TaxTMI 
TaxTMI 
2016 (8) TMI 1608
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....9;). Since all the matters are intertwined with each other, they are taken up together and disposed of by this common judgment. PRAYER IN W.P. NOS. 585 TO 588 OF 2012: 2. While W.P. Nos. 585 & 587 of 2012 have been filed by the petitioner to declare the first proviso to Section 4 of the Indian Telegraph Act, 1885 as violative of Articles 14 and 19(1)(g) of the Constitution alleging that it confers unguided power upon the Dept. of Telecommunications to claim a revenue share in respect of non-telecom activities carried on by the petitioners; W.P. Nos. 586 & 588 of 2012 have been filed for a declaration that the respondents can only charge License Fee/AGR from the revenue earned from licensed activities. PRAYER IN W.P. NOS. 2165 TO 2167 OF 2013: 3. W.P. Nos. 2165 to 2167 of 2013 have been filed by the petitioners against the demand notice issued by the respondents imposing One Time Spectrum Fee on the petitioners in respect of the licenses issued to them. PRAYER IN W.A. NOS. 1454 & 1455 OF 2014: 4. These writ appeals have been filed by the petitioners in W.P. Nos. 9220 and 9221 of 2014, wherein, the order dated 3rd Oct., 2013 and the consequential communication dated 23rd Jan., ....
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....ce Inviting Applications (for short 'NIA') for the auction of 3G and Broadband Wireless Access (for shore 'BWA') Spectrum. In addition to other conditions, spectrum charge for 3G spectrum was made payable on total AGR of 2G and 3G services and further condition was imposed that in case of group bidding entity being successful in the auction for Tamil Nadu, they shall merge the licenses for Chennai Area and RoTN Area in accordance with the circular dated 15.09.2005. Consequent upon the said condition in the NIA, ACL and AL furnished undertakings. On the appellant being announced as one of the successful bidder in the 3G auction as well as BWA auction, the Department of Telecommunication (for short 'DoT') issued Letter of Intent to AL in respect of TN Area. (iv) Further to the condition imposed in the circular dated 15.9.2005, the Boards of AL and ACL approved the scheme of amalgamation, wherein ACL was to amalgamate with AL. After communications between Aircel and DoT, AL addressed pre-intimation letter to DoT along with relevant undertakings and Board Resolutions in respect of the proposed amalgamation. (v) Accordingly, a scheme of amalgamation was submi....
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....(xi) Since there was no positive response from DoT for the merger of the license pertaining to Chennai Area and RoTN Area, AL & ACL approached the Telecom Disputes Settlement & Appellate Tribunal (for short 'TDSAT') for a direction to DoT to transfer ACL's Chennai license to AL by issuing a license for TN merged service area in accordance with the Merger Circular dated 15.9.2005 with a further prayer to restrain DoT from taking any coercive steps till the final disposal of the petition. (xii) DoT, pending the adjudication, vide show cause notice dated 12.10.2012, while alleging violation of Clause 9 and Condition 15.7 of the License Agreement as well as conditions of license amendment regarding transfer/assignment dated 2.6.03, called upon ACL to show cause within 60 days as to why penalty of Rs. 10 Crore should not be imposed and/or the license should not be terminated by invocation of Condition 15.1 of the License. (xiii) TDSAT, while taking cognizance of the above show cause notice issued by DoT, passed an order dated 31.10.12 directing ACL to file reply to the show cause notice and further directing DoT to dispose of the same after giving opportunity of personal....
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....ds to be issued by WPC/WPF wing relating to payment of One Time Spectrum Charges for the spectrum held for the erstwhile two service areas by the licensees and also payment for the spectrum holding of the erstwhile Chennai Area license for extended period from 29.11.2014 to 29.11.2018, as per the decision of the government. e) AL shall furnish unconditional and unequivocal undertaking in the prescribed format to pay all the demand with respect to extension of spectrum for Chennai Area from 2014 to 2018. f) Spectrum Usage Charges in terms of rates applicable at present shall be payable by AL at the rates of slab corresponding to 9.8 MHz from the date of transfer of license. (xix) AL, inter alia responded vide letter dated 25.10.2013 that it was entitled to an unconditional approval and that no new conditions could be imposed once the companies had complied with the circular dated 15.9.05 and the NIA dated 25.2.2010 and that AL was conferred with the right of an unconditional merger with ACL. AL also submitted that it could not be imposed with penalties and other adverse consequences on account of the delay on the part of DoT and highlighted that the conditions being vague and ....
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....ons as mentioned in the order dated 3rd Oct., 2013. Further, this Court had directed the tagging of all the issues covered in the various writ petitions along with the writ appeals for a comprehensive hearing and to give a quietus to the issues and, accordingly, all the writ petitions and writ appeals are heard and disposed of by this common judgment. CONTENTIONS ADVANCED IN W.P. NOS. 2165 TO 2167 OF 2012 7. Mr. Gopal Subramaniam, learned senior counsel appearing for the appellants/petitioners submitted that as per NTP 1994, ACL and AL were granted CMTS licenses dated 30.11.94 and 22.5.98 for Chennai Area and RoTN Area, the license fee was on fixed basis and spectrum fee was charged as per a stipulated formula. However, due to various issues, NTP 1999 was promulgated, which introduced the revenue share concept in respect of payment of licence fee. It is further submitted that NTP 1999 provided for payment of (i) Entry Fee and (ii) Licence fee on revenue share basis, which is a percentage of revenue of the operator agreed upon. On the promulgation of NTP 1999, migration package was given to the service operators, which provided for payment of entry fee and licence fee on revenue s....
