CENTRE FOR PUBLIC INTEREST LITIGATION Vs. U.O.I.& ORS.
Supreme Court of India (Full Bench (FB)- Three Judge)
Writ Petition (Civil), 382 of 2014, Judgment Date: Apr 08, 2016
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
WRIT PETITION (C) NO. 382 OF 2014
CENTRE FOR PUBLIC INTEREST LITIGATION .....PETITIONER(S)
VERSUS
UNION OF INDIA & ORS. .....RESPONDENT(S)
J U D G M E N T
A.K. SIKRI, J.
The petitioner herein, viz., Centre for Public Interest
Litigation, is a society registered under the Societies Registration Act,
1860. It claims that the very purpose for which this society was
established was to bring causes to the Superior Courts, which are of grave
public importance, by way of public interest litigation in an organised
manner. In the present writ petition filed under Article 32 of the
Constitution of India, the petitioner challenges the decision of the
Government of India, taken sometime in March 2013, allowing voice telephony
to respondent No. 2 (Reliance Jio Infocomm Ltd.) on payment of Rs.1,658
crores entry fee. Allegation of the petitioner is that the aforesaid
amount at which the license for voice telephony is granted to respondent
No. 2 is a pittance inasmuch as in normal course grant of this license
would have fetched a whopping sum of Rs.25000 crores approximately. This
insinuation is based upon a draft report of the Comptroller and Auditor
General of India (CAG) which report estimated the aforesaid license
fee/entry fee. It is also alleged that respondent No. 1, while allowing
voice telephony to respondent No. 2, has not revised the Spectrum Usage
Charges (SUC) matching with the charges which are paid by other operators
who bought voice telephony. It is stated in the petition that whereas the
other operators pay 3% to 5% revenue annually depending upon quantum of the
spectrum they hold, respondent No. 2 in contrast would be paying just 1% of
the revenue. In this way, alleges the petitioner, an undue favour is given
to respondent No. 2 by charging abysmally less entry fee and demanding much
lesser SUC, thereby causing loss of revenue to the Government over 20 years
license period. It has also resulted in disturbance in the level-playing
field between respondent No. 2 vis-a-vis other operators. The petitioner
has tried to project that unwarranted favouritism is shown to respondent
No. 2 and the decision making process, in this behalf, was also not only
faulty but in violation of accepted norms as well.
The factual details leading to the aforesaid allegations are averred in the
petition which can be summated in the following manner:
On 25.02.2010, the respondent No. 1 issued Notice Inviting
Applications (NIA) for the auction of:
(i) 3G: Three or 4 blocks each of 5+5 MHz spectrum for 3G services in
2.1 GHz band at a reserve price of Rs. 3,500 crore for a Pan-India license,
and
(ii) BWA (4G): Two blocks each of 20 MHz spectrum for BWA services
in 2.3 GHz band at a reserve price of Rs. 1,750 crore for a Pan-India
license.
In respect of BWA (4G), as per the NIA conditions, a bidder could be
an existing ISP-A licensee or UAS licensee (or obtain any of these licenses
later if successful in the bid), but it can provide only such services
which are allowed under the license it chooses. For example, an ISP-A
licensee cannot provide voice telephony. In this regard, reliance is
placed on the following clause of the NIA:
Clause 3.1.2: “Services can only be offered subject to the terms and
conditions of the license obtained by the operator. Award of spectrum does
not confer a right to provide any telecom services, and these are governed
by the terms and conditions of the license obtained by the operator.”
During May-June 2010 the auctions for 3G and BWA were concluded. The
3G auction fetched Rs. 16,750.58 crore for 5+5 MHz spectrum in 2100 MHz (or
2.1 GHz) band. Thus, per MHz price worked out to be Rs. 1,675 crore. This
spectrum price bequeathed the rights to provide both data and voice.
Immediately, after the 3G auction, the BWA auction began which
fetched Rs. 12,847.77 crore for 20 MHz pan-India license in the 2300 MHz
(or 2.3 GHz) band. This works out to be Rs. 642.39 crore per MHz.
Infotel Broadband Services Pvt. Ltd. (IBSPL) emerged as the only
company to have acquired pan-India BWA spectrum. Five other companies viz.
