Shrey Goyal, National Law University and Judicial Academy, Assam.
Sakshi Mehta, OP Jindal Global University.
Bhavya Venkatachalam, Ansal University.
Meghaa G., TNNLU
Relevant Case Citation: CC No. 01/14, ECIR/31/DZ/2010
When the erstwhile Comptroller and Auditor General, (CAG), Vinod Rai in 2010 wrote in his report that the misdeeds of the United Progressive Alliance (II) and its beneficiaries had cost the public exchequer upwards of Rs. 1.7 lakh crores, the whole world was shell-shocked. The Central Bureau of Investigation alternatively put the losses at around Rs. 20000 – 30000 crores, in its filed charge-sheet. Since then, this exceptionally high-profile and long case has come to be known as the 2G Spectrum Allocation Scam, named so for the sale of the 2G licenses by the UPA government, allegedly at a throwaway price, causing a huge public asset loss.
The larger trial comprised of a triumvirate of cases – two of which were filed by the CBI and one filed by the Enforcement Directorate (ED). The principals accused were politicians (the-then telecom minister A. Raja and DMK MP M.K. Kanimozhi), bureaucracy and government servants (the-then telecom secretary Siddharth Behura and Raja’s private secretary R.K. Chandolia) and well-known businessmen and companies (Unitech’s Sanjay Chandra, Essar’s Ravi Ruia, Reliance’s Gautam Doshi). Thus, due to the nature of the case, it attracted a lot of attention, from home and abroad. It was hence also a tad disappointing, however, when it reached its inevitable anticlimactic conclusion – which saw all the accused respectfully acquitted, and their assets released. Let us look in detail at the case made out by the E.D., analyse the outcomes and the judgment, and finally ascertain the future trajectory of the 2G Scam “money-laundering” case.
NGO Telecom Watchdog on May 4, 2009 lodged a complaint to the Central Vigilance Commission (CVC) on the wrongdoings in the area of spectrum allocation to Loop Telecom. Mr. Arun Agarwal later filed another complaint to the CVC regarding the spectrum allocation to Swan Telecom at expendable costs. CVC further directed C.B.I. to investigate the anomalies in the allotment of the 2G Spectrum. Department of Telecom’s unknown officials and unknown private persons or companies had to face a FIR lodged by the C.B.I. A case was also registered by the C.B.I. on October 21, 2009 under multiple provisions of the Indian Penal Code and the Prevention of Corruption Act. It also prompted tapping of conversations and raids. Ultimately, the investigation was ceased as the FIR registered had no name on it.
Comptroller and Auditor General of India in 2010, perceived comprehensive inconsistencies in the allotment of 2G spectrum. It was evaluated that there was a loss of Rs. 1.74 lakh crores to the Nation. The case was reopened when the public prosecutor, Subramanian Swamy made a reference in his complaint that A. Raja supported "ineligible" privately owned businesses - Unitech Wireless Ltd. and Swan Telecom Pvt. Ltd while allocating the spectrum. Later, Supreme Court cancelled all the 2G Spectrum licenses granted during A. Raja’s time as the Telecom Minister and declared it to be arbitrary and unconstitutional.
The Prevention of Money-Laundering Act, 2002-
Section 3 –
Defines the offence of money laundering as a direct or indirect attempt to intentionally assist (or) be a party (or) get involved in any activity connected with the “proceeds of crime” and projecting as untainted property.
“Proceeds of crime” is defined in Section 2(1)(u) as any property, directly or indirectly, obtained (or) derived, as a result of criminal activity relating to a scheduled offence or value of such property.
Section 4 –
Lays down the punishment for money-laundering. The person committing the offence will be punishable with rigorous imprisonment for a term, not less than three years and may extend to seven years. Additionally, will also be liable to fine, extending to five lakh rupees.
Section 45 –
States that no individual can be conceded bail for any offense under the Act except when the appointed Public Prosecutor, gets an opportunity to contradict the bail. In the event that the public prosecutor does as such, the Court must be persuaded that the accused was not liable for the wrongdoing and also that they were not prone to commit an offense when granted bail.
The Supreme Court put aside the unreasonable bail conditions forced by Section 45 because of its unconstitutional nature of violating Article 14 and 21 of the Constitution. An amendment has been made to Section 45(1) which proposes uniform pertinence of bail conditions, rather than just those violations recorded in the schedule that engages with more than three years of imprisonment. A further constraint of INR 1 crore (USD 140,200) associated with the supposed offense would permit the Court to apply bail arrangements all the more tolerantly to less genuine PMLA cases. Change have been made to make it hard for launderers to get bail when the offense is cognizable.
Having discussed the facts of the case and the relevant provisions, let us now look at the rationale the Special Judge, O. P. Saini used to give his verdict.
The sole determining factor Justice Saini used in his judgement to ascertain the guilt of the accused, was the “proceeds of crime”, as elaborated upon in the concerned statute, the Prevention of Money Laundering Act, 2002. In brief, “proceeds of crime” is a property derived by any person as a result of criminal activity relating to a scheduled offence.
According to Justice Saini, “Proceeds of crime is the essence and indispensable element of the offence of money laundering. It is the core constituent of the offence. Without the existence of proceeds of crime, there cannot be any commission of an offence of money laundering.”. As the proceeds of crime was entirely predicated on the 200-crore favour by DB Group to A. Raja in exchange of illegal licenses, who were earlier acquitted on all charges, in the case C.B.I. v. A. Raja & Ors., there was no case to be made here as well. Judge Saini did not consider the discussion of any other issue of substance, as according to him the prosecution failed to prove the essential condition for money laundering itself. Justice Saini’s reasoning and verdict, however, fly in the face of the earlier 2012 Supreme Court ruling that had held the licenses unlawful and revoked them. This discrepancy is hard to digest.