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....r the purpose of getting the two licenses merged into a single license and, anything to the contrary, would be against the letter issued by the respondent. 12. It is the further submission of the learned senior counsel for the appellants/petitioners that vide NIA dated 25.2.2010, applications were invited for the auctioning of 3G and BWA spectrum. Reliance was placed on Clause 3.5 of the said NIA, wherein 'Spectrum Usage Charges' have been mentioned, wherein it is found that the spectrum usage charge shall be payable by the successful bidders, which is to be calculated as a percentage of the AGR and the said charge will be over and above the spectrum auction price and the applicable licence fees. In the above backdrop, it is submitted by the learned senior counsel, when a spectrum usage charge has been levied by the respondent coupled with the fact that vide letter dated 22.7.99, the respondent having mentioned that the licensee will be required to pay an entry fee and license fee as a percentage of AGR, the stand of the respondent that OTSC can be levied retrospectively does not have legs to stand. 13. It is the further submission of the learned senior counsel appearing ....
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....cense. 16. It is further submitted by the learned senior counsel for the appellants/petitioners that ACL and AL having acted upon the licence entered into between AL and ACL and DoT, more particularly in terms of the migration package offered and licence fee and spectrum charges based on the said licence and having organised their commercial operations accordingly, the arbitrary action of the respondent/DoT in levying OTSC detriment to the interests of the petitioners/appellants is against the well settled principles of Promissory Estoppel. In this regard, reliance was placed on the judgment of the Supreme Court in Jai Narain Parasrampuria-Vs.-Pushpa Devi Saraf & Ors. (2006 (7) SCC 756). 17. Learned senior counsel further placed reliance on the judgment of the Supreme Court in Reliance Energy Ltd.-Vs.-Maharashtra State Road Development Corporation Ltd. (2007 (8) SCC 1) and Vodafone International Holdings B.V.-Vs.-Union of India & Anr. (2012 (6) SCC 613), wherein the Supreme Court held that the rule of law and the heart of parliamentary democracy is 'legal certainty', as mandated by the Indian Constitution and the said concept is not alien to contractual matters. 18. Lear....
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.... the levy being to the tune of over Rs. 1300 Crores, and in no manner envisaged in the license agreement, the service providers having not taken the same into consideration in their financial outlay, would only result in closure of the business of most of the existing operators, thereby destabilising the telecom sector, else, the same has to be passed on to the subscribers, leading to increase in the cost of service in the form of higher tariff and, therefore, would be very much against the avowed policy of the Government in promoting growth through affordable telecom service. 22. Without prejudice to the above contentions, it is further submitted that the rate of OTSC derived for the entire State of Tamil Nadu has been arbitrarily applied to compute OTSC for Chennai Area as well as RoTN Service Area and, thereby, the same overlaps each other creating unjust inflation in both the service areas. 23. Lastly, it is submitted by the learned senior counsel for the petitioners/appellants that the reliance placed by the respondents on the judgment of the Supreme Court in Centre for Public Interest Litigation-Vs.-Union of India (2012 (3) SCC 1) (for short '2G Spectrum case') is m....
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....hat the Supreme Court, while setting aside the order of the Tribunal, has decided the matter only with reference to the jurisdiction of the Tribunal to decide the validity of the conditions of license and the validity of the definition of 'Adjusted Gross Revenue' and has not gone into the merits of the matter. 26. It is the submission of the learned senior counsel that initially the petitions filed before TDSAT were allowed against which the Government preferred appeal to the Supreme Court. However, the Supreme Court, without going into the matter for the reason that fresh recommendations have been given by TRAI, dismissed the appeal with liberty to raise all contentions in the civil appeal before TDSAT. After hearing the matter, TDSAT, vide order dated 30.8.07 allowed the appeal against which the Government filed batch of Civil Appeals before the Supreme Court, which were allowed by the Supreme Court. 27. It is the further submission of the learned senior counsel for the petitioners that the scope of the appeal before the Supreme Court requires to be seen in the context of the questions of law formulated therein and the answers to the said issues by the Supreme Court. Le....
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....er Article 19(1)(g) of the Constitution. 31. It is the submission of the petitioners that for the grant of largesse by way of grant of telecom licenses, the licensor, viz., the State, could fix a price as it may deem fit, but the same can only be in relation to telecom activities/services and by no stretch of imagination could it be deemed to include any other activities, not related to telecom activities, that are being carried on by the service providers. 32. It is the submission of the learned senior counsel for the petitioners that the Government can only put reasonable restrictions in the levy of fee and any unreasonable restriction in violation of Article 19(1)(g) of the Constitution in relation to the conditions of license, which is ultra vires Section 4 of the Telegraphy Act and the unbridled power granted to the Government under Section 4 of the Telegraph Act is definitely ultra vires Article 14 of the Constitution and on the principle of ubi jus ibi remedium, the petitioners are left open with a remedy to challenge the same before this Court, which is the appropriate forum for transgression of Article 14 and 19(1)(g) of the Constitution. 33. It is further pointed out b....
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....) Cellular Operators Association of India & Ors.-Vs.-Union of India & Ors. (2003 (3) SCC 186); (x) Kerala Samsthana Chethu Thozhilai Union-Vs.-State of Kerala (2006 (4) SCC 327); (xi) Hotel & Restaurant Association & anr.-Vs.-Star India (P) Ltd. (2006 (13) SCC 753); (xii) BSNL-Vs.-BPL Mobile Cellular Ltd. (2008 (13) SCC 597); (xiii) Union of India & anr.-Vs.-Association of Unified Telecom Service Providers of India & Ors. (2011 (10) SCC 543); (xiv) Centre for Public Interest Litigation-Vs.-Union of India & Ors. (2012 (3) SCC 1); (xv) Avishek Goenka-Vs.-Union of India (2012 (5) SCC 275); (xvi) Subramanian Swamy-Vs.-A. Raja (2012 (9) SCC 257); (xvii) Bharat Sanchar Nigam Ltd.-Vs.-Telecom Regulatory Authority of India (2014 (3) SCC 222); (xviii) Association of Unified Telecom Service Providers of India & Ors.-Vs.-Union of India & Ors. (2014 (6) SCC 110); and (xix) Bharti Airtel Ltd.-Vs.-Union of India (CA No. 2803/2014). CONTENTIONS ADVANCED IN W.A. NOS. 1454 & 1455 OF 2014 36. Mr. Gopal Subramaniam, learned senior counsel appearing for the appellants, while submitted that the facts, as narrated above, are not in dispute, submits that the learned single Judge had....
