TaxTMI 
TaxTMI 
2012 (2) TMI 568
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....Police Service, who served as Director General of Police, Gujarat, Punjab and C.R.P.F. and Commissioner of Police, Mumbai, P.R. Guha, an eminent Senior Journalist and visiting faculty member of various institutions including IIMs, IITs, FTII, IIFT, Delhi University, Jawaharlal Nehru University and Jamia Milia Islamia University and Admiral R.H. Tahiliyani, former Chief of Naval Staff, former Governor and former Chairman of Transparency International India and the other has been filed by Dr. Subramanian Swami, a political and social activist, are: (i) Whether the Government has the right to alienate, transfer or distribute natural resources/national assets otherwise than by following a fair and transparent method consistent with the fundamentals of the equality clause enshrined in the Constitution? (ii) Whether the recommendations made by the Telecom Regulatory Authority of India (TRAI) on 28.8.2007 for grant of Unified Access Service Licence (for short `UAS Licence') with 2G spectrum in 800, 900 and 1800 MHz at the price fixed in 2001, which were approved by the Department of Telecommunications (DoT), were contrary to the decision taken by the Council of Ministers on 31.10.2003?....
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....anchar Nigam Ltd., (VSNL) were set up. 5. The New Economic Policy of India was announced on 24.7.1991. It was aimed at meeting India's competitiveness in the global market; rapid growth of exports, attracting foreign direct investment; and stimulating domestic investments. With a view to achieve standards comparable to international facilities, the sub-sector of Value Added Services was opened up to private investment in July 1992 for the following services: (a) Electronic Mail; (b) Voice Mail; (c) Data Services; (d) Audio Text Services; (e) Video Text Services; (f) Video Conferencing; (g) Radio Paging; and (h) Cellular Mobile Telephone. In respect of services (a) to (f), the companies registered in India were permitted to operate under a licence on non-exclusive basis. For services covered by (g) and (h) mentioned above, keeping in view the constraints on the number of companies that could be allowed to operate, a policy of selection through a system of tendering was followed for grant of licences. National Telecom Policy 1994 6. National Telecom Policy 1994 (NTP 1994) was announced on 13.5.1994. This was the first major step towards deregulation, liberalization and priva....
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....service to all uncovered areas including the rural areas and also provide high level services capable of meeting the needs of the country's economy by striking a balance between the two; (iii) to encourage development of telecommunication in remote, hilly and tribal areas of the country; (iv) to create a modern and efficient telecommunications infrastructure taking into account the convergence of IT, media, telecom and consumer electronics which will in turn propel India to become an IT superpower;. (v) to convert PCOs wherever justified into Public Teleinfo centres having multimedia capability such as Integrated Services Digital Network (ISDN) services, remote database access, government and community information systems, etc.; (vi) to transform, in a time bound manner, the telecommunications sector in both urban and rural areas into a greater competitive environment providing equal opportunities and level playing field for all players; (vii) to strengthen research and development efforts in the country and provide an impetus to build world class manufacturing capabilities; (viii) to achieve efficiency and transparency in spectrum management; (ix) to protect d....
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....sparent process of allocation of frequency spectrum which is effective and efficient and the same would be further examined in the light of ITU guidelines. In this regard the following course of action shall be adopted viz.: (a)spectrum usage fee shall be charged; (b)an Inter-Ministerial Group to be called Wireless Planning Coordination Committee, as a part of the Ministry of Communications for periodical review of spectrum availability and broad allocation policy, should be set up; and (c)massive computerization in WPC Wing would be started in the next three months so as to achieve the objective of making all operations completely computerized by the end of the year 2000. (emphasis supplied) Establishment of the Telecommunication Commission (for short, `the Telecom Commission') and the Telecom Regulatory Authority of India. 11. On 11.4.1989, the Council of Ministers passed a resolution and decided to establish the Telecom Commission. The relevant portions of that resolution are extracted below: "CABINET SECRETARIAT New Delhi the 11th April, 1989 RESOLUTION CONSTITUTION OF TELECOM COMMISSION No. 15/1/2/87-Cab. 1. Telecommunication service is an essential ....
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....ion on policy and allied matters shall be put to the Minister of Communications through the Chairman. (b) In case of any difference of opinion in the meetings of the Commission, the decision of the Chairman shall be final, but in financial matters, Member (Finance) of the Commission will have access to Finance Minister. (c) The Chairman may authorise any Member of the Commission to exercise on his behalf, subject to such general or special orders as he may issue from time to time, such of his powers and responsibilities as he may decide. 6. Member Finance The Member of Finance shall exercise powers of the Government of India in financial matters concerning the Department of Telecommunications except in so far as such powers have been, or may in future be conferred on or delegated to the Department. 7. The Commission shall have power to frame its own rules and procedures. The Commission shall meet at such time and places as fixed by the Chairman. 8. The Telecom Commission shall take over all legal and statutory authority vested with the Telecom Board." 12. The Rules of Business for the Telecom Commission were also framed in 1989. In terms of para 2 of the Rules ....