Bharti Airtel (4 Service Areas), Aircel (8 Sas), Qualcomm (4SAs), Tikona (5
Sas) and Augere (1 SA) shared the remaining other Pan India slot (22 Serve
Areas) of BWA spectrum in the country.
It is also averred that IBSPL had an ISP-A license since November 2007 and
had just one subscriber with revenue of Rs. 16.28 lakhs during 2009-10, and
its authorized share capital was Rs. 3 crore and the paid up capital was
Rs. 2.51 crore. Infotel Digicomm Pvt. Ltd. (IDPL) held 99.99% share of the
IBSPL at the time of submission of application in March 2010 for the BWA
auction.
It is alleged in the petition that within hours of completion of BWA
auction on 11.06.2010, IBSPL increased the authorised share capital from
Rs. 3 crore to Rs. 6,000 crore. On 17.06.2010, the company authorised its
Board of Directors to allot 475 crore equity share of Rs. 10 each to
Reliance Industries Ltd. (RIL) and 25 crore equity share of Rs. 10 to
Infotel Digicomm Pvt. Ltd. (IDPL) aggregating to the equity capital of Rs.
5,000 crore. On the same day, the company also decided to change from a
private company to Public Limited Company (Infotel Broadband Services Ltd).
Thus, the company within a week of winning the BWA spectrum disposed off
95% shares to RIL while 5% was retained by IDPL. Much later in March 2013,
the company was renamed as Reliance Jio Infocomm Pvt. Ltd. On that basis,
some suspicion is nurtured as to how IBSPL acquired BWA spectrum and
thereafter stakes in IBSPL came under the control of RIL. The said IBSPL
is now known as Reliance Jio Infocomm Pvt. Ltd.
However, we may like to add here itself that the auction of BWA
in which IBSPL turned out to be successful bidder resulting into
acquisition of Pan-India BWA spectrum in its favour is not the subject
matter of dispute and was never questioned by anybody. This auction, as is
clear from the above, was held way back in May-June, 2010. Though, there
were other prominent companies of repute who participated in the said
auction and shared the remaining other Pan-India slot (22 Serve Areas), no
competitor of IBSPL challenged BWA auction. The subject matter of
challenge in the instant writ petition is the conversion of BWA spectrum to
Unified License (UL) i.e. migration of existing BWA spectrum to UL which
has been done by respondent No.1.
In respect of the aforesaid central issue raised, it is pointed out by the
writ petitioner that on 16.04.2012, TRAI submitted its recommendations to
respondent No. 1 on Guidelines for UL and migration of existing license.
Thereafter, on 02.05.2012, respondent No. 1 sought clarification from TRAI
on migration of ISP licensees having BWA spectrum to UL regime. TRAI in
its response to respondent No. 1 clarified that the spectrum of 3G/BWA was
liberalized and the operators can migrate to UAS license, which meant
allowing voice telephony to them as well on such migration. According to
the petitioner, though TRAI had clarified that the spectrum of 3G/BWA was
liberalized and operators could migrate to UL, a Committee of Department of
Telecommunication (DoT) took the view, sometime around May 2012, that under
ISP licenses, voice telephony cannot be provided. This view was reiterated
by the DoT Committee once again in August, 2012. The allegation of the
petitioner, however, is that on 25.01.2013 another Committee was
constituted under the Chairmanship of Secretary (Telecom), though the order
in this respect was issued only on 11.02.2013, to go into this issue and
suggest the way forward. It is stated that Secretary (Telecom) was made
Chairman of the Committee even when he was due to superannuate two months
later i.e. in March, 2013. This Committee prepared its draft report on
30.01.2013 as per which the said Committee was not ready to make any
recommendations on ISP (holding BWA spectrum) migration to UASL. However,
still in its final report given on 13.02.2013, the Committee recommended
that on payment of Rs.1,658 crores, ISP (holding BWA spectrum) could be
migrated to UASL, thereby permitting voice telephony. This recommendation
was approved by Telecom Commission in its meeting on 18.02.2013. The
official from the Ministry of Finance who also attended this meeting, while
agreeing with the aforesaid proposal, ignored Finance Ministry's own
recommendations on the 2G spectrum issue inasmuch as in the year 2007 when
the then Telecom Minister wanted to award the licenses at Rs.1,658 crores,
the then Finance Secretary had objected to it. After the Telecom
Commission approved the recommendation, the same was forwarded to the
Telecom Minister who gave his final approval on 05.03.2013. It is this
decision of migration of BWA spectrum given to respondent No. 2 into USL
which is termed as totally arbitrary, illegal, unfair, impermissible and
against the public interest.
