme Court while dealing with the question of charge observed in para 10 as under: “Thus, on a consideration of the authorities mentioned above, the following principles emerge: (1) That the Judge while considering the question of framing the charges under Section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out: (2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will be fully justified in framing a charge and proceeding with the trial. (3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application. By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused. (4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the
CBI Vs. Dayanidhi Maran & others Page 51 of 424 present Code is a senior and experienced Judge cannot act merely as a Post Office or a mouth- piece of the prosecution, but has to consider the broad possibilities of the case, the total effect of the evidence and the documents produced before the Court, and the basic infirmities appearing in the case and so on. This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.”
106. Let me make a brief survey of law relating to conspiracy. 107. In an authority reported as Kehar Singh and others Vs. State (Delhi Administration) (1998) 3 SCC 609, it was observed by the Hon'ble Supreme Court in paragraphs 275 and 276 as under:- “275. Generally a conspiracy is hatched in secrecy and it may be difficult to adduce direct evidence of the same. The prosecution will often rely on evidence of acts of various parties to infer that they were done in reference to their common intention. The prosecution will also more often rely upon circumstantial evidence. The conspiracy can be undoubtedly proved by such evidence direct or circumstantial. But the court must enquire whether the two persons are independently pursuing the same end or they have come together in the pursuit of the unlawful object. The former does not render them conspirators but the latter does. It is, however, essential that the offence of conspiracy requires some kind of physical manifestation of agreement. The express agreement, however, need not be proved. Nor actual meeting of two persons is necessary. Nor it is necessary to prove the actual words of communication. The evidence as to transmission of thoughts sharing the unlawful design may be sufficient. Gerald Orchard of
CBI Vs. Dayanidhi Maran & others Page 52 of 424 University of Canterbury, New Zealand explains the limited nature of this proposition : Although it is not in doubt that the offence requires some physical manifestation of agreement, it is important to note the limited nature of this proposition. The law does not require that the act of agreement take any particular form and the fact of agreement may be communicated by words or conduct. Thus, it has been said that it is unnecessary to prove that the parties ''actually came together and agreed in terms'' to pursue the unlawful object : there need never have been an express verbal agreement, it being sufficient that there was ''a tacit understanding between conspirators as to what should be done''. 276. I share this opinion, but hasten to add that the relative acts or conduct of the parties must be conscientious and clear to mark their concurrence as to what should be done. The concurrence cannot be inferred by a group of irrelevant facts artfully arranged so as to give an appearance of coherence. The innocuous, innocent or inadvertent events and incidents should not enter the judicial verdict. We must thus be strictly on our guard.”
108. In an another authority reported as State Vs. Nalini and others (1999) 5 SCC 253, it was observed by the Hon'ble Supreme Court in paragraph 583 as under:- “Some of the broad principles governing the law of conspiracy may be summarized though, as the name implies, a summary cannot be exhaustive of the principles.
1. Under Section 120-A IPC offence of criminal conspiracy is committed when two or more persons agree to do or cause to be done an illegal act or legal act by illegal means. When it is a legal act by illegal means overt act is necessary. Offence of criminal conspiracy is an exception to the general law where intent alone does not constitute crime. It is
CBI Vs. Dayanidhi Maran & others Page 53 of 424 intention to commit crime and joining hands with persons having the same intention. Not only the intention but there has to be agreement to carry out the object of the intention, which is an offence. The question for consideration in a case is did all the accused have the intention and did they agree that the crime be committed. It would not be enough for the offence of conspiracy when some of the accuse merely entertained a wish, howsoever, it may be, that offence be committed.
2. Acts subsequent to the achieving of the object of conspiracy may tend to prove that a particular accused was party to the conspiracy. Once the object of conspiracy has been achieved, any subsequent act, which may be unlawful, would not make the accused a part of the conspiracy like giving shelter to an absconder.
3. Conspiracy is hatched in private or secrecy. It is rarely possible to establish a conspiracy by direct evidence. Usually, both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused.
4. Conspirators may for example, be enrolled in a chain – A enrolling B, B enrolling C, and so on; and all will be members of a single conspiracy if they so intend and agree, even though each member knows only the person who enrolled him and the person whom he enrols. There may be a kind of umbrella- spoke enrolment, where a single person at the centre does the enrolling and all the other members are unknown to each other, though they know that there are to be other members. These are theories and in practice it may be difficult to tell which conspiracy in a particular case falls into which category. It may however, even overlap. But then there has to be present mutual interest. Persons may be members of single conspiracy even though each is ignorant of the identity of many others who may have diverse roles to play. It is not a part of the
CBI Vs. Dayanidhi Maran & others Page 54 of 424 crime of conspiracy that all the conspirators need to agree to play the same or an active role.
5. When two or more persons agree to commit a crime of conspiracy, then regardless of making or considering any plans for its commission, and despite the fact that no step is taken by any such person to carry out their common purpose, a crime is committed by each and every one who joins in the agreement. There has thus to be two conspirators and there may be more than that. To prove the charge of conspiracy it is not necessary that intended crime was committed or not. If committed it may further help prosecution to prove the charge of conspiracy.
6. It is not necessary that all conspirators should agree to the common purpose at the same time. They may join with other conspirators at any time before the consummation of the intended objective, and all are equally responsible. What part each conspirator is to play may not be known to everyone or the fact as to when a conspirator joined the conspiracy and when he left.
7. A charge of conspiracy may prejudice the accused because it forces them into a joint trial and the court may consider the entire mass of evidence against very accused. Prosecution has to produce evidence not only to show that each of the accused has knowledge of the object of conspiracy but also of the agreement. In the charge of conspiracy the court has to guard itself against the danger of unfairness to the accused. Introduction of evidence against some may result in the conviction of all which is to be avoided. By means of evidence in conspiracy, which is otherwise inadmissible in the trial of any other substantive offence prosecution tries to implicate the accused not only in the conspiracy itself but also in the substantive crime of the alleged conspirators. There is always difficulty in tracing the precise contribution of each member of the
CBI Vs. Dayanidhi Maran & others Page 55 of 424 conspiracy but then there has to be cogent and convincing evidence against each one of the accused charged with the offence of conspiracy. As observed by Judge Learned Hand ''this distinction is important today when many prosecutors seek to sweep within the dragnet of conspiracy all those who have been associated in any degree whatever with the main offenders''.
8. As stated above it is the unlawful agreement and not its accomplishment, which is the gist or essence of the crime of conspiracy. Offence of criminal conspiracy is complete even though there is no agreement as to the means by which the purpose is to be accomplished. It is the unlawful agreement which is the gravamen of the crime of conspiracy. The unlawful agreement which amounts to a conspiracy need not be formal or express, but may be inherent in and inferred from the circumstances, especially declarations, acts and conduct of the conspirators. The agreement need not be entered into by all the parties to it at the same time, but may be reached by successive actions evidencing their joining of the conspiracy.
9. It has been said that a criminal conspiracy is a partnership in crime, and that there is in each conspiracy a joint or mutual agency for the prosecution of a common plan. Thus, if two or more persons enter into a conspiracy, any act done by any of them pursuant to the agreement is, in contemplation of law, the act of each of them and they are jointly responsible therefor. This means that everything said, written or done by any of the conspirators in execution or furtherance of the common purpose is deemed to have been said, done or written by each of them. And this joint responsibility extends not only to what is done by any of the conspirators pursuant to the original agreement but also to collateral acts incidental to and growing out of the original purpose. A conspirator is not responsible, however, for acts
CBI Vs. Dayanidhi Maran & others Page 56 of 424 done by a co-conspirator after termination of the conspiracy. The joinder of a conspiracy by a new member does not create a new conspiracy nor does it change the status of the other conspirators, and the mere fact that conspirators individually or in groups perform different tasks to a common end does not split up a conspiracy into several different conspiracies.
10. A man join a conspiracy by word or by deed. However, criminal responsibility for a conspiracy requires more than a merely passive attitude towards an existing conspiracy. One who commits an overt act with knowledge of the conspiracy is guilty. And one who tacitly consents to the object of a conspiracy and goes along with other conspirators, actually standing by while the others put the conspiracy into effect, is guilty though he intends to take no active part in the crime.”
109. I may add that I have carefully gone through the case law cited at the bar, but this has not been noted in the order as the instant case is capable of being disposed of on the facts alone without reference to any case law.
A. Issues relating to delay 110. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP for CBI, that Sh. Dayanidhi Maran was MOC&IT from 26.05.2004 to 17.05.2007. It is further submitted by him that Aircel Limited was having a telecom licence for Tamil Nadu service are and Aircel Cellular Limited was having a licence for Chennai service area. It is further submitted that Dishnet DSL Limited was granted seven telecom licences on 12.05.2004. It is further submitted that LOIs for
CBI Vs. Dayanidhi Maran & others Page 57 of 424 these seven service areas as well as for MP service area were issued on 06.04.2005. It is further submitted by him that in due course, it also applied for UASL in UP (E) and UP (W) service areas. It further applied for four licences in Punjab, Haryana, Kerala and Kolkata service areas. It is his case that the company had also applied for initial spectrum of 4.4+4.4 MHz in Bihar service area. It is further submitted that the company had also applied for additional spectrum beyond 6.2 MHz in Chennai service area. It is further submitted that the Aircel Limited and Aircel Cellular Limited had also applied for other regulatory approvals relating to transfer of equity to Aircel Digilink India Limited in Tamil Nadu and Chennai service areas and also relating to change of name of promoter Srinivas Computers Limited to Aircel Televentures Limited. It is further submitted that Dishnet DSL Limited had also applied for change of its name to Dishnet Wireless Limited. It is further submitted that company had also applied for provisioning of POIs in several service areas. 111. It is further submitted by him that all these regulatory approvals were not deliberately granted by Sh. Dayanidhi Maran in conspiracy with Dr. J. S. Sarma, who worked in different capacities in the DoT like Additional Secretary, Special Secretary and Secretary (T). It is further submitted that even the various representations made by the company to the DoT were not considered. It is repeatedly submitted by him that these regulatory approvals were deliberately withheld/ delayed by Sh. Dayanidhi Maran on one pretext or the other to force the exit of the aforesaid three
CBI Vs. Dayanidhi Maran & others Page 58 of 424 companies belonging to Siva group of Sh. C. Sivasankaran from telecom sector. It is further submitted that this was part of a conspiracy hatched by Sh. Ralph Marshall and T. Ananda Krishnan of Maxis, Malaysia, and Sh. Dayanidhi Maran and Dr. J. S. Sarma, to force Sh. C. Sivasankaran to sell the three companies to Maxis of Malaysia. It is repeatedly submitted by him that these delays were deliberate and conspiratorial in nature. It is submitted that perusal of the material on record indicates that queries put by Sh. Dayanidhi Maran or by Dr. J. S. Sarma, acting at the instance of Sh. Dayanidhi Maran, were outlandish and frivolous, carrying no meaning at all. It is repeatedly submitted by him that there is enough material on record to indicate dishonest and guilty intention of the accused persons. It is repeatedly submitted by the learned Spl. PP that there is enough material on record warranting framing of charge against the accused. 112. On the other hand, it is submitted by Sh. Kapil Sibbal, Dr. Abhishek Manu Singhvi, Sh. R. S. Cheema, Sh. Parag Tripathi, Sh. Sidharath Luthra, Ms. Rebecca John, all learned Sr. Advocates for the defence that the delay in these regulatory approvals cannot be attributed either to Sh. Dayanidhi Maran or to Dr. J. S. Sarma acting at the instance of Sh. Dayanidhi Maran. It is their case that these files suffered from various objections from the very beginning. None of the files were query-free files. It is further submitted that whatever questions were put by the Minister were well justified flowing from the material on the file and conduct of the companies. It is their case that there is no material on the file to indicate any
CBI Vs. Dayanidhi Maran & others Page 59 of 424 conspiracy by the Minister or anyone else. 113. It has been repeatedly emphasized by the learned legal luminaries that there is nothing on the file to indicate any wrong doing by the Minister, what to talk of a conspiracy. It is repeatedly submitted by them that there is nothing against the Minister in these voluminous files. It is their case that by no stretch of imagination these queries put by the Minister can be termed as frivolous. It is repeatedly submitted by the learned Sr. Advocates for the defence that there is no material on record warranting framing of charge against the accused and all of them deserve to be discharged. 114. Both the parties have extensively read out the files and the statements of the witnesses at the bar for days together in order to emphasize their point of view. 115. Let me deal with each issue separately.
I. Delay in grant of LOIs for award of UASL in UP(E) and UP(W) and grant of extension of time of signing licence agreements in MP service area to M/s Dishnet DSL Limited (D-2) 116. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP for the CBI, that the case of extension of time for compliance of LOI for MP service area and grant of LOIs for UASL in UP(E) and UP(W) was quite simple and could have been approved by the Minister without any hindrance, but he put questions which were not only out of context but totally frivolous. It is repeatedly submitted by him that there was no reason for him to put these questions. It is further submitted by
CBI Vs. Dayanidhi Maran & others Page 60 of 424 him that unnecessary questions relating to merger and acquisition, FDI etc., were put by Sh. Dayanidhi Maran to delay the matter. My attention has been invited to the questions recorded at 17/N in file D-2 as well as at 35/N in file D-40. It is submitted by the learned Spl. PP that putting of these frivolous questions shows dishonest intention of Sh. Dayanidhi Maran to force the exit of Siva group from the telecom sector. It is submitted by him that no frivolous question was put in case of Bharti Cellular and Reliance Infocom. It is further submitted that the case of Essar Spacetel was invoked for sounding to be even-handed by the Minister. It is further submitted that the Minister had no reason to put the frivolous questions. 117. On the other hand, learned counsel for the defence have forcefully submitted that the questions pre-dated the Minister. These questions were already raised by the various officers in different forms. Their emphasis is that the questions were relevant and the Minister was duty bound to put them. It is repeatedly submitted by the learned Sr. Advocates for the defence that the applications suffered from numerous deficiencies and LOIs could not have been granted to the company. It is repeatedly submitted that the record and reputation of the company was very bad as it was involved in grey market and had also sold its ISP licence without permission of DoT. It is repeatedly submitted that the financial capacity of the company was doubtful from the day one and it deserved no licence at all, what to talk of additional licences for UP(E), UP(W) etc. 118. Both parties have invited my attention to the
CBI Vs. Dayanidhi Maran & others Page 61 of 424 relevant note sheets in the file as well as the statements of various witnesses in great detail for days together. 119. For better appreciation of the arguments of the learned legal luminaries, the relevant files are required to be read in their full spectrum. Accordingly, I proceed to examine the relevant file in detail relating to the instant issue(s).
Issue of eight LOIs to Dishnet DSL Limited 120. Initially, Dishnet DSL Limited, an existing internet service provider holding all India licence, applied for grant of UASL in eight service areas, that is, Assam, Bihar, Himachal Pradesh, J&K, Madhya Pradesh, North East, Orissa and West Bengal on 05.03.2004, 36/C (D-38). These applications were processed on 09.03.2004 in file D-38, at 9/N and the LOIs were approved to be issued on 05.04.2004 at 13/N. Accordingly, LOIs for eight service areas were issued, including MP, on 06.04.2004. 121. Licence agreements were required to be signed within 15 days of the issue of LOIs. However, the company failed to do so. Not only the company failed to sign licence agreements for seven service areas, it even failed to comply with LOI for MP service area. This was a violation of clause 2 of LOI. 122. The LOIs issued on 06.04.2004 for eight service areas, including LOI for MP service area, page 61 (D-38) contains clause 2, which reads as under: “A copy of the prescribed licence agreement format is enclosed with this LOI. The License Agreement, in the prescribed format, shall be signed only after compliance of the following, within a period of 15
CBI Vs. Dayanidhi Maran & others Page 62 of 424 days from the date of receipt of this Letter of Intent, failing which the same shall stand cancelled without any further reference:- (i) Payment of entry fee of Rs. 17.4501 crores for the said service area; (ii) Submission of bank guarantees (PBG and FBG) of the value of Rs. 10 crores and Rs. 25 crores; (iii) In respect of all licences granted under Section 4 of Indian Telegraph Act (including Indian Wireless Telegraphy Act, 1933) to you or any of your promoter(s)/ partner(s) or associate(s)/ sister concern(s) you are required to furnish the following before signing the licence agreement: (a) No dues certificate; (b)...... (c) …...... ”
Failure to comply with LOIs: Opening of new file D-2 123. As noted above, the LOIs were issued on 06.04.2004, which were to be complied with within 15 days. However, the company failed to do so and consequently requested for extension of time for complying with the LOI for MP service area and also for signing of licence agreement in the remaining seven service areas. Though the company failed to sign the licence agreements in the seven service areas and failed to comply with LOI for MP service area, it had the audacity to apply for two more licences in UP (E) and UP (W) service areas on 21.04.2004. The issues of extension of time of the LOI for Madhya Pradesh service area and request for extension of time to sign licence agreements for seven service areas and the issue of LOIs for grant of UASL for UP (E) and UP (W) by Dishnet were dealt with in file D-2. All three issues were mixed up and taken
CBI Vs. Dayanidhi Maran & others Page 63 of 424 together. 124. For better appreciation of facts, the various note sheets are extracted as under: 125. The first note sheet dated 26.04.2004 was recorded by Sh. A. R. Devarajan, AD (BS-III), as under: “Subject: 1. Request for extension of time of LOI for Madhya Pradesh by 90 days for signing of the Licence Agreement.
2. Request for Extension of time to sign the Licence Agreement for Seven service areas. M/s Dishnet has submitted the Entry Fee, PBG and FBGs for these Seven Service areas.
3. Issue of LOI for grant of Unified Access Licence for UP (East) & UP (West) service area to M/s Dishnet DSL Ltd.
1. PUC is the letter dated 20-4-2004 received from Ms. Dishnet DSL Ltd. requesting for extension of time by 90 days from 20-4-2004, required to fulfill the formalities of Bank guarantees to sign the Licence Agreement in Madhya Pradesh service area. The LOI was issued on 6-4-2004.
2. PUC is a letter dt. 20-4-2004 received from Ms. Dishnet DSL Ltd. requesting for extension of time for signing the Licence Agreement for seven circles viz. Bihar, Assam, West Bengal, Orissa, North East, Himachal Pradesh and Jammu & Kashmir. Since the LOI was issued on 6-4-2004 the time limit of 15 days lapses on 20-4-2004. He has submitted the Entry Fee, FBG and PBG for signing of the Licence Agreement, but could not be signed because
CBI Vs. Dayanidhi Maran & others Page 64 of 424 some documents/formalities were not complete and it was not possible to sign the Licence on 20/4/2004 because he has submitted the documents on 20/4/2004 at 5:00 PM. In view of the above the time may be granted for 1 month keeping the effective date as 20-4-2004.
3. Applications have been received from M/s Dishnet DSL Ltd. for grant of Unified Access Service Licence for UP East & UP West service areas. The application in original is placed below for ready reference.
4. M/s Dishnet DSL Ltd., an Internet service provider holding all India Category A License. Its sister concerns holding CMTS License in Tamil Nadu and Chennai.
5. M/s Dishnet DSL Ltd. has applied in the format earlier prescribed for making application for basic service licence. A processing fee of Rs. 15,000/- per licence application has also been furnished. This format has been accepted for issuing earlier LOIs for UASL.
6. A check has been carried out with reference to these applications for issue of letter of intent for grant of UASL. Individual checklist in respect of these two applications are placed at 23 & 23/A. As per these checklists, the applications are in order and LOI can be issued.
7. It is intimated that, 8 LOI have already been issued to M/s Dishnet DSL Ltd.
8. In view of the above, the case is submitted for approval, for issue of Letter Of Intent (LOI) to M/s Dishnet DSL Ltd. for award of Unified Access Service Licence (UASL) in respect of UP (E) and UP (W) service areas as per the Draft format of LOIs placed at 24/c & 25/c and authorizing Director (BSIII) for signing the Licence Agreement after
CBI Vs. Dayanidhi Maran & others Page 65 of 424 fulfilling the conditions stipulated in the LOIs. Submitted for kind perusal and approval as in Para 1, Para 2 and Para 8 please.”
126. Thus, all three requests were recommended for approval and the file was marked upward.
Questions about funding of the company and extension of time 127. Thereafter, file reached Sh. H. P. Mishra, DDG (LF), who recorded note sheet dated 05.05.2004, questioning the funding aspect of the company, as under: “As discussed, while the revenue projection etc., even the Co's roll-out plans seem to be reasonable, the aspects of funding and esp. of the D/E ratio of 1:1 projected at P.P 5 and 5A don't seem to be very explicit, particularly in the context of eight more UAS licences applications by the Co. Please examine and put up.”
128. He marked the file to Director (LF), who recorded note dated 06.05.2004 as under: “Sub: 1. Extension of LOI 2. New UASL Dishnet DSL
Pre notes kindly refer. 1. DoT has not prescribed any specific debt equity ratio and is normally a business decision of the company. In this instant case company has laid down substantial requirement of funds. Therefore, it may have to be examined with reference to the following- aggregate fund requirement. The stated debt equity ratio vis-a-vis the present equity base. 2. Secondly, no guidelines as such exist for extension of LOI. The proposal for new UASL may perhaps be kept on hold, till the licence agreements for already approved service areas are signed. It may
CBI Vs. Dayanidhi Maran & others Page 66 of 424 be noted that they have not submitted the entry fee for MP even after 1 month from date of LOI. 3. Refer para 2 at 1/N. While the documents req. were received on 20.04.2004, it is not clear why the licence agreements are not yet signed for 7 areas, and also why 1 month time is required. 4. It is better to process the cases of the same entity in the same file for easy reference. Submitted please.”
129. He marked the file to Sh. H. P. Mishra, DDG (LF), who again recorded a note dated 11.05.2004, as under: “1. Above notes refer. 2. As regards point “1” above, the two cases presented in this file both state the D/E ratio as 1:1. The present paid up equity is under Rs. 30 crores (the authorized being Rs. 75 cr) and thus at present the Co. can't take debt more than Rs. 30 crores if it wants to maintain D/E ratio of 1:1. And yet the business plans of the Co. (Annex VIII) for these two applications above envisage a funding of Rs. 526.4 crores. If we add up this item for all the nine (9) licences, the mismatch is apparently great. While it can be argued that the investment would be spread out over a period of time, it still needs to be harmonious with facts. It's also seen that the total Depn. shown in the two applications over a nine- year period is at Rs. 3386 Mn & Rs. 3696 Mn respectively. This seems to be project specific, otherwise the totals would have been the same. BS Branch may, therefore, like to take a total look at these applications for new licences via-a-vis the network roll-out mandated under UASL guidelines and the data presented by the co. 3. I agree with Dir (LF/II)'s observations at sl. 2,3, and 4 on prepage.”
130. It is, thus, clear that Director (LF) and DDG (LF) were in agreement about the questionable funding arrangement
CBI Vs. Dayanidhi Maran & others Page 67 of 424 of the company and regarding there being no guideline for extension of LOI and also for extending time for signing the seven licence agreements. The debt equity ratio of the company was also not prudent and acceptable.
De-linking of signing of licence agreements for seven service areas 131. After recording the abovesaid observations, the file was marked to P. K. Mittal, DDG (BS), who recorded note dated 11.05.2004, asking for de-linking of issue of signing of licence agreements for seven service areas from the other two issues, as under: “Let us delink the cases. Pl. process for approval of item (ii) for which entry fee has been paid.”
132. It is, thus, clear that without answering the queries of Director (LF) and DDG (LF), Sh. P. K. Mittal, DDG (BS) directed the de-linking of issues. No reason has been given 133. In response to the aforesaid note of Sh. P. K. Mittal, Sh. Govind Singhal, Director (BS-III), recorded the following note dated 11.05.2004: “Subject: Request for Extension of time to sign the Licence Agreement for Seven Service areas. M/s Dishnet has submitted the Entry Fee, PBG and FBGs for these Seven Service areas.
As desired case is again put up for approval as below
PUC is a letter dt. 20-4-2004 received from Ms. Dishnet DSL Ltd. requesting for extension of
CBI Vs. Dayanidhi Maran & others Page 68 of 424 time for signing the Licence Agreement for seven circles viz. Bihar, Assam, West Bengal, Orissa, North East, Himachal Pradesh and Jammu & Kashmir. Since the LOI were issued on 6-4-2004 the time limit of 15 days lapsed on 20-4-2004. M/s Dishnet DSL Ltd had submitted the Entry Fee, FBG and PBG for signing of the Licence Agreement on the last day i.e. 20/4/2004 at 5:00 P.M. The documents require examination verification & correction by the LOI holder, if any. In the instant, corrections in FBG were carried out by the LOI holder. M/s Dishnet DSL had asked for extension for signing Licence Agreement for seven days & keeping in view the processing time, it was proposed that extension of time for one month may be given. As per information received from the DDG (LF) regarding no dues certificate which is placed in the file. The LOI holder as ISP Licensee is to pay Licence Fee of Re.1/- for 2002-03 & 2003-04. DDG (LF) may kindly see whether this statement may be taken as a no dues for signing of the Licence Agreement.
In view of the above the extension of time may be granted for 1 month keeping the effective date as 21-4-2004.
Submitted for kind perusal and approval as above please.”
134. Thus, the officer clearly records that the company is to pay licence fee for its ISP licence for the years 2002-03 and 2003-04. 135. He marked the file to Sh. P. K. Mittal who recorded the following note dated 11.05.2004: “Spoken to DDG (LF) on 11.05.2004. As per information received from DDG (LF), it was decided in a meeting taken by M(P) and attended by DDG (LF) & Director (LF), that FBG equivalent to disputed amount may be taken. Accordingly, the
CBI Vs. Dayanidhi Maran & others Page 69 of 424 Licensee had submitted FBG. However, LOI holder is to submit Rs. 2/- as Licence Fee for 2002-04. Other issues raised will be submitted separately. 'A' on prepage is submitted for approval pl.”
136. It was approved by the Secretary (T) on 12.05.2004. Thus, time was extended for licence agreements for seven service areas without any reason or guideline, though the company even had not cleared its dues for ISP licence, which was a small amount of Rs. 2/-. 137. As per statement of Sh. P. K. Mittal dated 16.07.2012, page 3, after the announcement of UASL guidelines dated 11.11.2003, applications for fresh UAS licences were to be accepted in the format and manner of basic service licence application. Clause 12 of guidelines dated 25.01.2001 relating to Basic Services also reads as under: “The application shall be decided, so far as practicable, within 15 days of the submission of the application and the applicant company shall be informed accordingly. In case the applicant is found to be eligible for grant of licence for basic service, the applicant shall be required to deposit Entry Fee and submit Bank Guarantees / other documents and sign the licence agreement within a period of three months from the date of issue of the letter failing which the offer of grant of licence shall stand withdrawn at the expiry of permitted period.”
138. This clause also speaks about withdrawal of LOI if licence agreement is not signed within the specified period. A bare perusal of the record would reveal that there is no provision for extending the time even for compliance to LOI or
CBI Vs. Dayanidhi Maran & others Page 70 of 424 for signing the licence agreement yet time was extended by de- linking the issue of signing of licence agreement vide order dated 12.05.2004 at 5/N (D-2). 139. Consequent thereto, UAS Licence agreements were executed in respect of seven service areas on 12.05.2004 itself. 140. The question is: Why the time was extended for signing the licences? Further the question is: Why the department was recommending extension of time for compliance of LOI relating to MP service area? It is clear from the record that there are no guidelines in this regard. On the contrary the guidelines referred to above are clear that compliance has to be made within the specified period failing which LOI shall be withdrawn without any further reference. 141. The question is: Why the provision regarding compliance of LOI are so rigid? Why there is no provision for extension of time in the guidelines? There is no discretionary power with anyone. Why? It is because telecommunication is lifeline of a country and this clause is aimed at ensuring that only serious players with adequate financial means should venture to enter the field. Non-serious players should not be allowed to enter in such a serious field of national activity, which requires huge capital outlay and should be shut out at the very beginning. It is thus, apparent that the company was not capable of complying with the LOI for MP service area and signing of licence agreements in seven service areas in the very first instance itself. Its funding was also in doubt as noted by DDG (LF) Sh. H. P. Mishra. 142. It is, thus, clear that the extension of time for
CBI Vs. Dayanidhi Maran & others Page 71 of 424 signing licence agreement was not as per the laid-down guidelines. It was rather in violation of guidelines and conditions of LOI.
Issue of extension of LOIs for MP service area and licence for UP (E) and UP (W): Questions about financial capacity of company 143. Thereafter, the remaining aforesaid two issues still survived, that is, extension of time for MP service area and issue of licence for UP (E) and UP (W) service areas. 144. Sh. Govind Singhal, Director (BS-III), again recorded a note dated 17.05.2004, recommending both, that is, extension of time for complying with LOI for MP service area and grant of licence in UP (E) and UP (W) service areas to Dishnet DSL Limited and marked the file to DDG (BS) Sh. P. K. Mittal, who marked the file to DDG (LF). DDG (LF) again recorded on 19.05.2004 as under: “Pls. check up reg. financial aspects of the application as well as of the applicant.”
145. He marked the file to Director (LF-II), who recorded a note dated 20.05.2004, pages 7/N and 8/N, as under: “Comments of DDG (LF) at 6/N kindly refers. 1. The co. has signed 7 licences, while MP is yet to be signed (although appd) and the co. has applied for 2 more Cat B licences- UPE, UPW. → Earlier, when the first eight cases (including MP) was processed, it was stated by LF Branch, that the funding requirement, as per the business plan of the co. is substantial (nearly Rs. 1500 cr) against a paid
CBI Vs. Dayanidhi Maran & others Page 72 of 424 up equity of Rs. 29.7 crores, and that such a scenario may require examination in view of the fact that new access service licence are now issued, as approved by the Minister on a first-come-first serve basis. The issue of Debt/Equity ratio is linked to the issue pointed earlier by LF Branch. → It is also noted that, while conditions governing grant of licence talks about requirement of networth and paid up equity, it is silent on the aspect of funding, D/E ratio etc. which are also important financial indicators. Perhaps, it was earlier felt that the two conditions of networth and paid up equity are sufficient to have serious players in the framework of competitive bidding, which is not the case now after introduction of UASL regime. → We are of the view that the issues pointed out may require examination and disposal in the changed scenario.
2. In the instant case, it is noticed that the combined networth have gone up by almost Rs. 200 cr, with that of Dishnet alone almost doubling. This mean that the company must have booked exceptional profits in a span of 1 month (29/2/04 – to – 31/3/04), as the paid up equity continues to be at Rs. 29.7 cr. It may be decided, whether this necessitate a closer look.
3. Thirdly, the co. has applied for a total 10 licences (some in Cat B & rest in C). The condition for 4th cellular requires a minimum paid up equity for that many licences. It may have to be examined, whether the paid up equity is sufficient, vis-a-vis condition laid down in the guidelines.
Submitted please.”
146. He marked the file to DDG (LF) Sh. H. P. Mishra, who recorded note dated 21.05.2004, page 8/N, as under: “1. Above notes refer. I don't think liberalization
CBI Vs. Dayanidhi Maran & others Page 73 of 424 can be equated with laissez faire. So long as licensing is resorted to, and the applicant companies are asked to furnish certain background data/ documents, it is automatically implied that these will receive some scrutiny so as to satisfy the Licensor (the “Central Govt”) that the applicant is fit for grant of licence in practical, probabilistic terms. 2. Member (P) may also kindly see.”
147. Perusal of the note sheet reveals that officers are repeatedly questioning the financial fitness of the company to undertake telecom projects. 148. On 24.05.2004, when file reached Sh. P. K. Mittal, he asked for linking up of file wherein seven licences were approved, that is, file D-38. 149. In due course the file reached Sh. Sukhbir Singh, Director (BS-III), who recorded a note dated 25.05.2004, page 9/N, as under: “ Ref: Notes on 7/N. It is clarified that the issue of Debt Equity Ratio was raised by LF Branch while considering the application for grant of additional licence to M/s DISHNET DSL Ltd. and not at the time of processing of grant of seven licence for UASL service in various service areas initially.
2. Irrespective of the above fact, it is pointed out that initially during Cellular Service/ Basic Service Licence the external commercial borrowing which is a part of ability to raise fund was linked to equity ratio. It was specified that the commercial international borrowing by licensee shall not be more than double the foreign equity of the licensee. This was acting as an impediment and hindrance for raising the funds and later on which was changed to 50% of the project cost and the same is being followed at present as per RBI/Ministry of Finance.
CBI Vs. Dayanidhi Maran & others Page 74 of 424 It is also pointed out that ECB approvals upto US$ 50 Million comes under automatic route which means that corporate can raise the loan without any approval from the Government. ECB limit for the telecom project is 50% of the total project cost including licence fee. Copy of the ECBs guidelines is placed at F/A.
3. Therefore, keeping in view the above, it may not be desirable to prescribe Debt Equity Ratio. It is worthwhile to point out that even in the tripartite agreement no such provision has been stipulated. It should be left to the best judgement of the lender to decide about the re-payment capacity and capabilities of the borrower. Therefore, it is felt that this condition is not desirable and should not be insisted upon as has been the practice so far while granting Unified Access Service Licence (UASL)/ Basic Service/NLD/ILD Licence.
4. As regards Paid Up Equity is concerned, the norms are very clear and the applicant company in question fulfills the condition of minimum paid up capital. Further, it is not desirable to ask for reasons for increase in the networth in the instant case.
With above observations, it is suggested that the proposal in Para 7 of 6/N may be considered for approval.”
150. It is clear from the perusal of note of Sh. Sukhbir Singh that he is blaming the LF branch for not raising the questions when seven licences were processed. He also dubbed the other questions raised by the LF branch officers as “not desirable”, without answering the same properly and recommends the proposal. 151. File again reached Sh. H. P. Mishra, DDG (LF), who recorded note dated 02.06.2004, page 10/N, as under:
CBI Vs. Dayanidhi Maran & others Page 75 of 424 “Reference notes on preceding page. The file was presumably sent to us to scrutinize the application. If so, the discrepancy noticed between the capital structure (comprising, inter-alia of debt & equity) of the company and its project financing plans as disclosed by the company was rightly pointed out. This was earlier also covered in our notes dated 22.3.04 (Paras 5,8,10 of N. 10-11; F/D) without referring to D/E ratio.
2. The comments of BS Branch at para 2 above are not relevant to the discussion at hand. So are the observations at para 3 above, since nowhere has the LF Branch talked about the need to prescribe any debt equity ratio.
3. As regards the views of BS Branch in para 4 above, Member (P) may kindly decide the matter as deemed fit. We have merely pointed out (para 2 at 7/N) that the combined Net Worth of the company and its promoter company has undergone a sudden and large increase in just one month. It may be decided whether this merits a closer look since: (a) there is no supporting document to explain this, and (b) additional NW is actually needed for additional licenses.”
152. Thus, the two branches, that is, LF and BS, are at loggerheads about financial plan of the company. BS branch asking LF branch as to why these issues were not raised earlier. The LF branch reminding that they raised the issues as early as 22.03.2004 (D-38), when eight LOIs were approved including for MP service area. It appears that on account of the past conduct of the company, the officers of Licence Finance Branch were subjecting the company to strict scrutiny, which is not palatable to the BS branch. 153. Thereafter, a letter was sent to the company seeking
CBI Vs. Dayanidhi Maran & others Page 76 of 424 certain clarifications as indicated by note sheet at page 11/N and after some note sheets Sh. P. K. Mittal recorded on 21.06.2004, at page 12/N, as under: “The case to be put up for approval of Competent Authority for grant of LOI. The views of LF and issue, so far not addressed & indicated may also be covered in the note.”
154. On this Sh. A. R. Devarajan, AD (BS), again recorded a note dated 23.06.2004, page 13/N, mentioning the background of the case and recorded in paragraphs 7 to 9 as under: “...... 7. There are two cases which are being under process since 26.4.2004. (i) In my opinion the Issue at subject -1, approval may be accorded for the extension of time because LOI has already been given to M/s Dishnet and this is a separate issue. (ii) The issue in subject-2 is being dealt since long.
8. For issue LOIs for the UP(E) and UP(W) service areas LF section has raised some issue, which can be seen in previous note-sheets. In brief the issues are a) The noting of the Director (LF-II) on N/s 3 Para 1 he says that “DOT has not prescribed any specific Debt Equity Ratio and is normally a business decision of the Company. In this instant case Company has laid down subsequentia Also it is submitted that noting of Director (LF-II) in Para (a) above itself says that DOT has not prescribed any specific Debt Equity Ratio and is normally a business decision of
CBI Vs. Dayanidhi Maran & others Page 77 of 424 the Company l requirement of funds. Therefore,it may have to be examined with reference to the following aggregate fund requirement, the stated Debt Equity Ratio vis-a-vis the present equity base.”
It is submitted that 8 LOIs were issued to M/s Dishnet Ltd. out of which licences for 7 service areas have already been signed except Madhya Pradesh Service area. At the time of issue of the 8 LOIs this issue of Debt Equity Ratio was not raised by the LF Section. Also it is submitted that noting of Director (LF- II) in Para (a) above itself says that DOT has not prescribed any specific Debt Equity Ratio and is normally a business decision of the Company. Therefore, this issue requires a decision whether LOI may be issued for UP(E) & UP(W).
b) The noting of the Director (LF-II) on N/s 7 Para 2 says that “The increase in the networth of the Company within a short span of time requires a closure look.
M/s Dishnet DSL was asked to submit the reason of increase of the networth. The reply is found satisfactory by DDG (LF) on N/s 11.
9. If the issue raised in Para 8(a) does not require further discussion and found satisfactory for issue of the LOI then the case is submitted for approval, for issue of Letter Of Intent (LOI) to M/s Dishnet DSL Ltd. for award of Unified Access Service Licence (UASL) in respect of UP (E) and UP (W) service areas as per the Draft format of LOIs placed at 30 & 31/c and authorizing Director (BSIII) for signing the Licence Agreement after fulfilling the conditions stipulated in the LOIs. The case is also submitted for approval of extension by 90 days of LOI of Madhya Pradesh Service Area.”
155. Thereafter the file reached in due course to Sh. H. P.
CBI Vs. Dayanidhi Maran & others Page 78 of 424 Mishra, DDG (LF), who recorded a note dated 29.06.2004, page 14/N, to the following effect: “The matter was discussed with M(P) yesterday evening when DDG (BS) was also present. The basic point of LF Branch can be summarized below. “The funding plans submitted by the co. – the ten applications for new UASL's have all shown D/E ratio as 1:1. Considering the facts that (a) the auth. equity of the co. is 75 cr, (b) subscribed/ paid up equity is below Rs. 30 crores, (c) the projects funding requirement is shown by the co. as over Rs. 2110 crores (as per data av. with us), and (d) the company has given year wise interest & depreciation provisions that have to correlate with extant framework of prevailing rates, it's not clear how the funding requirements would be met keeping the D/E ratio at 1:1 (as indicated by the co.)”. BS Br. may consider getting this aspect clarified appropriately.”
156. Thus, the capacity of the company to raise funds for telecom projects proposed to be undertaken by it is in serious doubt and is being questioned again and again. 157. Thereafter, a letter was again issued to the company seeking certain clarifications and the company provided the same. Thereafter, in the light of clarifications, Director (LF) Sh. P. K. Sinha recorded the following note dated 01.07.2004, page 15/N: “As per the letter of DDSL placed at 69/c, DDSL is in the process of tying up with Banks & FIs for debt as also would infuse addition equity from other sources (after increasing the auth. capital) to maintain the debt equity ratio as 1:1. Since the funding plans are internal decision of the company, we perhaps may have to accept the statements in their said letter. Submitted for consideration pls.”
CBI Vs. Dayanidhi Maran & others Page 79 of 424 158. Thus, the two officers were made to give up their earlier stand and made to accept that funding plan are internal decisions of the company. It is apparent that company could not furnish any acceptable clarification. 159. He marked the file to DDG (LF) Sh. H. P. Mishra, who recorded the following note on 05.07.2004: “1. Discussed with D (LF) and DDG (BS). 2. We may take the statement made by the company on record and process the case for approval by the competent authority.”
160. On recording this note, he marked the file to DDG (BS) Sh. P. K. Mittal. Thus, all issues raised by the LF branch are ignored without any valid reason, though the LF branch was right in putting these questions as business plan of the company is an essential part of a telecom project. 161. In the end, note sheet dated 08.07.2004, 16/N, was recorded by Sh. A. R. Devarajan, AD (BS-III), seeking approval for both issues, that is, extension of time for LOI for MP service area by 90 days and issue of grant of UAS licence for UP (E) and UP (W) to the following effect: “Subject: 1. Request for extension of time of the LOI for Madhya Pradesh by 90 days for signing of the Licence Agreement. 2. Issue of LOI for grant of Unified Access Licence for UP (East) & UP (West) service area to M/s. Dishnet DSL Ltd.
PUC is a letter dated 20.4.2004 received from M/s. Dishnet DSL Ltd. requesting for extension of time by 90 days from 20.4.2004 to sign the Licence
CBI Vs. Dayanidhi Maran & others Page 80 of 424 Agreement in Madhya Pradesh Service area. The LOI was issued on 6.4.2004. Applications have been received from M/s. Dishnet DSL Ltd. for grant of Unified Access Service Licences for Uttar Pradesh (East) & Uttar Pradesh (West) service areas placed below for ready reference.
2. M/s Dishnet DSL Ltd., an Internet service provider holding all India Category A License. Its sister concerns holding CMTS License in Tamil Nadu and Chennai.
3. M/s. Dishnet DSL Ltd. has applied in the format earlier prescribed for making application for basic service licence. A processing fee of Rs.15,000/- per licence application has also been furnished. This format has been accepted for issuing earlier LOIs for UASL.
4. A check has been carried out with reference to the applications for issue of letter of intent for grant of UASL and the check list is placed at 23/c. As per the check lists, the applications are in order and LOI can be issued.
5. Licensing Finance raised queries on 2/n,3/n, 4/n,7/n & 8/n on Net Worth, Debt Equity Ratio and Source of Funds for their projects to cost around Rs.1500 Crores. Clarifications received from the Company are placed at 67/c & 69/c . Thereafter Licensing Finance (LF) has given their consent for issuing of the LOIs at 15/N.
6. In view of the above, the case is submitted for approval, for issue of Letter Of Intent (LOI) to M/s Dishnet DSL Ltd. for award to Unified Access Service Licence (UASL) in respect of UP(East) & UP(West) Service Areas as per the Draft format of LOIs placed at 30/c & 31/c and authorizing Director (BSIII) for signing the Licence Agreement after fulfilling the conditions stipulated in the LOIs.
CBI Vs. Dayanidhi Maran & others Page 81 of 424 7. Grant of extension of time by 90 days for signing the Licence Agreement for Madhya Pradesh Service area.
Submitted for kind consideration and approval please.”
162. Sh. A. R. Devarajan records that LF branch had raised certain queries in response to which clarifications were received from the company and the LF branch had given its consent to the issue of LOIs. 163. Thus, after taking note of the statement of the company regarding its financial position, including funding plans at its face value, officials at all levels agreed to approve the aforesaid two requests of the company. This was agreed to by Secretary (T) also on 13.07.2004 and the file was marked to the MOC&IT Sh. Dayanidhi Maran. The objections regarding financial capacity of the company were not dealt with in an objective manner and were brushed aside on the specious ground that these are internal decision of the company.
Reaching of file to the office of MOC&IT and its return therefrom 164. As per note sheet at 16/N, the file was marked by the Secretary (T) to MOC&IT on 13.07.2004 and it reached its office on the same day. 165. However, the file was returned by the office of the Minister on 26.08.2004 with the following remarks recorded by Sh. K. Sanjay Murthy, PS to the Minister, at 17/N (D-2):
CBI Vs. Dayanidhi Maran & others Page 82 of 424 “From pre-page I have been directed to seek the below clarifications :
a) The financial/equity between M/s. Dishnet DSL Ltd. and its sister concerns holding licence elsewhere, particularly in Tamil Nadu and Chennai.
b) To please verify the status of the newspaper reports regarding sale of M/s. Dishnet DSL Ltd. or any of its sister concerns to any other company.
c) To also verify whether M/s. Dishnet DSL Ltd. or any of its sister concerns granted licences in other service areas were later sold to another licensee/entity.
d) It is recalled that the company has violated certain licence conditions entailing specific penalty being imposed on it. The legal implications to this case may please be examined and reported.”
166. The file was marked to the Secretary (T), who marked it downward. Thereafter, letters were issued to different branches on 09.09.2004 asking for information on the aforesaid issues. Thereafter, the file is silent till 13.12.2004.
Observations in D-40 167. File D-40 relates to change of name of the company from Srinivas Computers Limited to Aircel Televentures Limited and also change of equity structure of Aircel Limited on transfer of shareholding from Srinivas Computers Limited to Aircel Digilink Limited. This file was also returned by the
CBI Vs. Dayanidhi Maran & others Page 83 of 424 Minister and Sh. K. Sanjay Murthy, PS to MOC&IT, had recorded the following note on 15.09.2004, 35/N, while returning the file: “I have been directed to convey the following:
There are many inter-related issues between mergers & acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns. An overall view on issues arising in such cases needs to be taken before a decision can be taken. All the inter-related issues mentioned above pertaining to the case being dealt in the below mentioned files be examined and a consolidated Note submitted:-
(i) F. No. 842-21/2001-VAS (Vol. III)- (D- 30) (ii) F. No. 842-325/2000-VAS- (D-40) (iii) F. No. 808-26/2003-VAS (Vol. I)- (D- 45) (iv) F. No. 20-231/2003-BS-III- (D-2)
2. AS (T) may prepare the note and submit the same through Secretary (T). The above mentioned files are placed below.”
168. On recording this note, the file was marked to Secretary (T) Sh. Nripendra Mishra, who recorded the following note dated 15.09.2004 itself: “My recommendation are available on the file. AS(T) pls. comply with the orders of MOC&IT and submit it to MOC&IT for superior orders.”
169. After recording this note, he marked the file (D-40) to AS (T). AS (T) Dr. J. S. Sarma gave his comments in D-40 at
CBI Vs. Dayanidhi Maran & others Page 84 of 424 36/N to 38/N on 30.11.2004, which is noted as under:
Report of Dr. J. S. Sarma 170. In terms of the order dated 15.09.2004 recorded by the Minister, Dr. J. S. Sarma, Addl. Secretary (T) gave his report dated 30.11.2004 to the following effect at 36/N to 38/N (D-40) and marked the file to Secretary (T): “Kind attention is invited to the notes on pre-page as well as the note of PS to MOC&IT on the file 20- 25/04/Genl. Mts/Dishnet placed below.
There had been certain inter-related issues between mergers & acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns in the cases pertaining Aircel Ltd., Aircel Cellular Ltd., Dishnet DSL Ltd.; the licensee companies and their promoter companies. These issues are analyzed, company-wise, as under:-
1. M/s Aircel Ltd: (earlier known as M/s Srinivas Cellcom Ltd.)
M/s Srinivas Cellcom Ltd. was incorporated on 12.12.1994. The company was granted licence for CMTS for Tamil Nadu Circle on 22.05.1998. The company changed its name from M/s Srinivas Cellcom Ltd. to M/s Aircel Ltd. on 28.10.99.
100% share of Aircel Ltd. is with Srinivas Computers Ltd. The name of the company has been changed to M/s Aircel Televentures Ltd.
Shares of M/s Srinivas Computers Ltd. are held by M/s Sterling Infotech Ltd. (99.998%).
The promoter company of Aircel Ld. i.e. Aircel Televentures Ltd. has proposed to sell the shares of Aircel Ltd. (1800 million shares) to Aircel Digilinks
CBI Vs. Dayanidhi Maran & others Page 85 of 424 India Ltd., a company promoted by Hutch Group. With this transaction, the ownership of Aircel Ltd. will be transferred from Sterling Infotech Ltd. to Hutch Group.
The present FDI policy permits 49% FDI in the licence company and another 24.99% through the investment company making a total of 73.99% (direct + indirect). Further, as per the policy, investment company setup for making investment in the licensee company must ensure that management control of the company must rest in Indian hands.
From the flow chart at Flag 'X', it is noted that Aircel Digilinks India Ld. has a very complex equity structure. Companies like Telecom Investment India Ltd. (TIIL), UMTL Holdings Ltd., Usha Martin Telematics Ltd., etc. are investment companies set-up for making investment in telecom sector. However, instead of investing directly in the licensee company, they have pyramiding structure and have potential to induct foreign equity in the licensee company much beyond 73.99%. Even at present, of the investment company Usha Martin Telematics has indirect and direct foreign equity of 86.73%.
In file no. 842-325/2000-VAS, it has been recommended to allow change in the equity structure thereby change in the ownership. However, the equity structure of the new management is so complex that it is difficult to believe that management control will remain with Indian shareholders. Perhaps, Aircel Digilinks India Ltd. may have to simplify its equity structure so that direct and indirect FDI do not cross the prescribed limits. Till this is done, the request of the company may be kept in abeyance.
2. M/s Aircel Cellular Ltd: (earlier known as RPG Cellular Services Ltd.)
CBI Vs. Dayanidhi Maran & others Page 86 of 424 RPG Cellular Services Ltd. was issued licence to operate CMTS in Chennai in 1994. 49% foreign equity of the company was held by AirTouch (Mauritius).
M/s Srinivas Computers Ltd. subsequently purchased the foreign and Indian holding of RPG Cellular Service Ltd. and changed its name to Aircel Cellular Ltd.
Certain doubts have been raised on acquisition of foreign equity from AirTouch (Mauritius) to Siva Cellular Holding Ltd. (Mauritius) and thereafter transfer to Srinivas Computers, as such transaction were carried out without the knowledge of DoT.
The company has now applied for change in name of the company from RPG Cellular Services Ltd. to Aircel Cellular Ltd., Change in its ownership original Indian promoters and foreign promoters to Srinivas Computers Ltd. (now called Aircel Televentures Ltd.)
The company has further applied for transfer of 100% shares held by Srinivas Computes Ltd. to Aircel Digilinks India Ltd., a Hutch Group company. This proposal is not recommended on the grounds that promoters of the new management also hold substantial equity another company Hutchison Eassr South Ltd. who also hold the licence for same service in the same service area i.e. Chennai.
3. M/s Dishnet DSL Ltd:
M/s Dishnet DSL Ltd. has been promoted by Sterling Infotech Ltd. (79.11%), and three foreign / OCB companies. The company is holding all India Internet Licence and is in operation. They have also been issued LoIs for UASL.
As per the information available, there are five
CBI Vs. Dayanidhi Maran & others Page 87 of 424 vigilance cases against the company with regard to provision of Internet Service and DoT had imposed penalties total amounting to about Rs.2.27 crore. The company has not paid the penalties and filed cases in TDSAT.
From the above, it is noted that M/s Sterling Infotech has promoted all the three companies. It is holding equity shares of 79.11% of Dishnet DSL directly whereas 100% shares of Aircel Ltd. and Aircel Cellular Ltd. through Srinivas Computers Ltd. (or Aircel Televentures Ltd.). The Company is now proposed to sell its holding in Aircel Ltd. and Aircel Cellular Ltd. to Aircel Digilinks India Ltd. (Hutch). While there request to cell the equity of Aircel Cellular Ltd. cannot be considered as per the licence conditions, before considering the other case, perhaps, we may ask the Aircel Digilinks India Ltd. to ensure that FDI policy is not violated and restructure its equity in line with declared policy of the Government.
Before granting the UASL licences to Dishnet, we may await for the decision of TDSAT on the issue of vigilance cases and penalties imposed by DoT on this company.”
171. On giving his report, Dr. J. S. Sarma marked the file to Secretary (T) Sh. Nripendra Mishra, who asked the DDG (BS) to put up the legal status on the comments of AS (T).
Report of Sh. O. P. Nahar, LA(T) 172. Accordingly, matter went to LA(T) Sh. O. P. Nahar, whose opinion dated 11.01.2005 (42-43/N, D-40) is as under: “This is a reference on three aspects with regard to two companies.
Firstly M/s Dishnet DSL Ltd. whose majority
CBI Vs. Dayanidhi Maran & others Page 88 of 424 shareholding is held by M/s Sterling Infotech Ltd. applied for certain UASL license whereafter few LOIs are issued or are in process of issuance. In the meantime some vigilance cases against this internet service provider arose and DOT purported to impose penalty of Rs. 2.27 crore by issuing letter dt. 25.08.2004. Thereupon the company challenged this imposition of penalty before, TDSAT when Petition is allowed after withdrawal of DOT's aforesaid letter dt. 25.08.2004 whereby penalty was sought to be imposed. This withdrawal by DOT is made for the reasons that an opportunity for hearing before imposition of penalty was not given. Presently the Show Cause Notice proposing imposition of penalty is in the process of issuance.
In this regard it may be stated that there is no pending litigation as on today. Moreover approaching a court / tribunal is a normally enjoyed legal right, hence, this equity fact cannot disqualify the intending licensee from getting LOIs or license. Moreover the DOT withdrew of its own the letter of imposition of penalty so M/s Dishnet DSL Ltd. cannot be faulted on this count and denial of LOIs/license will not withstand legal scrutiny till the company is not blacklisted for already committed major malpractices in accordance with administrative instruction, if any, after holding a full fledged enquiry and affording fair opportunity of hearing (M/s Erusian Equipment & Chemicals Ltd. vs State of West Bengal, AIR 1975 SC 266).
The Second question referred relates to the pattern of equity holding especially the foreign equity. It is brought out at 34-36/N that direct foreign equity is below 49 per cent but indirect foreign equity is 24.99 per cent through foreign investment companies. There is no restriction against indirect foreign equity which can be raised to any level but with a condition that management remains in Indian hands. This is so provided in the Amendment to License Agreement dated
CBI Vs. Dayanidhi Maran & others Page 89 of 424 29.01.2001 (as at Clause (ix) (d) Flag 'X') of License Agreement modified pursuant to New Telecom Policy 1999. Hence no objection to indirect foreign investment to whatsoever level can be taken especially where DOT does not know the contrary facts about non-existence of management in Indian hands.
The third aspect for consideration is that 79.11 per cent equity of Dishnet DSL Ltd. is held by Sterling Infotech Ltd. There can be no objection by licensor to this equity holding. Further M/s Sterling Infotech Ltd. is also controlling 100 per cent equity of Aircel Ltd. and Aircel Cellular Ltd. through its subsidiary Srinivas Computers Ltd. (presently known as Aircel Televentures Ltd.). It may be added here that Aircel Televentures Ltd. has sought sale permission of its 100 per cent equity holding in Aircel Ltd. to Aircel Digilink India Ltd. whose 100% equity is further held by Hutchinson East Ltd. who is also holder of license for Calcutta. The equity of Calcutta licensee i.e. Hutchinson East Ltd. is further distributed amongst three companies i.e. (1) Asian Telecom (2) Essar Teleholdings (3) Ushamartin Telematics. And further the equity of Ushamartin Telematics is held by other four companies whose equity pattern needs no discussion but is some what depicts cross holding. Any objection to this equity pattern or of cross holding various companies cannot be taken by DOT. This for the business world to manage and not an unusual happening to have cross holdings.
With regard to complicated nature of equity holding no objection can be taken by licensor because such adverse notice is not provided in the License Agreement. Hence there is no locus standi i.e. legal standing to object either to indirect foreign equity of any percentage or to complicated nature of equity holding of licensee. Moreover after 5 years from the effective date of License Agreement there is no restriction against transfer / sale of equity except
CBI Vs. Dayanidhi Maran & others Page 90 of 424 that competition cannot be compromised.
The copy of this note is placed on two files i.e. (1) F. No. 842-325/2000-VAS and (2) F. No. 20- 231/2004-BS.III.”
173. Thus, the comments of AS(T) Dr. J. S. Sarma did not reach the Minister directly, as desired by him and were sent to Legal Advisor for his opinion thereon. The views of Dr. J. S. Sarma appears to be administratively correct, whereas the views of the Legal Advisor are narrow and too legalistic. A licensor has every right to ask for all information, which it was asking in other cases also and has right to be cautious when an existing defaulter applies for a fresh licence. However, the Legal Advisor was resorting to a very narrow legal interpretation.
Impact and observations in D-2 174. On the aforesaid directions of Secretary (T) regarding seeking of legal opinion on the report/ comments of AS (T), a note was also initiated in file D-2 by Sh. A. R. Devarajan, AD (BS-III), at pages 19/N and 20/N to seek legal opinion, as the file D-2 was also covered in the note dated 15.09.2004 of Sh. K. Sanjay Murthy, as extracted above. The instant file reached Sh. P. K. Mittal and he marked it to LA (T). 175. However, vide note dated 17.12.2004, recorded on the right margin by Sh. A. R. Devarajan on the oral instructions of Sh. P. K. Mittal, DDG (BS), the file was withdrawn from legal section.
Requisition of files D-2, D-38 and D-41 by the Minister
CBI Vs. Dayanidhi Maran & others Page 91 of 424 176. On the instant file being withdrawn from legal section, the file was marked to Director (BS-III). Sh. Sukhbir Singh, Director (BS-III), recorded a note dated 21.12.2004, at 21/N (D-2), to the following effect: “As desired the case files of M/s Dishnet DSL Ltd. in which the LOIs for 8 service areas for grant of UAS licences were approved are placed below. The case file for change of name of the company is also placed below. 1. F.No.20-231/2003-BS.III- (D-2) 2. F.No.20-231/2003-BS.III/Pt.- (D-38) 3. F.No.20-225/04- GenlMts/Dishnet/BS.III- (D-41)
2. The note of Additional Secretary (T) is placed at p.77-c to 80/c.
Submitted please.”
177. After the note, the file was marked to DDG (BS) Sh. P. K. Mittal and ultimately the file reached Secretary (T), who marked the file to the Minister on 24.12.2004. Thus, files D-2, D-38 and D-41 reached the Minister on 24.12.2004. It is to be noted that the Minister had asked for a note of AS(T) to be submitted through Secretary (T) vide order dated 15.09.2004 at 35/N in file D-40. This note should have reached the Minister independently, but was submitted to the Minister through the aforesaid note of 21.12.2004 alongwith other files. There is every possibility of the note escaping the attention of the Minister.
Pendency of the files with the Minister and return thereof:
CBI Vs. Dayanidhi Maran & others Page 92 of 424 Question of haste 178. However, the instant file remained with the office of the Minister and was returned to the Secretary (T) on 03.03.2005 alongwith other files as ordered by Sh. K. Sanjay Murthy, PS to the MOC&IT, in the following terms in D-41 at 7/N: “I have been asked to request Secretary (T) to re- examine if there has been undue haste in processing the case. The following files are enclosed :- 1. F.No.20-231/2003-BS-III (Vol.III)- (D- 2) 2. F.No.20-231/2003-BS-III- (D-46) (D- 592 main case) 3. F.No.20-231/2003-BS-III- (Pt.)- (D-38) 4. F.No.20-225/04-GnlBTS/Dishnet/BS- III - (D-41)”
Thus, the Minister was suspicious of the activities of his predecessor, perhaps rightly as the questions relating to the financial capacity of the company were not properly dealt with when eight LOIs were approved to be issued to Dishnet DSL Limited in 05.04.2004 in file D-38. 179. Thereafter, Secretary (T) discussed the matter with MOC&IT on 30.03.2005 and recorded a note at 21/N (D-2), which is as under: “Discussed with MOC&IT. These files are returned with the directions that the Dir. should ascertain all the show cause notices/advisory letters issued to the above company or companies belonging to the group and the nature of defaults before any view is taken. It may be submitted to my successor.”
180. Thereafter, from 06.05.2005 till 02.03.2006, 22/N
CBI Vs. Dayanidhi Maran & others Page 93 of 424 to 27/N, the file remained under process in the department on the points raised by the Secretary in note dated 30.03.2005, on the following four issues: (1) Request for extension of time of the LOI for MP service area under UAS by 90 days for signing of the licence agreement; (2) Issue of LOI for grant of UAS for UP(E) and UP(W) service areas to Dishnet DSL Limited; (3) Request for taking on record change of name of the company from Dishnet DSL Limited to Dishnet Wireless Limited; and (4) Issue of fresh LOI for Punjab, Haryana, Kerala and Kolkata service areas for Dishnet Wireless Limited for Unified Access Services. 181. On 28.06.2005, the issue of change of equity by sister concerns, that is, Aircel Limited and Aircel Cellular Limited, was also introduced by Sh. P. K. Mittal at 24/N, in the instant file. 182. Therefore, all six issues were being dealt with in this file. However, on withdrawal of application for change of equity, this issue was closed on 14.07.2005 in the instant file. 183. Thereafter, on 10.02.2006, at 27/N, it is recorded that a policy decision has been submitted regarding grey market issues. Thereafter, there is no development except marking of the file here and there on this page itself. It is also recorded on 02.03.2006 that note sheet of part file No. 20- 231/2004-BSIII pt. is enclosed as 28/N. 184. This note sheet of 02.01.2006, at 28/N, of the
CBI Vs. Dayanidhi Maran & others Page 94 of 424 aforesaid part file deals with the issue of LOI for grant of UASL in Madhya Pradesh, Punjab, Haryana, Kerala, Kolkata, UP (E) and UP(W) service areas to Dishnet DSL Limited and information is sought as per latest UASL guidelines. 185. Thus, the pending applications were to be dealt with as per the latest guidelines. The company gave some information and that was processed at 29/N.
Entry of Maxis 186. When the above information was being processed in note sheet dated 06.03.2006, 30/N, the fact that Maxis Communication Berhad will be holding about 73.99% of Aircel Limited was taken on record with the fact that the proposal for investment is listed before FIPB for approval in its meeting on 07.03.2006. Thereafter, the file remained under process on account of new development, that is, on account of Maxis holding 73.99% of the equity and related issues from 30/N to 38/N. 187. Finally, note sheet dated 13.11.2006 was recorded by Sh. R. K. Gupta, ADG (AS-I) at pages 39/N to 41/N taking on record all the developments including FIPB approval and the file was marked upward and the matter was finally approved by the Minister on 22.11.2006 at 42/N, relating to issue of LOI for grant of UASL for Punjab, Haryana, Kerala, Kolkata, UP(E) and UP(W) service areas and amendment of LOI for Madhya Pradesh service area. 188. The aforesaid note sheets clearly explain the process through which the instant file passed before final approval was
CBI Vs. Dayanidhi Maran & others Page 95 of 424 granted by Sh. Dayanidhi Maran on 22.11.2006. The observations made by different officers at different levels and time are also clear, more particularly about financial capacity of the company, that is, Dishnet DSL Limited, and its involvement in grey market and transfer of ISP licence without permission from the department, as mentioned at 33/N in detail, is as under: “...... (ii) LR has intimated that following are the cases under process in LR Wing.
(a) Show Cause Notice for imposing penalty amounting Rs.2,36,88,522 and submitting additional bank guarantee of Rs.3.20 crore because of grey market activities by its subscribers. Final order under issue after according personal hearing before Member (P). (b) Show Cause Notice for termination of licence for violation of clause 10 regarding Transfer of Licence is under issue. Approval of MOC received on 28th March, 2005. (c) 6 nos. of new cases have been reported for involvement of its subscribers in grey market recently (on 10th March, 2005). The cases are being processed...... (iv) VAS has mentioned on Note Sheet No. 26/N that the extracts of file no.843-325/2000-VAS(Pt) having remarks of Secretary (T) for information and further necessary action of BS Cell. In the remarks Secretary (T) has mentioned that please examine the matter afresh in the light of notices issued to the company in some of the ISPs related irregularities. …...... ”
CBI Vs. Dayanidhi Maran & others Page 96 of 424 Thus, the record of the company is not very impressive.
Observations in file D-38: File in which eight LOIs were granted 189. Vide note sheet dated 24.05.2004 at 8/N, Sh. P. K. Mittal had directed that file, wherein seven applications were approved be linked up with this file. This file is D-38. 190. Since this file, that is, D-38, was also ordered to be linked up, it is relevant to extract the required note sheets from this file also for better understanding of the case, which are as under: 191. As per D-38, eight applications, 36/C, were received in DoT on 05.03.2004 and were processed for the first time on 09.03.2004 at 9/N, recommending the issue of licences. DDG (BS) agreed to the same on 10.03.2004 and marked the file to DDG (LF). 192. The file reached Director (LF-II), who recorded note dated 22.03.2004, 10/N, to the following effect: “Pre notes kindly refers. 1. That new UASL licenses will be allotted as per the financial (entry fee, PBG, FBG, Net worth and paid up equity) and other conditions of 4 th cellular licensees and with reference to the guidelines issued for migration, on a continuous and first come first serve basis, have earlier been clarified by BS branch. Accordingly, new UAS licenses have been issued with the approval of Hon'ble MOC&IT in file no. 842-441/2003-VAS (pt).
2. Dishnet DSL, an existing ISP (Category A-All India) licensee has applied for 8 Unified Access Service License-2 category B (West Bengal including A&N and MP) and 6 category C (Assam, Bihar,
CBI Vs. Dayanidhi Maran & others Page 97 of 424 Himachal, J&K, NE and Orissa) licenses. They have indicated certain amount of foreign equity, in the subscribed equity, for which they will need to submit documents in accordance with items 9 and 10 of the application proforma.
3. The applicant is an ISP and they are paying license fee @ Re. 1 per year as stipulated. The two sister concerns M/s Aircel and M/s Aircel Cellular Limited are cellular licensees in Tamil Nadu and Chennai. They are paying quarterly 1 fees regularly. The FBGs are maintained and regularly reviewed by CCAs. The PBGs of Aircell Cellular (RPG) is already due for renewal and they have been intimated for submission of renewed BG.
4. Since Dishnet is an existing ISP licensee and its stated sister concerns– Aircell Ltd and Aircell Cellular Limited– being cellular licensees, it may have to be examined whether these licensees have been discharging the operational obligations to the satisfaction of the licensor. Secondly, it is presumed that BS Branch has found the details of experience and network roll out plan acceptable.
5. On the other hand, it is not stated how much is the shareholding of the promoter in the companies– Aircel Limited and Aircell Cellular Limited, but it is possible that the net worth of Sterling Infotech Ltd have been taken into account for purpose the cellular licenses of the sister concerns. Therefore, the requirement of net worth will need to be examined with reference to these cellular licenses. In isolation however, the net worth as disclosed by the company, by self-certification fulfills the conditions of net worth. On this issue Dir BS III has clarified that as per present policy the net worth is to be looked at in isolation and restriction exist in terms of allotment of license in the same service area.
6. The format of LOI has been seen by the LA(T)
CBI Vs. Dayanidhi Maran & others Page 98 of 424 on earlier occasions.
7. We may obtain the comments on 4& 5 above
8. In addition the following observations are made. For Assam alone the funding requirement is shown as Rs 88 crores, thus the total funding requirement would be substantial for 8 circles. On the other hand the authorized capital is Rs 75 crore, the paid up equity being even lesser at Rs. 29.7 crores. The net worth, including that of promoters is indicated as Rs. 400 crores. As such, the conditions of net worth and equity for CMTS were prescribed during tendering process, which were perhaps included to ensure that operators with capacity to deliver required quantum and quality of service comes to the market.
10. In addition, the entire net worth of the promoter is taken for purpose of net worth under the existing guidelines. However, it may have to be explored, while the promoter has a restricted share holding in the applicant, how appropriate it will be consider the entire net worth for purpose of grant of license.
Now that DoT is issuing the access services licenses on a first come first served basis– the above issues may require examination. These have been discussed with Dir BS III.
Submitted please.”
193. He marked the note to DDG (LF), who agreed to it. Perusal of the note reveals that operational capability of the company as well as its financial capacity was questioned in the very beginning itself. The file was marked the file to DDG (BS), who, in turn, marked the file to Director (BS-III). 194. Director (BS-III) Sh. Govind Singhal recorded note
CBI Vs. Dayanidhi Maran & others Page 99 of 424 dated 23.03.2004, page 12/N, which is as under: “Reference notes on page 10-11/N.
2. It is clarified that M/s Dishnet DSL applicant company is different from M/s Aircel and Aircel Cellular Ltd. holding cellular licence in Tamilnadu and Chennai respectively. With reference to para 4 on p.10/N, it is clarified that tender for 4th cellular licence clearly stipulated that the bidding company should have telecom experience. In this respect, the bidder company becomes applicant company and is an ISP licensee and therefore, has fulfilled the conditions. The roll out plans indicated by the company are as per the terms and conditions of the licence to be issued. As regards discharging the operational obligations by the sister concerns viz. Aircel Ltd. and Aircel Cellular Ltd., it is clarified that this is neither a condition nor the practice to examine it at the stage of considering for grant of licence. Further, condition 3(iii) of the LOI takes care of the unfulfilled roll out obligations.