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....rvice and conduct the periodical survey of such service provided by the service providers so as to protect interest of the consumers of telecommunication service; (vi) lay-down and ensure the time period for providing local and long distance circuits of telecommunication between different service providers; (vii) maintain register of interconnect agreements and of all such other matters as may be provided in the regulations; (viii) keep register maintained under clause (vii) open for inspection to any member of public on payment of such fee and compliance of such other requirement as may be provided in the regulations; (ix) ensure effective compliance of universal service obligations; (c) levy fees and other charges at such rates and in respect of such services as may be determined by regulations; (d) perform such other functions including such administrative and financial functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act: Provided that the recommendations of the Authority specified in clause (a) of this sub-section shall not be binding upon the Central Government: Provided further that the....
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....ate, friendly relations with foreign States, public order, decency or morality. (4) The Authority shall ensure transparency while exercising its powers and discharging its functions. 13. Power of Authority to issue directions. - The Authority may, for the discharge of its functions under sub-section (1) of section 11, issue such directions from time to time to the service providers, as it may consider necessary: Provided that no direction under sub-section (4) of section 12 or under this section shall be issued except on the matters specified in clause (b) of sub-section (1) of section 11." 14. After its establishment, TRAI made various recommendations either suo motu or on the request of the licensor, i.e., the Central Government or the Telegraph Authority. On a reference made by the Ministry of Communications and Information Technology on four issues including the issues of appropriate level of entry fee, basis of selection of new operators and entry of 4th cellular operator, TRAI made its recommendations, which were communicated to Secretary, DoT vide D.O. No. 250-14/2000-Fin (DF) (Vol. II) dated 23.6.2000. Paragraphs 4.1 to 4.3, 4.5 to 4.6 and 4.11 to 4.15 of that lett....
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....fication round will be by a process of bidding. The bids will be carefully structured so as to guard against the possible misuses of the process such as preemptive over-bidding or cartelisation. For this purpose, a bid structure involving "Multi Stage Informed Ascending Bids" is recommended. It is also recommended that such bids be invited for the entry fee for selection of operations and issuing licenses to them. Although, as recommended earlier in the case of NLDO, TRAI is primarily of the opinion that because of its greater relevance, direct impact on operations and being equitable, revenue sharing is a better basis on which to invite bids for licenses, in the case of CMSPs this choice is not available except in two vacant circles/slots. The 34 incumbent operators have already been given licenses through a process of bidding and it would not be correct to subject them to yet another process of bidding, this time concerning revenue sharing. They have already been asked to pay as license fee, albeit on a provisional basis a fixed amount of the revenue share viz. 15%. It is, therefore, recommended that a fixed percentage of revenue share be paid by all operators as the license fee ....
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....y of the Fourth Operator: 4.15 DOT/MTNL, the incumbent in basic services, are to enter the field of cellular mobile services as the third operator in terms of NTP 99 with the existing availability of spectrum. TRAI, however, has no information about the availability of spectrum either for the third or the fourth operator. The financial analysis conducted by the TRAI for the purpose of studying the revenue share which the operators can part with as licence fee assumes entry of the third operator in the sixth year of licence i.e. in the current year and of another i.e. the fourth operator two years later in accordance with NTP 99. The analysis reveals that even if the business in each of these metropolitan areas and circles is required to produce a reasonable IRR say 16-18 % and a decent return on the capital say around 20%, it would still enable the operators to share upto about 25% of the Gross (adjusted) revenue as the licence fee. In the circumstances, it would be reasonable to assume that on purely economic grounds, in most circles there is even at present, a fair case for the entry of the fourth operator. In this context, however, more than the market, the determining factor....
