Delhi High Court directs BSNL to initiate departmental action against officers on allegations of criminal conspiracy relating to Cellular Mobile Network’s Phase-VII Expansion tender

Delhi High Court

Delhi High Court: In a petition filed by the petitioner, a society working towards protecting the interests of consumers in the telecom sector, seeking direction to the Central Bureau of Investigation (CBI) to investigate a complaint dated 11-03-2016, sent by the petitioner to the CBI alleging a criminal conspiracy between some officials of Bharat Sanchar Nigam Ltd (BSNL) & Chinese vendor M/S ZTE Telecom Ltd. in relation to a tender invited by the BSNL for Planning, Engineering, Supply, Installation, Testing, Commissioning and Annual Maintenance of 14.37 million Lines for Phase-VII Expansion of GSM/UMTS Based Cellular Mobile Network in North, East & South Zones, a division bench of Satish Chandra Sharma, CJ., and Subramonium Prasad, J., directed BSNL to initiate departmental action, as suggested by the CBI, against its officers without giving any opinion on the merits of the case.

The allegation levelled by the Petitioner is that in October 2011, BSNL invited tenders for 14.37 million GSM mobile telephone lines on a turnkey basis for three zones, i.e., North, East & South Zones. After the bidding process, ZTE Private Ltd. (ZTE) emerged as a successful bidder for all three zones. It is the allegation of the Petitioner that though BSNL kept on procuring the material, ZTE had not made the sites ready for installation which resulted in the loss of a substantial quantity of material that was lying in the ZTE storeroom.

The allegation of the petitioner is that M/s ZTE in connivance with the officers of the BSNL wanted payments to be released for the material without the BSNL taking physical possession of the equipment. According to the petitioner, the payments were being released without the milestones having been achieved by ZTE.

On notice being issued by this Court, a Preliminary Enquiry was registered by the CBI, pursuant to which the CBI filed three Status Reports. The latest Status Report dated 11-01-2023 revealed that though the money had been received by Trimax IT and Infrastructure Ltd. from ZTE but no link has been established that the money received by Trimax IT and Infrastructure Ltd. was used in bribing the officials of BSNL.

However, the Status Report suggested that a departmental inquiry must be initiated against Mr. Anupam Srivastava, the then CMD, BSNL as Head of the Management Committee of BSNL for making modifications in the payment milestone without deliberating upon the efforts to acquire the sites which resulted into financial loss and technical degradation by having the add-on work contract with ZTE at the rate of the year 2011.

The Status Report further suggested that departmental action may be taken against the officers of BSNL for formulating improper tenders and lack of planning before issuing Purchase Orders. The Status Report further suggested that Self Contained Note be sent to the Enforcement Directorate as well as the Income Tax Department for dubious payment of Rs. 5.25 crores and for taking necessary action regarding the transaction between ZTE and Trimax IT and Infrastructure Ltd and a Self-Contained Note be sent to CVO, BSNL for systemic improvement and issuance of adequate guidelines regarding the procurement of material as surfaced during the inquiry of this case.

Thus, the Court directed BSNL to initiate departmental action against its officers and further directed the CBI to supply a copy of the entry of the closure to the petitioner disclosing the reasons, in brief, for closing the complaint and not proceeding further.

[Telecom Watchdog v Central Bureau of Investigation, 2023 SCC OnLine Del 759, decided on 09-02-2023]

Judgment By: Chief Justice Satish Chandra Sharma

Advocates who appeared in this case :

Mr. Prashant Bhushan with Mr. Pranav Sachdeva, Advocates for the Petitioner;

Mr. Anupam S. Sharma, SPP, CBI with Mr. Prakarsh Airan, Ms. Harpreet Kalsi, Mr. Abhishek Batra, Mr. Ripudaman Sharma, Advocates for the Respondent.

*Arunima Bose, Editorial Assistant has reported this brief.

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