3. As already clarified that while considering the total requirement of networth, the licences held by the applicant company is to be considered. In this case, the applicant company is not holding any Unified Access Service/Basic Service/Cellular service licence. Accordingly, total required networth for the 8 licences comes to Rs. 280 crores and as per the certificate given on the basis of unaudited results by the Company Secretary, the networth of the company and its promoter is Rs. 400 crores. The certificate of the company secretary in respect of networth and paid up capital is accepted. The same principle has been followed in respect of licences granted in 2001 and prior to this case. As regards observations in para 8 for capability of raising the funds, it is felt that the same may be left the Financiers/banks and the company itself as for such circles (except J&K, NE and Assam), after repeated bidding, the department failed to invite any
CBI Vs. Dayanidhi Maran & others Page 100 of 424 prospective service provider prior to issue of guidelines for UASL. As regards para 10, it is not as per the existing guidelines/tender conditions for 4th cellular.
Submitted please.”
195. In due course the file reached Sh. P. K. Mittal, DDG (BS), who agreed to the grant of licences on 23.03.2004 and marked the file upward. On 24.03.2004, he discussed the matter with senior officers and asked for a self-contained note. On 25.03.2004, Sh. Govind Singhal, Director (BS-III), recorded the following self-contained note, page 13/N: “Subject: Issue of LOI for grant of Unified Access Services Licence for Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East, Orissa and West Bengal including Andamon, Nicobar service areas to M/s. Dishnet DSL Ltd.
Applications have been received from M/s. Dishnet DSL Ltd. for grant of Unified Access Service Licences for Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East, Orissa and West Bengal including Andamon, Nicobar service areas. Since all the applications are similar one of the original application is placed below for ready reference.
2. M/s Dishnet DSL Ltd., an Internet service provider holding all India Category A License. Its sister concerns holding CMTS License in Tamil Nadu and Chennai.
3. M/s. Dishnet DSL Ltd. has applied in the format earlier prescribed for making application for
CBI Vs. Dayanidhi Maran & others Page 101 of 424 basic service licence. A processing fee of Rs.15,000/- per licence application has also been furnished. This format has been accepted for issuing earlier LOIs for UASL.
4. A check has been carried out with reference to these applications for issue of letter of intent for grant of UASL. Individual check list in respect of these eight applications are placed at 37 to 44/c. As per these check lists, the applications are in order and LOI can be issued.
5. Licensing Finance raised some queries on N/S 10 and the same have been replied on N/S12. Thereafter Licensing Finance (LF) had given consent for issuing of the LOIs on 12/N.
6. In view of the above, the case is submitted for approval, for issue of Letter Of Intent (LOI) to M/s Dishnet DSL Ltd. for award of Unified Access Service Licence (UASL) in respect of Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East, Orissa and West Bengal Service Areas as per the Draft format of LOIs placed at 45-76/c and authorizing Director (BSIII) for signing the Licence Agreement after fulfilling the conditions stipulated in the LOIs.
Submitted for kind consideration and approval please.”
196. On the same day, Sh. P. K. Mittal agreed to the same and marked the file upward and in due course the LOIs were approved to be issued by the then Minister on 05.04.2004. 197. PW 8 Sh. P. K. Mittal, in his statement dated 21.02.2012, at pages 2 and 3, has stated about these licences. 198. From the perusal of the aforesaid record in D-38, it is clear that questions were being raised about the discharge of
CBI Vs. Dayanidhi Maran & others Page 102 of 424 operational obligations by the company to the satisfaction of the licensor regarding its ISP licence as well as about its financial capacity to undertake the telecom project from the very beginning itself, as is clear from note sheet dated 22.03.2004. However, these objections were brushed aside stating that capacity to raise the fund may be left to the financiers, banks and the company itself as some circles failed to attract any prospective service provider and the LOIs were approved to be issued on 05.04.2004. But this does not appear to be a valid ground in view of the guidelines and the contents of the proforma of application for UASL. 199. A perusal of note sheets would show that there were serious doubts about the capacity of the company to undertake the telecom projects.
Guidelines and proforma of application for UASL 200. Let me take note of the guidelines and the proforma for issue of UASL to understand the relevance of the questions put by various officers. 201. Clauses 8 and 10 of the guidelines dated 25.01.2001 read as under: “8. The promoters of applicant company shall have a combined net-worth of amount indicated in Annex-I. The net-worth of only those promoters shall be counted who have at least 10% equity stake in the total equity of the company. Here networth shall mean as the sum total, in Indian Rupees, of paid up equity capital and free reserves of qualified promoters. While counting Net-worth the foreign currency shall be converted into Indian Rupees at the prevalent rate on the date of the application as
CBI Vs. Dayanidhi Maran & others Page 103 of 424 indicated by the Reserve Bank of India.
10. The applicant company shall also submit business plan along with its funding arrangement for financing the project in each Circle separately.”
202. It is interesting to note that the proforma prescribed by the guidelines take note of every minute detail. 203. Initially, the applications were being submitted in the format prescribed for basic services, issued with guidelines dated 25.01.2001. The format of the application contains sixteen clauses and the clauses 7, 8, 12, 13, 14 and 15 are as under: “7. Promoters/Partners in the Company: (details of equity holdings) S. No. Name of Promoter/ Indian/ Equity Networth Partner Foreign %age ------(Total foreign equity participation (s), if any, upto the extent of 49%, including NRI equity, both repatriable and non-repatriable, is allowed. Complete break-up of 100% of equity must be given.)
8. Paid up capital (proof to be attached) …......
12. List of Telecom Service Licence (s) held by the company and its allies/sister concerns/partners, if any, and their present status. (Attach separate sheet, if required) (i)
CBI Vs. Dayanidhi Maran & others Page 104 of 424 ------(ii) ------(iii) ------(iv) ------
13. List out experience of Promoters/Partners: S.No. Name of Promoter/Partner Experience ------
14. Network Rollout Plan
Year % of Total SDCAs proposed % coverage of uneconomic/ to be covered Remote Area SDCAs 1st ______2nd ______3rd ______4th ______5th ______6th ______7th ______
15. Details of business plan along with the funding arrangement for financing the project. …...... ”
204. The proforma of checklist, as available on 37/c onwards of Dishnet in D-38, also contains the following clauses 2, 3, 4, 10, 11 and 13. “CHECKLIST FOR APPLICATION FOR UNIFIED ACCESS SERVICES LICENSE
CBI Vs. Dayanidhi Maran & others Page 105 of 424 Name of the Company: M/s Dishnet DSL Ltd. Service Area applied for: West Bengal
S. PARTICULARS STATUS REMARKS No. –––– 2. Details of equity structure Submitted Available in the Application 3. Proof of net worth Submitted Annexure-II 4. Proof of paid up capital Submitted Annexure-III – – – – 10. Network roll out plan As per As per Annexure- Annexure-VII VII 11. Details of business plan Submitted Annexure-VIII along with funding arrangements –––– 13. List of Telecom Service Submitted Annexure-V Licenses held by the company
New Guidelines dated 14.12.2005 205. Thereafter, new guidelines were issued on 14.12.2005, consequent to change of FDI policy and a new proforma was also issued for filing up applications for Unified Access Services Licence. Clauses 7, 8, 13 and 14 are as under: 7.(a) Details of Promoters/Partners/ Shareholder in the Company: The promoters to be indicated
S. No. Name of Promoter/ Indian/ Equity Networth Partner/ Shareholder Foreign %age ------(Complete break-up of 100% of equity must be given. Equity holding upto 5% of the total equity shared among various shareholder can be clubbed but Indian and Foreign equity must be separate.) (b) Equity details Indian ------Foreign ------Total
CBI Vs. Dayanidhi Maran & others Page 106 of 424 (Certificate from Company Secretary to be attached)
(c) The applicant is required to disclose the status of such foreign holding and certify that the foreign investment is within the ceiling of 74%. (Certificate from Company Secretary to be attached)
8. Details of the Cellular and Unified access licence in the name of the applicant company and Networth required for the Licence
No. of No. of Cellular/ UAS licence No. of Cellular/ UAS Cellular/UAS in category B service area licence in category C licence in category service area A service area ABC A * 100=P B* 50=Q C* 30=R
Total = P+Q+R
13. List of Telecom Service Licence (s) held by the company and its allies/ sister concerns/partners, if any, and their present status. (Attach separate sheet, if required)
Type of the Licence Name of the Status Whether And Service area Company Operative/surrendered/Terminated ------(Type of the Licence means Basic/ Cellular/ UASL/ Paging/NLD/ILD/IP-II licences etc. details of all the Licences held by Allies/Sister concerns/ Partners or legal entities with 10% or more common equities must be shown separately.
14. Details of business plan along with the funding arrangement for financing the project.”
Regarding procedure of issue of LOI and UASL 206. In his statement dated 21.02.2012, PW 8 Sh. P. K.
CBI Vs. Dayanidhi Maran & others Page 107 of 424 Mittal, states about the procedure of grant of UAS licences at pages 1 and 2 as under: “...... While processing the applications, the proposal was to be initiated by the Asstt. Director and he used to put up the same to the Director and then it was put up to me. I used to further submit to DDG (Licensing Financing) and then it was to be submitted to Member (Production). The Member (Production) used to forward to Secretary, DOT after financial concurrence from Member (Finance). Thereafter the Secretary, DOT with his recommendations used to submit the file to the Minister of Communications and Information Technology (MOC & IT) for his approval. If at any stage any shortcomings/ deficiencies noticed in the proposal, the same was to be highlighted and got rectified. Without rectification of such deficiencies, the proposal for issuance of License cannot be approved. I would like to add here that at every stage from its initiation it was required to be ensured that the stipulated terms and conditions are fulfilled. Consequent upon approval of the MOC & IT, a Letter of Intent (LOI) is issued to the applicant to fulfill certain conditions such as payment of entry fee, submission of Performance Bank Guarantee (PBG) and Financial Bank Guarantee (FBG) and no dues certificate in respect of dues payable to the DOT for other licenses already issued to the applicant company and its sister concerns. These conditions have to be fulfilled within a stipulated period of 15 Days. On the request of the applicant company, the extension of one-two months for fulfilling the required conditions are granted by the Secretary DOT / MOC & IT. After fulfilling the required conditions the License Agreement is executed. Having executed the License Agreement, the Licensee becomes eligible to apply for the spectrum eg. 4.4 MHz in Global System Mobile
CBI Vs. Dayanidhi Maran & others Page 108 of 424 (GSM) band. Then the Licensee can roll- out service. …...... ”
207. A bare perusal of the aforesaid guidelines and proforma would reveal that an applicant for a telecom licence will have to satisfy the licensor about its financial capacity as well as business plan, that is, how would it fund and execute the project. It cannot be left entirely to a bare statement of an applicant company. 208. Thus, the financial capacity of the company to undertake the project was in doubt from the very beginning. It was further compounded by the fact that it failed to comply with LOI for MP service area and also to sign licence agreements in seven service areas in prescribed time.
Development in D-2 209. Funding aspect was all the more important in the instant case (D-2) when it was recorded on 29.06.2004 that the authorized capital of the company is Rs. 75 crore and paid-up equity/ capital is below Rs. 30 crore and the funding requirement was shown as over Rs. 2110 crore and a question was raised as to how funding requirement would be met. 210. PW 8 Sh. P. K. Mittal has stated in his statement dated 28.11.2011 as to how there were serious issues regarding the debt equity ratio of the company, sudden increase in the net worth of the company without any supporting documents, and as to how the funding requirement of Rs. 2100 crore would be
CBI Vs. Dayanidhi Maran & others Page 109 of 424 met keeping the debt equity ratio as 1:1 as indicated by the company with authorized capital of the company as Rs. 75 crore and subscribed and paid-up capital below Rs. 30 crore. Some clarifications were sought from the company. He has also stated about the doubts raised about the financial capacity of the company from 05.05.2004 onward when process for issue of eight LOIs was initiated in D-38. 211. Perusal of the note sheets recorded in the file from 05.05.2004 to 29.06.2004 indicate that the department entertained serious doubts about the financial capacity of the company to execute the telecom licences. However, after receipt of its clarifications, it was suddenly recorded by Sh. P. K. Sinha on 01.07.2004 as under: “As per the letter of DDSL placed at 69/C, DDSL is in the process of tying up with banks & FIs for debt as also would infuse additional equity from other sources (after increasing the authorized capital) to maintain the debt equity ratio as 1:1. Since the funding plans are internal decision of the company we perhaps may have to accept the statements in the said letter. Submitted for consideration please.”
212. He marked the file to DDG (LF). Thereafter, DDG (LF) Sh. H. P. Mishra, who recorded that “we may take statement made by the company on record and process the case for approval by the competent authority.” 213. Thereafter, on these lines a note sheet for approval dated 08.07.2004 was recorded by Sh. A. R. Devarajan for grant of licence to Dishnet for UP (E) and UP (W) service areas and also for extension of time for LOI for Madhya Pradesh.
CBI Vs. Dayanidhi Maran & others Page 110 of 424 Everybody concurred with that and thereafter, file was marked to the Minister on 13.07.2004, brushing aside all objections. 214. From the perusal of the two files, that is, D-38 and D-2, it is clear that: (a) Questions were being raised from the very beginning about the discharge of operational obligations by the sister concerns of the company regarding earlier licences to the satisfaction of licensor as the companies were involved in grey market; (b) The financial capacity to undertake the telecom projects was suspect from the very beginning; (c) The company had not paid licence fee regarding ISP licence for two years, though it was a small amount; (d) Extension of time for signing licence agreements for seven service areas was contrary to guidelines and conditions of LOI; and (e) Company failed to comply with the LOI for MP service area within the prescribed period and was seeking extension of the same, though there was no guidelines for extending the same. 215. The perusal of record would reveal that the opinion of Dr. J. S. Sarma was administratively correct, whereas that of Legal Advisor was too legalistic.
Issue of Licence to Bharti Cellular (D-46) 216. The application of Bharti Televenture Limited for LOI in Assam service area was processed at note sheets 14/N to 21/N. The grant of LOI was approved on 23.04.2004 at 14/N.
CBI Vs. Dayanidhi Maran & others Page 111 of 424 However, later on, that LOI was withdrawn and the company filed a fresh application for issue of UASL for Assam service area. The application was processed and the note sheet dated 31.05.2004, at 21/N, recorded by Sh. Govind Singhal, Director (BS-III), is the relevant note sheet. Following this note sheet, the LOI was approved to be issued by Sh. Dayanidhi Maran on 22.06.2004. It reads as under: “Subject: 1. Withdrawal of the application for Licence in Assam Service area by M/s Bharti Cellular Limited. 2. Issue of LOI for grant of Unified Access Services Licence for Assam service area to M/s. Bharti Tele- ventures Ltd.
Note sheet No. 15 -20/N may kindly be seen. Brief is as below:
M/s Bharti Cellular Limited applied for the grant of the Licence in the Assam service area. The application was processed and approved by Hon'ble MOC&IT on N/s 14/N.
2. M/s Bharti Cellular limited has requested for withdrawal of the same application which is placed at 98/c.
3. M/s. Bharti Tele-ventures Ltd. has submitted an application for grant of Unified Access Service Licences for Assam service area. The application in original is placed 97/c for ready reference.
4. M/s Bharti Tele-ventures Ltd., is the promoter of various Access service providers holding various Cellular Licences and Unified Access Licences. Its sister concerns holding CMTS License in Tamil Nadu and Chennai.
CBI Vs. Dayanidhi Maran & others Page 112 of 424 5. M/s. Bharti Tele-ventures Ltd. has applied in the format earlier prescribed for making application for basic service licence. A processing fee of Rs. 15,000/- per licence application has also been furnished. This format has been accepted for issuing earlier LOIs for UASL.
6. M/s Bharti has submitted a copy of foreign agreement. A check has been carried out with reference to the application for issue of letter of intent for grant of UASL. Individual checklist in respect of Assam application is placed at 95/c. As per checklist, the application is in order and LOI can be issued.
7. LOI has been modified as suggested by DDG (LF) on N/s -16.
8. In view of the above, the case is submitted for approval pls for the withdrawal of the application by the M/s Bharti Cellular Limited and also for issue of Letter of Intent (LOI) to M/s Bharti Tele-ventures Ltd. for award of Unified Access Service Licence (UASL) in respect of Assam Service Area as per the Draft format of LOI placed at 94/c and authorizing Director (BS-III) for signing the Licence Agreement after fulfilling the conditions stipulated in the LOIs.”
217. The proposal in the aforesaid note sheet was agreed to by DDG (BS) Sh. P. K. Mittal, DDG (LF), Member (P) and Member (F) and also Secretary (T) on 18.06.2004. The file was marked to the Minister and he approved it on 22.06.2004. 218. A perusal of the case reveals that no objection was raised by anyone to the grant of LOI to this company. The only objection was regarding a copy of a foreign agreement. That was placed on record by the company as noted in clause 6 above. Thereafter, the proposal was approved by the Minister.
CBI Vs. Dayanidhi Maran & others Page 113 of 424 There is no objection from any quarter to the grant of LOI. 219. PW 8 Sh. P. K. Mittal has stated about this in his statement dated 21.02.2012 at pages 4 and 5. He does not mention that there were any issues with this application. Hence, this case cannot be used as an example to question the questions raised by the Minister in the case of Dishnet DSL as noted above. 220. The defence has rightly raised the argument that it is a query-free file and no objection could have been raised by the Minister even if he wanted to.
Issue of Reliance Infocom (D-46) 221. The issue of grant of LOI to Reliance Infocom Limited for J&K service area was processed at 24/N in D-46. 222. It is interesting to extract from file D-46, page 24/N, wherein issue of LOI for grant of UASL for J&K service area to Reliance Infocom Limited was processed. The note sheet recorded by Sh. Govind Singhal, Director (BS-III), dated 10.08.2004, reads as under: “Subject: Issue of LOI for grant of Unified Access Services Licence for J&K Service Area to M/s. Reliance Infocomm Ltd.
History: M/s Reliance Infocomm Ltd. has earlier applied for UASL for J&K Service Area on 29.12.2003. LOI was issued on 12.01.2004. Further the Company had requested for extension of time, 3 times till 27/5/2004. Company had approached extension for the 4th time for 6 months which was not agreed to. The company was advised to apply afresh.
CBI Vs. Dayanidhi Maran & others Page 114 of 424 2. Applications have been received from M/s. Reliance Infocom Ltd. on 24.6.2004 for grant of Unified Access Service Licences for J&K service area. The application in original is placed below for ready reference.
3. M/s Reliance Infocomm Ltd., an Access service provider holding various Unified Access Licences, and other licences also.
4. M/s. Reliance Infocomm Ltd. has applied in the format earlier prescribed for making application for basic service licence. A processing fee of Rs. 15,000/- per licence application has also been furnished. This format has been accepted for issuing earlier LOIs for UASL.
5. A check has been carried out with reference to the application for issue of letter of intent for grant of UASL. Individual check list in respect of J&K application is placed at 111/c. As per check list, the application is in order.
6. In view of the above, the case is submitted for approval, for issue of Letter of Intent (LOI) to M/s Reliance Infocomm Ltd. for award of Unified Access Service Licence (UASL) in respect of J&K Service Area as per the Draft format of LOI placed at 120/c and authorizing Director (BSIII) for signing the Licence Agreement after fulfilling the conditions stipulated in the LOIs. Submitted for kind consideration and approval as above please.”
223. A bare perusal of the note sheet 24/N makes it clear that there was no objection from any quarter to the grant of LOI. The Secretary (T) recommended it on 13.08.2004 and the Minister approved on 20.08.2004. 224. Again, it was a case where no objection was raised
CBI Vs. Dayanidhi Maran & others Page 115 of 424 from any quarter and the Minister was also not in a position to raise any question. Hence, it cannot be used as an instance to advance the case that the Minister deliberately raised questions in the case of Dishnet DSL Limited, but not in other cases. 225. The proposal was put up by Sh. Govind Singhal on 10.08.2004 and was agreed to by Sh. P. K. Mittal, DDG (BS), on the same day, by Sh. H. P. Mishra, DDG (LF) on 11.08.2004, by Member (T) on 12.08.2004, and was recommended by Secretary (T) on 13.08.2004 and was approved by the Minister on 22.08.2004. 226. PW 8 Sh. P. K. Mittal in his statement dated 21.02.2012 at pages 5 and 6 has stated about this. He does not say that there was any serious issue with this application. 227. Thus, this file also does not advance the case of the prosecution as it was also a query-free file.
Regarding delay 228. PW 15 Sh. Govind Singhal in his statement dated 03.09.2013, at page 5, states as under: “...... On being asked, I state that BS section had recommended for the issuance of LOI for UP(E), UP(W), Punjab, Haryana, Kolkata and Kerala and extension of time limit of LOI by 90 days for Madhya Pradesh in respect of M/s Dishnet DSL Ltd. (new name Dishnet Wireless Ltd.). The legal opinion dated 11.01.2005 of Sh. O.P. Nahar, LA was very clear and was in favour of M/s Dishnet DSL Ltd. This legal opinion was also placed in VAS cell file no.842-325/2000-VAS. The legal opinion which was placed in VAS file was made available to the office of
CBI Vs. Dayanidhi Maran & others Page 116 of 424 MoC&IT. The approval was delayed due to the instructions conveyed by Sh. Nripendra Misra, the then Secretary(T) on 30.03.2005 in BS section file no. 20-231/ 2003- BS-III (Vol.III) (D-2). These instructions had linked the issuance of UASL to show cause notices/advisory letters issued to the company. Sh. B. Shiva Ramakrishnan, the then Member(P) had also passed an instruction on 08.04.2005 in file no.20-231/2004-BS-III. …...... ”
Regarding the events recorded in D-2, note of Minister and legal opinion 229. PW 8 Sh. P. K. Mittal, DDG (BS), has narrated about the noting in file D-2, in his statement dated 28.11.2011 from pages 1 to 17. Regarding the return of file from the office of Minister, he states as under on pages 12 to 16:
“...... On being asked I state that the said file was received in the O/o Shri Dayanidhi Maran, the then MoC &IT on 13.07.2004 itself. In spite of the unanimous recommendation from the dealing officers to the Secretary (T) for issuance of LOI for award of UASLs for UP (E) and UP (W) and extension of LOI for MP circles, Sh. Dayanidhi Maran, the then, MOC & IT instead of according approval, raised objections and sought clarification through his PS, Sh. K. Sanjay Murthy on 26-08- 2004 (17-N) which are reproduced herein below:- “I have been directed to seek the below clarifications: a) The financial/ equity between M/s. Dishnet DSL Ltd. and its sister concerns holding
CBI Vs. Dayanidhi Maran & others Page 117 of 424 licence elsewhere, particularly in Tamil Nadu and Chennai. b) To please verify the status of the newspaper reports regarding sale of M/s. Dishnet DSL Ltd. or any of its sister concerns to any other company. c) To also verify whether M/s. Dishnet DSL Ltd. or any of its sister concerns granted licences in other service areas were later sold to another licensee/ entity. d) It is recalled that the company has violated certain licence conditions entailing specific penalty being imposed on it. The legal implications to this case may please be examined and reported” This file was received back after 44 days from the office of MOC & IT. Sh. K. Sanjay Murthy, PS marked the file to Secretary Sh. Nripendra Misra who in turn marked the file to Member (P) Sh. B. Sivaramakrishna on the same day i.e. 26-08-2004 and this note was marked to dealing officer Sh. A.R. Devrajan on 27-08-2004 duly routed through myself and Sh. Govind Singhal, Director (BS-III). I recall that Sh. K. Sanjay Murthy when he signed the aforesaid note dated 26-08-2004 on behalf of MOC & IT, told me that Sh. Dayanidhi Maran the then MOC & IT was very furious with the officers of the DOT for recommending the case of M/s Dishnet DSL for grant of UASL for UP (E) and UP (W) and extension of LOI for MP circles and wanted to initiate action against such DOT officials. In compliance to the aforesaid instructions of the MOC & IT, Sh. Govind Singhal, Director (BS-III) issued a letter dated 08-09-2004 to M/s Dishnet DSL Ltd. requesting to intimate the details such as (i) Financial / equity between M/s Dishnet DSL Ltd. and its sister concerns holding License elsewhere specially in Tamilnadu and Chennai (ii) any sale of the company out of its sister concern which held
CBI Vs. Dayanidhi Maran & others Page 118 of 424 Licenses in other Service Area. (iii) Whether any violation of term & conditions had occurred and consequently incurred penalties by the company or its sister concerns (at page 19-C in file no. 20- 231/2004-BS-III). Simultaneously Sh. Singhal also sent UO notes to Sr. DDG (VAS), Wireless Advisor, DDG (LF) and DDG (LR) requesting to provide the aforesaid information available with them, so that the matter could be submitted to MOC & IT. (at page no. 16). With regard to the queries raised by the Minister, I would like to clarify that the issue regarding selling of License granted to its sister concern was in the context of newspaper reports indicating that M/s Aircel had sold its equity to ESSAR (erstwhile Hutch, now known as Vodafone). As regards the violation of License conditions are concerned, it was with reference to sale of broadband business to VSNL and misuse of internet connection by subscriber of M/s Dishnet DSL Ltd. for gray market calls whereby long distance call were converted into local calls resulting loss to the exchequer. It is worth while to mention that no such queries were raised in respect of M/s Reliance and Bharti for granting LOIs for UASL during the same period. Moreover, no such queries were raised for granting UASLs for seven circles to the same company during the stint of earlier Minister i.e. Mr. Arun Shourie. As such these queries raised are not on sound footing which appear to be on frivolous / out of context grounds. While the information was being collected for giving reply to the aforesaid queries of the Minister, another note was received from Sh. Dayanidhi Maran the then MOC & IT through his PS, Sh. K. Sanjay Murthy on 15-09-2004 which is placed at 11- C in file no. 20-231/2004-BS-III (D-3) (original in D-40, at 35/N). As per this note the said PS to MOC & IT conveyed to Secretary (T) Sh. Nripendra Misra which is reproduced below:-
CBI Vs. Dayanidhi Maran & others Page 119 of 424 “There are many inter-related issues between mergers and acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns. An overall view on issues arising in such cases needs to be taken before a decision can be taken. All the inter-related issues mentioned above pertaining to the case being dealt in the below mentioned files be examined and a consolidated Note submitted:- 1. F. No. 842-21/2001-VAS (Vol. III)(it contains the application for change of equity in M/s Aircel Cellular Ltd.) 2. F. No. 842-325/2000-VAS (it contains the application for change of equity in M/s Aircel Ltd.) 3. F. No. 808-26/2003-VAS (Vol. I) (it contains GoM on telecom matters i.e. D-591 in charge-sheet of RC 45(A)/2009-DLI) 4. F. No. 20-231/2003-BS-III (it contains the application of M/s Dishnet DSL Ltd. for UASL for UP(E), UP(W) and application for extension of LOI for MP)
AS (T) may prepare the note and submit the same through Secretary (T). The above mentioned files are placed below” Sh. K. Sanjay Murthy marked this note to Secretary (T) i.e. Sh. Nripendra Misra on 15.09.2004. On this Sh. Misra recorded his observations dated 15-09- 2004 which is reproduced herein below:- “My recommendation are available on the file. AS (T) pl comply with the order of MOC & IT and submit to MOC & IT for superior orders” The original of the above note-sheets are available in file No. 842-325/2000-VAS which has now been shown to me. I recall that Sh. Nripendra Misra mentioned to me that he had already given his recommendation for granting necessary approval by the Minister for various proposals including grant of UASLs to M/s
CBI Vs. Dayanidhi Maran & others Page 120 of 424 Dishnet DSL Ltd for UP (E) and UP (W) and equity restructuring for M/s Aircel and Aircel Cellular Ltd. in Tamilnadu and Chennai. He further mentioned that he was upset with these remarks as it amounted to scrutinizing the recommendation of superior officers by junior officers in the same department. Secretary being Head of the Office has the full responsibility to make recommendation to the Minister. I would like to add that Dr. J.S. Sarma, the then Additional Secretary to whom these files were marked by the PS to the Minister, was not at all concerned with the process of grant of UASL. Dr. J.S. Sharma submitted the detailed note on 30- 11-2004 which is placed at 12-C to 13-C in file no. 842-325/2000-VAS (Photocopy of the same is available in file No. 20-231/2004-BS-III). The comments of Dr. J.S. Sarma on three issues in nutshell are as under:- 1. M/s Aircel Ltd:- ”……..In file no. 842- 325/2000-VAS, it has been recommended to allow change in the equity structure thereby change in the ownership. However, the equity structure of the new management is so complex that it is difficult to believe that management control will remain with Indian shareholders. Perhaps, Aircel Digilinks India Ltd. may have to simplify its equity structure so that direct and indirect FDI do not cross the prescribed limits. Till this is done, the request of the company may be kept in abeyance.” 2. M/s Aircel Cellular Ltd:- “…..The company has further applied for transfer of 100% shares held by Srinivas Computers Ltd. to Aircel Digilinks India Ltd., a Hutch Group company. This proposal is not recommended on the grounds that promoters of the new management also hold substantial equity in another company Hutchison Essar South Ltd. who also hold the license for same service in the same service area i.e. Chennai.” 3. M/s Dishnet DSL Ltd:- “……..As per the
CBI Vs. Dayanidhi Maran & others Page 121 of 424 information available, there are five vigilance cases against the company with regard to provision of Internet Service and DOT and imposed penalties total amounting to about Rs. 2.27 crore. The company has not paid the penalties and filed cases in TDSAT. ………Before granting the UASL Licenses to Dishnet, we may await for the decision of TDSAT on the issue of vigilance cases and penalties imposed by DOT on this company” Dr. J.S. Sarma, Additional Secretary submitted his note dated 30.11.2004 to Secretary, DOT. On this Sh. Nripendra Misra, Secretary directed me to put up the legal status on the comments of Additional Secretary (T). I would like to mention that with the comments of AS (T) Dr. J.S. Sarma, the process of grant of UASL to Dishnet DSL for UP (E) and UP (W) and extension of LOI for MP was further hampered for uncalled grounds. However being the comments of the Sr. Officer I could not raise my observations. Dr. J.S. Sarma, Additional Secretary was relieved, hereafter, and repatriated to State Cadre.”
Regarding the case of Essar Spacetel (D-44) 230. This issue was dealt with in file D-44. PW 8 Sh. P. K. Mittal has narrated the events in this file in his statements dated 28.05.2012 and 30.05.2012. Amongst other things, he has stated on page 2 of his statement dated 30.05.2012 as under: “...... Sh. B. Sivaramakrishanan, Member (P) sought an appointment with Secretary (T) for discussion and the appointment was received for 22.07.2005 at 05:30 PM. Accordingly, a discussion took place in the chamber of Dr. J.S. Sarma, Secretary (T) on
CBI Vs. Dayanidhi Maran & others Page 122 of 424 22.07.2005 which was attended by Sh. B. Sivaramakrishnan, Member (P), Sh. R.N. Prabhakar, Advisor (P) and myself. In the said meeting, Dr. J.S. Sarma, Secretary (T) desired to have the details of all show cause notices/advisory letters issued to sister concerns of applicant company and nature of default. On being asked I state that it was already on record that the sister concern of the applicant company was in default for SLD and its network was used for grey market telephony by its subscriber. However, in view of direction given by Dr. J.S. Sarma, Secretary (T) in the meeting held on 22.07.2005, I requested DDG (VAS) to indicate all show cause notices/advisory letters issued to sister concern of the applicant company. In this way the application for UASL of M/s Essar Spacetel Pvt. Ltd. was linked to violations by its sister concerns in another licenses, before granting LOI for the license. …...... ”
231. He further states in his statement dated 16.07.2012 at page 2 as under: “...... On being asked I state that the guidelines did not provide for linking of any show cause notice or advisory issued to the applicant company or its sister concern or its associates from the process of granting any further UASL in other services areas or processing any request such as change of name of that company. Accordingly this was never linked up from the process of processing the application for grant of UASL for any other licence such as CMTS, Basic, NLD, ILD etc. …...... ”
232. It is the case of the prosecution that the queries
CBI Vs. Dayanidhi Maran & others Page 123 of 424 were raised in the case of Spacetel by the Minister so as to sound to be even handed in all cases. However, the case of Dishnet DSL is entirely different as it was being questioned on several counts while allegations against Essar Spacetel related only to involvement in grey market. Moreover, there is no harm in putting such a defaulting licencee to higher scrutiny when it asks for further licence. 233. Perusal of the aforesaid material reveals that the cases of Bharti Cellular and Reliance Infocom also do not serve the cause of the prosecution as both of them were query-free files, whereas the case of the Dishnet DSL was under question from the very beginning particularly regarding its financial capacity to undertake the telecom projects. 234. Sh. P. K. Mittal himself admits in his statement as extracted above dated 21.02.2012, that if at any stage any shortcomings are noticed in the proposal the same were to be highlighted and got rectified. He further states that without rectification of deficiencies, the proposal for issuance of licence cannot be approved. Contrary to this, the business plan of Dishnet DSL was not examined but it was left at the sweet will of the company. The company has to explain its business plan and financial worth to the Licensor and it must feel satisfied about the financial capacity of the company to undertake the projects. But these factors were not properly examined in the case of Dishnet DSL as noted above, in the very beginning itself in file D-38 and thereafter also. 235. As far as the case of notices, advisory letters issued to sister concerns are concerned, the same are also required to
CBI Vs. Dayanidhi Maran & others Page 124 of 424 be examined, otherwise what is the use of asking their details in the application proforma. These issues may not receive deeper legal consideration but at least the proposal of the company must receive some serious scrutiny as to its capacity to undertake the telecom projects. Granting fresh licences to an existing licencee, who is a defaulter in some respects, may dent the image of the Licensor in the public eyes. The illegalities committed by the sister concerns of the applicant company cannot be totally ignored, though they may not warrant refusal of licence to the company. Totally ignoring them may bring bad name to the DoT. Those violations are detailed below.
Sale of ISP licence without permission of DoT: Conduct of the Minister 236. Furthermore, as per file D-29, Dishnet Wireless Limited was an ISP licencee with service area all India. It sold its ISP licence to Videsh Sanchar Nigam Limited without seeking prior permission from the DoT and this amounted to a substantive violation. 237. This shows Dishnet Wireless Limited in very poor light. 238. Furthermore, a proposal was put by the department on 01.02.2005 at 3/N (D-29) narrating the facts to show cause the company. The two companies, that is, Dishnet Wireless Limited and M/s Track Online Net India (P) Limited had sold their broadband business to Videsh Sanchar Nigam Limited, another ISP licencee, without permission of the DoT and this amounts to violation of licence agreements. Accordingly, a
CBI Vs. Dayanidhi Maran & others Page 125 of 424 proposal was put up in para 3 as under: “In view of the above, it is proposed to issue show cause termination notice to Dishnet Wireless Limited, Track Online India (P) Limited and M/s Videsh Sanchal Nigam Limited for default under clause 10.1 of Schedule C part II of ISP licence agreement for violation of clause 10 (as amended) of the licence agreement as per the drafts placed below.”
239. This proposal was initiated on 01.02.2005 and reached the Minister Sh. Dayanidhi Maran on 10.02.2005. On 10.02.2005 itself he recorded “Pls discuss”. Thereafter, the matter was discussed and was approved by the Minister on 24.03.2005 and the file was marked to the Secretary on the same day. This shows that the Minister was not very active in clearing the file as he sat on this file also for 42 days, even when action was to be taken against the company. A show cause notice was issued to the company finally on 10.06.2005. This shows that the department was not very efficient either in granting licence or in taking action for violation of licence. 240. Again on receipt of reply from Dishnet and VSNL and the same were considered by the department for a long time and finally on 17.01.2006, a note was put up by DDG (LR) that the explanation given by the companies may be accepted and the show cause notices may be withdrawn. This was agreed to by all officials including the Secretary on 26.01.2006 and the file was marked to the Minister Sh. Dayanidhi Maran. However, the file was returned on 14.05.2006 with the remarks “MOC&IT could not see”.
CBI Vs. Dayanidhi Maran & others Page 126 of 424 241. Again this shows that the Minister was not very keen in performing his duties as he sat on this file for about four months. The file was again processed and was marked to the Minister on 15.06.2006 at 23/N (D-29). It was finally approved by the Minister on 05.07.2006, that is, the Minister again sat on the file for 20 days.
Allegations against the company of involvement in grey market 242. In file D-63, at 4/c, Minister Sh. Dayanidhi Maran had approved a policy for taking action against ISP indulging in grey market activities on 14.07.2004. 243. In this regard, at page 69/C (D-2), there is a list of defaults committed by Dishnet. Six cases of misuse of internet lease line were reported against the company during the period March 2002 to May 2004 and a show cause notice for imposition of penalty of Rs. 2,36,88,522/- was issued to the company. Then there was allegation of sale of broadband ISP business by it to VSNL. Then, 26 cases were reported against it for misuse of their internet lease line. 244. Proceedings were started against the company for termination of its ISP licences and imposition of penalty. The recovery of loss from the company was approved by the Minister on 20.08.2004 at 20/N (D-28). However, later on an opportunity of hearing was decided to be given to the company and a show cause notice was required to be issued before imposing the penalty. The show cause notice was approved by Sh. Dayanidhi Maran on 17.12.2004 at 22/N (D-28). This shows the company in very
CBI Vs. Dayanidhi Maran & others Page 127 of 424 poor light. A government department cannot and should not sit idle taking recourse to strict legal interpretations when a defaulter of one licence, applies for another one. It must at least put it to higher scrutiny or else take steps to amend the guidelines to prevent such defaulter from securing further licences.
Change of partner without permission of DoT 245. Even otherwise, earlier also the company Aircel Limited came under adverse notice in 2000 also when it sought approval for change of equity consequent to replacement of 10% equity partner M/s Century Telephone Enterprises Inc., USA, foreign partner, by another foreign partner namely Cellunet India Limited, Mauritius. This was done without prior approval of DoT and the then deputy Legal Advisor Sh. V. K. Bhatia, recorded at 6/N (D-40), inter alia, as under, in para 6: “6. It is intriguing that while condition 10 of the licencee agreement stipulates prior written consent of the licensor for any change in the composition of the licence, in this case, as per the papers made available to legal cell, the licencee is approaching the licensor after having got the necessary agreement. Prima-facie, the condition of the licence agreement appears to have been not complied with by the licence.”
246. Though subsequently this was allowed by recording that let the company avail some flexibility allowed by the Cabinet in its meeting held on 08.08.2000 without giving any valid reason. 247. In view of the above discussion as well as the
CBI Vs. Dayanidhi Maran & others Page 128 of 424 detailed facts recorded and extracted above, almost all of which are self explanatory, I am satisfied that the questions put by the Minister can, by no stretch of imagination, be called frivolous. More so, when the applicant company's credentials suffer from various deficiencies. **********
VIII.Delay in grant of approval to (a) change of name from RPG Cellular Services Limited to Aircel Cellular Limited; (b) to approve the purchase of 20.76% shareholding of foreign partner namely M/s Siva Cellular Holdings Limited in Aircel Televentures Limited by Aircel Televentures Limited to make it 100% Indian company; (c) taking on record the name change from Srinivas Computers Limited to Aircel Televentures Limited (D-30).
& II. Delay in Approval for change in equity of Aircel Limited and taking on record name change of Srinivas Computers Limited in Tamil Nadu service area (D- 40)
248. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP, that Aircel Cellular Limited was having a telecom licence for Chennai service area and Aircel Limited was having a licence for Tamil Nadu service area. It is submitted that Aircel Cellular Limited applied for change of name from RPG Cellular Services Limited to Aircel Cellular Limited and for approval for purchase of 20.76% shareholding of Aircel Cellular Limited by Aircel Televentures Limited, formerly Srinivas Computers Limited, from Siva Cellular Holding Limited, Mauritius, formerly Airtouch International Limited, Mauritius,
CBI Vs. Dayanidhi Maran & others Page 129 of 424 and also for taking on record change of name from Srinivas Computers Limited to Aircel Televentures Limited in Chennai service area. The officials recommended the same unanimously but Sh. Dayanidhi Maran did not approve the same by putting frivolous questions. It is further submitted that Aircel Limited applied for approval of change in the equity structure on sale of its shares held by Aircel Televentures Limited to Aircel Digilink Limited and also for change of name of Srinivas Computers Limited to Aircel Limited in Tamil Nadu service area, but the same was also not approved by Sh. Dayanidhi Maran by putting frivolous questions. My attention has been invited to the questions put by the Minister to emphasize that there is no merit in those questions. My attention has been invited to the various note sheets in the file as well as statements of witnesses to emphasize that the questions were meaningless, out of context and totally frivolous, showing dishonest intention of Sh. Dayanidhi Maran 249. On the other hand, learned Sr. Advocates for the defence have submitted that the questions put by the Minister were quite relevant, to the point and necessitated by the facts on the file. It is their case that the questions were needed to be asked and the Minister asked them rightly. 250. These issues pertain to Chennai and Tamil Nadu service areas. 251. Both shall be discussed together as the approval for change in equity structure consequent to sale/ transfer of shares of Aircel Limited and Aircel Cellular Limited to Aircel Digilink Limited is common in both the service areas.
CBI Vs. Dayanidhi Maran & others Page 130 of 424 Issues relating to Chennai service area (D-30) 252. The issues relating to Chennai service area, are as follows: (a) change of name from RPG Cellular Services Limited to Aircel Cellular Limited; (b) to approve the purchase of 20.76% shareholding of foreign partner namely M/s Siva Cellular Holdings Limited in Aircel Limited by Aircel Televentures Limited to make it 100% Indian company; and (c) taking on record the name change from Srinivas Computers Limited to Aircel Televentures Limited. 253. These issues were dealt with in file D-30. 254. The licence for CMTS in Chennai service area was signed by RPG Cellular Services Limited on 30.11.1994. 255. Subsequently, in 2004, Srinivas Computers Limited purchased 68.84% equity shares from from RPG Cellular Investment Holding (P) Limited and 10.40% equity from Cellfone Limited, Mauritius, thus acquiring 79.24% of the equity of the licencee company. The remaining equity of 20.76% was held by Airtouch International, Mauritius. The sale of 68.84% shares held by RPG Cellular Investment Holding (P) Limited and 10.40% shares held by Cellfone Limited, Mauritius, in RPG Cellular Services Limited to Srinivas Computers Limited was approved by DoT on 18.12.2003, 11/N (D-30). 256. Thus, in the eyes of DoT, the licencee company formally came under the control of Sh. C. Sivasankaran on
CBI Vs. Dayanidhi Maran & others Page 131 of 424 18.12.2003. 257. Vide letter dated 26.02.2004, 16/c (D-30), Aircel Cellular Limited informed DoT that the name of the company RPG Cellular Services Limited had been changed to Aircel Cellular Limited, effective from 23.01.2004, and prayed that it may be taken on record. This letter was processed at 12/N (D- 30) and a note sheet dated 12.03.2004 was recorded by Sh. S. C. Chaudhary, ADG (VAS-I), in the following terms: “PUC (16/C) is a letter dated 3.3.04 for change in the name of the licensee company for CMTS Chennai Metro Service Area from M/s RPG Cellular Services Limited to Aircel Cellular Limited.
2. The company in its letter has stated that name of the company has been changed from M/s RPG Cellular Services Limited to Aircel Cellular Limited and have requested to take this on record. The licensee has enclosed the copy of amended Fresh Certificate of Incorporation consequent to the change of name.
3. The above change of name of the company is to be taken on record by carrying out suitable modifications to this effect in the License Agreement.
4. Legal Advisor in the case of change of name of a company had opined that the change of name for the company can be equated with the name of a natural person and once notified the new name continues. After change of name, the old entity continues and enters into the new name. The continuity of the same entity permits all rights, privileges and liabilities (extract from file no. 311- 58/95-VAS is placed at 17/C).
5. It may please be noted that in case of change of name all the BGs against the said License also
CBI Vs. Dayanidhi Maran & others Page 132 of 424 need to be amended with the new name.
6. We may not have any objection to the change in name of the company from M/s RPG Cellular Services Limited to Aircel Cellular Limited in view of earlier legal advise subject to the condition that the company shall provide modified Bank Guarantees / Fresh Bank Guarantees in lieu of old BGs for the said License.
7. Accordingly a draft letter is put up for approval please. (18/C). DFA please.” 258. It was agreed to by various officers in the hierarchy and was formally approved by the Secretary (T) on 17.03.2004, 12/N, and the DoT informed the company about it vide letter dated 19.03.2004, 18/c, asking it to comply with the necessary formalities like furnishing of amended bank guarantees etc. 259. In response to this letter, the company vide letter dated 22.06.2004, 24/c, wrote to the DoT that it has complied with the necessary formalities regarding furnishing of fresh bank guarantees etc., incorporating the new/ changed name. Accordingly, a formal amendment in the licence agreement dated 20.10.1995 was required to be issued by the DoT. 260. Thereafter, Aircel Televentures Limited wrote letters dated 21.06.2004 and 22.06.2004, 25/c & 26/c, to DoT informing it that name of Srinivas Computers Limited has been changed to Aircel Televentures Limited w.e.f 28.04.2004. It was also intimated that Aircel Televentures Limited hold 100% of Aircel Limited, operating CMTS licence in Tamil Nadu service area and it also holds 79.24% in Aircel Cellular Limited, holding licence in Chennai metro service area. It was requested
CBI Vs. Dayanidhi Maran & others Page 133 of 424 to take the changed name on record. Both service areas, that is, Tamil Nadu and Chennai metro, are mentioned. 261. Further, vide letter dated 21.06.2004, 27/c, Aircel Cellular Limited also informed the DoT that 20.76% of its shares were held by Siva Cellular Holdings Limited (SCHL), formerly Airtouch International (Mauritius) Limited have now been purchased by ATVL and it now held 100% equity share capital of ACL. It requested DoT to take it on record. 262. Furthermore, vide letter dated 28.06.2004, 28/c, Aircel Cellular Limited informed DoT that at present Aircel Televentures Limited holds its 100% shareholding. It further informed that Aircel Televentures Limited (ATVL) wishes to transfer its 100% equity to Aircel Digilink Limited (ADIL). For this it sought the approval of DoT. 263. These four issues were processed in D-30 at 13/N in the note sheet recorded by Sh. P. V. S. R. C. Murthy, AD (VAS- III) on 08.07.2004 to the following effect: “Subject: (i) Change of name of M/s RPG Cellular Services Limited to Aircel Cellular Limited (ii) Change of name of M/s Srinivas Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited (iii) Change in equity structure of M/s Aircel Cellular Limited
PUC-I at P.24/C is a letter from M/s Aircel Cellular Limited requesting issue of formal amendment to Licence Agreement No. 842-23/93- TM dated 20.10.1995 for Chennai Metro Service Area, incorporating changed name. The company
CBI Vs. Dayanidhi Maran & others Page 134 of 424 has confirmed that it has furnished Bank Guarantees in accordance with DOT letter dated 18th March 2004 (P.18/C). Earlier, change of name of M/s RPG Cellular Services Limited to M/s Aircel Cellular Limited was permitted vide P.18/C subject to furnishing of fresh Bank Guarantees in the changed name i.e. M/s Aircel Cellular Limited.
2. Since the company has complied the requirement as conveyed to it vide P.18/C, a formal amendment to Licence Agreement No. 842-23/93- TM dated 20.10.1995 for Chennai Metro Service Area, incorporating changed name i.e. M/s Aircel Cellular Limited is required to be issued. Accordingly, a draft amendment order is put up below at P.30/C for consideration please.
3. PUC-II & III at P.25/C & P.26/C are letters from M/s Aircel Televentures Limited (promoters of M/s Aircel Cellular Limited formerly RPG Cellular Services Limited & M/s Aircel Limited) informing change of its name from M/s Srinivas Computers Limited. The company has enclosed resolution of its Board and fresh certificate of incorporation from Registrar of Companies.
4. As per our records, the equity structure of M/s Aircel Cellular Limited is as follows:
Shareholders' Indian/ No. of shares Total paid- % holding Name Foreign held up capital Srinivas Indian 79.24% Computers Ltd Airtouch Foreign 20.76% International (Mauritius) Ltd. Total 49,000,000 490,000,00 100% 0
5. In view of the above, we may take on record the changed name as conveyed by M/s Aircel Televentures Limited since this a case of change of name of a promoter. With this change, the revised
CBI Vs. Dayanidhi Maran & others Page 135 of 424 equity structure of M/s Aircell Cellular Limited will be as below:
Shareholders' Indian/ No. of shares Total paid- % holding Name Foreign held up capital Aircel Indian 79.24% Televentures Ltd Airtouch Foreign 20.76% International (Mauritius) Ltd. Total 49,000,000 490,000,00 100% 0
6. PUC-IV at P.27/C is a letter from M/s Aircel Cellular Limited informing purchase of its 20.76% shares by Aircel Televentures Limited from M/s Siva Cellular Holdings Limited [formerly Airtouch International (Mauritius) Limited]. Since, this transfer of shares is from a foreign promoter to an Indian promoter, the company has enclosed the approval of RBI for this transaction. The company has also enclosed the copy of Certificate of Incorporation on change of Name of its foreign promoter from Airtouch International (Mauritius) Limited to Siva Cellular Holdings Limited. With this transaction the revised equity structure of the company M/s Aircel Celular Ltd would be as below:
Shareholder's Indian/ No. of shares Total paid- % Name Foreign held up capital holding Aircel Televentures Indian 49,000,000 490,000,00 100% Limited (ATVL) 0
7. PUC-V at P.28/C is a letter from M/s Aircel Cellular Limited, who is holding a CMTS Licence in Chennai Metro Telecom Circle Service Area, seeking approval for change in equity structure consequent upon sale/ transfer of shares to M/s Aircel Digilink India Limited (ADIL). …...... 10. Equity structure after proposed sale/ transfer of shares as intimated by the company M/s Aircel
CBI Vs. Dayanidhi Maran & others Page 136 of 424 Cellular Limited will be as below:
Shareholders' Indian/ No. of shares Total paid- % holding Name Foreign held up capital Aircel Digilink Indian 490,000,00 490,000,00 100% India Limited 0 0 (ADIL)
(from pre-page) …...... 12. In Chennai Metro service area, the other CMTS/ UAS licensees are:
Sl. No. Licensee Company Type of Licenses 1. Hutchison Essar South Ltd. CMTS 2. Bharat Sanchar Nigam Ltd. CMTS 3. Bharti Cellular Ltd. UASL 4. Reliance Infocomm Ltd. UASL 5. Tata Teleservices Limited UASL
12.1 Shareholding patterns of these Licensees are placed at P.31/C to P.35/C
12.2 The present equity structure of ADIL is as below:
Shareholders' Indian/ No. of Paid-up % Name Foreign shares Equity Holdin Capital (Rs.) g Hutchison Indian 10,10,89,995 101,08,99,950 99.99 Telecom East Limited Sandip Das & Indian 1 10 - Hutchison Telecom East Limited Sankara Indian 1 10 - Narayanan & Hutchison Telecom East Limited
CBI Vs. Dayanidhi Maran & others Page 137 of 424 Rajiv Sawhney & Indian 1 10 - Hutchison Telecom East Limited Neha Sharma & Indian 1 10 - Hutchison Telecom East Limited Sundeep Kathuria Indian 1 10 - & Hutchison East Limited Swisscom Foreign 1 10 - TOTAL 10,11,00,00 101,10,00,00 100.00 0 0
12.3. From the above and P.31/C to P.35/C, it is observed that though M/s Hutchison Essar South Ltd. (HESL), which is an associate company of M/s Aircel Digilink India Limited, is already operating in Chennai Metro Service Area, there is no common share holder having 10% or more equity in HESL & ADIL and any other company in the same service area.
13. PUC-VI at P.29/C is a letter dated 30th June 2004 from M/s Aircel Digilink India Limited confirming no dues payable by ADIL to DOT towards license fees and WPC fees for Haryana, Rajasthan and UP (East) service areas. However, we may confirm the same from LF Cell.
14. In view of the above, from the licensing point of view as per the present policy, the proposal for transfer of 100% equity of ATVL to ADIL seems to be in order. However, comments of BS Cell, PIP Cell and LF Cell may please be sought in the matter before processing the case further.
Submitted for consideration please.”
264. The arrangement of the issues in the note speaks for itself. The issue of transfer of equity, which is the most serious
CBI Vs. Dayanidhi Maran & others Page 138 of 424 issue, has been listed in the last. Similarly, the issue of purchase of 20.76% shares from Siva Cellular Holding Limited, which is also a bit controversial has been listed in the middle. It appears that this arrangement has been done so that the serious issues escape the scrutiny/ attention of senior officers/ Minister. 265. Thereafter, the file was marked upward and everybody agreed with the four proposals upto the level of DDG (LF). 266. However, Sr. DDG vide note dated 28.07.2004 asked for a consolidated note to be put up before the competent authority. Accordingly on 29.07.2004, Sh. A. S. Verma, Director (VAS-II), put up a consolidated note at 19/N recommending the proposal to the following effect: “Subject: (i) Change of name of M/s RPG Cellular Services Limited to Aircel Cellular Limited. (ii) Change of name of M/s Srinivas Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited (iii) Change in equity structure of M/s Aircel Cellular Limited
The case of change of name of M/s RPG Cellular Services Limited to Aircel Cellular Limited, Change of name of M/s Srinivas Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited and Change in equity structure of M/s Aircel Cellular Limited has been examined by VAS Cell, PIP Cell, BS Cell and LF Cell. Notes at 13/N onwards may kindly be seen. There appears to be no problem with the proposed transaction of equity. Also, as per noting of LF Cell, there is no any
CBI Vs. Dayanidhi Maran & others Page 139 of 424 outstanding dues against the company.
2. Equity structure after proposed sale/ transfer of shares as intimated by the company will be as below.
Shareholders' Indian/ No. of shares Total paid- % holding Name Foreign held up capital Aircel Digilink Indian 490,000,00 490,000,00 100% India Limited 0 0 (ADIL)
3. In view of the notings from 13/N, the case is submitted for approval of (i) Amendment to the Licence Agreement No. 842-23/93-TM dated 20.10.1995 for Chennai Metro Service Area, incorporating changed name i.e. M/s Aircel Cellular Limited as per draft amendment order at P.30/C; (ii) To take on record the changed name of M/s Srinivas Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited; (iii) The proposed change of equity structure as indicated in para 2 above.
Submitted please.”
267. It may be noted that here the issue of purchase of 20.76% shares by Aircel Televentures Limited is missing. 268. This proposal was agreed to by Sr. DDG (VAS) and Member (P) and the file was marked to Secretary (T) on 03.08.2004. 269. However, on 06.08.2004 it was recorded by Sr. DDG (VAS) that matter was discussed with Secretary (T) on 05.08.2004 where DDG (BS) was also present. He called for further equity structure of the various units involved and marked the file to Director (VAS-II). Thereafter, certain
CBI Vs. Dayanidhi Maran & others Page 140 of 424 clarifications were sought from the company. 270. Thereafter, a note was put up on 23.08.2004, page 20/N, by Sh. A. S. Verma, Director (VAS-II), recommending change of name of RPG Cellular Services Limited to Aircel Celluar Service Limited and change of name of Srinivas Computers Limited to Aircel Televenture Limited but questioning the change in the equity structure of Aircel Cellular Limited as it would violate substantial equity clause. The note is to the following effect: “Subject: (i) Change of name of M/s RPG Cellular Services Limited to Aircel Cellular Limited. (ii) Change of name of M/s Srinivas Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel Televentures Limited (iii) Change in equity structure of M/s Aircel Cellular Limited
The case of change of name of M/s RPG Cellular Services Limited to Aircel Cellular Limited was approved by Chairman (TC) on 17.03.2004 subject to the condition that the company shall provide modified/ fresh Bank Guarantees in lieu of old BGs for the said Licence. Notings in this regard at 12/N may please be seen. The company has fulfilled the above condition and therefore it is proposed to issue formal amendment to Licence Agreement incorporating the changed name (Aircel Cellular Limited in place of RPG Cellular Services Ltd.). Accordingly, a draft amendment (P.30/C) may kindly be approved.
2. Change of name of M/s Srinivas Computers Limited (promoters of M/s RPG Cellular Services Limited & M/s Aircel Limited) to Aircel
CBI Vs. Dayanidhi Maran & others Page 141 of 424 Televentures Limited is a case of name change of a promoter of the Licensee company. The required certificate from Registrar of Companies indicating the changed name has been furnished by the company. We have to take this on our record against the Licensee Company's promoter(s). Approval may please be given to take on record the above stated changed name.
3. Change in equity structure of M/s Aircel Cellular Limited has been re-examined in the light of discussions of Sr. DDG (VAS), DDG (BS) and Secretary (T) on 5 th August 2004 after obtaining the equity structure of various companies involved. The equity structure of various companies involved was called for vide letter at P.37/C. The same has been supplied by these companies and are placed below at P.39/C to P.42/C. From the perusal of the equity structure of these companies, it has been observed that there is no common shareholding having 10% or more equity in HESL & ADIL and any other company in the same service area if we look at the equity structure of the licensee companies. However, on further scrutiny of the equity structure of the promoter(s) of the Licensee Company, it has been observed that there are substantial stakes of M/s Essar Teleholdings Limited in the companies M/s Hutchison Telecom East Limited (33.52%) and M/s Hutchison Essar Telecom Limited (49.03%). M/s Hutchison Telecom East Limited is a promoter of M/s Aircel Digilink India Limited, which is the proposed buyer of 100% stakes of Aircel Cellular Limited, having 99.99% stake. M/s Hutchison Essar Telecom Limited is a promoter of M/s Hutchison Essar South Limited, one of the Licensee in Chennai Metro Service area, having 50.815% stake.
4. In view of the above, the case needs to be examined specifically from the angle of company laws and the CMTS licence agreement clause 1.4 (ii) wherein it has been mentioned that “No single company/ legal person, either directly or through
CBI Vs. Dayanidhi Maran & others Page 142 of 424 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 'an equity of 10% or more'. A promoter company cannot have stakes in more than one licensee company for the same service area. (from pre-page)
5. Comments of PIP Cell is required in the above matter (para 4 above) indicating whether the present proposal of transfer of 100% equity of M/s Aircel Cellular Limited from M/s Aircel Televentures Limited to M/s Aircel Digilink India Limited is violative of condition 1.4(ii) of CMTS Licence Agreement?”
271. Thus, the Secretary (T) Sh. Nripendra Mishra thwarted the illegal sale of Aircel Cellular Limited to ADIL. 272. Thereafter, on 27.08.2004 Sh. N. P. Singh, Director (IP) recorded the following note on 22/N & 23/N: “Kindly refer to note from page 19/N ante.
VAS cell has referred this file for comments of PIP Cell in respect of para 4 of their note on page 20/N indicating whether the present proposal of transfer of 100% equity of M/s Aircel Cellular Limited from M/s Aircel Televentures Limited to M/s Aircel Digilink India Ltd. is violative of condition 1.4 (ii) of CMTS License Agreement.
On perusal of equity structure of Aircel Cellular Ltd and M/s Hutchison Essar South Ltd., (details placed at Flag 'X' and Flag 'Y' respectively), both holding licence for operating cellular mobile telephone service in Chennai, it is seen that these companies have common promoter/ ultimate beneficiary having more than 10% equity holding in both the licensee companies. M/s Hutchison
CBI Vs. Dayanidhi Maran & others Page 143 of 424 Telecom Hong Kong through its various direct and indirect subsidiaries like Asian Telecommunication Investment (Mauritius) Ltd, Al-Amin (Mauritius), Mobilvest (Mauritius), Prime Metal (Mauritius), Euro-Pacific (Mauritius) etc. is holding over 55% in both the companies, with complex equity structuring but ensuring that FDI policy is not violated. Similarly, Essar Group through Essar Teleholding and Essar Shipping is also holding more than 10% equity in both the companies. In addition to these two groups, Kotak Mahindra is also having their interest in both the companies, though there pro-rata share capital may be less than 10%.
The relevant clause 1.4(ii) of CMTS License Agreement is reproduced as under:- “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”.
The aforesaid clause was introduced with an objective to ensure that competition is maintained for the ultimate benefit of the consumers of the service and initially when only two licensees were granted for providing CMTS in a service area. Subsequently, after NTP 99, BSNL was allowed to provide CMTS service and fourth license was also issued (to M/s Hutchison Essar South Ltd) for Chennai. In addition to the above, Reliance Infocomm and Tata Teleservices have also been granted Unified Access Service License. Therefore, at present there are in total six licensee companies who can provide mobile telephone service in Chennai service area.
DoT has also issued guidelines for merger of licenses in a service area with inter-alia permits
CBI Vs. Dayanidhi Maran & others Page 144 of 424 merger of licenses subject to condition that there are atleast three operators in that service area for that service consequent upon such mergers. UASL is also counted for cellular services while deciding the number of operators in a given service area.
From the above, it may kindly be seen that so far as clause 1.4 (ii) of the License Agreement is concerned, there is a violation as both the promoters i.e. Hutchison Telecom, Hong Kong and Essar Group directly or through associates (subsidiaries) have more than 10% equity in both Aircel Cellular Ltd and Hutchison Essar South Ltd, both holding CMTS license for Chennai. However, keeping in view of the latest prevailing guidelines, which ensures competition with the presence of at least three operators in a service area for a service, the proposal could be considered provided that the promoters of both the companies give an undertaking that both the entities i.e. Aircel Cellular Ltd. and Hutchison Essar South Ltd. would be merged after following due procedures under the Companies Act in a reasonable time frame. Perhaps there is a need to amend clause 1.4 (ii) of the License Agreement in line with the present policy of the government on ensuring competition (a minimum of three operators in a service area for a service) as allowed under the guidelines of merger of licenses.
Submitted pl.”
273. The file was marked to Sh. R. N. Prabhakar, Sr. DDG (VAS). Sr. DDG (VAS) recorded the following note on 27.08.2004, 24/N-25/N (D-30): “Reference notes at prep-pages: (a) The case of change of name of M/s RPG Cellular Service Limited to Aircel Cellular Limited was approved by Secretary (T) on 17.03.2004 (12/N) subject to the condition
CBI Vs. Dayanidhi Maran & others Page 145 of 424 that the company shall provide modified/ fresh Bank Guarantees in lieu of old BGs for the said Licence. The company furnished the modified/ fresh Bank Guarantees on 02.04.2004 in lieu of old BGs for the said Licence and informed this cell on 22.06.2004 (24/C). A formal amendment to Licence agreement incorporating the changed name is required to be issued as per draft amendment (P.30/C). The same may please be approved.
(b) Change of name of M/s Srinivas Computers Limited, one of the promoter(s) of M/s Aircel Cellular Limited, to M/s Aircel Televentures Limited, which is to be taken on record as the same has been approved by the Registrar of Companies on 28.04.2004 as per fresh certificate of incorporation issued by him (25/C Annexure II). This may also be approved.
(c) M/s Srinivas Computers Limited, Chennai have purchased 20.76% (total) shareholding of foreign partner M/s Siva Cellular Holdings Ltd. [Formerly Airtouch Internal (Mauritius) Ltd.] with the approval of Reserve Bank of India issued on 07.04.2004 (27/C Annexure I). The company has also enclosed the copy of Certificate of Incorporation of change of Name of its foreign promoter from Airtouch International (Mauritius) Limited to Siva Cellular Holdings Limited. With this transaction the revised equity structure of the company M/s Aircell Cellular Ltd. would be as below:
Shareholders Indian/ No. of shares Total paid- % holding Name Foreign held up capital
CBI Vs. Dayanidhi Maran & others Page 146 of 424 Aircel Indian 490,000,00 490,000,00 100% Televentures 0 0 Limited (ATVL) [Formerly M/s Srinivas Computers Limited {(b) above}]
As per licence conditions [43/C para (viii)], the company is supposed to take prior approval of Licensor whenever any existing partner acquires foreign partner's shareholding. While the company has informed the licensor on 21.06.2004 (27/C) and have requested to take a note of it. As the company has taken RBI approval and after purchase of foreign share holding, 100% holding will be with Aircel Televentures Ltd. (formerly M/s Srinivas Computers Limited), we may approve the above transaction with a warning to the company that they must follow the terms and conditions of licence agreement. accordingly, draft letter placed at 44/C may please be approved.
(d) Aircel Cellular Limited (formerly RPG Cellular Services Ltd.) have applied for subsequent change of equity structure on proposed acquisition of 100% stakes of the company from M/s Aircel Televentures Limited (ATVL) by M/s Aircel Digilink India Limited (28/C dated 28.06.2004). This has been examined in detail with respect to clause 9 of amendment at 43/C relating to equity in more than one licensee company in the same service area for same service. It has been observed that there is a substantial stake of one its promoters namely, “Essar Teleholdings Limited” in M/s Hutchison Essar South Limited (49.03%) and M/s Aircel Digilink India Limited (33.52%). DDG (PIP) have examined it from the foreign holding aspect also (22/N & 23/N) and have stated that there is a violation of licence
CBI Vs. Dayanidhi Maran & others Page 147 of 424 conditions.
Thus, the proposed acquisition of equity by M/s Aircel Digilink India Limited would be violative of clause 9 of amendment of the licence agreement (43/C) relating to equity in more than one licensee company in the same service area for same service. Therefore, the change of equity structure of Aircel Cellular Limited from Aircel Televentures Ltd. to Aircel Digilink India Ltd. cannot be permitted. Accordingly a reply to M/s Aircel Cellular Limited intimating that their request of change of equity structure cannot be acceded to is proposed to be sent as per draft placed below at 45/C.
(Full details of the case are at 13/N onwards)”
274. Here again, the issue of purchase of 20.76% shares by Aircel Televentures Limited was introduced and it was recorded by the Sr. DDG that it was done without approval of DoT and a warning be given to the company. 275. After recording the note, the file was marked to Member (P) who recorded the note dated 31.08.2004 at 26/N to the following effect: “Ref. Notes on pre-pages.
2. The equity structure of M/s Hutchison Essar South Limited is at 41/c. This is one of the cellular companies operating in Chennai metro service area.
3. The equity structure of M/s Aircel Digilink India Limited is at 42/c and the company has sought permission for acquiring 100% stake of M/s Aircel Cellular Limited from its promoter M/s Aircel Televentures Limited. M/s Aircel Cellular Limited is another cellular operator for Chennai metro service
CBI Vs. Dayanidhi Maran & others Page 148 of 424 area.
4. From the holdings of M/s Hutchison Essar South Limited and M/s Aircel Cellular Limited, it is noticeable that M/s Essar Teleholdings Limited has 49.03% holdings in M/s Hutchison Essar Telecom Limited which would make it to 25% of weighted holding in M/s Hutchison Essar South Limited and 33.52% holdings in M/s Aircel Cellular Limited.
5. Therefore, it is not possible to support the current proposal for change of equity structure, as it will amount to violation Clause 9 of amendment of the licence agreement as 'indicated in the note at 25/N.
6. We may, hence, agree to all the suggestions of the VAS Wing given at 24/N and 25/N (a,b,c&d).”
Marking of the file to the Minister and return thereof 276. After recording the note the file was marked to Secretary (T) on the same day. Secretary (T) discussed the matter with Sr. DDG (VAS), DDG (BS) and DDG (PIP) and on 06.09.2004 marked the file to the Minister for approval of para 5 of the note of Member (P). 277. It may be noted that Member (P) vide para 6 of his note recommended four proposals as contained in the note of Sr. DDG (VAS) at points a, b, c, and d, pages 24/N and 25/N. However, the Secretary (T) discussed the matter with Member (P), Sr. DDG (VAS), DDG (BS) and DDG (PIP) and recommended only para 5 for approval to the Minister. The para 5 pertains to rejection of proposal for change in equity structure of Aircel Cellular Limited. The Secretary did not
CBI Vs. Dayanidhi Maran & others Page 149 of 424 recommend three other proposals. 278. However, vide order dated 15.09.2004 (49/c), the file was returned from the office of Minister as per direction of the Minister recorded by Sh. K. Sanjay Murthy in D-40 at 35/N, which reads as under: “I have been directed to convey the following:
There are many inter-related issues between mergers & acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns. An overall view on issues arising in such cases needs to be taken before a decision can be taken. All the inter-related issues mentioned above pertaining to the case being dealt in the below mentioned files be examined and a consolidated Note submitted:-
(i) F. No. 842-21/2001-VAS (Vol. III) (ii) F. No. 842-325/2000-VAS (iii) F. No. 808-26/2003-VAS (Vol. I) (iv) F. No. 20-231/2003-BS-III
2. AS (T) may prepare the note and submit the same through Secretary (T). The above mentioned files are placed below.”
279. This fact was noted in the instant file at 26/N on 14.12.2004 and the file was marked to ADG (VAS-I). 280. Thereafter, ADG (VAS-I), recorded note dated 17.12.2004, 27/N, which reads as under: “Reference notes on pre-page 'A' The case for permitting change of name by amending licence agreement was put up for approval and a draft letter for the same is placed at 30/C. The same may kindly be approved. 'B' The case of change of equity structure was
CBI Vs. Dayanidhi Maran & others Page 150 of 424 examined and approval was sought and it was proposed to intimate the company as per draft letter at 44/c. The same may also be kindly approved. 'C' With regard to change of equity structure consequent upon 100% acquisition by Aircel Digilink India Ltd the case was examined in detail and it was recommended that it is in violations of clause 9 of amendment dated 25.09.2001 of the licence agreement, as such this change was not to be permitted and accordingly the co. will be informed as per draft letter at 45/c. The same may kindly be approved. Submitted please.”