It would be pertinent to mention at the outset that in the writ petition,
the petitioner has specifically accepted that it has not made any
representation to the Government before approaching the Court in the form
of present writ petition. Reason given is that the CAG itself has
investigated this matter and in its draft report dated 07.11.2013 adversely
commented upon the manner in which the aforesaid migration is allowed to
respondent No. 2 at the cost of exchequer resulting into whopping loss of
public revenue thereby giving undue advantage of Rs.22,842 crores to
respondent No. 2. Thus, heavy reliance is placed on the said CAG report by
the petitioner in support of its contention and following part of the said
report is specifically referred to:
“(x) It was found that the basis of the decision i.e. payment of entry fee
of Rs. 1,658 crore by ISP lincensee for a permission to Pan India provision
of mobile voice services using BWA spectrum considered by the DoT
Committee, Telecom Commission and the MOC&IT, was primarily intended to
fill the gap between the eligibility criterion stipulated for participation
in the 3G/BWA auction in 2010 as UAS/CMTS licensees had paid entry fee of
Rs. 1,658 crore while ISP licensees had paid only Rs. 30 lakh.
The DoT Committee, Telecom Commission and the MOC&IT however ignored the
fact that the quantum of entry fee i.e. Rs. 1,658 crore was basically
discovered in 2001 through the bidding for the 4th Cellular licenses.
Market conditions since then have changed drastically, and this price
needed to be modified to reflect the present value. Neither the DoT
Committee/TC under the Chairmanship of the Secretary DoT nor the MOC&IT
felt the need for revision of the price discovered in 2001 as the entry fee
for UASL in 2013, even when the Hon'ble Supreme Court of India had
cancelled 122 licenses granted in 2008 on the basis of the same entry fee
stating that it was impossible for them to approve the action of the DoT.
9. Therefore, by permitting ISPs to provide mobile voice service using BWA
spectrum won in 2010 auction post-auction, the government has brought ISP
licensees with BWA spectrum at par with UAS/CMTS 3G spectrum winners so far
as provision of services are concerned – Voice, Data, etc., and post
auction interpretation of such vital nature would appear to be arbitrary,
inconsistent and not appropriate. Hence, IBSPL, now Reliance Jio Infocomm,
appeared to have been accorded undue advantage of Rs. 22,842 crore i.e. the
difference of the proportionate prices for 20 MHz block size in 2.1 GHz
spectrum band (3G spectrum) and 2.3 GHz spectrum band (BWA spectrum) plus
the Net Present Value of the entry fee for UASL at the end of FY 2009-10
(Rs. 20,653 crore plus Rs. 3,847 crore – Rs. 1,658 crore). Besides, the
sanctity of the entire auction process has been rendered vitiated due to
post auction interpretations and interventions after three years. It was
therefore no surprise that Reliance Jio Infocomm was among the first group
of companies which applied for UL immediately after introduction of the
scheme and obtained the Letter of Intent (LOI). Had the spectrum blocks
been specified and declared as liberalised spectrum blocks i.e. open for
all technology/services in the NIA in February 2010, there was no doubt
that bidders would have taken informed decision for putting up their bid
and the market discovered price would have been significantly different for
3G and BWA spectrum.”
Mr. Prashant Bhushan, at the time of arguments, pointed out the aforesaid
procedural and other alleged irregularities and the comments of CAG
thereupon. He submitted that there was no reason to allow migration of ISP
(holding BWA spectrum) to UASL. Instead, according to him, what was needed
was to hold independent auction of voice telephony. He submitted that
allowing the migration from one type of license to another with added
benefits was in the teeth of judgment of this Court in the Presidential
Reference on the issue of Alienation of Natural Resources[1] wherein this
Court has held that when “precious and scarce natural resources are
alienated for commercial pursuits of profit maximizing private
entrepreneurs, adoption of means other than those that are competitive and
maximize revenue may be arbitrary and face the wrath of Article 14 of the
Constitution.”
