1. The challenge in this writ petition is to the decision taken by the Foreign Investment Promotion Board („FIPB?), Ministry of Finance, Government of India at its meeting held on 11th May 2009 (which decision was communicated by a letter dated 13th May 2009) revoking an approval dated 14th February 2008 granted to the Petitioner to undertake activities of GSM based cellular telephone services all over India. The challenge is also to a communication dated 1st May 2009 issued by the FIPB withdrawing the security clearance granted to the Petitioner. A consequent relief is for a mandamus to the FIPB and the Union of India („UOI?) through the Ministry of Home Affairs („MHA?) (Respondent No.3 herein) to reconsider withdrawal of the security clearance and for a direction to the Department of Telecommunication („DoT?), Government of India not to cancel the letters of intent („LOIs?) granted to the Petitioner on 27th February 2008.

2. Petitioner No.1 ByCell Telecommunications India Private Ltd. („ByCell?), a private limited company having its registered office at New Delhi was incorporated on 13th October 2005 and is involved in the business of telecommunication in India. ByCell is a joint venture company with M/s. ByCell Holding AG („ByCell AG?), a company incorporated under the laws of Switzerland having its registered office in Zug Switzerland and M/s. Bitcorp Private Limited („Bitcorp?), an Indian company. ByCell AG holds 73.79% of the total shareholding of the ByCell and Bitcorp holds 26.19%. Mr. Andrey Polouektov („AP?) and Ms. Maxim Naumchenko („MN?) hold 0.0121% each of the total shares of ByCell. 97% of the shareholding of ByCell AG is held by a company called Tenoch Holdings Ltd. („THL?) incorporated in Nicosia, Cyprus and the remaining 3% is held by Mr. Philippe Bare, Mr. Geogette Guilmain and Mr. MN in the ratio of 1% each. THL, in turn, is held by Quallis Inc., incorporated in the Republic of Panama, and Kynance Business Ltd. („KBL?), incorporated in the British Virgin Islands both of which hold 50% of the shares of THL. Quallis Inc. is a 100% owned company of MN and KBL is a 100% owned company of AP.

3. The UOI through the Ministry of Communications and Information Technology („MCIT?) issued guidelines for Unified Access Service Licence („UASL?) on 14th December 2005. Clause 5D of the guidelines provided that if the foreign direct investment („FDI?) inflow is more than 49%, approval of the FIPB is a must. The admitted position is that ByCell, acting within the confines of the UASL guidelines, entered into a joint venture with ByCell AG and sought an investment from the foreign collaborator to the tune of 73.79% of the total share holding of ByCell.

4. Under the UASL guidelines, the FIPB is responsible for granting approval for FDI. One of the parameters is that the investment is not routed through an unfriendly country or countries of concern. The above FIPB approval is subject to the guidelines issued by way of Press Note 5 of 2005 and also the amended Press Note 3 of 1997, both of which require the FIPB to ensure that the investment is not coming from “countries of concern/unfriendly countries.”

5. By Cell was desirous of starting telecom operations in India and applied to the DoT for issuance of UASL. The FIPB on 17th January 2006 granted permission to ByCell AG to purchase 74% equity in By Cell for the operation of GSM based telecom services in five telecom circles namely Assam, Bihar, North-East, Orissa and West Bengal. On 31st January 2006, ByCell filed five applications for grant of UASL for the said five telecom circles. On 26th September 2007, ByCell approached the FIPB for increasing the scope of the operation area to 22 telecom circles so that ByCell could become a Pan India Operator.

6. On 18th October 2007, a complaint was filed by a Member of Parliament („MP?) raising doubts about the credentials of the Petitioner. In the meanwhile, on 24th October 2007 the FIPB transferred the approval