|Dial a refund|
|Monday, 06 February 2012 01:40|
Investors bought into a valid GoI-issued licence
Should Norway’s Telenor be compensated by the government now that the Supreme Court has said Uninor’s licence (Telenor owns 67% of Uninor, Unitech owns the rest) has to be cancelled as the process by which it was allocated was unfair. While that’s what Telenor and many others whose licences were cancelled are arguing, the counter argument is that since Telenor simply bought the equivalent of stolen goods, it can hardly make a case for compensation. But even if we assume that bribe-giving to get the licences is proved, and at this point it is far from being proven, the fact is that the licence was not issued to Telenor. Telenor simply bought into a firm that had already got a licence from the government. So when it did its due diligence, Telenor found the seller had a bona fide licence issued by the Government of India. At no point when Telenor was buying into the licence did the government ever question the licences, indeed Telenor’s investment was cleared by the government. In fact, several other clearances were given to Uninor by the government after the licence was given—and for all the talk of the Prime Minister, the law minister and others opposing Raja, none of them went out and warned investors they were buying into a licence that wasn’t kosher. Had it not been for the CAG and the Supreme Court, the government had given its imprimatur to the licences.
Or take the example of A selling a house to B. Naturally B will not just take A’s word that the house belongs to him, and will go and check if the government’s land records say the house belongs to A. If, after B has bought the house, it turns out A had bribed a clerk in the land records office to fake the records, that’s hardly B’s fault and surely B is justified in believing he has the right to get compensated by the government for investments made based on government records. That, in a nutshell, is what the compensation case is all about.
Which is why telecom minister Kapil Sibal is wrong when he says if anyone has a grievance with the Supreme Court’s decision, they should go to the court instead of coming to him. The companies have to come to Sibal first, and if they don’t get justice from him, they can then think of going to the courts against the government. Sure, Telenor can try and recover money from Unitech but, in the final analysis, the government has to share the blame.