TaxTMI 
TaxTMI 
2022 (3) TMI 1629
X X X X Extracts X X X X
X X X X Extracts X X X X
....T"]. The appellant claimed a refund of Rs 1454.94 crores representing the Entry Fee (together with interest) paid by it for 2G licences for twenty-one service areas. By the judgment of this Court in Centre for Public Interest Litigation v. Union of India [(2012) 3 SCC 1 ("CPIL")], the 2G licences which were granted by the Union of India, including to the appellant, were quashed. The appellant claims to be entitled to the refund of its Entry Fee on, as it contends, "well settled principles of civil, contractual and constitutional law". 2 The appellant applied for the grant of Unified Access Service Licences ["UASL"] for twenty-one service areas on 3 September 2007. A Letter of Intent was issued. The appellant paid the circle wise Entry Fee of Rs 1.1 crores and furnished a Performance Bank Guarantee and Financial Bank Guarantee for the twenty-one areas. The appellant entered into UASL agreements on 3 March 2008 for the twenty-one service areas with the respondent, which came into effect from 25 January 2008. Among the conditions which were stipulated in the UASL agreements, those governing the duration of the licence and the Entry Fee were in the following terms: "3. Dura....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Code 1860 in a case relating to the grant of UASLs. By a judgment dated 21 December 2017, the appellant was acquitted of criminal charges by the Special Judge, CBI. The Central Bureau of Investigation has filed a petition for leave to appeal against the order of acquittal, which is presently pending before the Delhi High Court. 5 Aggrieved by the judgment of the TDSAT dated 16 September 2015, the appellant moved this Court in Civil Appeal Nos 1447-1467 of 2016. On 13 May 2016, the appellant sought liberty of this Court to withdraw the civil appeals, and to approach this Court once again if it became so necessary. Leave was accordingly granted by this Court. 6 The appellant then instituted another petition before the TDSAT [Telecom Petition No 63 of 2018 ("Second Telecom Petition")] raising the issue of a refund of the Entry Fee, on the ground that it had been exonerated by the Special Judge, CBI. By its judgment dated 11 December 2018, the TDSAT dismissed the Second Telecom Petition noting that the appellant had made a second attempt for claiming the same relief which had been sought earlier in the First Telecom Petition. It further held that had the TDSAT sought to provid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ount of the fault of the appellant but due to the culpability of the Union government; (iv) The well settled principle is that no person can be prejudiced because of an act of a court (actus curiae neminem gravabit); (v) The substratum of TDSAT's decision which disallowed the claim of the appellant in view of the pending criminal proceedings has been wiped off by the acquittal of the appellant by the Special Judge, CBI; (vi) The set off policy of the Union government, in terms of which a set off of the Entry Fee which was paid was granted only to those entities who participated in the fresh round of auction which took place after the judgment of this Court in CPIL (supra), is based on incorrect classification which lacks intelligible differentia and nexus to its object. Further, the set off policy suffers from manifest arbitrariness and is discriminatory. Thus, it should be struck down as being violative of Article 14 of the Constitution; (vii) The set off policy of the Union government allowing the grant of a set off of the Entry Fee, albeit to certain bidders, is an admission of a debt that is due and payable: (a) On 12 October 2012, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt in Union of India v. Karam Chand Thapar and Bros. (Coal Sales) Ltd. [(2004) 3 SCC 504]; (ix) The non-refund of the Entry Fee to the appellant is discriminatory for the following reasons: (a) A set off towards the fee payable for the spectrum has been permitted to those Telecom Service Providers ["TSPs"] who participated in and won spectrum in the subsequent auction after the judgment of this Court in CPIL (supra); (b) The licences of eight TSPs were quashed by this Court by its judgment in CPIL (supra). There cannot be any distinction or classification in law between the said eight TSPs and similar treatment must be afforded to all. The classification based on their decision to participate in the subsequent auction for refund of Entry Fee is discriminatory and has no nexus with the object sought to be achieved by the set off policy; (c) Out of the eight TSPs, four TSPs participated in the subsequent auction and were permitted a set off of their Entry Fee towards payment for the auction allotted spectrum. Details of the cases where a set off was granted are: Name of Company Year of Auction Amount set off Status in the 2G Judgment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o participate in the fresh auction, for which it cannot be penalized; (xii) The