281. He marked the file to Director (VAS-II). Director (VAS-II), recorded a note of the same date at 28/N, which reads as under: “Ref. notes at pre-pages: This file was put up for approval of proposals contained in para marked 'A', 'B' & 'C' at 27/N. This file alongwith other files were referred to AS(T) for examination of inter-related issues regarding merger and acquisition. The remarks of AS(T) is available at 49/C, wherein he has mentioned status of this case and no further remarks has been given. In view of the above, it is proposed that proposals contained in para marked 'A', 'B' & 'C' at 27/N alongwith draft letters at 30/c, 44/c and 45/c may kindly be approved. Submitted please.”
282. Thus, the file was again processed at 27/N and 28/N taking note of the report of Additional Secretary (T) at 28/N. 283. On 11.01.2005, Sh. R. N. Prabhakar, Sr. DDG (VAS), recorded the following note at 29/N: “Subject: Change in name & Equity structure of M/s RPG Cellular Services Ltd., Chennai.
CBI Vs. Dayanidhi Maran & others Page 151 of 424 M/s RPG Cellular Services Ltd., a Cellular Mobile licensee of Chennai Telecom Service area had applied for following changes in their cellular mobile license:
(a) Change of name of the company from M/s RPG Cellular Services Ltd. to Aircel Cellular Ltd. (16/C) and it was approved by the competent authority on 17.3.2004 (12/N). The company was informed that your request for change of name has been provisionally approved and kindly submit modified Bank Guarantee / Fresh Guarantee. Final amendment shall be issued on receipt of modified Bank Guarantee (18/C). The company informed on 22.6.04 that they have submitted the revised Bank Guarantees on 5.4.2004 (24/C). Accordingly, the draft amendment letter (30/C & para 'a' at 24/N) was put up for approval.
(b) Purchase of 20.76% shareholding of foreign partners, M/s Siva Cellular Holdings Ltd. by M/s Srinivas Computers Ltd. The approval from Reserve Bank of India has been given on 7.4.2004 (enclosure with 27/C). With this purchase, the 100% shares of M/s RPG Cellular Limited (name changed to Aircel Cellular Ltd.) get acquired by M/s Srinivas Computers Ltd. (Para 'C' at 24/N). The company informed this on 21.6.04 (27/C).
(c) Change of name of the promoter, M/s Srinivas Computers Limited to M/s Aircel Televentures Ltd. issued by the Registrar of Companies Tamilnadu, Chennai on 28.4.04 (enclosure with 25/c) (para “b” at 24/N) and company intimated for this change by letter dated 21/22.6.2004 (25/C & 26/C).
(d) The company have applied for transfer of 100% equity structure from M/s Aircel Televentures Ltd. to M/s Aircel Digilink India Ltd. (28/C & para 'd' at 24/N).
CBI Vs. Dayanidhi Maran & others Page 152 of 424 The above cases were examined and proposal was put up for accepting the proposals mentioned at (a) to (c) above and rejecting the proposal at (d) above as per details at P. 24/N and 25/N. In regard to proposal at 'b' above, it was felt that prior approval of the licensor is required for any change in equity structure of the company even after lock-in period of five years as per amendment letter no. 842- 47/2000-VAS/Vol.IV dt. 29.1.2001 para (viii). The copy of the relevant amendment is placed at 43/C. However, in a similar case of M/s Escotel Mobile Communications Ltd. legal advice was sought and as per legal advice (copy at 51/C), no prior permission is required for change in equity structure after the lock-in period of five years. As such the proposal at 'b' above can be taken on record.
In regard to this whole case, certain information was desired by the PS to Hon'ble MOC&IT office and AS (T) was asked to examine these aspects (49/C). AS (T) has given its report and it is placed as enclosure to 49/C. In regard to this particular case, AS (T) has given the brief details of the case in Item 2 and these are as per details submitted by VAS Cell. No new issue has been stated by him. In view of this, the case is put up again with the remarks that the proposals at 'a' to 'c' above can be taken on record and accordingly draft letters at 30/C, 52/C are put up for approval. The proposal at 'd' above cannot be accepted and accordingly draft letter placed at 53/c may be approved.”
284. Thereafter, Member (P) recorded note dated 13.01.2005, 30/N, to the following effect: “The case concerns four portions.
The first portion is regarding change of name of the company from M/s. RPG Cellular Services Ltd. to Aircel Cellular Ltd. This was agreed to by the competent authority and the draft amendment was
CBI Vs. Dayanidhi Maran & others Page 153 of 424 put up for approval as per (a) of P.29/N.
2. The second portion is regarding approval of share holding of foreign partners, i.e. purchase of equity share holding of 20.76% of M/s. Siva Cellular holding Ltd. by M/s. Srinivas Computers Ltd. and the same has already been approved by Reserve Bank of India as cited at (b) of p.29/N. (In fact only information is required to be submitted to us as it is beyond lock in period).
3. The third portion is regarding change of name of the promoter M/s Srinivas Computers Ltd. to M/s. Aircel Televentures Ltd. issued by the Registrar of Companies which was intimated to us on 22.6.2004 as per (c) of p.29/N. 4. The fourth portion is regarding transfer of 100% equity structure from M/s. Aircel Televentures Ltd. to M/s. Aircel Digilink India Ltd. cited at (d) on p.29/N.
5. The proposal as regards 4 above had come back from Hon'ble MOC&IT suggesting for reexamination of the same along with note at p.49/c. Subsequently it was seen that there are no specific further inputs from AS(T).
6. As the things stand now, the proposals as items 1,2,3 above are required to be approved by Chairman (TC) as the same had not been accorded vide 24/N-26/N.
7. As regards our proposal of not supporting the change of equity structure at item(4), the same had been forwarded by Chairman(TC) to Hon'ble MOC&IT and this is, perhaps, required to be resubmitted to MOC&IT for final approval pl.”
285. After recording the note, the file was marked to Secretary (T) who asked for confirmation and approval of para 6 and 7 of the note of Member (P) and marked the file to the
CBI Vs. Dayanidhi Maran & others Page 154 of 424 Minister on 14.01.2005. 286. However, the file was again returned from the office of Minister vide order dated 03.03.2005 recorded by Sh. K. Sanjay Murthy at 31/N, to the following effect: “File Nos. 842-325/2000-VAS (D-40) and 842- 21/2001-VAS (D-30) are returned as reports on mergers and acquisitions are awaited.”
287. It is the case of the prosecution that this note is totally false as no report on merger and acquisition was awaited. Sh. P. K. Mittal has also so stated in his statement. However, vide order dated 15.09.2004 in D-40, Minister had asked for a note of AS(T) on the issue mentioned in the note as already extracted. However, this note was not directly and independently sent to the Minister, but was sent as a part of other voluminous record. In such a situation, there is every possibility of the note escaping the attention of the Minister and the Minister recording that reports on merger and acquisition are still awaited. I do not find anything mala fide in this.
Withdrawal of application for change of equity structure 288. In the meanwhile company wrote a letter dated 07.03.2005 (54/c) withdrawing the application for change of equity structure on transfer of equity of Aircel Cellular Limited held by Aircel Televenture Limited to Aircel Digilink India Limited. In the light of this development, the file was processed again and various note sheets were recorded and clarifications were sought. The proposal was recommended at all levels and
CBI Vs. Dayanidhi Maran & others Page 155 of 424 following note sheet dated 03.11.2005 was recorded by Sh. A. K. Dhar, ADG (VAS-I) to the following effect at 38 & 39/N: “Subject: Change of name & Equity structure of M/s RPG Cellular Services Limited and change of name of their promoter M/s Srinivas Computers Ltd.
M/s. RPG Cellular Services Ltd., a Cellular Mobile Telephone Service (CMTS) licensee of Chennai Telecom Service area had applied for following changes:
(i) Change of name of the company from M/s. RPG Cellular Services Ltd. to Aircel Cellular Ltd. (16/C) and it was approved by the competent authority on 17.03.2004 (12/N). The company was informed that the request for change of name has been provisionally approved. The company was asked to submit modified Bank Guarantee/ Fresh Guarantee in the new name of the company as per requirement of the Licence Agreement. it was also stated that Final amendment shall be issued on receipt of modified Bank Guarantee (18/C). The company informed on 22.06.2004 that they have submitted the revised Bank Guarantees on 05.04.2004 (24/C). Accordingly, the draft amendment letter (30/C & para 'a' at 24/N) was put up for approval.
(ii) Purchase of 20.76% shareholding of foreign partners M/s. Siva Cellular Holdings Ltd. by M/s. Srinivas Computers Ltd. The company obtained necessary approval from Reserve Bank of India on 07.04.2004 (enclosures with 27/C). With this purchase, the 100% shares of M/s. RPG Cellular Limited (name changed to Aircel Cellular Ltd.) gets acquired by M/s. Srinivas Computers Ltd. (Para 'c' at 24/N). The company informed this on 21.06.2004 (27/C).
CBI Vs. Dayanidhi Maran & others Page 156 of 424 (iii) Change of name of the promoter, M/s. Srinivas Computers Limited to M/s. Aircel Televentures Ltd. issued by the Registrar of Companies Tamilnadu, Chennai on 28.04.2004 (enclosure with 25/C) (para 'b' at 24/N) and company intimated for this change by letter dated 21/22.06.2004 (25/C & 26/C).
The above cases were examined and proposal was put up for accepting the proposals mentioned at (i) to (iii) above as per details at 13/N onwards.
In addition to the above, the company had also requested for transfer of its entire 100% equity to M/s Aircel Digilink India Limited (28/C). This case was also examined along-with above mentioned cases (notes from 13/N onward may kindly be seen). However, subsequently the company withdrew its application for transfer of its entire 100% equity to M/s Aircel Digilink India Limited (54/C, 32/N).
(from pre-page) In view of above, the proposals (i) to (iii) above for taking on record the changed name of M/s RPG Cellular Services Limited to M/s Aircel Cellular Limited, Change in shareholding of the company thereby 100% stake held by M/s Srinivas Computers Ltd., change of name of the promoter [of M/s Aircel Cellular Limited (Formerly M/s RPG Cellular Services Limited)] M/s. Srinivas Computers Ltd. to M/s Aircel Televentures Limited and DFAs 30/C, 52/C may kindly be approved.”
289. The file was marked upward and was approved by the Secretary on 10.11.2005. 290. Regarding the proceedings conducted in file D-30, about the aforesaid issues, PW 8 Sh. P. K. Mittal has narrated the events in detail in his statement dated 20.04.2012. It is
CBI Vs. Dayanidhi Maran & others Page 157 of 424 relevant to extract his statement from pages 4 onwards, which is as under:
“From perusal of the above referred shareholding pattern of M/s ADIL and M/s HESL, on the face of it, there was no common shareholding of more than 10% in M/s HESL and M/s ADIL. On being asked I state that Sh. A. S. Verma, the then Director (VAS-II) vide 19/N recommended for proposed change of equity structure of M/s Aircel Cellular Ltd. on 29.07.2004 and marked the file to Sh. R. N. Prabhakar, the then Sr. DDG (VAS) who also recommended the same and marked the file to Member (P) on 01.08.2004. Sh. B. V. Shivaramakrishnan, the then Member (P) also concurred with the said recommendation and signed the note-sheet on 03.08.2004 and sent the file to Sh. Nripendra Misra, the then Secretary (T). On being asked I state that thereafter a discussion took place on 05.08.2004 in the Chamber of Sh. Nripendra Misra, the then Secretary (T) which was attended by Sh. R. N. Prabhakar, the then Sr. DDG (VAS) and myself. As per the instruction of the then Secretary (T), a letter was sent to the following companies seeking equity structure of the companies and their promoters:- (i) M/s Aircel Cellular Ltd. (ii) M/s Hutchison Essar South Ltd. and (iii) M/s Aircel Digilink India Ltd. …...... The case was re-examined in the context of the detailed structure of these companies and it was noted by Sh. A.S. Verma the then Director (VAS-II) that M/s Essar Teleholdings Ltd. is having 33.52% in M/s Hutchison Telecom East Ltd. and 49.03% in
CBI Vs. Dayanidhi Maran & others Page 158 of 424 M/s Hutchison Essar Telecom Ltd. M/s Hutchison Telecom East Ltd. is a promoter of M/s ADIL which a proposed buyer of ACL, a licensee in Chennai Metro Circle area. M/s Hutchison Essar Telecom Ltd. is a promoter of M/s Hutchison Essar South Ltd. another licensee in Chennai Metro Circle area. He submitted the case for further examination specifically from substantial equity point of view and marked the file to DDG (PIP) on 23.08.2004. Sh. N. P. Singh, the then Director (IP) examined the case and put up a note on 27.08.2004 vide 22-23/N of the said file. He noted that so far as clause 1.4 (II) the License Agreement is concerned, there is a violation as both the promoters i.e. M/s Hutchison Telecom, Hong Kong and M/s Essar Group directly or through Associates (Subsidiaries) have more than 10% equity in both Aircel Cellular Ltd. and M/s HESL, both CMTS licensee after the acquisition...... Therefore, the change of equity structure of ACL from Aircel Televentures Ltd. to ADIL can not be permitted. He marked the file to Member (P) Sh. B. V. Shivaramakrishnan. Sh. B. V. Shivaramakrishnan, the then Member (P) noted on 31.08.2004 that it is not possible to support the current proposal for change of equity structure as it will amount to violation of clause 9 of amendment of the License Agreement and marked the file to Secretary (T). Sh. Nripendra Misra the then Secretary (T) directed to have a discussion on 06.09.2004 and to be attended by Member (P), Sr. DDG (VAS), DDG (VS) and DDG (PIP). Sh. Nripendra Misra marked the file to MoC&IT on 06.09.2004 for approving the proposal that it is not possible to support the current proposal for change of equity structure as it will amount to violation of clause 9 of amendment of the License Agreement. The said file was received along with other file from the office of MoC&IT vide a note, copy of which is placed at 419/C of the said file. As per the directions
CBI Vs. Dayanidhi Maran & others Page 159 of 424 of MoC&IT, as communicated by his PS Sh. K. Sanjaymurthy dated 15.09.2004, it was desired that AST may prepare a note and submit the same to Secretary (T) on the cases in the following file:- 1. 842-21/2001/VAS (Vol. III) 2. 842-325/2000-VAS- the file being referred above. 3. 808-26/2003-VAS (Vol. I) 4. 20-231/2003-BS-III The Secretary observed on the above note as under:- “My recommendations are available on the file. AST please comply with the orders of MoC&IT and submit it to MoC&IT for superior orders.” Thus, Additional Secretary (T) submitted a report dated 30.11.2004 which is available at 420/C to 422/C. He also mentioned in his report that his proposal is not recommended on the ground that promoters of new management also hold substantial equity in another company HESL who also hold the license for the same service area for the same service. Sh. R. N. Prabhakar processed the case again on 11.01.2005 vide 29/N along with three other proposals relating to change of name of promoters, purchase of 20.76% shares of foreign partners and change of name of company from RPG Cellular Services Ltd. to Aircel Cellular Ltd. He submitted the case to Member (Production) who noted on 13.01.2005 (inadvertently mentioned as 13.01.2004) that our proposal of note supporting the change of equity has been forwarded by Chairman (TC) to Hon’ble MoC&IT and this is, perhaps required to be resubmitted to MoC&IT for final approval. He also submitted the case for formal approval of Chairman (TC) for three above mentioned items. Sh. Nripendra Misra, the then Chairman (TC) marked the file to MoC&IT on 14.01.2004 for confirmation and approval of proposal submitted by Member (Production). The
CBI Vs. Dayanidhi Maran & others Page 160 of 424 said file was returned from the office of MoC&IT by Sh. K. Sanjaymurthy, PS to MoC&IT on 03.03.2005 vide note at 31/N of the said file stating that this file is returned as reports on merger and acquisition are awaited. On being asked I state that, no report on merger and acquisition was awaited. The report on the subject was already submitted by Dr. J.S. Sarma, the then AS(T). On 07.03.2005, Sh. V. Srinivasan, the then Director for Aircel Cellular Ltd. submitted a letter to Director (VAS) withdrawing their application for shareholding with immediate effect. It was stated that till date they had not received approval from DoT and the receipt of approval from DoT was an important requisite for consummation of the proposed transaction, Aircel Televentures Ltd. and Aircel Digilink India Ltd. have now terminated the Purchase Agreement. On being asked I clarified that since the applicant had withdrawn the application for the change of share holding pattern the case for the same was not processed further. On being asked I state that M/s Aircel Ltd. (having CMTS license for ROTM) and M/s Aircel Cellular Ltd. (having CMTS license for Chennai Metro) were the 100% subsidiary of M/s Aircel Televentures Ltd. M/s ADIL had submitted the following two applications:- 1. Application dated 28.06.2004 for approval for change of equity in Aircel Cellular Ltd. 2. Application dated 28.06.2004 for approval for change of equity in Aircel Ltd. …...... ”
291. PW 10 Sh. R. N. Prabhakar has also stated about the
CBI Vs. Dayanidhi Maran & others Page 161 of 424 movement of the two files, that is, D-30 and D-40, in his statement 26.12.2011, in which he has not stated anything specific except narrating the note sheets. However, in his statement dated 29.08.2013 he has narrated entire sequence of events as under: “...... In fact, M/s Aircel Cellular Ltd. had requested for approval for change of equity in Aircel Cellular Ltd. M/s Aircel Digilink India Ltd. (ADIL) was the proposed equity holder. The said request was processed by DoT officials and the same is available in the note sheet. Sh. A.S. Verma, the then Director(VAS-II) vide 19/N recommended for proposed change of equity structure of M/s Aircel Cellular Ltd. on 29.07.2004 and marked the file to me. I also concurred with the recommendation of Sh. A.S. Verma and marked the file to Member(P) on 01.08.2004 who in turn marked the file to Secretary(T) on 03.08.2004. A discussion took place on 05.08.2004 in the chamber of Sh. Nripendra Misra, the then Secretary(T) which was attended by Sh. V. Sivaramakrishnan, the then Member(P), Sh. P.K. Mittal, the then DDG(BS) and myself. During discussion, Sh. N.Misra, Secretary(T) directed to seek the equity structure of the following companies and their promoters: 1. M/s Aircel Cellular Ltd., 2. M/s Hutchison Essar South Ltd. and 3. M/s Aircel Digilink India Ltd. Accordingly, a letter dated 11.08.2004 which is available at 450/C of the above referred file, was sent under the signature of Sh. A.S. Verma, the then Director(VAS-II). The replies were received and the case was re-examined in the context of the detailed equity structure of this company. Sh. A.S. Verma examined the case and put up a note on 23.08.2004 which was marked to DDG(PIP).
CBI Vs. Dayanidhi Maran & others Page 162 of 424 Sh. N.P. Singh, the then Director(IP) examined the case and put up a note on 27.08.2004 vide 22-23/N of the said file and marked it to Sh. Vijay Kumar, the then DDG(PIP) who signed the note sheet on 27.08.2004 and marked the file to me. I thoroughly examined the proposal and prepared a note vide 24-25/N. I found that the proposed acquisition of the equity by M/s ADIL would be violating of clause 9 of amendment of the Licence Agreement relating to equity in more than one licencing company in the same service area for the same service. Therefore, the change of equity structure of M/s Aircel Cellular Ltd. from Aircel Televentures Ltd. to ADIL cannot be permitted. I marked the file to Member(P) who on 31.08.2004 noted that it was not possible to support the current proposal for change of equity structure as it will amount to violation of clause 9 of amendment of the Licence Agreement and marked the file to Secretary(T). Sh. Nripendra Misra, Secretary(T) directed to have a discussion with Mebmber(P), Sr. DDG(VAS), DDG(BS) and DDG(PIP) and accordingly a discussion took place on 06.09.2004. Sh. Nripendra Misra, the then Secretary(T) marked the file to Sh. Dayanidhi Maran, the then MoC&IT on 06.09.2004 for approving the proposal that it is not possible to support the current proposal for change of equity structure as it will amount to valuation of clause 9 of amendment of the Licence Agreement. The file was received in the office of MoC&IT on 06.09.2004 itself. The approval as recommended by the then Secretary(T) was not granted. In fact, the above referred file alongwith other files were sent back to Secretary(T) by Sh. K. Sanjay Murthy, the then PS to MoC&IT on 15.09.2004 stating that AS(T) may prepare a note and submit the same through Secretary(T). Sh. Nripendra Misra, the then Secretary(T) marked the file to Dr. J.S. Sarma, AS(T) on 15.09.2004 itself. Sh. J.S. Sarma, the then AS(T) offered his comments on 30.11.2004 and marked the file to Secretary(T) who directed Sh. P.K. Mittal, the
CBI Vs. Dayanidhi Maran & others Page 163 of 424 then DDG(BS) to put up the legal status on the comments of AS(T) on 03.12.2004. The DDG(BS) discussed the case with Legal Advisor, DoT on 08.12.2004. And LA desired a Self Contained Note to be prepared for his advice. The DDG(BS) sent the file to me on 10.12.2004 and I marked the same to Director(VAS-II) on 14.12.2004 for preparing a Self Contained Note as desired by LA. A copy of the note sheet through which the above referred file was sent to AS(T) is also placed in the above referred file at 419/C to 423/C. Sh. A.S. Verma, the then Director(VAS-II) marked the file to ADG(VAS-I) who prepared a note dated 17.12.2004 and marked the file to Director(VAS-II). Sh. A.S. Verma, the then Director(VAS-II) recommended as under on 17.12.2004 and marked the file to me: (a) To approve the change of name from RPG Cellular Services Ltd. to Aircel Cellular Ltd., (b) To approve the purchase of 20.76% share holding of foreign partner namely M/s Siva Cellular Holdings Ltd. by M/s Srinivas Computers Ltd. and 1. The transfer of 100% equity structure from M/s Aircel Televentures Ltd. to M/s Aircel Digilink India Ltd. may not be approved.
I also examined the matter and recommended as under on 11.01.2005: (a) To approve the change of name from RPG Cellular Services Ltd. to Aircel Cellular Ltd. (Aircel Cellular Ltd. was having CMTS Licence in Chennai Metro Service Area), (b) To approve the purchase of 20.76% share holding of foreign partner namely M/s Siva Cellular Holdings Ltd.(formerly Airtouch International (Mauritius) Ltd.) in Aircel Televentures Ltd. by Aircel Televentures Ltd. to make it 100% Indian Company and (c) Change of name of M/s Srinivas Computers Ltd. to M/s Aircel Televentures Ltd. (i) The transfer of 100% equity structure from M/s Aircel Televentures Ltd. to M/s Aircel Digilink India Ltd. may not be approved.
CBI Vs. Dayanidhi Maran & others Page 164 of 424 On being asked, it is clarified that M/s RPG Cellular Services Ltd. was having CMTS Licence in Chennai Metro Service Area. ROC, Chennai had approved the change of name from RPG Cellular Services Ltd. to M/s Aircel Cellular Ltd. The Licencee made a request vide letter dated 26.02.2004(available at 519/C) for taking on record the change of name from RPG Cellular Services Ltd. to M/s Aircel Cellular Ltd. was made . The share holding pattern of M/s Aircel Cellur Ltd. was as under: (i) 79.24% equity was held by Srinivas Computers Ltd.(Indian Company), (ii) 20.76% equity was held by Airtouch International (Mauritius) Ltd.(foreign company). The Licencee made a request vide letter dated 21.06.2004(available at 487/C) for taking on record purchase of above referred 20.76% foreign equity by M/s Aircel Televentures Ltd.(formerly Srinivas Computers Ltd.) after obtaining approval from Reserve Bank of India. M/s Aircel Televentures Ltd. vide its letter dated 21.06.2004 (available at 493/C) requested for taking on record the name change from Srinivas Computers Ltd. to Aircel Televentures Ltd. I marked the file to Member(P) on 11.01.2005. The Member(P) then marked the file to Chairman(TC) on 13.01.2005(inadvertently typed as 13.01.2004). Sh. Nripendra Misra, Chairman(TC) then sent the file to MoC&IT on 14.01.2005 for approval of the above four(a to d) recommendations. On being asked, I state that the approval was not granted and the file was returned on 03.03.2005 by Sh. K. Sanjay Murthy, PS to MoC&IT to Secretary(T) with the remark that reports on mergers and acquisition are awaited. M/s Aircel Cellular Ltd. vide its letter dated 07.03.2005(available at 414/C) informed the DoT that they are withdrawing the application for change of share holding pattern with immediate effect. This development was brought to the notice of Sh. Nripendra Misra, the then Secretary(T).
CBI Vs. Dayanidhi Maran & others Page 165 of 424 On being asked, I state that meanwhile the legal opinion dated 11.01.2005 was already received in another file in which the transfer of 100% equity of M/s Aircel Ltd. for Tamil Nadu service area was being processed. ADG(VAS) again put up a note dated 25.04.2005 (inadvertently mentioned as 25.04.2004) to Director(VAS-II) recommending for approval of the above referred three recommendations. Sh. A.S. Verma, the then Director(VAS-II) concurred with the recommendation and marked the file for approval to DDG(VAS) on 24.05.2005. Here it is pertinent to state that by this time I was promoted to the rank of Advisor(P) and Sh. P.K. Mittal was having the charge of VAS cell as DDG(VAS). Sh. P.K. Mittal enquired about merger and acquisition and sought specific comment on that from Director(VAS-II) who marked the file to AD(VAS-I). AD(VAS-I) put up a note on 30.08.2005 mentioning that the company vide letter dated 17.03.2005 has withdrawn the application for merger and acquisition of that company from Aircel Televentures Ltd. to ADIL. I perused the said note dated 30.08.2005 and there is no mention of a report awaited on merger and acquisition. AD(VAS- I) also recommended for approval of three recommendations i.e. to take on record the change of name from M/s RPG Cellular Services Ltd. to M/s Aircel Cellular Ltd. to grant approval for purchase of 20.76% share holding of foreign partner(M/s Siva Cellular Holdings Ltd.) by M/s Srinivas Computers Ltd. and to take on record the change of name of the promoter namely M/s Srinivas Computers Ltd. to ATVL. The file was marked to Director(VAS) who concurred with the recommendation and marked the file to DDG(VAS) who in turn marked it to me. I endorsed the recommendation and marked the file to Member(P) and Secretary(T) for approval. By this time, Dr. J.S. Sarma had joind DoT as Secretary(T) who raised certain queries with regard to the file on 20.09.2005 which was complied with
CBI Vs. Dayanidhi Maran & others Page 166 of 424 and the file was again put up to him by me on 01.10.2005. Dr. J.S. Sarma, Secretary(T) desired a discussion with me and after having discussion directed to prepare a brief consolidated note which was complied with and the file was again put up to him through me on 09.11.2005. Dr. J.S. Sarma, Secretary(T) approved the above referred three recommendations on 10.11.2005.”
292. PW 14 Sh. B. Siva Ramakrishnan, Member (P), and PW 78 Sh. A. S. Verma, Director (VAS-II), have also stated about this file in their statements dated 28.10.2013 and 27.04.2012 respectively, but have not said anything specific except narrating the note sheets. 293. It is interesting to note as to what Sh. C. Sivasankaran, PW 34, has to say about the sale of Aircel Limited, a licencee in Tamil Nadu service area, and Aircel Cellular Limited, a licencee in Chennai service area, to Aircel Digilink India Limited. He states in his statement dated 23.03.2012, pages 3 to 5 as under: “...... On being asked, I state that at this time, the stage was set in India for a revolution in mobile telephony. With Siva Group’s success in Chennai and RoTN circles, we felt confident to ride the revolution in mobile telephony and were planning for a pan India presence. Consequently, M/s Dishnet DSL Limited applied on 05.03.2004 to Department of Telecommunications, New Delhi (DoT) for grant of UASLs in respect of eight service areas namely, Assam, Bihar, Himachal Pradesh, North East, Orissa, Jammu & Kashmir, West Bengal and Madhya Pradesh telecom circles. The Letters of Intent (LOI) in respect of these eight telecom circles were issued by DoT on 06.04.2004. Further, the
CBI Vs. Dayanidhi Maran & others Page 167 of 424 UASLs in respect of above seven telecom circles except Madhya Pradesh telecom circle were issued on 12.05.2004. Thus, DOT issued licenses for all the said seven circles within two months of our applying for the same. As regards Madhya Pradesh circle, M/s Dishnet DSL Ltd. had requested DoT for extension of time of 90 days to comply the requirements of the LOI including arranging required bank guarantee and entry fee. On 21.04.2004, M/s Dishnet DSL Ltd. applied to DoT for grant of UASLs for two more telecom circles, viz. UP East and UP West. On being asked I state that having applied for all the licenses, the Siva Group was conscious of arranging adequate finance to roll out and operationalize the new circles. Siva Group had estimated a total investment of about Rs. 2,100 crores for this purpose, which was planned to be serviced by a combination of debt and equity in the ratio of 1:1. At this juncture sometime in June 2004, I decided to divest the holdings of Siva Group in M/s Aircel Ltd. and M/s Aircel Cellular Ltd. in order to raise funds to roll-out the new circles. On being asked I state that I directed Sh. V Srinivasan the Chief Executive Officer of Dishnet DSL Ltd., to search for prospective buyers for the telecom business in Chennai and RoTN circles. Meanwhile, Sh. V Srinivasan informed me that Hutchison Essar group (now known as Vodafone Essar group) controlled by Lika Shing of Hutchison Whampoa, Hong Kong, had contacted him and they had expressed their interest to acquire 100% stake of both M/s Aircel Ltd. and M/s Aircel Cellular Ltd. I then made the decision to sell 100% stake of both M/s Aircel Ltd and M/s Aircel Cellular Ltd. to Hutchison Essar group and asked the Siva Group team to negotiate and close the transaction with Hutchison Essar Group. I was subsequently informed by Sh. V Srinivasan that on 19th June 2004, an agreement was executed between ATVL and M/s Aircel Digilink India Ltd. (ADIL), a Hutchison Essar group company in which the said
CBI Vs. Dayanidhi Maran & others Page 168 of 424 buyer had agreed to pay a total consideration of Rs. 1,200 crores to ATVL to buy 100% of Aircel Ltd. and Aircel Cellular Ltd. Sh. V Srinivasan also informed that M/s Aircel Digilink India Limited had made a down payment of Rs. 100 crores on the same date as per the terms of the said agreement. On being asked I state that Sh. V Srinivasan had also informed me that the proposed sale mentioned above necessitated the approval of DoT for change of equity in M/s Aircel Cellular Ltd. and M/s Aircel Ltd. for which necessary applications were already submitted in this regard to the DoT. He had also informed that the entire team of seller and buyer i.e. ATVL and ADIL were rigorously pursuing the matter with DoT in order to obtain the necessary approval so that the divestment could be completed but the approval was however not forthcoming. Sometime during the months of November 2004 and December 2004, Sh. V Srinivasan informed me that he had a meeting in Mumbai with Mr. Asim Ghosh, Chief Executive Officer of Hutchison Essar group, with regard to the pending deal. Sh. V Srinivasan informed that during that meeting, Mr. Asim Ghosh had told him the following: that he along with Mr. Ravi Kant Ruia, shareholder of Hutchison Essar group, had met with Shri. Dayanidhi Maran, the then MOC&IT, that during the said meeting Sh. Dayanidhi Maran had advised Mr. Asim Ghosh and Mr. Ravi Kant Ruia not to approach the MOC&IT seeking approval for buying Aircel Ltd. and Aircel Cellular Ltd. that Sh. Dayanidhi Maran also told them “you come to me for any approvals but not for this, forget this, only over my dead body will I give this approval”. On being asked I state that upon hearing what had transpired during the meeting between Mr. Asim Ghosh and Mr. Ravi Kant Ruia with Sh. Dayanidhi Maran, the then MOC&IT, I was shocked. It was already more than 6 months since the agreements
CBI Vs. Dayanidhi Maran & others Page 169 of 424 for sale of Aircel Ltd and Aircel Cellular Ltd. were executed but we were unable to complete the deal. I decided to wait for some more time in hope of getting the approval but the approvals never came. and finally having apprehensions in getting the approval of the minister after being aware of such remarks, I instructed Sh. V. Srinivasan to terminate the deal with ADIL. Sh. V. Srinivasan subsequently informed me that ATVL and ADIL had executed agreements to terminate the deal for sale of Aircel Ltd and Aircel Cellular Ltd to ADIL and that ATVL had also repaid the down payment of Rs. 100 crores taken, to ADIL. On being asked I state that, it is apparent that I was forced to terminate the deal as the application to DoT by Aircel Ltd. and Aircel Cellular Ltd. for change in equity structure was not forthcoming for more than 8 months, especially after I learned about the real intentions of Shri. Dayanidhi Maran, the then MOC&IT, from Sh. V Srinivasan as told to him by Shri Asim Ghosh of Hutchison Essar Group, the prospective buyer. …...... ”
294. On page 11, he further states: “...... On being asked I state that as I have submitted right in the beginning, in line with sound business policy adopted by any business house, Siva Group was always intending to bolster the finances of the telecom business by debt as well as equity and was looking for equity investors. After it became clear that the DoT under Shri Dayanidhi Maran is not going to approve the request for change in shareholding in Aircel Ltd. for the proposed deal to sell 100% of Aircel Ltd. and Aircel Cellular Ltd. to ADIL, we had no choice but to rescind the sale agreement entered into with ADIL in March 2005. …......
CBI Vs. Dayanidhi Maran & others Page 170 of 424 ...... ”
295. Perusal of the file reveals that the processing of four issues started on 08.07.2004 at 13/N to 16/N in D-30. Thereafter, the processing of these four issues continued till 06.09.2005, when the Secretary (T) marked the file to MOC&IT for approval of para 5 of the note of Member (P) dated 31.08.2004 (D-30), already extracted above, which pertained to rejection of change of equity structure of Aircel Cellular Limited on transfer of its 100% stake to Aircel Digilink India Limited. The remaining three issues were not marked to the Minister. So what was recommended to the Minister was rejection of transfer of equity to ADIL. 296. However, this file was returned alongwith other files vide order dated 15.09.2004, at 35/N in D-40, already extracted above, copy of which is available at 49/C of D-30. Thus, the Minister did not approve the rejection of sale or transfer of equity to ADIL. The grievance of Sh. C. Sivasankara, as noted above, is that the Minister was not approving the sale/ transfer of equity of Aircel Cellular Limited, held by Aircel Televentures Limited, to ADIL. However, the department was recommending its rejection and rather the Minister was not approving it. The statement of Sh. C. Sivasankaran is thus, totally contrary to record. It is enough to knock out the prosecution case. 297. As per directions contained at 35/N in D-40, note of Additional Secretary (T) was obtained and in that light the file was processed again from 27/N onwards. On 14.01.2005,
CBI Vs. Dayanidhi Maran & others Page 171 of 424 Secretary (T) marked the file to the Minister for confirmation and approval of para 6 and 7 of the note of Member (P) dated 13.01.2005, already extracted. It may be noted that para 6 pertained to the three items regarding change of name of company from RPG Cellular Limited to Aircel Cellular Limited, purchase of 20.76% shareholding of foreign partner and change of name of promoter Srinivas Computers Limited to Aircel Televentures Limited and para 7 pertained to change of equity structure of Aircel Cellular Limited. The prayer was for approval of three issues and rejection of the fourth issue, that is, change of equity structure. 298. However, the file was returned by the Minister again on 03.03.2005 vide order at 31/N on the ground that reports on mergers and acquisitions are awaited. The case of the prosecution is that the file was returned dishonestly by the Minister as no reports on mergers and acquisitions was awaited. Sh. P. K. Mittal and Sh. R. N. Prabhakar also say that no such reports were awaited. Sh. R. N. Prabhakar further says that when Sh. P. K. Mittal asked for a comment on 25.05.2005 at 35/N regarding report on merger and acquisition, AD (VAS- I), put up a note dated 30.08.2005, in which no such report is mentioned. What is the truth of this statement? 299. However, when the file (D-30) was processed again at 24/N by ADG (VAS-I), he did not mention anything about comments of Dr. J. S. Sarma. However, Director (VAS-I), noted in this note sheet at 28/N, inter alia, that this file alongwith other files was referred to AS (T) for examination for inter- related issues regarding merger and acquisition. He further
CBI Vs. Dayanidhi Maran & others Page 172 of 424 records that the remarks of AS(T) is available at 49/c wherein he has mentioned status of the case and no further remarks have been given. Thereafter, Sh. R. N. Prabhakar, Sr. DDG (VAS), recorded his note at 29/N, and in the last paragraph he records that in regard to this particular case, AS (T) has given the brief details of the case in item 2 and these are as per details submitted VAS cell and no new issue has been submitted by him. Similarly, Member (P) also recorded in para 5 that there was no specific input from AS(T). 300. As noted earlier, the report/ comments of Dr. J. S. Sarma were not put to the Minister in the form of report as directed by him, but were made part of the voluminous file, in which multiple issues were being processed. A fleeting reference was made in the note sheets of the comments of Dr. J. S. Sarma. When the Minister had specifically asked for the comments, the comments should have gone to the Minister in original and not as part of some other record. The Minister was thus, right in recording that report on merger and acquisition is awaited. 301. Not only this, the department was pushing for illegal transfer of Aircel Cellular Limited to Aircel Digilink Limited and it stopped only with the intervention of Secretary (T) Sh. Nripendra Mishra. The company also came in adverse notice for purchasing 20.6% shares of foreign partner Siva Cellular Holding Limited, formerly Airtouch International Mauritius Limited, without permission of the department and the Sr. DDG Sh. R. N. Prabhakar advised to warn the company for this, but this was not followed on account of suspect legal
CBI Vs. Dayanidhi Maran & others Page 173 of 424 advice. ***********
Issues relating to Tamil Nadu service area 302. Let me now take the two issues relating to Tamil Nadu service area, that is, approval for change in equity of Aircel Limited and taking on record name change of Srinivas Computers Limited. The issues were dealt with in file D-40. 303. Aircel Limited, earlier known as Srinivas Cellcom Limited, was granted a CMTS licence for Tamil Nadu service area on 22.05.1998. The Aircel Limited was held 51% by Srinivas Computers Limited and 10% shares were held by Cellunet of India Limited and 39% were held by Asia Tech (Mauritius) Limited, both foreign companies. The 49% shares of these two companies were purchased by Srinivas Computers Limited, the Indian shareholder and this was approved by the DoT on 06.03.2002 at 15/N (D-40). Thus, the 100% shareholding of Aircel Limited was to be held by Srinivas Computers Limited. 304. Aircel Limited wrote a letter dated 28.06.2004 (D- 40, page 22/c) to DoT seeking approval for change in equity structure consequent to sale/ transfer of shares to Aircel Digilink India Limited for Tamil Nadu service area. This letter was processed in file D-40 at 23/N and the following note sheet dated 08.07.2004 was recorded by Sh. C. J. Kaujalgi, Asstt. Director (VAS-I): “Subject: Change in equity structure of M/s Aircel Limited. PUC at P. 22/C is a request from M/s Aircel Limited, who
CBI Vs. Dayanidhi Maran & others Page 174 of 424 is holding a CMTS Licence in Tamilnadu Telecom Circle Service Area, seeking approval for change in equity structure consequent up on sale / transfer of shares to M/s Aircel Digilink India Limited (ADIL).
2. As per our records, the equity structure of M/s Aircel Limited is as follows: P – 12/c & P – 21/c may be seen.
Shareholders' Indian / No. of shares Total paid-up % Name Foreign held capital holding Aircel Indian 1800,000,000 18,000,000,000 100% Televentures Limited (ATVL)
*Formerly Srinivas Computers Ltd. name change being processed. …......
5. Equity structure after proposed sale / transfer of shares as intimated by the company will be as below.
Shareholders' Indian / No. of shares Total paid-up % Name Foreign held capital holding Aircel Indian 1800,000,000 18,000,000,00 100% Digilink India 0 Limited (ADIL)
…......
7. In Tamilnadu service area, the other CMTS / UAS licensees are:
Sl. No. Licensee Company Type of Licence 1 BPL Mobile Cellular Ltd. CMTS 2 Bharat Sanchar Nigam Ltd. CMTS 3 Bharti Cellular Ltd. UASL
CBI Vs. Dayanidhi Maran & others Page 175 of 424 4 Reliance Infocomm Ltd. UASL 5 Tata Teleservices Limited UASL
7.1 Shareholding pattern of these Licensees are placed at P. 23/C to P. 27/C.
7.2 The present equity structure of ADIL is as below:
Sharehold Indian / No. of Shares Paid-up % er(s) Foreign Equity Capital Holdin Name (Rs.) g Hutchison Indian 10,10,89,995 101,08,99,950 99.99 Telecom East Limited Sandip Das Indian 1 10 - & Hutchison Telecom East Limited Sankara Indian 1 10 - Narayanan & Hutchison Telecom East Limited Rajiv Indian 1 10 - Sawhney & Hutchison Telecom East Limited Neha Indian 1 10 - Sharma & Hutchison Telecom East Limited Sundeep Indian 1 10 - Kathuria & Hutchison Telecom East Limited Swisscom Foreign 10,000 1,00,000 0.01
CBI Vs. Dayanidhi Maran & others Page 176 of 424 Total 10,11,00,000 101,10,00,00 100.00 0
7.3 From the above and P. 23/C to P. 27/C, it may be seen that there is no any common share holder having 10% or more equity in two companies in the same service area. 8. In view of the above, from the licensing point of view, the proposal for transfer of 100% equity of ATVL to ADIL seems to be in order. However, comments of BS Cell, PIP Cell and LF Cell may please by sought in the matter before processing the case further. Submitted for consideration please.”
305. Thereafter, certain other note sheets were recorded during the processing of the file pertaining to no dues and tripartite agreement signed between DoT, Aircel and IDBI. In the process, everything was found to be in order and note sheets after note sheets were recorded from 23/N to 28/N till 23.08.2004 recommending approval of the proposal and the file was marked to Sr. DDG (VAS). However, on 25.08.2004, Sr. DDG (VAS) asked for a consolidated note as per discussion on the matter.
Issue of name change 306. However, on 25.08.2004, a new issue regarding change of name of Srinivas Computers Limited (Promoter of Aircel Limited) to Aircel Televentures Limited was also added to the file. For dealing with the two issues, that is, change of name of Srinivas Computers Limited to Aircel Televentures Limited and for change in equity structure of Aircel Limited, a fresh note sheet was recorded on 25.08.2004 by Sh. A. S.
CBI Vs. Dayanidhi Maran & others Page 177 of 424 Verma, Director (VAS-II) at 31/N to 33/N to the following effect: “Subject: (i) Change of name of M/s Srinivas Computers Limited (promoter M/s Aircel Limited) to Aircel Televentures Limited (ii) Change in equity structure of M/s Aircel Limited.
PUC at P. 21/C is a letter from M/s Aircel Televentures Limited informing change of its name from M/s Srinivas Computers Limited. M/s Srinivas Computers Limited is the promoter of M/s Aircel Limited, who is a CMTS Licensee in Tamilnadu Telecom Circle Service Area, and as per our records (P. 12/C) holds 100% equity of the licensee company. The company has requested to take note of the changed name and has enclosed copy of resolution of its Board and fresh certificate of incorporation from Registrar of Companies. The original letter is placed in File No. 842-21/2001-VAS (Vol. III).
2. The change of name of a promoter has no bearing on the CMTS Licence Agreement and there appears to be no problem in taking on record the changed name in view of Board resolution and fresh certificate of incorporation from Registrar of Companies as submitted by the company. Therefore, it is proposed that approval may kindly be accorded for taking on record the changed name of M/s Srinivas Computers Limited as M/s Aircel Televentures Limited.
3. PUC at P. 22/C is a request from M/s Aircel Limited, who is holding a CMTS Licence in Tamilnadu Telecom Circle Service Area, seeking approval for change in equity structure consequent up on sale / transfer of its equity to M/s Aircel Digilink India Limited (ADIL).
CBI Vs. Dayanidhi Maran & others Page 178 of 424 4. As per our records (P. 12/C), the equity structure of M/s Aircel Limited is as follows:
Shareholders' Indian / No. of shares Total paid-up % Name Foreign held capital holding Srinivas Indian 1800,000,00 18,000,000,00 100% Computers 0 0 Limited
5. If we take on record the changed name of M/s Srinivas Computers Limited as M/s Aircel Televentures Limited as proposed in para 2 above, the equity structure of M/s Aircel Limited would be as follows.
Shareholders' Indian No. of shares Total paid-up % Name / held capital holding Foreign Aircel Indian 1800,000,00 18,000,000,00 100% Televentures 0 0 Limited (ATVL)
…......
8. Equity structure after proposed sale / transfer of shares as intimated by the company will be as below.
Shareholders' Indian No. of shares Total paid-up % Name / held capital holding Foreign Aircel Digilink Indian 1800,000,00 18,000,000,00 100% India Limited 0 0 (ADIL)
…...... 10. In Tamilnadu service area, the other CMTS / UAS licensees are:
CBI Vs. Dayanidhi Maran & others Page 179 of 424 Sl. No. Licensee Company Type of Licence 1 BPL Mobile Cellular Ltd. (23/c) CMTS 2 Bharat Sanchar Nigam Ltd. (24/c) CMTS 3 Bharti Cellular Ltd. (25/c) UASL 4 Reliance Infocomm Ltd. (26/c) UASL 5 Tata Teleservices Limited (27/c) UASL
10.1 Shareholding pattern of these Licensees are placed at P. 23/C to P. 27/C.
10.2 The present equity structure of ADIL is as below:
Sharehold Indian / No. of Paid-up % er(s) Foreign Shares Equity Holdin Name Capital (Rs.) g Hutchison Indian 10,10,89,995 101,08,99,950 99.99 Telecom East Limited Sandip Das Indian 1 10 - & Hutchison Telecom East Limited Sankara Indian 1 10 - Narayanan & Hutchison Telecom East Limited Rajiv Indian 1 10 - Sawhney & Hutchison Telecom East Limited Neha Indian 1 10 - Sharma & Hutchison Telecom East Limited Sundeep Indian 1 10 - Kathuria & Hutchison Telecom East Limited Swisscom Foreign 10,000 1,00,000 0.01
CBI Vs. Dayanidhi Maran & others Page 180 of 424 Total 10,11,00,00 101,10,00,00 100.00 0 0
10.3 From the above and P. 23/C to P. 27/C, it may be seen that there is no any common share holder having 10% or more equity in two companies in the same service area.
11. The case of change in equity structure of M/s Aircel Limited has been re-examined in the light of discussions of Sr. DDG (VAS), DDG (BS) and Secretary (T) on 5 th August 2004 in the similar case of M/s Aircel Cellular Limited. The equity structure of various companies involved was called for vide letter at P. 33/C. The same has been supplied by these companies and the copies are placed below at P. 34/C to P. 37/C. From the perusal of the detailed equity structure of ADIL vis-a-vis other operators listed in para 10 at 30/N also, it has been observed that either we look at the equity structure of the licensee companies or the equity structure of their promoter(s), there is no common shareholding having 10% or more equity in any two companies in the same service area for CMTS / UASL. In view of the above and notes at 21/N onwards, there appears to be no problem with the proposed transaction of equity.
12. Final equity structure after proposed sale / transfer of shares as intimated by the company will be as below.
Shareholders' Indian / No. of shares Total paid-up % Name Foreign held capital holding Aircel Indian 1800,000,00 18,000,000,00 100% Digilink India 0 0 Limited (ADIL)
13. Change of equity structure as proposed by the company and mentioned in para 12 above may kindly be approved.
CBI Vs. Dayanidhi Maran & others Page 181 of 424 14. Submitted for approval of proposal in para 2 at 29/N and para 13 above.”
307. The file was marked upward and reached Secretary (T), as mentioned below.
Re-examination of the issue in the light of Aircel Cellular case 308. It is clear from this note sheet, particularly para 11, that the issue was re-examined in the light of discussion with the Secretary (T) in view of the development in the related case of M/s Aircel Cellular Limited for Chennai service area being processed in D-30. 309. Thereafter, file reached Sh. R. N. Prabhakar, Sr. DDG (VAS), who also recorded the note dated 26.08.2004 at 34/N recommending both the proposals. 310. After recording the note he marked the file to Member (P). Member (P) agreed with the same on 27.08.2004 and marked the file to the Secretary (T), who also agreed to the proposal on 27.08.2004 itself and marked the file to the Minister.
Reaching of the file to the Minister and return thereof 311. However, the Minister returned the instant file (D- 40) along with other files vide order dated 15.09.2004, 35/N, recorded by his Private Secretary Sh. K. Sanjay Murthy to the following effect: “I have been directed to convey the following:
There are many inter-related issues between
CBI Vs. Dayanidhi Maran & others Page 182 of 424 mergers & acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns. An overall view on issues arising in such cases needs to be taken before a decision can be taken. All the inter-related issues mentioned above pertaining to the case being dealt in the below mentioned files be examined and a consolidated Note submitted:-
(i) F. No. 842-21/2001-VAS (Vol. III) (ii) F. No. 842-325/2000-VAS (iii) F. No. 808-26/2003-VAS (Vol. I) (iv) F. No. 20-231/2003-BS-III
2. AS (T) may prepare the note and submit the same through Secretary (T). The above mentioned files are placed below.”
312. The file was marked to Secretary (T) who recorded his note dated 15.09.2004 to the following effect and marked the file to Addl. Secretary (T) at 35/N: “My recommendations are available on the file. AS (T) pl. comply with the orders of MOC&IT and submit it to MOC&IT for superior orders.”
Report of Dr. J. S. Sarma 313. In terms of the order dated 15.09.2004 recorded by the Minister, Dr. J. S. Sarma, Addl. Secretary (T) gave his report dated 30.11.2004, as already noted above.
Legal opinion on the report of Dr. J. S. Sarma 314. However, Secretary (T) asked for legal status on the comments of AS (T) vide order dated 03.12.2004, 38/N (D-40). Thereafter, the file was processed at 39/N to 41/N (D-40) and sent to LA (T) on 18.12.2004. LA (T) Sh. O. P. Nahar gave his
CBI Vs. Dayanidhi Maran & others Page 183 of 424 legal opinion on 11.01.2005 (42-43/N, D-40) as already noted above.
Re-processing of the file in the light of legal opinion and return from the office of Minister 315. After receipt of legal opinion, the file was processed again recommending the approval of two issues and the proposal was approved upto the level of Secretary. Secretary (T) marked the file to the Minister on 24.01.2005. 316. However, the file was again returned by the Minister on 03.03.2005, vide note of Sh. K. Sanjay Murthy, PS to MOC&IT, at 47/N, by recording as under: “File Nos. 842-325/2000-VAS and 842-21/2001- VAS are returned as reports on mergers and acquisitions are awaited.”
317. As earlier noted above, the note of Dr. J. S. Sarma was not put to the Minister directly and independently and it might have escaped the attention of the Minister. Hence, the Minister was right in recording that reports on mergers and acquisitions are awaited. Furthermore, Sh. K. Sanjay Murthy has stated in his statement dated 05.12.2011 that this note was not received in the office of Minister. This further fortifies the stand of the Minister.
Withdrawal of application for transfer of equity 318. The file was processed again in the light of letter dated 07.03.2005, 41/C, written by Aircel Limited for withdrawal of the application for transfer of its equity to Aircel
CBI Vs. Dayanidhi Maran & others Page 184 of 424 Digilink India Limited in Tamil Nadu service area. Accordingly, the file was recommended to be returned to the VAS cell and the file was marked to Secretary (T) on 21.03.2005, 48/N. 319. However, on 30.03.2005 Secretary (T) recorded a note as under at 48/N: “Pl. link it with the main file. The file has been recd from MOC&IT office on 03.03.2005. Pl. examine the matter afresh also in the light of notes issued to the company in some of the ISP related irregularities.”
320. He marked the file downward to Advisor (P). The file reached Sr. DDG (VAS), who recorded on 31.03.2005 that action will be taken as per the directions of Secretary (T), 49/N.
Issue of name change 321. Now, after the withdrawal of application for transfer of equity, the only issue regarding change of name of promoters of Aircel Limited from Srinivas Computers Limited to Aircel Televentures Limited survived and this issue was processed at 50/N and 51/N. The first note on 50/N was recorded on 25.04.2005, but the file was marked downward till 25.05.2005. Thereafter, there is no movement in the file, without assigning any reason. 322. However, suddenly, on 03.11.2005 a note was put up by Sh. A. K. Dhar, ADG (VAS-I). The note reads as under: “Subject: Change of name of promoter of M/s Aircel Limited from M/s Srinivas Computers Ltd. to M/s Aircel Televentures Ltd.
M/s Aircel Televentures Ltd. promoter of M/s Aircel
CBI Vs. Dayanidhi Maran & others Page 185 of 424 Limited, a Cellular Mobile Telephone Service (CMTS) licensee of Tamilnadu Telecom Circle Service area had applied for following changes:
Change of name of the promoter, M/s Srinivas Computers Limited to M/s Aircel Televentures Ltd. issued by the Registrar of Companies Tamilnadu, Chennai on 28.04.2004 and company intimated for this change by letter dated 21/22.06.2004 (21/C).
In addition to the above, the company had also requested for transfer of its entire 100% equity to M/s Aircel Digilink India Limited (22/C). This case was also examined along-with above mentioned case (21/N onwards may kindly be seen). However, subsequently the company withdrew its application for transfer of its entire 100% equity to M/s Aircel Digilink India Limited (41/C, 46/N).
In view of above, the proposal of change of name of the promoter [of M/s Aircel Limited] M/s Srinivas Computers Ltd. to M/s Aircel Televentures Limited and DFA 42/C may kindly be approved.”
323. This was agreed to by other officials also and was approved by Secretary (T) on 10.11.2005. 324. Perusal of the note sheet dated 25.08.2004, para 11, reveals that this issue was linked up with the issue of transfer of equity of Aircel Cellular Limited to Aircel Digilink India Limited in Chennai service area. The Additional Secretary had noted that Aircel Digilink India Limited had a complex equity structure. He further noted that due to this complex equity structure the management control may not remain with Indian hands. He recommended that company be asked to simplify its
CBI Vs. Dayanidhi Maran & others Page 186 of 424 equity structure. 325. If the department does not understand the equity structure of a company, it is fully within its right to ask the company to simplify it or at least explain it to the department to ensure that it conforms to the rules and guidelines. There can be no quarrel with this proposition. I find this position being explained by the companies in all the files and the department insisting on it repeatedly. This is clear at least from perusal of files D-4 and D-41, where details of equity structures of the company were repeatedly sought. As such, it cannot be said that these observations of the Additional Secretary were out of context aimed at delaying the matter. 326. Furthermore, when the company withdrew its application for transfer of equity to Aircel Digilink India Limited as noted at 48/N, thereafter, the issue became very simple and was approved by the Secretary on 10.11.2005. After withdrawal of the applications, the first note sheet is dated 25.04.2005 at 50/N. Thereafter, the file was marked upward and downward till 25.05.2005. 327. Suddenly, the file was taken up by Sh. A. K. Dhar, ADG, on 03.11.2005 and a note sheet for approval of change of name of promoter Srinivas Computers Limited to Aircel Televentures Limited was recorded. There is no explanation in the file as to why the file remained pending from 25.05.2005 till 03.11.2005. Sh. A. K. Dhar has not been examined as a witness. There is no material on the file to attribute this delay to the Minister or Secretary. 328. Thus, the delay in grant of approval for Tamil Nadu
CBI Vs. Dayanidhi Maran & others Page 187 of 424 service area was due to the fact that the issue got linked with the Chennai service area and also the fact that the equity structure of Aircel Digilink India Limited and its promoters was not clear to the department. In this regard, I find that the observations of Dr. J. S. Sarma in his report were administratively correct, whereas the opinion of Legal Advisor is suspect and is too legalistic. Not only this, his observation about the indirect foreign equity is contrary to the FDI policy, where he states that there is no restriction against indirect foreign equity which can be raised at any level. A licensor has every right to ask for clarification regarding equity structure of a licencee company and its promoters and as noted above, the DoT was repeatedly doing it in many cases. There can be nothing wrong in this. This is all the more so when behaviour of the company is not normal and repeatedly invited adverse notice for its activities. 329. Thus, the file was returned by the Minister correctly as it got linked with D-30, wherein issue of Chennai service areas was being dealt with. Thus, in the two files there is nothing wrong in Minister asking the question when the company was selling one licence in violation of competition clause and the department was pushing for it, though later on the Secretary (T) prevented it. The sale of two licences in Chennai service area and Tamil Nadu service area was the main issue and the remaining other issues were petty in nature. Moreover, as per statement of Sh. K. Sanjay Murthy, the note of Dr. J. S. Sarma never reached the office of the Minister. The act of the Minister, thus, cannot be termed to be mala fide, though
CBI Vs. Dayanidhi Maran & others Page 188 of 424 he may be dilatory in the performance of his duties.
*********
III. Change of name from Dishnet DSL Limited to Dishnet Wireless Limited (D-41). 330. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP, for the CBI that even a matter as small as name of change was not approved by the Minister in the regular course of his duties. He deliberately delayed it to harass the company with the objective to force the exit of companies of Siva group out of telecom business. He has very eloquently argued that this shows the deep conspiratorial mind of accused Dayanidhi Maran, who was not willing to do even the smallest of the job of the company. 331. On the other hand, the case of the defence is that the Minister had no role in it and the instant file was linked to the other file by the officials. 332. Both parties have extensively read out the file(s) as well as the relevant statements at the bar to emphasize their respective point of view. 333. In order to appreciate the facts correctly, let me take note of the note sheets recorded in the file and the relevant statements. 334. Dishnet DSL Limited, which was having UAS licences in seven service areas, wrote to DoT vide letter 21.07.2004 for taking on record change in the name of the company from Dishnet DSL Limited to Dishnet Wireless
CBI Vs. Dayanidhi Maran & others Page 189 of 424 Limited. The company also recorded in the letter that it confirms that there is no change in the shareholding and equity pattern continues to be unchanged and it was given in the letter in tabular manner, indicating no change in the shareholder's name and their holdings, percentage-wise. 335. This issue was processed in file D-41 and the first note sheet was recorded by Sh. A. R. Devarajan, AD (BS-III), on 23.07.2004, to the following effect: “PUC is a letter dated 21.07.2004 from M/s. Dishnet DSL Ltd. at 1/c.
M/s. Dishnet DSL Ltd. have changed their name of the company to M/s. Dishnet Wireless Ltd. and approval from the Registrar of companies is placed at 2/c. As per para 1.5 of the general conditions in Unified Access Service License, it is stated as “Change in name of the Licensee company shall be permitted in accordance with the provisions under the Indian Companies Act 1956”
Because M/s. Dishnet DSL Ltd. has submitted a fresh Certified copy of the Registrar of Companies, therefore the change in name from M/s. Dishnet DSL Ltd to M/s. Dishnet Wireless Ltd., may be approved to be taken on record. Draft to M/s. Dishnet DSL Ltd. is placed at 3/c.
Submitted for perusal and approval as above please.”
336. In this process, the file reached Sh. P. K. Mittal, who asked for details of licences and also asked for putting up amendment to licence agreement vide his note dated 26.07.2004 at 1/N. 337. On the same date, that is, on 26.07.2004, Sh.
CBI Vs. Dayanidhi Maran & others Page 190 of 424 Govind Singhal, Director (BS-III), recorded a note to the following effect: “PUC is a letter dated 21.07.2004 from M/s. Dishnet DSL Ltd. at 1/c.
M/s. Dishnet DSL Ltd. have changed their name of the company to M/s. Dishnet Wireless Ltd. and approval from the Registrar of Companies is placed at 2/c. As per para 1.5 of the general conditions in Unified Access Service License, it is stated as “Change in name of the Licensee Company shall be permitted in accordance with the provisions under the Indian Companies Act 1956”
Because M/s. Dishnet DSL Ltd. has submitted a Fresh Certified copy of the Registrar of Companies, therefore the change in name from M/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd., may be approved to be taken on record.
Draft to M/s. Dishnet DSL Ltd. is placed at 3/c.
Submitted for perusal and approval as above please.”
338. Thereafter, in the course of processing Sh. P. K. Mittal sought detail of equity of partners and promoters directly or indirectly vide note dated 06.08.2004, 2/N. 339. Thereafter, certain information was sought from the company and company submitted the desired information and again a note dated 24.08.2004 was recorded by Sh. Govind Singhal, Director (BS-III), 4/N, to the following effect: “As per the direction on N/s – 1, the desired information was called for from M/s Dishnet DSL Limited. M/s Dishnet DSL Limited has submitted the
CBI Vs. Dayanidhi Maran & others Page 191 of 424 information, which are placed at 7/c. The % interest of each promoter/ Partner has been submitted in the statement. M/s. Dishnet DSL Ltd. have changed their name of the company to M/s. Dishnet Wireless Ltd. and approval from the Registrar of Companies is placed at 2/c. As per para 1.5 of the general conditions in Unified Access Service License, it is state as “Change in name of the Licensee Company shall be permitted in accordance with the provisions under the Indian Companies Act 1956”
Because M/s Dishnet DSL Ltd. has submitted a Fresh Certified copy of the Registrar of Companies, therefore the change in name from M/s Dishnet DSL Ltd to M/s Dishnet Wireless Ltd., may be approved to be taken on record.
Draft to M/s Dishnet DSL Ltd. is placed at 3/c.
Submitted for perusal and approval as above please.”
340. And the file was marked to Sh. P. K. Mittal, who recorded “Please link with other file”.” As per statement of Sh. P. K. Mittal dated 01.12.2011, page 12, this file was D-38 in which seven licences were initially given. 341. The perusal of the file this far shows that when the file reached Sh. P. K. Mittal, on 26.07.2004, he asked for details of licences and also asked for amendment to licence agreement. The file was reprocessed and when it reached him, he, on 06.08.2004, again asked for details of equity of promoters and partners directly or indirectly. The file was reprocessed after seeking information from the company and when the file reached him, he again asked for linking of the file with other
CBI Vs. Dayanidhi Maran & others Page 192 of 424 file. I may note that in the processing of the file this far, there was no interference from any other authority, but at every stage, Sh. P. K. Mittal is putting something new, though the proposals are submitted for approval by Sh. A. R. Devarajan and Sh. Govind Singhal. 342. Thereon, the file was linked to other file (D-38) on the initiative of Sh. P. K. Mittal as noted above. The name change was recommended by all officials, including Secretary (T) on 01.10.2004 and he marked the file to the Minister. However, in his statement dated 01.12.2011, he blames this linking on the Minister.
Marking of the file to the Minister and return thereof 343. The file reached the Minister on 01.10.2004 itself. However, the same was returned by the office of Minister on 07.10.2004 with the following directions at page 6/N and the file was marked to the Secretary (T): “I am directed to convey the following:
The issues pertaining to this case are similar to the issues being examined for preparation of a consolidated note bringing out the inter-related issues between mergers and acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns. The issues arising from this case may also be incorporated in the consolidated note being prepared.”
344. The PS of the Minister marked the file to Secretary (T), but he was on tour and the file was marked to Additional Secretary (T). Additional Secretary (T) Dr. J. S. Sarma again
CBI Vs. Dayanidhi Maran & others Page 193 of 424 marked the file to the Secretary (T)/ MOC&IT on 30.11.2004, recording that “General note was placed in file No. 842- 21/2000/VAS (Vol.III)”, referring to his report dated 30.11.2004. However, as per statement of Sh. K. Sanjay Murthy dated 05.12.2011, page 7, this was not received in the office of the Minister. 345. I may note that the report of Dr. J. S. Sarma has already been referred to above. It is not clear from the perusal of the file as to when the file reached the office of the Minister. 346. However, the file was again returned by the office of Minister on 03.03.2005 with the following directions: “I have been asked to request Secretary (T) to re- examine if there has been undue haste in processing the case. The following files are enclosed :- 1. F.No.20-231/2003-BS-III (Vol.III)- (D- 2) 2. F.No.20-231/2003-BS-III- (D-46) 3. F.No.20-231/2003-BS-III (Pt.)- (D-38) 4. F.No.20-225/04-GnlBTS/Dishnet/BS- III”
347. The file was marked to Secretary (T). However, thereafter, there is no movement recorded in the file for a long time. Though the Minister had asked for examining if there was undue haste in processing the case, but there are no remarks on the file either of the Secretary or any other officer regarding undue haste in processing the files mentioned in note dated 03.03.2005, referred to above. 348. It may be noted that the agreement for sale of 100% equity of Aircel Televentures Limited to Maxis group was executed on 26.12.2005 and was to be effective from
CBI Vs. Dayanidhi Maran & others Page 194 of 424 30.12.2005. 349. However, without making any comment on the issue of haste, all of a sudden a note sheet dated 29.06.2006 was recorded by Sh. S. A. Malik, AD (BS-III), to the following effect: “Subject: Name change by M/s. Dishnet DSL Limited
1. PUC was a letter dated 21.7.2004 from M/s. Dishnet DSL Ltd. at 1/c. M/s Dishnet DSL Ltd. have changed their name of the company to M/s Dishnet Wireless Ltd. Fresh Certificate of Incorporation of the Registrar of Companies is placed at 2/c.
2. M/s. Dishnet DSL Ltd. was issued UAS licences for Jammu and Kashmir, Assam, North East, West Bengal, Orissa, Bihar & Himachal Pradesh service areas. M/s. Dishnet DSL Ltd. has also applied for grant of UAS Licences in respect of Madhya Pradesh, UP(East) & UP(West).
3. As per Para 1.5 of the general conditions in Unified Access Service Licence, it is state as “Change in name of the Licensee Company shall be permitted in accordance with the provisions under the Indian Companies Act 1956”.
4. This issue of change of name is long pending because it got linked with issue of new UAS Licences where an overall view on the interrelated issues between merge and acquisition, licensing, FDI and FII investment in holding companies and their sister companies was to be taken. On 05.06.2006, AS (T) returned back all the linked files for further necessary action.
5. As directed the case is reprocessed again. At the time of Licence, share holding pattern of M/s. Dishnet DSL Limited was as follows:
CBI Vs. Dayanidhi Maran & others Page 195 of 424 Sl. Name of Promoter/ shareholders Indian/ Percent of Net worth No Foreign Equity held (Crores of . Rupees) 1. M/s Sterling Infotech ltd. Indian 79.11 220 2. M/s Siva Limited, Bermuda Foreig 9.71 - n 3. M/s Westgrove Foreig 6.71 - International Holding n Limited, Mauritius 4. M/s IQ Investments Foreig 4.22 - Limited, Mauritius n 5. Individuals Indian 0.25 -
6. Meanwhile, the share holding pattern of M/s. Dishnet Wireless Limited kept on changing and the company intimated it vide letter dated 27.07.2005, 05.01.2006 19.01.2006 and 22.05.2006. The case was processed in File No. 20-.225/2004- Dishnet/BS-III(Pt.). Original file is linked herewith.
7. As per the letter dated 22.05.2006, M/s. Dishnet Wireless Limited has submitted revised equity structure and affidavit confirming the Indian and Foreign equity in Dishnet Wireless Limited as well as the copy of the FIPB Approval of Aircel Limited which is holding company of M/s Dishnet Wireless Limited as per the details below:
(A) Details of share holding pattern of M/s. Dishnet Wireless Limited:
S. Name of the Shareholder Category No. of % to No. shares held share holding 1. Mr. R. Chinnakkannan Resident Indian 1 --- 2. Mr. A. Subramanian Resident Indian 1 --- 3. Mr. K. V. P. Baskaran Resident Indian 1 --- 4. Aircel Limited Indian Company 29,798,124 100.00 5. Senthil Trade and Indian Company 1 --- Business Links Private Limited 6. Hi-tech Housing Indian Company 1 --- Projects Private Limited
CBI Vs. Dayanidhi Maran & others Page 196 of 424 7. Karthik Shelters Private Indian Company 1 --- Limited TOTAL 29,798,130 100.00
(B) Details of Indian/ Foreign Equity held in M/s. Dishnet Wireless Limited
Equity Percentage Indian 26.01% Foreign-Direct - Foreign-Indirect 73.99% Total Equity 100.00%
8. In view of above facts, draft for taking on record of the change in name in respect of the UASL licences issued for Jammu and Kashmir, Assam, North East, West Bengal, Orissa, Bihar & Himachal Pradesh service areas and pending applications for grant of UASL in respect of Madhya Pradesh, UP(East) & UP(West), is placed at 80/C for kind consideration and approval please.”
