The cold war between finance minister Pranab Mukherjee and home minister P Chidambaram is again hotting up thanks to a note sent by a babu in the finance ministry to the Prime Minister?s Office suggesting that the former finance minister could have prevented the A Raja scam.

The 12-page note sent in March 2011 by PGS Rao, deputy director in the finance ministry, to Vini Mahajan, joint secretary in the PMO, says it ?has been seen by the finance minister?.

The document was filed by Janata Party president Subramanian Swamy in the Supreme Court on Wednesday as a part of his petition that the CBI must investigate Chidambram?s role in the 2G spectrum scam. While Chidambaram did not respond to the contents of the note, what?s not clear is whether the finance ministry is suggesting that only Chidambaram was in the know.

While meeting economic editors earlier in the year, the Prime Minister had said that he did not get into the matter of pricing since Chidambaram had been looking into it.

Officials who worked with Chidambaram in the finance ministry, however, said that till even until a week before he had moved out of the finance ministry, Chidambaram had stuck to the position on record that the 2001 entry fee of R1,651 crore should be reviewed.

After detailing some history of telecom pricing, the note says ?the DEA (department of economic affairs) explicitly took up the issue of fixation of entry fee on November 22, 2007?, and the DEA argued that charging an entry fee of R1,651 crore in 2008 was not appropriate as this fee had been determined in an auction way back in 2001.

While the DoT gave a reply that wasn?t quite satisfactory, the note says, ?no follow-up appears to have been done from the DEA ? as per available records?.

It gets worse after this. Rao?s note goes on to say that a meeting of the full Telecom Commission which includes representatives from the finance ministry was held on January 15, 2008. But the finance ministry ?representative who attended the meeting did not raise the issue of revision of entry fee?.

A fortnight later, the note says, there was a joint meeting of the then finance minister and the telecom minister and ?it was noted by the then finance minister that he was, for now, not seeking to revisit the current regimes for entry fee or revenue share?.

After detailing some of the correspondence between the finance and telecom ministries, the note goes on to say that the finance secretary D Subbarao (who is now RBI governor) ?had suggested to go for auction for initial spectrum of 4.4 MHz in early February, 2008?. While the telecom ministry was understandably not keen to do this, the finance ministry’s note points out the finance ministry didn’t follow through even at this stage. At the Public Accounts Committee hearing on the matter, when he was asked why he didn’t pursue the matter after having raised it, Subbarao had said that he had got involved in Budget-making!

According to the note that ?has been seen by the finance minister?, ?there was a way out by invoking Clause 5.1 of the UAS licence? ? that is, the government could have modified the licence to charge a higher entry fee since the licence allowed for a modification ?in the public interest?.

The telecom ministry ?could have invoked this clause for cancelling licences in case (finance ministry) had stuck to the stand of auctioning the 4.4 MHz spectrum?.