A bench led by Justice D.Y. Chandrachud<\/a> said that it was “pari delicto (in equal fault or wrong)” with DoT and the then officials of the Union government and was a “beneficiary of the first come first serve policy<\/a> intended to favour a group of private bidding entities at the cost of the public exchequer”.
The company’s contention that it was exculpated from any wrong doing by the 2G judgment is patently erroneous, the bench, which also included Justices Surya Kant and Vikram Nath<\/a>,said.
“The process leading up to the award of the UASLs (licenses) and the allocation of the 2G spectrum was found to be arbitrary and constitutionally infirm.”
“The need for an open and transparent bidding process for the allocation of natural resources was substituted by a process which was designed to confer unlawful benefits on a group of selected bidders by which the appellant benefited.”
“The beneficiaries of the patently unconstitutional mechanism deployed for the allocation of spectrum were corporate entities who were favoured under the First Come First Serve policy. The appellant is one of them.”
The company has tried to obviate these findings by relying on its acquittal by the Special Judge, CBI, the bench noted.
“... the criminal trial before the Special Judge, CBI, was limited to the question as to whether its promoters had cheated the DoT by providing a false representation of its compliance with Clause 8 of the UASL guidelines,since it was allegedly being controlled by the Essar group.”
The Special Judge, CBI, acquitted the promoters… since the prosecution was unable to prove that: (i) officers of DoT considered its representation to be false; (ii) the company was engaging in a sham transaction; or (iii) the company was actually controlled by the Essar group, the top court said.
“Hence, the acquittal of the promoters… of these criminal charges does not efface or obliterate the findings contained in the final judgment of this court in CPIL Hence, as a beneficiary and confederate of fraud, the company cannot be lent assistance of this court for obtaining the refund of the entry fee.”
Loop had claimed a refund of Rs 1454.94 crores representing the entry fee (together with interest) paid by it for 2G licences for 21 service areas. It had also claimed damages caused to it by the cancellation of its licenses.
It claimed that the government’s subsequent set-off policy was a concession that companies could seek restitution for cancellation of licenses.
The government on its part argued that the entry fee was a non-refundable fee.
It also contended that the company’s acquittal had no bearing on the findings of this court in the CPIL case according to which UASL and allocation of spectrum was held to be stage managed and violative of the principles of public law.
This precludes the company from claiming any refund or restitution.
As a matter of fact, this court in CPIL imposed costs of Rs 50 lakhs on the company for wrongly benefitting from the wholly arbitrary and unconstitutional exercise of licence and spectrum allocation.
Consequently, even under the contract law, it was disentitled from claiming any refund or restitution of the entry fee based on the principle of in pari delicto.
The court also deprecated the “rising trend of cases where parties have attempted to take another bite at the cherry by initiating proceedings over various forums, particularly to circumvent the jurisdiction of this court which is in seisin of the matter.”
“A purportedly ancillary remedy is urged in another forum as a dilatory tactic or as an attempt at forum shopping.”
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