Who is the most powerful person in India? Manmohan Singh, the 79-year-old prime minister whose second term has been a washout? Not likely. Sonia Gandhi, the Italian-born torchbearer of the Nehru-Gandhi dynasty? Possibly. How about S.H. Kapadia? Who, you might ask, is S.H. Kapadia? Well, he is chief justice of the supreme court, which this month set all of India chattering when it revoked 122 second-generation (2G) mobile licences. The court, which declared a spectrum sale in 2008 “arbitrary and unconstitutional”, ordered the regulator to reallocate the licences by auction in four months.

The decision, though unsettling, was necessary. It draws some sort of line under the previous spectrum sale, conducted on a murky “first-come, first-served” basis and now the subject of a corruption probe. By selling the licences on the cheap, the telecoms ministry is accused of shortchanging the exchequer to the tune of $39bn.

But the supreme court’s ruling also opens up a can of worms. To change the rules so abruptly is not reassuring for foreign investors. Norway’s Telenor, Russia’s Sistema and Etisalat of United Arab Emirates all bought 2G licences awarded to Indian companies. Telenor alone has invested $2bn in building a network it now stands to lose.