appellant ought not to be punished for the wrongdoing of the respondent: (a) In the judgment in CPIL (supra), this Court held that the "First Come First Serve" policy of the Union government for the grant of telecom licenses was flawed, arbitrary and illegal; (b) This Court further imposed costs of Rs 5 crores upon those licence holders before it who had benefitted at the cost of the public exchequer and had offloaded their stakes for thousands of crores in name of fresh infusion of or transfer of equity. On the other hand, costs of only Rs 50 lakhs were imposed on those licence holders (including the appellant) who had allegedly benefited by the wholly arbitrary and unconstitutional action of the Department of Telecommunication ["DoT"] for the grant of UASLs and the allocation of the 2G spectrum band. Hence, no role was attributed to the appellant for quashing of its licenses; (c) In any event, the appellant has been acquitted of criminal charges on 21 December 2017 by the Special Judge, CBI; (d) Even otherwise, the pendency of criminal proceedings is not an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... provided on a representation that they would have a tenure of twenty years but were declared to be void within four years due to the flawed policy of the Union Government, the appellant will be entitled to refund of the Entry Fee with interest; and (h) The respondent is estopped from relying upon the UASL Guidelines and UASL agreements, which provide that the Entry Fee is non-refundable. This is because the licences were not quashed either due to a default on part of the appellant or its withdrawal, but due to the policy of the Union government being found to be illegal and arbitrary; and (xiv) The decisions [Union of India v. Association of Unified Telecom Service Providers of India and Ors., (2020) 3 SCC 525; and Union of India v. Association of Unified Telecom Service Providers of India and Ors., Civil Appeal Nos 6328-6399 of 2015] of this Court in the relation to the payment of Adjusted Gross Revenue ["AGR"] have no relevance to the present case. 9 Opposing the submissions which have been urged on behalf of the appellant, Mr. Vikramjit Banerjee, learned Additional Solicitor General, appearing on behalf of the Union of India has urged the following submissi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssary. Thus, in view of the order dated 13 May 2016, the appellant could have only moved this Court and not TDSAT. However, it instituted a Second Telecom Petition before the TDSAT. The TDSAT by its judgment dated 11 December 2018 rejected the second attempt of the appellant for claiming the same relief, since this would essentially amount to a review of the judgment in CPIL (supra). Thus, moving the Second Telecom Petition was not only contrary to Section 14 of the TRAI Act but also in violation of the text and spirit of the order dated 13 May 2016 of this Court; (v) The decision of the EGoM dated 31 October 2012 granting set off to those bidders who had participated and were found to be successful in the fresh round of auctions was a one-time concession offered to TSPs whose licences were quashed earlier, in order to ensure that telecom services were provided to consumers in an uninterrupted manner. The decision in CPIL (supra) did not bar licensees from participating in the subsequent auction. Since the Entry Fees paid by licensees covered by the judgment in CPIL (supra) could not have been refunded, the EGoM decided to adjust their Entry Fee in the subsequent auction i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing of the licences could not have been contemplated by any of the litigants. Theoretically, even if the claim for restitution could have been made before this Court at that stage, the appellant is not precluded from raising the claim before this Court in the present proceedings. Further, Sections 14 and 15 of the TRAI Act confer a plenary remedy before the TDSAT. Hence, the appellant moved the TDSAT within a few weeks of the judgment in CPIL (supra). It was urged that for the principles of constructive res judicata to apply, the bar must be clearly evident. In a Public Interest Litigation petition, it would not be appropriate to apply the principles of constructive res judicata against the respondent (the appellant herein) save in an exceptional case. Elaborating on the above submissions, Mr. Huzefa Ahmadi urged that: (i) The right to claim restitution would arise only after the licences were quashed by this Court and hence, the decision in CPIL (supra) does not operate as constructive res judicata; (ii) The relief sought before this Court in the public interest petition under Article 32 of the Constitution which led to the decision in CPIL (supra) was the settin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich were arbitrary and contrary to public interest, since they recommended the granting of licences at the entry fees which were determined in 2001; (v) While granting licences which were bundled with the spectrum at a price which was fixed in 2001, the DoT did not consult the Finance Ministry and violated the decision taken by the Council of Ministers in 2003; (vi) The "First Come First Serve" policy violated Article 14, and its distortion by the then Minister of Communications and Information Technology and the consequent grant of licences was liable to be annulled; and (vii) The Union government did not take any action to cancel the licences of a number of licensees who had failed to fulfil the roll-out obligations and violated the conditions of the licences. 