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....ar dated 15.9.05, merger was contemplated by DoT itself in public interest and in connection therewith the appellants have taken steps for the merger of ACL with AL and all along, the DoT was kept in the loop about the steps being taken by the appellants for merger, it cannot be said that for grant of approval, conditions imposed by DoT ought to be complied with. Learned single Judge has not appreciated this aspect of the matter while dealing with the writ petitions. 41. It is the further submission of the learned senior counsel for the appellants that when condition 9 of the license agreement postulates prior application for merger being sanctioned by DoT on a valid scheme being presented before the High Court and the same have to be sanctioned and approved by the High Court and the appellants having scrupulously followed the condition to the letter and acted in a dutiful manner in fulfilment of the conditions of license, the said fact has not been appreciated by the learned single Judge in proper perspective. 42. Learned senior counsel appearing for the appellants further submitted that pursuant to the approval of scheme of amalgamation of ACL with AL in terms of clause 9 of th....
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....in the 3G and BWA auction, the stand of DoT that the scheme of amalgamation filed by the appellants before this Court for merger, without its approval, is a violation of condition of license cannot hold water. When merger is condition for participating in the 3G and BWA auction, which condition has been laid down by the DoT itself, and the appellants, in the course of fulfilling its part of NIA for the purpose of participating in the auction, have moved this Court with a scheme of amalgamation and have further kept DoT in the loop by their pre-intimation letter dated 15.7.2010 informing DoT about the proposed amalgamation, the stand of the DoT that no prior approval was taken before the filing of the scheme of amalgamation before this Court is in violation of the terms of the license cannot be sustained. 44. Learned senior counsel further contended that while the circular dated 15.9.05 clearly establishes that the Chennai Area and RoTN Area were merged into one area, option was offered to the service providers for the merger of licenses unconditionally without any further obligation being imposed including payment of any additional entry fee. The above circular reveals that not on....
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....ts order dated 22.06.2012, the action of DoT to demand the said amount by means of an obtaining an undertaking in a matter pertaining to grant of approval of merger, would go against the very spirit of the stay order and would tend to make the order of this Court a nullity, which is impermissible in law and against the judicial dicta laid down by Courts in a catena of cases. 49. It is the further submission of the learned senior counsel that it is well settled law that what cannot be done directly is not permitted to be done obliquely. It is contended that what is prohibited by law cannot be legally effected by an indirect and circuitous method and it violates the principle of "quando aliquid prohibetur, prohibetur et omne per quod devenitur ad illud". It is the law of this land and no authority can be permitted to evade the law by shift or contrivance. Reliance in this regard is placed on the decisions of the Supreme Court in Jagir Singh-Vs.-Ranbir Singh & Anr. (AIR 1979 SC 381) and M.C. Mehta-Vs.-Kamal Nath & Ors. (AIR 2000 SC 1997). It is the submission of the learned senior counsel that inspite of the stay order passed by this Court against the levy of OTSC, DoT is trying to n....
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.... clarifying that they will not be enforcing the dues/demands which are under orders of stay granted by the Tribunals/Courts, the demand raised on the appellants, having been stayed by this Court, should also not be enforced and, accordingly, the approval for merger as sought for along with the merger of licenses should be granted without insisting on any undertaking insofar as the above demand is concerned. 52. Learned senior counsel further assailed the order of the learned single Judge by submitting that though the prayer as made by the appellants/petitioners therein was a direction to the respondent to grant an unconditional formal approval to the petitioners to merge their Chennai and RoTN licenses for the merged service area, i.e., Tamil Nadu Service Area, learned single Judge has gone beyond the scope of the writ petition and has given a direction to the petitioners/appellants herein to comply with the conditions imposed in the order of the respondent dated 3.10.2013. By the said order, learned single Judge had, technically, vacated all the interim orders granted by this Court, though the said matters in which interim orders were granted were not on the Board of the learned ....
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....l appearing for the appellants submitted that the reliance placed on the decisions in S.M. Amarchand Sowcar's case (1999 (2) LW 47) and Vishnuvardhan Paper Mills case (W.P. (MD) No. 12507 of 2011 dated 23.11.2011) are not applicable to the facts of the present case. It is contended that those cases relate to matters arising out of the Electricity Act, which is a self-contained statute, wherein powers have been vested with the authority to disconnect any electricity connection relating to a single individual/entity in the event of the individual/entity defaulting payment for any other connection. However, the present case falls under the law of contracts, whereby lawfully entered contract is being bent to suit the needs of the licensor, which is per se impermissible and, therefore, the above decisions relied on by the learned single Judge will not in any way advance the case of DoT. In any view of the matter, the reliance placed on the above decision is totally misconceived and is totally not relatable to the facts of the present case. 56. It is further contended on behalf of the appellants that the essence of the circular dated 15.9.05 having formed part of the NIA dated 25.2.....
