Delhi HC rejects ByCell Telecom’s plea

“On the basis of the intelligence inputs which have been shown to us,we are not inclined to direct any further investigation …,” the division bench,also comprising Justice Rajiv Sahai Endlaw,said.

“We therefore do not find any merit in the appeal and dismiss the same,” the bench said.

ByCell is a joint venture company of Switzerland-based ByCell Holding AG and an Indian company Bitcorp Private Limited.

Rejecting the contention of the telecom firm that it has became eligible for the license after changing its structure,the court said “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.”

On November 17,the court had reserved its order after the Centre said the Foreign Investment Promotion Board (FIPB) decision was based on the Home Ministry’s opinion pertaining to security clearance.

Earlier,a bench of Justice S Muralidhar had refused to grant any relief to the telecom firm saying the court was satisfied that there was material available with the government to justify the withdrawal of the security clearance given by the Home Ministry to ByCell.

“ByCell may have satisfied other requirements of the policy concerning FDI and grant of UASL,(but) the security angle was a crucial factor. The lack of security clearance in the instant case was a valid ground for withdrawal of the FIPB approval earlier granted,” Justice Muralidhar had said in the order.

The telecom firm had contended it complied with all the requirements of the policy concerning FDI and grant of UASL,including the bank guarantee,but the Centre has wrongly denied processing of its application for UASL and consequently its seniority for grant of spectrum is getting affected as award of spectrum is based upon First-Come-First-Serve policy (after UASL is granted).

ByCell had approached a single judge challenging the decision taken by FIPB revoking its approval granted to it to undertake GSM-based cellular telephone services all over India.

The telecom company had also challenged FIPB’s decision revoking the approval granted to it before the security clearance of the company was withdrawn by MHA.