13 While dealing with the grounds of challenge, in the course of the judgment, this Court underscored that natural resources, such as spectrum, are public goods and the doctrine of equality and public trust must guide the State in determining the actual mechanism for their distribution. After analysing the rationale adopted by TRAI for recommending the allocation of the 2G spectrum on the basi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hos and values. 16 In the course of its decision, this Court held, in no uncertain terms, that the then Minister for Communications and Information Technology had acted to favour some companies at the cost of the public exchequer: "97. The exercise undertaken by the officers of DoT between September 2007 and March 2008, under the leadership of the then Minister of Communications and Information Technology was wholly arbitrary, capricious and contrary to public interest apart from being violative of the doctrine of equality. The material produced before the Court shows that the Minister of Communications and Information Technology wanted to favour some companies at the cost of the public exchequer and for this purpose, he took the following steps: (i) Soon after his appointment as Minister of Communications and Information Technology, he directed that all the applications received for grant of UAS licence should be kept pending till the receipt of the TRAI recommendations. (ii) The recommendations made by TRAI on 28-8-2007 were not placed before the full Telecom Commission which, among others, would have included the Finance Secretary. The notice of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he cut-off date as 25-9-2007 for consideration of the applications received for grant of licence despite the fact that only one day prior to this, a press release was issued by DoT fixing 1-10-2007 as the last date for receipt of the applications. This arbitrary action of the Minister of Communications and Information Technology though appears to be innocuous, actually benefited some of the real estate companies who did not have any experience in dealing with telecom services and who had made applications only on 24-9-2007 i.e. one day before the cut-off date fixed by the Minister of Communications and Information Technology on his own. (vii) The cut-off date i.e. 25-9-2007 decided by the Minister of Communications and Information Technology on 2-11-2007 was not made public till 10-1-2008 and the first-come-first served policy, which was being followed since 2003 was changed by him on 7-1-2008 and was incorporated in press release dated 10-1-2008. This enabled some of the applicants, who had access either to the Minister or the officers of DoT to get the demand drafts, bank guarantee, etc. prepared in advance for compliance with conditions of the LoIs, which was the basis ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... (v) Respondents 2, 3 and 9 who have been benefited at the cost of public exchequer by a wholly arbitrary and unconstitutional action taken by DoT for grant of UAS licences and allocation of spectrum in 2G band and who offloaded their stakes for many thousand crores in the name of fresh infusion of equity or transfer of equity shall pay costs of Rs 5 crores each. Respondents 4, 6, 7 and 10 shall pay costs of Rs 50 lakhs each because they too had been benefited by the wholly arbitrary and unconstitutional exercise undertaken by DoT for grant of UAS licences and allocation of spectrum in 2G band. We have not imposed costs on the respondents who had submitted their applications in 2004 and 2006 and whose applications were kept pending till 2007. (vi) Within four months, 50% of the costs shall be deposited with the Supreme Court Legal Services Committee for being used for providing legal aid to poor and indigent litigants. The remaining 50% costs shall be deposited in the funds created for Resettlement and Welfare Schemes of the Ministry of Defence. (vii) However, it is made clear that the observations made in this judgment shall not, in any manner, affect t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....infusion or transfer of equity. On the other hand, the appellant was amongst the four licensees who were directed to pay a cost of Rs 50 lakhs each "because they too had been benefited by the wholly arbitrary and unconstitutional exercise undertaken by DoT for grant of UASL and allocation of spectrum of 2G band". 