350. The file was marked to all concerned upward and was approved by Secretary (T) on 30.06.2006. 351. Now the question is: When the Secretary (T) himself was competent to approve it, why did he mark the file to the Minister in the first instance? There is nothing on the file or in any statement to suggest that the Minister had asked for the file. When the file went to the Minister, it was returned by Sh. K. Sanjay Murthy, PS to the Minister, linking it with other issues, of course, as per the directions of the Minister. 352. In file D-2, the issues relating to financial capacity of the company and its involvement in grey market was involved. The violation of clause 1.4(iii) of licence agreement is related to merger and acquisition. In files D-30 and D-40 issue
CBI Vs. Dayanidhi Maran & others Page 197 of 424 related to violation of this clause was involved. Once the file reached the Minister, it got linked up with these files, not on the initiative of the Minister, but on the initiative of Sh. P. K. Mittal vide note dated 27.08.2004 at 4/N. 353. After the issue of change of equity structure was not there on account of withdrawal of applications by Aircel Cellular Limited vide its application dated 07.03.2005 (54/C, D-30), the issue of violation of merger and acquisition no longer survived and thereafter the file was again put up by Sh. S. A. Malik, AD (BS-III), vide note dated 26.09.2005, giving all the details and requesting for approval of taking of change of name of the company on record. The same was approved by the Secretary (T) on 30.06.2006. 354. The note dated 29.06.2006 was recorded by Sh. S. A. Malik, AD (BS-III). The note does not mention that it was recorded either at the initiative of the Minister or the then Secretary (T) Dr. J. S. Sarma. There is no indication in the file as to where it was from 03.03.2005 to 29.06.2006. Sh. S. A. Malik has not been examined as a witness. 355. However, PW 15 Sh. Govind Singhal states in his statement dated 25.09.2013 that this file was with Sh. Yashwant Bhave till 05.06.2006. However, Sh. Yashwant Bhave does not say so and his statement is only about file D-4. He repeatedly refers to this file alone. 356. While dealing with this file the Minister suspected that licences were granted to the company in haste and asked the Secretary to examine it. However, there is no report of any such examination by anyone.
CBI Vs. Dayanidhi Maran & others Page 198 of 424 357. Let me take note of relevant statements in this regard. 358. PW 15 Sh. Govind Singhal in his statement dated 25.09.2013 narrates the events relating to this file, as under: “I am as above. Now I have been shown one original file of DoT bearing no. 20-225/04-Genl- Mts/Dishnet/BS-III and state that Sh. D.V.S. Rajan, Authorised Signatory of M/s Dishnet Wireless Ltd. submitted a letter dated 21.07.2004 addressed to me i.e. Director (BS-III), DoT, New Delhi stating that the name of company has changed from Dishnet DSL Ltd. to Dishnet Wireless Ltd. An attested photo copy of fresh certificate of incorporation consequent on change of name dated 02.06.2004 issued by Registrar of Companies, Chennai was also enclosed with the said letter dated 21.07.2004. I marked the said letter to A.R. Devarajan, the then AD (BS-III) who put up the said letter in the above referred file on 23.07.2004 recommending for approval for taking on record the name change. He marked the file to me. I in turn marked the file to Sh. P.K. Mittal, the then DDG (BS) who sought the details of licences issued in the name of M/s Dishnet DSL Ltd. On 26.07.2004, I put up a draft letter addressed to M/s Dishnet DSL Ltd. conveying that the change of name of M/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd. has been noted and taken on record in respect of 7 licences viz. West Bengal, Assam, Bihar, Himachal Pradesh, J&K, North-East and Orissa and marked the file to DDG (BS) Sh. P.K. Mittal for approval who in turn marked the file to Member (P) on 28.07.2004. Member (P) also concurred with the recommendation and signed the notesheet on 28.07.2004 and the file was sent to Sh. N.Misra, the then Secretary (T) who sought a discussion with Sh. P.K. Mittal, DDG (BS). Sh. P.K. Mittal, DDG(BS) marked the file to me on 06.08.2004 after noting as under: “Discussed on 05.08.2004. Let us have details
CBI Vs. Dayanidhi Maran & others Page 199 of 424 of equity of partners & promoters directly or indirectly.” I sent a letter dated 11.08.2004 to M/s Dishnet DSL Ltd. seeking the details of promoter, shareholders or any legal entity of area of shareholders/promoters which are related directly or indirectly and also the type of each equity whether it is foreign, Indian, financial institutions and non-financial institutions. A copy of the said letter is available in the above referred file. Here it is clarified that in the said letter, it is inadvertently mentioned that ‘with reference to your letter dated 21.08.2004’. It should have been 21.07.2004 in place of 21.08.2004. The reply was received from M/s Dishnet DSL Ltd. and I again put up the file to Sh. P.K. Mittal, DDG (BS) on 24.08.2004 recommending for approval for taking on record the name change. However, on perusal of the file, I find that the said reply is not available in the above referred file.
On 27.08.2004, Sh. P.K. Mittal directed me as under: “Pl link with other file.” On being asked, I state that file no, 20- 231/2003-BS-III (D-38) was the other file which was referred to by Sh. P.K. Mittal. On being asked, I state that the said file contained the approval of competent authority for issuance of LOI to M/s Dishnet DSL Ltd. for award of Unified Access Service Licence in respect of 8 service areas. On being asked, I state that Sh. A.R. Devajaran, AD, BS-III placed the file no. 20-231/2003-BS-III in file no. 20-225/04-Genl Mts./Dishnet/BS-III and put up the same to me for approval for taking on record the name change. I marked the file to Sh. P.K. Mittal, DDG(BS) on 27.09.2004 who concurred with the recommendation and marked the file to Sh. H.P. Mishra, DDG(LF) who also signed the notesheet and sent the file to Sh. Shiva Ramakrishnan, Member (P). Member (P) also concurred and signed the notesheet on 01.10.2004
CBI Vs. Dayanidhi Maran & others Page 200 of 424 and sent the file to Sh. N. Misra, Secretary (T). Sh. Nripendra Misra also concurred with the proposal and sent the file to Sh. Dayanidhi Maran, the then MoC&IT for approval on 01.10.2004. The approval was not granted and the file was sent to Dr. J.S. Sarma, the then AS (T) by Sh. K. Sanjay Murthy, the then PS to MoC&IT on 07.10.2004 stating that the issues pertaining to this case are similar to the issues being examined for preparation of a consolidated note bringing out the inter-related issues between mergers and acquisitions, licensing, FDI, FII investment in holding companies and their sister concerns. On being asked, I state that Dr. J.S. Sarma, the then AS (T) was directed by the then MoC&IT to prepare a consolidated note on the subject. This direction was conveyed by PS to MoC&IT to Secretary (T) on 15.09.2004 in another file bearing no. 842-325/2000-VAS. Dr. J.S. Sarma, the then AS (T) offered his comments on 30.11.2004 in DoT file no. 842- 325/2000-VAS and sent this file i.e. 20-225/04- Genl Mts/Dishnet/BS-III to Secretary (T). On being asked, I state that the file i.e.20- 225/04-Genl. Mts/Dishnet/BS-III was again called by Sh. Dayanidhi Maran, the then MoC&IT and the same alongwith other files were made available to MoC&IT on 24.12.2004 (21/N of file no. 20- 231/2003-BS-III (Vol.III)). Again this file i.e. 20- 225/04-Genl. Mts./Dishnet/BS-III alongwith other files were sent back to Sh. P.K. Mittal, DDG(BS) by Sh. Nripendra Misra, the then Secretary (T) on 30.03.2005. It was then submitted to Dr. J.S. Sarma, the then Secretary (T) on 24.08.2005 (vide 7/N of file no. 20-231/2005-BS-III) for seeking guidelines. Dr. J.S. Sarma, the then Secretary (T) marked the file to Sh. Yashwant Bhave, the then Additional Secretary (T) on 15.09.2005 and the file i.e. 20-225/04-Genl Mts/ Dishnet/BS-III alongwith other files remained pending with Sh. Yashwant Bhave, the then AS (T) till 05.06.2006. On being asked, I state that Sh. S.A. Malik, AD
CBI Vs. Dayanidhi Maran & others Page 201 of 424 (BS-III) then initiated a note on 29.06.2006 recommending for taking on record the change in name which was concurred by Sh. R.K. Gupta, ADG (BS-III), by me, by Sh. P.K. Mittal, DDG (BS) and by Sh. A.K. Sawhney, Member (P). The file was sent to Dr. J.S. Sarma, the then Secretary (T) on 30.06.2006 and the approval was granted on the same date by Dr. J.S. Sarma, the then Secretary (T).”
359. Sh. Govind Singhal does not attribute any motive to anyone as far as delay in name change is concerned. He has just narrated the facts as they occur on the file. 360. Sh. P. K. Mittal in his statement dated 01.12.2011 at pages 11 and 12, regarding name change, states as under: “...... Now, I have been one original file of DoT bearing No. 20-225/04/Genl Mts/Dishnet/BS-III (MR. II, Memo 47, Sl. No. 2) and state that Sh. D.V.S. Rajan, authorized signatory of M/s Dishnet DSL applied for change in name of the company from M/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd. on 21-07- 2004 (vide 84-C of file no. 20-225/04/Genl Mts/Dishnet/BS-III). Copy of fresh certificate of incorporation consequent to change of name issued by Vasantha Kumar Ail, Assistant Registrar of Companies, Tamilnadu, Chennai was also submitted. Sh. A.R. Devrajan, Assistant Director (BS-III) (vide 1-N in file no. 20-225/04/Genl Mts/Dishnet/BS-III) submitted a note recommending to take change name from M/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd. to be approved to be taken on record. Shri A. R. Devrajan, AD (BS-III) also put-up a draft letter addressed to M/s Dishnet DSL Limited informing that the change of name of M/s Dishnet DSL Limited to M/s Dishnet Wireless Ltd. has been noted and taken on record for the 7 licences.
CBI Vs. Dayanidhi Maran & others Page 202 of 424 He marked the file to Sh. Govind Singhal, Director (BS-III) who marked it to me on 26-07-2004. I directed, Sh. Govind Singhal, Director (BS-III) on the same day i.e. 26-07-2004 that details of Licenses to be provided and to be put-up as amendment to license agreement (Vide 1-N of file no. 20- 225/04/Genl Mts/Dishnet/BS-III) Sh. Govind Singhal, Director (BS-III) submitted the case for approving to take on record the change in name of M/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd. (vide 2-N in file no. 20-225/04/Genl Mts/Dishnet/BS-III) on 26-07-2004. I recommended the same for approval on 28-07-2004 and marked the file to Member (P) Sh. B. Sivaramakrishna. He marked the file on the same day i.e. 28-07-2004 to Secretary (T) Sh. Nripendra Misra. Secretary (T). On 28.07.2004 Sh. Nripendra Misra directed me to discuss. Matter was discussed with him on 05-08-2004 and as per direction, details of equity of partner and promoters directly and indirectly were called for on 11-08-2004 by Sh. Govind Singhal, Director (BS-II) (vide 81-C in file no. 20-225/04/Genl Mts/Dishnet/BS-III). Case was again processed on 24-08-2004 by Sh. Govind Singhal, Director (BS-III) recommending to take on record change of name. I asked him to link with other file on 27-08-2004 (vide 4-N). The other file no. 20-231/2003-BS-III which was under process was received and linked by Sh. A.R. Devrajan, Assistant Director (BS-III) on 24-09-2004 (vide 5-N in file no. 20-225/04/Genl Mts/Dishnet/BS-III). This is the file where original licences for 7 circle area were approved. Sh. Govind Singhal marked the file to me on 27-09- 2004 recommending to take on record change in name to M/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd. I marked the file on the same day i.e. 27-09-2004 to DDG (LF) Sh. H.P. Mishra after putting my signature as a token of concurrence with the proposal. Sh. H.P. Mishra marked the file to Member (P), Sh B. Sivaramakrishna on 30-09-2004 after putting his signature as a token of concurrence
CBI Vs. Dayanidhi Maran & others Page 203 of 424 with the proposal, Member (P) marked the file to Secretary (T) Sh. Nripendra Misra on 01-10-2004 who marked it to MOC & IT on the same day i.e. 01- 10-2004 after putting his signature in token of having concurred with the proposal, although previously such cases were being approved by Secretary (T) himself. The said file was sent to Shri Dayanidhi Maran, the then MoC & IT on 01.10.2004. The approval for name change was not granted. The file was marked to Additional Secretary, Dr. J.S. Sarma on 07-10-2004 (vide 6-N of file no. 20- 225/04/Genl Mts/Dishnet/BS-III) by Sh. K. Sanjay Murthy, PS to MOC & IT on the direction of MOC & IT Sh. Dayanidhi Maran stating that “The issues pertaining to this case are similar to the issues being examined for preparation of a consolidated note bringing out the interrelated issues between mergers and acquisitions, licensing, FDI and FII investment in holding companies and their sister concerns. The issues arising from this case may also be incorporated in the consolidated note being prepared”
I would like to state that with these direction the request for taking change of name from M/s Dishnet DSL Ltd. to M/s Dishnet Wireless Ltd. on record was linked to other issues regarding extension of LOI for MP circle by 90 days and grant of new LOIs for UASL for UP (E) and UP (W). …...... ”
361. He further states at page 14 in his statement 01.12.2011 as under:
“...... On being asked it is clarified that the issue of taking change of name on record is not at all connected to
CBI Vs. Dayanidhi Maran & others Page 204 of 424 FDI policy, merger and acquisition policy etc. In spite of this, it was connected with these issues as envisaged from the note dated 07-10-2004 of PS MOC & IT Sh. K. Sanjay Murthy on the direction of MOC & IT Sh. Dayanidhi Maran (vide 6-N on file no. 20-225/04/Genl Mts/Dishnet/BS-III). Thus it took approximately two years to take name change on record. On being asked I clarify that there are no such instances in respect of other Service Provider which took such a long time for taking the name change on record.”
362. Thus, Sh. P. K. Mittal states that the question of approval of name change was not connected with the question of merger etc., but he himself linked the instant file with D-38, in which eight LOIs were approved and in which Minister suspected haste in grant of LOIs and UAS licences. 363. PW 2 Sh. Nripendra Mishra, the then Secretary (T), has stated in his statement dated 23.08.2013 at page 2 as under: “...... Now I have been shown one original file of DoT bearing no.842-21/01-VAS(Vol.-III MR-II Memo 46 Sl. No.1) and state that Sh. R.N. Prabhakar, Sr. DDG(VAS) vide 29/N of the file had recommended for approval of the following: (i) To take on record the change of name of the company from M/s RPG Cellular Ltd. to M/s Aircel Cellular Ltd. (ii) To take on record the shareholding of foreign partners i.e. purchase of equity shareholding of 20.76% of M/s Siva Cellular Holding Ltd. by M/s Srinivas Computers Ltd. (iii) To take on record the change of name of the promoter M/s Srinivas Computers Ltd. M/s Aircel Televentures Ltd.
CBI Vs. Dayanidhi Maran & others Page 205 of 424 Sh. R.N. Prabhakar had also recommended that transfer of 100% equity structure from M/s Aircel Televentures Ltd. to M/s Aircel Digilink India Ltd. may not be approved. He marked the file to Member (Production) on 11.01.2005 who in turn marked the file to me on 13.01.2005(inadvertently typed as 13.01.2004). On being asked, I state that I was competent to accord approval for the above mentioned 3 recommendations. Yet I sent the file to Sh. Dayanidhi Maran, the then MoC&IT for confirmation and approval of the above stated 4 proposals on 14.01.2005. The file was sent back to me by Sh. K. Sanjay Murthy, PS to MoC&IT on 03.03.2005 stating that reports on merger and acquisition are awaited. The recommendations were not acceded to at that point of time by the then MoC&IT.”
364. Though the statement of Sh. Nripendra Mishra does not pertain to this file, but it is indicative of the fact that Secretary (T) was competent to grant approval for change of name of the company. Perusal of the file D-30 reveals that he has done so in case of RPG Cellular Services Limited at 12/N when he approved the same on 17.03.2004. 365. None of the three witnesses have explained as to why the file was sent to the Minister when the Secretary himself was competent to accord approval for name change. There is no evidence that the Minister had himself asked for the file or that he had created an atmosphere in the Ministry where the officials below him were rendered totally ineffective in the discharge of their official functions. There is a contradictory version as to where the file was from 03.03.2005 to
CBI Vs. Dayanidhi Maran & others Page 206 of 424 29.06.2006, as the file is silent on this point, but Sh. Govind Singhal states that file was with Sh. Yashwant Bhave till 05.06.2006, though Sh. Yashwant Bhave has not been examined on this point. In such a situation, one is left with no material to say, even prima facie, that the delay in the instant file could be attributed to the Minister alone, that too for mala fide reasons. More so, it was Sh. P. K. Mittal who linked the instant file to file D-38. More so, Sh. Dayanidhi Maran was suspecting haste in the matters of Siva group. This suspicion is indicative of the fact that he did not suffer from any guilty intention but was suspicious of the actions of his predecessor and wanted them to be examined in all details. 366. Once the earlier promoter/ management was not there, many of the issues did not survive and subsequent approval cannot be called a smooth approval, but it is an approval in the natural course. There is no material on the file to call the approval on 30.06.2006 to be so smooth as to arouse suspicion as the agreement for sale, as noted above, was to be effective from 30.12.2005, but the approval was given on 30.06.2006 by the Secretary (T) Dr. J. S. Sarma.
IV. Grant of UASL in Punjab, Haryana, Kerala and Kolkata service areas (D-4) 367. It is submitted by Sh. Anand Grover that the company had applied for four UAS licence on 01.03.2005. However, Sh. Dayanidhi Maran deliberately delayed them also on the pretext of linking them to show cause notices issued to
CBI Vs. Dayanidhi Maran & others Page 207 of 424 the company relating to violation of ISP licence. It is repeatedly submitted by him that the Minister was determined not to grant any regulatory approval to the company including issuance of fresh LOIs. 368. On the other hand, the learned defence counsel have submitted that the file never reached the Minister and he had no role at all either in the processing of this file or in its alleged delay. 369. Learned counsel for both the parties have read out the file as well as the statements at the bar extensively to support their point of view. 370. Let me examine the issue in detail. 371. Dishnet Wireless Limited had applied for UAS licences in Punjab, Haryana, Kerala and Kolkata vide application dated 01.03.2005. These applications were processed in D-4 vide note dated 09.03.2005, recorded by Sh. A. R. Devarajan, AD (BS-III) to the following effect: “Subject: Issue of LOI for grant of Unified Access Services License for Punjab, Haryana, Kerala and Kolkata service areas to M/s. Dishnet Wireless Ltd.
M/s Dishnet Wireless Limited has applied for grant of new UASL for Punjab, Haryana, Kerala and Kolkata service areas, all the four (4) original applications are placed below for ready reference.
2. M/s. Dishnet Wireless Limited has applied in the format earlier prescribed for making application for basic service licence. A processing fee of Rs. 15,000 for each licence application has been furnished and has been
CBI Vs. Dayanidhi Maran & others Page 208 of 424 sent to LF section.
3. A preliminary check has been carried out with reference to these applications for issue of letter of intent for grant of licence. The check list in respect of the four (4) applications are placed at 29/c to 32/c. As per this check list, the applications are in order and LOI can be issued.
4. M/s. Dishnet Wireless Limited is the new name of M/s. Dishnet DSL Ltd.
5. The company has declared its networth and the Promoters networth as follows.
i) Audited networth as 367.09 Cr on 31.03.2004 (ii) Unaudited increase in 88.24 Cr earnings Total 455.34 Cr Unaudited Networth of the Promoter as on 31st January 2005 182.89 Cr
So total networth of the Applicant and Promoter is 638.23 crores. From the number of Licences issued (and pending issue) in the name of M/s. Dishnet DSL Ltd., and the present applications for 4 licences from M/s. Dishnet Wireless Ltd.. the prescribed networth works out to 630 crores. The declared networth satisfies the requirement. (See calculation in Check List). LF section may see the above point please.
6. In view of the above, we may grant UASL to M/s. Dishnet Wireless Limited for the above said FOUR service areas and the Draft format of LOI is placed at 33/c to 44/c for approval please.
CBI Vs. Dayanidhi Maran & others Page 209 of 424 Submitted please.”
372. The file was marked to Sh. P. K. Mittal, who posed the following question: “Is shareholding pattern directly or indirectly provided?” on 10.03.2005 and marked the file to Director (BS-III). 373. Thereafter, reply was sought from the company and on information being supplied by it, it was recorded by Sh. Govind Singhal on 17.03.2005 “M/s Dishnet has submitted the details of equity pattern directly and indirectly. The same is placed in the file. The same may be checked whether it meets out the latest FDI policy decision or not so that the case may be processed.”
374. After recording this note, he marked the file to DDG (BS), who recorded on 18.03.2005 as under: “May also see for advice.” And marked the file to Sr. DDG (VAS). Sr. DDG (VAS) recorded on the same date as under: “Case to be processed as per guidelines in this regard.” 375. After noting this, he marked the file again to DDG (BS) Sh. P. K. Mittal, who recorded on 21.03.2005 as under: “Is non-resident individual same as non-resident Indian? Please clarify.”
376. He marked the file to DDG (PIP), who recorded to the following effect: “ 'Individual', cannot be substituted for 'Indian' ” 377. He again marked the file to DDG (BS) Sh. P. K.
CBI Vs. Dayanidhi Maran & others Page 210 of 424 Mittal, who recorded as under: “Please ask clarification” 378. On recording this, Sh. P. K. Mittal marked the file to Director (BS-III). In response to this, a letter was written to the company and clarification was sought from it on 23.03.2005 and on receipt of response of the company, Sh. Govind Singhal recorded the following note sheet dated 29.03.2005, page N/S 3:
● “M/s Dishnet Wireless Limited has clarified that “all the Resident Individuals and the Non- Resident Individual mentioned in their replies are Indian Citizens Only”. ● The above clarification was sought as per decision on N/S-2 marked 'A'. ● The case is being submitted to check that whether the applicant meet out the latest FDI policy for allotment of licence or not? ● 46/c, 49/c and 50/c may be referred.”
379. On recording this note, he marked the file to DDG (BS) Sh. P. K. Mittal, who, in turn, marked the file to DDG (PIP), who recorded the following note on 30.03.2005 at N/S 3 asking for a committee to examine the issue: “Latest FDI policy is yet to be notified, however, a copy of the relevant portion of conditions proposed & appd by Cabinet while enhancing FDI from 49% to 74% was sent to BS Cell also. The details can be examined by the Committee of DDG (PIP), DDG (BS) & Sr. DDG (VAS). The direct & indirect equity structure may be placed before the Committee pl.”
380. He again marked the file to Sh. P. K. Mittal, who, in turn, marked the file to Director (BS-III). Thereafter, a date for
CBI Vs. Dayanidhi Maran & others Page 211 of 424 the meeting of DDG (PIP), DDG (BS) and Sr. DDG (VAS) was fixed on 29.04.2005. 381. Accordingly, a meeting was held and a note sheet was recorded on 04.08.2005 by Sh. Govind Singhal to the following effect: “The minutes of the above meeting were sent to DDG (PIP) for signature, but the same has not come to this office. An draft copy of the minutes is placed with the file for signature pls.”
382. The file was marked to Director (BS). Thereafter, in due course the file reached DDG (BS) Sh. P. K. Mittal, DDG (PIP) and DDG (VAS), who all appended their signatures. The signature of DDG (VAS) bears the date of 09.08.2005. He again marked the file to DDG (PIP), who appended his signature on 11.08.2005 itself and again marked the file to DDG (BS) Sh. P. K. Mittal on the same date. Sh. P. K. Mittal appended his signatures on 11.08.2005 and marked the file to Director (BS- III). 383. Thereafter, there is no movement in the file on the issue of four licences in Punjab, Haryana, Kerala and Kolkata service areas. The file falls silent on this issue on the aforesaid date of 11.08.2005. 384. However, in his statement dated 08.10.2012, page 2, PW 8 Sh. P. K. Mittal states as under: “On being asked I state that at that point the revised FDI policy was under approval of the cabinet but not notified. So any action at that point of time which is not in conformity of the upcoming guidelines, was not desirable. Therefore, it was directed to ask
CBI Vs. Dayanidhi Maran & others Page 212 of 424 shareholding pattern of the applicant company in terms of direct and indirect holding. M/s Dishnet submitted the details of the equity pattern which was put up by Sh. Govind Singhal on 17.03.2005 to me. I marked the file to Sh. Prabhakar, Sr. DDG (VAS) for advice. He directed the case to be processed as per the prevailing guidelines. On being asked I further state that the equity holding submitted by M/s Dishnet DSL Wireless Ltd. has indicated status as the resident individuals with economic interest of approximately 68% so it was essential to know whether individual is same as Indian so as to treat the equity accordingly. I sought the clarification from Sh. Vijay Kumar, the then DDG (PIP). He clarified that individual cannot be substituted for Indian on 21.03.2005 vide notes on 2/N. Accordingly, a clarification was sought from M/s Dishnet. M/s Dishnet replied that all the resident individuals and non resident individuals mentioned in their replies are Indian citizens only. Case was further submitted to check whether the applicant meet out the latest FDI policy for allotment of licence or not as during that period cabinet was also approved the FDI policy which was in the knowledge of the department but although not notified. Sh. Vijay Kumar the then DDG (PIP) suggested that the details can be examined by the Committee of DDG (PIP), DDG (BS) and Sr. DDG (VAS) vide his note dated 30.03.2005 on NS-III on the said file. At the same time in another file i.e. DoT file bearing No.20-231/2003-BS-III (Vol.III) marked as D-589, Sh. Nripendra Misra, the then Secretary (T) discussed with Hon’ble MoC&IT and directed that “Discussed with MoC&IT. These files are returned with the directions that the div. should ascertain all the show cause notices/advisory letters issued to the above company or companies belonging to the group and the nature of defaults before any view is taken. It may be submitted to my successor.” The above orders cannot be applied to a particular
CBI Vs. Dayanidhi Maran & others Page 213 of 424 case but has to be applied to the company as a whole and all other pending applications to ensure level playing field and similar treatment for all the applications. Hence, the application for the above referred four service areas got linked with the show cause notices issued to the companies. This issue was resolved in May, 2006 when delinking was approved by the then MoC&IT. On being asked I state that the original file bearing No.20-231/2005-BS-III containing the applications for the above referred four services areas was never put up before the then MoC&IT.”
385. He was examined again on this point as PW 8 on this point on 01.12.2011, page 10, and states as under: “Now, I have been shown one original file of DoT bearing No. 20-231/2005-BS-III and state that M/s Dishnet Wireless Ltd. had applied for grant of new UASL for Punjab, Haryana, Kerala and Kolkata service areas. The said applications were process and checked by Shri A.R. Devarajan who put up a note on 09.03.2005 recommending for issue of LOI in favour of M/s Dishnet Wireless Limited for the said four service areas. He marked the file to Shri Govind Singhal, Director (BS-III) who signed the note-sheet on 09.03.2005 and marked it to me. I noted as under:- “Is share holding pattern directly or indirectly provided.” I marked the file to Shri Govind Singhal, Director (BS-III) on 10.03.2005. Accordingly, a letter was sent to M/s Dishnet DSL Limited requesting to provide the said information on 11.03.2005. The reply of M/s Dishnet DSL Limited was received which is placed at 35/C. The said reply was ambiguous. Hence, one another letter was M/s Dishnet DSL Limited on 23.03.2005 under the
CBI Vs. Dayanidhi Maran & others Page 214 of 424 signature of Shri Govind Singhal, Director (BS-III). It was asked to clarify whether this Resident Individual is Indian citizen or any other entity. Also Non-Resident Individual may be clarified. We received a clarification on 28.03.2005 which is placed at 42/C stating that the Resident-Individual and Non-resident Individual are Indian citizen only. A Cabinet Decision was taken which was yet to be notified regarding change in foreign equity pattern in Telecom Sector. Accordingly, a meeting was held on 29.04.2005 with the concerned section with DDG (PIP), DDG (VAS) and myself. Minutes of the meeting are placed at 15/C. However, I would like to clarify that during the intervening period direction of the then MoC & IT Shri Dayanidhi Maran was received linking Show Cause Notices and Advisories to the grant of UASL. It was conveyed through Shri Nripendra Misra, the then Secretary (T) in file No. 20-231/2003-BS-III (Vol. III) at 21/N.”
386. However, the aforesaid direction was passed by Sh. Nripendra Mishra, Secretary (T), on 30.03.2005 in file D-2. Sh. Nripendra Mishra in his statement dated 23.08.2013 states as under: “...... Now I have been shown a copy of DoT file bearing no.20-231/2003-BS-III(Vol.-III) Marked as D-589, I state that on 30.03.2005, I had a discussion with Sh. Dayanidhi Maran, the then MoC&IT in the matter of grant of UASL for UP(E) and UP(W) and grant of extension of time limit for 90 days for signing LOI for MP circle in respect of M/s Dishnet DSL Ltd. As I stated earlier, the legal opinion dated 11.01.2005 of Sh. O.P. Nahar, Legal Advisor was already on record and the same was made available to the then MoC&IT in the above referred file of VAS. The directions given by the Minister on the
CBI Vs. Dayanidhi Maran & others Page 215 of 424 following files alongwith file no.20-231/2003-BS- III(Vol.III) was that the div. should ascertain all the show cause notice/advisory letters issued to the above company or companies belonging to the group and the nature of defaults before any view is taken. This was recorded by me on 30.03.2005 and was further stated by me that it should be put up to my successor. 1. F. No.20-231/2003-BS-III 2. F. No.20-231-2003-BS-III/Pt, 3. F.No.20-225-04-Genl.Mts./Dishnet/BS-III On question about the information sought by the Minister, it was clarified that these information were not considered necessary at the time of making recommendation for grant of licence. …...... ”
387. The four applications were processed for the first time on 09.03.2005, as noted above. As already noted, Sh. Govind Singhal had recorded a note on 29.03.2005 at N/3 and had marked the file to Sh. P. K. Mittal on 30.03.2005. Sh. P. K. Mittal marked the file on the same day to DDG (PIP), who had recorded a note as already extracted above regarding FDI policy. After recording this note, he had marked the file on the same day to Sh. P. K. Mittal, who appended his signatures on 31.03.2005 and marked the file to Director (BS-III). Thereafter, the processing of file continued till 11.08.2005, whereafter the file fell silent as there are no further entries in the file on this issue. 388. Sh. P. K. Mittal states that the processing of the file stopped as it got linked with other files on account of the note of Sh. Nripendra Mishra recorded in file D-2 on 30.03.2005. However, if this was true, the processing of file should have
CBI Vs. Dayanidhi Maran & others Page 216 of 424 been stopped on 30.03.2005 itself or at least on the very next day, that is, on 31.03.2005, on which date also Sh. P. K. Mittal appended his signature on the file and marked the file to Director (BS-III). 389. As such, the statement of Sh. P. K. Mittal that the processing of the file stopped due to the note dated 30.03.2005 of Sh. Nripendra Mishra is entirely contrary to the record. He himself says that this file never reached the Minister. As per record, this file also never reached the Secretary (T). Sh. Nripendra Mishra does not say anything about this file in his four statements. Accordingly, this delay cannot be attributed to the Minister. 390. A bare perusal of note sheets reveals as to what type of insignificant questions were being asked from the company and the file was kept pending by the officials at their own end from 09.03.2005 to 11.08.2005. There is no intervention in the processing of file either from Secretary Dr. J. S. Sarma or the Minister Sh. Dayanidhi Maran. As noted in the statement of Sh. P. K. Mittal, the file was pending due to FDI policy to be announced by the Government and perusal of the file also indicates this. However, in his oral statements his shifts the blame to the directions of Sh. Nripendra Mishra, dated 30.03.2005. The pendency of the file due to FDI policy is also reinforced by the noting at 28/N, dated 02.01.2006 in D-2, wherein information was asked from the company as per latest UASL Guidelines. 391. As earlier noted above, if it was so, the processing of file should have been stopped on 30.03.2005 itself or at least
CBI Vs. Dayanidhi Maran & others Page 217 of 424 the very next day, but the processing of file continued till 11.08.2005 at 4/N. The delay on this count is not attributable to the accused persons at all. It is clear that the statement of Sh. P. K. Mittal attributing delay to the note dated 30.03.2005 of Sh. Nripendra Mishra is contrary to record. Hence, this delay cannot be attributed to the Minister or Dr. J. S. Sarma. 392. Accordingly, this circumstance cannot be read against the accused at all.
*************** V. Delay in allocation of start-up spectrum in Bihar service area to Dishnet (D-35) 393. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP, that Dishnet applied for allocation of spectrum in Bihar service area vide letter dated 24.05.2004. This was being processed and Wireless Advisor and Member (T) recommended allocation of spectrum to it and the file reached Dr. J. S. Sarma on 17.06.2005. It is submitted that instead of approving the file, he asked for another connected file and for a consolidated note. It is further submitted that when the file was submitted again through a consolidated note and it reached Dr. J. S. Sarma on 26.07.2005, he again did not approve the file and asked a frivolous question as to the stage of network planning of the company and sent the file back. It is further submitted that he also orally instructed WA Sh. P. K. Garg to put up the file only when he asked for it. It is submitted by him that these actions on the part of Dr. J. S. Sarma show
CBI Vs. Dayanidhi Maran & others Page 218 of 424 that he deliberately delayed the allocation of spectrum to Dishnet DSL Limited in Bihar service area in order to constrict its business environment. He has read out the relevant parts of the file as well as relevant statements at the bar to emphasize his point of view that the queries put were irrelevant and frivolous and Dr. J. S. Sarma deliberately delayed the allocation of spectrum. 394. On the other hand, learned defence counsel have submitted that the queries put by Dr. J. S. Sarma were relevant and by no stretch of imagination can be termed as frivolous. It is further submitted that the oral statement of Wireless Advisor Sh. P. K. Garg is of no value even prima facie as the same is contrary to record and he himself was responsible for delaying the file. It is submitted that when Dr. J. S. Sarma was giving directions in writing, there was no occasion for him to give oral directions to Wireless Advisor. The relevant note sheets and statements have been read out at the bar. 395. Let me take note of the relevant note sheets as recorded in the file. 396. On getting UAS licences, Dishnet applied for allocation of frequency in all seven service areas, including Bihar. 397. The request of Dishnet DSL Limited for allocation of spectrum in the seven service areas, that is, Bihar, Orissa, West Bengal, HP, Assam, North-East and J&K, was being dealt with in D-68 (Main case), which file is referred to by the witnesses in their statements, but is not part of record of the instant case as per the list of documents attached to the charge sheet.
CBI Vs. Dayanidhi Maran & others Page 219 of 424 398. Thus, the request of Dishnet DSL Limited for allocation of spectrum in Bihar service area was also dealt with in this file (D-68), when a proposal was put up on 07.02.2005 for allocation of spectrum to this company in 16 districts of Bihar service area. The proposal was agreed to up to the level of Secretary, who marked the file to MOC&IT on 08.02.2005. However, the file was returned on 28.06.2005 with the observation that this was discussed and position was asked with respect to the other districts of Bihar. It appears from the file that though the Secretary marked the file to the MOC&IT, but it was returned under the signature of Dr. J. S. Sarma. Thereafter, there is no movement in the file in this regard, except discussion about the query raised by AS(T) Sh. Yashwant Bhave on 17.10.2005 at 8/N in file D-4, already extracted. This discussion continued till 02.11.2005 at 25/N. The note sheets in both the files, that is, D-68 and D-4, are similar. 399. However, the request for allotment of spectrum in Bihar service area was also being dealt with in file D-35 vide letter dated 24.05.2004, page 96. This was processed vide note dated 26.05.2004, recorded by Sh. M. C. Pandey, Engineer. As such, this file was also opened on the same subject for assignment of spectrum to Dishnet. 400. Incidentally, one more file D-6 was opened on 16.07.2004 on the request of Dishnet for frequency allocation in Assam and North-East service areas. Not only this, one more file D-34 was opened on 03.03.2006 for allocation of initial spectrum to Dishnet DSL Limited in HP service area.
CBI Vs. Dayanidhi Maran & others Page 220 of 424 Coordination of spectrum for Bihar service area 401. In due course, DoT wrote letters to JCES for earmarking of the spectrum in the seven service areas. Perusal of file D-35 reveals that the coordination of spectrum for Bihar service area to Dishnet was received in DoT and was taken on record on 09.06.2005 vide note sheet recorded as under at 7/N: “S. Nos. 12I & 13I S. No. 14 (R) (copy of letter from M/s Dishnet to WA) S. No 15 (R) PUC is received from M/s JCES regarding co- ordination of spectrum in 1800 MHz Band for Bihar state district wise. As the request for spectrum in Bihar for various districts in 1800 MHz is already pending for M/s Dishnet, placed on S.No. 14 (R). We may consider their request. Submitted please.”
402. Thereafter, the file was marked upward and file reached Joint Wireless Advisor on 10.06.2005, who asked for a self-contained note and marked the file to Deputy Wireless Advisor. 403. In response to that, Sh. B. Gunasekar, Deputy Wireless Advisor, recorded a note date 10.06.2005 at 8/N as under: “Case relates to earmarking of GSM Spectrum in 1800 MHz to M/s Dishnet DSL Ltd. in 37 districts of Bihar telecom service area. M/s Dishnet DSL Ltd. had earlier requested for 6.2 MHz bandwidth in 900 MHz band for rollout of UASL service in Bihar telecom service area. The case was taken up with JCES, Ministry of Defence for release of 4.4+4.4 MHz spectrum in 900 MHz band out of remaining 4.8+4.8 MHz held by them. 2. JCES, Ministry of Defence have clarified that no
CBI Vs. Dayanidhi Maran & others Page 221 of 424 further spectrum in 900 MHz band can be released by them, as the remaining 4.8+4.8 MHz spectrum in this band is being used by them. 3. JCES was requested to coordinate spectrum in 1800 MHz band. M/s Dishnet DSL also requested to earmark GSM spectrum in 1800 MHz band to roll out and launch UASL service to meet license obligations. 4. JCES have now coordinated spectrum in 1800 MHz band for 37 districts in Bihar telecom service area. In 6 districts (Gaya, Jehanabad, Lakhisarai, Muzaffarpur, Samastipur and Vaisali) out of 37 districts, spectrum will be confirmed after trials. For the remaining 18 districts of Bihar, the case is already under submission. With this coordination, we may earmark 4.4+4.4 MHz in all 37 districts of Bihar. However districts of Jharkhand, which is also part of Bihar telecom service area are not covered in the coordination. Draft earmarking letter is placed below for consideration please.”
404. He marked the file upward to Joint Wireless Advisor, Wireless Advisor and Member (T). They all agreed to the aforesaid note and Member (T) marked the file to Special Secretary (T) Dr. J. S. Sarma on 17.06.2005. The file reached Special Secretary Dr. J. S. Sarma, who recorded on 28.06.2005 that: “There was another file on the same subject. Please put up a consolidated note.”
405. In fact, Dr. J. S. Sarma was asking for file D-68, which is clear from the following note sheets. Moreover, he had returned the file D-68 on the same day, as noted above. 406. The instant file was marked by Dr. J. S. Sarma to Wireless Advisor, who, in turn, marked the file to Assistant
CBI Vs. Dayanidhi Maran & others Page 222 of 424 Wireless Advisor as Joint Wireless Advisor and Deputy Wireless Advisor were on leave. 407. In response to the note of Special Secretary, Sh. D. Jha, Assistant Wireless Advisor, to whom the file was marked, recorded a note dated 04.07.2005 at page 10/N as under: “With reference to minutes of Secretary (T) on prepage: Case relates to initial earmarking of 4.4 + 4.4 MHz GSM spectrum in 1800 MHz Band for UASL services in Bihar Telecom Service Area to M/s Dishnet DSL Limited.
2. The service provider applied for GSM Spectrum vide his application dated 24.05.2004 in 900 MHz band. As per the license agreement signed between DOT and the service provider initial 4.4 + 4.4 MHz GSM spectrum (900/1800MHz band) can be allotted, subject to availability. The case was pursued with JCES, but they could not coordinate spectrum in 900 MHz beyond 20.2+20.2 MHz, already coordinated and in use by other service providers. Then the request was made for coordination in 1800 MHz band. M/s Dishnet DSL also requested GSM spectrum in 1800 MHz band to roll out their network. 3. JCES vide their letter no. IDS/1128/2/JCES dated 18.01.2005 had earlier coordinated 10+10 MHz in 16 districts of Bihar state under Bihar licenced service area, which was processed in F. No. L-14047/02/2004-NTG (Pt.). They have now coordinated 5/10MHz in 1800 MHz band for all 37 districts of Bihar state. Both the cases have now been merged for consolidated approval of initial earmarking in all the districts of Bihar state. 3.1 In 6 districts (Gaya, Jehanabad, Lakhisarai, Muzaffarpur, Samastipur and
CBI Vs. Dayanidhi Maran & others Page 223 of 424 Vaishali) out of 37 districts spectrum will be confirmed after trials. With this coordination, we may earmark 4.4+4.4 MHz in all 37 districts of Bihar state. However, 18 districts of Jharkhand state, which is also part of Bihar licenced service area are not covered in the coordination.
4. The case is submitted for kind consideration and approval of the competent authority for earmarking of initial 4.4 + 4.4 MHz GSM Spectrum in 1800 MHz Band as per co- ordination received from JCES and as per terms of service licence granted to them.
408. Paragraph 3 of this note indicates that the file asked by Dr. J. S. Sarma was D-68. Thus, D-68 was relevant file in which coordination and allocation of spectrum to Dishnet in all seven service areas, that is, Bihar, Orissa, West Bengal, HP Assam, North-East and J&K service areas was being dealt with and this file was opened on 23.06.2004. In note sheet dated 07.02.2005 at 23/N, spectrum was recommended to be allocated to Dishnet in sixteen districts of Bihar, but the file was returned asking about the status in the remaining districts on 28.06.2005 at 23/N by Dr. J. S. Sarma himself. Instant file was returned by Dr. J. S. Sarma on 28.06.2005 itself asking for another file. As noted above, this file was D-68. As such, this query can, by no stretch of imagination, be called a frivolous query. When two parallel files were there and the same were put up on the same day, Dr. J. S. Sarma was right in asking for another file and for a consolidated note. 409. The aforesaid consolidated note dated 04.07.2005
CBI Vs. Dayanidhi Maran & others Page 224 of 424 recommending allocation of spectrum to Dishnet in Bihar service area was agreed to by Deputy Wireless Advisor and Joint Wireless Advisor and Wireless Advisor. This was agreed to by Member (T) also and he marked the file to Secretary (T) Dr. J. S. Sarma on 13.07.2005. 410. When the file reached him, Dr. J. S. Sarma again asked a question as under on 26.07.2005: “What is the stage of network planning? Have they identified sites even?”
411. He marked the file to Wireless Advisor. On this note, PW 9 Sh. P. K. Garg appended a yellow slip on 10/N putting a query: “Regarding sites we may check with SACFA if they have applied for site clearance in Bihar. If yes, how many?”
412. And he marked the file to Joint Wireless Advisor. However, on the yellow slip itself it is recorded by Deputy Wireless Advisor on 29.07.2005 as under: “Checked with SACFA, no case as on date.”
413. Thereafter, information was sought from Dishnet vide note dated 02.08.2005 at 11/N. 414. On the basis of the information received from Dishnet, the following note was recorded by Sh. D. Jha on 16.08.2005 at 12/N (D-35): “As directed by Chairman (TC) on page-10/n ante, the clarifications were obtained from M/s Dishnet and is placed below. M/s Dishnet has stated that they have
CBI Vs. Dayanidhi Maran & others Page 225 of 424 completed network planning for the GSM network to be deployed in Bihar telecom service area based on the coverage plan of cities and towns proposed to be covered by them. A detailed planning for the backbone connectivity along with the highways for the network has also been completed. 2. M/s Dishnet has stated that they have identified locations for Main Switching Centers (MSCs) and Base Switching Centers (BSCs) at Patna and Ranchi in Bihar. 3. Further, they have stated that their plan for acquisition of BTS sites and placement of purchase orders for the infrastructure and equipments are pending due to firm assignment of frequencies. They have requested for early assignment of GSM spot frequencies. 4. In this context, it is mentioned that now the GSM Spectrum 4.4 + 4.4 MHz in 1800 MHz band for whole of Bihar telecom service area including Jharkhand, under Bihar telecom service area, are available, for initial earmarking as per licensing condition. The case is submitted please.”
415. On recording this note, the file was marked upward and the file reached Wireless Advisor Sh. P. K. Garg, who recorded on 21.08.2005: “Whether the DSL had applied for SACFA clearance for any site in Bihar and Jharkhand areas.”
416. Sh. P. K. Garg marked the file downward. The file reached Sh. Ashok Kumar, JW(F), Incharge, SACFA group, who recorded on 24.08.2005 as under: “Reference note above. It is stated that till date M/s Dishnet Wireless Limited has not applied for sitting clearance in Bihar and Jharkhand areas.”
CBI Vs. Dayanidhi Maran & others Page 226 of 424 Reaching of file to the Wireless Advisor, custody of file and approval 417. The file reached the Wireless Advisor on 24.08.2005 itself. 418. Thereafter, there is no movement on the file till 13.01.2006. On this date, Sh. D. Jha recorded at 13/N as under: “From pre-page. As desired with ref. to the notes on pre-page, the case is resubmitted for kind consideration please.”
419. He marked the file upward and the file was marked to the Wireless Advisor on the same date. Again, there is silence in the file till 01.02.2006. 420. On 01.02.2006, Sh. P. K. Garg, Wireless Advisor recorded the following note at 14/N: “The case relates to allotment of initial GSM spectrum to M/s Dishnet Wireless Ltd. for Bihar Telecom service area, which includes Jharkhand, under their UASL. Recently, JCES, MOD, had coordinated GSM spectrum in 1800 MHz band for various Districts of Bihar, including Jharkhand. The service provider has also informed that he has firm plans for rolling out the network. It is, therefore, proposed that we may allot the initial 4.4 + 4.4 MHz of GSM spectrum in the 1800 MHz band, to M/s Dishnet Wireless Ltd. for Bihar Telecom service area, which includes Jharkhand. For kind consideration.”
421. This note was approved by Secretary (T) on 03.02.2006. 422. Now the question is: Whether the query put up by
CBI Vs. Dayanidhi Maran & others Page 227 of 424 the Secretary is frivolous? 423. PW 99 Sh. M. K. Rao, Deputy Wireless Advisor, states that after allocation of spectrum, licencee has to approach SACFA secretariat for site clearance (mast height/ full site clearance). As per this statement, SACFA clearance is to be sought after allocation of spectrum. If this statement is to be believed, the query regarding SACFA was not required.
Allocation of spectrum in H.P. service area (D-34) 424. The case of the prosecution is that Dr. J. S. Sarma did not ask any question about SACFA clearance in HP service area, but this frivolous query was asked only in Bihar service area to delay the allocation of spectrum to Dishnet DSL Limited. 425. In this regard, Sh. D. Jha, in his statement dated 06.11.2012, speaks about allocation of spectrum in Himachal Pradesh service area by referring to file D-34. He states that allocation of 4.4+4.4 MHz spectrum for Himachal Pradesh service area was approved by Dr. J. S. Sarma on 10.03.2006 and no such query was asked. His statement dated 06.11.2012, page 2, is as under: “...... No undue delay was caused in allocation of start-up spectrum to M/s Dishnet Wireless Ltd. in Himachal Pradesh service area. From the above referred file, it is clear that no irrelevant query like SACFA clearance, networks details etc. was asked from Dishnet Wireless Ltd. in this case.”
426. The implication of this statement is that after
CBI Vs. Dayanidhi Maran & others Page 228 of 424 transfer of Dishnet DSL Limited to Maxis, no such query was put, but when Dishnet DSL Limited was with Siva group, this frivolous query was put regarding Bihar service area. 427. However, it is instructive to extract the note sheet dated 09.03.2006, recorded by Sh. P. K. Garg, Wireless Advisor, at 4/N (D-34) as under: “The case relates to allotment of initial GSM spectrum to M/s Dishnet Wireless Ltd. for telecom service area of H. P. under their Unified Access Service Licence.
Recently, JCES, MOD, had coordinated additional GSM spectrum in 1800 MHz band for various districts of H. P. The service provider has informed that they have firm plans for rolling out the network.
A minor harmonization adjustment is required for spectrum already earmarked in GSM 1800 MHz band to M/s Escorts Telecom Ltd. in the area, so that both the service providers can be earmarked contiguous GSM 1800 MHz spectrum to ensure its efficient utilisation. This has been discussed with representatives of M/s Escorts Telecom Ltd. and they have agreed for the same.
Now, it is proposed to allot the initial 4.4 + 4.4 MHz of GSM spectrum in the 1800 MHz GSM band, to M/s Dishnet Wireless Ltd. for H. P. telecom service area.
For kind consideration,”
428. The perusal of the note sheet reveals that the company itself had informed the DoT that they had firm plans for rolling out the network. In such a situation, where was the
CBI Vs. Dayanidhi Maran & others Page 229 of 424 question of putting the query. 429. However, Sh. P. K. Garg in his statement states that SACFA clearance/ network planning was not required to be asked at the time of allocation of spectrum. 430. But the above note sheets contradict his oral statement. If it is not required, why did he record in para 2 that service providers had informed that they had firm plans for rolling out the network. More so, this is in the case of H.P. service area in which allocation was made subsequently on 10.03.2006. The oral statement of Sh. P. K. Garg is also contradicted and falsified by his note dated 01.02.2006 at 14/N (D-35), wherein also he records that service provider has informed that it has firm plans for rolling out the network. If it is not required, why Sh. P. K. Garg is so recording? These two instances indicate that information about roll out plan is needed, regarding which question was put by Dr. J. S. Sarma.
Regarding SACFA clearance: Statement of P. K. Garg, Wireless Advisor 431. It is instructive to take note of statement of PW 9 Sh. P. K. Garg in this regard, who has stated in his statement dated 02.12.2011 at page 5 as under: “In this regard I would like to clarify that in view of the direction of the Special Secretary (T) Dr. J. S. Sarma, the aforesaid query was raised. Moreover, I would like to explain that earlier the Service Providers could apply for SACFA site clearance only after allotment of initial spectrum. However, subsequently a change was made and during this period i.e. 2005-2006, the Service Providers could apply for initial spectrum and simultaneously could
CBI Vs. Dayanidhi Maran & others Page 230 of 424 apply for clearance of sites by SACFA as per their network planning. There was no application of the applicant pending in respect of site clearance in SACFA as per the note of Sh. Gunasekar, DWA (V) on the slip on 29.07.2005 affixed on the note sheet (10N).”
432. However, in his statement dated 24.05.2012, at page 20, Sh. P. K. Garg states as under: “...... Before providing initial spectrum to the telecom service providers, SACFA (Standing Advisory Committee on Frequency Allocation) clearance is not mandatory since 2003-04. When a service provider is allocated spectrum and frequency assignment letter is issued to it, as per the conditions provided in the frequency assignment, applicant has to approach SACFA Secretariat for site clearance (Mast height/Full site clearance). …...... ”
433. The query regarding status of network planning was raised by Dr. J. S. Sarma on 26.07.2005 at 10/N. From the above statements, it is not clear as to when the policy was started that service provider could apply for SACFA clearance only after allocation of initial spectrum, as Sh. P. K. Garg states that the policy got changed in the year 2005-06 and in the latter statement, in the year 2003-04. Sh. P. K. Garg further compounds the statement by stating in his statement dated 02.12.2011 that to the best of his memory, such information regarding network planning and acquisition of sites was generally not asked from service providers at the time of initial GSM spectrum. As such, he is not sure of anything and
CBI Vs. Dayanidhi Maran & others Page 231 of 424 contradicts the official record prepared by he himself. 434. Similarly, PW 67 Sh. R. J. S. Kushvaha has also stated in his statement dated 18.11.2011, page 6, that network planning and acquisition of sites were not mandatory for grant of initial spectrum and such information was not being sought from other service providers, but he does not state since when the policy was changed. If the policy was changed in 2005-06 and one does not know the date and month of the change of policy regarding SACFA clearance, how can Dr. J. S. Sarma is faulted for this query. 435. However, the relevant provisions regarding SACFA clearance and identification of sites are contained in the licence agreement, a copy of which is available in D-5, pages 4 to 86, which read as under: “43. Frequency Authorization
43.1 A separate specific authorization and licence (hereinafter called WPC licence) shall be required from the WPC wing of the Department of Telecommunications, Ministry of Communications permitting utilization of appropriate frequencies / band for the establishment and possession and operation of Wireless element of the Telecom Service under the Licence Agreement of Unified Access Service under specified terms and conditions including payment for said authorization & WPC licence. Such grant of authorization & WPC licence will be governed by normal rules, procedures and guidelines and will be subject to completion of necessary formalities therein. 43.2 For this purpose, a separate application shall be made to the “Wireless Advisor to the Government of India, WPC Wing, Department of Telecommunications, Ministry of Communications, Sanchar Bhawan, New Delhi-110 001” in a
CBI Vs. Dayanidhi Maran & others Page 232 of 424 prescribed application form available from WPC Wing. 43.3 Site clearance in respect of fixed stations and its antenna mast shall be obtained from the WPC Wing for which the applicant shall separately apply to the Secretary, Standing Advisory Committee on Frequency Allocations (SACFA) WPC Wing in a prescribed application form, to the following address: The Secretary (SACFA), WPC Wing, Ministry of Communications, Department of Telecommunications, Sanchar Bhawan, New Delhi-110 001.
EXPLANATION: SACFA is the apex body in the Ministry of Communications for considering matters regarding coordination for frequency allocations and other related issues / matters. (Siting clearance refers to the agreement of major wireless users for location of proposed fixed antenna from the point of view of compatibility with other radio systems and aviation hazard. It requires inter departmental coordination and is an involved process). Normally the siting clearance procedure may take two to six months depending on the nature of the installation and the height of the antenna / masts...... 43.9 For use of space segment and setting up and operationalisation of Earth Station etc., LICENSEE shall directly coordinate with and obtain clearance from Network Operations and Control Centre (NOCC), apart from obtaining SACFA clearance and clearance from other authorities.”
436. The aforesaid provisions do not make it clear as to when SACFA clearance is to be obtained, that is, before allocation of spectrum, simultaneously with the allocation of
CBI Vs. Dayanidhi Maran & others Page 233 of 424 spectrum or after the allocation of spectrum. 437. The case of PW 9 Sh. P. K. Garg and PW 67 Sh. R. J. S. Kushvaha is that SACFA clearance and identification of sites is not required at the time of initial spectrum. PW 9 Sh. P. K. Garg further states in his statement dated 24.05.2012 at page 20 that SACFA clearance is not mandatory since 2003-2004 for initial spectrum. PW 67 Sh. R. J. S. Kushvaha, Joint Wireless Advisor, also stated in his statement dated 18.11.2011, page 6, that information regarding network planning and sites was not mandatory for initial spectrum. However, when the query was put up by the Secretary, none of them brought this to his notice. Sh. Ashok Kumar, Incharge, SACFA, has not been examined as a witness. 438. However, in statement dated 21.11.2011, PW 67 Sh. R. J. S. Kushvaha, based on file D-6, page 6/N, while referring to allocation of spectrum to Dishnet in different service areas and problems faced in Bihar and Orissa service areas, states as under: “Further, at page No. 6/N of file No. L- 14042/30/2004-NTG, a note has been put up by Sh. Dinesh Jha on 06.05.2005 regarding the processing of cases for allotment of spectrum to M/s Dishnet Wireless Ltd. in seven Telecom Service Areas and providing details of spectrum earmarked in each telecom service area. He has also submitted a table in which he has provided details in respect of service area date of earmarking of frequencies for Microwave Access, Microwave Backbone and GSM Frequency. The table available on page 6/N of the file is reproduced as below:
CBI Vs. Dayanidhi Maran & others Page 234 of 424 S. Circle Microwave Microwave Frequency Date of No. Access (Date Backbone Band Earmarking of (Date of Earmarking) Earmarking ) 1. Assam 18.08.2004 28.02.2005 900 MHz 22.07.2004 2. North East 23.08.2004 09.03.2005 900 MHz 22.07.2004 3. Jammu and 23.08.2004 03.12.2004 900 MHz 01.09.2004 Kashmir 4. Himachal 23.08.2004 17.01.2005 - Yet to be Pradesh allotted 5. West 23.08.2004 23.12.2004 1800 15.12.2004 Bengal MHz 6. Orissa 23.08.2004 03.01.2005 1800 24.12.2004 MHz 7. Bihar 18.08.2004 23.02.2005 Proposed Case has in 1800 been MHz submitted
This chart indicates that till that time the spectrum was already allotted in the service areas namely Assam, North-East, Jammu & Kashmir, West Bengal and Orissa. It is mentioned in the chart that the case for allotment of spectrum for Bihar had been submitted for kind consideration of competent authority. As far as Himachal Pradesh is concerned no coordination had been received from JSES in spite of several reminders issued from our side.
Further in para 2 of this note, the reason has been given why allotment of GSM Spectrum in 900 MHz for Bihar and Orissa could not be met.
The file was submitted to the then DWA (V), Sh. G. K. Agarwal, who marked the file to me on 06.05.2005. I marked the file to the then WA, Sh. P. K. Garg on the same day i.e. 06.05.2005.
Wireless Advisor Sh. P. K. Garg has written on the file:-
“There was another similar letter to MOC&IT wherein we have provided similar comments to Member (P), after showing to Member (T). In this
CBI Vs. Dayanidhi Maran & others Page 235 of 424 case also we may provide similar information to Member (P) or send a reply regarding spectrum and SACFA issues. Our preference would be second alternative. For kind perusal.”
He has signed the note on 10.05.2005 and marked the file to the then Member (T), who further marked the file to the then Member (P) on 11.05.2005.”
439. As per the aforesaid statement, the note was put up on 06.05.2005 by Sh. D. Jha and in this note sheet, the issues of SACFA were involved. This date is prior to the date on which Dr. J. S. Sarma asked the status of network planning on 26.07.2005, which led to the enquiry about SACFA clearance etc. This also indicates that there were at least some issues related to SACFA clearances.
Role and responsibility of Wireless Advisor 440. PW 9 Sh. P. K. Garg, Wireless Advisor, in his statement dated 02.12.2011, page 1, states as under: “...... While working as Wireless Advisor, DOT my duties and responsibilities were to formulate the policies relating to spectrum, with the approval of competent authority i.e. MOC & IT through Secretary (T) and then to implement such spectrum policies in letter and spirit. I was required to have coordination of frequencies with existing/ earlier users for allotment of spectrum to telecom service providers and grant of Wireless Licenses. …...... ”
441. He further states at pages 6 and 7 as under: “On 24-08-2005, the information received from SACFA Group i.e. M/s Dishnet DSL Ltd. had not
CBI Vs. Dayanidhi Maran & others Page 236 of 424 applied for site clearance in Bihar and Jharkhand area till that date i.e. 24-08-2005 (Page 12/N). Sh. D. Singaravelu DWA (P) submitted the file to JWA (F) Sh. Ashok Kumar on 24-08-2005. Sh. Ashok Kumar JWA (F) marked the file to me on the same day i.e. 24-08-2005, as evident from the note at 12/N.
On 13-01-2006 Sh. D. Jha, AWA (V) re- submitted the file for kind consideration (13/N). The DWA (V), Sh. Kushwaha, JWA (N) signed in token of having again recommended to approve for allotment of spectrum for Bihar telecom service area including Jharkhand. On this I gave my remarks dated 01-02-2006 which are reproduced herein below:-
“The case relates to allotment of initial GSM spectrum to M/s Dishnet Wireless Ltd. for Bihar Telecom service area, which includes Jharkhand, under their UASL.
Recently, JCES, MOD, had coordinated GSM spectrum in 1800 MHz band for various Districts for Bihar, including Jharkhand. The service provider has also informed that he has firm plans for rolling out the network.
It is, therefore, proposed that we may allot the initial 4.4 + 4.4 MHz of GSM spectrum in the 1800 MHz band, to M/s Dishnet Wireless Ltd. for Bihar Telecom service area, which includes Jharkhand.
For kind consideration”
Then I marked the file to Secretary (T), Dr. J.S. Sarma who was earlier Special Secretary. Dr. J.S. Sarma signed it on 03-02-2006 in token of having approved the same. Thereafter, the letter dated 07-02-2006 under the signature of Sh. D. Jha, AWA (V) was issued to M/s Dishnet Wireless Ltd.
CBI Vs. Dayanidhi Maran & others Page 237 of 424 conveying earmarking of initial spectrum 4.4 + 4.4 MHz in 1800 MHz GSM band for Unified Access Services in Bihar Telecom Service Area (page no. 16/N and 174/C). Accordingly the aforesaid spectrum was allotted on 07-02-2006. On being asked I clarify that the information regarding network planning and sites being acquired was not required for grant of initial spectrum. Further to the best of my memory such information was generally not asked from other Service Providers at the time of grant of initial GSM spectrum. From the above, it is evident that the co- ordination of spectrum in the matter of allotment of spectrum for Bihar circle from the JCES was received on 08-06-2005 by WPC Wing and was received on 21-07-2005 for Jharkhand (part of Bihar telecom circle). In spite of it the spectrum was allotted on 07-02-2006. Hence an undue delay took place in the allotment of initial spectrum for Bihar Telecom Circle to M/s Dishnet DSL Ltd. To the best of my memory, it is clarified that Dr. J. S. Sarma had asked me after sending the file to me on 26-07-2005, to get the complete information about network planning and identification of site etc. and then put up the file to him only when he will call for the same. Dr. J. S. Sarma called for the file in the month of January, 2006 and accordingly the file was put up by the WPC Wing as per my direction on 13.01.2006 and I gave my remarks on 01-02-2006, recommending to accord approval for allotment of spectrum for Bihar Telecom Area. From the above it is evident that the JCES had conveyed coordination on 08-06-2005 (page no. 161 & 162) and on 21-07-2005 (page no. 163) in respect of Bihar and Jharkhand respectively. However, in my note dated 01.02.2006, the word 'recently' was mentioned by me inadvertently, whereas, the coordination was received about 6 months back, not recently. On being asked about the reason for delay in
CBI Vs. Dayanidhi Maran & others Page 238 of 424 allotment of spectrum to Dishnet DSL Limited for Bihar circle, I explain that the file speaks volumes about the fact that the officers of the WPC wing including myself had tried our best to get the spectrum allotment approved in time. Due to the queries raised by Dr. J. S. Sarma, Secretary (T) which were not required (particularly dated 26- 07-2005), the delay in approval and allotment was caused. Moreover, I reiterate that to the best of my memory Dr. J. S. Sarma, the then Secretary (T) had asked me to put up the file when he would ask me to do so.”
442. He further states in his statement dated 29.12.2011, at page 2, as under: “...... From the above, it is apparent that the said file remained pending with me during the period from 25.8.2005 to 31.12.2005 (127 days). In this context it is stated that to the best of my memory, Dr. J.S. Sarma the then Secretary (T) had asked me after sending the file to me on 26-07-2005, to get the complete information about network planning and identification of site etc. and then put up the file to him only when he would call for the same. I also state that I had no intention of delaying the case as can be seen from the fact that the case was submitted for approval thrice earlier - on 14.06.2005, 16.06.2005 and 06.07.2005, but was returned with queries first by Shri K.L. Jain, the then Member (T), and then by Dr. J.S. Sarma, the then Special Secretary (T) who subsequently became Secretary (T). As per my memory, Dr. J. S. Sarma had called for the file in the month of January, 2006 and accordingly the file was put up by Shri D. Jha, Assistant Wireless Advisor (V) as per my direction on 13.01.2006 and I gave my remarks on 01-02- 2006, recommending to accord approval for allotment of spectrum for Bihar Telecom Service
CBI Vs. Dayanidhi Maran & others Page 239 of 424 Area.”
443. It is clear from the aforesaid statement that he was responsible for formation of policy relating to spectrum with the approval of the Minister. It is a highly responsible position in the Government of India. But he is not sure of anything and he changed his statement thrice regarding SACFA issues, as already noted above. Neither he remembers the correct position nor the year when the policy regarding SACFA clearance was changed. He sat on the file for 127 days and thereafter, orally blames the Dr. J. S. Sarma for that. Dr. J. S. Sarma passed his directions twice, that is, on 28.06.2005 and 26.07.2005, on both occasions in writing. In such a situation, it was incumbent on Sh. P. K. Garg to record his views in writing. Sh. D. Jha and Sh. R. J. S. Kushvaha have stated that they do not know as to where the file was from 24.08.2005 to 31.12.2005, when the file was marked downward by the Wireless Advisor. Sh. P. K. Garg admits that the file was with him, but he kept the file with him on the asking of Dr. J. S. Sarma. This statement is quite contrary to the record.
Authorities competent to allocate spectrum 444. In his statement dated 09.05.2012, pages 3 and 4, Sh. P. K. Garg states about authorities, who were at different times competent to grant spectrum and how they kept changing, which reads as under: “...... On being asked I state that till end of January 2005,
CBI Vs. Dayanidhi Maran & others Page 240 of 424 Joint Wireless Advisors of WPC Wing, DoT were the competent authority for approval of allotment of initial as well as additional spectrum as per policy, guidelines and criteria. Now I have been shown a copy of order dated 31.01.2005 issued under the signature of Sh. Nripendra Misra, the then Secretary (T) and Chairman (TC) which states as under:- “MOC&IT has directed that the following type of cases should be submitted to him via Member (T) / Secretary (Telecom), for approval. (i) Frequency assignment for telecom service provider while granting license. (ii) Frequency for terrestrial broadcasting and uplinking of satellite TV channels. Please ensure compliance and issue suitable instructions to various levels in the Wireless Division for compliance.” The said order dated 31.01.2005 was marked to me as the then Wireless Advisor and copy thereof was also endorsed to Member (F), Member (S), Member (T), Member (P) and AS (T). I noted the said order on 02.02.2005 {on the copy received from Member (T)} and further marked it to Sh. Ashok Kumar, the then JWA (F). Prior to 31.01.2005, as stated above, Joint Wireless Advisor was competent to approve the allotment of spectrum/additional spectrum to different service providers. After 31.01.2005, the then MOC&IT became the competent authority to approve the allotment of spectrum/additional spectrum. Although in the above referred order dated 31.01.2005, the specific mention of allocation of additional spectrum is not there, yet it was being approved by the then MOC&IT. Now I have been shown a copy of order dated 16.06.2005 issued under the signature of Dr. J. S. Sarma, the then Special Secretary (T) which states that the following types of cases should be submitted via Member (T) to the Special Secretary for approval:- (i) Frequency assignment for telecom service
CBI Vs. Dayanidhi Maran & others Page 241 of 424 provider while granting license. (ii) Frequency for terrestrial broadcasting and uplinking of satellite TV channels. The said order dated 16.06.2005 was marked to me as Wireless Advisor. I noted the said order on 16.06.2005 itself and marked it to my subordinates. Dr. J. S. Sarma was regularized as Secretary (T) in July, 2005 and no Special Secretary was posted in his place. Hence, all the cases pertaining to frequency assignment for telecom service providers were being sent to him as the then Secretary (T) for approval.”
445. The mere change of authority for allocation of spectrum does not by itself indicate anything. Amongst other things he states that Dr. J. S. Sarma was authorized by Sh. Dayanidhi Maran to allocate spectrum. In the absence of any other incriminating material, authorizing an officer to do a particular act by itself does not indicate any criminal intent.
Recording name of authority at whose instance note sheet recorded 446. Dr. J. S. Sarma, when he was Special Secretary (T), asked for another file and also for a consolidated note on 28.06.2005, at 9/N (D-35). Similarly, he asked for status of network planning on 26.07.2005, when he was Secretary (T) at 10/N. In response to both the queries, notes dated 04.07.2005 and 16.08.2005 at 10/N and 12/N respectively were recorded by Assistant Wireless Advisor. Both the notes clearly record that these were recorded at the instance of noting of Secretary (T). This indicates that wherever Dr. J. S. Sarma directed anything to be done, it was clearly recorded in the file. These
CBI Vs. Dayanidhi Maran & others Page 242 of 424 two instances are enough to indicate this. 447. However, wherever the notes were recorded, which apparently were dilatory in nature, nothing of this sort was noted in the file and only in the oral statements, the delay is being attributed to the Secretary (T) Dr. J. S. Sarma. The oral statements are thus, contradictory to the record available in the file as wherever Dr. J. S. Sarma asked for any information, the note recorded in response to that indicates it that it was being recorded on the asking of the Secretary (T)/ Chairman (TC). The delay is, thus, also attributed to the oral instructions of Dr. J. S. Sarma, for which there is no written record. 448. Let me take note of the official procedure in this regard.
Oral instructions vis-a-vis written record 449. Sh. P. K. Garg has introduced the plea of oral instructions by Dr. J. S. Sarma for delaying the file. Let me take a look as to what the Manual of Office Procedure issued by the Ministry of Personnel, Public Grievances and Pensions says on this point. 450. Clauses 36 to 39 deal with oral instructions issued by superior officers or Ministers. It is relevant to extract them as under: “36. Oral discussions - (1) All points emerging from discussions (including telephonic discussions) between two or more officers of the same department or from discussions between officers of different departments, and the conclusions reached will be recorded on the relevant file by the officer
CBI Vs. Dayanidhi Maran & others Page 243 of 424 authorising action.
(2) All discussions/instructions/decisions which the officer recording them considers to be important enough for the purpose, should be got confirmed by all those who have participated in or are responsible for them. This is particularly desirable in cases where the policy of the government is not clear or where some important deviation from the prescribed policy is involved or where two or more level differ on significant issues or the decision itself, though agreed up to by all concerned, is an important one.”