All the three respondents in this petition, namely, Union of India (R-1),
Reliance Jio Infocomm Ltd. (R-2) and TRAI (R-3) have stoutly contested the
stand taken by the petitioner in this petition by disputing the averments.
Apart from putting stiff resistance to the issues raised in the petition on
merits, the respondents have even questioned the bonafides of the petition
by vehemently arguing that it does not serve any public purpose and on the
contrary, the petition is motivated. In the counter affidavit filed on
behalf of the Union of India, it is stated that the writ petition is
preferred on an absolutely erroneous footing by misconstruing and
misinterpreting the judgment of this Court in Centre for Public Interest
Litigation v. Union of India[2] (hereinafter referred to as “2G Case”) and
also the provisions of the TRAI Act. It is stated that entry fee of Rs.
1,658 crore fixed earlier was for UASL along with spectrum bundled with it,
whereas in the year 2010 for 3G and BWA spectrum, license and spectrum were
delinked and it was only the spectrum which was auctioned. Moreover, the
amount of Rs. 1,658 crore is not the entry fee as alleged by the petitioner
but is only migration fee. It is further stated that the aforesaid
decision of allowing migration was taken after it was duly permitted by the
TRAI and, thus, such a decision was based on the economic policy of the
Government with which the Courts normally do not interfere unless the same
is found to be arbitrary, malafide or contrary to the public interest,
which is not the case here. A detailed history from TRAI recommendation to
the decision taken by the DoT is narrated in the counter affidavit with the
emphasis that the decision in question was actuated by valid economic and
other relevant considerations. On that basis, respondent No. 1 insists
that neither the manner of allowing migration was irregular or illegal nor
fixation of migration fee of Rs. 1,658 crore was arbitrary or against
public interest or prompted to give any undue favour to respondent No.2.
On the similar lines is the counter affidavit filed by respondent No.2,
which has attempted to explain the factual position in much greater detail
and reference thereto shall be made at the appropriate stage.
Oral arguments on behalf of Union of India were addressed by Mr. Ranjit
Kumar, learned Solicitor General whereas Mr. Harish Salve, senior advocate
put up the defence on behalf of respondent No.2. Ms. Niranjana Singh
appeared for TRAI. It is not necessary to separately take note of their
respective arguments as we intend to refer to those submissions during our
deliberations on the various facets of the case.
Before we embark on the specific areas of lis which need to be examined, it
may be apposite to make some introductory remarks pertaining to
Telecommunications sector and the manner in which spectrum is licensed from
time to time. To put it pithily, it is well known that Telecommunication
is a sector with fast changing technologies. Each technology has its
features, compatibility and market adaptability. Some technologies which
are at a horizon today may not be even commercially successful as updated
and other technology become available before commercial deployment of that
technology at affordable rates for common man in India. In the year 1991,
India had 5 million telephone subscribers. At the end of July, 2007 this
number increased to 233 million and as on July, 2015 it has touched 1006.96
million subscribers. This phenomenal growth has not been achieved in any
country, other than China. The primary reason for this growth is the
introduction of mobile services coupled with privatization of the Telecom
sector. Mobile service in India is dominated by private sector enterprise
and the Government religiously followed a policy of 'managed competition'
by licensing more than one company in Telecom. This led to competition in
the mobile industry, result whereof which not only resulted in providing
better services but another direct effect of this competition is lower
prices that the Telecom consumer has to pay. A call charge of Rs.16/- per
minute in the year 1998 has come down to few paisa per minute. Another
significant development over the years, which is a result of technological
development influenced by market economic considerations is that though
mobile services started with voice telephony, there is a gradual growth in
data telephony. Mobile telephones are not used only for making telephone
calls. Number of other services are provided by the service providers on
these phones which are known as 'smart phones'. The various policy
decisions are taken at a point of time considering various technological
options, policy objectives and regulatory framework.