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....be notified by the licensor based on TRAI recommendations to include nominal entry fee, USO, etc. The charges for spectrum shall be determined separately. The operator shall be required to approach the licensor mainly for spectrum allocation. Since, spectrum is a scarce resource, it needs to be regulated separately. Spectrum should be distributed using such a mechanism that it is allocated optimally to the most efficient user." 17. Paragraphs 7.15 to 7.19 of the 2003 recommendations contained various alternatives for deciding the benchmark for the entry fee for Unified Access Licensing Regime. In paragraph 7.30, TRAI laid emphasis on efficient utilization of spectrum by all service providers and indicated that it would make further recommendations on efficient utilization of spectrum, spectrum pricing, availability and spectrum allocation procedure shortly, and the DoT may like to issue spectrum related guidelines based on its recommendations. 18. In the meanwhile, a Group of Ministers was constituted on 10.9.2003 with the approval of the Prime Minister to consider the following matters: i) To recommend how to ensure release of adequate spectrum needed for the growth of the t....
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....tment of Telecom in a time bound manner. (3) The Department of Telecom and Ministry of Finance would discuss and finalise spectrum pricing formula which will include incentive for efficient use of spectrum as well as disincentive for sub-optimal usages (4) The allotment of additional spectrum be transparent fair and equitable, avoiding monopolistic situation regarding spectrum allotment usage (5) The long term 15-20 years, spectrum requirements along with time frames would also be worked out by Department of Telecom. (6) As per the directions of GoM, a Task Force has been constituted under the chairmanship of Wireless Adviser to the Govt. of India with representatives from Department of Telecom, Ministry of Defence and Ministry of Finance. The terms of reference of the Task Force and the progress of its work so far are given in Annexures II & III.(Page 17-18). 2.4 4 the Term of Reference :- To chart the course to a Universal Licence: 2.4.1 The GoM took note of the exercise that had already been indicated by Telecom Regulatory Authority of India (TRAI), in regard to Unified Licensing Regime in the Telecom Sector Chairman, TRAI and Chairman HDFC were specially invit....
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....d License and Unified Access Service License NTP-99 recognises access service providers as a distinct class. For the purpose of licensing, this has been sub-divided into cellular fixed and cable service providers. NTP-99 also states that convergence of both markets and technologies is a reality that is forcing realignment of the industry. This convergence now allows operators to use their facilities to deliver some services reserved for other operators necessitating a re-look at NTP-94 policy framework. For bringing into effect the regime of Unified Access Service for basic and cellular service licenses and Unified Licensing comprising all telecom services, it would be necessary to enhance the scope of NTP-99 to include these as distinct categories of licenses as pet of NTP-99. 2.4.5 TRAI recommendations on entry fee of WLL(M) based on TDSAT judgement: TRAI has also submitted its recommendations in regard to additional entry fee payable by basic service operators for providing WLL(M) services on which Government had sought its recommendations based on the judgment of TDSAT dated 8/8/03 in the WLL(M) case. TRAI has given detailed reasoning on this matter and has recommended....
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.... on 31.10.2003. 21. Thereafter, DoT issued Office Memorandum dated 11.11.2003 and made some additions to NTP 1999. The same day, DoT issued new guidelines for UAS Licences. Two salient features of these guidelines were that the existing operators would have an option to continue under the existing licensing regime or to migrate to new UAS Licence and the licence fee, service area, rollout obligations and performance bank guarantee under UAS Licence was to be the same as the 4th CMTS. 22. Vide letter dated 14.11.2003, the Chairman, TRAI, on his own, made recommendation regarding entry fee to be charged from the new UAS Licensees. On 24.11.2003, the Minister of C& IT' accepted the recommendation that entry fee for new UAS Licensees will be the entry fee of 4th cellular operator and where there is no 4th cellular operator, it will be the entry fee fixed by the Government for the basic operator. A decision was also taken by him in F. No.20-231/2003-BS-III (LOIs for UASL) at 4/N that, "As regards the point raised about the grant of new licences on first-come-first-served basis, the announced guidelines have made it op....
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.... Terms of Reference. The revised Terms of Reference did not include the issue relating to Spectrum Pricing. 25. On 14.12.2005, the DoT issued revised guidelines for UAS Licence. Paragraph 11 of the new guidelines reads as under: "The licences shall be issued without any restriction on the number of entrants for provision of unified access services in a Service Area." In terms of paragraph 14 of the guidelines, the licensee was required to pay annual licence fee at 10/8/6% of Adjusted Gross Revenue (AGR) for category A/B/C service areas, respectively excluding spectrum charges. This was in addition to the non-refundable entry fee. In terms of paragraph 19 the licensee was required to pay spectrum charges in addition to the licence fee on revenue share basis. However, while calculating AGR for limited purpose of levying spectrum charges, revenue from wireless subscribers was not to be taken into account. 26. After one year and about six months, the DoT vide its letter dated 13.4.2007, requested TRAI to furnish its recommendations under Section 11(1) (a)....
