The legal implications of the 2G order is still not entirely clear. The Supreme Court has indicated to the government to find a way out to re-auction the spectrum. What is interesting is that the judgment has not disqualified any of the parties, senior corporate lawyer in Kesar Dass B Associates Sumant Batra said. According to him the former licence holder of the spectrum should be given the right of first refusal if it match up to the auctioned price.
In my opinion there should be a transparent auctioning process of the 122 licences so that the highest bidder is selected. But the government must give the former holder of the licence the right to first refusal. This would not only ensure that the scarce natural resource gets the highest valuation while being fair to the former holder, Batra said.
Another senior company law expert who specialises in FDI related matters questioned the validity of the order. The moot question for me really is that how easily a key policy decision that has been taken by the entire cabinet can be reversed by the apex court. The lawyer who did not wish to be identified asked, How are foreign investors supposed to feel secure in a country where policies are challenged and reversed He also said that the Central Bureau of Investigation is yet to clearly prove that the new telecom operators used unfair means to procure the spectrum hence the cancellation is fair, he reasoned.
However, senior corporate lawyer Atul Sharma ruled out any adverse impact on foreign inflows.
The SC order has proven that anything acquired through corrupt means can be upturned in the court of law. Even in the UK there is a strong anti-corruption legislation, he said. He added that the most significant implication of the SC order would be felt by the banks and the financial institutions that had lent money to the new telecom operators who had bid for the 122 licences. It is far from clear how the banks would recover their costs, he said.