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Synopsis

The Delhi High Court has ordered Bharat Sanchar Nigam Ltd (BSNL) to initiate departmental action against its officers for allegedly preparing improper tenders and failing to plan before issuing purchase orders for GSM telephone mobile lines, as suggested by the Central Bureau of Investigation (CBI).

A division bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad noted that the CBI initiated the preliminary enquiry and after the investigation was completed, it has filed the status reports. 

The court was hearing a plea by an NGO Telecom Watchdog seeking directions to the CBI to investigate a complaint of March 2016, wherein a criminal conspiracy was alleged between some officials of BSNL and Chinese Vendor ZTE Telecom Ltd. in a tender 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.

The NGO stated that BSNL invited tenders in 2011 for 14.37 million GSM mobile telephone lines on a turnkey basis in the north, south, and east zones, and following a transparent competitive bidding process, ZTE Telecom emerged as the successful bidder for all three zones for Rs 4,204.85 crore. It claimed that BSNL had prescribed eight milestones for releasing payments in its tender, with only 50% of payment payable up to the delivery stage and the balance to be released in stages on installation and commissioning.

However, it alleged, that while the BSNL continued to procure materials, ZTE Telecom did not prepare the sites for installation, resulting in the loss of a significant amount of material that was lying in ZTE's storeroom.

“The Petitioner alleges 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 M/s ZTE”, the court noted.

The CBI in its status report of January 11 stated that while money was received by Trimax IT and Infrastructure Ltd (another company) from ZTE, no link could be established that the money received by Trimax IT and Infrastructure Ltd was used to bribe BSNL officials.

CBI, however, stated that necessary departmental action can be taken against BSNL officers for preparing improper tenders and failing to plan before issuing purchase orders.

The court noted that the CBI report suggested that a departmental inquiry be initiated against Anupam Srivastava, the then BSNL CMD who was the head of the management committee of BSNL for making "modification 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 division bench observed, “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”.

However, the court clarified, “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 is taken to its logical conclusion on its own merits.”

Additionally, the court stated that as per the directions of the Apex Court in the Latika Kumari case, the CBI is directed to provide a copy of the entry of the closure entry of the petitioner, outlining the reasons for closing the complaint and not proceeding further.

Disposing of the plea, the court granted liberty to the petitioner NGO to take recourse to the legal remedies by the law.

Case Title: Telecom Watchdog v. Central Bureau of Investigation