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....ken up as a long term policy issue. There is an urgent need to address the issues linked with spectrum efficiency and its management. 2.69 The Entry fee for acquiring a UASL license enables the licensee to become eligible for spectrum allocation in certain specified bands without any additional fee for acquisition of spectrum which means that allocation of spectrum follows the grant of license subject however to availability of spectrum. There is only one direct cost to the operator for spectrum i.e. spectrum charge in the form of royalty. 2.73 The allocation of spectrum is after the payment of entry fee and grant of license. The entry fee as it exists today is, in fact, a result of the price discovered through a markets based mechanism applicable for the grant of license to the 4th cellular operator. In today's dynamism and unprecedented growth of telecom sector, the entry fee determined then is also not the realistic price for obtaining a license. Perhaps, it needs to be reassessed through a market mechanism. On the other hand spectrum usage charge is in the form of a royalty which is linked to the revenue earned by the operators and to that extent it captures the economic val....
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.... operators. Further, the technological progress enables the operators to adopt a number of technological solutions towards improving the efficiency of the radio spectrum assigned to them. A cost- benefit analysis of allocating additional spectrum beyond 10 MHz to existing wireless operators and the cost of deploying additional CAPEX towards technical improvements in the networks would show that there is either a need to place a cap on the maximum allocable spectrum at 10 MHz or to impose framework of pricing through additional acquisition fee beyond 10 MHz. The Authority feels it appropriate to go in for additional acquisition fee of spectrum instead of placing a cap on the amount of spectrum that can be allocated to any wireless operator. In any case, the Authority is recommending a far stricter norm of subscriber base for allocation of additional spectrum beyond the initial allotment of spectrum. The additional acquisition fee beyond 10 MHz could be decided either administratively or through an auction method from amongst the eligible wireless service providers. In this matter, the Authority has taken note of submissions of a number of stakeholders who have cited evidences of the....
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.... has come to the conclusion that it would be appropriate in future for a market based price discovery systems. In response to the consultation paper, a number of stakeholders have also strongly recommended that the allocation of spectrum should be immediately de-linked from the license and the future allocation should be based on auction. The Authority in its recommendation on "Allocation and pricing of spectrum for 3G and broadband wireless access services" has also favored auction methodology for allocation of spectrum for 3G and BWA services. It is therefore recommended that in future all spectrum excluding the spectrum in 800, 900 and 1800 bands should be auctioned so as to ensure efficient utilization of this scarce resource. In the 2G bands (800 MHz/900 MHz/1800 MHz), the allocation through auction may not be possible as the service providers were allocated spectrum at different times of their license and the amount of spectrum with them varies from 2X4.4 MHz to 2X10 MHz for GSM technology and 2X2.5 MHz to 2X5 MHz in CDMA technology. Therefore, to decide the cut off after which the spectrum is auctioned will be difficult and might raise the issue of level playing field." (und....
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....t No.12) had made an application for UAS Licence in 2004 and 3 others, namely, Idea Cellular Ltd. (respondent No.8), Tata Teleservices Ltd. (respondent No.9) and M/s. Aircel Ltd. (respondent No.11) had made similar applications in 2006. However, the same were not disposed of by the DoT and they were included in the figure of 167. Between 24.9.2007 and 1.10.2007, over 300 applications were received for grant of UAS Licences. Member (Technology), Telecom Commission and Ex-officio Secretary to Government of India sent a letter dated 26.10.2007 to Secretary, Department of Legal Affairs, Ministry of Law and Justice seeking the opinion of the Attorney General of India/Solicitor General of India on the issue of the mechanism to deal with what he termed as an unprecedented situation created due to receipt of large number of applications for grant of UAS Licence. The statement of case accompanying the letter of Member (Technology) contained as many as 14 paragraphs. Paragraph 11 outlined the following four alternatives: (I) The applications may be processed on first-come-first-served basis in chronological order of receipt of applications in each service area as per existing procedure. L....
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.... the case and various options indicated in the statement of the case, it is necessary that whole issue is first considered by an empowered Group of Ministers and in that process legal opinion of Attorney General can be obtained." 32. When the note of the Law Minister was placed before the Minister of C& IT', he recorded the following note on 2.11.2007 - "Discuss please". On the same day, i.e., 2.11.2007 the Minister of C& IT' did two things. He approved the note prepared by Director (AS-1) containing the following issues: (i) Issuing of LoIs to new applicants as per the existing policy, (ii) Number of LoIs to be issued in each circle, (iii) Approval of draft LoI, (iv) Considering application of TATAs for dual technology after the decision of TDSAT on dual technology, and (v) Authorising Shri R.K. Gupta, ADG (AS-1) for signing the LoIs on behalf of President of India. 33. While approving the note, the Minister of C& IT' on his own recorded the following - "LoI may be issued to the applicants received upto 25th Sept. 2007". Simultaneously, he sent D.O. No.20/100/2007-AS.I dated 2.11.2007 to the Prime Minister and criticised the suggestion made by the Law Minister by descr....