Aside from the specific favour to A. Raja by the DB Group, there were many facets of the case, wherein substantial evidence was presented and grounds for conviction were present. These include the conclusive handing out of benami licenses, arbitrary fixing of the first-come first-serve basis and rampant bribing.
The E.D. officials said they would see if the case was rejected merely because the predicate offence probe of the C.B.I. had been rejected or were there other reasons as well. Thus, subsequently, in March, 2018, both the E.D. and the C.B.I. filed separate appeals against the decision of the Special Court in the Delhi High Court. As of 2020, these appeals have still been pending, moving along at a glacial pace. The High Court on multiple occasions refused to move up hearings from their original dates. Moreover, the accused were reprimanded as they were late in filing their responses to the appeal by the E.D. and the C.B.I. As a result, they were charged with planting 3000 trees and taking care of them until monsoon. After the accused protested these were “extremely burdensome” requests, the punishments were reduced to 1500 by presiding judge, Justice Najmi Waziri.
The latest development in the case as of January, 2020, saw two of the principals accused, i.e. former telecom minister A. Raja’s then private secretary RK Chandolia and ex-telecom secretary Siddharth Behura, have approached the Delhi High Court submitting that they can no longer be tried under the previous appeal as it has become “infructuous” with the new Prevention of Corruption Act, 2018, coming into force. According to them, the law under which they are being “taken to Court” is itself obsolete.
Lastly, the Supreme Court in December, 2019, said to the Solicitor General, Tushar Mehta (who was jointly representing the E.D. and the C.B.I.) that it would consider constituting a bench to deal with the pleas relating to the 2G Spectrum Allocation Scam case. However, any follow-through to the same has not been observed in more than half a year.
In an unprecedented move, the C.B.I. Court under the Special Judge O. P. Saini acquitted all the accused in the 2G Spectrum Allocation Case. This move sent shockwaves throughout the country.
Special Judge O. P. Saini noted he found “no proceeds of crime” and that this had “knocked out” the “very basic fact required for constitution of an offence of money laundering”. He further said that “the prosecution failed to prove any charge.”
The essentials of the 105-page judgment are as follows:
· All the 19 accused in the case were fully acquitted as “proceeds of crime” were not found;
· The bail bonds of the accused were cancelled;
· Sureties filed with the court were also discharged and documents seized were to be returned, and
· Property worth Rs. 223.55 crore of DB group of companies and its associates was also released.
The infamous 2G scam case today begs the question: why does the Indian Judiciary, time and time again, refuse to hold the influential accountable? Prashant Bhushan, the reputed Supreme Court lawyer who argued before the Apex Court for the cancellation of the spectrum licenses in 2012, wrote a scathing indictment of this inefficiency or sheer reluctance of the judiciary to ever hold the powerful liable. He said that, “I don’t know on what basis the Court said there was no evidence. In at least 40 pages of the judgment, the court has reproduced the evidence,” referring to the 105-page judgment in the Raja case.
What Time Magazine hailed as the second worst abuse of power in history, only after Richard Nixon’s infamous ‘Watergate’ scandal, was perhaps not treated with the severity it should have been. To be sure, this huge scam definitely played a pivotal rule in the public perceptions of the UPA nosediving and their crushing defeat in the 2014 elections at the hands of the Bhartiya Janta Party. But is that enough? The appeal proceedings continue in the High Courts but justice seems unlikely to arrive anytime soon. Many jurists and learned advocates have already written off the possibility of that ever happening, considering how acquittals being turned into convictions is extremely rare. The Supreme Court has made a few hollow promises as well, but is yet to take any tangible action. Also, amongst the COVID-19 pandemic the whole justice system has come to a screeching halt, and it seems that we will have to still patiently wait for a long time before we ever see a resolution.
 The Prevention of Money-Laundering Act, 2002, No. 15, Acts of Parliament, 2003 (India).  ET Bureau, Enforcement Directorate will appeal the judgement at High Court, The Economic Times, (Dec. 22, 2017, 02:29 AM), https://economictimes.indiatimes.com/news/politics-and-nation/enforcement-directorate-will-appeal-the-judgement-at-high-court/articleshow/62197081.cms.  Staff Reporter, Plant trees, Delhi HC tells 2G case accused, The Hindu, (Feb. 07, 2019, 10:42 PM), https://www.thehindu.com/news/cities/Delhi/plant-trees-delhi-hc-tells-2g-case-accused/article26207157.ece  Livelaw News Network, 2G Case: 'CBI Appeal Infructuous After Changes In PC Act', Accused Moves Delhi HC, LiveLaw, (Jan. 24, 2020, 1:13 PM), https://www.livelaw.in/news-updates/2g-case-C.B.I.-appeal-infructuous-after-changes-in-pc-act-accused-moves-delhi-hc-read-application-151964?infinitescroll=1.  PTI, SC to consider bench to deal with 2G scam case pleas, Deccan Herald, (Dec. 04, 2019, 11:05 PM), https://www.deccanherald.com/national/sc-to-consider-bench-to-deal-with-2g-scam-case-pleas-782751.html.  PTI, 2G spectrum scam judgment: A Raja, Kanimozhi and 17 others acquitted in ED's money laundering case, Firstpost, (Dec. 21, 2017, 02:54 PM), https://www.firstpost.com/india/2g-spectrum-scam-judgment-a-raja-kanimozhi-and-17-others-acquitted-in-eds-money-laundering-case-4269175.html.  Prashant Bhushan, 2G scam judgment tells India the judicial system won’t hold the influential accountable, The Print, (Dec. 21, 2017, 04:41 PM), https://theprint.in/opinion/2g-scam-judicial-system-wont-hold-influential-accountable/24047/.