20 The beneficiaries of the patently unconstitutional mechanism deployed for the allocation of spectrum were corporate entities who were favoured under the "First Come First Serve" policy. The appellant is one of them. The distinction made by the judgment of this Court between the three licensees who were subjected to costs of Rs 5 crores and four licensees, including the appellant, who were subject to costs of Rs 50 lakhs was because in the case of a former their stakes had been offloaded ostensibly in the name of a fresh infusion or transfer of equity. However, it is evident that all these licensees were complicit in the illegal exercise of obtaining favours for themselves by the indulgence of those in power. That, above all, was the foundation of the decision in CPIL (supra) and the justification for quashing licences and the allocation of the 2G spectrum. This Court....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ord. In the facts of the present case the petitioner failed to get entry into...the exclusive domain reserved by law for the State..." 24 There is much to commend in the above line of reasoning of the TDSAT. The Entry Fee, under the terms of the UASL Guidelines and the UASL agreements, was a one-time non-refundable fee. The TDSAT held that the submission of the Union of India would have credence if the licences were terminated for breach or if the licensee were to voluntarily surrender the licence. However, this was a case where the licence was held to be unlawful, due to its grant being in breach of the constitutional mandate under Article 14. All the licences and the allocation of spectrum came to be cancelled by the decision in CPIL (supra) on the ground that the policy and the process followed by the Union government were arbitrary, and unjustified benefits had been granted to the licensees. Thus, the TDSAT held that, strictly speaking, the contractual term stipulating that the Entry Fee was nonrefundable would not by and in itself preclude the claim for refund on the basis of the judgment of this Court in CPIL (supra), which held that the entire process leading up to the aw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sector and to promote and ensure orderly growth of the telecom sector..." The TRAI Act governs the functioning of the TDSAT. The jurisdiction of civil courts has been ousted by Section 15. Section 16 enables the TDSAT to regulate its own procedure, guided by the principles of natural justice. An appeal on a substantial question of law lies to this Court under Section 18 of the TRAI Act. In the above statutory context, the jurisdiction of TDSAT will be evaluated below. 27 Section 14(a)[6] of the TRAI Act empowers the TDSAT to adjudicate any dispute: (i) Between a licensor and licensee; (ii) Between two or more service providers; and (iii) Between a service provider and a group of consumers. 28 The scope of the TDSAT's powers to adjudicate "any dispute" was interpreted in Cellular Operators Association of India v. Union of India [(2003) 3 SCC 186] by a three-judge Bench of this Court. The Court held that the powers envisaged by the TRAI Act for the TDSAT are wide and it would not be appropriate for this Court to impose limitations on them. Chief Justice G B Pattanaik noted: "8...Chapter IV containing Section 14 was inserted by an amendment....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Attorney-General..." Justice S B Sinha, in his concurring opinion, further elaborated on the jurisprudence surrounding tribunals constituted under regulatory statutes. The judgment noted that the TDSAT was a creature of statute and was empowered to determine its jurisdiction, subject to the constraints stipulated in the statute. The appeal to this Court under Section 18 has been confined to a "substantial question of law". Since no such constraints have been placed on the jurisdiction of the TDSAT under Section 14, the jurisdiction of the TDSAT was held to be broader: "27. TDSAT was required to exercise its jurisdiction in terms of Section 14-A of the Act. TDSAT itself is an expert body and its jurisdiction is wide having regard to sub-section (7) of Section 14-A thereof. Its jurisdiction extends to examining the legality, propriety or correctness of a direction/order or decision of the authority in terms of sub-section (2) of Section 14 as also the dispute made in an application under subsection (1) thereof. The approach of the learned TDSAT, being on the premise that its jurisdiction is limited or akin to the power of judicial review is, therefore, wholly unsustainab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther as a licensor or a service provider, the Union government could make an application to TDSAT regarding a dispute between it and the licensee, another service provider or a group of consumers. This Court noted that there was no reason to whittle down the right "of the Union government to move the Tribunal for adjudication of its claim within the purview of Section 14(1)". This Court observed that if the subject matter was capable of being raised by way of a claim under Section 14 of the TRAI Act, it would not be logical to exclude the power to raise a counterclaim. Having held that the TDSAT had jurisdiction to entertain a counter claim, the judgment dealt with the submission of the respondent that where a licence had not actually been issued to a party by the Union government, the dispute did not fall either under Clause (i) or (ii) of Section 14(a). The Court held that: "19...In other words, a dispute commencing with the acceptance of a tender leading to the possible issue of a licence and disputes arising out of the grant of licence even after the period has expired would all come within the purview of Section 14(a) of the Act. To put it differently, Section 14 take....