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....s relating to allocation of spectrum have been raised by telecom sector companies as well as in sections of the media. Broadly, the issues relate to enhancement of subscriber linked spectrum allocation criteria, permission to CDMA service providers to also provide services on the GSM standard and be eligible for spectrum in the GSM service band, and the processing of a large number of applications received for fresh licenses against the backdrop of inadequate spectrum to cater to overall demand. Besides these, there are some other issues recommended by TRAI that require early decision. The key issues are summarized in the annexed note. I would request you to give urgent consideration to the issues being raised with a view to ensuring fairness and transparency and let me know of the position before you take any further action in this regard. With regards, Yours sincerely, Sd/- (Manmohan Singh) Shri A. Raja Minister of Communications and IT New Delhi. Annexure 1. Enhancement of subscriber linked spectrum allocation criteria In August 2007, the TRAI has recommended interim enhancement of subscriber linked spectrum allocation criteria. Service providers....
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....at it will be unfair, discriminatory, arbitrary and capricious to auction the spectrum to new applicants as it will not give them a level playing field. The relevant portions of paragraph 3 of the Minister's letter are extracted below: "3. Processing of a large number of applications received for fresh licenses against the backdrop of inadequate spectrum to cater to overall demand. The issue of auction of spectrum was considered by the TRAI and the Telecom Commission and was not recommended as the existing licence holders who are already having spectrum upto 10 MHz per Circle have got it without any spectrum charge. It will be unfair, discriminatory, arbitrary and capricious to auction the spectrum to new applicants as it will not give them level playing field. I would like to bring it to your notice that DoT has earmarked totally 800 MHz in 900 MHz and 1800 MHz bands for 2G mobile services. Out of this, so for a maximum of about 35 to 40 MHz per Circle has been allotted to different operators and being used by them. The remaining 60 to 65 MHz, including spectrum likely to be vacated by Defence Services, is still available for 2G services. Therefore, there is enough scope for....
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.... extracted below: "1. Issue of Letter of Intent (LOI): DOT follows a policy of First-cum-First Served for granting LOI to the applicants for UAS licence, which means, an application received first will be processed first and if found eligible will be granted LOI. 2. Issue of Licence: The First-cum-First Served policy is also applicable for grant of licence on compliance of LOI conditions. Therefore, any applicant who complies with the conditions of LOI first will be granted UAS licence first. This issue never arose in the past as at one point of time only one application was processed and LOI was granted and enough time was given to him for compliance of conditions of LOI. However, since the Government has adopted a policy of "No Cap" on number of UAS Licence, a large number of LOI's are proposed to be issued simultaneously. In these circumstances, an applicant who fulfils the conditions of LOI first will be granted licence first, although several applicants will be issued LOI simultaneously. The same has been concurred by the Solicitor General of India during the discussions." (underlining is ours) 39. After 12 day....
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....42. On the same day, another press release was issued asking all the applicants to assemble at the departmental headquarters within 45 minutes to collect the response(s) of the DoT. They were also asked to submit compliance of the terms of LoIs within the prescribed period. The second press release is also reproduced below: "Department of Telecommunications Press Release Date : 10^th January 2008 Sub : UASL applicants to depute their authorised representative to collect responses of DOT on 10.1.2008. The applicant companies who have submitted applications to DOT for grant of UAS licences in various service areas on or before 25.9.2007 are requested to depute their Authorised signatory/Company Secretary/ authorised representative with authority letter to collect response(s) of DOT. They are requested to bring the company's rubber stamp for receiving these documents to collect letters from DOT in response to their UASL applications. Only one representative of the Company/group Company will be allowed. Similarly, the companies who have applied for usage of dual technology spectrum are also requested to collect the DOT's response. All above are requested to assemble at 3....
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.... Single Judge vide his order dated 1.7.2009 declared that the cut-off date, i.e., 25.9.2007 was totally arbitrary and directed the respondents in the writ petition to consider the offer made by the writ petitioner to pay Rs.17.752 crores towards additional revenue share over and above the applicable spectrum revenue share. The observations made by the learned Single Judge on the justification of fixing 25.9.2007 as the cut-off date read as under: "Thus on the one hand the respondent has accepted the recommendation of the TRAI in the impugned press note, but acted contrary thereto by amending the cut-off date and thus placed a cap on the number of service providers. The stand taken by respondent and the justification sought to be given for fixing a cut- off date retrospectively is on account of large volume of applications, is without any force in view of the fact that neither any justification was rendered during the course of argument, nor any justification has been rendered in the counter affidavit as to what is the effect of receipt of large number of applications in view of the fact that a recommendation of the TRA....