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....sion of the Apex Court in Ramana Dayaram Shetty-Vs.-International Airport Authority of India & Ors. (1979 (3) SCC 489). 59. Learned senior counsel for the appellants submitted that on the merger of the two licenses, as per the condition in the license agreement, the effective date would be the later of the dates as mentioned in the license, which would practically be 30.12.2018 as the license for the RoTN Area was dated 22.5.98 and effective date being 31.12.1998. In such a case, on the merger, the license would expire only after 20 years terms on 30.12.2018. The rights accrued in favour of AL and ACL by virtue of the terms of the existing licenses read with the terms of NIA dated 25.2.2010 and the circular dated 15.9.05 and the said accrued right cannot be taken away by DoT by imposing additional onerous conditions, which abrogates and curtails the right of the appellant. The non-grant of the approval, which is formal in nature, as is evident from NIA dated 25.2.2010 and the circular dated 15.9.05, infringes on the vested right of the appellants to exploit the 3G and BWA spectrum, which right accrued on their paying huge sums of money in terms of the licence agreement. 60. In fi....
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....com East Ltd.-Vs.-Alapan Bandyopadhyay & Anr. (W.P. No. 183/2003); (xv) Kishan R. Bhatijha & anr.-Vs.-The Deputy Director, Enforcement Directorate, Govt. of India & Anr. (1995 (2) CTC 230); (xvi) Delhi Development Authority-Vs.-Skipper Construction Co. & Anr. (1996 (4) SCC 622); (xvii) All Bengal Excise Licensees' Association-Vs.-Raghabendra Singh (2007 (11) SCC 374); (xviii) Anil Ratan Sarkar & Ors.-Vs.-Hirak Ghosh & Ors. (2002 (4) SCC 21); (xix) Manohar Lal-Vs.-Ugrasen (2010 (11) SCC 557); (xx) Surjit Singh & Ors.-Vs.-Harbans Singh & Ors. (1995 (6) SCC 50); (xxi) Ashwapati-Vs.-State of U.P. (Writ (c) No. 62617 of 2009); (xxii) State of Bihar-Vs.-Rani Sonabati Kumar (AIR 1961 SC 221); (xxiii) Hoshiar Singh & anr.-Vs.-Gurbachan Singh & Ors. (AIR 1962 SC 1089); (xxiv) Nalla Senapathi Sarkari Manradiar-Vs.-Sri Ambal Mills (P) Ltd. (AIR 1966 Mad 53); (xxv) Satyabrata Biswas & Ors.-Vs.-Kalyan Kumar Kisku & Ors. (1994 (2) SCC 266); (xxvi) Mulraj-Vs.-Murti Raghonathji Maharaj (AIR 1967 SC 1386); (xxvii) Vidya Charan Shukla-Vs.-Tamil Nadu Olympic Association (AIR 1991 Mad 323); (xxviii) All India Regional Rural Bank Officers Federation & Ors.-Vs.-Govt. of I....
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....etitioners/appellants have approached this Court under Article 226. Further, as against any order passed by TDSAT, the petitioners/appellants have a right of appeal to the Supreme Court under Section 18 of the TRAI Act. Without exhausting the remedy, the petitioners/appellants having approached this Court under Article 226 of the Constitution, the writ petitions and the consequent writ appeals are not maintainable. In this regard, reliance has been placed on the decision of the Supreme Court in Association of Unified Telecom Service Providers of India case (supra) to submit that license having been granted to the licensee, it is the Tribunal, which has to adjudicate the dispute between the licensor and a licensee with regard the interpretation of the terms and conditions of the license. 63. It is submitted by the learned Addl. Solicitor General that the above being the position of law, though the learned single Judge has held that the petitioners have an alternative remedy to approach the TDSAT, however, erroneously held that since this Court is seized of the matter, it is not possible to relegate the petitioners to the TDSAT. This, according to the learned Addl. Solicitor General....
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....r a period of 10 years on payment of licence fee and entry fee. The licensees, by paying the fee as contemplated in the license agreement, were granted license agreements. 67. After execution of the license agreements, NTP 1999 was introduced which provided for a migration package, wherein the licensees were to pay a one time entry fee and license fee as percentage share of gross revenue and on the licensees agreeing for the migration, the period of license was extended to 20 years from the effective date of license agreement. It is contended by the learned Addl. Solicitor General that by invocation of power Clause 13 (ii) of the license agreement, the said migration package was arrived at to which the appellants had no quarrel and had accepted the same. Having accepted the same, now it is not open to them to contend that DoT cannot levy OTSC by invocation of the abovesaid clause 13 (ii) of the license agreement. It is not permissible for the appellants to blow hot and cold over the said license agreement to suit their needs. 68. It is contended by the learned Addl. Solicitor General that as early as 2008, Union of India was in consultation with TRAI regarding collection of OTSC ....
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....h Act coupled with Clause 13 (ii) of the License Agreement dated 30.11.1994, the Central Government having decided to levy OTSC from the licensees holding over and above 6.2 MHz of spectrum with retrospective effect from 1.7.08 vide the impugned order dated 23.01.2014, the grievance expressed by the licensee that DoT cannot levy OTSC is unsustainable. 72. Learned Addl. Solicitor General submitted that demand of OTSC was made in terms of Clause 13 (ii) of the License Agreement in public interest. It is the submission on behalf of DoT that on the basis of the decision and advice of the Supreme Court in the 2G Spectrum case (supra), DoT, in consultation with TRAI, had levied OTSC, more specifically on account of the fact that the spectrum was a rare, finite and valuable commodity and that it is the duty of the Central Government not to while away the resources, which are for the public at large. Therefore, the Central Government thought it fit to impose the levy, which would in turn be beneficial for the public at large, more so, the resource has to be used for the welfare of the public. It is only through such levy, welfare of the people can be taken care of by the use of natural re....