“37. Oral instructions by higher officers - (1) Where an officer is giving direction (including telephonic direction) for taking action in any case in respect of matters on which he or his subordinate has powers to decide, he shall ordinarily do so in writing. If, however, the circumstances of the case are such that there is no time for giving the instructions in writing, he should follow it up by a written confirmation at his earliest.
(2) An officer shall, in the performance of his official duties, or in the exercise of the powers conferred on him, act in his best judgement except when he is acting under instructions of an official superior. In the latter case, he shall obtain the directions in writing wherever practicable before carrying out the instructions, and where it is not possible to do so, he shall obtain written confirmation of the directions as soon thereafter as possible. If the Officer giving the instructions is not his immediate superior but one higher to the latter in the hierarchy, he shall bring such instructions to the notice of his immediate superior at the earliest.”
“38. Oral orders on behalf of or from Minister - (1) Whenever a member of the personal staff of a Minister communicates to any officer an oral order on behalf of the Minister, it shall be confirmed by
CBI Vs. Dayanidhi Maran & others Page 244 of 424 him in writing immediately thereafter.
(2) If any officer receives oral instructions from the Minister or from his personal staff and the orders are in accordance with the norms, rules, regulations or procedures they should be brought to the notice of the Secretary (or the head of the department where the officer concerned is working in or under a non-secretariat organisation).
(3) If any Officer receives oral instructions from the Minister or from his personal staff and the orders are not in accordance with the norms, rules, regulations or procedures, he should seek further clear orders from the Secretary (or the head of the department in case he is working in or under a non- secretariat organisation) about the line of action to be taken, stating clearly that the oral instructions are not in accordance with the rules, regulations, norms or procedures.
(4) In rare and urgent cases when the Minister is on tour/ is sick and his approval has to be taken on telephone the decision of the Minister can be conveyed by his Private Secretary. In such cases, confirmation will be obtained on file when the Minister returns to Headquarter/ rejoins.”
“39. Confirmation of oral instructions-
(1) If an officer seeks confirmation of oral instructions given by his superior, the latter should confirm it in writing whenever such confirmation is sought.
(2) Receipt of communications from junior Officers seeking confirmation of oral instructions should be acknowledged by the senior officers or their personal staff, or the personal staff of the Minister, as the case may be.”
CBI Vs. Dayanidhi Maran & others Page 245 of 424 451. Thus, rule 37 clearly states that oral instructions be put in writing at the earliest possible time after taking of the action following oral instructions. Sh. P. K. Garg who was Wireless Advisor and was in the rank of Joint Secretary/ Additional Secretary to the Government of India was supposed to follow the official procedure. He is the custodian of the spectrum and was holding a highly sensitive and responsible post. He himself was remiss in performing his duties, but is blaming others in violation of official procedure by making oral statements, which are wholly contrary to official record. 452. The Wireless Advisor was duty bound to record the instructions in writing, but he failed in performing his duties and is now blaming others, contrary to official record. However, in his further statements, which would be discussed while dealing with allocation of additional spectrum in Chennai service area in D-37, he states that the files of all service providers were kept pending, indicating that there was no hostile discrimination against Dishnet DSL Limited. 453. However, the prime question is: Whether the query put up by Dr. J. S. Sarma regarding network planning was frivolous? If so, why? The above discussion indicates that the question of network planning was not frivolous, though there may be difference of opinion as to whether it was required to be put up or not. Sh. P. K. Garg is wavering on this point and contradicts official record. Licence agreement, the relevant part of which has been extracted above, does not indicate as to when such query is required to be put, though SACFA clearance is mandatory for mobile network to avoid interference in the
CBI Vs. Dayanidhi Maran & others Page 246 of 424 communication provided by two service providers. Written record as extracted above indicates that some issues of SACFA clearance were certainly there. 454. Accordingly, I do not find anything wrong or incriminating on the part of Dr. J. S. Sarma in this regard. *****************
VI. Delay in allocation of additional spectrum to Aircel Cellular Limited in Chennai Metro Service Area (D-37) 455. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP, that Aircel Cellular Limited had applied for additional spectrum of 1.8+1.8 MHz beyond 6.2+6.2 MHz in Chennai metro service area on 11.07.2005, when it had become eligible for that having crossed its subscriber base of 5 lac. It is further submitted that when the file was put to Dr. J. S. Sarma on 23.07.2005 recommending the allocation of additional spectrum to Aircel Cellular Limited, Dr. J. S. Sarma asked the Wireless Advisor to keep the file with him and put it up only when asked by him. It is further submitted by him that this delay was conspiratorial. 456. On the other hand, learned defence counsel have submitted that there is no material on the file to indicate that Dr. J. S. Sarma had directed the Wireless Advisor to keep the file with him. It is further submitted that even otherwise there was doubt about the eligibility of the company. It is repeatedly submitted that there is no material on record to suggest that Dr. Sarma was responsible for this.
CBI Vs. Dayanidhi Maran & others Page 247 of 424 457. Let me examine the issue in the light of the file as well as the statements on record.
(A) First attempt to seek additional spectrum beyond 6.2 MHz: Data found false 458. The issue of grant of additional spectrum beyond 6.2+6.2 MHz to Aircel Cellular Limited in Chennai service are was dealt with in file D-37. This file was opened on 16.02.2005 by the note of Junior Wireless Officer, who recorded as under: “PUC is received from M/s Aircel regarding allocation of additional 1.8 MHz GSM spectrum in 900 MHz GSM band for providing CMTS in Chennai. Submitted please.”
459. Thereafter, on the same day, another note sheet was recorded by Sh. M. C. Pandey, Engineer, regarding spectrum being coordinated in 1800 MHz band by JCES and asking the applicant if it was willing for spectrum in that band, to the following effect: “M/s Aircel Cellular Ltd, Chennai has requested for additional GSM spectrum in Chennai Metro service area after reaching subscriber base of 5 lakh. It is requested to allocate additional 1.8+1.8 MHz in 900 MHz band beyond already earmarked 6.2+6.2 MHz. JCES have coordinated spectrum in 1800 MHz band. We may advice the operator if spectrum in 1800 MHz band is acceptable, the same may be considered. Dft letter for approval pls.” The file was marked upward.
460. On 30.03.2005, a request was received from Bharti
CBI Vs. Dayanidhi Maran & others Page 248 of 424 also and the following note sheet was recorded: “Request received in 1800 MHz band. Application for additional GSM requirement of 1.8+1.8 MHz at Chennai metro from M/s Bharti.”
461. The file was marked upward and on 08.04.2005, the following note sheet was recorded: “It may pls. be informed if the case of M/s Bharti and M/s Aircel who fulfill the requisite criteria for additional spectrum is to be processed now. File was pending due to Chennai (BSNL case).”
462. The file was marked upward to Assistant Wireless Advisor. 463. Thereafter, note was recorded on 30.05.2005, 2/N, by the Assistant Wireless Advisor Sh. D. Jha to the following effect: “Request letter from M/s Aircell Cellular Ltd. for requirement of additional spectrum 1.8+1.8 MHz beyond 6.2+6.2 MHz already allocated in 900 MHz. 2. M/s Aircell is the only service provider who has crossed 5.0 lakhs subscriber base in Chennai Metro service area (COAI statistics April 05). M/s Bharti has subscriber base of 4,68,310/- only. We may agree to the request of M/s Aircell. 3. The co-ordination letter from JCES is placed below for Chennai Metro. 4. Draft earmarking letter for assignment of 1.8+1.8 MHz additional GSM spectrum for Chennai Metro for Aircell Cellular Ltd. is placed below for consideration.”
464. It may be noted that his note was recorded by Sh. D. Jha after delay of 52 days without assigning any reason for the
CBI Vs. Dayanidhi Maran & others Page 249 of 424 delay. 465. The file reached Wireless Advisor who recorded on 03.06.2005, 2/N & 3/N, as under, asking for information about active users (VLR): “Recently on another file it was requested that we may obtain information regarding the active users (VLR) and peak traffic etc. on weekly basis from all service providers. Hence, we may obtain this information for processing these current cases also.”
466. Thereafter, information was sought from the company and on receipt of information the following note sheet was recorded on 14.06.2005, at 4/N: “Vide 'PUC' M/s Aircel Cellular Ltd. Chennai, have submitted information regarding subscriber & Traffic detail for the first week of June 2005 as given below in Chennai Metro Service area: i) Subscriber in HLR 6,98.740 ii) Subscriber in VLR 4,68,218 iii) Total No. of BTS 354 iv) BTS equipped capacity (Theoretical Erl.) 21,201 v) BTS Equipped capacity 15901 (Effective Erl.) vi) Busy Hour Traffic (Erl.) 17,545 Submitted pls.”
467. The file was marked upward and on 16.06.2006 the following note sheet was recorded by the Deputy Wireless Advisor on 4/N and 5/N “Reference notes above. Also kindly refer W.A's note on pages 2-3/ante. We my consider the case of M/s Aircel Cellular Ltd., Chennai for their requirement of additional spectrum of 1.8+1.8 MHz in 1800 MHz band beyond 6.2+6.2 MHz already earmarked in 900 MHz band.
CBI Vs. Dayanidhi Maran & others Page 250 of 424 (Sl. No. 4-R).
2. JCES have co-ordinated the spectrum in 1800 MHz band vide letter dated 04/2/05 & is placed.
3. As directed, M/s Aircel have provided the desired information on subscribers/ Traffic particulars for the week ending 05 th June 2005 in Chennai Metro Service Area. Moreover as per COAI statistics M/s Aircel have more than 5 lakhs subscribers as on 30 th April 2005 [i.e. 5,46,478 as per telecom Live June 2005 issue]
Draft placed for earmarking of additional spectrum of 1.8+1.8 MHz in 1800 MHz band. For kind consideration pl.”
468. The file reached Wireless Advisor who recorded on 19.06.2005 as under: “Their subscriber No. in VLR, which indicates the number of active subscribers is below 5 lakh. We may enquire the highest number of subscribers in their VLR, during last 2 months.”
469. In due course another note sheet dated 27.06.2005 was recorded at 6/N as under: “M/s Aircel Cellular Ltd. has given their VLR subscriber base in Chennai Metro for April 05 and May 2005. The VLR figure for April 2005 is 427615 and that for May 2005 is 466510. VLR subscriber base in the metro for the week 30.5.2005 to 5.06.2005 was earlier intimated as 468218. Submitted for information pls.”
470. Thereafter, the file was marked upward to the Assistant Wireless Advisor, who recorded on 28.06.2005, as
CBI Vs. Dayanidhi Maran & others Page 251 of 424 under: “M/s Aircel has provided VLR for April & May 2005 for Chennai metro. They have to wait till it reached 5.0 lacs in the service area. May kindly be seen for information”
471. The file reached Wireless Advisor, who approved it and marked the file further for conveying the information to the company and it was conveyed vide letter dated 28.06.2005, page 58 (D-37) that additional spectrum will be considered when its VLR subscriber base reached 5 lac. 472. Perusal of the file reveals that there was an unexplained delay of 52 days on the part of Sh. D. Jha, when he recorded the note dated 30.05.2005, after the file was marked to him on 08.04.2005. Furthermore, the company was seeking additional spectrum beyond 6.2 +6.2 MHz on incorrect data, that is, active subscribers base and officials of DoT were helping it by putting a note that it has reached subscriber base of 5 lac and the note sheet dated 30.05.2005 recorded by Sh. D. Jha clearly mentions that Aircel has crossed 5 lac subscriber base in Chennai. This claim was subsequently found to be false. 473. Strangely the note sheet dated 16.02.2005 does not quote the date of the letter written by Aircel. However, this letter is dated 28.10.2004, photocopy of which is available at page 4 of the file. The statement of P. K. Garg dated 23.03.2012 in this regard is quite interesting, which is extracted as under: “In continuation of my previous statement dated 29.12.2011, I further stated that today I have been shown one file of DoT, WPC Wing, bearing No.L- 14043/3/2005-NTG (PE 1/2011, MR-II, Memo-I, Sl. 5) (D-37) and state that the said file contains the
CBI Vs. Dayanidhi Maran & others Page 252 of 424 details with regard to allotment of additional GSM spectrum to service providers in Chennai metro circle.
On being asked, I state that M/s Aircel Cellular Ltd. vide its letter 28.10.2004 requested WPC Wing, DoT, New Delhi for allocation of additional 1.8 MHz GSM spectrum in the 900 MHz GSM band (i.e.890- 915 MHz paired with 935-960 MHz) for providing CMTS in Chennai metro circle. A copy of the said request letter is available at C/4 to C/11 of the said file. Although, the said request letter is dated 28.10.2004, the copy thereof was made available to WPC Wing on 28.01.2005. The initial dated 28.01.2005 of Sh. D. Jha, the then AWA (V) is available on the said request letter. However, the said request letter dated 28.10.2004 of M/s Aircel Cellular Ltd. was processed in the above referred file by the then Junior Wireless Officer on 16.02.2005 and thereafter Sh. M.C. Pande, the then Engineer, further processed the said request mentioning that M/s Aircel Cellular Ltd., Chennai have requested for additional GSM spectrum in Chennai metro service area after reaching subscriber base of 5 lacs. Sh. M.C. Pande recommended for allocation of additional 1.8+1.8 MHz in 900 MHz band beyond already earmarked (allotted) 6.2+6.2 MHz. Sh. Pande also pointed out that JCES had coordinated spectrum in 1800 MHz band whereas the request was for 900 MHz band. Sh. M.C. Pande proposed to enquire from M/s Aircel Cellular Ltd. if spectrum in 1800 MHz band was acceptable. He marked the file to Sh. D. Jha, the then AWA (V) on 16.02.2005 itself. Here it is clarified that M/s Aircel Cellular Ltd. was initially allotted startup spectrum i.e. 4.4 MHz only in 900 MHz band in the month of November, 1995 and subsequently in the month of March, 2000, additional spectrum 1.8 MHz in 900 Mhz band was allotted to M/s Aircel Cellular Ltd. for Chennai metro circle. Initially the startup spectrum of 4.4 MHz only was being allotted and subsequently, in September, 2001 the startup
CBI Vs. Dayanidhi Maran & others Page 253 of 424 spectrum upto 6.2 MHz was permitted to be allotted.
A letter dated 22.02.2005 was sent to M/s Aircel Cellular Ltd., Chennai informing that the GSM spectrum in 900 MHz band was not available and the request for additional GSM spectrum may be considered in 1800 MHz band only. M/s Aircel Cellular Ltd. was also advised to apply for additional spectrum in 1800 MHz band. A copy of the said letter is available at C/19.
Accordingly, M/s Aircel Cellular Ltd. vide its letter dated 28.02.2005 informed WPC Wing of DoT, New Delhi about their acceptance of the proposed allotment of additional spectrum in 1800 MHz band. The said service provider further requested for allotment of 1.8 MHz+1.8MHz of contiguous band for both uplink and downlink communication in the 1800 MHz band. The said letter dated 28.02.2005 of M/s Aircel Cellular Ltd. is available at C/21. M/s Aircel Cellular Ltd. sent one reminder dated 23.03.2005 to WPC Wing, DoT, New Delhi which was received by me on 23.03.2005. I marked the said letter to Sh. R.J.S. Kushwaha, the then JWA (N) who in turn marked the said letter to Sh. D. Jha, the then AWA (V) on 23.03.2005 itself.
Meanwhile, one request letter dated 24.03.2005 of M/s Bharti Cellular Ltd. was received by Sh. D. Jha, the then AWA (V) on 31.03.2005 who put up the said letter of M/s Bharti along with letter dated 28.02.2005 and 23.03.2005 of M/s Aircel Cellular Ltd. in the above referred file on 31.03.2005 but, inadvertently it appears Sh. D. Jha has put the date as 30.03.2005 in place of 31.03.2005. The said file was marked to Sh. M.C. Pande, the then Engineer (V) by Sh. D. Jha. Sh. M.C. Pande noted on the note sheet if the case of M/s Bharti and M/s Aircel Cellular Ltd., who fulfilled the requisite criteria for additional spectrum, was to be processed then. Sh. M.C. Pande marked the file to Sh. D. Jha AWA (V)
CBI Vs. Dayanidhi Maran & others Page 254 of 424 on 08.04.2005.”
474. From the perusal of the statement, it is clear that the company had made the request vide letter dated 28.10.2004 and a copy of it was sent to WPC Wing on 28.01.2005 and the WPC Wing processed it for the first time on 16.02.2005. This shows the way in which DoT was working. Sh. P. K. Garg does not say that the Minister Sh. Dayanidhi Maran or anyone else was interfering in the processing of the request of the company. Furthermore, as noted above, the DoT was processing the letter on wrong basis. The company was seeking spectrum on the ground that its subscriber base in September 2004 was 4.4 lac and Airtel's subscriber base was 4.38 lac. The company had a grievance that a company which had lesser subscriber base was granted additional spectrum, so its case may also be considered. The company explained that they are as eligible as Airtel, but the department processed it on the ground that the company had crossed the 5 lac subscriber base. This is totally contrary to the record and reflects adversely on the working of the DoT. 475. This is clear from the letter itself, the relevant part of which is extracted as under: “Sub: Request for allocation of additional 1.8 MHz GSM Spectrum in the 900 MHz GSM band (i.e. 890 – 915 MHz paired with 935 – 960 MHz) for providing CMTS in Chennai.
Ref: Our Letter dated September 16th, 2004 on the above subject.
CBI Vs. Dayanidhi Maran & others Page 255 of 424 Dear Sir,
Reference is made to our letter dated September 16th on the above subject.
We have made our formal application for additional 1.8 MHz GSM Spectrum and have been waiting for allocation from your good office.
As of COAI data on Cellular Subscribers as on 30 th September, our subscriber base is 4.43 lacs and our next competitor in Chennai, M/s Airtel's Subscriber base is 4.38 lacs.
Wherein we have found that you have allocated additional spectrum in 900 MHz to M/s Airtel Chennai (the copies of our Regular Drive Test Results are attached with ARFCN details). At present, M/s Airtel Chennai is using 8 MHz Spectrum.
Since we have more subscriber base than M/s Airtel in Chennai, we request you to allocate the 1.8 MHz spectrum to us, as allotted by you to M/s Airtel Chennai.
We are as eligible as M/s Airtel to get this 1.8 MHz Spectrum allotted. Hence we request you to allot the 1.8 MHz spectrum to us.
The ARFCN used by M/s Airtel Chennai in this 1.8 MHz are ARFCN – 91, 92, 93, 94, 95, 96, 97, 98 & 101. WE request you to allot a contiguous band of 1.8 MHz like this.
Thanking you,
Yours Faithfully, For Aircel Cellular Limited”
476. The perusal of file this far also shows that whenever
CBI Vs. Dayanidhi Maran & others Page 256 of 424 DoT wished to allocate spectrum, they would allocate and whenever they wished to stop it, they would stop it by putting all type of queries. For example, Sh. D. Jha recommended for approval of additional spectrum on the ground that the company had crossed 5 lac subscriber base, but Sh. P. K. Garg prevented it by putting a query regarding VLR. This part of the file has been taken note of and discussed just to show the strange ways of working of DoT, where nothing is certain and delay and stalling are a normal feature of its working. Things can be stalled by putting any query and can also be expedited by putting no query depending upon the whims of the officer concerned.
(B) Second attempt and Approval by Secretary (T) 477. Thereafter, in response to the letter of DoT dated 28.06.2005, referred to above, company again wrote a letter dated 11.07.2005, page 61 (D-37), stating that it has crossed the 5 lac mark of VLR and asking for allocation of additional spectrum of 1.8 MHz. This letter was processed at 7/N and the following note sheet dated 13.07.2005 was recorded by the Assistant Wireless Advisor recommending the allocation: “Reference to our letter dated 28.06.2005 (S.No. 11), M/s Aircel Cellular Ltd Chennai has intimated that their VLR in Chennai Metro service area has now crossed 5.0 lakhs subscriber base. It has been checked that frequency 1.8+1.8 MHz is available in 1800 MHz band after co- ordination from JCES. The earmarking to M/s Hutch of 6.2+6.2 MHz in 1800 MHz has also been checked. We may earmark 1.8+1.8 MHz spectrum (in
CBI Vs. Dayanidhi Maran & others Page 257 of 424 1800 MHz band) to M/s Aircell for Chennai Metro beyond 6.2+6.2 MHz as per draft placed below. For kind consideration please.”
478. In due course, the file was marked to Wireless Advisor on 23.07.2005. Thereafter, the file is silent as there is no movement in the file. 479. However, the file remained with Wireless Advisor till 31.12.2005. On 31.12.2005, he recorded on a white sheet stapled at 7/N to the following effect. “Let us wait for the decision of higher authorities on the note regarding spectrum availability.”
480. On recording the aforesaid note, Wireless Advisor marked the file to Joint Wireless Advisor/ Assistant Wireless Advisor. Joint Wireless Advisor signed the white sheet on 03.01.2006. 481. Thereafter, on 13.01.2006, Assistant Wireless Advisor, recorded at 8/N as under: “As desired, with reference to the notes on pre-page the case is resubmitted for kind consideration please.”
482. The file was marked to Deputy Wireless Advisor and Joint Wireless Advisor. The Joint Wireless Advisor Sh. R. J. S. Kushvaha marked the file to Wireless Advisor on 13.01.2006. 483. On 17.01.2006, Wireless Advisor Sh. P. K. Garg recorded a note sheet at 9/N as under: “The case relates to request from M/s Aircell Cellular Ltd., for additional GSM spectrum beyond 6.2+6.2 MHz in Chennai service area, after crossing the subscriber base of 5 Lakh.
CBI Vs. Dayanidhi Maran & others Page 258 of 424 M/s Aircell Cellular Ltd. have reached a subscriber base of 6.54 Lakh in Chennai in end December 2005, as per COAI figures. Thus, they meet the criteria (5 Lakh subscribers) for getting 1.8 MHz of additional GSM spectrum, beyond 6.2+6.2 MHz. The coordinated spectrum in 1800 MHz GSM band is available in Chennai. Hence, it is proposed that we may allot 1.8 + 1.8 MHz spectrum in 1800 MHz GSM band (out of the available spectrum) to M/s Aircell Cellular Ltd. for Chennai. For kind consideration.”
484. He marked the file to Secretary (T), who approved the same on 18.01.2006 at 9/N. 485. This time no question was asked from the company and Sh. D. Jha straightway recommended the case on 13.07.2005 at 7/N and everybody agreed with that. However, WA Sh. P. K. Garg sat on the file from 23.07.2005 to 31.12.2005. No written explanation is there in the file as to why the file remained with him for such a long time, but the allegation is that Sh. P. K. Garg sat on the file on the oral instructions of Dr. J. S. Sarma. 486. Let me take a look on the statement of Sh. P. K. Garg in this regard. Sh. P. K. Garg states in his statement dated 08.05.2012, page 4, as under: “...... …...... On being asked I state that M/s Aircel Cellular Ltd. sent a letter dated 11.07.2005 to me intimating that their VLR subscriber base has crossed 5 lacs and requested for allotment of 1.8 MHz + 1.8 MHz of contiguous band for both uplink and downlink communication in the GSM 1800 MHz band. The said letter is available at C/61 of the above referred
CBI Vs. Dayanidhi Maran & others Page 259 of 424 file. I marked the said letter to DWA (V) on 12.07.2005, who in turn marked the letter to AWA (V) on the same day. Sh. D. Jha, the then AWA (V) put up the said letter dated 11.07.2005 of M/s Aircel Cellular Ltd. in the above referred file on 13.07.2005 recommending for earmarking 1.8 + 1.8 MHz spectrum to Aircel Cellular Ltd. for Chennai metro circle beyond 6.2 + 6.2 MHz. Sh. D. Jha marked the file to Sh. B. Gunasekar, the then DWA (V) who signed the notesheet on 15.07.2005 and marked the same to Sh. R.J.S. Kushwaha, the then JWA (N) who in turn marked the file to me on 23.07.2005. On being asked I state that I kept the said file along with other files pertaining to spectrum allocation, pending with me at the verbal instructions of Dr. J. S. Sarma, the then Secretary (T). I kept waiting for instructions from Secretary (T). …...... ”
487. Thus, he orally blames Dr. J. S. Sarma, the then Secretary (T), for asking him to keep the file with him till further instructions, but he qualifies it by saying that files of other service providers were also kept pending. He does not talk of any adverse discrimination against Dishnet DSL Limited. 488. Sh. P. K. Garg further states in his statement dated 09.05.2012, pages 1 and 2, as under: “...... Today I have been shown one original file of WPC Wing of DoT bearing No. L-14043/3/2005-NTG (PE 1/2011, MR-II, Memo-I, Sl. 5) and state that I stapled one white sheet on 7/N of the above referred file wherein it was mentioned that 'let us wait for the decision of higher authorities on the note regarding spectrum availability.' I signed the said notesheet on
CBI Vs. Dayanidhi Maran & others Page 260 of 424 31.12.2005 which was also signed by Sh. R. J. S. Kushwaha, the then JWA (N) on 03.01.2006. Similar observation was also passed by me on other pending cases at that time. Here I would like to clarify that Dr. J. S. Sarma, the then Secretary (T) had instructed me to hold the cases for allotment of spectrum/additional spectrum till further orders. This instruction was given in the month of July/August, 2007 and was applicable to all service providers. On being asked I state that in the first half of January, 2006, Dr. J. S. Sarma, the then Secretary (T) instructed me to process the pending cases for allotment of spectrum/ additional spectrum to different service providers. Accordingly, I directed the concerned official of WPC Wing to process/ resubmit the pending cases. Sh. D. Jha, the then AWA (V) resubmitted the above referred file on 13.01.2006 for consideration and marked it to Sh. B. Gunasekar, DWA (V) who in turn marked the file to Sh. R. J. S. Kushwaha, the then JWA (N) on the same day and the file was sent to me by Sh. R. J. S. Kushwaha on 13.01.2006. I examined the case and noted that M/s Aircel Cellular Ltd. had reached a subscriber base of 6.54 lac in Chennai in end December, 2005 as per COAI figures. I proposed that 1.8 + 1.8 MHz additional spectrum in 1800 MHz GSM band may be allotted to M/s Aircel Cellular Ltd. for Chennai. I marked my note dated 17.01.2006 to Secretary (T) who approved the same on 18.01.2006 and sent back the file to me. …...... ”
489. Here again he blames Dr. J. S. Sarma for asking him to hold the cases for allotment of spectrum and additional spectrum till further orders and this was applicable to all service providers. He also adds that when the files were
CBI Vs. Dayanidhi Maran & others Page 261 of 424 processed, the order was also applicable to all service providers. Repeatedly the witness says that there was no adverse/ hostile discrimination against Aircel Cellular Limited.
Criteria for allocation of spectrum beyond 6.2 MHz and processing of file 490. In this regard, PW 9 Sh. P. K. Garg states in his statement dated 24.05.2012, page 22, as under: “I have also been shown a copy of order No. L- 14041/06/2000-NTG dated 01.02.2002 issued by Sh. R. K. Srivastava, Engineer (Memo-69, Sl. No. 3). On perusal of the said order, I state that this order was issued for allocation for additional radio frequency spectrum to the cellular mobile telephone service providers. Vide this order, it was decided to assign additional spectrum up to 1.8 + 1.8 MHz to the CMTS operators (beyond 6.2 MHz). This order speaks that any service provider having customer base of more than 4 lakhs or more could apply for additional spectrum but would be allocated additional spectrum only when its customer base reaches 5 lakhs or more. It is also mentioned in the order that the additional spectrum will be assigned in 1800 MHz band. This order also states that further additional spectrum upto 10+10 MHz per operator in a service area could also be considered. Such additional allocation could be considered only after a suitable subscriber base, as may be prescribed, is reached.”
491. Furthermore, Sh. D. Jha in his statement dated 17.11.2011, page 6, states as under: “...... I marked the file to Engineer (V) Sh. M.C. Pandey on 30.03.2005. Engineer (V) in his note in the file has indicated on 08.04.2005 that whether the case for
CBI Vs. Dayanidhi Maran & others Page 262 of 424 additional spectrum for M/s Aircel and another service provider M/s Bharti should be processed who fulfill the requisite criteria for additional spectrum. It is indicated that the file was pending due to Chennai (BSNL Case). At that time the case for additional spectrum for BSNL in Chennai Metro was under the examination of the Higher Authority (ies) and its outcome was essential to take a view for the allotment of such additional spectrum. The case was processed by me on 30.05.2005 for earmarking of additional spectrum to M/s Aircel Cellular Ltd. in Chennai Metro. On the basis of claim of M/s Aircel vide there letter dated 10.05.2005 it is mentioned in the file that as per COAI Statistics April 05. M/s Aircel was the only service provider who has crossed 05 lakh subscriber base (HLR) in Chennai Metro Service area which was the criteria for claiming additional 1.8 + 1.8 MHz over and above allotted 6.2 + 6.2 MHz at that time. The file was approved by the then DWA (V) Sh. G.K. Aggarwal and marked to Wireless Advisor who wrote on the file on 03.06.2005 “Recently on another file, it was requested that we may obtain information regarding the active users (VLR) and peak traffic etc. on weekly basis from all service providers, hence we may obtain this information for processing these current cases also …...... ”
492. It is clear from the note sheets as well as statement of Sh. D. Jha that since both Bharti and Aircel fulfilled the requisite criteria and a direction was sought by Sh. M. C. Pandey as to how the file would be processed. He also states that at that time case of additional spectrum for BSNL was under examination of higher authorities. However, in the note, he does not disclose as to or on whose direction he had initiated the note and what was the direction of higher authorities
CBI Vs. Dayanidhi Maran & others Page 263 of 424 regarding allocation of additional spectrum. 493. However, from Deputy Wireless Advisor to Wireless Advisor, all of them kept processing the file and making one remark after the another as extracted above. Finally, Wireless Advisor also recorded on a white slip on 31.12.2005 that: “Let us wait for the decision of higher authorities on the note regarding spectrum availability.”
494. As such, it is apparent that things were not clear in the department. Sh. D. Jha sat on the file for 52 days without any explanation, though he states orally that matter was pending due to BSNL case. 495. Wireless Advisor sat on file from 23.07.2005 to 31.12.2005, for full 161 days. In the file, there is no direction recorded by Dr. J. S. Sarma or the Minister. The file was processed by the officers of WPC Wing on their own. None of the note sheets, extracted above in detail, state as to on whose instance any particular note sheet is being recorded. In such a situation, it is reasonable to presume that the officers were recording the note sheets on their own initiative in their usual course of business, sometime expediting the file and sometime delaying or stalling the same. Furthermore, as already noted above, there was no hostile discrimination against Aircel Cellular Limited and the files of all service providers were kept on hold. 496. Not only this, the oral statement of Sh. P. K. Garg is contrary to written record available in the file. In such a situation, I do not find anything incriminating which can put the blame on Dr. J. S. Sarma alone in this regard, more so,
CBI Vs. Dayanidhi Maran & others Page 264 of 424 when there was no hostile discrimination against Aircel Cellular Limited, as cases of all service providers were put on hold. 497. The delay allegedly started w.e.f 23.07.2005. Wireless Advisor Sh. P. K. Garg states in his statement that he kept this file alongwith files of other service providers on the oral instructions of Dr. J. S. Sarma, but he has not noted this fact anywhere in the file. The statement, as such, is contrary to the written record. Furthermore, in his note sheet dated 13.01.2006, Sh. D. Jha recorded the note beginning with “As desired.....”, but he does not state as to who desired the note to be put up. Similarly, Sh. P. K. Garg in his note dated 17.01.2006 does not state as to why did he choose to record this note on this particular date itself by sitting over the file for a long time. Sh. D. Jha in his statement dated 17.11.2011, page 7, speaks about his note dated 13.01.2006, but does not say as to on whose instance he resubmitted the file. Thus, Sh. P. K. Garg has introduced the name of Dr. J. S. Sarma in oral statement for delaying the file, though the written record says that it was he who was responsible for the delay. Furthermore, such delays are not unknown in the DoT as the letter dated 28.10.2004 was processed on 16.02.2005 and thereafter, Sh. D. Jha sat on the file for 52 days. 498. Furthermore, Wireless Advisor Sh. P. K. Garg does not say that he withheld the file of Dishnet alone. He states in his two statements dated 08.05.2012 as well as 09.05.2012, both extracted above that he withheld this file alongwith the file of other service providers for allocation of additional spectrum. He does not talk about any discrimination against
CBI Vs. Dayanidhi Maran & others Page 265 of 424 Dishnet. This is contrary to the case of prosecution that only the file of Dishnet was being deliberately delayed to choke and constrict its business environment. It strikes at the root of the prosecution case that the target was Sh. C. Sivasankaran.
********
VII. Representations (D-4) 499. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP, that fed up with various delays caused by the DoT at the instance of Sh. Dayanidhi Maran and Dr. J. S. Sarma, the Siva group made several representations, but these were never considered or heeded. It is repeatedly submitted that these representations were not considered by the officials at the instance of Sh. Dayanidhi Maran and Dr. J. S. Sarma as both were in conspiracy and wanted to force the exit of Siva group of companies from the telecom sector. My attention has been invited to the files in which these representations were dealt with as well as the statements of witnesses to emphasize that the DoT was not attending to the grievances of these companies, so that their business environment was choked. 500. On the other hand, learned defence counsel have submitted that these representations never reached Sh. Dayanidhi Maran and he had no role in this regard. My attention has been invited to the relevant files and statements in great detail. 501. Let me take note of the material on record in this regard. 502. Dishnet had submitted a representation dated
CBI Vs. Dayanidhi Maran & others Page 266 of 424 17.08.2005 to Secretary (T) Dr. J. S. Sarma. It was processed in file D-4 at 5/N and a detailed note was recorded by Sh. Govind Singhal, Director (BS-III) on 24.08.2005. One more representation dated 30.09.2005 is also available in the file. 503. The note dated 24.08.2005 contains the whole history of issues of the company pending with the DoT and the development in the department on these issues. This is a lengthy note, but for proper understanding of the issue, entire note is extracted, which is as under: “1. PUC is a letter from M/s Dishnet Wireless Ltd. (old name M/s Dishnet DSL Ltd.) dated 17th August 2005. They have mentioned that a presentation was given to Secretary (T) on 8/8/2005. They have mentioned in the letter various issues pending with DOT.
2. Issues are related to WPC, LR & BS Cell as below:
S. No. Issue Name of Section to whom related 1 Licence for Madhya Pradesh, UP (E) and BS UP (W)
2 Licence for Kolkata, Punjab, Kerala & BS Haryana
3 Point of Interconnect (POI) from BSNL for BS the ongoing GSM project at Jammu & Kashmir, North-East, Assam, West Bengal, Orissa, Bihar and Himachal Pradesh Circles
4 ------
5 Wireless Frequencies for Bihar & WPC Himachal Pradesh
6 ------
CBI Vs. Dayanidhi Maran & others Page 267 of 424 7 ------
8 WiMax Frequency Spectrum for ISP WPC business division
9 Application for permission to provide IP- LR VPN Services
10 --- LR
11 --- LR
12 Amendments of name change in the UASL BS Licences
3 They have requested for resolving the BS above issue by: a) Immediate execution of Licence Agreements for MP, UP (East & West), Kolkata, PB, HR and Kerala Telecom Circle b) Appropriate directions to BSNL to BS/BSNL provide POI across all the Seven Licenced Circles as required by the Company c) Immediate allocation of frequency for WPC Bihar and HP Circles WPC as required by the company. d) Immediate allocation of frequency for WPC ISP Division as required by the Company e) Immediate permission to provide IP LR VPN services and amendment of ISP Licence f) Immediate amendment of name in BS UASL Licences
4. The letter has been sent to WPC & LR Section for dealing with the issues related to their section.
5. As desired the comments on the issues which are pending in BS Cell are as below: 1. M/s Dishnet DSL Ltd. had applied for the grant of Unified Access Service Licences for 8 service areas, which are Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East, Orissa and West Bengal on 5 5 th March, 2004. The approval of
CBI Vs. Dayanidhi Maran & others Page 268 of 424 Hon'ble MOC&IT was received for issuance of 8 LOIs to M/s Dishnet DSL Ltd. on 5 th April, 2004 on Note Sheet No. 13 of File No. 20-231/2003-BS-III (Vol. I) 2. LOI were issued on 6-4-2004. M/s Dishnet DSL Ltd. submitted the required document as per the LOI to the BS Cell on 20-04-2004 that was the last day to submit the required documents. M/s Dishnet DSL Ltd. submitted the entry fee etc. for seven service areas except Madhya Pradesh. In case of Madhya Pradesh M/s Dishnet DSL Limited requested for the extension of LOI by three months. 3. M/s Dishnet DSL Limited applied for UP (East) and UP (West) service area also on 21 st April, 2004. The case for extension of Madhya Pradesh LOI, The case for issue of LOI for Up (East) and UP (West) service area and the case for taking the approval for signing of the licence agreement after 15 days from the issuance of LOI was put up combindly on 26.04.2004 vide Note Sheet no. 1 File No. 20-231/2003-BS-III/Vol. III (Vol. 2). 4. As per the direction on Note Sheet No. 4/N of the same file, the case was delinked for the service area for which the entry fee has been paid, therefore, the case was processed on 11 th May, 2004 at Note Sheet no. 5/N and the Secretary (Telecom) gave the approval for signing of the licence agreement after 15 days from the issue of LOI at Note Sheet No. 5/N. 5. The other two cases i.e. extension of the LOI of Madhya Pradesh by 90 days and issue of LOI for UP (East) and UP (West) service area were processed on
CBI Vs. Dayanidhi Maran & others Page 269 of 424 17th May, 2004 vide Note Sheet No. 6/N of File No. 20-231/2003-BS-III/Vol. III (Vol. 2). The case was under consideration from Note Sheet no. 6/N upto 16/N. On 13 July 2004 Secretary (T) forwarded the file to Hon'ble MOC & IT for consideration and approval vide Note Sheet No. 16/N. PS to Hon'ble MOC&IT directed to seek the clarifications as mentioned on N/S No. 17/N. 6. A letter was issued to the applicant company asking for the information of its sister concern holding the licences. A UO note was forwarded to Sr. DDG (VAS), DDG (LF), DDG (LR) and Wireless Advisor in respect of the PS to MOC & IT notings on 17/N. The UO Note was issued on 8th September 2004 vide Note Sheet No. 18/N (Vol-2). 7. On 27 th August, 2004 Hon'ble MOC&IT had desired the cae file of M/s Dishnet DSL Ltd. in which the Letter of Intent for 8 service areas were issued. The same information was conveyed to Hon'ble MOC&IT vide Note Sheet No. 23/N on 27th August, 2004 (Vol-1). 8. PS to Hon'ble MOC&IT forwarded all the case of BS Cell and VS Cell to Additional Secretary (T) for the preparation of note on 15 th September, 2004. Additional Secretary (T) gave his opinion on 30-11-2004 and forward to Secretary (T). The Secretary (T) asked to take the legal status on the comments of the AS (T) (Vol-3). On 13 th December, 2004, the case was forward to Legal Advisor for legal opinion on the comments of the AS (T) vide Note Sheet No. 19/N and 20/N (Vol-3). 9. On 17th December, 2004, the file was withdrawn from the Legal Advisor as per
CBI Vs. Dayanidhi Maran & others Page 270 of 424 the direction to submit all the file related to M/s Dishnet DSL Ltd. to Hon'ble MOC&IT. All the files were put up to the Hon'ble MOC & IT on 21st December, 2004 vide Note Sheet No. 21/N (Vol-3). 10. The case for legal opinion was again submitted on 22 nd December, 2004 and the legal opinion is available on 21 and 22/N. Secretary (T) has mentioned on the Note Sheet 21/N on 30 March, 2004 (Vol-2) that the case was discussed with Hon'ble MOC&IT and these files are being returned with the direction that the division should ascertain all the show cause notices / advisory letter issued to the above company or companies belonging to the Group and the nature of defaults before any view is taken. It may be submitted to my successor. As per the direction of Secretary (T), a UO Note was issued to DDG (VAS), DDG (LR), DDG (LF) and Wireless Advisor for giving their comments. 11. With the above remarks a letter was issued to DDG (LF), DDG (LR), DDG (VAS) and Wireless Advisor for giving the comments as above. The reply of DDG (LF), DDG (VAS), Wireless Advisor and DDG (LR) have been received and the comments are as follows: a. LF Cell has intimated that the LF Branch has not issued any Show Cause Notice / Advisory Letters to M/s Dishnet DSL Ltd. b. LR has intimated that following are the cases under process in LR Wing: (i) Show Cause Notice for imposing penalty amounting Rs.2,36,88,522 and submitting additional bank guarantee of Rs.3.20 crores because of grey market activities by its subscribers. Final order
CBI Vs. Dayanidhi Maran & others Page 271 of 424 under issue after according personal hearing before Member (P). (ii) Show Cause Notice for termination of licence for violation of clause 10 regarding Transfer of Licence is under issue. Approval of MOC received on 28 th March, 2005. (iii) 6 nos. of new cases have been reported for involvement of its subscribers in grey market recently (on 10 10 th March, 2005). The cases are being processed. c. Wireless Advisor has intimated that no Show Cause Notices/Advisory Letters have been issue to the Company. d. VAS has mentioned on Note Sheet No. 26/N that the extracts of file no. 843-325/2000-VAS (Pt) having remark of Secretary (T) for information and further necessary action of BS Cell. In the remarks Secretary (T) has mentioned that please examine the matter afresh in the light of notices issued to the company in some of the ISPs related irregularities. Case is submitted for further guidelines.”
504. Sh. Govind Singhal marked the file to Sh. P. K. Mittal, who endorsed the note to Advisor (P) on the same date, that is, 24.08.2005. Advisor (P) endorsed it on 31.08.2005 to Member (P) and Member (P) marked it to Secretary (T) on 01.09.2005. 505. Secretary (T) Dr. J. S. Sarma recorded on 15.09.2005, page 7/N, as under: “AS(T) to go through and comment.”
CBI Vs. Dayanidhi Maran & others Page 272 of 424 506. The file went to Additional Secretary (T) Sh. Yashwant Bhave, who recorded on 19.09.2005 as under: “I would like to discuss with DDG (BS). Is the nature of irregularities such as to warrant stringent action regarding further examination?”
507. After recording the aforesaid note, he marked the file to DDG (BS). Sh. P. K. Mittal, DDG (BS), sought time for discussion from AS (T) and recorded a note in this regard: “May kindly indicate time and date for discussion at the convenience of AS (T).”
508. He marked the file to PS to AS (T). AS (T) Sh Yashwant Bhave discussed the matter with Sh. P. K. Mittal on 17.10.2005 and recorded a note as under: “Discussed. WA may kindly indicate if any spectrum has been given/ allocated to M/s Dishnet and if so what is the status of those applications.”
509. After recording the note, he marked the file to Wireless Advisor (WA) Sh. P. K. Garg. Sh. P. K. Garg marked the file to Deputy Wireless Advisor Sh. D. Jha, who recorded a note on 31.10.2005 at page 9/N as under: “With reference to minutes of AS (T) on prepage:
1. GSM spectrum:
1.1 Case for allotment of initial 4.4+4.4 MHz GSM frequencies in 1800 MHz band in Bihar Telecom Service area is under processing. As regards, HP Telecom service area, coordination of spectrum has, so far, not been received from JCES and same is being pursued.
CBI Vs. Dayanidhi Maran & others Page 273 of 424 2. Spectrum for ISP network
Status i.r.o. The applications received from M/s Dishnet Wireless Ltd. for frequency assignment in 2.5 GHz, 3.3 GHz and 5.7 GHz bands for ISP is as follows:
2.1 M/s Dishnet Wireless Ltd. was requested for status of conversion of decision letters already issued by WPC Wing, into operating licences. Reply is awaited.
2.2 Cases pertaining frequency assignment in 3.3 GHz and 5 GHz have been examined and are pending for further processing for want of information from the applicant regarding conversion of decision letters into operating licences.”
510. After this note, the file reached the Wireless Advisor. He marked this file to AS (T) on 02.11.2005. It is of some interest in the files D-35 and D-37 also in which allocation of initial spectrum to Dishnet in Bihar service areas and allocation of additional spectrum to Aircel Cellular Limited in Chennai service area were also dealt with. Here, AS (T) Sh. Yashwant Bhave had sought a report from Sh. P. K. Garg and Sh. P. K. Garg marked the file to Sh. D. Jha and Sh. D. Jha put up his aforesaid note dated 31.10.2005. The file was marked by Sh. P. K. Garg to Sh. Yashwant Bhave on 31.10.2005/02.11.2005 at 9/N (D-4). Thus, Sh. P. K. Garg had full opportunity to record the status of these two files, that is, D-35 and D-37, as both the files were with him as D-35 was marked to him on 24.08.2005 and remained with him till
CBI Vs. Dayanidhi Maran & others Page 274 of 424 31.12.2005 and file D-37 was marked to him on 23.07.2005 and remained with him till 31.12.2005. So, both the files were with him but he did not record anything about Dr. Sarma asking him to retain the two files. It is also of interest that the direction of AS(T) Sh. Yashwant Bhave was recorded at the top of note sheet by Sh. D. Jha. This indicates that whenever directions came from an authority, it was duly recorded. This nullifies the stance in oral statements. 511. Thereafter, the file is silent till 05.06.2006. 512. However, at 10/N Sh. Yashwant Bhave, AS (T) recorded note on 05.06.2006, as under: “This has reference to Secretary (T)'s remark on 7/N. I am submitting my comments after discussing the case in detail with DDG (LR), DDG (BS) and Wireless Adviser from different points of view as indicated in the above note. As far as the issue of licences are concerned, from page 5 it is clear that LOIs for 8 Service Areas (Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East, Orissa and West Bengal) have been issued on 06.04.2004.
All LOIs (except Madhya Pradesh) were converted into licence agreements. M/s Dishnet has further applied for licences in respect of other service areas of UP (East), UP (West), Kolkata, Punjab, Kerala and Haryana and extension for Madhya Pradesh. M/s Dishnet had some violation of terms and conditions of licences for which show cause notices were issued. They had requested that issue of new licences as well as validity of LOI in case of Madhya Pradesh may not be linked with show cause notices.
The issues pending with different Branches in DOT have been examined in the above notes. It
CBI Vs. Dayanidhi Maran & others Page 275 of 424 appears that there are some show cause notices from the LR Branch issued to the company after the legal opinion dated 11.01.2005. The aspect to be deliberated upon is whether new licences/LOIs can be granted during the pendency of issue of show case notices or litigations.
This was discussed at different times with DDG (LR), DDG (BS) as well as WA. I now understand the Hon'ble MOC & IT has approved the delinking of show cause notice in the grant of LOIs, etc. The file is, therefore, returned for appropriate action.”
513. Sh. Yashwant Bhave has also recorded that this note has been recorded with reference to Secretary (T)'s remarks. This again means that wherever the directions were given, the same were given in writing and were duly acknowledged by the officials to whom directions were given. Further, perusal of the note reveals lack of interest by Sh. Yashwant Bhave in the work assigned to him in writing by superior officer. The reading of the note reveals that his attitude was lackadaisical, with no interest in the assigned work. 514. On recording this note, he (Yashwant Bhave) marked the file to DDG (BS) Sh. P. K. Mittal, who appended his signature on the file on 05.06.2006 itself and marked the file to Director (BS-III). On the same date, Director (BS-III) marked the file to DDG (BS-III). 515. Thereafter, there is absolutely no movement in the file and the file stops at this. 516. PW 3 Sh. Yashwant Bhave in his statement dated 13.01.2012, pages 2 and 3, inter alia, states as under:
CBI Vs. Dayanidhi Maran & others Page 276 of 424 “On being asked I state that the said file remained pending with me since 02.11.2005 till 05.06.2006.
No other file with regard to UASL was marked to me earlier, the subject was not allotted to me. Hence, I state that I did not have detailed domain knowledge in the procedure of issue of licences or spectrum etc. I was not dealing with the matter of licences or spectrum allocation. However, Dr. J. S. Sarma, the then Secretary (T) had indicated that the issuance of UASL has been linked with the show cause notices issued as desired by Shri Dayanidhi Maran, the then MoC & IT and that it was not yet decided if show cause notices could be delinked to grant of new UASL.
I examined the matter as directed by Dr. J. S. Sarma, the then Secretary (T) summarising the position and also mentioning that the aspect to be then deliberated was whether new licences/ LOIs can be granted during the pendency of show cause notices or litigations. I have also mentioned that these issues and aspects were discussed at different times. My understanding based on the discussion was that Shri Dayanidhi Maran, Hon'ble MoC & IT had recently approved the delinking of show cause notices in grant of LOIs etc.
On being asked I state that I could not offer my comments as desired by Dr. J. S. Sarma, the then Secretary (T) vide his note dated 05.09.2005 as I was asked by Dr. J. S. Sarma to keep the file with me till a decision is taken in the matter of delinking the show cause notices to grant of new UASL.
In the first week of June, 2006 I was conveyed by DoT officials either by DDG (LR) or DDG (BS) or WA that the Hon'ble MOC&IT had delinked the show cause notices in the grant of LOIs. However, the file in which the decision for delinking the show cause notice with grant of UASL was taken was never put up through me. Accordingly, I offered my
CBI Vs. Dayanidhi Maran & others Page 277 of 424 comments on 05.06.2006 recommending for taking appropriate action in the matter in the light of the fact that the issue of delinking of show cause notices from grant of fresh licences was decided by Shri Dayanidhi Maran, Hon'ble MoC & IT. I marked the file to DDG (BS) Sh. P. K. Mittal on 05.06.2006. This note is available at 10/N of the said file.”
517. Furthermore, in his further statement dated 26.08.2013, recorded after more than one and a half year of his earlier statement dated 13.01.2012, Sh. Yashwant Bhave states as under: “I had discussed the matter with Dr. J. S. Sarma, the then Secretary (T) in the matter. He had informed me that the issuance of UASL has been linked with the show cause notices issued as desired by Sh. Dayanidhi Maran, the then MoC&IT. He also apprised me of the fact that the then MoC&IT did not want to clear the files pertaining to M/s Dishnet DSL Ltd. unless a policy decision on the issue of delinking the irregularities of/show cause notices issued to M/s Dishnet from issuance of fresh licences to it is first taken by him. I was given the impression that till then there was no need to offer comments in the matter earliest pending the said decision and that I should keep the file with me till then. I reiterate that grant of licences, their monitoring and other actions attendant thereto were never the subject matter allotted to me.
I was in the zone of consideration of empanelment for Secretary's post and retained the file with me as desired by the Secretary Dr. J. S. Sarma. On being asked I state that I was brought to DoT at the recommendation of Sh. Nripendra Misra, the then Secretary (T). I state that my predecessor AS (T) Dr. J. S. Sarma was brought as Secretary (T) after retirement of Sh. Nripendra Misra after a period of four months as was desired by the then
CBI Vs. Dayanidhi Maran & others Page 278 of 424 MoC&IT. However, meanwhile Secretary, Department of Information Technology Mr. Brajesh Kumar held additional charge of Secretary (T).”
518. PW 15 Sh. Govind Singhal in his statement dated 03.09.2013, at page 5, states about his note dated 24.08.2005, extracted above, as under: “...... Now I have been shown one original file of DoT bearing no. 20-231/2005-BS-III(Vol.IV) and state that M/s Dishnet Wireless Ltd. had submitted four applications for grant of UASL for Punjab, Haryana, Kerala and Kolkata Service areas and the same was processed by Sh. A.R. Devarajan, AD(BS-III) on 09.03.2005. He recommended for grant of UASL and marked the file to me. The applications were examined at different level in DoT. Meanwhile M/s Dishnet Wireless Ltd. sent a representation dated 17.08.2005 to Dr. J.S. Sarma, Secretary(T). The said representation was marked to me by Sh. P.K. Mittal, DDG(BS) on 23.08.2005. I examined the said representation and put up a note on 24.08.2005 giving a comprehensive note on different pending issues/approval of M/s Dishnet Wireless Ltd. for further guidance. At para 7 of my note dated 24.08.2005, I mentioned that on 27.08.2004, the MoC&IT had desired the case file of M/s Dishnet DSL Ltd. in which the LOI for 8 service areas were issued. At para 8, I mention that PS to MoC&IT forwarded all the cases of BS cell and VAS cell to AS(T) for preparation of note on 15.09.2004. AS(T) gave his opinion on 30.11.2004. Secretary(T) asked to take legal status on the comments of AS(T). On 13.12.2004, the case was forwarded to Legal Adviser for legal opinion on the comments of AS(T). All the files were again put up to MoC&IT on 21.12.2004 after withdrawing the files from LA. The case for legal opinion was again submitted on 22.12.2004 and the legal opinion was received on 11.01.2005.
CBI Vs. Dayanidhi Maran & others Page 279 of 424 At para 10, vide 7/N, I have mentioned that on 30.03.2005(inadvertently typed as 30.03.2004), the case was discussed by Secretary(T) with MoC&IT and the files were returned with the direction that the division should ascertain all the show cause notices/advisory letters issued to M/s Dishnet Wireless Ltd. or the companies belonging to the group and the nature of the default before any view is taken. The LR cell has intimated the details of the show cause notices issued to the company or its sister concern. I marked the file to DDG(BS) who in turn marked the file to Sh. R.N. Prabhakar, the then Advisor(P) who in turn marked the file to Sh. B. Shiva Ramakrishnan, the then Member(P). Dr. J.S. Sarma, the then Secretary(T) marked the file to Sh. Yashwant Bhave, the then AS(T) with direction to go through and comment on 15.09.2005. The file remained pending with AS(T) till 05.06.2006. …...... ”
519. PW 8 Sh. P. K. Mittal has also stated about these representations in his statement dated 01.12.2011 at pages 3 to 6. He also states that the file remained with Additional Secretary till 05.06.2006 for about 216 days, when it was returned by him after recording his observations.
Representations of Sh. V. Srinivasan: D-5 520. Similarly, some representations of Sh. V. Srinivasan were also dealt with in file D-5, which were processed by Sh. A. R. Devarajan, AD (BS-III), at 1/N on 28.10.2004 by recording note sheet, which reads as under: “Subject: (i) Extension of time for signing License after issue of LOI in respect of Madhya Pradesh service areas. (ii) Issue of LOI for UP (East) & UP
CBI Vs. Dayanidhi Maran & others Page 280 of 424 (West) service areas. (iii) M/s. Dishnet DSL Limited had applied for change of name. As directed the following letters are being put up for further action please. PUC are three letters (i), (ii) & (iii) all dated 26.05.2004 received from M/s. Dishnet Wireless Ltd erstwhile Dishnet DSL Ltd.
2. In respect of PUC (i) the Letter of Intent for Madhya Pradesh Telecom circle was issued to M/s. Dishnet DSL Ltd. on 6.4.2004. The company had requested for extension of time for 90 days to sign the licence agreement. At present the company is ready to sign the Licence Agreement.
3. Regarding PUC (ii) application from M/s. Dishnet DSL Ltd was received on 21.4.2004 and processed for issue of LOI for Uttar Pradesh (East) and Uttar Pradesh (West).
4. PUC (iii) is in regard to the change of name by M/s. Dishnet DSL Ltd. to M/s. Dishnet Wireless Ltd. Relevant documents were submitted. File also submitted for approval of change of name.
PUC's are submitted please.”
521. The file was marked by Sh. A. R. Devarajan to Director (BS-III), who, in turn, marked the file to DDG (BS) Sh. P. K. Mitta, who recorded that the letters are being sent for kind information please and marked the file to Member (P) and
CBI Vs. Dayanidhi Maran & others Page 281 of 424 Member (P) marked the file to Additional Secretary (T) Dr. J. S. Sarma. Dr. J. S. Sarma recorded on 30.11.2004, “These have been sent to Secretary (DoT) separately”, and marked the file to DDG (BS), who marked the file to Director (BS-III), who, in turn, marked the file to AD (BS-III). Thereafter, the file is silent and a new issue of liquidated damages to be imposed on the company was started from 2/N. 522. Sh. P. K. Mittal in his statement dated 11.02.2013 states about various representations as under:
“In continuation to my statement dated 08.10.2012, I further state that today I have been shown one original file of DoT bearing No.20- 225/Dishnet/2004GENL Matters/BS-III (Pt.) and state that Sh. A.R. Devarajan, the then AD, BS-III, DoT had initiated a note on 28.10.2004. In fact, Sh. V. Srinivasan, CEO and Director of M/s Dishnet Wireless Ltd. had submitted three representations, all dated 26.10.2004 which were addressed to the Chairman, DoT, New Delhi and available at 238, 239 and 240/C of the above referred file. However, it appears that Sh. A.R. Devarajan had mentioned the dates of the said three representations as 26.05.2004 in place of 26.10.2004 inadvertently. Vide those three letters, Sh. V. Srinivasan had sought the following:- (1) Request for extension of time period for LOI issued to Dishnet Wireless Ltd. for Madhya Pradesh telecom circle. (2) Request for issuance of LOI for UP(East) & UP(West) telecom circle. (3) Request for taking on record change of name of M/s Dishnet DSL Ltd. to Dishnet Wireless Ltd. Sh. A.R. Devarajan marked the file to Sh. Govind
CBI Vs. Dayanidhi Maran & others Page 282 of 424 Singhal, the then Director (BS-III) who in turn sent the file to me on 28.10.2004. I sent the file to Sh. B. Sivaramakrishna, the then Member Production. In fact, the relevant files in which the above referred three requests were dealt with and recommended for approval to the Minister, were already sent to Dr. J.S. Sarma, the then Additional Secretary (T) by the then MoC&IT office. Therefore, these representations were also sent to Dr. J.S. Sarma, the then Additional Secretary by Member (P). The above referred file was returned to me by Dr. J.S. Sarma, the then Additional Secretary on 30.11.2004 with the remark that ‘these have been sent to Secretary, DoT separately’. On being asked I state that the word ‘these’ in the above referred remark refers to the files where the requests of M/s Dishnet were dealt in three different files which were sent to the Secretary by Dr. J.S. Sarma, the then Additional Secretary. I marked the file to Director BS-III on 02.12.2004, who in turn marked it to AD (BS-III) on 03.12.2004. It appears that the said three representations all dated 26.10.2004 of M/s Dishnet Wireless Ltd. were not put up before Secretary (T). …...... ”
523. Perusal of files reveals that Secretary (T) Dr. J. S. Sarma had asked Sh. Yashwant Bhave in writing on 15.09.2005 to go through the representations and comment. However, he sat on the file till 05.06.2006 and makes an oral statement that it was Dr. Sarma who had asked him to keep the file with him till a decision is taken in the matter of de-linking. However, the issue de-linking of show cause notices from the grant of new UAS licence was nowhere in sight at that time as the file (D-43) for that was opened on 27.12.2005 and approval was finally granted by the Minister on 16.05.2006. However, Sh. Yashwant
CBI Vs. Dayanidhi Maran & others Page 283 of 424 Bhave sat on the file till 05.06.2006. This statement is contrary to record as well as official procedure already noted above. Furthermore, it is not clear as to why, when the representations were being dealt with in D-5, which was opened on 28.10.2004, further representations from Dishnet Wireless Limited were interposed on 24.08.2005 in another file D-4, at 5/N, which was initially opened for dealing with UASL applications of Dishnet for Punjab, Haryana, Kerala and Kolkata service areas. 524. It is also absurd for an Additional Secretary to be so scared of Secretary that he would do an illegal act of sitting over a file for close to nine months, that is, from 15.09.2005 to 05.06.2006, only at his asking. This is further compounded by the fact that Additional Secretary had been empanelled as Secretary. This is contrary to the Manual of Office Procedure, already quoted above. The statement of Sh. Yashwant Bhave is also contrary to record, as wherever Dr. Sarma gave instructions, he gave the same in writing only. 525. Furthermore, Sh. P. K. Mittal states in his above statement that it appears that these representations, all dated 26.10.2004, were never put up before Secretary (T). However, this statement is also contrary to record as all three representations bear the number of the office of Chairman (TC) 8391 to 8393. Furthermore, all three representations bear initials of Secretary (T) Sh. Nripendra Mishra, with date of “26/10”. 526. However, one thing is clear that these two files were not put up to the then MOC&IT Sh. Dayanidhi Maran.
CBI Vs. Dayanidhi Maran & others Page 284 of 424 527. The perusal of the record reveals that the delay was on the part of Sh. Yashwant Bhave and not on the part of Dr. J. S. Sarma. The statement of Sh. Yashwant Bhave is contrary to record. These representations never reached the Minister.
Conspiracy between Sh. Dayanidhi Maran and Dr. J. S. Sarma 528. It may be noted that PW 1 Sh. K. Sanjay Murthy and PW 2 Secretary (T) Sh. Nripendra Mishra are the only two witnesses who interacted with Sh. Dayanidhi Maran. Both of them have not made any oral statement against Sh. Dayanidhi Maran, except narrating the record available in the files. 529. There is also no statement on record indicating the type of relationship between Dr. J. S. Sarma and Sh. Dayanidhi Maran, except the orders issued by Sh. Dayanidhi Maran authorizing Dr. J. S. Sarma to allocate spectrum and also to give his comments on certain issues. There is also statement of Sh. P. K. Garg indicating the role of Dr. J. S. Sarma in modification of terms of references (ToRs). 530. The issue is how to infer conspiracy between Sh. Dayanidhi Maran and Dr. J. S. Sarma? From the aforesaid material it is difficult to infer any conspiracy between the two. Simply because Minister is asking a particular officer to perform certain official acts, one cannot call them conspirators. 531. Furthermore, a perusal of the statement of Sh. Yashwant Bhave reveals that Dr. J. S. Sarma and Sh. Dayanidhi Maran were not in conspiracy, which is clear from the following sentences: “I had discussed the matter with Dr. J. S. Sarma, the
CBI Vs. Dayanidhi Maran & others Page 285 of 424 then Secretary (T) in the matter. He had informed me that the issuance of UASL has been linked with the show cause notices issued as desired by Sh. Dayanidhi Maran, the then MoC&IT. He also apprised me of the fact that the then MoC&IT did not want to clear the files pertaining to M/s Dishnet DSL Ltd. unless a policy decision on the issue of delinking the irregularities of/show cause notices issued to M/s Dishnet from issuance of fresh licences to it is first taken by him.”
532. The case of the prosecution is that Dr. J. S. Sarma was a conspirator with Sh. Dayanidhi Maran. However, the statement of Sh. Yashwant Bhave as extracted above goes against the theory of conspiracy as here the alleged co- conspirator Dr. J. S. Sarma is not projecting himself to be a conspirator but is entirely blaming the Minister for linking the show cause notices to the issuance of new UASL. He further states that Dr. J. S. Sarma told him that MOC&IT did not want to clear the file pertaining to Dishnet DSL Limited unless a policy decision on de-linking is taken. Thus, the alleged conspirator is not exhibiting the behaviour of a conspirator, but is fairly and squarely blaming the Minister. Where is the agreement to do an illegal act or a legal act by illegal means? Furthermore, Dr. J. S. Sarma does not tell Sh. Yashwant Bhave that the Minister was trying to delay the issues of Dishnet for any illegal consideration, but purely for a policy decision on the issue of de-linking of irregularities of/ show causes notices issued to Dishnet from issuance of fresh licences. This statement breaks the theory of conspiracy between the two.
CBI Vs. Dayanidhi Maran & others Page 286 of 424 Representations of Sh. C. Sivasankaran 533. Sh. C. Sivasankaran in his statement dated 23.02.2012, at pages 8 to 11, states as under: “...... Now, I have been shown a folder (MR II, Memo 41, Sl. No. 1) (at pages 115 to 121) that contains the letters written by me to Sh. Dayanidhi Maran, the then MOC&IT on 04.04.2005, 03.05.2005 and 01.06.2005 in which I had tried to explain to the then MOC&IT, the various pending issues of my telecom business with the DoT, WPC & BSNL, with a request to the Hon’ble Minister to release the pending clearances at the earliest. In my letter dated 04.04.2005 addressed to Sh. Dayanidhi Maran, the then MOC&IT, I quote the following issues which were brought to the notice of the Hon’ble Minister by me: “First, consequent to change in the name of the company from Dishnet DSL Limited to Dishnet Wireless Limited, we have made a request for effecting the change of the name of the company in UASL Licence. This is pending for the last 8 months. Such a request is normally cleared at the lowest levels in the administration and instantly. But our request is pending for an unusually long 8 months. Second the company was given the Letter of Intent for M.P circle in April 2004. Despite the fact that as early as April 20th 2004 the company had written to the DoT expressing its readiness to fulfill the terms of the LoI and asking for the normal extension of the LoI and for issue of UASL, both requests are pending with the DoT for the last 8 months. All clarifications required by the DoT have been furnished. Third, the application for issuance of LoI and UASL is pending in respect of UP (West) and UP (East) circles for the past 9 months. Whatever clarification the DoT wanted has been given.
CBI Vs. Dayanidhi Maran & others Page 287 of 424 Fourth, despite that in principle sanction for frequency was given for the Bihar and Himachal Pradesh circles, no spot frequency has been allotted for the past 9 months. In the case of Orissa, the spot frequency allotted is 1800 MHz against the in principle sanction of 900 MHz. Despite all clarifications given by the company, there is complete stagnation in the matter. I may add at this stage that because of the delay in giving the frequencies the revenue accruals that will yield revenues to government have not taken place and to that extent there is revenue loss to the state. Fifth, our request for provision of points of interconnection by BSNL for J&K, HP, Assam, North East, Rest of WB, Orissa and Bihar Telecom Circles, which is normally done for all as a matter of routine, were pending since October 2004. For example, out of 453 ports required for all the mentioned circles, BSNL is yet to raise demand notes for 362 ports. In J&K even though it has raised demand notes for 8 ports unusually the BSNL is not accepting the fee for them. Sixth, the issue of UASL license in respect of Kolkata city circle and for the States of Punjab, Haryana and Kerala is pending for the last six weeks. Seventh, also the allocation of WiMax Frequency Spectrum for ISP business division of the company is pending for the last two months”. In my letter dated 04.04.2005 addressed to Sh. Dayanidhi Maran, the then MOC&IT, I had also mentioned that I was bringing those unusual occurrences to the Hon’ble Ministers notice only to show how there appears to be some unspoken convergence in the delays and denials with the BSNL too acting in tandem with DoT. Since all those circumstances were intriguing for me I did not want it to remain unreported to the Hon’ble Minister as the highest functionary of the DoT, and therefore I had considered it my duty to bring it to his notice and accordingly wrote to Sh. Dayanidhi Maran, the then MOC&IT on the subject through my letters dated 04.04.2005, 03.05.2005 and 01.06.2005
CBI Vs. Dayanidhi Maran & others Page 288 of 424 which was already submitted by Sh. V. Srinivasan. In my letter dated 04.04.2005 addressed to Sh. Dayanidhi Maran, the then MOC&IT, I had also mentioned that the way the events had moved for the previous 8 – 9 months had made me apprehensive of the intent of those in decision- making positions, and as I had no way of knowing what happened within the system, I was constrained to seek a hearing from the Hon’ble Minister himself to submit my side of the case. I had therefore requested the Hon’ble Minister to give me an appointment so that I can explain all the facts relating to each of the issues from my side and how the delay had imposed heavy costs on my group. I had also expressed my trust on the Hon’ble Minister that he would ensure that the normal treatment which the government gives under the policies and pronouncements will be given to the Siva Group as well, particularly Dishnet DSL Ltd. (renamed as Dishnet Wireless Ltd.) and that justice is done. On being asked I state that I reiterated more or less the same issues in my subsequent letters dated 03.05.2005 and 01.06.2005 to Sh. Dayanidhi Maran, the then MOC&IT, as was done by Sh. V. Srinivasan and Sh. Rohit Chandra in their various communications and presentations to Shri J.S. Sarma, the then Chairman, Telecom Commission and Secretary, DoT. On being asked I state that to my dismay, neither did the DoT under Shri Dayanidhi Maran take any action to weaken the freeze/strangulation policy being exercised by them on the telecom business of Siva Group nor did the Hon’ble Minister consider it worth his time to grant me an audience which I had sought repeatedly. On being asked I state that it was becoming increasingly clear from the analysis of the above course of events that the policy of freeze/strangulation being exercised by the DOT vis- a-vis my telecom business is not an usual case of bureaucratic red tape but a policy well thought out, commanded and monitored by none other than Shri
CBI Vs. Dayanidhi Maran & others Page 289 of 424 Dayanidhi Maran, the then MOC&IT himself. Perplexing and frustrating as it was to me, the motive for such a deliberate negative attitude on the part of Shri Dayanidhi Maran, the then MOC&IT vis-à-vis my telecom business became even more clear to me when as mentioned above Sh. V. Srinivasan informed me about his conversation with Sh. Asim Ghosh of Hutchison Group. …...... ”
534. Copies of these representations are contained in D- 80 and D-305. However, there is absolutely no material on record to indicate that these representations were put up before Sh. Dayanidhi Maran or even brought to his notice. These representations are not available in the DoT record, but copies of the same were supplied to the CBI by the company itself. 535. The statement of Sh. C. Sivasankaran is not supported by the material on record regarding non- consideration of his representations by Sh. Dayanidhi Maran. 536. The conclusion is that there is no material to indicate that Sh. Dayanidhi Maran or Dr. J. S. Sarma were responsible for delay in considering the representations of Sh. C. Sivasankaran or Sh. V. Srinivasan or for not considering them at all. *********
IX. Provisioning of POIs (D-117 for NE, D-120(i) for Orissa & D-118(ii) for H.P.) 537. It is submitted by Sh. Anand Grover, learned Spl. PP for CBI, that provisioning of POIs by BSNL was delayed at the instance of Sh. Dayanidhi Maran. It is further submitted that it
CBI Vs. Dayanidhi Maran & others Page 290 of 424 was also deliberately done to force the exit of Siva group of companies from the telecom business as it was delayed for a wholly outlandish reason that the company was not allocated spectrum. It is submitted that allocation of spectrum was not a requirement for provisioning of POIs. It is further submitted that on account of the pressure of Sh. Dayanidhi Maran, which was being done through Chairman, BSNL, Sh. A. K. Sinha, Sh. Mahipal Singh, Joint DDG (Regulation), had sent an e-mail dated 06.05.2005 to various service areas to stop work on provisioning of POIs as the company had not been allocated spectrum. It is repeatedly submitted that BSNL officials had no business to ask such questions and this all was done to delay the matter at the instance of Sh. Dayanidhi Maran. 538. Learned counsel for the defence have refuted this, submitting that there is no legally admissible evidence on this point in the record. 539. Both parties have invited my attention to relevant files and statements of witnesses to support their point of view. 540. The provisioning of Point of Interconnects (POI) by BSNL to Dishnet DSL Limited was allegedly delayed for a period of three to seven months in Himachal Pradesh, North- East and Orissa telecom service areas. It is alleged that this was done at the instance of Sh. A. K. Sinha, the then CMD, BSNL, who was doing it at the behest of Sh. Dayanidhi Maran.
