1. Introduction
The 2G spectrum matter became one of the most politically and legally consequential corruption controversies in modern India. Beginning with a Comptroller & Auditor General (CAG) audit in 2010 that alleged large-scale irregularities in the allocation of 2G telecom licences, the episode triggered parliamentary uproar, criminal investigations, lengthy litigation and significant changes in telecom policy and procedure.
This case study summarizes the core facts, the principal legal questions, how authorities behaved, the judicial outcomes and the longer-term effects on law and governance.
2. Facts of the Case
In 2008 the Department of Telecommunications (DoT) allocated 122 licences and corresponding 2G spectrum licences to various telecom operators mainly on a first-come-first-served basis and at 2001 price levels.
The CAG’s 2010 audit concluded that serious procedural lapses and favouritism had allowed specific firms to obtain licences at prices far below market value, and estimated a “presumptive” loss to the public exchequer — a figure that sparked intense public debate and political action.
The revelations led to resignations at ministerial levels, and demands for a thorough inquiry.
Key commercial consequences followed:
- Foreign investors and operators faced litigation and exit threats.
- Several companies were fined or sued.
- The government faced reputational and financial exposure both domestically and internationally.
The CAG findings and ensuing media coverage framed the allocations as potentially arbitrary and unconstitutional, putting the allocation mechanism and ministerial conduct at the center of scrutiny.
3. Legal Issues Raised
The 2G controversy raised multiple legal issues, several of which were novel or tested existing doctrine:
- Legality of Allocation Method: Whether allocation on a first-come-first-served basis (with 2001 prices) violated principles of public procurement, comparative fairness and the public interest.
- Constitutional Question: Whether the allocations were “arbitrary” or violated Article 14 (equality before law) and other constitutional norms, thereby rendering licences void.
- Criminal Liability: Whether ministerial actions (including alleged manipulation of file notings and deadlines) and corporate conduct amounted to criminal offences — chiefly cheating, criminal conspiracy, and offences under Prevention of Corruption statutes.
- Quantification of Loss: Whether the CAG’s method for estimating loss (the “presumptive loss” figure) was legally sound and admissible as evidence of criminal misappropriation or corruption.
- Evidentiary Challenges: The case exposed the gap between audit inferences and admissible testimonial/documentary evidence required for criminal conviction. The special CBI court later criticized the prosecution’s reliance on extrapolated figures and oral statements not corroborated at trial.
4. Role of Authorities
Multiple institutions played significant roles — some complementary, others adversarial:
- CAG (Comptroller & Auditor General): Conducted a performance audit and produced the seminal report that flagged the allocations as arbitrary and quantified presumptive loss; its work triggered political and legal consequences.
- Parliament and Political Actors: Opposition parties used the CAG report to press for inquiries; political contestation shaped the public narrative and pressured executive responses.
- Department of Telecommunications (DoT): Its internal processes, record-keeping and files were scrutinized; policy failures at DoT were alleged.
- Telecom Regulatory Authority of India (TRAI): Subsequently became integral to recommending market-based allocation mechanisms (auctions) and reserve pricing, though TRAI’s role and timing were criticized during some stages.
- Central Bureau of Investigation (CBI) & Enforcement Directorate (ED): Investigated and prosecuted alleged criminal conduct, filing multiple charge-sheets and leading criminal trials. The prosecution strategy — its evidence collection, witness handling and charges — later became a central point of judicial criticism.
5. Judicial Action & Case Timeline
2010: CAG report tabled; political fallout begins.
2011–2012: Criminal investigations by CBI/ED; several arrests and charge-sheets filed.
2 February 2012: The Supreme Court declared the 2008 allocation procedure “unconstitutional and arbitrary,” cancelled 122 licences and directed fresh allocation via auction, remitting further steps to TRAI and the government. This decision forcibly ended the contested first-come-first-served regime.
2012–2017: Protracted criminal trials in a special CBI court. Evidence disputes and witness credibility questions dominated proceedings.
21 December 2017: Special CBI court judge O.P. Saini acquitted all accused, including then-Minister A. Raja and several private individuals, noting deficient evidence and criticizing the prosecution for relying on “misreading” documents and uncorroborated oral statements. The court described the chargesheet as “well-choreographed.”
The verdict produced strong reactions: relief for the acquitted, and critique of investigative shortcomings from others.
Post-2017: Appeals and further judicial reviews followed; higher courts have examined the adequacy of the trial court’s reasoning and the conduct of investigation in interlocutory proceedings. (For instance, appellate action was taken by investigative agencies to challenge the acquittal.)
6. Impact on Law & Policy
The 2G episode produced immediate and systemic policy shifts:
- Move to Auctions: The Supreme Court’s cancellation of licences and subsequent policy direction accelerated India’s transition from administratively allocated spectrum to market-based auction mechanisms — strengthening transparency and pricing discipline in telecom resource allocation. This remains the most enduring policy outcome.
- Stronger Institutional Oversight: The affair amplified calls for better internal record-keeping, transparent file notings, and time-stamped decision trails in ministries; it also enhanced the perceived role of independent regulators and auditors.
- Investigative & Prosecution Lessons: The trial exposed how audit conclusions and large “presumptive loss” figures do not automatically translate into criminal convictions unless supported by admissible, corroborated evidence. This led to critical introspection within investigative agencies on evidence collection, witness management and forensic accounting methodologies.
- Litigation & Compensation Exposure: The cancellation and subsequent legal turbulence created liabilities and compensation claims between the government and private operators, highlighting the fiscal and commercial costs of policy reversals.
7. Conclusion
The 2G spectrum saga is a paradigmatic public-policy and legal failure — one that mixed audit findings, political contestation, regulatory shortcomings and prosecutorial weaknesses.
Its legacy is mixed: on the positive side, it ushered in market-based spectrum allocation and higher transparency expectations; on the negative side, it exposed how politicized narratives, sensational loss figures and investigative gaps can produce polarised outcomes that leave litigants, regulators and the public uncertain about both culpability and remedy.
For future anti-corruption enforcement, the principal lesson is the need for rigorous, evidence-centric investigation that carefully translates audit inferences into admissible proof, and for policy design that minimizes discretionary allocation of economically scarce public assets.
8. References
- Comptroller & Auditor General of India — Performance Audit: Issue of Licences and Allocation of 2G Spectrum (Report No. 19 of 2010).
- Indian Express — “2G case verdict: CBI court acquits A Raja, Kanimozhi and all accused” (21 Dec 2017).
- Indian Express — analysis of the 2017 verdict and CBI criticisms.
- Supreme Court / legal summary and notice: cancellation of 122 telecom licences (February 2012) / legal briefs summarizing the judgment and directions to TRAI.
- Economic Times / TRAI commentary on post-sc cancellation auction process and policy implications.
Also Read:
Rights of undertrial prisoners in India
How To Send A Legal Notice In India