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.... the revision of a cut-off date after applications have been received in terms of the previous cut-off date, is amenable to judicial review on administrative and constitutional law parameters. We are of the view that the two situations cannot be equated. The Government would have to justify its decision to revise a cut-off date already fixed, after applications have been received from persons acting on the basis of the earlier cut-off date. It would be for the court to be satisfied when a challenge is made, that the decision to revise a cut-off date after receiving applications on the basis of the cut-off date earlier fixed was based on some rational basis and was not intended to benefit a few applicants while discriminating against the rest. In the present case, for the reasons pointed out by the learned Single Judge, with which we concur, the Appellant has been unable to show that its decision to revise the cut-off date after receiving the application of the Respondent was based on some rational criteria. It is vulnerable to being labelled arbitrary and irrational. 14. We are not able to appreciate, in the instant case, the submission of the learned Attorney General that the m....
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....25.9.2007 fixed for consideration of the applications was arbitrary and unconstitutional, the entire procedure adopted by the DoT for grant of UAS Licences with the approval of the Minister of C& IT' is liable to be declared illegal and quashed. Another plea taken by the petitioners is that the DoT violated the recommendations made by TRAI that there should be no cap on the number of Access Service Providers in any service area and this was in complete violation of Section 11(1) of the 1997 Act. The petitioners have relied upon the report of the Comptroller and Auditor General (CAG) and pleaded that the consideration of large number of ineligible applicants and grant of LoIs and licenses to them is ex facie illegal and arbitrary. The petitioners have also pleaded that the entire method adopted by the DoT for grant of licence is flawed because the recommendations made by TRAI for grant of licences at the entry fee determined in 2001 was wholly arbitrary, unconstitutional and contrary to public interest. Yet another plea of the petitioners is that while deciding to grant licences, which are bundled with spectrum, at the price fixed in 2001 the DoT did not bother to consult the Financ....
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....or providing better telecom services in remote areas of the country and any intervention by the Court would result in depriving the people living in those areas of telecom services. (viii) The Government and TRAI have already initiated action for levy of penalty/liquidated damages for non-compliance of the roll out obligations and violation of conditions of the license. That the licensees have not violated any conditions of the license and that the notices issued by TRAI alleging the same have already been challenged before TDSAT and in most cases, interim orders have been passed. That the remedy, if any, available to the petitioners is to approach the TDSAT. (ix) Some of the respondents have also questioned the application of the policy of first-come-first-served by asserting that even though they had applied in 2004 and 2006, and licences had been granted to them before 25.9.2007, the allocation of spectrum was delayed till 2008 and those who had applied in 2007 were placed above them because they could fulfil the conditions of LoI in terms of the distorted version of the policy first-come-first-served. 50. The petitioners have filed rejoinder affidavit and reiterated th....
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.... IT' to favour some of the applicants including those who were not even eligible. Shri Bhushan pointed out that, out of 122 applications, 85 were found to be ineligible and those who could obtain information either from the concerned Minister or the officers of DoT about the change of the criteria for implementing the first-come-first-served policy got advantage and acquired priority over those who had applied earlier. (vii) The meeting of the Telecom Commission scheduled for 9.1.2008 was deliberately postponed because vide letter dated 22.11.2007 the Finance Secretary had strongly objected to the charging of entry fee fixed in 2001. (viii) Shri Bhushan pointed out that the recommendations made by TRAI on 28.8.2007 were contrary to public interest as well as financial interest of the nation because at the time of entry of 4th cellular operator the same TRAI had suggested multi-stage bidding and even for allocation of 3G spectrum the methodology of auction was suggested but, for no ostensible reason, the so-called theory of level playing field was innovated for grant of UAS Licences in 2007 on the basis of the entry fee fixed in 2001. Learned counsel emphasized that the transf....