Allocation of spectrum to Dishnet 541. Sh. D. Jha, PW 16, in his statement dated 06.11.2012, states about allocation of spectrum to Dishnet in
CBI Vs. Dayanidhi Maran & others Page 291 of 424 various service areas as under: “...... Out of the above referred seven applications, start- up spectrum for the following five service areas were allocated by WPC Wing. The details have been reflected by me at 6/N of the original file bearing No.L-14042/30/2004-NTG, which is reproduced as under:- Sl. No. Circle Frequency band Date of earmarking 1. Assam 900 MHz 22.07.2004 2. North East 900 MHz 22.07.2004 3. J&K 900 MHz 01.09.2004 4. Himachal - Yet to be allotted* Pradesh 5. West Bengal 1800 MHz 15.12.2004 Orissa 1800 MHz 24.12.2004 Bihar Proposed in Case has been 1800 MHz submitted …...... ”
542. Thus, the allegation is that the provisioning of POIs was delayed in three service areas, that is, Himachal Pradesh, North-East and Orissa. The spectrum was allocated in North- East on 22.07.2004 and in Orissa on 24.12.2004. 543. Similarly, spectrum was allocated in HP service area on 10.03.2006 (4/N, D-34).
Application for POIs 544. The company had filed application(s) for provisioning of POIs. On receipt of application dated 21.04.2005, which was received in the office of BSNL on 29.04.2005, from Dishnet regarding opening of MSC code for
CBI Vs. Dayanidhi Maran & others Page 292 of 424 provisioning of POIs for Orissa service area, file No. 342- 4/05/Regulation (D-120-i) was opened on 02.05.2005. The letter was treated as urgent.
Plea of non-allocation of spectrum and approval of CMD 545. However, on 02.05.2005, it was recorded by Sh. Mahipal Singh that Dishnet Wireless Limited had not been allocated any spectrum for commissioning of its services and confirmation be obtained from the company in this regard. 546. As per note at 3/N dated 30.06.2005, it is recorded that Dishnet confirmed vide letters dated 06.05.2005 and 16.05.2005 that it had been allocated spectrum in J&K, Assam, NE, West Bengal, Orissa, Bihar and H.P. 547. Thereafter, a comprehensive note was recorded by Sh. Mahipal Singh on 07.07.2005 to the following effect: “Subject: Provisioning of POIs to M/s Dishnet Wireless Ltd.
M/s Dishnet Wireless Ltd. (DWL) signed Inerconnect Agreements with BSNL on 13th October 2004 for services under UASL for the seven service areas of Assam, North East, West Bengal, Bihar, Orissa, J&K and Himachal Pradesh. M/s DWL had obtained POIs at various locations and also requested various BSNL field units for opening of MSC codes.
2. During a meeting in DOT a doubt was raised whether M/s DWL has been allotted spectrum. It was further deliberated, if M/s DWL has not been allotted spectrum then whether still BSNL is allotting interconnection resources to M/s DWL although other operators are being denied the same due to scarcity of the same. In this regard, BSNL
CBI Vs. Dayanidhi Maran & others Page 293 of 424 requested M/s DWL to confirm whether the requisite spectrum has been allocated to them to ascertain whether M/s DWL was in a position to commission their services so that BSNL can continue to allow its scarce interconnect resources like E1 ports, infrastructure, leased lines, opening of the additional levels in BSNL switches etc. BSNL field units were requested by this office to give details of E1 ports sanctioned & commissioned and other leased line resources given to M/s DWL and to await further instructions for provisioning of additional interconnect resources including POIs to M/s DWL.
3. The information has since been received from both M/s DWL as well as the field units of BSNL. BSNL field units of BSNL have already given PoI at various locations as well as infrastructure like leased lines has also been permitted to M/s DWL but at none of these places the POIs of M/s DWL have been commissioned till now. M/s DWL vide their letters dated 5 th and 16 th May, 2005 has intimated that they have been allocated spectrum in each of their seven service areas and have also enclosed copies of these letters from WPC Wing allocating spectrum to M/s DWL.
4. Now M/s DWL vide their letter dated 9th June 2005 (PUC) has informed that M/s DWL has not been given all the ports at the POIs as demanded by them. M/s DWL has also referred to instructions of DOT to comply with their roll out obligation under UASL license. They have also referred to TRAI Direction dated 7 th June 2005 to provide the POIs within 90 days of the date of payment for the port charges. M/s DWL had also requested BSNL vide their letter dated 31 st May 2005 to instruct the concerned officers of BSNL to process their PoI demand. M/s DWL has further requested CMD BSNL for a meeting with their CEO to give their submissions in this regard. It is now proposed to inform the field units to continue to provide PoI to
CBI Vs. Dayanidhi Maran & others Page 294 of 424 M/s DWL as per the terms and conditions of their Interconnect Agreement.
Submitted please.”
548. This was note passed through DDG (Regulation) and Director (C&N) and was approved by the Chairman (BSNL) Sh. A. K. Sinha on 20.07.2005. The approval was for all the seven service areas, that is, Assam, North-East, West Bengal, Bihar, Orissa, J&K and HP. 549. It is apparent that though this file was meant for Orissa service area alone, but all service areas were being dealt with in it. Vide e-mail dated 06.05.2005, Sh. Mahipal Singh had asked various service areas to await further instructions for further provisioning of POIs. It is alleged that he was acting at the behest of Sh. A. K. Sinha, who was acting at the behest of Sh. Dayanidhi Maran. However, Sh. Sinha had approved provisioning of POIs in all service areas on 20.07.2005. As such, if there was any delay due to conspiracy, it was only from 06.05.2005 to 20.07.2005, which is not large enough to force the exit of a company from telecom business.
Issue of H.P. and Bihar 550. However, on 02.08.2005, Sh. Mahipal Singh again recorded a note at 5/N to the following effect that spectrum has not been allocated in Bihar and Himachal Pradesh: “As per letter of 16-5-2005 of M/s Dishnet Wireless Ltd. the spot frequencies of Bihar & Himachal Pradesh are yet to be allocated by WPC. For rest of service areas we may advise BSNL field units to
CBI Vs. Dayanidhi Maran & others Page 295 of 424 continue to provide interconnection resources to M/s Dishnet Wireless Ltd.
Submitted pl.”
551. Thereafter, on 03.08.2005, Sh. K. S. Gulliani recorded that Dishnet is requested to confirm allocation of spectrum for Bihar and H. P. In consequence of this, letters were written to the company and the file continued to be processed further regarding these two service areas and the same was finally approved by Sh. D. P. Singh, DDG (Regulation), on 13.12.2005 at 9/N for these two service areas for provisioning of POIs. 552. It is, thus, clear from the perusal of file that Sh. A. K. Sinha, who is alleged to be acting at the behest of Sh. Dayanidhi Maran had already approved POIs in all service areas, but these two officials, that is, Sh. Mahipal Singh and Sh. K. S. Guliani, were acting on their own and asking for allocation of spectrum in Bihar and HP service areas, more so, when they knew that allocation of spectrum is not a condition for provisioning of POIs. 553. It is of some interest to take note of the statements of various witnesses in this regard. 554. PW 69 Sh. Mahipal Singh was responsible for this, and in his statement dated 19.12.2011, page 1, he states as under: “...... As a Joint DDG (Regulation I), my duties were to interact with TRAI, TDSAT and sign Interconnect
CBI Vs. Dayanidhi Maran & others Page 296 of 424 Agreements with Private Service providers for establishment of interconnection with BSNL. The interconnect agreements were signed after the approval of interconnect agreement committee consisting of Sr. DDG (MS), Sr. DDG (EFC), DDG (Regulation) & DDG (NM) BSNL and then approval of Director (C&M) & CMD, BSNL. I was authorised by the then CMD, BSNL to signed interconnect agreement on behalf of BSNL. I further state that for the purpose of establishing interconnection between telephone switch of one service provider to other service provider a interconnect agreement is signed between them for this purpose. …...... ”
555. He further states at page 2 onwards: “...... Today, you have shown me file no. ENG/10- 1188/04 (POI) of Orissa Telecom Circle in respect of provision of POI to M/s Dishnet DSL Ltd. On being shown this file I state that I wrote a letter dated 05/05/2005 to Sh. Sushil Aggarwal, Head projects, M/s Dishnet Wireless Ltd., Chennai regarding operation of full mobility service in Orissa Telecom Circle mentioning therein that it was understood that spectrum had still not been allotted to M/s Dishnet Wireless Ltd. for commissioning of its service and in this regard the said company was required to confirm, the copy of same is available at page 224, marked in pencil. I further state that on 06/05/2005, I sent an e-mail to DGMs of Orissa, Assam, West Bengal, J&K, Himachal Pradesh, Bihar and North East Telecom Circles of BSNL requesting them to furnish details of POIs sanctioned and commissioned and other leased lines resources given to M/s Dishnet DSL Ltd., it was also mentioned that further instructions be awaited for further provisioning of interconnect resources
CBI Vs. Dayanidhi Maran & others Page 297 of 424 including POIs to M/s Dishnet DSL Ltd. The same is available at page 216, marked in pencil. Sh. Vikram Chona, GM, Dishnet Wireless Ltd. sent a letter dated 06/05/2005 addressed to me on 06/05/2005 informing therein that Dishnet wireless Ltd. had already been allotted spectrum in 1800 MHz GSM Band for unified access in Orissa telecom Circle on 24/12/2004. He also enclosed the copy of letter dated 24/12/2004 of WPC Wing addressed to Dishnet DSL Ltd., regarding allotment of said spectrum (at page 226 & 225). Today, I have been shown the file no. C&M (Regln.)/2004-05/25-109 of Himanchal Pradesh Telecom Circle in respect of provision of POI to M/s Dishnet DSL Ltd. and state that on 06/05/2005, I sent an e-mail to DGMs of Orissa, Assam, West Bengal, J&K, Himachal Pradesh, Bihar and North East Telecom Circles requesting them to furnish details of POIs sanctioned and commissioned and other leased lines resources given to M/s Dishnet DSL Ltd. It was also mentioned that further instructions be awaited for further provisioning of interconnect resources including POIs to M/s Dishnet DSL Ltd., at page 206 marked in pencil and encircled. Sh. B.D. Sharma, AGM (BD & NC), HP Circle, Shimla wrote a letter dated 19/05/2005 to me asking the clarification whether the POIs were to be commissioned or to be with held in respect of Himanchal Circle to M/s Dishnet where payments had already been received and advice notes issued at page 205 marked in pencil and encircled. Again, Sh. R.P. Gupta sent a letter to me vide letter dated 05/09/2005 requesting to intimate the decision taken in the aforesaid matter at page 203, marked in pencil and encircled. Sh. R.P. Gupta, AGM (BD & NC) vide his letter dated 02/12/2005 addressed to me informed that HP Telecom Circle had received a letter dated 01/12/2005 of Sh. A.K. Mittal, DDG (NM), BSNL Corporate Office, New Delhi asking for reasons of delay for providing POIs. He requested to convey the decision immediately so that they could reply to DDG (NM) accordingly at page 190 & 191
CBI Vs. Dayanidhi Maran & others Page 298 of 424 marked in pencil and encircled. Accordingly, I issued a letter dated 15/12/2005 addressed to CGMs of Bihar and Himanchal Pradesh referring that TRAI had issued directions to release POIs within 90 days and therefore, it was decided to release POIs to M/s DWL in service areas of Bihar and Himanchal Pradesh at page 186 marked in pencil and encircled. I have also been shown file no- 342-4/2005- Regulation maintained at BSNL Corporate Office, New Delhi in respect of opening of MSC Code to M/s Dishnet Wireless Ltd. I was shown letter dated 21.04.2005 from Mr. Shushil Agarwal, Head Projects, Dishnet Wireless Ltd., address to Chief General Manager, BSNL, Orissa Circle with a copy to D.D.G. Regulation, BSNL Head Quarter, New Delhi wherein M/s Dishnet Wireless Ltd. had requested to open the allocated MSC code in Orissa Circle, copy placed at page 21. This letter was marked by the then D.D.G Regulation to me on 29.04.2005. The then D.D.G. Regulation, Sh. K.S. Guliani, informed me that CMD, BSNL had informed him that a meeting was held in DoT in which it was discussed that if M/s Dishnet DSL has not been allotted spectrum for all the circles then whether still BSNL is allotting inter connect resource to M/s Dishnet DSL Ltd. although other operators are being denied the same due to scarcity of the same. The then D.D.G Regulation also gave verbal direction to me on 29.04.2005 in his office room at Corporate office of BSNL, 6 th floor, at Statesman House, Barakhamba Road, New Delhi to confirm from M/s Dishnet Wireless Ltd., whether spectrum has been allotted to it by DOT. Accordingly, in the file no- 342-4/2005- Regulation I had processed such notes on 02/05/2005 and after approval on 3.05.2005 sent a letter dated 05.05.2005 to Shri. Sushil Agarwal, Head Projects, M/s Dishnet Wireless Ltd. that it is understood that spectrum has still not been allotted to M/s Dishnet Wireless Ltd. in Orissa Telecom Circle, for commissioning of its service and asked
CBI Vs. Dayanidhi Maran & others Page 299 of 424 him to confirm the same. Sh. Vikram Chona, G.M., M/s Dishnet Wireless Ltd., intimated vide its letter dated 06.05.2005 addressed to me that spectrum for Orissa Telecom Circle has been allotted on 24.12.2004 copy of the same is placed at page 49. Meanwhile, similar letters were received from M/s Dishnet Wireless Ltd. for opening of MSC codes in its other services areas of Assam, West Bengal, J&K, Himachal Pradesh, Bihar and North East Telecom Circles. Accordingly, I wrote a letter dated 06.05.2005, to M/s Dishnet Wireless to send similar information of allocation of spectrum for other services area also. The then D.D.G Regulation also gave verbal direction to me on 06.05.2005 in his office room at Corporate office of BSNL, 6 th floor, at Statesman House, Barakhamba Road, New Delhi that as desired by CMD, BSNL it is required to take status from the fields units regarding the details of POIs sanctioned and commissioned and other leased line resources given to M/s Dishnet Wireless Ltd., and also to intimate the field units to await for further provisioning of interconnect resources including POIs to M/s Dishnet Wireless Ltd. As per these verbal directions of D.D.G Regulation, I sent e-mail on 06.05.2005 to DGMs of Orissa, Assam, West Bengal, J&K, Himachal Pradesh, Bihar and North East Telecom Circles requesting them to furnish details of POIs sanctioned and commissioned and other leased lines resources given to M/s Dishnet DSL Ltd., it was also mentioned that further instructions be awaited for further provisioning of interconnect resources including POIs to M/s Dishnet DSL Ltd., at page 54. Sh. Vikram Chona, G.M., M/s Dishnet Wireless Ltd. intimated vide its letter dated 16.05.2005 addressed to me that spectrum for West Bengal Circle, Assam Circle, North East Circle and J & K Circle Telecom Circle has also been allotted by DOT and for Bihar and Himachal Pradesh the spectrum / spot frequencies are still being coordinated with WPC. Copy of the same is placed at page 52. The letter dated 09.06.2005, was also
CBI Vs. Dayanidhi Maran & others Page 300 of 424 seen which was sent from Sh. Vikram Chona, General Manager, Dishnet Wireless addressed to CMD, BSNL copy available at page 96. This letter was marked by O/O CMD to Director (C&M) without any comment who further marked it to DDG Regulation without any comment and it was further marked to me. The letter dated 31.05.2005 from Sh. Vikram Chona, General Manager, Dishnet Wireless Ltd. addressed to Joint DDG Regulation -1 copy placed at page 115. This letter was marked by O/O CMD, BSNL to DDG Regulation and DDG Regulation marked this letter to me. In these letters dated 31.05.2005 and 09.06.2005, M/s Dishnet Wireless Ltd., while sharing its problems being faced in BSNL field units, requested to instruct concerned official of BSNL to process their POI demand. After receiving this information from M/s Dishnet Wireless Ltd, on 05.05.2005, 16.05.2005 and compilation of status reports as called for from BSNL Circles i.e. West Bengal Circle, Orissa Circle and Himachal Pradesh Circle, in the above mentioned E-mail dated 06.05.2005, I immediately put up a comprehensive note dated 07/07/2005 that DWL had informed that the spectrum had been allotted and therefore it was proposed to inform the field units to continue to provide POI to M/s DWL as per the terms and conditions of their interconnect agreement. In this note prepared it was mentioned that during a meeting in DOT, a doubt was raised whether M/S Dishnet has been allotted Spectrum. It was further deliberated, if M/S Dishnet not been allotted spectrum then whether still BSNL is allotting interconnection resources to M/s Dishnet although other operators are being denied the same due to scarcity of the same. In this regard, BSNL requested M/s Dishnet to confirm whether the requisite spectrum has been allotted to them to ascertain whether M/s Dishnet was in position to commission their services so that BSNL can continue to allow its scarce interconnect resources like E1 ports, infrastructure, leased lines,
CBI Vs. Dayanidhi Maran & others Page 301 of 424 opening of the additional levels in BSNL switches etc. BSNL field units were requested by Regulation branch BSNL to give details of E1 ports sanctioned & commissioned and other leased line resources given to M/s Dishnet and to await further instructions for provisioning of additional interconnect resources including POIs to M/s Dishnet. The information called for had been received from both M/s Dishnet and BSNL field units. M/s Dishnet had already been given POIs at various locations as well as infrastructure like leased lines has been permitted to M/s Dishnet but at none of these locations the POIs have been commissioned till then. M/s Dishnet had intimated that that they have been allocated spectrum in each of their seven service areas. Accordingly, it was proposed to inform the BSNL field units to continue to provide POI to M/s Dishnet as per terms and conditions of the Interconnect Agreement. This note was concurred by Sh. K.S. Guliani, DDG, Regulation and Sh. G.S. Grover, Director BSNL Board and then was finally approved by Sh. A.K. Sinha, CMD, BSNL on 20/07/2005 (at 4/N). Accordingly, the field units of BSNL in Orissa, West Bengal Circle, Assam Circle, North East Circle, and J & K Circle were informed on 22 nd August 2005, as available at page 135 in the file no- 342- 4/2005-Regulation, after taking approval of final draft on 19 th Aug 2005 from the then DDG Regulation, to take necessary action for provision of Interconnect resources to M/s Dishnet as per terms and conditions of Interconnect agreement. Also as per approval of DDG Regulation of 19.08.2005, letter dated 22.08.2005 as available at page 136 was sent to Sh. Vikram Chona G.M M/s Dishnet Wireless Ltd., to confirm if the spot frequencies has been allotted by WPC for Bihar and Himanchal Pradesh Circles. To this M/s Dishnet Wireless in its letter dated 30.08.2005 from Mr. Sushil Agarwal, Head Projects intimated that the spot frequencies are still being coordinating by WPC. On being asked I admit that due to conveying
CBI Vs. Dayanidhi Maran & others Page 302 of 424 of instructions for withholding POIs as per the oral orders of DDG (Regulation) Sh. K.S. Guliani in respect of DWL, the delay had caused in processing/ provisioning of POIs to M/s Dishnet in certain locations as at some location M/s DWL itself was not ready for interconnection. Today after perusing copy of text of e-mail available at page 93, marked in pencil of File No NE- I/op/Dishnet-UAS/04-05, I state that it is the copy of text of email sent by me on 6th May 2005 to DGM, NE-I circle, BSNL. Telecom Regulatory Authority of India (TRAI) vide its direction dated 7th June 2005 to all Telecom Service Providers including BSNL directed to provide POIs within 90 days of the date of payment for the port charges. TRAI also issued show cause notices to BSNL for delay in provisioning POIs by BSNL.
Q- Whether such instructions were issued for other service providers for withholding provisioning of POIs till further instructions which had not been allotted the spectrum. Please explain. Ans- No such instructions were given for withholding provisioning of POIs in respect of other service providers during my stint as Jt. DDG (Regulation) at BSNL Corporate Office, New Delhi from June 2001 to July 2006 since I resigned. Q- Whether it is required to be ascertained by the field officers while provisioning POIs that spectrum had been allotted or not to the service providers. Please explain. Ans- There is no such mention specifically in the Interconnect Agreement. However, for efficient utilization of the POI/ ports it is required that it carries telephone traffic instead of just lying idle. In fact as per interconnect agreement signed between BSNL and service providers M/s Dishnet DSL there was a provision in clause no 3.2.2 “The UASL shall ensure that the interconnect capacities are got tested within 30 days from the date these are made
CBI Vs. Dayanidhi Maran & others Page 303 of 424 available by BSNL and these capacities are used fully within a period of three months from the date of commissioning. After expiry of six months extendible to nine months on request, the demand shall be deemed to have withdrawn if these are not put to full use by UASL’s. BSNL shall have the right to use these capacities for its consumption”. Copy of this clause of the interconnect agreement of M/s Dishnet DSL is available at page 299 marked in pencil of File No NE-I/op/Dishnet-UAS/04-05. Q- You replied after perusing above referred files that when M/s Dishnet replied to BSNL that he as has been allotted spectrum in Orissa Circle vide letter dated 06.05.2005, received in BSNL Corporate office then why instructions for allotment of POI was not issued to Orissa Circle BSNL. Ans- Information for status of allotment of spectrum of balance six circles from M/s Dishnet and details of POIs sanctioned and commissioned and other leased lines resources given to M/s Dishnet DSL Ltd. was awaited from six BSNL circle units. It was required to put up a comprehensive note for information of status of resources allocated by BSNL for all seven circles together and seeking approval of CMD, BSNL for issue of instructions for commissioning of POIs by BSNL field units as desired by Sh. A.K. Sinha, the then CMD, BSNL and conveyed to me by Sh. K.S. Guliani, the then, DDG (Regulation).”
556. In his statement dated 26.12.2011, he further states at page 2 as under: “...... As I was preparing the drafts to be sent to various field offices of BSNL, I realised that the fact that M/s Dishnet Wireless Limited was not having spectrum in Bihar and Himachal Pradesh Telecom Circles. Accordingly, on 2.8.2005, vide my noting
CBI Vs. Dayanidhi Maran & others Page 304 of 424 at 5/N I brought this fact into the knowledge of Shri K.S. Guliani who asked for draft for approval. Accordingly, I asked Shri Devender Singh to put up draft letters to be sent to different telecom circles of BSNL and in addition, asked to put up a draft letter to M/s Dishnet asking them about allocation of spectrum Bihar and Himachal Pradesh Telecom Circles. I discussed the matter Shri K.S. Guliani who informed me that we cannot send the file again to CMD, BSNL for approval as he apprehended that the file may be held up by CMD, BSNL. Thus, it was decided to send letters to the service areas in which M/s Dishnet Wireless Limited was having spectrum. Accordingly, letter dated 22.8.2005 was issued for Orissa, J & K, Assam, West Bengal, and North East telecom circles of BSNL informing therein to continue to provide POIs to M/s Dishnet Wireless Limited. Another letter was also sent to Shri Vikram Chona, GM, M/s Dishnet Wireless Limited to confirm whether Dishnet has been allotted spectrum in Bihar and Himachal Pradesh service areas. After two or three days of issuance of this letter, I received a call from the O/o the then MoC & IT on my official basic phone. The Officer making the call enquired me why did I issue such letter of M/s Dishnet Wireless Limited. I informed that I had issued the letter after due approval of the CMD, BSNL. On this, he shouted that I will speak to your CMD then and disconnected the phone. I shared this with Shri K.S. Guliani, the then DDG (Regulation) on his mobile phone as he was not available in the office. He asked me to stay calm and not to worry. After receipt of this call I was under fear as it was not usual for an officer of my level to receive a call from Minister’s Office. After this, I did not pursue the matter of providing POIs to Dishnet in Bihar and Himachal Pradesh Telecom circles.
CBI Vs. Dayanidhi Maran & others Page 305 of 424 …...... On receipt of this letter I asked Shri Devender Singh to put up it on file. On my directions Shri Devender Singh put up the letter on file and initiated a general note at 9/N as he was not having the knowledge of this issue. He marked the file to me on 12.12.2005. I proposed to release POIs for Bihar and Himachal Pradesh service areas to M/s Dishnet Wireless Limited in view of the TRAI Guidelines and show cause notices issued by TRAI to BSNL in the matter of provisioning of POIs. I marked the file to Shri D.P. Singh, the then DDG (Regulation) who approved the proposal on 13.12.2005. Accordingly, a letter dated 15.12.2005, was sent to CGMs of Bihar and Himachal Pradesh telecom circles to release POIs to M/s Dishnet Wireless Limited. …...... ”
557. He further states at page 4 as under: “...... Q. Initially Regulation Branch of BSNL Corporate office had requested to BSNL field units on 06.05.2005 through e-mail to await further instructions for further provisioning of POI as it was understood that M/s Dishnet Wireless was not having spectrum. Then in December, 2005, when the spectrum had still not been allotted to M/s Dishnet for Bihar and Himanchal Circle why approval was given to BSNL Circle units for providing POI for Bihar and Himanchal Pradesh Circle. Ans. Initially instructions of 06.05.2005 through e- mail to seven BSNL fields units were issued based on the verbal instructions of Sh. K.S. Guliani, the then D.D.G Regulation, BSNL, Corporate office. When I issued letters to five Telecom circles to continue to provide POIs to M/s Dishnet Wireless
CBI Vs. Dayanidhi Maran & others Page 306 of 424 Ltd., a call from the then Minister’s office came to me and I was asked why had I issued such directions. On this, I got afraid and stopped pursuing the matter of provisioning of POIs to M/s Dishnet Wireless Ltd. in Bihar and Himanchal Pradesh Service Area. However, meanwhile TRAI issued show cause notice to BSNL asking for reasons for delay in provisioning of POIs for all Circles and all operators concerned. It was at this time that I proposed to allow further provisioning of POI for M/s Dishnet Wireless in Bihar and Himanchal Pradesh Circle on 12.12.2005 in note sheet 9/N in file No. 342-4/2005-Regln of BSNL Corporate office New Delhi. Sh. D.P. Singh, the then D.D.G (Regulation) approved the same and accordingly I had issued the instructions to Bihar and Himachal Pradesh Telecom Circles, dated 15.12.2005, copy of same is placed at page 152 of this file. …...... ”
558. The gist of this long statement is that he was acting on the oral instructions of Sh. K. S. Guliani. However, he has not recorded these facts in the file. This is violation of official procedure. 559. PW 84 is Sh. K. S. Guliani, the then DDG (Regulations), BSNL, who also used to deal with POIs. He states in his statement dated 05.01.2012 as under: “...... On being asked I state that some time in the month of April - May, 2005, the then CMD Sh. A K Sinha called me in his chamber at Statesman House, Barakhamba Road, New Delhi and told me that issue is being raised in DOT that BSNL is providing POIs to M/s Dishnet who does not have even spectrum and is not providing POIs to other
CBI Vs. Dayanidhi Maran & others Page 307 of 424 operators who are already providing services. Sh. A K Sinha directed me to check the status of spectrum allotted to M/s Dishnet. Accordingly, I directed the then Joint DDG Sh. Mahipal Singh to get the information collected from M/s Dishnet. This information was being collected in between after few days Sh. A K Sinha called me again in his office and asked me the status of the spectrum allotted to M/s Dishnet. I informed him that information is being gathered. Sh. A K Sinha told me that there are serious complaint against BSNL that BSNL is providing POIs to M/s Dishnet who even does not have spectrum and is not in a position to launch the services. Sh. A K Sinha directed me to withhold further provisioning of POIs and other resources like lease lines to M/s Dishnet, till the time we verify and take a view on that. I accordingly directed Sh. Mahipal Singh to get the information as soon as possible and withhold further provisioning of POIs to M/s Dishnet. Sh. Mahipal Singh told me personally that he had send e-mail to M/s Dishnet and field unit of BSNL to get the information about interconnected resources, already provided to M/s Dishnet as well as the spectrum availability with M/s Dishnet. I further state that after getting the required information, the whole case alongwith background note was submitted by the then Joint DDG Sh. Mahipal Singh who mark the file to me as DDG (Reg.), I mentioned in file ‘A’ above for kind consideration and approval please and marked the file to Director (C&M) Sh. G S Grover who signed on 11.07.2005 and put up the file to the then CMD BSNL Sh. A K Sinha who directly marked the file to me mentioning ‘please discuss’ on 15.07.2005. Today you have shown me file no. 342-4/2005- regln marked as Malkhana CBI/ACB/Delhi PE no. 1(A)/2011 MR II Memo VI serial no. 1 page no. 4N, I identify signatures of myself, Sh. G S Grover as Director (C&M) and signature of the then BSNL Sh. A K Sinha on it. I further state that on 20.07.2005 I wrote on the file
CBI Vs. Dayanidhi Maran & others Page 308 of 424 at page 4N ‘Discussed. Resubmitted for kind perusal and approval of proposal as at ‘A’ above. CMD approved the proposal on the same day. I marked the file to the then Joint DDG (Regulation) Sh. Mahipal Singh on 21.07.2005 for necessary action as discussed. I further state after perusing page no. 5/N of file no. 342-4/2005-regln that Sh. Mahipal Singh, the then Joint DDG (Regulation) mentioned that “As per letter of 16.05.2005 of M/s Dishnet Wireless Ltd. the spot frequencies of Bihar and Himachal Pradesh are yet to be allocated by WPC. For rest of service areas we may advised BSNL field units to continue to provide interconnection resources to M/s Dishnet Wireless Ltd. and marked the file to me. I agreed and directed to put up draft accordingly Sh. Mahipal Singh Put up two drafts, one for M/s Dishnet and other for BSNL field units. After some corrections it was finally approved by myself on 19.08.2005. After perusing page no. 7/N of file no 342-4/2005- Regln, I state that on 23.09.2005 Sh. Mahipal Singh, the then Joint DDG (Regulation) mentioning “For Himachal Pradesh circle, M/s Dishnet has yet to confirm allotment of spectrum we make await this conformation from M/s Dishnet and submitted the file to me. I agreed on the same date and directing Sh. Mahipal Singh to issue to reminder to M/s Dishnet. After perusing page no. 8/N of file no. 342-4/2005- Regln a note was put up to the then Joint DDG (Regulation) Sh. Mahipal Singh on 18.10.2005 who marked the file to me as DDG (Regulation). I directed on 18.10.2005 to Sh. Mahipal Singh to Discuss the matter but I was transferred before discussion. The note which were put up at page 8/N are related with requesnt of M/s Dishnet DSL Ltd. to provide E1s in Jharkhand Circle and the information received from M/s Dishnet Wireless Ltd. in response to our letter dated 26.09.2005 stating that spot frequencies are still being coordinated by WPC for Himachal Pradesh Circle.
CBI Vs. Dayanidhi Maran & others Page 309 of 424 Q .1. Whether BSNL, Corporate Office or the field staff of the concerned telecom circles were required to ensure the allotment of spectrum to the service provider before provisioning of POI in the respective telecom circles. Please Explain? Ans. Normally, the BSNL Corporate Office and telecom circles of BSNL was not required to ensure the allotment of spectrum for provisioning and commissioning of interconnect resources including POI to the service provider because some of the service provider may like to provide services using wire line networks only. However, BSNL field staff do check the preparedness of the operators for roll out of the networks and launch of services before providing POIs to ensure that these are used judiciously to protect the commercial interest of BSNL. There is specific clause in the interconnect agreement which ensures that the service provider has to use the POIs provided by BSNL fully within three months of their commissioning falling which BSNL reserve the right to withdraw the POIs provided by BSNL. Therefore, if it is brought to the notice of BSNL corporate office or its field units that a particular service provider is not be in a position to launch services due to non-availability of spectrum or any other network element, BSNL may withhold provisioning of POIs to such service provider to protect its commercial interest. …...... ”
560. He further states at page 5 as under: “...... Q. 5. Has this action of BSNL delayed the provisioning of services by M/s Dishnet DSL Ltd. Ans. No, Even after the clearance was given by BSNL Head Quarter in August 2005 and the POIs were provided by field units immediately wherever
CBI Vs. Dayanidhi Maran & others Page 310 of 424 they were technically feasible, M/s Dishnet was not able to provide commercial services to its customers till October 2005. Further in Himachal and Bihar M/s Dishnet DSL Ltd. was not having any spectrum as a result even if POIs were provided by BSNL, it could not have launched the services. It is further to state that in all the circles BSNL was the first operator to provide POIs to M/s Dishnet DSL Ltd.”
561. He further states in his statement dated 12.01.2012 at page 2 as under: “...... When I went to discuss the matter with Sh. A. K. Sinha, the then CMD, BSNL, he asked me “can we delay the POIs for few more days” . On this I replied in negative and told him that “you asked us to check for the spectrum. We have checked it and they have spectrum. We should release this now.” On this Sh. A. K. Sinha shouted that, “Mantri daantega”. Then, I pleaded with CMD, BSNL that we should not get into this problem. On this, he agreed with me. I at the same time put up the file then and there for approval of CMD which he accorded immediately. After this, he informed someone over telephone on DOT PAX (internal numbers) that “we have checked spectrum with Dishnet. We cannot hold POIs anymore and I am releasing the file.” He made this call in front of me but I cannot ascertain to whom he was talking. …...... ”
562. He further states at pages 3 and 4 as under: “......
CBI Vs. Dayanidhi Maran & others Page 311 of 424 Q4:- When the CMD, BSNL approved the proposal of informing BSNL field units to continue to provide POIs to M/s Dishnet Wireless Ltd. then why Bihar and Himachal Pradesh circles were not informed about the same and why it took nearly a month to issue letters to other BSNL circles? Ans. While the file was submitted for approval of CMD on 07.07.2005 the fact that M/s Dishnet DSL Ltd. does not have spectrum in Bihar and Himachal Pradesh was overlooked by Sh. Mahipal Singh, the then Joint DDG (Regln.-I) inadvertently. The approval of the CMD was accorded on the fact that M/s Dishnet DSL Ltd. is having spectrum in all the seven circles including Himachal Pradesh and Bihar. When the instructions were to be issued to the field units, it was discovered that M/s Dishnet DSL Ltd. does not have spectrum in Himachal Pradesh and Bihar and the same was communicated to me by Sh. Mahipal Singh on file. As the approval of CMD, BSNL was in the context of availability of spectrum with M/s Dishnet DSL Ltd., the instructions were issued only for the five circles where M/s Dishnet had spectrum and Bihar and Himachal Pradesh circle were not informed as M/s Dishnet DSL Ltd. did not have spectrum in these two circles. We were of the opinion that if we will resubmit the file to CMD, BSNL for approval again, the file could be withheld by him and we could not do anything in this regard as evident from his earlier instructions. As we had to decide whether to send the file again to CMD, BSNL for approval and what action is to be taken for Bihar and Himachal Pradesh service areas, the matter was discussed several times between me and Sh. Mahipal Singh and several draft letters were modified. That’s why, it took us nearly one month to send letters to other telecom circles. We decided to process the issue of provisioning of POIs in Bihar and Himachal Pradesh separately, that’s why the letter to Bihar and Himachal Pradesh circles could not be sent in time. As soon as BSNL Corporate Office received show cause notice from
CBI Vs. Dayanidhi Maran & others Page 312 of 424 TRAI, letters were issued to Bihar and Himachal Pradesh telecom circles for releasing of POIs to Dishnet DSL Ltd. in accordance to the TRAI guidelines. At this point of time, I was deputed as Advisor to the Minister of Communications and IT, Trinidad & Tobago through Ministry of External Affairs under ITEC program.”
563. Sh. K. S. Guliani blames Sh. A. K. Sinha for issuing him oral instructions for withholding further provisioning of POIs. Sh. K. S. Guliani also did not record the instructions anywhere. Again, this is contrary to the official procedure. 564. PW 91 is Sh. G. S. Grover, who is Director, C&N, BSNL, at that time, states in his statement dated 06.01.2012 as under: “...... Today, I have been shown file no. 342-4/2005- Regln (Memo VI, Sl. No. 1). On being shown the said file, I state that on 02.05.2005 Sh. Mahipal Singh, the then Joint DDG (Regln.-I) put up a note which is reproduced below:- “It is understood that spectrum has still not been allotted to M/s Dishnet for commissioning of its services. We may confirm the same from M/s Dishnet.”
The said note was put up to Sh. K S Guliani, the then DDG (Regln.) who approved the same on 3.05.2005. Accordingly, a letter dated 5.05.2005 was sent to Sh. Sushil Aggrawal, Head Projects, M/s Dishnet Wireless Ltd. by Sh. Mahipal Singh to confirm the allotment of spectrum in Orissa Telecom circle (at page 46). Further, another letter was also sent on 06.05.2005 to Mr. Sushil Aggrawal to confirm the allocation of spectrum in other service areas also (at page 51). On the same day an e-mail was also sent by Sh. Mahipal Singh to various BSNL field officers
CBI Vs. Dayanidhi Maran & others Page 313 of 424 mentioning therein that (at page 54) :- “Please refer to the Interconnect Agreement dated 12.05.2004 for UASL services of M/s Dishnet Ltd. You are requested to give details of POIs sanctioned and commissioned and other leased line resources given to M/s Dishnet DSL Ltd. Further instructions be kindly awaited for further provisioning of Interconnect resources including POIs to M/s Dishnet DSL Ltd.”
Further, on 6.05.2005, vide its letter Sh. Vikram Chona, GM, Dishnet Wireless Ltd. informed that M/s Dishnet Wireless Ltd. has already been allotted spectrum in Orissa Telecom service area (at page 59). The said letter received on 9.05.2005 in BSNL Corporate office. In the meanwhile, the BSNL field officials of different Telecom circles informed the BSNL Corporate office about the stage of providing Interconnect resources to M/s Dishnet Wireless Ltd. in their respective Telecom circles (at page 68, 70 & 55). On 16.05.2005, Sh. Vikram Chona again wrote a letter to Joint DDG (Regln.), BSNL Corporate office informing therein that M/s Dishnet Wireless Ltd. has been allocated spectrum in J&K, Assam, North East and West Bengal service areas while spectrum is being coordinated with WPC wing of DoT for Bihar and Himachal Pradesh service areas. He also enclosed the earmarking letters issued by WPC wing of DoT for the respective telecom circles (at page 61). Thereafter, on 13.06.2005, a letter was received from Sh. Vikram Chona, GM, Dishnet Wireless Ltd. which was addressed to CMD. It was mentioned in the letter that Dishnet has demanded 461 ports but only 125 ports have been allotted to them and they requested to resolve the issue and also requested for a meeting of Sh. V Srinivasan, CEO with the CMD, BSNL for resolving the issues. As the letter was addressed to CMD, it came to me and I marked the same to DDG (Regln.) for further necessary action. I identify my signatures on the said letter (at page 77). But on perusal of the file, it is apparent that the said
CBI Vs. Dayanidhi Maran & others Page 314 of 424 letter was processed on 07.07.2005 after 21 days vide a note by Sh. Mahipal Singh mentioning therein that M/s Dishnet Wireless Ltd. had informed that they are not being given all the ports at the POIs as demanded by them and they also referred to TRAI directions dated 07.06.2005 to provide the POIs within 90 days of payment of port charges. It was proposed to inform the field units of BSNL to continue to provide POIs to M/s Dishnet Wireless Ltd. as per the terms and conditions of their Interconnect Agreement. Sh. K.S. Guliani, the then DDG (Regln.) signed the said note on 08.07.2005 and marked the same to me which I signed on 11.07.2005 and marked the file to Sh. A.K. Sinha, the then CMD, BSNL who put up a note of ‘please discuss’ and marked the file to Sh. K.S. Guliani, the then DDG (Regln.) on 15.07.2005. Sh. K.S. Guliani discussed the matter with CMD and resubmitted the note for approval of CMD, BSNL on 20.07.2005 which was approved by the CMD, BSNL on the same day. The file was finally marked to Sh. Mahipal Singh, the then Joint DDG (Regln.-I) for necessary action as discussed on 21.07.2005 by Sh. K.S. Guliani (at 4/N). Finally, a letter was issued by Sh. Mahipal Singh, the then Joint DDG (Regln.) on 22.08.2005, after 31 days to CGMs of Assam, West Bengal, Orissa, J&K and North East Telecom circles in which it was instructed to take necessary action for provision of Interconnect resources to M/s Dishnet Wireless Ltd. as per the terms and conditions of Interconnect Agreement (at page 135). On the same day, another letter was sent by Sh. Mahipal Singh to Sh. Vikram Chona, GM, Dishnet Wireless Ltd. to confirm whether spectrum for Bihar and Himachal Pradesh Telecom circles has been allocated by WPC (at page 136). On 09.09.2005, a letter was received from Sh. R P Gupta, AGM (BD&NC), HP Telecom Circle in the name of Sh. Mahipal Singh requesting therein to intimate the decision taken in the matter of provisioning of POIs to M/s Dishnet Wireless Ltd. at
CBI Vs. Dayanidhi Maran & others Page 315 of 424 the earliest (at page 137). The matter was dealt after 14 days at 7/N on which Sh. Mahipal Singh remarked on 23.09.2005 as under:- “For Himachal Pradesh circle, M/s Dishnet has yet to confirm allotment of spectrum. We may await this confirmation from M/s Dishnet.” The file was marked to Sh. K.S. Guliani, the then DDG on 23.09.2005 who remarked as under:- “As proposed. Please send reminder to M/s Dishnet.” The file was marked to Sh. Mahipal Singh who noted “We may also inform HP circle to await further instructions.” and marked the file to Assistant (Regln.) on 24.09.2005. Accordingly, a letter was sent to Sh. Vikram Chona, GM, Dishnet Wireless Ltd. on 26.09.2005 to confirm whether Dishnet has been allotted spectrum for Bihar and Himachal Pradesh service areas (at page 139). Vide its letter dated 7.10.2005, Sh. Vikram Chona informed that the spot frequencies for Bihar and Himachal Pradesh are still being coordinated (at page 140). The file remained with Sh. Mahipal Singh, the then Joint DDG (Regln.) since 20.10.2005 to 12.12.2005 (52 days). On 2.12.2005, Sh. R P Gupta the then AGM (BD&NC), HP Telecom Circle wrote a letter to Sh. Mahipal Singh, Joint DDG (Regln.) informing therein that HP Telecom Circle has received a letter from Sh. A.K. Mittal, DDG (NM) seeking reasons for delay in provisioning of POIs. The e-mail of Sh. Mahipal Singh dated 06.05.2005, Letter from HP Telecom Circle dated 19.05.2005 and reminder letter from HP Telecom Circle dated 05.09.2005 was also enclosed with this letter. The copy of the said letter was also sent to Sh. A.K. Mittal, DDG (NM) (at page 145). The said letter was dealt at 9/N and a note was put up by Sh. Mahipal Singh on 12.12.2005 which is reproduced as under:- “TRAI has issued direction to release POIs within 90 days. SACFA clearance was awaited for M/s Dishnet. We may permit release of POIs in balance service areas of Bihar and HP. Reference of notes
CBI Vs. Dayanidhi Maran & others Page 316 of 424 at pre pages may also be done.” The file was marked to Sh. K.S. Guliani, the then DDG (Regln.) who opined as under:- “May be cleared in the light of above clearly telling operator that SACFA clearance shall be his responsibility and then file may be sent to concerned for information please.” He marked the file to Joint DDG (Regln.) on 13.12.2005. Finally, a letter dated 15.12.2005 was sent to CGMs of Bihar and Himachal Pradesh circle wherein it was mentioned that TRAI has issued direction to release POIs within 90 days. It has been decided to release POIs to M/s DWL in service areas of Bihar and Himachal Pradesh. The letter was signed by Sh. Mahipal Singh, the then Joint DDG (Regln.-I) (at page 152).
I identify the signatures of Sh. Mahipal Singh, the then Joint DDG (Regln.), Sh. A.K. Sinha, the then CMD, BSNL and Sh. K.S. Guliani, the then DDG (Regln.) as I have seen them signing during the normal course of my duty. Q.1
Whether BSNL is required to see allocation of spectrum to the service provider before providing POIs? Please explain. Ans.
In general it is not mandatory but in case there is shortage of POIs this can be checked by the BSNL circle office concerned. Corporate office of BSNL is involved only in signing the Interconnect Agreement with other service providers.”
565. Sh. G. S. Grover blames Sh. Mahipal Singh for the delay at various levels. He states that the letters dated 16.05.2005 and 13.06.2005 written by Dishnet Wireless Limited were processed by Sh. Mahipal Singh on 07.07.2005
CBI Vs. Dayanidhi Maran & others Page 317 of 424 after 21 days. He states that when the matter reached CMD Sh. A. K. Sinha, he asked for a discussion on 15.07.2005 and approved the same on 20.07.2005. He further states that subsequently Sh. Mahipal Singh conveyed the approval to the company on 22.07.2005 after delay of 31 days. He again blames Sh. Mahipal Singh in delaying the matter for HP service area for fourteen days and again Bihar and HP service areas for 52 days. Thus, he holds Sh. Mahipal Singh responsible for all the delay at various levels and times. 566. PW 92 Sh. Devendra Singh, Assistant (Regulation), was also involved in processing the file. He states in his statement dated 09.01.2012 as under: “...... Today, I have been shown file no. 342-4/2005- Regln. (Memo VI, Sl. No. 1). On perusal of the said file I state that a letter was received from Sh. Sushil Aggrawal, Head Projects, Dishnet Wireless Ltd. on 27.04.2005 in the office of DDG (Regln.) which was marked to Sh. Mahipal Singh, the then Joint DDG (Regln.) by Sh. K. S. Guliani, the then DDG (Regln.) (at page 1). Sh. Mahipal Singh marked the letter to me on 29.04.2005 with the remarks ‘urgent please, put up’ . I accordingly put up the letter in the file vide my note on 1/N and marked the file to Sh. Mahipal Singh, the then Joint DDG (Regln.) who remarked as under:- “It is understood that spectrum has still not been allotted to M/s Dishnet for commissioning of its services. We may confirm the same from M/s Dishnet. Put up DFA.” The file was marked to me on 02.05.2005 by Sh. Mahipal Singh. I accordingly put up a draft letter and marked the file to Sh. Mahipal Singh, the then Joint DDG (Regln.) on the same day. Sh. Mahipal Singh marked the file to Sh. K. S. Guliani on
CBI Vs. Dayanidhi Maran & others Page 318 of 424 02.05.2005 who signed the file on 3.05.2005 and marked the same to Joint DDG (Regln.-I). Sh. Mahipal Singh signed the file on 4.05.2005 and accordingly a letter was sent to M/s Dishnet Wireless Ltd. on 05.05.2005 (at page 46). Here, I would like to mention that I don’t have any technical knowledge regarding provisioning of POIs. I also did not know from where Sh. Mahipal Singh got the information regarding unavailability of spectrum with M/s Dishnet Wireless Ltd., as mentioned in the above noting of Sh. Mahipal Singh. I would like to clarify that as per the wishes of Sh. Mahipal Singh, I put up the note on 1/N as apparent from his remarks on the said letter from M/s Dishnet Wireless Ltd. On 06.05.2005, Sh. Vikram Chona, General Manager, M/s Dishnet Wireless Ltd. sent a letter to Joint DDG (Regln.-I) addressing to his query of spectrum allocation to M/s Dishnet Wireless Ltd. in Orissa Telecom Circle, mentioning therein that spectrum has been allotted to M/s DWL on 24.12.2004 and also enclosed copy of allotment letter issued by WPC wing of DoT (at page 49). I accordingly put up the letter on file at 2/N and proposed as under:- “Reply received from M/s Dishnet Wireless Ltd. may kindly be seen. Since they have sent the information regarding OTS, we may request them to send the similar information for other service areas also. Submitted Please.” I marked the file to Joint DDG (Regln.-I) on 6.05.2005 who approved the same on the same day. Accordingly, a letter was sent to M/s Dishnet Wireless Ltd. on 06.05.2005 (at page 51). Here, I would like to clarify that I put up the above mentioned note as per the directions of Sh. Mahipal Singh, the then Joint DDG (Regln.-I) who instructed me to put up such note. I further state that Sh. Mahipal Singh himself approved the proposal without sending the file to DDG (Regln.) and on the same day he sent an e-mail through his e-mail ID to the e-mail IDs of various BSNL Circle Officers (at
CBI Vs. Dayanidhi Maran & others Page 319 of 424 page 54) despite the fact that the proposal was for enquiring availability of spectrum from M/s Dishnet Wireless Ltd. not from the BSNL Circle Offices concerned. Here, I would like to clarify that the said proposal should have been approved by DDG (Regln.) instead of Joint DDG (Regln.-I). The contents of the said e-mail are as follows:- “Please refer to the Interconnect Agreement dated 12.05.2004 for UASL services of M/s Dishnet Ltd. You are requested to give details of POIs sanctioned and commissioned and other leased line resources given to M/s Dishnet DSL Ltd. Further instructions be kindly awaited for further provisioning of Interconnect resources including POIs to M/s Dishnet DSL Ltd.” As per this e-mail, the BSNL circle offices were directed to await further instruction of the BSNL Corporate office before providing POIs to M/s Dishnet Wireless Ltd. …...... ”
567. He further states at page 3 as under: “...... Thus, by the end of May, 2005, Sh. Mahipal Singh was in the receipt of all the information which he desired vide his e-mail dated 6.05.2005 and letter to M/s DWL dated 06.05.2005. The file remained with Sh. Mahipal Singh, the then Joint DDG (Regln.-I) since 6.05.2005 to 7.06.2005 (31 days). On 7.06.2005, Sh. Mahipal Singh called me and asked me to put the letters of M/s Dishnet Wireless Ltd. on file. I, accordingly, put up the said letters along with a request for provisioning of POIs in NE Telecom Circle by M/s Dishnet Wireless Ltd. The said letter is not available in the file. On this, Sh. Mahipal Singh, the then Joint DDG (Regln.-I) remarked on 9.06.2005 to put up a comprehensive note and marked the file to me but he did not hand over the said file to me
CBI Vs. Dayanidhi Maran & others Page 320 of 424 and the file remained with Sh. Mahipal Singh, the then Joint DDG (Regln.-I). On 30.06.2005, Sh. Mahipal Singh called me and asked me to put up a note at 3/N which was typed on computer and printed on a note sheet. As per the directions of Sh. Mahipal Singh, I signed the said note on 30.06.2005 and marked the same to Joint DDG (Regln.-I). Here, I would like to clarify that I did not have computer with me nor did I use computer typed note sheet while I was working as Assistant Regulation. I used to put up notes by hand. A computer was installed in the room of Sh. Mahipal Singh, the then Joint DDG (Regln.-I) and he was using the same for writing his note sheets. He generally printed the notes himself and asked me to sign the same. As I was junior to him and I did not have much knowledge about the technical aspects of provisioning of POIs, I used to follow such directions given by him. Generally, Sh. Mahipal Singh kept all the files with him and marked the same only when some correspondence came. …...... ”
568. In reference to enquiry by AGM, HP service area regarding provisioning of POI and the letters written by him on 05.09.2005 and 09.09.2005, Sh. Devendra Singh states further: “...... The said letter was not dealt with at that time but when the reminder from HP Telecom Circle came on 09.09.2005, I was directed by Sh. Mahipal Singh to put up the same on the file. On the said note Sh. Mahipal Singh remarked as under:- “For Himachal Pradesh Circle, M/s Dishnet has yet to confirm allotment of spectrum. We may await this confirmation from M/s Dishnet.”
CBI Vs. Dayanidhi Maran & others Page 321 of 424 The file was marked to Sh. K.S. Guliani, the then DDG (Regln.) on 23.09.2005 who remarked as under:- “As proposed. Please send reminder to M/s Dishnet.” The file was marked to Sh. Mahipal Singh who marked the file to me on 24.09.2005. Accordingly, a letter was sent to Sh. Vikram Chona, GM, Dishnet Wireless Ltd. on 26.09.2005 to confirm whether Dishnet has been allotted spectrum for Bihar and Himachal Pradesh service areas (at page 139). I marked the file to Sh. Mahipal Singh who again noted “We may also inform HP circle to await further instructions.” but did not sign the said note and marked the file to me. But the said file was not handed over to me and Sh. Mahipal Singh kept the said file with him. Vide its letter dated 7.10.2005, Sh. Vikram Chona, GM, Dishnet Wireless Ltd. informed that the spot frequencies for Bihar and Himachal Pradesh are still being coordinated (at page 140). The said letter was received in the office of Joint DDG (Regln.-I) on 14.10.2005. On 18.10.2005, Sh. Mahipal Singh, the then Joint DDG (Regln.-I) again called me in his room and asked me to put up the said letter on file. I, accordingly, put up a note at 8/N and marked the file to Sh. Mahipal Singh who signed the file and marked it to DDG (Regln.). Sh. K. S. Guliani, the then DDG (Regln.) noted “please discuss” and marked the file to Joint DDG (Regln.-I) who signed the file on 20.10.2005 and marked the file to me but actually he kept the file and did not hand over the same to me. The file remained with Sh. Mahipal Singh, the then Joint DDG (Regln.) since 20.10.2005 to 12.12.2005 (52 days). On 02.12.2005, a letter was received from Sh. R. P. Gupta the then AGM (BD&NC), HP Telecom Circle through fax. The enclosures of the said letters received through fax are available in the file at pages 142 to144 but the covering letter is not available in the file. The same letter along with its enclosures was received in the office of Joint DDG (Regln.-I) on
CBI Vs. Dayanidhi Maran & others Page 322 of 424 9.12.2005. It was informed in the letter that HP Telecom Circle has received a letter from Sh. A.K. Mittal, DDG (NM) seeking reasons for delay in provisioning of POIs. The e-mail of Sh. Mahipal Singh dated 06.05.2005, Letter from HP Telecom Circle dated 19.05.2005 and reminder letter from HP Telecom Circle dated 05.09.2005 were also enclosed with this letter. The copy of the said letter was also sent to Sh. A.K. Mittal, DDG (NM) (at page 145). On receipt of this letter, Sh. Mahipal Singh called me on 12.12.2005 and asked me to put up a note on the file regarding this letter. As I was unaware of the developments in the case and the matter discussed in the letter, I put up a general note on 12.12.2005 at 9/N and marked the file to Joint DDG (Regln.-I). A note was put up by Sh. Mahipal Singh on 12.12.2005 which is reproduced as under:- “TRAI has issued direction to release POIs within 90 days. SACFA clearance was awaited for M/s Dishnet. We may permit release of POIs in balance service areas of Bihar and HP. Reference of notes at pre pages may also be done.” The file was marked to Sh. D. P. Singh, the then DDG (Regln.) who opined as under:- “May be cleared in the light of above clearly telling operator that SACFA clearance shall be his responsibility and then file may be sent to concern for information please.” He marked the file to Joint DDG (Regln.-I) on 13.12.2005 who marked the file to me on 15.12.2005. I accordingly put up a letter which was signed by Sh. Mahipal Singh, the then Joint DDG (Regln.-I). Accordingly, the said letter dated 15.12.2005 was sent to CGMs of Bihar and Himachal Pradesh Circles wherein it was mentioned that TRAI has issued direction to release POIs within 90 days. It has been decided to release POIs to M/s DWL in service areas of Bihar and Himachal Pradesh (at page 152). I identify the signatures of Sh. Mahipal Singh, the then Joint DDG (Regln.-I), Sh. A.K. Sinha, the
CBI Vs. Dayanidhi Maran & others Page 323 of 424 then CMD, BSNL, Sh. D. P. Singh, the then DDG (Regln.) and Sh. K.S. Guliani, the then DDG (Regln.) as I have seen them signing during the normal course of my duty. On being further asked I state that my room was in front of the room of Sh. Mahipal Singh, the then Joint DDG (Regln.-I). Sh. Vikram Chona, GM, Dishnet Wireless Ltd. met several times with Joint DDG (Regln.-I) during this period for getting the matter of provisioning of POIs to M/s Dishnet Wireless Ltd. cleared. During such visits he also used to sit in my room while waiting for the meeting. During his visits, he shared with me that he is being harassed by the indifferent attitude of Sh. Mahipal Singh, the then Joint DDG (Regln.-I). I used to console him.”
569. Sh. Devendra Singh also blames Sh. Mahipal Singh for delaying the matter at various stages. 570. Perusal of the statement of Sh. Mahipal singh reveals that he was acting on the oral instructions of Sh. K. S. Guliani. Furthermore, the CMD had given his approval for all the seven service areas on 20.07.2005, but he (Mahipal Singh) conveyed the instructions only to five service areas, that is, Orissa, West Bengal, Assam, North-East and J&K, vide letter dated 22.08.2005, that is, after a gap of more than one month of the approval. After the approval, he (Mahipal Singh) on his own recorded on 02.08.2005 that Dishnet has not been allocated frequencies for Bihar and HP. When allocation of spectrum was not necessary for providing inter-connect resources by BSNL, why did he put this question after the approval of CMD on 20.07.2005? 571. Sh. K. S. Guliani is also making his statement
CBI Vs. Dayanidhi Maran & others Page 324 of 424 without any documentary record. He also states that he agreed with Mahipal Singh regarding his note dated 02.08.2005 at 5/N that spot frequencies for Bihar and HP are yet to allocated by WPC, so only rest of the five service areas be informed for providing inter-connect resources. Again if allocation of spectrum is not necessary, why they were putting this condition? He further states that even on 23.09.2005. Mahipal Singh recorded that Dishnet had not been provided spot frequencies and they should await till Dishnet confirms it. 572. Furthermore, he is quite wavering in his statement also when he states as under: “Therefore, if it is brought to the notice of BSNL corporate office or its field units that a particular service provider is not be in a position to launch services due to non-availability of spectrum or any other network element, BSNL may withhold provisioning of POIs to such service provider to protect its commercial interest.”
573. He further states: “Further in Himachal and Bihar M/s Dishnet DSL Ltd. was not having any spectrum as a result even if POIs were provided by BSNL, it could not have launched the services. It is further to state that in all the circles BSNL was the first operator to provide POIs to M/s Dishnet DSL Ltd.”
574. Furthermore, Sh. Mahipal Singh and he (K. S. Guliani) were also acting on their own, when he states as under: “While the file was submitted for approval of CMD on 07.07.2005 the fact that M/s Dishnet DSL Ltd. does not have spectrum in Bihar and Himachal Pradesh was overlooked by Sh. Mahipal Singh, the then Joint DDG (Regln.-I) inadvertently. The
CBI Vs. Dayanidhi Maran & others Page 325 of 424 approval of the CMD was accorded on the fact that M/s Dishnet DSL Ltd. is having spectrum in all the seven circles including Himachal Pradesh and Bihar. When the instructions were to be issued to the field units, it was discovered that M/s Dishnet DSL Ltd. does not have spectrum in Himachal Pradesh and Bihar and the same was communicated to me by Sh. Mahipal Singh on file. As the approval of CMD, BSNL was in the context of availability of spectrum with M/s Dishnet DSL Ltd., the instructions were issued only for the five circles where M/s Dishnet had spectrum and Bihar and Himachal Pradesh circle were not informed as M/s Dishnet DSL Ltd. did not have spectrum in these two circles. We were of the opinion that if we will resubmit the file to CMD, BSNL for approval again, the file could be withheld by him and we could not do anything in this regard as evident from his earlier instructions.”
575. It is apparent that both Sh. Mahipal Singh and Sh. K. S. Guliani were not only acting on the oral instructions of CMD, which they say were contrary to the policy, but were also against the orders of CMD dated 20.07.2005. Any delay after this date cannot be attributed to any instructions of CMD Sh. A. K. Sinha. 576. Even otherwise, there is no written record to show that any instructions were issued to Sh. K. S. Guliani either by the Minister or Sh. A. K. Sinha. 577. Moreover, on perusal of case diaries, I find that Sh. Anil Kumar Sinha, the then Chairman-cum-Managing Director, BSNL, was examined by CBI on 19.04.2012 and his statement was recorded on the same day. The same is extracted as under: “I am as above on being asked state that I have done B.Sc. (Engineering) in the year 1966 from MIT, Muzaffarpur. I qualified Indian Telecom Service
CBI Vs. Dayanidhi Maran & others Page 326 of 424 Exam conducted by UPSC in the year 1967 and joined as Assistant Divisional Engineer (Telegraph) in DoT in the year 1969. Thereafter, I worked in various capacities in DoT and BSNL. In the year 2004, I got selected by Public Enterprise Selection Board (PSEB) to the rank of CMD, BSNL and worked in the same capacity till my superannuation in the year 2007. As CMD, BSNL my duty was to look after the overall control of the corporation which includes its operation, maintenance activities, expansion, HRD, finance, liaison with Government etc.
Today, I have been shown file No. 342-4/05- Rgln. maintained at the regulation branch of BSNL Corporate Office, New Delhi. On perusal of the said file, I state that at 1/N there is a note of Sh. Mahipal Singh, the then Jt. DDG (Regln.-1) dated 02/05/2005 mentioning therein that it is understood that spectrum has still not been allotted to M/s Dishnet for commissioning of its service we may confirm the same from M/s Dishnet. This information that M/s Dishnet has still not been allotted spectrum was not passed on by me. I further state that allocation of spectrum is not at all looked after by BSNL while provisioning of POIs to any service providers. Spectrum is only required for commencement of the services by any service providers.
Accordingly, a letter was issued on 05/05/2005 by Sh. Mahipal Singh, the then Jt. DDG (Regulation-I) after the approval of Sh. K. S. Guliani, the then DDG (regulation) to M/s Dishnet Wireless Ltd. to confirm whether they have been allotted frequency in Orissa Telecom circle (at page 46). This matter should have been brought into the knowledge of Director or CMD before issuing such letter. Thereafter, another e-mail was sent to different BSNL field offices by Sh. Mahipal Singh, the then Jt. DDG (Reg-I) on 06/05/2005, directing therein to await further instructions from BSNL
CBI Vs. Dayanidhi Maran & others Page 327 of 424 Corporate office before providing POIs to M/s Dishnet (at page 54). Another letter was also issued to M/s Dishnet Wireless Ltd. on the same day to intimate the allocation of frequency in other service areas (at page 51). Here, I would like to say that these instructions should not have been issued by the concerned BSNL officials.
On being asked I state that the matter was brought into my knowledge only on 15/07/2005 at 4/N when the file came to me. Normally, these types of files do not come to CMD and are dealt at the level of Director/ DDG. As I was not aware of the developments in this case, I discussed the matter with Sh. K. S. Guliani, the then DDG (Regulation). After the discussion as I became aware of the facts of this case, I immediately approved to continue to provide POIs to M/s Dishnet on 20/07/2005. Despite my approval, the instructions were issued by Sh. Mahipal Singh, the then Jt. DDG (Regln.-I) on 22/08/2005. This clarifies that I did not have any intention to delay the provisioning of POIs to M/s Dishnet but it was Sh. Mahipal Singh who delayed the issuance of instructions to BSNL field offices to continue to provide POIs to M/s Dishnet and issued instructions after a delay of 38 days. In the meanwhile, the file moved between Sh. Mahipal Singh, the then Jt. DDG and Sh. K. S. Guliani, the then DDG only.
Q- What you have to say with regard to the allegation made by Sh. K. S. Guliani, the then DDG (Regulation) who has categorically taken your name, as it was you who had directed him to check the spectrum of M/s Dishnet and further directed him to keep the matter of provisioning of POIs to M/s Dishnet pending. Please clarify. Ans- Sh. K. S. Guliani is covering his delay by taking my name. The matter should have been brought into my knowledge by Sh. K. S. Guliani on 06/05/2005 itself when the letter and e-mails were
CBI Vs. Dayanidhi Maran & others Page 328 of 424 sent to BSNL field offices.
Q- What you have to say on the allegation of Sh. K. S. Guliani, the then DDG (Regulation) that when he intimated you that the matter of M/s Dishnet cannot be delayed further you uttered “Minister will scold” and asked him to further delay the matter. Ans- I did not delay the matter of provisioning of POIs to M/s Dishnet and the allegations made by Sh. K. S. Guliani are wrong. I cleared the file on the very next day when it was put up to me.
Q- Did anyone in DoT directed you to delay the matter of provisioning of POIs to M/s Dishnet Wireless Ltd. as it has not been allotted spectrum yet. Please clarify. Ans- No one directed me to delay the provisioning of POIs to M/s Dishnet Wireless Ltd. nor did I do the same.
578. PW 88 Sh. Thaiu Mag, the then DGM, Planning, NE-1 Telecom Circle; PW 89 Sh. Harish Kumar Verma, the then General Manager, H. P. Telecom Circle; and PW 94 Ms. Anupama Sanghi, the then DGM, Marketing and Network, Orissa Telecom Circle have stated about the delay, if any, in commissioning the POIs in the three circles. 579. Sh. K. S. Guliani has categorically denied in his statement in response to question No. 5, quoted above, that there was any delay in the provisioning of services by Dishnet DSL Limited on account of action of BSNL in the provisioning of POIs. 580. Delay or no delay, Sh. Mahipal Singh was acting on the oral instructions of Sh. K. S. Guliani and he, in turn, was acting on the oral instructions of Sh. A. K. Sinha, CMD (BSNL).
CBI Vs. Dayanidhi Maran & others Page 329 of 424 However, Sh. Sinha has denied having given any oral instructions to Sh. K. S. Guliani. In such a situation, there is no legally admissible evidence for attributing the delay to the two alleged conspirators, that is, Dr. J. S. Sarma or Sh. Dayanidhi Maran. 581. In view of the above discussion, I find that there is no legally admissible evidence on record that either the Minister or Dr. J. S. Sarma were involved in this. Even the charge sheet admits that there is no documentary evidence to prove that the e-mail dated 06.05.2005 was sent by Sh. Mahipal Singh at the instance of Sh. A. K. Sinha. Sh. A. K. Sinha has also denied having issued any such instructions. Hence, this circumstance cannot be used against the conspirators. As such, this circumstance cannot be legally read against the two conspirators as the link snaps with the denial of Sh. A. K. Sinha. This is more so when there is absence of any other evidence in this regard. 582. This case is based on the foundation that Sh. Dayanidhi Maran and Dr. J. S. Sarma deliberately delayed the approval relating to aforesaid nine issues relating to issue of UAS licences in six service areas, that is, UP(E), UP(W), Punjab, Haryana, Kerala and Kolkata, and other regulatory approvals as noted and discussed above to force the exit of Siva group of companies from telecom sector. All the nine allegations have been found to be without any legal evidence. There is no legally admissible evidence on record to indicate any incriminating conduct of the two accused. As such, the very foundation of the case is knocked out that the delay was meant
CBI Vs. Dayanidhi Maran & others Page 330 of 424 to choke the business environment of Siva group of companies. 583. Thus, the case can be disposed of on the basis of these findings alone as once the very concept of delay is not accepted, nothing survives in the case. However, the other points contained in the charge sheet would also be discussed to find if there is any merit therein also.
