BSNL-ZTE Alleged Scam: Delhi High Court Directs BSNL to Initiate Departmental Action

The Delhi High Court has directed Bharat Sanchar Nigam Ltd (BSNL) to initiate departmental action, as suggested by the CBI, against its officers for allegedly formulating improper tenders and lack of planning before issuing of purchase orders of GSM telephone mobile lines.

The high court made it clear that it has not expressed any opinion on the merits of the imputations of allegations on the officers of BSNL and any action initiated by the telecom company be taken to its logical conclusion on its own merits.

The court's order came while disposing of a plea in which it was alleged that BSNL officials allegedly caused loss of about Rs. 1,000 crore to the exchequer by releasing unauthorised payment to the subsidiary of a Chinese firm by fabricating documents.

"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.

It said as ordered by the apex court in the Latika Kumari case, the CBI is directed 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.

It granted liberty to the petitioner NGO Telecom Watchdog to take recourse to the legal remedies in accordance with law.

The petition filed by the NGO, represented through advocate Prashant Bhushan, had alleged that officials of BSNL had connived with M/s ZTE Telecom India Pvt Ltd, a Chinese contractor, and forged official records of BSNL so that "undue payments" of about Rs. 1,000 crore could be released to the firm.

The CBI, in its latest status report filed in the court in January, stated that though money had been received by M/s Trimax IT and Infrastructure Ltd from ZTE no link has been established that the money received by them was used in bribing the officials of BSNL.

The status report, however, suggested that departmental enquiry must be initiated against a senior officer 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 2011.

It further suggested that departmental action, if found necessary, be taken against the officers of BSNL for formulating improper tenders and lack of planning before issuing of purchase orders.

The petition had claimed that in 2011, BSNL had invited tender for north, south and east zones for 14.37 million GSM mobile telephone lines on turnkey basis and following a transparent competitive bidding process, ZTE emerged as the successful bidder for all three zones at a cost of Rs. 4,204.85 crore.

The plea had alleged that in its tender, BSNL had prescribed eight milestones for releasing payments, according to which only 50 percent payment was payable up to delivery stage and the balance to be released in stages on installation and commissioning.

"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 had claimed that certain officials of BSNL and ZTE entered into a conspiracy to release undue payment of 95.10 percent "illegitimately for all such uninstalled equipment".

It had alleged that official documents were fabricated to release payment of 95.10 percent "illegitimately" to ZTE.

"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.