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....ties performed by the appellants. It is contended by the learned Addl. Solicitor General that the definition of "Adjusted Gross Revenue" has been defined in amendment to the license agreement dated 25.9.01 at clause 2, wherein the gross revenue was provided to include installation charges, late fees, sale proceeds of handsets (or any other terminal equipment, etc.), revenue on account of interest, dividend, value added services, supplementary services, access or interconnection charges, roaming charges, revenue from permissible sharing of infrastructure and any other miscellaneous revenue without any set off for related item of expense, subject to exclusions as defined under clause 2.2 of the said amendment. The appellants, being signatories to the agreement, cannot now come out and say that DoT is not entitled to have share in the gross revenue of the appellants. 75. Insofar as the contention of the appellants that merger of the two licenses into one license is a mandatory condition imposed by DoT vide its circular dated 15.9.05 and NIA dated 25.2.2010 and, therefore, approval is automatic and for grant of the said approval, DoT cannot impose onerous conditions, which is against ....
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....lants for which action was taken by DoT and, therefore, for the approval sought for by the appellants, conditions imposed by DoT have to be complied with. Further, levies as made in the different writ petitions are also in terms of Clause 13 (ii) of the license agreement to which the petitioners are signatories and they cannot try to wriggle out of the same by contending that those levies are not provided for in the license agreement. 78. Replying to the submissions of the learned Addl. Solicitor General, Mr. Satish Parasaran, learned senior counsel for the appellants/petitioners submitted that the contentions of DoT are per se unsustainable in view of the fact that Supreme Court in the 2G Spectrum case (supra) has held that though exclusive use of resources is vested in the Central Government, the Central Government is within its powers to allow private parties the right to use the resources upon conditions. While it is submitted that the appellants are not liable to be put under conditions, it is the submission of the learned senior counsel that what has not been envisaged in the license agreement and not agreed upon, cannot be unilaterally thrust upon the appellants/petitioners....
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....tion of date from which OTSC is payable. DoT has not placed any credible material to justify the date of levy of OTSC and in that view of the matter, the arbitrary fixation of date is not sustainable. 82. It is also submitted by the learned senior counsel that no differentiation has been placed by DoT with regard to SUC and OTSC. Charges for allocation of spectrum has been paid in the form of entry fee and for the grant of licence, license fee is being paid by the service providers and pursuant to the migration package, licence fee is made as a share of the gross revenue. Such being the case, entry fee having been paid by the service providers as a part of the migration package, levy of OTSC is impermissible. 83. It is further submitted by the learned senior counsel that what was under consideration of the Supreme Court in the 2G Spectrum case (supra) was the grant of 122 licenses during the period 2007-2008, without there being any auction and not the licenses granted previously and that Supreme Court has made it clear in its order that they are not dealing with other licenses than the 122 licenses. That being the case, the grant of licenses of the appellants/petitioners dating ....
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....dness on the part of DoT. Accordingly, learned senior counsel prayed for allowing the writ petitions and the writ appeals in toto on the above set of facts and contentions. 86. Heard the learned senior counsel appearing for the petitioners/appellants and the learned Addl. Solicitor General appearing on behalf of the respondents and also perused the voluminous records placed before this Court. PLEA OF MAINTAINABILITY: 87. Before adverting to the merits of the matter, it would be just and fair to deal with the preliminary objection raised by the respondent with regard to the maintainability of the petitions before this Court in view of the alternative remedy available to the petitioners/appellants. 88. It is contended by the learned Addl. Solicitor General that Section 14(a)(i) of the TRAI Act prescribes that in respect of any dispute between a licensor and a licensee, the remedy lies before the TDSAT. It is the contention of the learned Addl. Solicitor General that without availing the remedy before TDSAT, the petitioners have approached this Court. Further, as against any order that may be passed by TDSAT, an appeal lies only to the Supreme Court under Section 18 of the TRAI Ac....
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....i) of the licence agreement, as the fresh levy is an addition, which is easily distinguishable from modification. 91. In Unified Telecom Service Providers of India case (supra), the Supreme Court has held that the dispute between a licensor and a licensee referred to in Section 14(a)(i) of the TRAI Act is a dispute after a person has been granted a licence by the Central Government or the Telegraph Authority under sub-section (1) of Section 4 of the Telegraph Act. Therefore, it is clear that only a person, who has been granted a licence, would fall within the ambit of licensee and only disputes arising between such licensee and the licensor can be adjudicated by the Tribunal. It has also been further held that the Tribunal has no jurisdiction to decide upon the validity of the terms and conditions incorporated in the licence of a service provider, but it will have the jurisdiction to decide "any" dispute between the licenser and the licensee on the interpretation of the terms and conditions of the licence. Therefore, it is clear from the above decision of the Supreme Court that while the Tribunal has jurisdiction to decide "any" dispute between the licensor and the licensee on the....
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.... of any power conferred by or under this Act. * * * * * * * * 18. Appeal to Supreme Court.-(1) Notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or in any other law, an appeal shall lie against any order, riot being an interlocutory order, of the appellate Tribunal to the Supreme Court on one or more of the grounds specified in section 100 of that Code. (2) No appeal shall lie against any decision or order made by the Appellate Tribunal with the consent of the parties. (3) Every appeal under this section shall be preferred within a period of ninety days from the date of the decision or order appealed against: PROVIDED that the Supreme Court may entertain the appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time." 95. While Section 14(1) of the TRAI Act confers power on the Tribunal to adjudicate any dispute between (i) a licensor and a licensee, (ii) between two or more service providers and (iii) between a service provider and a group of consumers, as against any such adjudication, appeal is provided to the Supreme Court under ....
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....icy, and discretion rather than a rule of law and the court may therefore in exceptional cases issue a writ such as a writ of certiorari notwithstanding the fact that the statutory remedies have not been exhausted. In The State of Uttar Pradesh-Vs.-Mohammad Nooh, 1958 SCR 595, 605, S.R. Das, C.J., speaking for the Court, observed: "In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute. (Halsbury's Laws of England, 3rd Ed., Vol. II, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if an....