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vices (supra), the appellant claims that the refund of the Entry Fee falls within the purview of Section 14(a)(i) of the TRAI Act. While evaluating the submissions, it must be noted at the outset, that there is an inconsistency in the line of submissions urged on behalf of the appellant. The Union of India submitted that the Entry Fee which was paid by the appellant was a one-time non-refundable fee in terms of the UASL Guidelines and the UASL agreement. The response of the appellant to the above submission is that the licence was not terminated for a breach on the part of the appellant, nor did the appellant voluntarily surrender the licence. Hence, according to the appellant, the clause in the guidelines and the agreement precluding refund would not stand attracted. In other words, as a result of the decision of this Court in CPIL (supra), the entire process leading up to the award of licence for 2G spectrum was held to be vitiated and the licences were quashed. The TDSAT has accepted this line of submission of the appellant and held that the UASL condition in regard to the non-refundability of the one-time Entry Fee would not per se stand attracted where the licence was not term....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roceedings under Article 32 was for the setting aside of the auction and the award of damages. It is in this backdrop, that the conduct of the appellant assumes significance. The appellant did not, in the course of the adjudication before this Court, put forth the plea for refund of the Entry Fee in the event that the allocation of the spectrum or the grant of licences were to stand vitiated. 33 This Court has noticed a rising trend of cases where parties have attempted to take another bite at the cherry by initiating proceedings over various forums, particularly to circumvent the jurisdiction of this Court which is in seisin of the matter. A purportedly ancillary remedy is urged in another forum as a dilatory tactic or as an attempt at forum shopping. One of us (Dr Justice D Y Chandrachud), speaking for a two-judge Bench of this Court in Vedanta Ltd. v. The Goa Foundation & Ors. [Review Petition (Civil) Diary No. 18447 of 2020 (9 July 2021)] had disapproved of such tactics. In that case, the Court dismissed a review petition against the decision in Goa Foundation v. Sesa Sterlite Limited & Ors. [(2018) 4 SCC 218] which had analysed a party's attempt to pursue litigation be....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the financial terms governing the award of the licence and was not a stand-alone feature which could be isolated from the overall process leading up to the award of licences. Therefore, the submission of the appellant that the right to appeal for a refund of the Entry Fee would enure after the decision in CPIL (supra) would be a simplistic understanding of the process and the ultimate decision of this Court. While directing the cancellation of the licences and ordering a fresh auction, this Court imposed costs of Rs 5 crores on one set of licensees and Rs 50 lakhs on another set, after assessing their culpability in wrongly benefitting from the "wholly arbitrary" and "unconstitutional exercise" of license and spectrum allocation. It would be an improper reading of the judgment to postulate that the decision leaves open a claim for the refund of the Entry Fee. The payment of the Entry Fee was one element in the overall financial conspectus which led to the award of licences. The adjudication before this Court in CPIL (supra) must be construed as a one composite whole from which its parts cannot be separated. 35 The appellant has argued that if the TDSAT's conclusion on the ju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from activities outside the licence of the licensee. 