Auction of 3G spectrum & BWA spectrum in the year 2010
It is in this context we have to keep in mind that when notice dated
25.02.2010 was issued inviting applications (NIA), though it was for both
3G spectrum as well as BWA spectrum, there is a significant difference in
the characteristics of both the spectrums, namely, 3G on the one hand and
BWA on the other hand. It may be mentioned that 3G spectrum is in
Frequency Division Duplex (FDD) mode whereas the Broadband Wireless Access
(BWA) spectrum as per TRAI recommendations as well as Guidelines issued by
DoT is in Time Division Duplex (TDD) mode. Distinct and different features
of both are highlighted in the following manner:
a. FDD needs fewer base stations than TDD
Since FDD devices achieve desired cell edge rates at farther
distances, the number of base stations required to achieve a given area of
coverage is reduced.
b. In a coverage-limited system comparison using the same frequency
band, the TDD system required 31% more base stations than FDD when using a
1:1 TDD system and 65% more base stations when using a 2:1 TDD system.
Higher frequency bands required even more base stations.
c. FDD incurs lower costs
Capital expenditure (CAPEX) and operating expenditure (OPEX) costs
are associated with each base station. These costs are independent of the
type of duplexing technique used (FDD or TDD). Since FDD requires fewer
base stations for the same coverage, it incurs lower deployment and
operating costs.
d. FDD/TDD: Basic difference
FDD is implemented on a paired spectrum where downlink and uplink
transmissions are sent on separate frequencies. This provides simultaneous
exchange of information and reduces interference between the uplink and
downlink. Therefore FDD is more suitable for Voice systems that require
continuous duplex working.
TDD is implemented on an unpaired spectrum, implying the usage of
only one frequency for both downlink and uplink transmissions. It is
suitable for asymmetric transmission demands and in cases where paired
frequency is not available while Voice services are symmetric transmission.
e. Efficiency of use:
FDD has higher frequency usage efficiency. There is wastage of
spectrum in TDD as it requires more accurate timing & greater guard bands.
f. Range:
TDD has a lower range (area covered) due to fact that guard band
timing needs to be met.
g. Carrier Aggregation:
With 3G and LTE big advantage is carrier aggregation, which allows
receiving handsets to make better use of the fragmented bands that a
carrier may have, in order to download data faster. This was not available
in WiMAX at that time since the complete mobility was not available.
h. Network Evolution:
A clear roadmap to move to a new technology was available for 3G but
it was not there for broadband networks in terms of mobility, carrier
aggregation, etc.
These are some of the comparisons of 3G spectrum which was based on
FDD mode and TDD based digital Broadband Wireless Access (BWA) systems
which are drawn by the learned Solicitor General on the basis of which it
is stated that there was distinct advantage, clearly discernible, of 3G
spectrum over BWA spectrum that was understood by TRAI & DoT and hence the
pricing had to be differentiated on this basis. The only technology
available at that time in 2.3 GHz band was WiMax as LTE (Long Term
Evolution) was not available. Although in theory any packet based network
core can be used for Voice or data still there are requirements to ensure
smooth and contiguous reception of packets which puts a extra burden on
allocation of resources. Moreover, LTE was available only post 2012 and
that too VOLTE (Voice over LTE) was experimental technology over LTE core.
It will also be pertinent to note some of the queries and responses for
auction of 3G and BWA spectrum which were published by DoT on 25.02.2010
i.e. simultaneously with the issuance of NIA, wherein it was specifically
clarified that usage of spectrum including BWA spectrum is linked to the
license held or to be acquired by the bidder. It was, thus, envisaged that
BWA spectrum can be used for all telecom services including voice telephony
linked to the relevant license, as can be gaged from some of the queries
and responses thereto which are as under:
“Question 34: Does the BWA license allow use of voice to be offered by the
BWA operators? Even in VOIP form?
Answer 34: There is no BWA license. Service conditions including allowing
Internet Telephony will depend on whether the winner of the BWA spectrum
holds UAS or ISP license.
Question 71: Spectrum usage rights shall be awarded separately for specific
service areas. Please clarify.
Answer 71: Spectrum usage rights are based on the provisions of the
applicable license and the licenses are specific to a service area. The
auction is for the award of spectrum only, while award of license is a
separate process.
Question 72: To which entity BWA license will be given in case a company
has both 'UAS' & ISP – Category A license?
Answer 72: The successful bidder will be allowed to determine the license
that it wishes to use for award of BWA spectrum.”
Auction for 3G and BWA spectrum was conducted between May and June, 2010.