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.... these remedies. However, while exercising the power under Article 226 or under Article 32, the legislative intent that manifested in the provisions of the Act should be adverted to by the Court while exercising their jurisdiction, which should be consistent with the provisions of the enactment. 99. In the case of Kartar Singh-Vs.-State of Punjab (1994 (3) SCC 569), a Constitution Bench of the Supreme Court observed that extraordinary power is given to High Court under Article 226 not only for the purpose of correcting manifest errors but also to exercise the said jurisdiction for the sake of rendering complete justice. The High Court, being the highest court for the purposes of exercising civil, appellate, criminal or constitutional jurisdiction so far as that State is concerned in terms of the framework of the Constitution, the jurisdiction possessed by it before coming into force of the Constitution was preserved by Articles 225 and in terms of Articles 226 and 227, extraordinary jurisdiction was conferred on it so as to ensure that the subordinate authorities do not act against the rule of law, but to see that they function within the framework of law. That jurisdiction of the....
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....e warrants no interference. REVENUE SHARE ON NON-TELECOM ACTIVITIES:- 104. It is the contention of the learned senior counsel for the petitioners in W.P. Nos. 585 to 588/2013 that though in terms of the Migration Package entered into between the licensor and the licensee vide amendment to the agreement dated 22.7.99 in the NTP 1999 regime, the licensee was to pay license fee as a percentage share of the gross revenue under the licence. It is the submission of the learned senior counsel that to calculate the share of gross revenue of the licensee company, the yardstick should be the licence based on which a link is created between the licensor and the licensee to enter into the above agreement. It is an undisputable fact that the licence pertains to running of telecom activities for a particular area. That being the case, the gross revenue of the licensee company should be only on the activities enumerated in the licence and not on all the activities of the licensee company, which includes activities, which are not covered by the licence. Therefore, it is the stand of the petitioners that any revenue generated through activities, which do not form part of the licence, the licensor....
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....V) (Part) dated 25.9.01 and whether such a power is violative of Articles 14 and 19(1)(g) of the Constitution". 107. If the answer to the above query is in the negative, the ancillary query that arises is: "Whether a writ of declaration can be issued that the respondents can charge only License Fee/AGR (Adjusted Gross Revenue) from revenue earned from licensed activities". 108. Before this Court decides to address this issue, it would be prudent to have a look at the definition of "Adjusted Gross Revenue" as is found in the amended licence agreement dated 25.09.2001, which reads as hereunder:- "2. Definition of Adjusted Gross Revenue: 2.1 Gross Revenue: The Gross Revenue shall be inclusive of installation charges, late fees, sale proceeds of handsets (or any other terminal equipment, etc.), revenue on account of interest, dividend, value added services, supplementary services, access or interconnection charges, roaming charges, revenue from permissible sharing of infrastructure and any other miscellaneous revenue, without any set-off for related item of expense, etc. 2.2 For the purpose of arriving at the "Adjusted Gross Revenue" the following will be excluded from the ....
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....license agreement and become a licensee and the word "any" in Section 14(a) of the TRAI Act cannot widen the jurisdiction of the Tribunal to decide a dispute between a licensor and a person who had not become a licensee. The result is that the Tribunal has no jurisdiction to decide upon the validity of the terms and conditions incorporated in the license of a service provider, but it will have jurisdiction to decide "any" dispute between the licensor and the licensee on the interpretation of the terms and conditions of the license. 48. Coming now to the facts of the cases before us, clause (iii) of the letter dated 22.07.1999 of the Government of India, Ministry of Communications, Department of Telecommunications, to the licensees quoted above made it clear that the license fee was payable with effect from 01.08.1999 as a percentage of gross revenue under the license and the gross revenue for this purpose would be total revenue of the licensee company excluding the PSTN related call charges paid to DOT/MTNL and service tax calculated by the licensee on behalf of the Government from the subscribers. It was also made clear in the aforesaid clause (iii) that the Government was to ta....
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....Supreme Court was on the issue whether the Tribunal had powers to decide on the validity of the terms and conditions, which the Supreme Court negatived and held that the Tribunal has jurisdiction only to interpret the terms and conditions of the licence. The Supreme Court did not go into the question of whether AGR would stand attracted even on revenue generated through non-telecom activities, which are not governed by the licence. On that ground the petitioners are before this Court on the issue as noted above, which is before this Court for consideration. 112. The rule of law as propounded by the Supreme Court on the jurisdiction of the Tribunal is clear. However, in the case on hand, the point that requires consideration is whether Section 4 of the Indian Telegraph Act gives unbridled powers to DoT to claim a share of revenue generated from non-telecom activities on the basis of the definition of "Adjusted Gross Revenue", which forms part of the licence agreement and whether such power is violative of Articles 14 and 19(1)(g) of the Constitution. 113. For deciding this issue, it would be useful to look at the provisions of Section 4 of the Telegraph Act, which vests the Centra....
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....he rule of law as enunciated by the Supreme Court, which is quoted hereunder:- "13... The fact that the Government was the seller does not change the legal position once its exclusive right to deal with those privileges is conceded. If the Government is the exclusive owner of those privileges, reliance on Article 19(1)(g) or Article 14 becomes irrelevant. Citizens cannot have any fundamental right to trade or carry on business in the properties or rights belonging to the Government-nor can there be any infringement of Article 14, if the Government tries to get the best available price for its valuable rights." 116. The above proposition has been reiterated by the Supreme Court in the case of Har Shankar-Vs.-Excise & Taxation Commissioner (1975 (1) SCC 737) as well as its subsequent decisions. The Supreme Court, in the above cited decision, also had occasion to consider the case of State of Punjab-Vs.-Devans Modern Breweries Ltd., wherein a Constitution Bench of the Supreme Court, relying on Har Shankar's case (supra) and Panna Lal-Vs.-State of Rajasthan (1975 (2) SCC 633), held that issuance of liquor licence constitutes a contract between the parties. 117. What flows from ....
