Bycell Telecommunications India ... vs Union Of India & Ors.
2011 Latest Caselaw 6031 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                     Date of decision: 9th December, 2011.

+                        LPA 673/2010

%     BYCELL TELECOMMUNICATIONS INDIA
      PVT. LTD. & ANR.                         .......Appellants
                    Through: Mr. Sudhir Nandrajog, Sr. Adv. with
                             Mr. Satinder Kapur, Mr. Manish
                             Gandhi & Mr. Dhiraj Philip,
                             Advocates.

                                   Versus

      UNION OF INDIA & ORS.                           ..... Respondents
                   Through:           Mr. Ravinder Agarwal, CGSC for
                                      UOI.
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
                                JUDGMENT

RAJIV SAHAI ENDLAW, J.

1. The appellants being dissatisfied with the dismissal on 16th April,

2010 by the learned Single Judge of W.P.(C) No.8989/2009 preferred by

them have filed this appeal. Notice of the appeal was issued and the

respondents directed to produce the original files for perusal of this Court.

Though no reply was filed (neither required), the appellants filed an

additional affidavit to bring on record certain additional documents. The

counsels have been heard and we have also perused the original files

produced by the respondents. The counsel for the respondents has also

shown to us the complete minutes of the meetings of the Foreign Investment

Promotion Board (FIPB). The appellants after the close of hearing, have

handed over a short note of arguments.

2. The writ petition was filed impugning the order dated 13 th May, 2009

of the FIPB of revocation of the approval earlier accorded on 14th February,

2008 to the appellants to undertake activities of GSM based Cellular

Telephone Services all over India. The FIPB withdrew the approval for the

reason of security clearance having not been granted to the appellants.

Consequently, relief in the petition was also claimed for re-consideration of

the refusal of security clearance to the appellants.

3. The learned Single Judge in his detailed judgment has set out the facts

and need is thus not felt to reiterate the same.

4. The learned Single Judge was also shown the files containing the

information received by the Security Agencies from secret sources and

found the decision reached on assessment of the inputs contained therein to

be not interfereable by the Court and has expressed satisfaction of the said

assessment having been made on objective criteria. The learned Single

Judge has also expressed satisfaction that the material available with the

respondents justified the withdrawal of security clearance earlier granted to

the appellants.

5. The plea of the appellants, of the appellants being entitled to

disclosure of such information before the same could be used to affect them,

was negatived by the learned Single Judge expressing satisfaction with the

defence of the respondents that the disclosure of the information was likely

to jeopardize and expose the sources of information of the respondents. It

was further held that the material on the files of the respondents was not of

such a nature that the respondents could be asked to disclose the same to the

appellants. Reference was made to Indo China Steam Navigation Co. Ltd.

Vs. Jasjit Singh, Addl. Collector of Customs AIR 1964 SC 1140 holding

that foreign investors have no fundamental right to carry on business in India

and to Star India Pvt. Ltd. Vs. Telecom Regulatory Authority of India 146

(2008) DLT 455 (DB). Mention was also made by the learned Single Judge

of People's Union for Civil Liberties Vs. Union of India (2004) 2 SCC 476

and Vishnu Ram Borah Vs. Parag Saikia (1984) 2 SCC 488.

6. The learned Single Judge has held that though the appellants may

have satisfied the other requirements of the policy concerning FDI, the

security angle was a crucial factor and lack of security clearance in the

instant case was a valid ground for withdrawal of the FIPB approval. It was

further held that in matters of foreign investments in the country, what the

decisive parameters should be, is part of the policy decision and some of the

inputs that go into the decision-making process are bound to be of a

confidential nature and unless the decision is shown to be mala fide, there

can be no basis to doubt that the assessment of information received on the

security aspects is, both relevant and sufficient to support the decision taken.

7. We have not only perused the files containing the intelligence inputs

but also the minutes of the meetings of the FIPB. We affirm the findings of

the learned Single Judge that neither any case for mala fides or victimization

is pleaded or made out, nor is any found to be borne out from the files. The

FIPB itself has evaluated the various inputs received from the Security

Agencies and has on the basis thereof objectively reached a conclusion that

the clearance earlier given to the appellants needs to be revoked. Once the

Agencies of the Government having expertise and vested with the powers to

take decision in such matters have reached a conclusion that it is risky to

open the telecommunication channels of the country to a certain set of

foreigners and such conclusion is found to have been reached on the basis of

material available on record, it is not for this Court to in the exercise of its

powers of judicial review, sit in appeal over such decision. The Supreme

Court in Fertilizer Corporation Kamgar Union (Regd.) Sindri v. UOI

(1981) 1 SCC 568 held that judicial interference with the administration

cannot be meticulous in our montesquien system of separation of powers

and the Court cannot usurp and the parameters of judicial review can never

be exceeded. The Apex Court in Balco Employees Union (Regd.) v. UOI

(2002) 2 SCC 333 extended the said principle further to spheres of economic

policy and disinvestment.

8. The senior counsel for the appellants has of course taken us through

the developments since the year 2005 and to the work done and expenditure

incurred by the appellants and to the approvals, licenses and letters of intent

given to the appellants from time to time but all this in our opinion, is

irrelevant qua the reasons which prevailed with the respondents for revoking

the clearance earlier granted to the appellants.

9. The senior counsel for the appellants has also reiterated before us that

no opportunity was given to the appellants to clarify/rectify the objections.

However, as aforesaid, the said aspect has been sufficiently dealt with by the

learned Single Judge and we are unable to take a different opinion.

10. The senior counsel for the appellants further contended that the

appellant no.1 company has changed its structure and in view thereof is

entitled to a fresh opportunity.

11. We are again not satisfied. Once the appropriate agencies have found

it unsafe to allow inroads in the country to a particular foreign entity, merely

because such foreign entity undergoes a mutation would not change the

position. Such mutation cannot wash away the taint with which the

investment was found to be suffering.

12. The senior counsel for the appellants on the basis of the information

gathered and filed by way of the additional documents has lastly urged that

the conclusions against the appellants remain inconclusive and the appellant

is entitled to a direction for further inquiry. However on the basis of the

intelligence inputs which have been shown to us, we are not inclined to

direct any further investigation when the respondents themselves have not

deemed the same necessary.

13. We therefore do not find any merit in the appeal and dismiss the same.

RAJIV SAHAI ENDLAW, J

ACTING CHIEF JUSTICE

DECEMBER 09, 2011 bs