33. For deciding this question, we must first look at the language of the order dated 19-1-2007 [Union of India v. Assn. of Unified Telecom Service Providers of India, Civil Appeal No. 84 of 2007 decided on 19-1-2007 (SC)] of this Court in Civil Appeal No. 84 of 2007. The order dated 19-1- 2007 [Union of India v. Assn. of Unified Telecom Service Providers of India, Civil Appeal No. 84 of 2007 decided on 19- 1-2007 (SC)] is quoted hereinbelow: "Heard the parties. Pursuant to the direction of TDSAT in the impugned order, a fresh recommendation has been made by TRAI. In view thereof, we see no reasons to interfere. The appeal is dismissed. The appellant is, however, given liberty to urge the contentions raised in this petition before TDSAT." (emphasis supplied) It will be clear from the language of the order dated 19-1-2007 [Union of India v. Assn. of Unified Telecom Service Providers of India, Civil Appeal No. 84 of 2007 decided on 19-1-2007 (SC)] that while dismissing the appeal, the Court has given liberty to the appellant, namely, Union of India, to urge the contentions raised in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings since the coram in both cases would be the Supreme Court and the appellant is now in appeal before this Court against the decision of the TDSAT. Such a course of action would not plainly be open to the appellant since the jurisdiction which has been invoked presently in the civil appeal is the appellate jurisdiction arising out of the decision of the TDSAT to reject the claim for refund of the Entry Fee. The conduct of the appellant indicates that on 13 May 2016, the appellant sought to withdraw the appeals against the order of the TDSAT. The Court had recorded - "the appellant prays for liberty to withdraw the present appeals and instead approach this Court once again if it becomes so necessary". The appellant ought to have obtained specific liberty of the Court on 13 May 2016 of pursuing proceedings before the TDSAT, something which is conspicuous by its absence in the order which was passed by this Court. Yet, the appellant chose to move the TDSAT by filing the Second Telecom Petition. The TDSAT noted that the petition was a "second attempt" by the Appellant "for claiming the same relief" which had been sought under the impugned order of the TDSAT. Thus, when the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erson by granting a licence in his favour on such conditions and in consideration of such terms as it thinks fit, a licence granted under the proviso to sub-section (1) of Section 4 of the Telegraph Act is in the nature of a contract between the Central Government and the licensee." The principle which has been elucidated in the above extract is that when the Union government parts with the exclusive privilege which is conferred upon it by Section 4(1) of the Telegraph Act by granting a licence, the licence is in the nature of contract between the Union government and the licensee. 41 It is on the above premise that the appellant seeks to invoke the application of the doctrine of frustration of contract and of restoration. Section 56 of the Indian Contract Act provides as follows: "56. Agreement to do impossible act.- An agreement to do an act impossible in itself is void. Contract to do act afterwards becoming impossible or unlawful.-A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Compe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under a mistake as to a matter of fact. 43 In Tarsem Singh (supra), this Court was confronted with a contract being void under Section 20 of the Indian Contract Act as the parties were under a mistake of fact regarding the metric for assessing the area of land that was the subject of the contract. This Court, while interpreting the expression "discovered to be void", held that these words comprehend a situation in which parties were suffering from a mistake of fact from the very beginning but had not realized at the time of entering into the agreement or signing of the documents that they were suffering from any such mistake and had therefore acted bona fide while entering into such agreements. The agreement, as the Court held, in that case was void from its inception and was discovered to be so at a much later date. 44 The appellant, besides placing reliance on Tarsem Singh (supra), has urged that all judicial decisions are retrospective (unless in a particular case this Court makes its judgment prospective) and hence, the voidness which attaches to its UASLs would relate back to their very inception. It is on this basis that the appellant stakes its claim for a refund of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....trary to the real justice, as between him and the plaintiff, by accident, if I may so. The principle of public policy is this; ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or illegal act. If, from the plaintiff 's own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted." (emphasis supplied) The Principles of Law of Restitution subsequently notes that in pari delicto potior est conditio possidentis is a way of qualifying the ex turpi causa defence [Supra at 35, pg 711]: "This in pari delicto principle enables the court to analyse the particular circumstances of the case to determine whether the claimant is less responsible for the illegality than the defendant, for then, as between the claimant and the defendant, the just result is that the claimant should not be denied relief, since the