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....t of interest, dividend, value added services, supplementary services, access or interconnection charges, roaming charges, revenue from permissible sharing of infrastructure and any other miscellaneous revenue, without any set-off for related item of expense, etc. 121. It is not the case of the petitioners that they are not signatory to the migration package in which definition was defined. The migration package dated 25.9.2001, was entered into between the licensor and the licensee, wherein while the licensor was granted the benefit of revenue sharing towards licence fee, the period of licence was extended from 10 years to 20 years in favour of the licensee. Therefore, on consensus the licence agreement was amended. While the licensee had the benefit of extended term, the licensor had the benefit of revenue share. That being the case, it is not open to the licensee to contend that DoT cannot claim a share of the revenue from non-telecom activities vide the definition of AGR as violative of Articles 14 and 19(1)(g) of the Constitution. The licensee, with open eyes, had accepted the terms of the agreement, which was to their advantage as well and now their contention that revenue g....
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....activities would not fall within the ambit of the above definition of AGR. 124. As has been held by the Supreme Court in Harinarayan Jaiswal's case (supra), the Central Government, being the seller has exclusive right to deal with the privileges flowing from Section 4(1) of the Telegraph Act and once the exclusive privilege of the Central Government is conceded, violation of Articles 14 and 19(1)(g) cannot be pressed into service by persons citing fundamental right to trade or carry on business, when such right belongs to the Government and there cannot be any infringement of Article 14, if the Government tries to get the best available price for its valuable rights. The contract executed between the licensor and the licensee above is in the realm of the Government trying to get the best available price for parting with its valuable rights and, therefore, this Court is of the considered view that violation of Articles 14 and 19(1)(g) of the Constitution does not merit acceptance. Accordingly, this Court holds that first proviso to Section 4 of the Indian Telegraph Act is not violative of Articles 14 and 19(1)(g) of the Constitution. 125. The primary question of Section 4(1) o....
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....DoT has taken a stand that OTSC has been levied in terms of the judgment of the Supreme Court in the 2G Spectrum case (supra), it is pointed out that the Supreme Court did not deal with licences prior to 2007 and it pertained only to 122 licences of which the petitioners were not a party. Further, the Supreme Court had also directed TRAI to make fresh recommendations for grant of licence and allocation of spectrum in the 2G band in 22 service areas by auction as was done for allocation of spectrum in 3G band and direction was issued to the Central Government to consider the recommendations of TRAI and take appropriate decision for grant of fresh licences through auction. It is therefore contended by the petitioners that when the direction of Supreme Court as above is explicit, which is only in relation to future/fresh licences, the reliance placed on the said judgment for imposition of OTSC on the petitioners cannot be sustained. 128. It is further submitted by the learned senior counsel for the petitioners that it is a well accepted proposition that Court cannot substitute its opinion for the one formed by the experts in the particular field and due respect should be given to the....
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....d in the licence of a service provider and, therefore, writ petition is very well maintainable. 130. Countering the said stand, it is contended by the learned Addl. Solicitor General that the Central Government having been vested with the exclusive privilege to deal with telegraph and for the grant of licences, which has been approved by the Supreme Court and the Supreme Court having held that spectrum is a scarce national resource which should be used both economically for the benefit of the public as well as sub-optimal usage also needs to be avoided, burden has been cast on the Central Government to ensure protection of national/public interest. In the above backdrop, the Government, in consultation with TRAI, the expert body, thought it fit to impose OTSC on all the service providers in exercise of power vested in it under Clause 13 (ii) of the licence agreement, whereby, the Central Government is conferred with power to modify at any time the terms and conditions of the licence, if in the opinion of the authority it is necessary or expedient to do so in the interests of the general public or for the proper conduct of telegraphs or on security consideration. With the avowed ob....
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....o do so in the interests of the general public or for the proper conduct of telegraphs or on security consideration." 134. The interpretation on the word "modify" appearing in the above clause, as per the petitioners is that, the DoT has no power to make any additions to the existing provisions, and the levy of OTSC, which doesn't form part of the licence agreement, being an addition is impermissible, whereas according to the DoT, the interpretation should be expansive and should not curtail the power of the Department to levy OTSC, when the intention of the Government at the time of entering into the agreement was to alter the contract so that the interests of the public are safeguarded, which has been emphasised by the Supreme Court in the 2G Spectrum case (supra). 135. Though very many contentions have been advanced on the side of the petitioners, all the contentions are relatable and are consequential to the validity of the levy of OTSC by this Court. Therefore, the moot question that arises before this Court for answering the issue raised by the petitioners is "whether the modification power provided under clause 13 (ii) of the licence agreement confers power on the DoT ....
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....ew natural resources are considered as national assets, more so because the State benefits immensely from their value. * * * * * * * * 77. Spectrum has been internationally accepted as a scarce, finite and renewable natural resource which is susceptible to degradation in case of inefficient utilisation. It has a high economic value in the light of the demand for it on account of the tremendous growth in the telecom sector. Although it does not belong to a particular State, right of use has been granted to States as per international norms. * * * * * * * * In Jamshed Hormusji Wadia's case, this Court held that the State's actions and the actions of its agencies/instrumentalities must be for the public good, achieving the objects for which they exist and should not be arbitrary or capricious. In the field of contracts, the State and its instrumentalities should design their activities in a manner which would ensure competition and non-discrimination. They can augment their resources but the object should be to serve the public cause and to do public good by resorting to fair and reasonable methods." 137. In fine, on broader principles, the Supreme Court held that natur....