10 bidders participated in 3G spectrum auction and 11 bidders participated
in BWA spectrum auction. The results of BWA spectrum were published on
12.06.2010. It is emphasized by the respondents, and to which there is no
denial, that this occasion was conducted over 16 days and involved 117
rounds of bidding across service areas. In the said occasion, all the 44
blocks that were put for auction across 22 service areas in the country
were sold. Reserve price of BWA spectrum was fixed at Rs.1750 crores.
During bidding, highest bid that was given by IBSPL was Rs.12847.77 crores
for one block of Pan-India BWA spectrum. In this way, respondent No.2
emerged as successful in acquiring various BWA frequencies in all 22
service areas across the country. Further, as already noted in the earlier
part of this judgment, though 11 bidders had participated, none of the
other bidders make any complaint about the fairness, transparency and as
well as about the process of bidding.
In this scenario, insofar as IBSPL becoming successful bidder cannot be
questioned at this stage. No doubt, the petitioner has alleged that
shortly after acquiring Pan-India BWA spectrum, IBSPL increased its
authorized capital from Rs.3 crores to Rs.6,000 crores and question the
manner in which control of this company is taken over by RIL. However,
that cannot be the subject of scrutiny in these proceedings inasmuch as it
has no causal connection with the validity of the auction of BWA spectrum
in the year 2000. We may stated that respondent No.2 has specifically
denied such allegations and has endeavor to explain that promoters of IBSPL
did not derive in unfair gains and also that they did not divest or sell
their equity to RIL, it is for our reasons recorded above. It is not
necessary to delve into this aspect any further as that is neither the
subject matter of controversy nor any relief claimed by the petitioner in
this behalf. If at all, there is a reference to the same by the petitioner
in the chain of submissions on the central issue which pertains to post-
auction permission to provide voice services on BWA spectrum.
Migration from BWA to UAS licence
Without much ado, therefore, we would like to address the aforesaid central
issue that arises for consideration viz. whether a decision of respondent
No.1 allowing the migration from BWA to UAS license was valid and legal and
whether such a decision has unduly benefited respondent No.2 who is charged
a sum of Rs.1,658 crores for this purpose, which according to the
petitioners, is abysmally low.
As highlighted above, there have been technological developments in
telecommunication are taking place at abnormal pace. Various policy
decision taken at one point of time may, therefore, require a re-look
necessitating modifications and changes therein and the circumstances may
even mandate change of existing policy altogether by substituting with new
policy decision depending upon the such technological advancements coupled
by commercial and economic considerations. It can be supported by the fact
that first Telecom Policy was announced in the year 1994, which was
replaced by revised Policy of 1999 and thereafter in the year 2004 and
again substituted by Telecom Policy of 2012.
Having regard to such features/developments, in the year 2012, the TRAI
started exercise of bringing Unified Licensing regime. On 10.02.2012, it
issued a consultation paper on Draft Guidelines for Unified License/Class
License and migration of existing licenses. It was followed by the
statement of the Ministry for Telecommunication and IT on 15.02.2012 on
Spectrum Management and Licensing Framework. This statement broadly
indicated that there would be no more licenses linked with Spectrum and
issuance of licenses and allocation of spectrum will be completely
delinked. Thereafter, on 16.04.2012, TRAI addressed a letter to the
Secretary, DoT enclosing its recommendations for Unified License/Class
License and migration of existing licenses. After due deliberations at
appropriate levels, the Government of India issued on 31.05.2012 the
National Telecom Policy-2012 and announced approval for introduction of
Unified Licensing regime. This was followed by the policy decision of DoT
dated 13.03.2013 to allow migration to UL from UASL as well as ISP to UL
regime. The detailed background in taking this policy decision is stated
in the counter affidavit filed by the Union of India and the position
stated therein is not in dispute. These details are required to be noted,
which are as follows:
“1. The Department of Telecommunications (DoT) vide their D.O. letter No.
L- 14047/09/2005-NTG dated May 22, 2006 sought recommendations from the
Telecom Regulatory Authority of India (TRAI) on the methodology for
allotment of spectrum for 3G services and its pricing aspects.
TRAI gave the recommendations on 27th Sept 2006 after following the
procedure of consultation and conducting open house discussion to have
understanding of views of stakeholders.