B. Acquisition of Aircel by Maxis: Constricted business environment 584. It is submitted by Sh. Anand Grover, learned Spl. PP, that on account of delay in regulatory approvals, the business environment of Siva group of companies was highly constricted. Apart from that the Standard Chartered Bank had made unsolicited offer to the group for selling the telecom business. It is further submitted that Sh. Ralph Marshall, Sh. Kalanithi Maran and Sh. Dayanidhi Maran also put pressure on Sh. C. Sivasankaran to sell the companies, though he was resisting it and wanted to retain at least 26% of the shareholding. It is repeatedly submitted that finding no alternative due to the constricted business environment and the pressure put by the accused persons, Sh. C. Sivasankaran was left with no option but to sell Aircel Limited to Maxis group. It is repeatedly submitted by him that this was a forced sale which was conducted under pressure of Sh. Dayanidhi Maran. He has argued at length that the sale was not as per the free will of Sh. C. Sivasankaran but he was forced due to the choked business environment created by Sh. Dayanidhi Maran and also by the pressure exerted on him by Sh. Dayanidhi Maran and Sh.
CBI Vs. Dayanidhi Maran & others Page 331 of 424 Kalanithi Maran. It is repeatedly submitted by him that by effecting this sale, Sh. C. Sivasankaran was attempting to get the best out of a bad situation. My attention has been invited to the relevant files, e-mails and statements of witnesses in great detail to emphasize the point. 585. On the other hand, learned counsel for the defence have argued that the sale was voluntary as Sh. C. Sivasankaran was getting the price of his choice fixed at US$ 800 million. It is repeatedly submitted that Sh. Dayanidhi Maran has no role in the transaction and he is being dragged into it for no reason at all. My attention has been invited to the relevant documents and statements to emphasize that the sale was voluntary and Sh. Dayanidhi Maran had no role in it. It has been repeatedly argued that Sh. C. Sivasanakaran was already in market to sell his companies and in such a situation where is the question of any pressure being put on him. It is repeatedly submitted that there is no evidence, even prima facie, in this regard. 586. The case of the prosecution is that on account of the delay in regulatory approvals concerning aforesaid nine issues of Aircel Limited/ Dishnet Limited, the business environment of Siva group of companies became very constricted and this led to the sale of Aircel Limited to Maxis. The allegation is that this delay was due to conspiracy by Sh. Dayanidhi Maran and Dr. J. S. Sarma and a part of the conspiracy was that the company be sold to Maxis alone. It is the case of the prosecution that Sh. C. Sivasankaran was left with no alternative except to sell the company to Maxis. 587. However, out of nine issues, as already noted, the
CBI Vs. Dayanidhi Maran & others Page 332 of 424 Minister had no role as far as alleged delay relating to grant of UASL for Punjab, Haryana, Kerala and Kolkata service areas are concerned as the file D-4 never reached him as it remained pending due to issues relating to impending FDI policy. Similarly, the representations were also dealt with in this file (D-4) and these representations also never reached the Minister. Sh. Yashwant Bhave has orally stated that he retained the file till 05.06.2006 on the oral directions of Dr. J. S. Sarma, but this is contrary to record as Dr. J. S. Sarma always gave the instructions in writing. 588. The issue relating to delay in provisioning of POIs is also of no consequence as there is no legally admissible evidence connecting Sh. Dayanidhi Maran or Dr. J. S. Sarma with this issue. There is no evidence to show that these three issues ever reached the Minister or the Minister was in any way connected with these. 589. As far as issues relating to delay in spectrum allocation in Bihar service area and delay in allocation of additional spectrum in Chennai metro service area are concerned, the same were also not in the notice of the Minister as per the files. These two files never reached the Minister. The delay was on the part of the Wireless Advisor who sat on the two files, but in the oral statement blames Dr. J. S. Sarma for this, but this is also contrary to record. Furthermore, he says in his statement dated 09.05.2012, page 1, that Dr. J. S. Sarma instructed him to hold all cases for allotment of spectrum/ additional spectrum till further orders. He further states that these instructions were given in the month of July-August
CBI Vs. Dayanidhi Maran & others Page 333 of 424 2007. However, this may be read as “July/August 2006” as Dr. J. S. Sarma held the office of Secretary (T) till 16.07.2006 alone. In these circumstances there is not much incriminating evidence against the accused and whatever little oral evidence is there, it is contrary to official record. Even otherwise a delay of a few months cannot be constrictive enough as to choke business environment of a company as the negotiation for sale of the company started in October 2005 itself. The alleged delay in allocation of initial spectrum in Bihar service area is alleged to be from 26.07.2005, when Dr. J. S. Sarma asked a question about network planning. Similarly, the alleged delay in the allocation of additional spectrum in Chennai service area is from 23.07.2005, when the file was marked to Wireless Advisor. The alleged delay started in these two cases in the last week of July 2005 and the negotiations for sale were started in first half of October 2005. This is not an instance of great delay. As such, these two instances are also of no use for indicating constriction of business environment of Siva group. 590. As far as delay in grant of approval for change in equity of Aircel Limited and taking on record name change of Srinivas Computers Limited in Tamil Nadu service area (D-40) and issues relating to delay in approval (a) of change of name from RPG Cellular Services Limited to Aircel Cellular Limited; (b) to approve the purchase of 20.76% shareholding of foreign partner namely M/s Siva Cellular Holdings Limited in Aircel Cellular Limited by Aircel Televentures Limited to make it 100% Indian company; (c) taking on record the name change from Srinivas Computers Limited to Aircel Televentures
CBI Vs. Dayanidhi Maran & others Page 334 of 424 Limited in Chennai service area (D-30), are concerned, the same remained pending as there was illegality in the sale to Aircel Digilink India Limited as it was in violation of competition clause and for Tamil Nadu service area the equity structure of Aircel Digilink India Limited and its promoters was not clear to the DoT. 591. Not only this, the grievance of Sh. C. Sivasankaran in his statement is that he was forced to terminate the deal with Aircel Digilink India Limited as the approval for sale was not forthcoming and it was due to the conspiratorial acts of Sh. Dayanidhi Maran, but the facts are contrary to this. The officials of DoT had recommended rejection of sale proposal, but Sh. Dayanidhi Maran sat on the proposal and did not reject it. Secretary (T) had approved the rejection on 06.09.2004. Similarly, the equity structure of ADIL was held to be complicated as far as sale of licence in Tamil Nadu service area (D-40) was concerned. If Sh. C. Sivasankaran had really wanted to sell the company, he could have made efforts to explain the equity structure of ADIL to the DoT and also for asking the purchaser ADIL to become compliant to the competition clause by reducing its equity as far as Chennai service area was concerned. But he took no such steps in this regard and rather withdrew the applications filed for seeking approval of DoT. In these circumstances how can it be alleged that the acts of the department in not permitting the sale led to the constriction of business environment of Siva group. 592. As far as the next issue relating to delay in change of name from Dishnet DSL Limited to Dishnet Wireless Limited
CBI Vs. Dayanidhi Maran & others Page 335 of 424 (D-41) is concerned, the same was linked with other issues by Sh. P. K. Mittal on 27.08.2004 and not by the Minister or Dr. J. S. Sarma. Furthermore, when the Secretary (T) himself was competent to approve the issue, there was no need for him to mark the file to the Minister without specifying any reason. As already noted, there is no material on the file to suggest that the Minister had asked for the file. When the file reached the Minister, it got linked with other files, as the Minister was suspicious that licences were granted to the company in hasty manner, which doubt of the Minister was not unfounded as the issues relating to financial capacity of the company were not dealt with properly when eight LOIs were granted to it in file D- 38. This delay cannot be laid at the door of the Minister. Even if it is so, there is no material on the file to term it as mala fide. 593. Even otherwise, the issue is so small that it cannot have any constricting impact on the business environment of the company. It is not clear as to why a separate file D-41 was opened for this, when the issue relating to grant of licences in four service areas of Punjab, Haryana, Kerala and Kolkata was being dealt with in file D-4 and the issues relating to UP (E) and UP(W) and extension of time for compliance of LOI in MP service area were being dealt with in file D-2. Strange are the ways of DoT as many issues were being dealt with collectively in files D-30 and D-40 making things very complicated. 594. As far as delay in grant of LOI in UP (E) and UP (W) and extension of time for signing of licence agreement in MP service area (D-2) is concerned, the same was also for reasons which cannot be termed as frivolous or outlandish, as already
CBI Vs. Dayanidhi Maran & others Page 336 of 424 noted above. 595. It has already been recorded that the financial capacity of the company was suspect from day one and it was also indulging in the grey market activities and sold the ISP licence without permission of the DoT. The Minister was suspicious, as already noted above, that the earlier licences were granted to it in undue haste. This fact is on record in D-41 at 7/N. A suspicious mind cannot be termed as a conspiratorial mind. 596. In view of the above discussion, it is hard to believe that the Minister or the Secretary had created a situation by resorting to delay in approval relating to the aforesaid nine issues. The basic thrust of the statement of Sh. C. Sivasankaran is that the sale of licences in Tamil Nadu and Chennai service areas was not allowed mala fide on account of which he could not raise requisite finance for his business. But the Minister could not have allowed that for the reasons already noted. Other issues relating to change of name etc are very petty. 597. In view of the above discussion, I am satisfied that there were no issues which were the making of the two accused which constricted the business environment of Sh. C. Sivasankaran resulting in the sale of company to Maxis. 598. Furthermore, feeling constricted is highly elastic and subjective feeling. It is difficult to believe as to when one would feel constricted enough in a particular situation compelling him to take a certain course of action. 599. It is further alleged that when the sale was being negotiated, Siva group wanted the buyers to take responsibility
CBI Vs. Dayanidhi Maran & others Page 337 of 424 for obtaining regulatory approvals as Sh. Dayanidhi Maran as MOC&IT had choked the business environment of its group companies. How and when one would feel that one's business environment is choked? Sh. C. Sivasanakaran was in telecom business since 1994. His company Sterling Cellular Limited was given a licence for CMTS in Delhi service area in 1994. His company Aircel Limited was a licencee in Tamil Nadu service area since 22.05.1998 (1/N, D-40). He had acquired RPG Cellular Services Limited, which was operating a telecom licence in Chennai metro service area, in the year 2003 and the same was approved by the DoT on 18.12.2003 (D-30). These facts indicate that Sh. C. Sivasankaran was having sufficient experience in the field of telecom sector. He was no novice in telecom sector. He is deemed to know the pace at which DoT works. 600. He was granted licence for seven service areas, in which spectrum was allocated in six service areas and there is no allegation in this regard. If one has no grievance against allocation of spectrum in six service areas, how can a delay of a few months in one service area can amount to choking of business environment. Furthermore, the delay in allocation of start-up spectrum in Bihar service area is attributed to Dr. J. S. Sarma from 26.07.2005 onwards, whereas delay in allocation of additional spectrum beyond 6.2 MHz is being attributed to Dr. J. S. Sarma since 23.07.2005. 601. The case of the prosecution is that the delay started in these two service areas in the last days of July. Very strangely Sh. C. Sivasankaran felt frustrated enough to sell his business
CBI Vs. Dayanidhi Maran & others Page 338 of 424 and started negotiation in early October 2005 and he valued his company at US$ 850 million. A delay of about two and a half months, counted from 26.07.2005, in allocation of initial spectrum is not of much consequence in telecom business, which has a long gestation period and is a capital intensive industry. Similarly, additional spectrum beyond 6.2 MHz may be needed but a delay of about two and a half months or three months would not push the owner of the company into such frustration as to sell his company. It is interesting to quote from his statement dated 04.09.2013, page 2, which is as under: “...... By the third quarter of 2005, the roll out of services was stalled in all 14 but 4 circles. At this stage, sometime in the month of October 2005, Mr. Rahul Goswamy who is from the Investment Banking division of SCB in Singapore, called me with a proposal from M/s Maxis Communications Berhad, Malaysia (Maxis) to acquire 100% of Aircel, Aircel Cellular and Dishnet Wireless. Simultaneously, V. Srinivasan, my CEO, informed me that he had also received a similar call from Mr. Prahlad Shantigram, who was the head of Investment Banking in India for Standard Chartered Bank (SCB). …...... ”
602. This indicates that he engaged himself in the negotiations for sale of the companies, frustrated due to delay of two-three months. Perusal of the various DoT files reveals that delay in spectrum allocation was usual thing, more so, in case of additional spectrum. 603. As far as grant of licence in UP (E) and UP(W)
CBI Vs. Dayanidhi Maran & others Page 339 of 424 service areas and extension of time for compliance of LOI in MP service area is concerned, the Minister was suspicious that the earlier file, in which eight LOIs including MP service area was granted, was processed in undue haste and he put this on record and asked for its examination. The financial capacity of the company was in doubt from the very beginning itself. In such a situation, how can one claim that his business environment was choked or for that matter constricted by Sh. Dayanidhi Maran forcing him to sell his business. It is relevant to extract from his statement dated 04.09.2013, page 1, which is as under: “...... Sometime in June 2004, I decided to divest the holdings of Siva Group in M/s Aircel Ltd. and M/s Aircel Cellular Ltd. in order to raise funds to roll-out the new circles. Subsequently, in June 2004, an agreement was executed between ATVL and M/s Aircel Digilink India Ltd. (ADIL), a Hutchison Essar group company in which the said buyer had agreed to pay a total consideration of Rs. 1,200 crores to ATVL to buy 100% of Aircel and Aircel Cellular. DoT approval was required for the deal to be completed. Since approval from DoT was not received for more than eight months, I decided to terminate the agreement to sell Aircel and Aircel Cellular. …...... ”
604. This statement makes it clear that he wanted to sell his companies Aircel Limited and Aircel Cellular Limited ADIL for raising funds, but permission for the same was not coming from the DoT. No permission could have been granted by the DoT as the sale of Aircel Cellular Limited in Chennai service
CBI Vs. Dayanidhi Maran & others Page 340 of 424 area was in violation of competition clause and department had recommended its rejection. In this statement lies his real grievance which is wholly unfounded and is contrary to record. As such, there is no material on the file to indicate that the business environment of Siva group was ever constricted or choked by the actions of Sh. Dayanidhi Maran. It is a wholly unfounded allegation. 605. The further allegation is that Sh. Ralph Marshall and Sh. Dayanidhi Maran pressurized Sh. C. Sivasankaran to sell his entire stakes in the company. Let me take a look as to what Sh. C. Sivasankaran states in his statement dated 23.02.2012, pages 14 to 16, relevant parts of which are as under: “...... On being asked I state that by the third quarter of 2005, the roll out of services was stalled in all 14 but 4 circles. At this stage, sometime in the month of October 2005, Mr. Rahul Goswamy who is from the Investment Banking division of SCB in Singapore, called me with a proposal from M/s Maxis Communications Berhad, Malaysia (Maxis) to acquire 100% of Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd. Simultaneously, Sh V. Srinivasan informed me that he had also received a similar call from Mr. Prahlad Shantigram, who was the head of Investment Banking in India for Standard Chartered Bank (SCB). On being asked I state that I was aware of the fact that Maxis was a telecom company based in Malaysia and the company was promoted by Sh. T. Ananda Krishnan who was of Sri Lankan tamil origin. On being asked I state that sometime after the commencement of Aircel operations in 1999, Sh. T.
CBI Vs. Dayanidhi Maran & others Page 341 of 424 Ananda Krishnan, of Maxis met with me in 2002 to obtain my advice of entering the Indian telecommunication sector. This was the first meeting between us. On being asked I state that having received the above mentioned calls from the SCB officials sometime in October 2005, I then participated in a telephonic conference call organized by SCB on the next day which call I attended from Chennai. In the said telephonic conference call, the other participants were Sh. Rahul Goswamy, Sh. Prahlad Shantigram from SCB, Sh. V Srinivasan and Sh. Ralph Marshall, Chairman of Maxis. On being asked I state that during the call Sh. Ralph Marshall introduced himself as a representative of T Ananda Krishnan, promoter of Maxis. Sh. Ralph Marshall conveyed that Maxis was interested in the deal for acquiring equity stake in ATVL. I explained to SCB and Maxis officials, the issues being faced by Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd. with DoT, regarding approvals for UASLs, spectrum, POI, FIPB, etc. which were not forthcoming. On this, Sh. Ralph Marshall responded, “Don’t worry about that, Maxis will take responsibility in this regard” and further added, “you will also hear from the Telecom Minister in this regard”. On being asked I state in keeping with the efforts of the Siva Group to infuse equity for financing pan India operations, the offer from SCB on behalf of Maxis was initially taken at its face value. I was always confident that if allowed to grow normally the telecom business would be a company worth US $10 billion is not a too distant future and I wanted to participate in that growth. Incidentally, the company was valued at US$ 8 billion in 2009. Thus, I always wanted to be having a controlling stake in my telecom business and negotiations with Maxis initially started on this note. However, when the negotiations proceeded further, the hidden agenda of Maxis started unfolding itself when Sh. Ralph Marshall and others on behalf of the Maxis started
CBI Vs. Dayanidhi Maran & others Page 342 of 424 insisting on 100% sale of Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd. to Maxis. On being asked I state that subsequent to the conference call, I went to Kuala Lumpur, Malaysia for a meeting with Sh. Ralph Marshall also of Sri Lankan origin and a Malaysian national on 04.11.2005. In the said meeting we discussed regarding the terms of Maxis’ investment. I also made a presentation to Shri Ralph Marshall at the meeting wherein I had mentioned very clearly to him about my intention to continue holding a significant stake in my telecom business. …...... ”
606. He further states at pages 16 and 17 as under: “...... On being asked I state that during the meeting with Sh. Ralph Marshall on 04.11.2005 in Kuala Lumpur, Malaysia, Sh. Ralph Marshall had arranged for Shri T. Ananda Krishnan to have a telephonic conversation with me. During the said telephone call, Shri T. Ananda Krishnan told me the following: That he (Shri T. Ananda Krishnan) had already spoken to the Maran brothers with regard to Maxis’ investment in my telecom business. That Sh. Dayanidhi Maran, the then MOC&IT, will provide all approvals including the pending approvals of Aircel Ltd., Aircel Cellular Ltd. and Dishnet DSL Ltd. and also the approval for Maxis’ proposed investment in my telecom business. That I can retain only 26% equity stake in my telecom business. On being asked I state that after the meeting with Shri Ralph Marshall in Kuala Lumpur, Malaysia and the telephone call with Sh. T. Ananda Krishnan, I returned to Chennai, after which the discussions/negotiations with Maxis continued through emails and telephone conversations.
CBI Vs. Dayanidhi Maran & others Page 343 of 424 …...... ”
607. He further states at pages 19 to 25 as under: “...... On being asked I state that an overall view of the email communications mentioned above leads only to one conclusion at all stages of negotiations, that Siva Group always wanted to retain at least 26% stake in the company (as per the new FDI norms which allowed only 74% share holding by a foreign partner in a telecom company). On being asked I state that the fact that I and Siva Group had in fact, become victims of a criminal conspiracy between Sh. Dayanidhi Maran, the then MOC&IT and his brother Sh. Kalanithi Maran on one hand and Sh. T. Ananda Krishnan and Sh. Ralph Marshal of the Maxis on the other hand, became clear when Maxis started showing confidence about getting all the stalled/freezed approvals of Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd. from the DOT and gave an undertaking to that effect. They have said so clearly in the correspondence referred to above. Hoping against hope, even at this stage, I felt that if the Maxis could get the freezed approvals through and if I could have the operations in the new circles launched in a normal way, my telecom business would be gaining in value very soon and I as an entrepreneur would also get benefitted in the process. This was the reason that I insisted to Maxis on retaining a stake in the business right till the very end of the discussions. However, that was not to be. On being asked I state that I was suddenly called for a meeting with Sh. Kalanithi Maran, promoter of Sun TV Group and the brother of Sh. Dayanidhi Maran, the then MOC&IT on 12.11.2005 at the Sun TV Group headquarters at Anna Arivalayam (which has also been the DMK party headquarters) in Chennai.
CBI Vs. Dayanidhi Maran & others Page 344 of 424 On being asked, I state that this meeting with Sh. Kalanithi Maran on 12.11.2005 was organized by Sh. Ralph Marshall. On being asked I state that on 12th November 2005, around 10:30am to 11:00am in the morning I instructed my chauffer, Sh. C.V. Venkatamuni to drive me from my residence situated at 78/81 Fir Haven Estate, R.A Puram, Santhome High Road, Chennai – 600 028, to the Sun TV Group headquarters at Anna Arivalayam building. On the way to Anna Arivalayam building, I briefly stopped at our office at Sterling Towers, Anna Salai, Chennai and informed Sh. V. Srinivasan that I was going to Sun TV Group headquarters at Anna Arivalayam to meet with Sh. Kalanithi Maran. On being asked I state that I subsequently arrived at the Sun TV Group headquarters at Anna Arivalayam building in my Toyota Camry car driven by my chauffer, C.V. Venkatamuni, between 11:00am and 11:30am. On being asked I state that upon arriving at Anna Arivalayam building, I got off my vehicle, and I was received by a person at the portico of Anna Arivalayam building who then escorted me to the meeting room located inside the Sun TV group’s office where I waited briefly to meet with Sh. Kalanithi Maran. On being asked, I state that during the meeting with Sh. Kalanithi Maran, he directed me to do the following with respect to the sale of my telecom business to Maxis: That Siva Group had to sell 100% equity in ATVL and that too to Maxis only. Further, that while Maxis would hold 74%, the remaining 26% equity will be held by an Indian Partner which would be arranged by Maxis. That I would shortly after the discussions with Sh Kalanithi Maran, receive a telephone call from Sh Kalanithi Maran’s brother, Sh Dayanidhi Maran, the then MOC&IT with the assurance that the deal for sale of Aircel Ltd., Aircel Cellular Ltd. and Dishnet
CBI Vs. Dayanidhi Maran & others Page 345 of 424 Wireless Ltd. to Maxis would be cleared/approved by the then MOC&IT, Sh Dayanidhi Maran. On being asked I state that, immediately after the meeting I went to our office at Sterling Towers, Anna Salai, Chennai, and shared with Sh. V. Srinivasan the above said directions given by Sh. Kalanithi Maran with respect to sale of my telecom business to Maxis. On being asked I state that, shortly after my visit to our office in Sterling Towers, Anna Salai, Chennai, according to the script written by the Maran brothers and Maxis, I did receive a phone call from Shri Dayanidhi Maran, the then MOC&IT himself on the same day on my mobile phone no.+91 98414 91000 in which call Shri Dayanidhi Maran, the then MOC&IT told me in no uncertain terms that I had no choice but to sell 100% stake in Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd. to Maxis as nothing else will meet with his approval. On being asked, I state that on the same day, i.e. 12.11.2005, in the evening around 4pm, I along with Sh. V. Srinivasan met with Sh. Ralph Marshall and Sh. Chan Chee Beng of Maxis at the 6th floor, Club Lounge of the Taj Coromandel Hotel, Nungambakkam High Road, in Chennai. During the said meeting, Sh. Ralph Marshall discussed various choices available to me about the sale of the company but all the choices had one thing in common, that I had to sell my 100% stake in Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd. Sh. Ralph Marshal also during conversation clearly stated that this was the desire of Shri Dayanidhi Maran, the then MOC&IT. Sh. Ralph Marshall also confirmed to Sh. V. Srinivasan and me the following: that the sale had to be for 100% equity stake in Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd. that Maxis will give me an upside payment for 26% stake linked to the increase in valuation of Aircel Ltd., Aircel Cellular Ltd and Dishnet Wireless
CBI Vs. Dayanidhi Maran & others Page 346 of 424 Ltd. through an IPO. It meant Siva Group will get 26% stake in the increase in the valuation after IPO without actually owning the 26% equity in the business. that Maxis will on their own identify an Indian partner to hold the 26% equity in the business. On being asked I state that, I agreed to the said offer of upside payment as I knew that I will not get the pending approvals from the MOC&IT if I did not accede to the said offer from Maxis.
On being asked I state that Sh. Ralph Marshall of M/s Maxis Communications sent me an email dated 16.11.2005, referring to the discussions in Chennai on 12.11.2005 and subsequent telephone conversations. Also, in this email Sh. Ralph Marshall gave me, four final offers (transaction structures) and asked me to choose from one of these offers. The significant features of the four options are as under: Offer A: o Siva Group to sell 74% stake to Maxis for US$ 520 million and retain balance 26% stake in Aircel Ltd, Aircel Cellular Ltd and Dishnet DSL Ltd. o Maxis to have a call option for 11.2% stake at US$ 200 Mn. o In case Aircel was not listed within 36 months, then between 37th and 48th month, Maxis can exercise Call Option for 14.8% stake at equity value based on 10 times EV / EBIDTA. o In case Aircel was not listed with 36 months, then between 37th and 48th month, SVL can exercise Put Option for 14.8% (upto 26% in case call option for 11.2% has not been exercised by Maxis) at equity value based on 10 times EV / EBIDTA. Offer B: o Under this offer, SVL was provided an offer to sell its 100% stake in Aircel for US$ 800 Mn plus an upside amount on 26% stake. o Upside amount payable to SVL will be calculated based on the increase in the valuation of
CBI Vs. Dayanidhi Maran & others Page 347 of 424 the company calculated on the market price of Aircel, 18 months after its listing in the stock exchange(IPO) Offer C: o Under this offer, SVL was provided an offer to sell its 100% stake in Aircel for US$ 900 Mn. Offer D: o Under this offer, SVL was provided an offer to sell its 100% stake in Aircel for US$ 800 Mn. In addition to cash of US$ 800 Mn, Maxis also offered to provide 15 Mn warrants (approx. 8 % stake of Aircel) that can be exercised by SVL prior to IPO at par value. On being asked I state that all the 4 options given by Sh. Ralph Marshall were for me to primarily sell 100% of my equity in my telecom business to Maxis. Further, in this email Sh. Ralph Marshall undertook that Maxis will obtain necessary approvals in India and Malaysia for the transaction. On being asked I state that I never wanted to sell 100% of the business. My vision/intention for Siva Group’s telecom business was always to do few private equity deals then follow it up with an IPO to get additional funds into the company in order to further expand the business into one of the leading telecom operator with pan India operations. I always believed that the business had tremendous growth potential and expected the valuation of the business to be about US$ 10 billion by 2008. Being the founder and mentor of the business, I always wanted to ride this growth and benefit from the increased valuations, by having majority stake in the company at all times. It is only on account of the strangulation by Sh. Dayanidhi Maran, the then MOC&IT, by holding all the approvals of Aircel Ltd, Aircel Cellular Ltd. and Dishnet Wireless Ltd and the coercion by the Maran brothers to sell 100% of the business, that I got frustrated and was left with no choice but to do the deal with Maxis. On being asked I state that as the Maran brothers had very clearly communicated to me that I had to
CBI Vs. Dayanidhi Maran & others Page 348 of 424 sell 100% equity held by me to Maxis and only then approvals will be given by Sh. Dayanidhi Maran, the then MOC&IT and as Sh. Ralph Marshall had told me that he would work out a way through which I would at least get 26% upside payment in lieu of even the 26% equity I was not allowed to retain, I had no other option but to choose Offer B. Besides, out of the 4 options given, Offer – B as per which Siva Group would sell 100% stake in Aircel Ltd, Aircel Cellular Ltd and Dishnet Wireless Ltd. to Maxis for US$ 800 million plus upside payment on 26% stake to Siva Group, would fetch me the maximum value under the forced circumstances. On being asked I state that my underlined thought in this decision was also the same confidence that given the proper conditions to grow, Aircel Ltd, Aircel Cellular Ltd and Dishnet Wireless Ltd. would gain its true well deserved value of around US$ 10 billion and I would be able to make up atleast some part of the huge loss that I had incurred by the sale of my telecom business under coercion to Maxis. On being asked I state that in an ideal situation as in the case of a normal business negotiation, I would have not agreed to any of the 4 final offers given by Maxis. But, I was pushed to a situation where I had no other choice but to choose Offer - B. The other offers given by Sh. Ralph Marshall would have anyway not given me an opportunity to get better value due to the following reasons: Offer A: o While Siva Group was provided an option to retain 26% in Aircel, the following were the disadvantages in the offer: . There was a risk of Maxis not exercising Call Option for 11.2% for US$ 200 million . Moreover, for the balance of 14.8%, call option was to be exercised at an equity value based on 10 times EV / EBIDTA. . In the event Siva Group had exercised Put option, it was also based on equity value at 10 times EV / EBIDTA
CBI Vs. Dayanidhi Maran & others Page 349 of 424 o Hence, the Offer A and Offer B was similar offers except that Maxis had the option to exercise Call Option for 11.2% at US$ 200 million. o There was also a risk of exit being offered to Siva Group’s stake. Offer C o Siva Group always believed that it made commercial sense to retain interest in 26%. It is justified by the fact that under Offer A, Maxis had offered call option for 11.2% stake for US$ 200 million. Offer D o While amount received was similar between Offer B and Offer D (i.e. US$ 800 million) at the time of sale of 100%, under Offer B, Siva Group had an option to realize value for 26% stake in Aircel, while under Offer D, it was for approx. 8% stake. Hence, it was prudent that Siva Group had decided not to accept Offer D. On being asked I state that after having taken the decision under the forced circumstances to adopt Offer – B as the preferred offer, I communicated my preferred choice to Sh. Ralph Marshall of Maxis and Sh. Prahlad Shantigram of SCB telephonically. …...... ”
608. He further states on page 25 as under: “...... On being asked I state that, the agreement for sale of 100% equity of ATVL in Aircel Ltd, Aircel Cellular Ltd and Dishnet DSL Ltd., was signed with Maxis on 22.12.2005 in Kuala Lumpur, Malaysia. The agreement came to be effective from 30.12.2005. Sh. V. Srinivasan signed the said agreement on behalf of ATVL and Mr. Ralph Marshall signed on behalf of Maxis. …...... ”
CBI Vs. Dayanidhi Maran & others Page 350 of 424 609. He further states at pages 28 and 29 as under: “...... On being asked I state that the key element to this conspiracy by which I was forced to sell my telecom business to Maxis at a grossly lower value concerns the interest of Shri Dayanidhi Maran, the then MOC&IT and his brother, Sh. Kalanithi Maran, promoter of Sun TV Group. The motive behind the interest the Maran brothers had personally taken for the benefit of Maxis at both my cost and the cost of Government of India became clear when Maxis was allotted the long pending licenses in 14 circles in December 2006 and right after that on 05.04.2007, an agreement was signed between Astro All Asia Networks Plc., a company belonging to the Maxis group and Sun Direct TV Private Limited, a company promoted by the Maran family, according to which Maxis/Astro had agreed to pass on Rs. 600 crores to Sun Direct in the form of Astro purchasing shares at a highly inflated value of Rs. 79.57 per share in Sun Direct whereas the Maran’s had acquired the same shares at par value of Rs. 10 per share. As has become very apparent now, this was a payback/quid-pro-quo by Maxis to Shri Dayanidhi Maran, the then MOC&IT and his family for the favors done to them by Shri Dayanidhi Maran by misusing his office and position as the then MOC&IT and his brother Sh. Kalanithi Maran, by coercing me to sell my telecom business to Maxis at a low value. This huge payoff by Maxis to Maran’s was the bedrock on which the conspiracy involving forced sale of my telecom business to Maxis was resting. On being asked I summarize as under: 1. I never intended to exit my telecom business completely. 2. I tried to dilute stake only to the extent of 20% – 22% to private equity players in order to raise the funds.
CBI Vs. Dayanidhi Maran & others Page 351 of 424 3. I also tried to sell Chennai and RoTN licenses to ADIL in order to meet the rollout expenses for other existing and prospective licenses. 4. I was coerced to sell my telecom business to M/s Maxis only by Sh. Dayanidhi Maran and his brother Sh. Kalanithi Maran. 5. I intended to retain at least 26% stake in my telecom business which was also denied by Sh. Dayanidhi Maran and his brother Sh. Kalanithi Maran. 6. The regulatory approvals in respect of my telecom business was not granted by Sh. Dayanidhi Maran, the then MOC&IT. It did not allow my company to grow which resulted into under valuation of my telecom business at the time of its forced sale to Maxis.”
610. He made a further statement on 04.09.2013, running into five pages, in which he has almost repeated the above assertions/ allegations. 611. If the above statements are read carefully in the light of material on record, it would become clear that either most of the statement is contrary to the record or bragging by the buyer about his links with the Minister and tough negotiations on his part (buyer) for purchase of entire business are being dubbed as indicators of conspiracy and pressure tactics to sell the entire business. It is more so as the negotiation continued for about three months and that too in writing through e-mails and thereafter, only the share subscription agreement and share purchase agreement, both dated 30.12.2005, were executed. The statement of Sh. C. Sivasankaran, as already noted, is either contrary to record or is based on suspicion. Why? He infers conspiracy because the
CBI Vs. Dayanidhi Maran & others Page 352 of 424 buyer showed confidence that he would get the needed approvals. Why would a buyer buy a business unless he is reasonably sure of its future course of action. Hence, the confidence of the buyer cannot be termed as an indicator of conspiracy. Moreover, as long as the Siva group was promoter of the three companies, that is, Aircel Limited, Aircel Cellular Limited and Dishnet DSL Limited, there were several allegations against these companies as already noted in detail. Once the management changed, most of them would no longer survive and this may be the reason for the confidence of the buyer. He himself says in his statement that he knew that he will not get the pending approvals. Perhaps he was right because his financial capacity was suspect from the day one and there were several other allegations against his company. He further alleges that it was strangulation of Sh. Dayanidhi Maran which led him to sell 100% of his business. The record as discussed above in detail does not support this view. It were his own mistakes and deficiencies which led to the situation, which he complains about. 612. I have no hesitation in recording that his statement is based on speculations, surmises and conjectures and is totally contrary to the record, as discussed in detail above. 613. It is also interesting to take note of the statement of PW 121 Sh. Krishan Kumar Bhojane, who is a qualified Company Secretary, and was Company Secretary to M/s Dishnet DSL Limited. He states in statement dated 25.10.2013, pages 1 and 2, as under: “......
CBI Vs. Dayanidhi Maran & others Page 353 of 424 ...... Now I have been shown original board meeting minutes of M/s Dishnet Wireless Ltd. for the period from 04.03.2004 to 02.11.2007 and also register of directors of M/s Dishnet Wireless Ltd. After verification of the original minutes of the board meeting held on 06.01.2006 and 21.03.2006 and the entries in the register of directors, I state that in the board minutes dated 06.01.2006, the board informed that the management team successfully inked a historic deal with M/s Maxis Communications Bhd. of Malaysia on 30.12.2005. Pursuant to the arrangement, Maxis and its Indian Joint Venture Company (JVC) would acquire a 100% interest in Aircel Ltd. (Aircel). Maxis and JVC would jointly invest UDS 1.08 billion (RM 4.104 billion) to purchase the 100% stake of which USD 280 million (RM 1.064 billion) would be injected into the company as cash. This implied a pre-money equity valuation of USD 800 million (RM 3.040 billion) for Aircel. On completion of the proposed acquisition, Maxis would hold a 65% equity stake in Aircel directly while the JVC would hold the remaining 35%. The JVC would be an Indian company jointly owned by Maxis and its Indian partner in a ratio that would give Maxis an overall equity interest in Aircel of 74%, the maximum foreign ownership permitted. Maxis’ Indian partner in the JVC would be the Chennai based Reddy family. The transaction would be executed in two independent stages; the first, a subscription for new equity shares (26% of the expanded capital) and the second, the purchase of all of the existing equity shares held by Aircel Televentures Limited (ATVL). The second transaction would be subject to shareholders’ and Malaysian as well as Indian regulatory approvals. The board took note of the developments. It also overwhelmingly congratulated Mr. V. Srinivasan, CEO for acting as a catalyst in the process and ensuring the completion of the deal
CBI Vs. Dayanidhi Maran & others Page 354 of 424 with extraordinary initiative and energy. The Board noted that the deal had been completed without the involvement of a Merchant Banker in the process, thus reducing the costs involved. The Board also recorded its specific appreciation of the efforts taken by Mr. R. Narayankumar, GM-Strategy, Mr. T.L. Guruvijendran, CFO, Mr. T. Sivakumar, GM and Company Secretary and their team members in ably assisting Mr. V. Srinivasan, CEO in the process. …...... ”
614. It is further interesting to take note of statement of PW 62 Sh. A. Subramanian, a qualified Chartered Accountant, who was Director (Finance) to the Siva group of companies. He states in his statement dated 07.12.2012, page 5, as under: “...... In the board meeting dated 06.01.2006, I attended the meeting as Director and Dr. Vijay P. Bhatkar, Chaired the meeting, who was pleased to report that the management successfully inked a historic deal on 30/12/2005 with Maxis of Malaysia. Pursuant to that arrangement, Maxis and its Indian Joint Venture Company (JVC) would acquire a 100% interest in Aircel Ltd. Maxis and the JVC would jointly invest US$ 1.08 billion to purchase the 100% stake of which US$ 280 million would be injected into Aircel Ltd. as cash. This implied a pre money equity valuation of US$ 800 million for Aircel Ltd. The board took note of the developments and also overwhelmingly congratulated Sh. V. Srinivasan, CEO for acting as a catalyst in the process and ensuring the completion of the deal with extraordinary initiative and energy. The board also noted that the deal had been completed without the involvement of the merchant banker in the process thus, reducing the cost involved. The board also recorded its specific appreciation of the efforts
CBI Vs. Dayanidhi Maran & others Page 355 of 424 taken by Sh. R. Narayankumar, GM-Strategy, Sh. T.L. Guruvijendran, CFO, Sh. T. Sivakumar, GM and Company Secretary and their team Members in ably assisting Sh. V. Srinivasan, CEO in the process. …...... ”
615. How can one ignore this written record. That is why the oral narrations of Sh. C. Sivasankaran are contrary to record. Furthermore, it is interesting to take note of statements of Sh. Prahalad Shantigram, PW 32, and Sh. Rahul Goswamy, PW 37, in which they have described the entire process, which lasted for about three months, followed by written agreements dated 30.12.2005. In the face of such written record and long negotiations, the oral suspicions do not constitute a ground to suspect the deal as the one negotiated under pressure, more so, when the board of the company is congratulating the negotiators. 616. In brief, there is no ground to presume that the business environment of Siva group was constricted or choked enough as to pressurize them into selling its companies to Maxis and that the subsequent sale was the result of pressure from any quarter including the Minister or Ralph Marshall. This allegation is based entirely on the oral statement of Sh. C. Sivasankaran, as has been deliberately extracted in detail above to make things clear and understandable. Once the statement of Sh. C. Sivasankaran is found to be imaginary and contrary to record, nothing survives under this head.
C. Issues relating to smooth approvals
CBI Vs. Dayanidhi Maran & others Page 356 of 424 617. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP for CBI, that after sale of the three companies, that is, Aircel Limited, Aircel Cellular Limited and Dishnet DSL Limited, to Maxis group, there was change in the attitude and behaviour of Sh. Dayanidhi Maran and Dr. J. S. Sarma relating to the issues of three companies. It is further submitted that as long as the companies remained with Siva group, the two conspirators were putting every hurdle in their cases relating to new licences and other regulatory approvals. However, once the management passed over to the Maxis group, the two conspirators became very active and every approval was granted not only smoothly but very quickly. It is repeatedly submitted by him that this is an indicator of conspiracy between Sh. Dayanidhi Maran, Dr. J. S. Sarma and other accused relating to Maxis group. My attention has been invited to the notings in the various files as well as statements of witnesses in great detail. 618. On the other hand, it is submitted by learned Sr. Advocates for the defence that once the management passed over to the Maxis group, the shortcomings and deficiencies from which the three companies were suffering were no longer there and approval became very easy. It is further submitted that even otherwise there is no instance of any hurried or hasty approval post transfer to Maxis. It is repeatedly submitted that whatever Sh. Dayanidhi Maran or Dr. J. S. Sarma did was done by them in the regular course of official business without any favour to anyone. My attention has been invited to the various notings as well as statements of witnesses to emphasize their
CBI Vs. Dayanidhi Maran & others Page 357 of 424 point of view. 619. Let me take note of each circumstance.
(i) De-linking of show cause notices (D-43) 620. It is the case of Sh. Anand Grover, learned Spl. PP, that as long the three companies were with Siva group, Sh. Dayanidhi Maran linked various violations by the companies to the issue of new licences, thus, stalling the issue of new licences. It is submitted that this was a deliberate attempt. It is further submitted that once the management of the three companies passed to Maxis group, he immediately ordered de- linking of the two issues. It is repeatedly submitted that thereafter, Sh. Dayanidhi Maran and Dr. J. S. Sarma became very active and this indicates that both were in conspiracy with the Maxis group. 621. This has been refuted by the learned defence counsel submitting that the issue of de-linking was processed in the ordinary course of business by the official of the department in which Sh. Dayanidhi Maran or Dr. J. S. Sarma had no role. It is repeatedly submitted that even otherwise Sh. Dayanidhi Maran was not hyper-active at all, as alleged, but he sat on this file also for close to four months from 26.01.2006 to 16.05.2006, when the approval was finally granted. It is repeatedly submitted that where is the active/ smooth behaviour of Sh. Dayanidhi Maran. It is repeatedly submitted that he was at his natural self as he always was and there was no change in his attitude or behaviour. 622. Let me take note of the details as they exist in the
CBI Vs. Dayanidhi Maran & others Page 358 of 424 file to find out the reality of the issue. 623. This issue has been dealt with in file D-43. The first note sheet was recorded by Sh. R. K. Gupta on 27.12.2005 at 1/N to the following effect: “As directed the summary of the cases pending for issue of Licences are as below.
1. The cases M/s Dishnet DSL Limited were forwarded to AS(T) by PS to Hon'ble MOC&IT in last year. The opinion of the AS(T) is Placed at 1/c. As directed by the then Secretary (T), the comments of Additional Secretary (T) was submitted to LA for Legal opinion on this matter.
2. The opinion of LA is placed at 2/c. Salient points of LA opinion are as below:
In Para 2. Moreover the DOT withdrew of its own letter of imposition of penalty so M/s. Dishnet DSL Ltd. cannot be faulted on this count and denial of LOIs/License will not withstand legal scrutiny till the company is not blacklisted for already committed major malpractices in accordance with administrative instruction, if any, after holding a full fledged enquiry and affording fair opportunity of hearing.
In Para 3. Hence no objection to indirect foreign investment to whatsoever level can be taken especially where DOT does not know the contrary facts about non-existence of management in Indian hands.
In Para 4. Any objection to this equity patten or of cross holding various companies can not be taken by DOT. This for the Business World to manage and not an unusual happening to have cross holdings.
In Para 5. With regard to complicated nature
CBI Vs. Dayanidhi Maran & others Page 359 of 424 of equity holding, no objection can be taken by Licensor because such adverse notice is not provided in the licence agreement.
3. The last noting of Secretary (Telecom) in the month of March, 2005 is that “the files are returned with the direction that the division should ascertain all the Show Cause Notices/ Advisory Letters issued to the above company or companies belonging to the Group and the nature of default before any view is taken”.
4. The cases pending for issuance of the Licences are summarized and summary is placed at 3/c.
5. The file is submitted for further orders please.”
624. The note does not mention as to who directed the note to be recorded. 625. The file was marked upward and DDG (BS) Sh. P. K. Mittal recorded on the same date that the case was discussed with ADG (BS-III) and asked for a detailed self-contained note. 626. Thereafter, again a detailed self-contained note was put up by Sh. R. K. Gupta on 28.12.2005 at N/2 to N/5, which incidentally again begins with the words: “Subject: Pending cases for issue of licences As directed, the summary of the cases pending for issue of licences are as below: …...... 7. ”
627. It can be taken that this note was recorded as per the directions of Sh. P. K. Mittal, as contained in his note dated
CBI Vs. Dayanidhi Maran & others Page 360 of 424 27.12.2005. 628. He marked the file to DDG (BS) Sh. P. K. Mittal, who again recorded a detailed note on 30.12.2005, suggesting de-linking and many other things. In due course the file reached Secretary (T), who asked for a discussion on 05.01.2006. Thereafter, the file was marked downward. 629. Again on 19.01.2006, Sh. P. K. Mittal recorded a detailed note at 7/N and 8/N suggesting de-linking of various issues to the following effect: “Sub:Policy regarding grant of licence- issue regarding show cause notices and advisories.
The details of various applications pending in BS Group as on 31.12.2005 and the reasons there upon is placed at p.3/c.
2. It was opined in case of M/s Dishnet DSL Ltd. that “before granting of UASL licence to M/s Dishnet DSL Ltd., we may await the decision of TDSAT on the issue of vigilance cases and penalties imposed by DoT on this company.”
3. It was also desired to ascertain all the show causes notices/ advisory letters issued to the above company or companies belong to the group and the nature of default before any view is taken.
3.1 Accordingly, the practice along with observations indicated in para 2 above was followed without discrimination for other companies.
3.2 On the observation in para 2, Legal Advisor has opined that, “in this regard it may be stated that there is no pending litigation as on today. Moreover, the DoT withdrew of it's own letter of imposition of penalty so M/s Dishnet DSL Ltd. cannot be faulted
CBI Vs. Dayanidhi Maran & others Page 361 of 424 on this count and denial of LOIs/ Licence will not withstand legal scrutiny till the company is not blacklisted for already committed major malpractices in accordance with administrative instructions, if any, after holding a full fledged enquiry and affording fair opportunity of hearing.”
4. The matter was discussed in a meeting chaired by Secretary (T) and attended by Member (F), Member (P), Advisor (P), Sr. DDG (LF) and DDG (BS) on 13.1.2006. It was felt that as opined by the Legal Advisor, denial of LOIs/ licences will not withstand legal scrutiny till the company is black listed for already committed major malpractices in accordance with administrative instructions, if any, after holding a full fledged enquiry and affording a fair opportunity of hearing.
4.1 Further, it was felt that if for any major malpractices any action has be taken then action can be taken for that particular licence. For violation of a particular licence, it may not be legally tenable to terminate or suspend various other licences of the same company or group of companies.
4.2 Processing of responses to various explanations/ show cause notices is a continuous process.
5. Keeping in view the above, it was felt that processing of application for grant of new licences should be de-linked from show cause notices or explanation call for or any other advisory issued to that company or any other sister/ group company is respect of any other licence.
Submitted for kind consideration and approval please.”
630. In due course the file reached the various officials, including Secretary (T), who agreed to the note of Sh. P. K.
CBI Vs. Dayanidhi Maran & others Page 362 of 424 Mittal on 26.01.2006 and marked the file to the Minister. 631. The Minister finally approved the note on 16.05.2006. In due course, the file reached Sh. P. K. Mittal on 17.05.2006, who marked it to ADG (BS-III) on the same day. Thereafter, there is no movement in the file. 632. It is interesting to note as to what Sh. R. K. Gupta, who has been examined as PW 7, says on this point. His statement is as under: “...... N ow I have been shown one original file no. 20- 231/2005/BS-III/ Volume –II (MR-II, Memo 47, Serial No.4 in PE 1/2011) and state that Shri Govind Singhal, the then Director(BS-III) directed me to put up a summary of the cases pending for issue of UAS Licenses. Accordingly, I put up a note on 27.12.2005 in the above referred file. I had referred to the salient points of the opinion of Shri O.P. Nahar, Legal Advisor and the last noting dated 30.03.2005 of Shri Nripendra Misra, the then Secretary (T). I had placed the details of the cases pending for issuance of licenses at 3/C of the said file. I marked the file to Shri Govind Singhal, the then Dircector (BS-III) for further orders who in turn marked the file to Shir P.K. Mittal, the then DDG(BS) on 27.12.2005 itself. Shri P.K Mittal discuss the matter with me and instructed to prepare a detailed self contained note. I accordingly put up note dated 28.12.2005 at 2-4/N detailing the cases pending for issue for licenses. On being asked I state that at that time applications of M/s Dishnet DSL Ltd. for grant of UAS licenses in UP (E), UP (W), Punjab, Haryana, Kerala, and Kolkata Service Areas were pending. Besides, case of M/s Dishnet DSL Limited for extension for LOI for grant of UAS licenses in Madhya Pradesh Service Area was also pending. I have also mentioned the reasons for pendency. At that time, Licensing Regulation (LR) Wing of DoT had intimated that the
CBI Vs. Dayanidhi Maran & others Page 363 of 424 following show cause notices were under process in respect of sister concerns of M/s Dishnet DSL Limited.:- 1. Show Cause Notice for imposing penalty amounting Rs. 2,36,88,522/- and submitting additional bank guarantee of Rs. 3.20 crore because of grey market activities by its subscribers. Final order under issue after according personal hearing before Member (P). 2. Show cause notice for termination of license for violation of clause 10 regarding Transfer of License is under issue. Approval of MOC received on 28th March 2005. 3. 6 nos. of new cases have been reported for involvement of its subscribers in grey market recently (on 10th March, 2005). The cases are being processed.
I marked the file to Shri Govind Singhal, the then Dircector (BS-III) on 28.12.2005 for further orders who in turn marked the file to Shir P.K. Mittal, the then DDG(BS) on 28.12.2005 itself. Shri P.K Mittal, DDG(BS) put up the file to Adviser(P) vide 5-6/N on 30.12.2005. He had stated the following vide para 5 at 5/N:- ‘The various licensees have been issued Show Cause Notices and their response are processes. It is a continuous process as complaints keeps on coming and the show cause notices issues. Keeping in view the legal advise, a view may have to be taken whether further processing of these applications for grant of license for any breach or violation of that licensee or associate/sister concern is to be delinked as that breach or violation is to be dealt with according to the terms and conditions of that particular license. Further, if any penalty is imposed and realized that violation/breach get liquidated’.
Shri R.N. Prabhakar, the then Adviser (P) signed the notesheet on 03.01.2006 and send the file to Member(P)/ Member(F) who also signed the
CBI Vs. Dayanidhi Maran & others Page 364 of 424 notesheet on 05.01.2006 and send the file to Shri J.S. Sarma, the then Secretary (T). Dr. J.S. Sarma, the then Secretary (T) sent back the file on 05.01.2006 to Member (P)/Adviser(P)/DDG(BS) with a direction to discuss the matter. Shri P.K. Mittal put up another note dated 19.01.2006 vide 7-8/N. He had stated the following vide para 5 at 8/N:- ‘Keeping in view the above, it was felt that processing of application for grant of new license should be de-linked from show cause notices or explanation call for or any other advisory issued to that company or any other sister /group company in respect of any other license.’ Senior DDG(LF) signed the said notesheet on 19.01.2006, Adviser(P) & Member(P) signed the said notesheet on 20.01.2006, Member(F) signed the said notesheet on 23.01.2006 and Secretary(T) signed the said notesheet on 26.01.2006 and sent the file to the then MoC&IT. The then MoC&IT approved the above note on 16.05.2006.
633. Thus, Sh. R. K. Gupta states that he initiated the note on the asking of Sh. Govind Singhal. 634. PW 15 Sh. Govind Singhal, the then Director (BS- III), to whom Sh. R. K. Gupta marked the file, states in his statement dated 03.09.2013, at page 6, as under: “...... Now I have been shown one original file of DoT bearing No. 20-231/2005/BS-III/Vol.II and state that Sh. R. K. Gupta, ADG (BS-III) had put up a summary of the cases pending for issue of UASL and marked the file to me on 27.12.2005. Then it was marked to DDG (BS). DDG (BS) desired to submit the detailed Self Contained Note. Sh. R. K. Gupta, ADG (BS-III) submitted the detailed note from notesheet No. N/2 to N/4 dated 28.12.2005. DDG
CBI Vs. Dayanidhi Maran & others Page 365 of 424 (BS) processed the case on 19.01.2006 for delinking the issue of show cause notices or explanation called for or any other advisory issued to the company or any other sister/ group company from granting the new licences. Sh. P. K. Mittal, DDG (BS) in his proposal dated 19.01.2006 has referred to the legal opinion dated 11.01.2005 of Sh. O. P. Nahar, LA. Sh. P. K. Mittal has also mentioned that the matter was discussed in a meeting chaired by Secretary (T) and attended by Member (F), Member (P), Advisor (P), Sr. DDG (LF) and DDG (BS) on 13.01.2006. In the said meeting, it was felt that as opined by the Legal Advisor, denial of LOIs/ Licences will not withstand legal scrutiny till the company is black listed for already committed major malpractices in accordance with the administrative instruction, if any, after holding a full fledged enquiry and affording a fair opportunity of hearing. The proposal was concurred by Sr. DDG (LF), Advisor (P) & Member (P) and Member (F). Dr. J. S. Sarma, the then Secretary (T) also concurred with the proposal and sent the file to MoC&IT on 27.01.2006. And approval was granted by the then MoC&IT on 16.05.2006.
From the above, it is evident that the legal input was already available on 11.01.2005 and the linking of issuance of UASL with show cause notices/advisory letters issued to the applicant company or group of companies, which was conveyed by Sh. Nripendra Misra, the then Secretary(T) on 30.03.2005, appears to be reason of delay in issuance of LOI to M/s Dishnet DSL Ltd. in 7 telecom service areas including extension of LOI in Madhya Pradesh area. …...... ”
635. Sh. Govind Singhal does not say that he had asked Sh. R. K. Gupta to put up the note. He states that Sh. R. K. Gupta had put up the summary of cases pending for issue of
CBI Vs. Dayanidhi Maran & others Page 366 of 424 UASL and marked the file to him (Govind Singal) on 27.12.2005 and he, in turn, marked the file to DDG (BS). 636. It is also relevant to quote PW 8 Sh. P. K. Mittal from his statement dated 30.05.2012, pages 2 and 3, which is as under: “...... On being asked I state that in the month of December, 2005 it was desired by Secretary to submit a note for consideration for taking a view for delinking the violations for grant of new licenses. Accordingly, a note was submitted in a separate file No. 20-231/2005/BSIII/Vol-II on 27.12.2005 by Sh. R. K. Gupta, the then ADG (BS III). The note was further approved on 28.12.2005 by him and on 30.12.2005 by me before submitting to Advisor (P) & Member (P) Sh. R. N. Prabhakar. Sh. R. N. Prabhakar submitted the file to Dr. J. S. Sarma, the then Secretary (T) through Member (F), Secretary (T) desired to have discussion. The matter was discussed in a meeting chaired by Secretary (T) and attended by Sh. A. K. Sahawney the then Member (F), Sh. R. N. Prabhakar, the then Member (P) and Advisor (P), Smt. Sadhna Dixit, the then Sr. DDG (LF) and myself on 13.01.2006. It was felt that as opined by the Legal Advisor, denial of LOIs/ licenses will not withstand legal scrutiny till the company is blacklisted for already committed major malpractices in accordance with administrative instructions, if any, after holding a full fledged enquiry and affording fair opportunity of hearing. It was also felt that if for any major malpractices any action has to be taken, then action can be taken for that particular license. For violation of any particular license, it may not be legally tenable to terminate or suspend various other licenses of the same company or group of companies. Processing of responses to various explanations/ show cause notices is a continuous process.
CBI Vs. Dayanidhi Maran & others Page 367 of 424 Therefore, it was felt that processing of applications for grant of new licenses should be delinked from show cause notices or explanation call for or any other advisory issue to that company or any other sister or group company in respect of any other license. The aforesaid recommendation was submitted to the then MoC&IT Sh. Dayanidhi Maran on 26.01.2006 and was approved on 16.05.2006 by him.”
637. In the statement dated 01.12.2011, page 9, he further states that: “I would like to add here that as per oral directions of Dr. J. S. Sarma, the then Secretary DOT, a proposal for delinking Show Cause Notices from the processing of applications of grant of new License was initiated on 27.12.2005 by Sh. R. K. Gupta, ADG (BS-III). In fact, Dr. J. S. Sarma, the then Secretary (T) had orally directed me to put up a proposal for delinking show cause notices. Hence, I conveyed the directions to Sh. Govind Singhal, the then Director (BS-III). Accordingly, Sh. R. K. Gupta, ADG (BS-III) prepared a self contained note on the note-sheet itself explaining different pending applications of different companies and reasons of pendency, the legal opinion suggesting that linking of licences with Show Cause Notices will not withstand legal scrutiny. I also summarized the status and issues and marked the file to Sh. R. N. Prabhakar the then Advisor (P) and Member (P) on 30.12.2005 who in turn marked the same to Shri A. K. Sawhney, Member (F) on 03.01.2006 who further marked the same to Dr. J. S. Sarma, Secretary (T) on 05.01.2006. Secretary (T) directed to have a discussion which took place on 13.01.2006 which was chaired by Secretary, DOT and attended by me, Sh. A. K. Sawhney, the then Member (Finance), Sh. R. N. Prabhkar, the then Member (P) as well as Advisor (P) and Mrs. Sadhna Dixit, the then Sr. DDG (Licensing Finance). It was felt that
CBI Vs. Dayanidhi Maran & others Page 368 of 424 processing of application for grant of new licences should be delinked from show cause notices or explanation call for or any other advisory issued to that company or any other sister/ Group company in respect of any other licence. Accordingly, I put up a note on 19.01.2006. Thereafter, the said note was seen and signed by Ms. Sadhna Dixit, Sr. DDG (LF), Sh. R N. Prabhakar, Advisor (P) and Member (P), Sh. A.K. Sawhney, Member (F) and Dr. J. S. Sarma, Secretary (T). The said file containing the proposal for delinking was sent to the then MoC & IT on 27.01.2006. It remained pending till 16.05.2006 when Shri Dayanidhi Maran the then MoC & IT approved the proposal for delinking the process of UASL from the Show Cause Notices.”
638. Furthermore, in his statement dated 08.10.2012, pages 3 and 4, Sh. P. K. Mittal states regarding de-linking as under: “...... Today I have been shown one original file No.10- 21/05-BS-I (Vol.II) (MR-II, Memo-143, Sl. No.2 (i)) wherein guidelines for grant of UASL were approved by Sh. Dayanidhi Maran, the then MoC&IT on 13.12.2005 at 3/N. The said guidelines were issued on 14.12.2005, a copy of which is available at serial No.427 in KW folder of said file (MR-II, Memo-143, Sl. No.2 (ii)). The said guideline also does not provide for linking of any show cause notice or advisory issued to the applicant company or its sister concern or its associates from the process of granting any further UASL in other services areas or processing any request such as change of name of that company. Prior to approval of the said guidelines on 13.12.2005 by Sh. Dayanidhi Maran, the then MoC&IT, the UASL applications were being processed as per the guidelines approved by Sh. Arun Shourie, the then MoC&IT and issued on 11.11.2003. This guideline also does not link any
CBI Vs. Dayanidhi Maran & others Page 369 of 424 show cause notice or advisory issued to the applicant company or its sister concern or its associates from the process of granting any further UASL in other services areas or processing any request such as change of name of that company.”
639. The perusal of the note sheet dated 27.12.2005 does not reveal as to on whose direction this note was recorded by Sh. R. K. Gupta, but in oral statement, he states that he recorded it on the direction of Sh. Govind Singhal, but Sh. Govind Singhal is silent on this point and states that Sh. R. K. Gupta had put up the note. Sh. P. K. Mittal in his statement dated 01.12.2011 states that Dr. J. S. Sarma orally directed him to put up a proposal for de-linking, show cause notices from the processing of applications of grant of new UAS licence. He further states that he conveyed the directions to Sh. Govind Singal, but as already noted Sh. Govind Singhal is silent on this point. 640. Sh. P. K. Mittal states that Dr. J. S. Sarma had orally directed him to do so, but in the file there is no such mention. In the oral statement he put the blame on Dr. J. S. Sarma, but his written note is contrary to this, particularly paras 4 and 4.1 of his note dated 19.01.2006, which for ready reference read as under: “4. The matter was discussed in a meeting chaired by Secretary (T) and attended by Member (F), Member (P), Advisor (P), Sr. DDG (LF) and DDG (BS) on 13.1.2006. It was felt that as opined by the Legal Advisor, denial of LOIs/ licences will not withstand legal scrutiny till the company is black listed for already committed major malpractices in accordance with administrative instructions, if any,
CBI Vs. Dayanidhi Maran & others Page 370 of 424 after holding a full fledged enquiry and affording a fair opportunity of hearing.
4.1 Further, it was felt that if for any major malpractices any action has be taken then action can be taken for that particular licence. For violation of a particular licence, it may not be legally tenable to terminate or suspend various other licences of the same company or group of companies.”
641. The written record shows that it was a collective decision, but in his oral statements Sh. P. K. Mittal puts the blame on the Secretary alone. This stance of the witness is contrary to the written record and is violation of official procedure and guidelines as noted above. 642. Furthermore, the file was marked to the Minister by the Secretary (T) on 26.01.2006, but he approved the same on 16.05.2006. Thus, he sat on the file for close to four months. There is no eagerness or hurry exhibited by the Minister here. 643. Furthermore, the processing of file does not reveal having any ministerial interference. 644. I may note that it may set dangerous precedent to prosecute public servants on the basis of oral statements which are contradictory to the official record maintained in the ordinary course of government business. The de-linking is at the core of the charge sheet as the case of the prosecution is that this was done by the Minister to help Maxis, but the file does not reveal any such thing. The file appears in its entirety to be the doing of Sh. P. K. Mittal, but when questioned he cast the blame on the Secretary by making oral statement which is contrary to the official record and procedure.
CBI Vs. Dayanidhi Maran & others Page 371 of 424 645. The case of the prosecution is that the regulatory approvals of Siva group of companies, that is, Aircel Limited, Aircel Cellular Limited and Dishnet DSL Limited, were being delayed deliberately by Sh. Dayanidhi Maran and Dr. J. S. Sarma, who were in conspiracy with each other, in order to force its exit from telecom sector. It is further their case that this regulatory delay forced the exit of the aforesaid companies as the same were sold by Sh. C. Sivasankaran to the Maxis group vide agreement dated 30.12.2005. It is further their case that subsequent to the transfer of the companies to Maxis group, Sh. Dayanidhi Maran became very active and he de- linked his earlier objections from the grant of new licences/ approvals to these companies. 646. However, as noted above, file D-43, which deals with de-linking, does not reveal that the file was initiated at the initiative of Dr. J. S. Sarma. It may be noted that there is no material on the file to indicate that the file was initiated on the initiative of Sh. Dayanidhi Maran. However, Sh. P. K. Mittal has stated in his oral statement that he has done so at the instance of Dr. J. S. Sarma and he directed Sh. Govind Singhal to put up the note, but Sh. Govind Singhal does not say so. Thus, there is a contradiction amongst the three witnesses about the initiation of the file. Needless to add, at the cost of repetition, that the oral statement of Sh. P. K. Mittal is contrary to the file. The file has the footprints of Sh. P. K. Mittal at every stage of the case, but whenever he is questioned, he, by making oral statement, cast the blame on others. The file appears to be the doing of Sh. P. K. Mittal in its entirety. In this file, three officials, namely,
CBI Vs. Dayanidhi Maran & others Page 372 of 424 Sh. R. K. Gupta, Sh. Govind Singhal and Sh. P. K. Mittal, were mainly involved at the processing stage, while at the final stage Member (P), Secretary (T) and the Minister were involved. The file itself does not indicate much role of anyone except that of Sh. R. K. Gupta, who initiated the file and Sh. P. K. Mittal, who recorded the two crucial notes dated 30.12.2005 and 19.01.2006. However, by making oral statement, any one of the six could be held guilty for the issues dealt with and approved in the file. This is the pitfall of the oral statements when made contrary to official record. The real offenders can put the innocent at the risk of prosecution by making oral statements contrary to official record. I have already noted that in many files when the directions were passed by the Secretary (T), the next note sheet was recorded by the official concerned quoting that the note sheet was being recorded as per the directions of Secretary (T)/ Chairman (TC), but no such thing appears in this file. 647. Even if it is assumed that the file was initiated at the instance of Dr. J. S. Sarma, even then there is no smooth or hurried approval by Sh. Dayanidhi Maran. The file was marked by Dr. J. S. Sarma to Sh. Dayanidhi Maran on 26.01.2006, but he sat on the file for more than four months and approved it on 16.05.2006. This breaks the theory propounded by the prosecution that after sale of Aircel Limited to Maxis, the Minister became very active and granted smooth approval. Sitting over a file for about four months can by no stretch of imagination be called smooth approval. This also breaks the theory of conspiracy between Dr. J. S. Sarma and Sh. Dayanidhi
CBI Vs. Dayanidhi Maran & others Page 373 of 424 Maran. 648. This ground itself is enough to destroy the entire theory of conspiracy propounded by the prosecution regarding smooth approval. **************** ii. Approval granted for issue of LOI to Dishnet Wireless Limited after acquisition by Maxis Communication 649. The allegation is that after the sale of the company to Maxis, Sh. R. K. Gupta recorded a note on 08.11.2006 (D-2, 39/N to 41/N) recommending issue of LOI to the company in Punjab, Haryana, Kerala, Kolkata, UP(E) and UP(W) service areas and amendment to the LOI in MP service area, issued on 20.04.2004. It is further alleged that the file was marked by the Secretary (T) to the Minister on 21.11.2006 and the same was approved by him on 22.11.2006. Accordingly, it was smooth approval post acquisition by Maxis. 650. The fact of Maxis acquiring 73.99% of Aircel Limited was taken on record in the file D-2 for the first time on 06.03.2006 at 30/N. 651. This instant file, that is, D-2, remained under processing from 26.04.2004 to 13.07.2004, when it was marked by the Secretary (T) to the Minister. As noted earlier, the Minister asked for certain clarifications vide note dated 26.08.2004 at 17/N, which for ready reference are extracted again as under: “a) The financial/equity between M/s. Dishnet
CBI Vs. Dayanidhi Maran & others Page 374 of 424 DSL Ltd. and its sister concerns holding licence elsewhere, particularly in Tamil Nadu and Chennai.
b) To please verify the status of the newspaper reports regarding sale of M/s. Dishnet DSL Ltd. or any of its sister concerns to any other company.
c) To also verify whether M/s. Dishnet DSL Ltd. or any of its sister concerns granted licences in other service areas were later sold to another licensee/entity.
d) It is recalled that the company has violated certain licence conditions entailing specific penalty being imposed on it. The legal implications to this case may please be examined and reported.”
652. Thereafter, the file was again sent to the Minister, as desired by him, per statement of Sh. P. K. Mittal dated 29.11.2011, page 1, and the file was marked to him by Secretary (T) on 24.12.2004 at 21/N (D-2), but the file was returned with the note of Secretary (T) dated 30.03.2005, which for ready reference is extracted as under: “Discussed with MOC&IT. These files are returned with the directions that the Dir. should ascertain all the show cause notices/advisory letters issued to the above company or companies belonging to the group and the nature of defaults before any view is taken. It may be submitted to my successor.”