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.... term "modify" is defined as "to make somewhat different", "to make small changes by way of improvement, suitability or effectiveness". 142. Reference can be made to the Law Lexicon (P. Ramanatha Aiyar), wherein the meaning of "modify" is shown thus: To change, or vary, to qualify or reduce. The expression 'modify' must be construed to be a change or an alteration which may introduce some new elements regarding the details or cancels some of them without touching the general purpose and effect of the subject-matter. 143. The word "modify" means-"to change slightly, especially in order to make it more suitable for a particular purpose" (as per the Concise Oxford Dictionary 7th Edn.) and "a change and alteration or amendment, which introduces new element into the details or cancel some of them but leave the general purpose and effect of the subject-matter intact" (as per the Judicial Dictionary-by Justice L.P. Singh and P.K. Majumdar). 144. In Stevens-Vs.-General Steam Navigation Co. Ltd. (1908 (1) KB 890), which was relied on by the Supreme Court in Western Theatres Ltd.-Vs.-Municipal Corporation of the City of Poona (AIR 1959 SC 586), it has been held that the word '....
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.... the words should be construed. Useful reference can be had to the following:- "(c) Words not Defined Where the definition of a word has not been given, it must be construed in its popular sense if it is a word of everyday use. 'Popular sense' means that sense which people, conversant with the subject matter with which the statute is dealing, would attribute to it. (d) Words Judicially Interpreted It is well-settled that where the legislature uses a legal term which has received judicial interpretation, the courts must assume that the term has been used in the sense in which it has been judicially interpreted. It would be hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so, when such statute or statutory instrument does not deal with any cognate subject. (e) When Meaning is plain There is no need to call to aid any of the rules of construction when the meaning of any term or expression given in the statute is plain and unambiguous. A definition clause does not necessarily, in any statute, apply in all possible contexts in which the word which is defined may be found therein." 149. It is clear ....
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.... in clause 13 (ii) of the licence agreement brings within itself the power of addition, more specifically in the interest of general public, the levy of OTSC by the Government on the service providers cannot be held to be in violation of the licence agreement or against the contractual obligations. The word "modify" as depicted in the above clause could only be termed as changes made by way of improvement for the effectiveness and overall benefit of the public at large. Once the interest of the public at large is taken into consideration, any revenue generation contemplated by means of imposition of OTSC, in exercise of the right vested under clause 13 (ii) of the licence agreement would very well stand the test of legal scrutiny, as such imposition is within the power of the licensor. It cannot, by any yardstick, be treated as an imposition of levy which is not authorised by the clause, more so the rule of law. 154. Therefore, on a harmonious reading of the said clause 13 (ii) of the licence agreement, what follows is that the licensor reserves the right to modify (inclusive of addition and subtraction) at any time the terms and conditions of licence covered under the schedules i....
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....OTSC on service providers, holding in excess of 6.2 MHz upto 10 MHz of spectrum retrospectively, while OTSC has been levied on service providers holding spectrum from 4.4 MHz to 6.2 MHz prospectively. Though over all imposition of OTSC is submitted to be bad, it is further submitted on behalf of the petitioners that differentiation of service providers based on the amount of spectrum held by them for the purpose of levy of OTSC on different dates is per se unsustainable. Further, the date fixed for the imposition of OTSC retrospectively is also arbitrary and no reason has been adduced by the Central Government for fixation of the said date. 157. Though the above plea has been raised by the petitioners, the same cannot be sustained for the simple reason that the petitioners were aware of the consultation between the Central Government and TRAI on the imposition of OTSC. However, for reasons best known to them, either they have not objected to such imposition, or no documents portraying their objection in this regard is placed before this Court. Loud plea without any documentary evidence cannot partake the character of proof. Had the petitioners submitted their objections to the sai....
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....ing successful, they will merge their licences. The appellants, being successful in the 3G auction, to honour their undertaking, took steps for the merger of the company by submitting scheme of amalgamation before this Court, which was approved subject to requisite approval from DoT. However, the matter got dragged due to some errors, though not on the part of the appellants, but still and after some prolonged legal battle, DoT issued communication dated 3.10.2013, calling upon the appellants to submit undertaking that on the approval of the merger, the outstanding due on the transferor company will be cleared by the transferee company. This undertaking contained the undertaking to be submitted by the transferee company relating to clearing of OTSC, which was due and payable by the transferor company. However, as the recovery of OTSC and payment of share on non-telecom activities were under stay by this Court, it was submitted by the appellants that as the matter was sub-judice and stay was there, DoT cannot enforce the recovery as any coercive action in the form of demand by DoT would be a contemptuous act on the part of DoT, which would be against the stay order. However, DoT bei....
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....to maintain status quo as on 5 November 2014 both in respect of demands as contained in the proceeding dated 3 October 2013 and provision of Telecommunication Services by the petitioners subject to the conditions indicated herein. (ii) There shall be an interim direction in view of the In Principle approval granted by the respondent to amend the CMTS Licence No. 842-92/97-VAS-Dated 22 November 1998 for Tamil Nadu (Excluding Chennai) Service Area issued to M/s. Aircel Ltd., to include the erstwhile Chennai Service Area which was served by M/s. Aircel Cellular Ltd., the merging company holding CMTS Licence No. 842-21/93-TM dated 30 November 1994, to permit M/s. Aircel Ltd., to continue to provide its telecommunication services for Tamil Nadu including Chennai subject to the conditions enumerated below: (a) M/s. Aircel Ltd., shall pay all charges as per NIA. (b) M/s. Aircel Ltd., shall pay 10% of AGR Provisionally as indicated in the circular dated 15 September 2005 on account of one time Spectrum charges for the quantum of Spectrum held by erstwhile Aircel Cellular Ltd., in Chennai Service Area for the extended period from 29 November 2014 to 29 November 2018. Such payment shal....