parties are not in pari delicto. But where the claimant is more responsible for the illegality or the parties are considered to be equally responsible, the in pari delicto principle appli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....three learned judges of this Court relied on a judgment of a five-judge bench of the then Hyderabad High Court. While construing the provisions of Section 65, this Court held: "8. A Full Bench of five Judges of the Hyderabad High Court in Budhulal v. Deccan Banking Company [AIR 1955 Hyd 69 (FB) : ILR 1955 Hyd 101] speaking through our brother, Jaganmohan Reddy, J. as he then was, referred with approval to these observations of the Privy Council. They then went on to refer to the observations of Pollock and Mulla in their treatise on Indian Contract and Specific Relief Acts, 7th Edn. to the effect that Section 65, Indian Contract Act does not apply to agreements which are void under Section 24 by reason of an unlawful consideration or object and there being no other provision in the Act under which money paid for an unlawful purpose may be recovered back, an analogy of English Law will be the best guide. They then referred to the reasoning of the learned authors that if the view of the Privy Council is right namely that "agreements discovered to be void" apply to all agreements which are ab initio void including agreements based on unlawful consideration, it follows that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Section 84, Indian Trust Act, however, has made an exception in a case - where the owner of property transfers it to another for illegal purpose and such purpose is not carried into execution or the transferor is not as guilty as the transferee or the effect of permitting the transferee to retain the property might be to defeat the provisions of any law the transferee must hold the property for the benefit of the transferor. This specific provision made by the legislature cannot be taken advantage of in derogation of the principle that Section 65, Contract Act, is inapplicable where the object of the agreement was illegal to the knowledge of both the parties at the time it was made. In such a case the agreement would be void ab initio and there would be no room for the subsequent discovery of that fact." We consider that this criticism as well as the view taken by the Bench is justified. It has rightly pointed out that if both the transferor and transferee are in pari delicto the courts do not assist them." (emphasis supplied) While upholding the view of the Hyderabad High Court, this Court held "it [the Full Bench of the Hyderabad High Court] has rig....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed into service by the rival parties, and to enquire which of the maxims would be relevant and applicable in the circumstances of the case. It is common ground that the approach of the Court in determining the present dispute must be conditioned solely by considerations of public policy. Which principle would be more conducive to, and more consistent with, public interest, that is the crux of the matter. To put it differently, having regard to the fact that both the parties before the Court are confederates in the fraud, which approach would be less injurious to public interest. Whichever approach is adopted one party would succeed and the other would fail, and so it is necessary to enquire as to which party's success would be less injurious to public interest." (emphasis supplied) 51 The principle which was enunciated in the judgment in Inmani Appa Rao (supra) has been more recently applied in a decision of a three-judge Bench of this Court in Narayanamma v. Govindappa [2019 (19) SCC 42]. The Court held: "28. Now, let us apply the other test laid down in Immani Appa Rao [Immani Appa Rao v. Gollapalli Ramalingamurthi, (1962) 3 SCR 739 : AIR 1962 SC 370]. At the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for six circles. On 10 January 2008, by another press note, the deadline for fresh licences was retrospectively advanced to 25 September 2007. On the same day, the government granted licences to 122 applicants, including the petitioner's previous application for six circles, whose applications had been received prior to 25 September 2007. Against the denial of licences for sixteen circles on the ground that the application was made beyond the cut-off date, the petitioner moved the Delhi High Court challenging the action of the government in retrospectively advancing the last date for submission of applications as arbitrary. The High Court held that the decision to fix the cut off-date for making applications, with a view to limit the number of service providers was contrary to the decision of the TRAI which the government had purported to accept. The government was accordingly directed to consider the petitioner's application which was submitted on 28 September 2007. The Division Bench having dismissed an intra court appeal, led to proceedings before this Court. The Attorney General stated that