653. As already noted above, the financial capacity of the company was in question from the very beginning itself. Furthermore, the company was trying to sell its licence in
CBI Vs. Dayanidhi Maran & others Page 375 of 424 violation of the competition clause in the agreement in Chennai service area to Aircel Digilink India Limited, as noticed in file D-30. 654. Furthermore, the company was involved in several violations, as already noted. In such a situation, the questions raised by the Minister cannot be termed to be outlandish or frivolous. When the company was involved in so many violations by being engaged in grey market and also sale of ISP licence without permission of the department, its applications should have received some serious or higher scrutiny. 655. The Minister had asked for a note of AS (T) vide order dated 15.09.2004 at 35/N in D-40. On this, AS (T) Dr. J. S. Sarma submitted his note dated 30.11.2004 suggesting that before granting UAS licences to Dishnet, decision of TDSAT may be awaited. 656. On this, Secretary (T) Sh. Nripendra Mishra asked for legal opinion on the comments of Dr. J. S. Sarma. 657. Sh. O. P. Nahar, LA (T), submitted his report dated 11.01.2005 (43/N, D-40). In this regard, the opinion of Legal Advisor is too legalistic. If a company is involved in several violations pertaining to earlier licences held by it, denial of new licence is not the only action, which can be taken against it nor the Minister was calling for it nor the AS(T) had suggested it. The AS(T) had only suggested that they may await the decision of TDSAT. Postponing an action on the application of a company on account of its being involved in grey market relating to other licence and denying a new licence to it on this ground are two entirely different things. Nobody had suggested
CBI Vs. Dayanidhi Maran & others Page 376 of 424 that applications for new licences be rejected or that the new licences be denied. 658. The Legal Advisor took it as if the AS(T) had suggested for denial of licence to the company and gave a very legalistic report, which is wholly out of context. As already noted above, when the company was involved in grey market and was also accused of selling an ISP licence without permission of DoT and its financial capacity was in doubt from the very beginning, its applications should have received higher/ strict scrutiny. The note of Dr. J. S. Sarma makes sense in the light of the facts of the case. 659. The case of the prosecution is that post-acquisition by Maxis, when proposal was submitted by Sh. R. K. Gupta on 08.11.2006 and the file was marked upward and reached the Secretary (T) on 21.11.2006. The Secretary (T) marked the file to Minister Sh. Dayanidhi Maran, who approved it on the very next day, that is, 22.11.2006. The allegation is that post- acquisition, it was a smooth approval with mala fide intention. 660. However, the charge sheet does not say as to what questions or objections ought to have been raised by the Minister. How the Minister could have stopped or rejected or delayed the proposal? What to talk of a reasonable objection, the charge sheet is silent on this point. In such a situation, the Minister had no option but to approve it as the earlier objections ceased to have effect on account of changed circumstances like change of management from Siva group to Maxis group, withdrawal of applications for sale of licences to Digilink as the same was in violation of licence conditions and
CBI Vs. Dayanidhi Maran & others Page 377 of 424 the issues about the financial capacity of the company also vanished with change of management. Hence, this ground does not carry any value in the eye of law that it was a smooth approval with mala fide intention. iii. Approval granted for taking on record change of name from Dishnet DSL Limited to Dishnet Wireless Limited 661. The allegation is that note dated 29.06.2006 was put up by Sh. S. A. Malik, as already noted above, in file D-41 at 8/N, for taking on record change of name of Dishnet DSL Limited Sh. Dishnet Wireleless Limited in ten service areas, that is, J&K, Assam, North-East, West Bengal, Orissa, Bihar, Himachal Pradesh, Madhya Pradesh, UP (E) and UP(W). The file was marked to Dr. J. S. Sarma on 29.06.2006 and he approved the same on 30.06.2006. The allegation is that it was smooth approval after sale of the companies to Maxis. 662. The last entry in this file prior to the note of 29.06.2006 is dated 03.03.2005, by which the Minister had directed the Secretary (T) to examine if there was undue haste in processing the files, as contained in D-2, D-46, D-38 and D- 41. However, there is no such report on the file. 663. The agreement of sale of the companies to Maxis was executed 26.12.2005 and it was to be effective from 30.12.2005. 664. However, the approval was granted by the Secretary (T) on 30.06.2006, that is, after six months of the sale of the companies. Moreover, there is no material on the record to
CBI Vs. Dayanidhi Maran & others Page 378 of 424 indicate that Sh. S. A. Malik put up the note at the instance of either Sh. Dayanidhi Maran or Dr. J. S. Sarma so that early approval can be granted. 665. There is a delay of six months from the date the agreement of sale became effective, that is, 30.12.2005. How can an approval granted after six months of the sale of the company can be called smooth approval. Moreover, by now earlier objections ceased to be there. It became a query-free file. Accordingly, I do not find any merit in this point also. iv. Approval granted to take on record change of name of promoter (of Aircel Limited), M/s Srinivas Computers Limited to Aircel Televentures Limited 666. The allegation is that Sh. A. K. Dhar put up a note, as already noted, on 03.11.2005 in file D-40 at 51/N, seeking approval for change of name of promoter of Aircel Limited, M/s Srinivas Computers Limited to M/s Aircel Televentures Limited. It is alleged that the file was marked to Dr. J. S. Sarma on 09.11.2005 and he approved the same on 10.11.2005. 667. The allegation in the charge sheet is that after the execution of agreement for sale of 100% equity of Aircel Televentures Limited in Aircel Limited was executed, there was a change in the attitude of the two accused, that is, Dr. J. S. Sarma and Sh. Dayanidhi Maran, towards various pending applications of UAS licences and other proposals of Aircel Limited, Aircel Cellular Limited and Dishnet DSL Limited. It is alleged that thereafter, regulatory approvals became very smooth for the companies.
CBI Vs. Dayanidhi Maran & others Page 379 of 424 668. However, the agreement of sale was executed on 26.12.2005, which was to be effective from 30.12.2005. 669. The approval in the instant case was granted on 10.11.2005 by Dr. J. S. Sarma much before the sale. This circumstance is thus contrary to the allegation in the charge sheet as this happened much before the execution of the agreement. It strikes at the very root of the charge sheet. There is no merit in this circumstance also. v. Allocation of start-up spectrum to Dishnet DSL Limited in Bihar telecom circle 670. The application dated 24.05.2004 (page 96, D-35) of Dishnet DSL Limited for allocation of start-up spectrum 4.4+4.4 MHz in Bihar service area was being processed in file D-35. The allegation is that the file was called by Dr. J. S. Sarma, the then Secretary (T), in January 2006 and it was put to him by Wireless Advisor on 02.02.2006 and the same was approved by him on 03.02.2006. 671. However, the said file was with Wireless Advisor from 24.08.2005 to 13.01.2006. There is nothing on the file except the oral statement of Sh. P. K. Garg. This statement is contrary to the record as contained in the file D-35. There is no other material on record except oral statement of Sh. P. K. Garg. 672. This fact has already been discussed in detail while dealing with delay in the grant of initial spectrum in Bihar service area. The question put by Dr. J. S. Sarma related to roll out plan of the company. While recording his note dated
CBI Vs. Dayanidhi Maran & others Page 380 of 424 01.02.2006, at 14/N, Wireless Advisor Sh. P. K. Garg had clearly indicated that the service provider also informed that it has firm plans for rolling out the network. This indicates that the query put by Dr. J. S. Sarma was satisfied by the service provider. This also nullifies the oral statement of Sh. P. K. Garg that the query about roll out plan put up by Dr. J. S. Sarma was not justified. Once the query was satisfied or properly answered, there was no reason to hold up the file. The charge sheet also does not say as to what question or query could have been put by Dr. J. S. Sarma. Accordingly, this circumstance also does not have any merit. vi. Allocation of additional spectrum to Aircel Cellular Limited in Chennai Metro 673. As already noted, this issue was dealt with in file D- 37 from 16.02.2005 to 18.01.2006 from 1/N to 9/N. 674. The allegation is based on the fact Dr. J. S. Sarma called for the file in the month of January 2006 and the same was put up by the Wireless Advisor on 17.01.2006 and was approved by the Secretary (T) on 18.01.2006. It is the contention of the prosecution that it was smooth approval post transfer of the company to Maxis. 675. As noted earlier, the file was with Wireless Advisor from 23.07.2005 to 31.12.2005. The statement of the Wireless Advisor Sh. P. K. Garg is contrary to the record. There is no other material on the file in this regard, except the oral statement of Sh. P. K. Garg. 676. Furthermore, on the margin of 7/N, there is a note
CBI Vs. Dayanidhi Maran & others Page 381 of 424 in pencil of Sh. R. J. S. Kushvaha dated 18.07.2005, which is as under: “WA/ Member (T) & Secretary (T) on tour abroad.” Thus, the senior officers including Dr. J. S. Sarma may not be knowing about this file at all, as it reached the Wireless Advisor when they were abroad, but by oral statement he is being blamed. 677. Sh. R. J. S. Kushvaha states in his statement dated 21.11.2011 about this as under: “...... The case has been submitted to the then DWA (V) Sh. B. Gunasekar, who marked the file to me on 15.07.2005. I sent the file to the then WA on 23.07.2005. I had also mentioned on 18.07.2005 on page 7/N of note, by pencil, in the side margin of the not sheet that “WA/Member (T) & Secretary (T) on tour abroad.”
As per diary No. of 1079/JWA (N) dated 25.07.2005, this file was sent to WA vide diary No. 982/WA/05 dated 25.07.2005. As per diary No. 3129/WA/05 dated 31.12.2005 the file was sent to me which was received in my office on 03.01.2006 vide diary No. 51/JWA (N) dated 03.01.2006. There was a white paper stapled with the note on page 7/N mentioning “Let us wait for the decision of higher authorities on the note regarding spectrum availability” initialed by Sh. P. K. Garg, the then WA. I also put my initial dated 03.01.2006 on stapled white paper in lower portion of page 7/N.
The case was resubmitted as desired on 13.01.2006 by Sh. Dinesh Jha, the then AWA (V). He marked the file to the then DWA (V) Sh. Gunasekar, who put his signature and sent the file to me on 13.01.2006. On the same day i.e. 13.01.2006 I signed and sent
CBI Vs. Dayanidhi Maran & others Page 382 of 424 the file to the then WA.
On page 9/N of the note sheet, a case was initiated by Wireless Adviser himself on 17.01.2006 for allocation of addition GSM spectrum 1.8 + 1.8 MHz in 1800 MHz (out of the available spectrum), to M/s Aircel Cellular Ltd. for Chennai Metro mentioning in the note that M/s Aircel Ltd. had reached a subscriber base of 6.54 lakh in Chennai in end December 2005 as per COAI figures. Thus, they meet the criteria (5 lakh subscribers) for getting 1.8 MHz of additional GSM spectrum, beyond 6.2+6.2 MHz. The proposal by Sh. Garg for allotment of 1.8+1.8 MHz spectrum in 1800 MHz GSM band to M/s Aircel Cellular Ltd. for Chennai was approved on 18.01.2006 by the then Secretary (T) Sh. J. S. Sarma. Accordingly, the earmarking letter for the additional GSM spectrum to M/s Aircel Cellular Ltd. for Chennai Metro was issued by the then AWA (V) Sh. D. Jha on 20.01.2006. …...... ”
678. Thus, the day the file was marked to the Wireless Advisor, the three senior officers were not in India and, as such, the Secretary (T) may not be knowing about this file at all. Wireless Advisor, by making oral statement contrary to record, is trying to shift the blame to Secretary (T), though he himself sat on the file. Once the file was marked to Secretary (T) on 17.01.2006 by the Wireless Advisor, on what ground he could have withheld the same. The charge sheet is silent on this point. In the processing of this file in its entirety, there is no interference either by the Minister or Secretary (T). Once the file reached Dr. J. S. Sarma, he had no option but to approve it as it was a query-free file. I do not find any objection recorded anywhere by anyone, except by Sh. P. K. Garg himself when he
CBI Vs. Dayanidhi Maran & others Page 383 of 424 noted on 31.12.2005 that the decision of higher authorities regarding spectrum availability be awaited. Accordingly, this approval does not indicate anything incriminatory against the accused. Accordingly, there is no merit in this circumstance also. vii. No query/ objection was raised by Sh. D. Maran, the then MOC&IT to the proposal of foreign investment of M/s Global Communication Services Holdings Limited, Mauritius, in Aircel Limited (D-39) 679. The proposal for approval of foreign investment of Global Communication Services Holdings Limited was processed in D-39. In the first note, it was recorded by Sh. J. B. Dobhal on 16.02.2006, at 2/N, that FIPB, DEA, has forwarded the proposal of foreign investment of M/s Global Communication Services Holdings Limited, Mauritius, seeking approval for enhancing its direct and indirect investment in Aircel Limited from 26% to 73.99% and had requested for the comments of DoT on the proposal. He marked the file to DDG (IP). 680. This was processed again by Sh. N. P. Singh, DDG (IP), who supported the proposal vide his note dated 24.02.2006, at 4/N, and marked the file to Joint Secretary (T). Sh. M. S. Sahu, Joint Secretary (T), also supported the proposal vide his note dated 01.03.2006 at 6/N and marked the file to Additional Secretary (T). He (AS (T)) put up a question regarding management control issues and marked the file again
CBI Vs. Dayanidhi Maran & others Page 384 of 424 to Joint Secretary (T)/ DDG (IP). Sh. N. P. Singh, DDG (IP), again recorded a note on 04.03.2006 at 7/N, clarifying the issue and seeking support for the proposal and again marked the file to JS (T), who agreed to the same and marked the file to AS (T). AS (T) recorded his note on the same day, that is, 04.03.2006, 7/N, supporting the proposal and marked the file Secretary (T), who also agreed to it on the same day and marked the file to MOC&IT. MOC&IT Sh. Dayanidhi Maran granted his approval on 06.03.2006 at 7/N. A bare perusal of this file shows that it is also a query- free/ objection-free file. No objections were raised by any officer at any level from Section Officer to Secretary (T). 681. The case of the prosecution is that no query was raised by Sh. Dayanidhi Maran, though earlier he was raising queries when change of equity was sought by Sh. C. Sivasankaran in the month of August 2004. 682. Now the question is: How anyone can be expected to put a query in an environment when nothing is faulted or objected to by anyone from any quarter? It may be noted that the proposal put forward by Sh. C. Sivasankaran regarding transfer of equity to Aircel Digilink India Limited was in violation of licence agreement as far as Chennai service area was concerned and the equity structure of Aircel Digilink India Limited was not clear to the department as far as Tamil Nadu service area was concerned. As such, there is no comparison between the two issues. The allegation, as such, is wholly unfounded and baseless. Accordingly, there is no merit in this
CBI Vs. Dayanidhi Maran & others Page 385 of 424 also. viii. Dilution of Terms of Reference (ToRs) 683. The allegation of the prosecution is that in November 2005, a Group of Ministers (GoM) was constituted by the Prime Minister for looking into the issues relating to allocation of spectrum to mobile operators. It is further alleged that proposed terms of reference (ToRs) of the GoM included spectrum pricing policy and spectrum allocation policy and this was approved by the PMO on 14.02.2006. However, Sh. Dayanidhi Maran wrote DO letter dated 16.11.2006 to the Prime Minister asking for exclusion of spectrum pricing from ToRs and this was approved. It is alleged that this was got done by Sh. Dayanidhi Maran to help Maxis Communication in the allocation of spectrum. 684. PW 9 Sh. P. K. Garg has stated about constitution of GoM and its terms of reference in his statement dated 24.05.2012. He states that he had proposed terms of reference for the GoM, which included spectrum pricing and its allocation. Planning Commission also suggested inclusion of spectrum pricing in the terms of reference in its letter dated 10.01.2006. He further states that late Dr. J. S. Sarma wanted their exclusion. Thereafter, Dayanidhi Maran also wrote a letter dated 11.01.2006 to the PM. Subsequently, correspondence continued between PMO, Cabinet Secretariat and DoT. However, Sh. Dayanidhi Maran again wrote a letter dated 28.02.2006 to the PM. Sh. Dayanidhi Maran again wrote a letter dated 16.11.2006 to the PM, in which the thrust was on
CBI Vs. Dayanidhi Maran & others Page 386 of 424 vacation of spectrum. 685. He further states at page 13 that Ministry of Finance wanted issue of spectrum pricing to be retained in the ToRs for the GoM while Sh. Dayanidhi Maran, the then MOC&IT, was insisting that it was the normal work of DoT and should be excluded from the ToRs. He further states at page 15 that spectrum pricing is a dynamic issue depending on number of factors, hence spectrum pricing is part of day-to-day functions of WPC. 686. In his statement dated 24.05.2012, running into 26 pages, he has given detailed narration of the constitution of GoM and its terms of reference. However, it all appears to be about official correspondence in which MOC&IT, Planning Commission, Department of Economic Affairs, Ministry of Finance, Cabinet Secretariat and PMO were involved. In his entire statement, I do not find anything, which may indicate anything wrong in the Minister making efforts to have spectrum pricing policy within his domain on the ground that it was part of normal work of DoT. 687. There is no material to indicate any mala fide intention of the Minister in this regard except that he was making efforts to retain spectrum pricing within his area of responsibility. 688. However, subsequent to the modification of ToRs, Minister had allocated the spectrum in Kolkata service area and additional spectrum beyond 8.8 MHz in Chennai service area. The same is discussed below to find out if there is any mala fide by the Minister by giving benefit to Maxis in the allocation of
CBI Vs. Dayanidhi Maran & others Page 387 of 424 spectrum.
Kolkata service area (initial spectrum): Post-Maxis events (D-50) 689. The allocation of initial spectrum to Dishnet Wireless Limited in Kolkata service are was dealt with in file D- 50 (Main case). 690. Allocation of initial spectrum to Dishnet Wireless Limited in Kolkata service area was approved to be allocated on 05.04.2007 at 6/N in D-50. The relevant note sheet is dated 04.04.2007 recorded by Sh. D. Jha, which is as under: “PUC is a request for initial GSM 1800 MHz spectrum of 4.4+4.4 MHz under UASL from M/s Dishnet Wireless Ltd. (5th operator) in Kolkata Metro telecom service area. Recently they had signed UASL Licence Agreement with DOT and applied for initial spectrum.
2. M/s Dishnet have stated in their recent letter that they have cellular GSM service in West Bengal but they do not have GSM spectrum in Kolkata Metro. Kolkata being state capital, there is lot of movement of subscribers between West Bengal and Kolkata. So, M/s Dishnet Wireless Ltd. are unable to provide single rate facility (without roaming charges) to their customers. Other service providers have their services both in West Bengal and Kolkata Metro. Hence, they have requested for early allotment of spectrum for Kolkata Metro service area.
3. Another request for additional spectrum 2+2 MHz beyond 8+8 MHz is also pending i.r.o. M/s Bharti Airtel Ltd., vide their application dated 04.12.2006. However, due to some ambiguity in their subscriber data, it is being verified.
CBI Vs. Dayanidhi Maran & others Page 388 of 424 3.1 The request of M/s Bharti Airtel Ltd. for additional spectrum, as per eligibility criteria, will be considered after verification of their subscriber data and traffic.
4. The GSM spectrum of 5+5 MHz is available in 1800 MHz band for Kolkata Metro area. We may consider the request of M/s Dishnet Wireless Ltd. and earmark 4.4+4.4 MHz GSM spectrum in 1800 MHz band as per their service licence condition.
Submitted for kind consideration.”
691. He marked the file upward and it was agreed to by Wireless Advisor and Member (T). The file reached Secretary (T) Sh. D. S. Mathur, who approved it on 05.04.2007. 692. Four witnesses have been examined on this point, namely, Sh. D. Jha; Sh. P. K. Garg, Wireless Advisor; Sh. K. Sridhara, Member (T); and the then Secretary (T) Sh. D. S. Mathur. The relevant parts of their statements are as under: 693. Sh. D Jha, PW 16, in his statement dated 22.01.2013, at pages 2 and 3, states as under: “...... M/s Dishnet Wireless Ltd. vide their letter dated 03/04/2007 (at page 117) requested Wireless Advisor to allocate 4.4.+ 4.4 MHz in Kolkata Metro Circle which will facilitate them a single rate across West Bengal and Kolkata Telecom Circle (without roaming charges). He actually discussed the matter with Sh. B. Gunasekhar, the then DWA (V) who then asked me to put up the file for startup spectrum for M/s Dishnet Wireless Ltd. immediately. Accordingly, on 04/04/2007, I put up the case of allocating 4.4 +4.4 MHz. initial spectrum to M/s Dishnet Wireless Ltd. which was concurred by Sh.
CBI Vs. Dayanidhi Maran & others Page 389 of 424 B. Gunashekhar, the then DWA (V), Sh. P.K. Garg, the then WA, Sh. K. Shridhara, Member (T). Sh. D.S. Mathur, the then Secretary (T) while approving the case on 05/04/2007 mentioned that it was discussed with Hon’ble MOC & IT.
On being asked I state that I am of the opinion that since the case of M/s Bharti Airtel’s claim for additional spectrum was still under consideration subject to verification, their interest should be protected while allocating spectrum to M/s Dishnet Wireless Ltd. which was not done on that date.
The representatives from TEC and WPC wing jointly verified the data of Bharti, BSNL and Hutch for additional spectrum and submitted the report on 23/04/2007. The case for allocating additional cumulative spectrum of 2+2 MHz (0.6+0.6 MHz from coordinated spectrum and 1.4+1.4 MHz on trial basis) to M/s Bharti was put up by me on 08/05/2007. The case was approved by DWA (V), JWA (F) and WA. However, the then Member (T) Sh. K. Shridhara returned the case with the remarks please discuss to WA who discussed the matter on 10/05/2007.
In this case, on being asked I am of the opinion that since the claim of M/s Bharti was entirely in order after the verification of their subscriber and traffic data, it should have been approved.
On 03/07/2007, the case was again submitted by me for allocating additional spectrum to M/s Bharti which was approved by the then DWA (V), JWA (L), WA, Member (T), Secretary (T). However, the case was not approved by MoC & IT with comments that “MoC & IT has desired that the file may be submitted after policy for additional spectrum is reviewed”.
694. PW 9 Sh. Pawan Kumar Garg, Wireless Advisor, in
CBI Vs. Dayanidhi Maran & others Page 390 of 424 his statement dated 22.10.2012, page 2, states as under: “...... On being asked I state that M/s Dishnet Wireless Ltd. sent other request letters dated 19.02.2007 and 21.03.2007 requesting for allocation of startup spectrum in Kolkata telecom circle. M/s Dishnet again sent a request letter dated 03.04.2007 wherein it was stressed that as a result of services not being available in Kolkata, their subscribers were not able to avail the facility of single rate (without roaming charges). This request letter dated 03.04.2007 was processed in the above referred file by Sh. D. Jha on 04.04.2007. Sh. D. Jha, recommended for allocation of startup spectrum of 4.4+4.4 MHz in 1800 MHz to M/s Dishnet Wireless Ltd. in Kolkata metro area. Sh. D. Jha also noted that the request of M/s Bharti Airtel Ltd. for allocation of additional spectrum, as per eligibility criteria, would be considered after verification of their subscriber data and traffic, for which there was some ambiguity. He marked the file to Sh. B. Gunasekar, who signed the notesheet on 04.04.2007 and sent the file to me on the same day as Sh. Kushwaha, the then JWA was on leave. I also signed the notesheet and sent the file to Sh. K. Sridhara, the then Member (T), who also signed the notesheet and sent the file to Sh. D.S. Mathur, the then Secretary (T). Sh. D.S. Mathur, the then Secretary (T) approved the allocation of startup spectrum of 4.4 MHz in 1800 MHz in Kolkata metro to M/s Dishnet Wireless Ltd. On 05.04.2007, Sh. Mathur noted that this was discussed with Hon’ble MoC&IT. …...... ”
695. Sh. K. Sridhara, PW 56, has stated in his statement that no undue favour was shown to Dishnet in the matter of allocation of start-up spectrum in Kolkata metro service area.
CBI Vs. Dayanidhi Maran & others Page 391 of 424 The relevant part of his statement is as under: “...... Now, I state that today I have been shown a copy of file of WPC bearing No.L-14047/16/2006-NTG (marked as D-50) and state that Sh. D. Jha, the then Assistant Wireless Advisor (V) initiated a note vide 2/N on 21.12.2006. M/s Bharti had applied for earmarking of additional spectrum beyond 8+8 MHz in Kolkata circle vide letter dated 14/17.11.2006. Sh. D. Jha the then AWA, after examining the application noted vide note dated 04.01.2007 that Bharti had submitted contradictory figures in respect of traffic data dated 01.11.2006.(vide their letter dated 14.11.2006 and 04.12.2006). Therefore, it was proposed that TEC may be requested to verify the data physically from their NMS (Network Management System). M/s Dishnet Wireless Ltd. had also applied for earmarking of startup spectrum 4.4 MHz in Kolkata metro circle vide letter dated 18/19.12.2006. Sh. D. Jha vide his note dated 04.04.2007, reported that due to some ambiguity in the subscriber data of M/s Bharti Airtel Ltd. the request for allocation of additional spectrum 2+2 MHz beyond 8+8 MHz is pending. He recommended for allocation of startup spectrum of 4.4+4.4 MHz in 1800 MHz to M/s Dishnet Wireless Ltd. in Kolkata metro area. He marked the file to Sh. B. Gunasekar, who signed the notesheet on 04.04.2007 and sent the file to Sh. P. K. Garg on the same day as Sh. Kushwaha, the then JWA was on leave. Sh. P. K. Garg also signed the notesheet and sent the file to me. I considered and concurred with the recommendation of Sh. D. Jha and sent the file to Sh. D.S. Mathur, the then Secretary (T). Sh. D.S. Mathur, the then Secretary (T) approved the allocation of startup spectrum of 4.4 MHz in 1800 MHz in Kolkata metro to M/s Dishnet Wireless Ltd. On 05.04.2007, Sh. Mathur noted that this was discussed with Hon’ble MoC&IT. From the above it is evident that no undue favour
CBI Vs. Dayanidhi Maran & others Page 392 of 424 was shown to M/s Dishnet Wireless Ltd. in the matter of allocation of start-up spectrum in Kolkata Metro circle.”
696. Sh. D. S. Mathur, PW 13, states on this point as under: “...... Now, I state that today I have been shown a copy of file of WPC bearing No.L-14047/16/2006-NTG (marked as D-50) and state that Sh. D. Jha, the then Assistant Wireless Advisor (V) initiated a note vide 2/N on 21.12.2006. M/s Bharti had applied for earmarking of additional spectrum beyond 8+8 MHz in Kolkata circle vide letter dated 14/17.11.2006. Sh. D. Jha the then AWA, after examining the application noted vide note dated 04.01.2007 that Bharti had submitted contradictory figures in respect of traffic data dated 01.11.2006 (vide their letter dated 14.11.2006 and 04.12.2006). Therefore, it was proposed that TEC may be requested to verify the data physically from their NMS (Network Management System). M/s Dishnet Wireless Ltd. had also applied for earmarking of startup spectrum 4.4 MHz in Kolkata metro circle vide letter dated 18/19.12.2006. Sh. D. Jha vide his note dated 04.04.2007, reported that due to some ambiguity in the subscriber data of M/s Bharti Airtel Ltd. the request for allocation of additional spectrum 2+2 MHz beyond 8+8 MHz is pending. He recommended for allocation of startup spectrum of 4.4+4.4 MHz in 1800 MHz to M/s Dishnet Wireless Ltd. in Kolkata metro area. Here it is clarified that due to ambiguity in the figures/data submitted by M/s Bharti, the case for allocation of additional spectrum was not considered. He marked the file to Sh. B. Gunasekar, who signed the notesheet on 04.04.2007 and sent the file to Sh. P. K. Garg on the same day as Sh. Kushwaha, the then JWA was on leave. Sh. P. K.
CBI Vs. Dayanidhi Maran & others Page 393 of 424 Garg also signed the notesheet and sent the file to Sh. K. Sridhara, the then Member (T), who considered and concurred with the recommendation of Sh. D. Jha and sent the file to me. I approved the allocation of startup spectrum of 4.4 MHz in 1800 MHz in Kolkata metro to M/s Dishnet Wireless Ltd. on 05.04.2007. In fact, before approving the allocation of startup spectrum to M/s Dishnet Wireless Ltd., I alongwith Sh. K. Sridhara, Member (T), Sh. P.K. Garg, Wireless Advisor discussed the matter with Sh. Dayanidhi Maran, the then MoC&IT. Sh. K. Sridhara explained and apprised the Minister about the facts of both the applicants. During discussion it was decided to allocate startup spectrum i.e. 4.4+4.4 MHz in 1800 MHz band to Dishnet Wireless Ltd. in Kolkata metro telecom service. Accordingly, I approved the same on 05.04.2007 on the file and also noted about the discussion which took place with the then MoC&IT. …...... ”
697. Perusal of the entire record shows that PW 9 Sh. P. K. Garg, PW 56 Sh. K. Sridhara and PW 13 Sh. D. S. Mathur have stated that the spectrum was allocated to Dishnet correctly on the recommendation of Sh. D. Jha. Sh. K. Sridhara has specifically stated that no undue favour was shown to Dishnet Wireless Limited. 698. Only Sh. D. Jha has stated that the interest of Bharti Airtel Limited should have been protected. He opined that claim of Bharti was entirely in order. However, this is contrary to the note sheet recorded by him on 04.04.2007. He had specifically recorded in para 4 that: “We may consider the request of Dishnet Wireless Limited and earmark 4.4+4.4 MHz GSM spectrum in 1800 MHz band as per their service licence
CBI Vs. Dayanidhi Maran & others Page 394 of 424 condition.”
699. In this allocation of spectrum to Dishnet Wireless Limited, post-acquisition by Maxis, no mala fide intention can be attributed to anyone including the Minister.
Grant of additional spectrum beyond 8.8 MHz to Dishnet in Chennai (D-37) 700. The issue of additional spectrum beyond 8.8 MHz in Chennai service area was dealt with in file D-37, page 10/N onwards. 701. The note dated 14.07.2006, 10/N, of Sh. D. Jha, Assistant Wireless Advisor (V) reads as under: “The case relates to requests from M/s Aircel Cellular Ltd. and M/s Bharti for earmarking of additional spectrum beyond 8+8 MHz in 1800 MHz band in Chennai Metro. All GSM service providers have 8+8 MHz GSM spectrum earmarked in Chennai Metro service area.
2. JCES had coordinated 15+15 MHz spectrum in 1800 MHz band out of which only 1.4+1.4 MHz GSM spectrum is available. The status of spectrum availability in Chennai Metro is placed below. 3. Both M/s Aircel Cellular Ltd. and M/s Bharti have submitted active subscribers (VLR) data) as well as peak traffic averaged over a month. Both of them are meeting the criteria of active subscribers as well as peak traffic averaged over a month. M/s Aircel has average VLR figure 6,00,848 for the month of April 2006 whereas M/s Bharti has VLR figure of 6,30,896 for a month from 12.05.06 to 11.06.06. Both have peak traffic meeting the criteria. It is not clear who has met the criteria first since M/s Bharti has not submitted the VLR data for
CBI Vs. Dayanidhi Maran & others Page 395 of 424 the month of April 06.
4. In view of the above, the case is submitted for kind consideration of GSM spectrum earmarking between the two eligible operators.”
702. The file was marked to DWA (T), who recorded note dated 17.07.2006, 10/N, which is as under: “1. Out of Spectrum coordinated for Chennai, only 1.4 MHz is available for allocation. 2. Both M/s Aircel & M/s Airtel have met the criteria for allotment beyond 8 MHz. Submitted for advise.”
703. The file was then marked to JWA Sh. R. J. S. Kushvaha, who recorded note dated 20.07.2006, 10/N, which is as under: “For further direction in the matter, so that case could be processed accordingly.”
704. Thereafter, the file reached Wireless Advisor Sh. P. K. Garg, who asked Joint Wireless Advisor to speak to him and after speaking, he recorded note dated 22.07.2006, 10/N, which reads as under: “Discussed. We may seek clarification regarding peak radio traffic V/s peak traffic (switch) from Aircell.”
705. Thereafter, DWA (T) Sh. D. Jha recorded note dated 25.07.2006, 10/N, as under: “We may seek clarification as per draft placed below.”
706. Thereafter, through proper channel, the file again
CBI Vs. Dayanidhi Maran & others Page 396 of 424 reached DWA Sh. D. Jha, who recorded note dated 18.08.2006, 11/N, which reads as under: “With reference to minutes of WA on prepage the clarification was obtained from M/s Aircell. They have clarified that “Peak Hour Radio Traffic” is the sum of traffic in each cell during its peak hour and as such has stated that peak hour radio traffic should be taken as total traffic. With this clarification, they meet the criteria for additional spectrum. M/s Bharti has also submitted the VLR and peak traffic data for the month of March-April 06 and meet the criteria. In view of the above, the case is resubmitted for consideration please.”
707. The file was marked to JWA Sh. R. J. S. Kushvaha, who recorded on 25.08.2006, 11/N, as under: “The clarification provided by M/s Aircel indicates average peak hour traffic as 21,403 and average peak hour radio traffic as 24879. It may be recalled that as per order of 29 March, 2006, peak hour traffic averaged over a month is required alongwith subscriber base in VLR. 2. Besides requirement of M/s Aircel 'X' above is also for kind consideration.”
708. Thereafter, the file was marked to Wireless Advisor Sh. P. K. Garg, who recorded a note dated 29.09.2006, 12/N, which reads as under: “The case relates to allotment of GSM spectrum beyond 8 MHz (paired) for M/s Bharti Enterprises Ltd. in Chennai Metro telecom service area.
They have reportedly crossed the active subscriber base (VLR) of 6 Lakh and peak traffic of 24,000 Erlangs, required for allotment of 2 MHz
CBI Vs. Dayanidhi Maran & others Page 397 of 424 (paired) spectrum beyond 8 MHz in Chennai Metro telecom service area.
Incidentally, there was another request from M/s Aircell, Chennai for additional spectrum beyond 8 MHz (paired). However, as per their recent clarification, their peak traffic, averaged over a month, does not meet the criteria of 24,000 Erlangs. Hence, their request can not be acceded to at present.
Coordinated spectrum of 1.4 MHz (paired) in 1800 MHz band is available in Chennai area. Hence, the allotment of available 1.4 MHz (paired) in 1800 MHz GSM band (beyond 8 MHz paired) to M/s Bharti Cellular Ltd is being made for Chennai Metro service area as per the request of the service provider.
For kind perusal.”
709. Thereafter, file was marked to Member (T), who recorded note dated 04.10.2006, 12/N, as under: “As discussed pl. confirm that traffic figures of M/s Airtel also refer to Av TCBH.”
710. The file again reached Assistant Wirless Advisor Sh. D. Jha, who recorded a note dated 03.11.2006, 13/N, which reads as under: “With reference to minutes of Member (T) on prepage: The clarifications were obtained from M/s Bharti Airtel and their reply is placed at S.No.27 (R). They have stated that the subscriber and traffic figures submitted vide their letters dated 13.06.2006 and 11.07.2006 were as per WPC Order dated 29.03.2006 for allotment of additional spectrum. However, vide their letter dated
CBI Vs. Dayanidhi Maran & others Page 398 of 424 27.10.2006, they have submitted required data for the month of Sept 2006 and accordingly their subscribers (VLR) figures and Peak Traffic in Earlangs (from NMS) (TCBH at 19:00-20:00 Hrs) are respectively 7,57,761 and 28,564 respectively.
2. Meanwhile M/s Aircel has also submitted their claim for additional spectrum beyond 8+8 MHz vide their letter dated 11.10.2006 addressed to Chairman, Telecom Commission and Secretary (T). Their subscribers (VLR) figures and Peak Traffic in Earlangs during TCBH are respectively 6,99,064 and 26,729 respectively for the month of Sept. 2006.
3. It may be mentioned here that only 1.4+1.4 MHz GSM spectrum in 1800 MHz band is available in Chennai Metro service area and both M/s Bharti Airtel and M/s Aircel has 8+8 MHz spectrum assigned in the service area and they meet the criteria for GSM spectrum upto 10+10 MHz as per their subscriber data of Sept. 2006.
The case is submitted please.”
711. The file again reached JWA Sh. R. J. S. Kushvaha, who recorded note dated 03.11.2006, 13/N, which reads as under: “Adequate spectrum is not available to meet the requirements of both operators. It is for kind consideration whether available spectrum (i.e. 1.4+1.4 MHz) could be divided (say 3 carriers each) between both the operators?”
712. He marked the file upward and when the file reached Member (T), he asked for a discussion on 07.11.2006 and after discussing the matter, recorded the note dated 08.11.2006, which reads as under:
CBI Vs. Dayanidhi Maran & others Page 399 of 424 “Discussed. 'X' proposed above may kindly be approved.
713. 'X' here refers to note of Sh. R. J. S. Kushvaha recommending equal division of spectrum. 714. He marked the file to the Secretary (T), who approved it on 13.11.2006. 715. Thus, the spectrum was recommended to be equally divided between Bharti and Aircel and the same was approved by the Secretary. 716. Sh K. Sridhara, PW 56, states in his statement dated 07.11.2012 at page 2 as under: “...... The above referred letters of M/s Bharti Airtel Ltd. and M/s Aircel Cellular Ltd. were processed in the above referred file by Sh. D. Jha, the then AWA on 03.11.2006. The file was put up to me by Sh. Ashok Kumar, the then JWA (F) on 07.11.2006. I sent back the file to Sh. P.K. Garg, Wireless Advisor directing to have a discussion on the subject. I discussed the matter with Sh. P.K. Garg. During discussion I remember that I was informed that 1.4+1.4 MHz spectrum in 1800 MHz band is available in Chennai Metro and both operators are eligible and they need badly to improve the network, it was decided that we distribute the spectrum of 1.4 equitably between the two operators i.e. three carrier each operator. In fact, it was earlier suggested by Sh. R.N. Kushwaha, the then JWA (N) on 03.10.2006. I sent the file to Sh. D.S. Mathur, the then Secretary (T) who approved for allocation of three carriers each to both operators on 13.11.2006. From the above, it is evident that no favour was shown to M/s Aircel Cellular Ltd. in the matter of grant of additional spectrum
CBI Vs. Dayanidhi Maran & others Page 400 of 424 beyond 8 MHz in Chennai Metro Circle. …...... ”
717. Sh. D. S. Mathur, PW 13, states in his statement dated 06.12.2012 as under: “...... Now, I have been shown one original file of WPC Wing bearing No.L-14043/3/2005-NTG and state that a copy of order dated 29.03.2006 issued under the signature of Sh. Sukhpal Singh, Assistant Wireless Advisor is available at 2/C of the above referred file. This order relates to subscriber base criteria for allotment of GSM spectrum. This order is self explanatory. M/s Aircel Cellular Ltd. had applied to Wireless Advisor, WPC Wing for allocation of additional spectrum of 2.0 MHz beyond 8 MHz in GSM 1800 MHz band for use in Chennai Metro. The said request letter dated 22.04.2006 of M/s ACL was received in WPC Wing on 26.04.2006 and processed in the above referred file. On the other hand M/s Bharti had also applied to Wireless Advisor, WPC Wing for allocation of additional spectrum of 2 MHz beyond 8 MHz for use in Chennai Metro. The said request letter dated 13.06.2006 was received in WPC Wing on 14.06.2006. Sh. D. Jha, the then Assistant Wireless Advisor (V) examined the above referred two applications and put up a note on 14.07.2006 wherein inter alia he has recommended/noted as under:- 1. JCES had recommended 15+15 MHz spectrum in 1800 MHz band out of which only 1.4+1.4 MHz GSM spectrum is available in Chennai metro. 2. Both M/s Aircel Cellular Ltd. and M/s Bharti are meeting the criteria of active subscribers as well as peak traffic average over a month. 3. M/s Aircel Cellular Ltd. has average VLR
CBI Vs. Dayanidhi Maran & others Page 401 of 424 figure 6,00,848 for the month of April, 2006 whereas M/s Bharti has VLR figure of 6,30,896 for a month from 12.05.2006 to 11.06.2006. From the above it is evident that M/s Aircel Cellular Ltd. met the criteria first for allotment of additional spectrum beyond 8 MHz in Chennai metro service area because it had reached the criteria in the month of April, 2006 whereas M/s Bharti had reached the criteria subsequently during 12.05.2006 to 11.06.2006. It is not clear as to under what circumstances Sh. D. Jha noted that it was not clear who met the criteria first. It appears that on the basis of April, 2006 data, Aircel Cellular Ltd. had qualified for allotment of additional spectrum in Chennai metro. On being asked I state that on 29.09.2006, Sh. P. K. Garg, the then WA had recommended for allotment of 1.4 MHz (paired) in 1800 MHz GSM band (beyond 8 MHz paired) to M/s Bharti Cellular Ltd. for Chennai Metro service area. Here Sh. P.K. Garg had also mentioned that coordinated spectrum for 1.4 MHz (paired) in 1800 MHz band is available in Chennai area. Hence, in place of 2 MHz (paired), Sh. P. K. Garg recommended for allocation of 1.4 MHz (paired) to M/s Bharti Cellular Ltd. in Chennai Metro. In fact, Sh. P. K. Garg in his note dated 29.09.2006 had mentioned that M/s Aircel does not meet the criteria of their peak traffic, average over a month. On the other hand he did not mention the same fact in respect of M/s Airtel. He mentioned about the peak traffic only. Meanwhile, one another request letter dated 11.10.2006 was received from M/s Aircel Cellular Ltd. requesting for allocation of additional spectrum of 2 MHz beyond 8 MHz in Chennai Metro. On being asked I state that the above referred file was put up before me for the first time by Sh. K. Sridhara, the then Member (T) on 08.11.2006. He had concurred with the recommendation with Sh. Kushwaha, the then JWA (N) who had recommended for equal division of available spectrum among M/s Aircel Cellular Ltd. and M/s
CBI Vs. Dayanidhi Maran & others Page 402 of 424 Bharti. The said file remained with me during the period from 08.11.2006 to 13.11.2006 when I approved the allocation of additional spectrum to M/s Aircel Cellular Ltd. and M/s Bharti as recommended by Sh. K. Sridhara, the then Member (T). Here it is clarified that I alongwith Sh. K. Sridhara, Member (T) and officers of the WPC namely Sh. Kushwaha had discussed the matter with Sh. Dayanidhi Maran, the then MoC&IT. He was apprised of the fact that M/s Aircel Cellular Ltd. and M/s Bharti meet the eligibility criteria for allotment of additional spectrum beyond 8 MHz in Chennai metro as per the data available for the month of September, 2006. He concurred with the recommendation of WPC Wing and Member (T) and accordingly I had approved the allocation of additional spectrum. On being asked I state that Wireless Advisor was competent to grant spectrum to new licencees and additional spectrum grant cases were through the Secretary (T) brought to the notice of the Minister of the department. Therefore, this case of equal division of spectrum between Bharti Airtel and Aircel was brought to the notice of the Minister and after that approval was recorded on the file by me. This was the understanding in the department since long that additional spectrum allocation cases would be brought to the notice of the Minister.
718. Sh. D. S. Mathur and Sh. K. Sridhara have stated that spectrum was allocated to both the operators after discussion and on the recommendation of Sh. R. J. S. Kushvaha. Sh. K. Sridhara is quite categorical in his statement to the effect that no undue favour was shown to Aircel Cellular Limited. 719. Sh. D. S. Mathur has faulted Sh. P. K. Garg on this point regarding his note dated 20.09.2006 on the ground that
CBI Vs. Dayanidhi Maran & others Page 403 of 424 Sh. P. K. Garg had recorded that Aircel does not meet the criteria of their peak traffic, averaged over a month, but he did not mention this fact in respect of Airtel. This also indicates as to how WPC Wing works. It can deny grant of spectrum by putting any unwarranted question. It also reflects on the working of Sh. P. K. Garg. 720. Sh. D. Jha, who has been examined as PW 16, in his four statements has not stated anything on this point. I also could not find anything in this regard in the statements of Sh. P. K. Garg and Sh. R. J. S. Kushvaha. 721. From the above material, no mala fide can be attributed to anyone including the Minister. 722. Hence, there is no material on record to indicate that the terms of reference were got changed by Sh. Dayanidhi Maran with mala fide intention to help Maxis.
Post-Maran Events imputed to Maran (D-50) 723. As per charge sheet, accused Dayanidhi Maran was MOC&IT fro, 26.05.2004 to 17.05.2007. 724. However, it is quite interesting to take a look of the statement of Sh. D. S. Mathur dated 06.12.2012, page 4, which reads as under: “...... On 03.07.2007 Sh. D. Jha, the then AWA (V) initiated a note recommending for earmarking of additional spectrum of 0.6+0.6 MHz on regular basis and 1.4+1.4 MHz on trial basis to M/s Bharti in Kolkata metro. This proposal was concurred by Sh. Kushwaha, JWA, Sh. P. K. Garg, Wireless Advisor and Sh. K. Sridhara, Member (T). I also
CBI Vs. Dayanidhi Maran & others Page 404 of 424 concurred and recommended for the same on 05.07.2007 and sent the file to the office of MoC&IT. However, the proposal was not approved by Sh. D. Maran, the then MoC&IT and the said file was returned by the office of MoC&IT to me on 14.08.2007 mentioning that 'MoC&IT has desired that file may be resubmitted after the policy for allotment of additional spectrum is (not legible)'. On being asked I state that I do not remember if the policy for allotment of additional spectrum was under review/ consideration at that point of time.”
725. Sh. Dayanidhi Maran ceased to be the Minister on 17.05.2007, but the events of August 2007 are also being imputed to him. 726. Similarly, PW 16 Sh. D. Jha in his statement dated 22.01.2013, page 3, states as under: “...... The representatives from TEC and WPC wing jointly verified the data of Bharti, BSNL and Hutch for additional spectrum and submitted the report on 23/04/2007. The case for allocating additional cumulative spectrum of 2+2 MHz (0.6+0.6 MHz from coordinated spectrum and 1.4+1.4 MHz on trial basis) to M/s Bharti was put up by me on 08/05/2007. The case was approved by DWA (V), JWA (F) and WA. However, the then Member (T) Sh. K. Sridhara returned the case with the remarks please discuss to WA who discussed the matter on 10/05/2007. In this case, on being asked I am of the opinion that since the claim of M/s Bharti was entirely in order after the verification of their subscriber and traffic data, it should have been approved. On 03/07/2007, the case was again submitted by me for allocating additional spectrum to M/s
CBI Vs. Dayanidhi Maran & others Page 405 of 424 Bharti which was approved by the then DWA (V), JWA (L), WA, Member (T), Secretary (T). However, the case was not approved by MoC & IT with comments that “ MoC &IT has desired that the file may be submitted after policy for additional spectrum is reviewed ”.
727. Thus, the two witnesses have been made to say things against accused when he was no longer in the office. This file was returned by the then MOC&IT on 14.08.2007. This shows the anxiety of the investigating officer to somehow implicate the accused. 728. Thus, the conclusion is that after withdrawal of the application for transfer of Chennai and Tamil Nadu licence to Aircel Digilink India Limiter and further post-acquisition of Aircel Limited by Maxis, the issues had become from simple. The aforesaid approvals cannot by any stretch of imagination be considered as smooth or granted for extraneous reasons. The charge sheet does not mention anywhere as to how these approvals could have been refused by Sh. Dayanidhi Maran or Dr. J. S. Sarma, post-acquisition by Maxis, more so, when the issues raised by the Minister no longer survived for the reasons already noted above.
D. Receiving of illegal gratification in the garb of share premium in M/s Sun Direct TV (P) Limited promoted by Sh. Kalanithi Maran, brother of Sh. Dayanidhi Maran, the then MOC&IT, from M/s South Asia Entertainment Holdings Limited, Mauritius, (100% subsidiary of M/s Astro All Asia Networks of Plc., UK).
CBI Vs. Dayanidhi Maran & others Page 406 of 424 729. It is submitted by Sh. Anand Grover, learned Sr. Advocate/ Spl. PP, that by delaying the grant of new UAS licences to Dishnet DSL Limited and withholding various regulatory approvals to Aircel Limited, Aircel Cellular Limited and Dishnet DSL Limited, Sh. Dayanidhi Maran forced the exit of these companies from the telecom sector resulting into the sale of the companies to Maxis. It is further submitted that when the companies were sold to Maxis, grant of new licences and other regulatory approvals were smoothly done by Sh. Dayanidhi Maran. It is further submitted that as quid pro quo for these actions of Sh. Dayanidhi Maran, an amount of Rs. 549 crore was invested by Maxis through its subsidiary Astro All Asia Network in South Asia FM Limited. It is further submitted that further a sum of Rs. 193 crore was invested through other subsidiaries, namely, AH Multisoft Limited and South Asia Multimedia Technologies Limited in South Asia FM Limited. It is further submitted that Sun Direct TV (P) Limited and South Asia FM Limited are the companies promoted by Sh. Kalanithi Maran, who is real brother of Sh. Dayanidhi Maran. It is further submitted that there was no reason for Maxis to invest in these two companies, except for the delaying tactics and subsequent smooth approvals by Sh. Dayanidhi Maran. It is repeatedly submitted by him that these two investments are nothing but blatant acts of corruption. My attention has been invited to the various documents showing the flow of money. My attention has also been invited to the three valuation reports, that is, ENAM Securities (P) Limited, BOB Capital Markets Limited and Tata Sky Limited. It is repeatedly emphasized by him that
CBI Vs. Dayanidhi Maran & others Page 407 of 424 there is enough material on the record to indicate that the alleged investment was nothing but bribe and bribe alone. 730. In the end, he has repeatedly emphasized that there is enough incriminating material on record warranting framing of charge against the accused. My attention has been invited to the relevant case law and legal provisions. It is emphatically submitted by him that at this stage only a prima facie view is required to be taken and the case of the prosecution is presumed to be true. 731. On the other hand, it is submitted by the learned counsel for defence that there is absolutely no material on record to indicate that aforesaid investment was in any way linked to the alleged acts of Sh. Dayanidhi Maran. It is repeatedly submitted that the case of the prosecution is not only speculative, but is wholly based on presumptions and assumptions. It is the case of the defence that there is no legally admissible evidence on record in this regard. During long winding arguments, it has been the case of the defence that the valuation reports cited in support of the investment being a bribe carry no value in the eyes of law as the same are based on various assumptions and presumptions, which cannot be legally proved. It is repeatedly submitted that the three valuation reports carry no value in the eyes of law and, as such, are meaningless. My attention has been invited to various documents, statements and legal provisions for emphasizing that there is no incriminating material on record warranting framing of charge. It is repeatedly submitted that the entire case is just a figment of imagination, simply for the reason that
CBI Vs. Dayanidhi Maran & others Page 408 of 424 investment has been made in the companies incorporated by the brother of Sh. Dayanidhi Maran, the then MOC&IT. It is repeatedly submitted that since there is no legally admissible evidence on record, all accused may be discharged. 732. It is the case of the prosecution that Astro Asia Network, through its wholly owned subsidiaries, subscribed to equity shares of Sun Direct TV (P) Limited at a premium and equity shares of South Asia FM Limited at par. It is the case of the prosecution that these two companies were promoted by Kalanithi Maran. It is further alleged that in fact illegal gratification in the garb of share premium of Sun Direct TV (P) Limited was received by Sh. Dayanidhi Maran through his brother Sh. Kalanithi Maran on investment being made by South Asia Entertainment Holdings Limited (SAEHL), a wholly owned subsidiary of Astro Overseas Limited, which, in turn, is wholly owned subsidiary of Astro All Asia Network Limited, in which Sh. T. Ananda Krishnan has an indirect shareholding of 42.49%. It is further alleged that investment made by Astro All Asia Network, through its subsidiaries, namely, South Asia Software Technology Limited, Mauritius, and South Asia Multimedia Technology Limited, in South Asia FM Limited was also illegal gratification. It is alleged that these illegal gratifications were in the nature of quid pro quo for approvals granted by Sh. Dayanidhi Maran to Maxis Communications during his tenure as MOC&IT, after it acquired Aircel Limited, Dishnet Wireless Limited and Aircel Cellular Limited. 733. FIPB approval for the investment was granted on 22.02.2007 by the Cabinet Committee on Economic Affairs and
CBI Vs. Dayanidhi Maran & others Page 409 of 424 approval letter was issued to Sun Direct TV (P) Limited on 02.03.2007. The Shareholders Agreement (D-316) and Share Subscription Agreement (D-317) were executed for investment in Sun Direct TV (P) Limited on 05.04.2007. It is the case of the prosecution that SAHEL invested Rs. 549 crore in Sun Direct TV (P) Limited from 10.12.2007 to 30.09.2008. 734. Now the question is: How this investment of Rs. 549 crore can be termed as bribe or illegal gratification meant for Sh. Dayanidhi Maran? It is the case of the prosecution that no valuation of Sun Direct TV (P) Limited was conducted prior to entering into Share Subscription and Shareholders Agreement dated 05.04.2007. It is their case that such a big deal cannot be entered into without prior valuation by qualified professionals. It is further their case that valuation carried out by ENAM Securities (P) Limited (D-310 to 312) is of no consequence as it was conducted subsequent to the date of agreements, that is, 05.04.2007. Further, the report itself specified that the opinion of ENAM is based on business plan of the company and they did not make any independent verification of the same. Hence, of no use. 735. It is further case of the prosecution that they got the valuation of Sun Direct TV (P) Limited conducted during investigation from BOB Capital Market Limited, a SEBI registered category-I merchant banker, as on 01.04.2007 and it gave its report on 02.09.2013. It is the case of the prosecution that BOB Capital Market Limited in its report opined that post- money equity valuation of Sun Direct TV (P) Limited as on 01.04.2007 was Rs. 1833.8 crore and pre-money valuation of
CBI Vs. Dayanidhi Maran & others Page 410 of 424 the company was Rs. 1284.80 crore and the price of equity comes to Rs. 53.15 per share. It is their case that on the other hand, Share Subscription Agreement dated 05.04.2007 (D-316) had put the post-money valuation of the company at Rs. 2745 crore and price of equity per share at Rs. 79.57. 736. In brief, the case is that post-money value of a share of Sun Direct TV (P) Limited as on 01.04.2007 was Rs. 79.57, whereas as per BOB report it was Rs. 53.15. It is their case that either the entire amount of Rs. 549 crore was bribe as it was not a purely business driven investment or at least a portion of the premium of Rs. 26.42 per share was unjustified/ overvalued, which was paid in the garb of equity subscription. 737. It is further their case that during March 2007, Tamasek Capital Limited, an investing company of Singapore, valued the equity shares of M/s Tata Sky Limited, which was also engaged in the same business as Sun Direct TV (P) Limited to provide Direct-to-Home services to its subscribers, at Rs. 26.24 per share. It is further their case that Tamasek Capital Limited subscribed to shares of Tata Sky at a price of Rs. 30 per share (D-265). M/s Baytree was investing company and it invested Rs. 154.44 crore in Tata Sky in order to own 10% of the increased share capital. It is also their case that another investor NDDS also subscribed to 20% shareholding of Tata Sky at the price of Rs. 30 per share, in the month of May 2007. It is their case that, post-money valuation of Tata Sky was Rs. 30 per share. 738. Hence, based on the two valuations, the overvalued share premium for investment in Sun Direct TV (P) Limited
CBI Vs. Dayanidhi Maran & others Page 411 of 424 was quid pro quo. 739. However, it is not clear to the prosecution as to whether the entire investment made in Sun Direct TV (P) Limited was illegal gratification or the overvalued share premium was illegal gratification or at least a portion thereof, that is, of Rs. 26.42, was illegal gratification. Be that as it may. 740. It may be noted that except these two reports, there is no other evidence prima facie indicating that the investment was, in fact, illegal gratification for the approvals granted by Sh. Dayanidhi Maran during his tenure as MOC&IT. 741. I have carefully gone through the valuation reports of ENAM Securities (P) Limited, BOB Capital Market Limited and Tata Sky Limited. These reports are subject to numerous limitations and qualifications and are based on several assumptions and presumptions. This is illustrated by the following portion of report of BOB (D-568): “STATEMENT OF LIMITING CONDITIONS AFFECTING THE VALUATION RESULTS
Our Report is subject to the scope limitations detailed hereinafter. ● The Report has been prepared on the request of Central Bureau of Investigation. The Report may not be disclosed, in whole or in part, to any third party or used for any purpose whatsoever other than those indicated in the Engagement and Report itself. The Report is to be read in totality, and not in parts, in conjunction with the relevant documents referred to in this Report. ● Valuation methodology and results are specific to the purpose of valuation and the Relevant Date mentioned in the Report and
CBI Vs. Dayanidhi Maran & others Page 412 of 424 as per terms of our Engagement. It may not be valid for any other purpose or as at any other date. A valuation of this nature involves consideration of various factors including those impacted by industry trends prevailing around the Relevant Date. The actual financial results of the Company may be different from our estimates as our forecast is specific to the factors prevalent around the Relevant Date. Further, we also do not express any opinion on the achievability of the projections in the future. ● The Report does not constitute an audit, due diligence or certification of the financial statements of the business referred to in this Report. We have relied on the documents made available by CBI. We have also placed reliance on industry reports sourced by us. We have not checked or independently verified the completeness and/or accuracy of the information given by CBI and the industry reports. We have also not had any discussions with the Company's management concerning the history and nature of its business, its financial conditions and its future prospects. It must be recognized that events of which we have no actual to constructive knowledge affecting the Transaction may have a bearing on the valuation worked out by us as contained herein and that we have no obligation to update or to revise or to reaffirm the conclusion of our Report. ● Our scope of work involves giving a Report on valuation of equity shares of Sun Direct as of the Relevant Date and in connection with the Transaction. However, we were not part of any negotiation or decision making at the time of signing of SSA between SAEHL, Maran Group and the
CBI Vs. Dayanidhi Maran & others Page 413 of 424 Company. For the purpose of this Report, we have assumed that the Company is a going concern and will continue to be so after the date of this Report. ● No investigation of the claim to title of assets of the Company has been made for the purpose of this Report and the Company's claim to such rights has been assumed to be valid. We have not verified or examined or reviewed the title of any property or shareholding in any company during the course of exercise. ● We take no responsibility for matters of legal nature. We were not required to carry out a legal due diligence review. It is further clarified that, any advice or views expressed or information rendered by us shall be deemed as financial opinion only and should not be considered as opinions regarding legal, accounting, regulatory, tax matters etc. ● Valuation is not a precise art and the conclusion arrived at will be subjective and dependent on the exercise of individual judgment. …...... ” (All underlinings by me for supplying emphasis.)
742. The reports of ENAM Securities (P) Limited and Tata Sky Limited are also subject to similar limitations and qualifications. A bare perusal of these reports would reveal that they are based on too many assumptions and presumptions. These reports assume too much and prove too little. There is hardly any fact in these reports which can be put to legal proof. Linguistically these reports are highly hedged in the sense that
CBI Vs. Dayanidhi Maran & others Page 414 of 424 they neither affirm nor deny anything. In simple words, in legal terms, contents of these reports neither mean 'yes' nor 'no'. There is no firm commitment to any statement of fact contained in these reports. On the basis of these reports, in the eyes of law, no definitive view can be taken, even prima facie. As far as law is concerned, they are of no value. These reports may be good for economic/ business projections as they are only indicative in nature. There are no definitive/ quantitative statements in these reports. These reports do indicate the estimated price of the shares on the relevant date, but these prices are only indicative of the price on the relevant date. One may get only an indication as to whether the shares were correctly valued or over-valued, but no definitive view. In such a situation they may offer a guide to the investigator to investigate the matter further and collect legally admissible evidence. I have no hesitation in recording that these reports by themselves do not constitute legal proof, for or against anyone, even prima facie. 743. Further, Man does not always work rationally. In market situation, there is no computer like thinking or precision. Human beings are also influenced by non-economic considerations. 744. In view of this discussion, I am of the firm opinion that these reports do not constitute any legally admissible evidence but can certainly furnish a ground for investigation for collecting legally admissible evidence. 745. Apart from these reports, as already noted above, there is no other material on record to indicate that the entire
CBI Vs. Dayanidhi Maran & others Page 415 of 424 investment or premium on the shares or even a portion of the premium was bribe. It remains only a matter of perception or suspicion and in the absence of legally admissible evidence, perception or suspicion means nothing in law.
Investment in South Asia FM Limited 746. The case of the prosecution is that South Asia Software Technologies Limited, a subsidiary of Astro All Asia Network, through its subsidiaries South Asia Multimedia Technologies Limited and AH Multisoft Limited, also invested a sum of Rs. 193.54 crore in South Asia FM Limited from 20.02.2007 to 20.12.2010 for purchasing its equity shares at par value of Rs. 10 per share. It is their claim that it was not a business driven investment, but illegal gratification for Sh. Dayanidhi Maran. 747. However, there is absolutely no material on record to arrive at such a conclusion. No document has been pointed out at the bar to arrive at such a conclusion. It is simply an ipsi dixit of the investigating officer without any factual or legal basis. However, if an overall view of the prosecution case is taken, this investment is sought to be linked to the alleged tactics of delay by Sh. Dayanidhi Maran and subsequent smooth approvals, as noted above. However, allegations relating to these have already been found to be incorrect. In such a situation, it cannot be said that the amount of investment was an illegal gratification. 748. Furthermore, if the two investments of Rs. 549 crore and Rs.193 crore were not business driven investments,
CBI Vs. Dayanidhi Maran & others Page 416 of 424 but were something else, then the question is: How to connect Sh. Dayanidhi Maran with that? As per allegations in the charge sheet, both brothers, that is, Sh. Dayanidhi Maran and Sh. Kalanithi Maran, share economic interests through some of their companies like Sun Academic (P) Limited, DMS Entertainment Limited, HFO Entertainment Limited, DK Enterprises Limited and a partnership firm S.S. Textile, which is run by wives of both the accused. It is further their case that a letter dated 19.03.2007 issued by Sh. Ashish Dutta, Under Secretary, Ministry of I&B, and addressed to Kalanithi Maran, conveying approval of FIB and CCA was got collected by Sh. Dayanidhi Maran through his stenographer Sh. Balasubramanian. 749. It may be noted that Sh. Dayanidhi Maran or his wife Priya Dayanidhi had no stake in Sun Direct TV (P) Limited or South Asia FM Limited. 750. However, in the eyes of law, these grounds themselves are not enough to connect the money received in the company of Kalanithi Maran to Dayanidhi Maran. The three simple and ordinary facts that they are real brothers or that both are shareholders in some companies or that Sh. Dayanidhi Maran got a letter addressed to his brother Sh. Kalanithi Maran collected through his stenographer are by themselves not indicative of any conspiracy between the two on this point. They may indicate their close association but nothing beyond that. These may create a perception or a suspicion that the money received in the company of Sh. Kalanithi Maran was meant for Sh. Dayanidhi Maran, but perception or suspicion
CBI Vs. Dayanidhi Maran & others Page 417 of 424 are not enough for criminal prosecution. The perception or suspicion is required to be investigated and supported by legally admissible evidence, which is wholly lacking in this case.
Scared, submissive and obstructive bureaucracy: A threat to constitutional democracy and rule of law 751. Some comments on the conduct of the senior officers involved in the processing of the files are not out of context. In processing file D-2, the role of Sh. P. K. Mittal is writ large on the face of record. It is he who directed that the issue of signing of seven licences be de-linked from the issue of extension of time for compliance of LOI for MP service area and for grant of LOI for UP(E) and UP(W) service area. Similarly, the officers of LF branch were questioning the financial capacity of the company as well as indicating that there is no guideline for extension of time for LOI, but he was ignoring all these issues. It is he who ultimately forced the LF branch to give up the issues relating to the business plan and financial capacity of the company in the processing of file D-2, but in oral statement he blames the Minister for putting frivolous questions. Perhaps the officers of LF branch were submitting Dishnet DSL Limited to higher scrutiny due to its earlier adverse track record, as already noted above in detail. 752. Similarly, in the processing of file D-4 relating to licences in Punjab, Haryana, Kerala and Kolkata service areas, the footprint of Sh. P. K. Mittal are writ large everywhere. The type of questions put by him have also been already extracted above. The perusal of the file reveals that he was putting all sort
CBI Vs. Dayanidhi Maran & others Page 418 of 424 of questions like “Is shareholding pattern directly or indirectly provided”. Again when the file reached him, he put a question “Is non-resident individual same as non-resident Indian. Pls. clarify”. When the issues clarified, he again records “Pls. ask clarification” and accordingly a letter was written to the company. Thereafter, when the file is further processed, he introduces the idea that latest FDI is yet to notified etc. The perusal of the file reveals that the file was pending due to impending FDI policy. However, in the oral statements, he blames Sh. Dayanidhi Maran and note dated 30.03.2005 of Sh. Nripendra Mishra. Similar is his attitude regarding processing of the representations, which were also dealt with in this file as well as in file D-5. As per record, the representations of Sh. V. Srinivasan was brought to the notice of Sh. Nripendra Mishra, but in oral statement he states that these representations were not brought to the notice of Secretary (T). The most astonishing and disturbing part is that the then Additional Secretary (T) Sh. Yashwant Bhave also blames Dr. J. S. Sarma by making an oral statement, which is wholly contradictory to the official record. 753. Similarly, in file D-41, as already noted above, the role of Sh. P. K. Mittal is all pervasive and the type of questions put by him and his acts have already been noted above. He himself linked this file with other file, but by resorting to oral statement, he blames Sh. Dayanidhi Maran for the delay. 754. Similarly, in processing of file D-30 after discussion with Secretary (T) on 05.08.2004, equity structure of various companies involved was called for and was supplied by the companies and this was taken note of in the next note sheet.
CBI Vs. Dayanidhi Maran & others Page 419 of 424 However, Dr. J. S. Sarma called for further examination of the equity structure of the companies to understand it, as the same was appearing to be complex, his report has been questioned by the oral statements. At every step, the DoT was repeatedly asking for equity structure of the companies. 755. As far as issue of de-linking is concerned, which was dealt with in file D-43, the role of Sh. P. K. Mittal is writ large on the face of the record. Perusal of the file reveals that he himself was responsible for this, but by oral statement he blames Dr. J. S. Sarma for this. In the end, the decision appears to be result of a joint discussion amongst the senior officers of the department, but by oral statement, the blame is laid on Dr. J. S. Sarma. In all these files, it was incumbent upon the officers to record in the note sheets the instructions of the senior officers, but nowhere it has been done. 756. Similarly, in the case of allocation of initial spectrum in Bihar service area, perusal of the file reveals that it was Wireless Advisor Sh. P. K. Garg who was doing everything, but by oral statement, wholly blames Dr. J. S. Sarma. Similarly, in the allocation of additional spectrum beyond 6.2 MHz to Aircel, which was dealt with in D-37, the record shows that Sh. P. K. Garg was wholly responsible for everything, but by making oral statement, he blames Dr. J. S. Sarma. 757. Similarly, as per provisioning of POIs is concerned, the perusal of file D-121(i) reveals that everything was the doing of Sh. Mahipal Singh and Sh. K. S. Guliani, but by making oral statements, they shift the blame on CMD (BSNL) Sh. A. K. Sinha.
CBI Vs. Dayanidhi Maran & others Page 420 of 424 758. A perusal of these files reveals that the concerned officers were doing all the acts relating to the issues dealt with therein and were either stalling or expediting the same on their own initiative, but by making oral statements blame Dr. J. S. Sarma for the same. Now the question is: If such oral statements, which do not flow from the record or find corroboration from anywhere from any circumstance, are given judicial recognition, what shall be the fate of the rule of law? These oral statements are in violation of the official rules and procedures which mandate that instructions of the senior officials are to be recorded on the file. If such a practice is allowed, anybody and everybody in the Government can be made to face prosecution. No Minister or Secretary would remain safe or for that matter anyone working in the department. The official record which is deemed to be correct and true shall loose all importance and wrong doers would have a hay day as by making oral statement they can accuse anyone and themselves go scot-free. In the instant case, everyone who was responsible for any delay, wrong doing or obstructive questions have been made a witness and has thus, readily and willingly made an oral statement, fully and wholly contrary to the official record. This is a dangerous trend and can strike at the root of rule of law and the constitutional democracy as wrong doers can gang up against those, who, by the perusal of record, are innocent. 759. It has been the case of the prosecution that such oral statements are to be accepted at the face value at the stage of charge. There can be no dispute about this proposition.
CBI Vs. Dayanidhi Maran & others Page 421 of 424 However, this is not a rigid rule and depends upon the facts of the case. When an oral statement is contrary to official record, unreasonable as it does not find any support from any quarter or circumstance, and verges on absurdity, the same can be ignored and should be ignored to save the innocents from needless prosecution. Of course, in the instant case, there are so many other factors to reject the case of the prosecution, as has been noted above in detail. 760. I have no manner of doubt that these officers were timid and obstructive at the time of preparation of record as well as subsequently when making the statement to the CBI, wherein they readily shifted the blame to others. 761. In contrast to these officers, there is a Secretary Sh. Nripendra Mishra who performed his duties with due diligence and confidence and never shied away from recording his views on the file. The transfer of shares of Aircel Cellular Limited to Aircel Digilink India Limited was being recommended by lower level officers, including up to the level of Member (P), which was in violation of competition clause in the agreement. However, it stopped when the file reached Sh. Nripendra Mishra on 05.08.2004. Similarly, in file D-40, when the Minister asked AS(T) on 15.09.2004 to go through the files and submit a note, despite the recommendation up to the Secretary (T), Sh. Nripendra Mishra was forthright in recording his disapproval by observing in writing that “My recommendations are available on the file and AS(T) please comply with the orders of the MOC&IT and submit to MOC&IT for superior order”. Furthermore, when Dr. J. S. Sarma put up his note, Sh.
CBI Vs. Dayanidhi Maran & others Page 422 of 424 Nripendra Mishra was again forthright in asking for legal opinion on that. Thus, he did not hesitate in expressing his views and that too in writing. 762. However, he also understood that in constitutional democracy, the views of the Minister are to be obeyed and respected and on 30.03.2005, after speaking to the Minister complying with his orders, he recorded the following note: “Discussed with MOC&IT. These files are returned with the directions that the Dir. should ascertain all the show cause notices/advisory letters issued to the above company or companies belonging to the group and the nature of defaults before any view is taken. It may be submitted to my successor.”
763. This note is in consonance with the guidelines and proforma of application for UASL, as noted and extracted above in detail. This shows that when an officer wishes to work independently, he is free to do so. Everywhere, he is recording his note in writing and quite forthrightly. Furthermore, he did not make any statement under Section 161 CrPC which is contrary to official record. 764. On the other hand, the conduct of Sh. Yashwant Bhave, Sh. P. K. Mittal, Sh. P. K. Garg, Sh. Mahipal Singh and Sh. K. S. Guliani is totally in violation of official procedures and rules. It is strange that an Additional Secretary to Government of India is so scared of his Secretary that he readily agrees to do an illegal act. When Secretary (T) Sh. Nripendra Mishra himself was forthright in expressing his views, what prevented these senior officers from recording their own. 765. In view of the above discussion I am satisfied that
CBI Vs. Dayanidhi Maran & others Page 423 of 424 the entire case is based on the misreading of the official files, contradictory statements of the witnesses as well as speculations and surmises of Sh. C. Sivasankaran. I have no hesitation in recording no prima facie case warranting framing of charge against any of the accused is made out. 766. Accordingly, all accused stand discharged.
767. File be consigned to Record Room. Since most of the files are official files of DoT, the department is at liberty to seek their return after time of filing of appeal is over.
Announced in open Court (O. P. Saini) today on February 2, 2017 Spl. Judge/CBI(04) (2G Spectrum Cases)/ New Delhi
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