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....sion not to auction UAS Licences was based on the recommendations of TRAI and as the petitioners have not challenged the recommendations for two years, the exercise undertaken by the DoT for grant of UAS Licences in 2008 and subsequent allotment of spectrum should not be nullified. Shri Salve argued that the question of institutional integrity is involved in the matter and if the Court comes to the conclusion that auction is the only method for grant of licences and allocation of spectrum then everything should be annulled right from 2001. Learned senior counsel submitted that multi-stage bidding was done only for the purpose of entry of 4th cellular operator but, thereafter, no auction was held. He submitted that if the spectrum was allotted free of charge till 2007, there could be no justification for auction of licences or spectrum in 2007. 54. Shri C.A. Sundaram, learned counsel appearing for respondent Nos. 2 and 4, heavily relied on paragraphs 7.2, 7.4, 7.12, 7.29, 7.30, 7.37 and 7.39 of TRAI's recommendations dated 27.10.2003 and argued that the recommendations made in 2007 were nothing but a continuation of the old policy and, therefore, the petitioners are not entitled ....
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....yan Krishnan, learned counsel for respondent No. 6, adopted the arguments of other learned counsel and submitted that the licences granted in 2007 should not be quashed at this belated stage. 59. Shri Rakesh Dwivedi, learned senior counsel for TRAI, referred to TRAI's written submissions to justify why it had not recommended auction of licences. Learned senior counsel extensively referred to the recommendations made by TRAI in 2007 and submitted that even though it was specifically suggested that the DoT should take a comprehensive decision on the allocation of spectrum, no effort was made in that direction and the licences were granted without determining availability of spectrum. Shri Dwivedi also submitted that TRAI has already initiated action for cancellation of licences of those respondents who have violated the terms of licence and/or failed to fulfil roll- out obligations. 60. Learned counsel for both the sides relied upon a large number of decisions. Shri Prashant Bhushan and Dr. Subramanian Swamy relied upon the following judgements: K. Manjusree v. State of Andhra Pradesh (2008) 3 SCC 512, Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corpn.....
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....d with licence. The licence to be issued to telecom operators will be in the nature of `unified licence' and the licence holder will be free to offer any of the multifarious telecom services. In the event the licence holder would like to offer wireless services, it will have to obtain spectrum through a market driven process. In future, there will be no concept of contracted spectrum and, therefore, no concept of initial or start-up spectrum. Spectrum will be made available only through market driven process. While moving towards a new policy dispensation, it is necessary to ensure a level playing field between all players. Hence going forward, any new policy of pricing would need to be applied to equally to all players. Additionally, assignment of balance of contracted spectrum may need to be ensured for the existing licensees who have so far been allocated only the startup spectrum of 4.4 MHz. It may be recalled that show cause notices have been issued to certain licensees for cancellation. Only in respect of the licences that will be found valid after the process is completed, the additional 1.8 MHz will be assigned on their becoming eligible, but the spectrum will be assigne....
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....erial resources of the community should be so distributed so as to best sub-serve the common good, but no comprehensive legislation has been enacted to generally define natural resources and a framework for their protection. Of course, environment laws enacted by Parliament and State legislatures deal with specific natural resources, i.e., Forest, Air, Water, Costal Zones, etc. 64. The ownership regime relating to natural resources can also be ascertained from international conventions and customary international law, common law and national constitutions. In international law, it rests upon the concept of sovereignty and seeks to respect the principle of permanent sovereignty (of peoples and nations) over (their) natural resources as asserted in the 17th Session of the United Nations General Assemble and then affirmed as a customary international norm by the International Court of Justice in the case opposing the Democratic Republic of Congo to Uganda. Common Law recognizes States as having the authority to protect natural resources insofar as the resources are within the interests of the general public. The State is deemed to have a proprietary interest in natural resources an....
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....ph L. Sax and made the following observations: "53. The public trust doctrine enjoins upon the Government to protect the resources for the enjoyment of the general public rather than to permit their use for private ownership or commercial purposes. This doctrine puts an implicit embargo on the right of the State to transfer public properties to private party if such transfer affects public interest, mandates affirmative State action for effective management of natural resources and empowers the citizens to question ineffective management thereof. 54. The heart of the public trust doctrine is that it imposes limits and obligations upon government agencies and their administrators on behalf of all the people and especially future generations. For example, renewable and non-renewable resources, associated uses, ecological values or objects in which the public has a special interest (i.e. public lands, waters, etc.) are held subject to the duty of the State not to impair such resources, uses or values, even if private interests are involved. The same obligations apply to managers of forests, monuments, parks, the public....
