SC flays PSU banks for their role in 2G scam

New Delhi: The Supreme Court on came down heavily on public sector banks for their role in the 2G spectrum scam. A two-judge bench of justices GS Singhvi and AK Ganguly said that massive amounts were lent by some public sector banks to the 2G licencees and it must be investigated.

The bench pointed out that about Rs 600-700 crore was lent out as if it was an amount like Rs 60-70. The court also questioned how did public sector banks continued to disburse loans to telecom companies even after the Central Bureau of Investigation (CBI) registered an FIR in connection with the 2G scam and searched the premises of the telecom companies in October 2009.

One of the banks, State Bank of India, lent Rs 10,000 crore to Unitech during 2009-2010. The court said that the disbursement of such a huge loan amount must be investigated.

The CBI said that the agency will refer the matter to its Bank Fraud Cell and submit a report to the court.

Favouring the widening of the ambit of the ongoing investigation into the 2G spectrum case, the court said that it should also include the period since 2001 when first-come-first-served was the norm for spectrum allocation.

"The issue raised in the case is not only limited to Rs 1.76 lakh crore but has a much wider compass. We would not like to prejudice the probe. But, what happened in 2001 needs to be looked into. It is for the CBI to investigate and find out," the two-judge bench of justices Singhvi and Ganguly said.

"Why don't you go into the matter from 2001," the bench said, noting that the prices for allocation of spectrum on first-come-first-served basis was fixed at that time.

The Bharatiya Janata Party-led National Democratic Alliance government was in power in 2001 and the late Pramod Mahajan was the telecom minister.

The judges' remarks assume importance as former telecom minister A Raja has maintained that he was treading on the footsteps of his predecessors and was following the 2001 policy.

In 2001, government was not following the policy of auction but was allocating spectrum on first-come-first-served basis.

The apex court also remarked about the policy of transfer of dual technology - CDMA and GSM, saying that while the notification for the dual technology was issued on October 19, 2007, one of the service provider was given the permission a day earlier.

The court also reserved its judgement on a petition seeking monitoring of the investigation into 2G spectrum case by the apex court while expresses concern on the involvement of public sector banks in lending huge sums of money to those companies who got the spectrum licences.

The Court heard the arguments forwarded by NGO Centre for Public Interest Litigation which had brought the issue before it, the CBI, Enforcement Directorate, Department of Telecommunication and former telecom minister A Raja, who resigned from the Cabinet in the wake of the scam.