TRAI while replying to DoT in recommendations said:
“The Authority is committed to the view that the consumers must get the
benefit of new technology and variety of services. It also believes that
the telecom service providers should have the flexibility to choose from
the range of technologies available and the regulatory policies must not
restrict the choice of the operator. Therefore, the Authority considered
it appropriate to offer its recommendations both on 3G technology and on
broadband wireless access (BWA) systems at the same time. It would also
ensure that the spectrum issues are considered in a holistic manner and
piecemeal or ad-hoc solutions do not find place in future planning. The
Authority has also made suggestions on the wider issue management of
spectrum, which is now a scarce resource in the country. The future growth
in telecom would largely depend on the way we manage our spectrum.”
While forwarding its recommendations TRAI, inter-alia, considered the
following:
Band identification for 3G services
Allocation methodology and pricing for 3G spectrum
Band identification, and allocation and pricing of BWA spectrum as well as
Spectrum Management
Allocation methodology and pricing for BWA spectrum
Spectrum Pricing
Spectrum for BWA
The DoT examined the recommendations and had referred some of them back to
TRAI as required by TRAI Act and took final views based on TRAI
recommendations and DoT's internal discussions.
The TRAI issued another consultation paper “On Allocation and Pricing for
2.3-2.4 GHz, 2.5-2.69 GHz & 3.3-3.6 GHz bands” on 2nd May 2008 and issued
its recommendations on 11th July, 2008.
The TRAI was clear that spectrum in 2.3-2.4 GHz band could be used for
mobile services as mentioned in the preface of these recommendations itself
which is reproduced as below:
“During the period of September, 2006 to October, 2007, there have been
significant changes in the international scenario. The International
Telecommunications Union-Radio (ITU-R) has identified 2.3-2.4 GHz band also
as IMT (International Mobile Technology) band (spectrum in the band of 2.5-
2.69 GHz band was already identified as IMT-2000 band). The use of 2.3-2.4
GHz and 2.5-2.69 GHz band offers significant scope for innovation with the
potential for induction of new technologies, services, applications and
devices. With the availability of mobile services in this band, it
provides an important opportunity for the introduction of next generation
mobile technologies (BWA).
Even TRAI in its recommendations admit that there could be different
technologies by which BWA could be provided and stated that:
“5.12 During the consultation process, the respondents stated that there
are various versions of BWA technology applications. The Authority also
recognizes that given the wide range of possible technologies, it is
essential that any policy concerned with identification and allocation of
spectrum for BWA must be technology-neutral and flexible to permit co-
existence of all types of BWA technologies.....”
“5.72 ….The average price for allocations comes to $0.65 (Rs.30) per Hz
including South Korea, and $0.08 (Rs.3.75) per Hertz excluding South Korea
….”
The final reserve price in NIA as issued by DoT was @Rs.87.5 per Hz. (Rs.
1750 crores for 20 MHz) which is much higher than recommended by TRAI.
In view of that Guidelines were followed in allowing Reliance Jio Infocomm
RJIO to offer Mobile services which has been done after following due
process of law by taking TRAI recommendations on the issue and considering
the same in DoT and approving Unified License (UL) guidelines wherein ISP
could migrate to UL.
The TRAI recommendations of April, 2012 on UL had recommendations on
Guidelines for UL/Class License and migration of existing licenses. TRAI
recommended that all present licenses be migrated to UL and in future only
UL be issued. TRAI had recommended that all existing Basic/CMSP/UASL/ISP
without spectrum/ISP with spectrum be allowed to migrate to UL. As per
this an ISP after migration will have all India UL after payment as
required.
It is pertinent to note that NTP 2012 states that National Telecom Policy –
2012 recognizes that the evolution from analog to digital technology has
facilitated the conversion of voice, data and video to the digital form.
Increasingly, these are now being rendered through single networks bringing
about a convergence in networks, services and also devices. Hence, it is
now imperative to move towards convergence between various services,
networks, platforms, technologies and overcome the existing segregation of
licensing, registration and regulatory mechanisms in these areas to enhance
affordability, increase access, delivery of multiple services and reduce
cost.
11. Further, it envisages providing secure, reliable, affordable and high
quality converged telecommunication services anytime, anywhere for an
accelerated inclusive socio-economic development. One of the objectives of
the National Telecom Policy-2012 is “Strive to create One Nation – One
License” across services and service areas...”