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..... Even though this doctrine has been applied in cases dealing with environmental jurisprudence, it has its broader application." Learned Judge then referred to the judgments, In re Special Reference No. 1 of 2001 (2004) 4 SCC 489, M.C. Mehta v. Kamal Nath (1997) 1 SCC 388 and observed: "This doctrine is part of Indian law and finds application in the present case as well. It is thus the duty of the Government to provide complete protection to the natural resources as a trustee of the people at large." The Court also held that natural resources are vested with the Government as a matter of trust in the name of the people of India, thus it is the solemn duty of the State to protect the national interest and natural resources must always be used in the interests of the country and not private interests. 69. As natural resources are public goods, the doctrine of equality, which emerges from the concepts of justice and fairness, must guide the State in determining the actual mechanism for distribution of natural resources. In this regard, the doctrine of equality has two aspects: first, it regulates the rights and ....
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....nd/or its agencies/instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well-defined policy, which shall be made known to the public by publication in the Official Gazette and other recognised modes of publicity and such policy must be implemented/executed by adopting a non-discriminatory and non-arbitrary method irrespective of the class or category of persons proposed to be benefited by the policy. The distribution of largesse like allotment of land, grant of quota, permit licence, etc. by the State and its agencies/instrumentalities should always be done in a fair and equitable manner and the element of favouritism or nepotism shall not influence the exercise of discretion, if any, conferred upon the particular functionary or officer of the State." 71. In Sachidanand Pandey v. State of West Bengal (1987) 2 SCC 295, the Court referred to some of the precedents and laid down the following propositions: "State-owned or public-owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public inte....
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....ommendations became a handle for the then the Minister of C& IT' and the officers of the DoT who virtually gifted away the important national asset at throw away prices by willfully ignoring the concerns raised from various quarters including the Prime Minister, Ministry of Finance and also some of its own officers. This becomes clear from the fact that soon after obtaining the licences, some of the beneficiaries off-loaded their stakes to others, in the name of transfer of equity or infusion of fresh capital by foreign companies, and thereby made huge profits. We have no doubt that if the method of auction had been adopted for grant of licence which could be the only rational transparent method for distribution of national wealth, the nation would have been enriched by many thousand crores. 74. While it cannot be denied that TRAI is an expert body assigned with important functions under the 1997 Act, it cannot make recommendations overlooking the basic constitutional postulates and established principles and make recommendations which would deny people from participating in the distribution of national wealth and benefit a handful of persons. Therefore, even though the scope of....
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....of licence or permission to use public property, the invocation of first-come-first-served policy has inherently dangerous implications. Any person who has access to the power corridor at the highest or the lowest level may be able to obtain information from the Government files or the files of the agency/instrumentality of the State that a particular public property or asset is likely to be disposed of or a contract is likely to be awarded or a licence or permission is likely to be given, he would immediately make an application and would become entitled to stand first in the queue at the cost of all others who may have a better claim. This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy applicants. When it comes to alienation of scarce natural resources like spectrum etc., it is the burden....
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....recommendations made by TRAI. If they had not done so, they would have incurred the wrath of Minister of C& IT'. (iv) In view of the approval by the Council of Ministers of the recommendations made by the Group of Ministers in 2003, the DoT had to discuss the issue of spectrum pricing with the Ministry of Finance. Therefore, the DoT was under an obligation to involve the Ministry of Finance before any decision could be taken in the context of paragraphs 2.78 and 2.79 of TRAI's recommendations. However, as the Minister of C& IT' was very much conscious of the fact that the Secretary, Finance, had objected to the allocation of 2G spectrum at the rates fixed in 2001, he did not consult the Finance Minister or the officers of the Finance Ministry. (v) The Minister of C& IT' brushed aside the suggestion made by the Minister of Law and Justice for placing the matter before the Empowered Group of Ministers. Not only this, within few hours of the receipt of the suggestion made by the Prime Minister in his letter dated 2.11.2007 that keeping in view the inadequacy of spectrum, transparency and fairness should be maintained in the matter of allocation thereof, the Minister of C& IT' rejec....
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....of spectrum on priority basis. 78. The argument of Shri Harish Salve, learned senior counsel, that if the Court finds that the exercise undertaken for grant of UAS Licences has resulted in violation of the institutional integrity, then all the licences granted 2001 onwards should be cancelled does not deserve acceptance because those who have got licence between 2001 and 24.9.2007 are not parties to these petitions and legality of the licences granted to them has not been questioned before this Court. 79. In majority of judgments relied upon by learned Attorney General and learned counsel for the respondents, it has been held that the power of judicial review should be exercised with great care and circumspection and the Court should not ordinarily interfere with the policy decisions of the Government in financial matters. There cannot be any quarrel with the proposition that the Court cannot substitute its opinion for the one formed by the experts in the particular field and due respect should be given to the wisdom of those who are entrusted with the task of framing the policies. We are also conscious of the fact that the Court should not interfere with the fiscal policies ....