the application submitted by the petitioner was not rejected but was held in abeyan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pari delicto. The decision of this Court in CPIL (supra) leaves no manner of doubt that the appellant was among the group of licensees who were found to be complicit in obtaining benefits under the "First Come First Serve" policy of the Union government at the cost of the public exchequer. In such a situation and following the well-settled principles which have been enunciated above, the appellant could not be held entitled to claim a refund of its Entry Fee. 55 On behalf of the appellant, it is sought to be urged that in the auction which followed the decision in CPIL (supra), the Union government granted fresh licences including for the areas which were governed by the licences in favour of the appellant at a much higher value. This argument is completely unacceptable for the simple reason that if the Union government had held a transparent and objective process of conducting an auction when the initial licences were granted in favour of the appellant, a much higher value would have been realized by the public exchequer. The appellant has been the beneficiary of a manifestly arbitrary policy which was adopted by the Union government and which was quashed in the decision of thi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt for no reason attributable to xxx should be allowed to be used for the acquisition and allotment of new licenses and spectrums towards the requirement of the same, in the event of a successful bid by xxx. In the event there would be any shortfall in the bank guarantees required to be submitted by xxx on successful bid and the bank guarantees already submitted with DoT in respect of the quashed 21 UASL, xxx shall obviously submit such bank guarantees additionally. Required bank guarantees in the event of winning of spectrum/acquisition of Unified License (Access Services) will need to be furnished. 75. i) We would like to seek clarity with regards to Government's position on levying "One Time Charge" on the incumbent Operators before the auction, so that we could arrive at a well-informed decision with regards to our participation in the auction. This cannot be clarified at this stage ii) The price already paid by xxx at the time of issuance of licenses in 2008 should be adjusted in totality towards the auction price in case we are successful in auction else it should be refunded in totality. (Not to be linked Circle wise) Please refer to response to query at Sl.n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry Fee, in case the bidder had emerged successful in the fresh auction. The appellant did not challenge the policy per se at that stage, nor did it attempt to enter into the fray at that stage when a fresh auction was held. In these circumstances, the policy decision adopted by the Union government cannot be allowed to be questioned at the behest of the appellant who sought a refund simpliciter in proceedings before the TDSAT. As held by a Constitution Bench in R K Garg v. Union of India [(1981) 4 SCC 675], a greater free play in the joints must be accorded to decisions of economic policy where the legislature or the executive is called upon to make complex choices which cannot always conform to a straitjacket or doctrinaire solution. 59 For the above reasons, we do not find any reason to entertain the challenge to the set off policy at this stage at the behest of the appellant. H Conclusion 60 For the above reasons, we have come to the conclusion that the appellant was in pari delicto with DoT and the then officials of the Union government. The appellant was the beneficiary of the "First Come First Serve" policy which was intended to favour a group of private bidding e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve, the Licensee shall also pay Licence fee annually @ 10/8/6% of Adjusted Gross Revenue (AGR) for category A/B/C service areas respectively excluding spectrum charges." [3] "18.1 Entry Fee: One Time non-refundable Entry Fee of Rs .1.1 Crore has been paid by the LICENSEE prior to signing of this Licence agreement." [4] "10.1 The LICENSOR reserves the right to suspend the operation of this LICENCE in whole or in part, at any time, if, in the opinion of the LICENSOR, it is necessary or expedient to do so in public interest or in the interest of the security of the State or for the proper conduct of the TELEGRAPH. Licence Fee payable to the LICENSOR will not be required to be paid for the period for which the operation of this LICENCE remains suspended in whole. If situation so warrant, it shall not be necessary for Licensor to issue a notice for seeking comments of the LICENSEE for this purpose and the decision of the Licensor shall be final and binding. Provided that the LICENSOR shall not be responsible for any damage or loss caused or arisen out, of aforesaid action. Provided further that the suspension of the licence will not be a cause or ground for extension of the per....