Mr P. Chidambaram was caught in the ongoing 2G investigations after the prime accused and former Communications and IT Minister, Mr A. Raja, charged the former Finance Minister with being in the know of the basis on which 2G licences were handed out to new players in 2008.
Mr Raja had alleged that the decision to give out licences on a first-come-first-served basis was taken in consultation with the Finance Ministry and the Prime Minister.
There was extensive correspondence between the Telecom Department and the Finance Ministry in 2007 on the pricing of spectrum. An internal Finance Ministry note dated March 25, 2011 stated that the Telecom Department would have been forced to cancel the 2G licences if the Finance Ministry had stuck to its original demand for auctioning the initial spectrum of 4.4 MHz.
In a January 15, 2008 note to the Prime Minister, Mr Chidambaram recommended that the government should bury the past and treat the chapter of giving spectrum without auctions as “closed”.
Mr Chidambaram's letter said: “This leaves the question about licencees who already hold spectrum over and above the start-up spectrum. In such cases, the past may be treated as a closed chapter and the payments made in the past for additional spectrum may be treated as the charges for spectrum for that period.” But in the same letter he acknowledged that auctioning spectrum was the best way.
The Supreme Court, in its Thursday's judgment on cancelling 122 licences, however, said that it was Mr Raja who had ignored the Finance Ministry while taking the decision to issue new licences.
The apex court observed that the crucial meeting of the Telecom Commission did not have representation from officials of the Finance Ministry.
“As the Minister of Communication and IT (A. Raja) was very much conscious of the fact that the Secretary, Finance, had objected to the allocation of 2G spectrum at the rates fixed in 2001, he did not consult the Finance Minister (P. Chidambaram) or the officers of the Finance Ministry,” the apex court said.