BSNL scam: Delhi HC orders BSNL to start departmental action
It enabled NGO Telecom Watchdog to pursue legal options.

The Delhi High Court ordered Bharat Sanchar Nigam Ltd. (BSNL) to take disciplinary action against its personnel for reportedly drafting faulty contracts and failing to strategize before buying GSM mobile connections.

The high court openly stated that it has not stated any judgment on the merits of the false statements of accusations on BSNL officials and that any case started by the telecom corporation be pursued to its natural conclusion based on its own merits.

The court’s decision came after BSNL executives were suspected of releasing illegal payments to a Chinese firm’s affiliate by fabricating paperwork, costing the exchequer Rs. 1,000 crores.

BSNL kept releasing purchase orders without caring for demand in the field, the plea alleged.

“The Preliminary Enquiry (PE) has been registered by the CBI at the instance of this court and the CBI, after concluding the investigation has filed status reports before this court. On a perusal of the status reports, this court does not find any reason to discard the status reports filed by the CBI and pass any further directions.

“This court, however, directs the BSNL to initiate departmental action, as suggested by the CBI, against its officers. It is made clear that this court has not expressed any opinion on the merits of the imputations of allegations on the officers of BSNL. Any action initiated by the BSNL be taken to its logical conclusion on its own merits,” a bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad said in an order passed on Thursday.

As instructed by the Supreme Court in the Latika Kumari case, the CBI must provide the petitioner with a duplicate of the closure entry describing the reasons for closing the case and not advancing.

It enabled NGO Telecom Watchdog to pursue legal options.

The NGO, represented by advocate Prashant Bhushan, charged that BSNL personnel conspired with M/s ZTE Telecom India Pvt Ltd, a Chinese contractor, to fake documentation and issue “undue payments” of approximately Rs. 1,000 crores to the company.

In its January progress report, the CBI claimed that M/s Trimax IT and Infrastructure Ltd. accepted funds from ZTE, but there was no proof that they bribed BSNL authorities.

The progress report stated that a top BSNL officer should be examined for changing the payment target without considering the efforts made to acquire the locations, which caused economic loss and technical damage by establishing the add-on job contract with ZTE in 2011.

It also recommended departmental action against BSNL officers for inappropriate bidding and a lack of preparation before purchase requisitions.

The complaint stated that in 2011, BSNL sought tender for north, south, and east regions for 14.37 million GSM mobile phone lines on a turnkey basis. After an open competitive tendering process, ZTE won all three parameters for Rs. 4,204.85 crores.

The petition claimed that in its bid, BSNL had set eight goals for payment release, including 50 percent up to shipment as well as the rest on commissioning and installation.

“During implementation of the project, for unknown reasons, BSNL kept releasing purchase orders without caring for demand in the field. As a result, a huge quantum of the ordered material started piling-up at M/s ZTE’s stores for which BSNL had already paid 50 per cent of the equipment cost including customs duty as per the tender clauses,” it had alleged.

The plea stated that BSNL and ZTE authorities conspired to discharge 95.10 % “illegitimately for all such uninstalled equipment”.

It said official records were forged to “illegitimately” compensate ZTE 95.10 %.

“It is apparent that the respondent (CBI) is not taking any action on the complaint filed by the petitioner for some unknown reasons even in such a serious matter where hundreds of crores of rupees have been released illegitimately in criminal conspiracy between officials of BSNL and a Chinese contractor by forging documents in a contract worth Rs. 4,204.85 crore,” the petitioner had alleged.