The government today defended in the Supreme Court the new telecom licensees's decision to sell their equity to foreign firms after getting allotment of the 2G spectrum on the ground that there was no violation of conditions.

"No sale of promoter's equity has been taken place. This was only (infusion) of an additional capital through FDI. It does not amount to divesting of promoter's equity," Solicitor General Gopal Subramanium told a bench of justices G S Singhvi and A K Ganguly.

Subramanium said "companies can raise additional capital which come through FDI by divesting their equity."

The government's response came as the Bench said firms which got the spectrum without any auction in 2008 on the base price of 2001 has sold their shares and earned huge money.

Tata Teleservices had sold its 26 per cent stake to Japan-based cellular operators NTT Docomo after allotment of the spectrum.

The Solicitor General, however, said there was no sale of the promoter's controlling stake in any of the companies.

Moreover, he said, all such transactions were legal in nature as only transfer of above 49 per cent shares needs regulatory approvals.

He submitted the present law permits an FDI upto 76 per cent in telecom companies.

On Tuesday, Centre for Public Interest Litigation (CPIL) counsel Prashant Bhushan, had alleged firms like -- Tata Tele Services, Unitech - after getting cheap spectrum, sold equity to foreign promoters and received huge amount.

Bhushan had submitted that as per rules, mergers and acquisitions were barred for the firms who got licenses.

However, altering the terms and conditions, the then Telecom Minister A Raja had allowed sale of equities, he had alleged.