From the aforesaid, it follows that a policy decision was taken by the
Government not only with regard to introduction of Unified Licensing regime
but it also including allowing migration to UL from UASL as well as ISP to
UL regime. This meant that those having UAS license which permitted data
services only were allowed to migrate to Unified License enabling them to
provide both data service as well as voice telephony. This was a pure
policy decision after due deliberations by the experts in the fields and
even TRAI had recommended allowing such migration.
Such a policy decision, when not found to be arbitrary or based on
irrelevant considerations or mala fide or against any statutory provisions,
does not call for any interference by the Courts in exercise of power of
judicial review. This principle of law is ingrained in stone which is
stated and restated time and again by this Court on numerous occasions. In
Jal Mahal Resorts (P) Ltd. v. K.P. Sharma[3], the Court underlined the
principle in the following manner:
116. From this, it is clear that although the courts are expected very
often to enter into the technical and administrative aspects of the matter,
it has its own limitations and in consonance with the theory and principle
of separation of powers, reliance at least to some extent to the decisions
of the State authorities, specially if it is based on the opinion of the
experts reflected from the project report prepared by the technocrats,
accepted by the entire hierarchy of the State administration, acknowledged,
accepted and approved by one Government after the other, will have to be
given due credence and weightage. In spite of this if the court chooses to
overrule the correctness of such administrative decision and merits of the
view of the entire body including the administrative, technical and
financial experts by taking note of hair splitting submissions at the
instance of a PIL petitioner without any evidence in support thereof, the
PIL petitioners shall have to be put to strict proof and cannot be allowed
to function as an extraordinary and extra-judicial ombudsmen questioning
the entire exercise undertaken by an extensive body which include
administrators, technocrats and financial experts. In our considered view,
this might lead to a friction if not collision among the three organs of
the State and would affect the principle of governance ingrained in the
theory of separation of powers. In fact, this Court in M.P. Oil Extraction
v. State of M.P., (1997) 7 SCC 592 at p. 611 has unequivocally observed
that:
“41. The power of judicial review of the executive and legislative action
must be kept within the bounds of constitutional scheme so that there may
not be any occasion to entertain misgivings about the role of judiciary in
outstepping its limit by unwarranted judicial activism being very often
talked of in these days. The democratic set-up to which the polity is so
deeply committed cannot function properly unless each of the three organs
appreciate the need for mutual respect and supremacy in their respective
fields.”
117. However, we hasten to add and do not wish to be misunderstood so as to
infer that howsoever gross or abusive may be an administrative action or a
decision which is writ large on a particular activity at the instance of
the State or any other authority connected with it, the Court should remain
a passive, inactive and a silent spectator. What is sought to be emphasised
is that there has to be a boundary line or the proverbial “laxman rekha”
while examining the correctness of an administrative decision taken by the
State or a central authority after due deliberation and diligence which do
not reflect arbitrariness or illegality in its decision and execution. If
such equilibrium in the matter of governance gets disturbed, development is
bound to be slowed down and disturbed specially in an age of economic
liberalisation wherein global players are also involved as per policy
decision.”
Minimal interference is called for by the Courts, in exercise of judicial
review of a Government policy when the said policy is the outcome of
deliberations of the technical experts in the fields inasmuch as Courts are
not well-equipped to fathom into such domain which is left to the
discretion of the execution. It was beautifully explained by the Court in
Narmada Bachao Andolan v. Union of India[4] and reiterated in Federation of
Railway Officers Assn. v. Union of India[5] in the following words:
“12. In examining a question of this nature where a policy is evolved by
the Government judicial review thereof is limited. When policy according
to which or the purpose for which discretion is to be exercised is clearly
expressed in the statute, it cannot be said to be an unrestricted
discretion. On matters affecting policy and requiring technical expertise
the court would leave the matter for decision of those who are qualified to
address the issues. Unless the policy or action is inconsistent with the
Constitution and the laws or arbitrary or irrational or abuse of power, the
court will not interfere with such matters.”
Limits of the judicial review were again reiterated, pointing out the same
position by the Courts in England, in the case of G. Sundarrajan v. Union
of India[6] in the following manner:
“15.1. Lord MacNaughten in Vacher & Sons Ltd. v. London Society of
Compositors (1913 AC 107 : (1911-13) All ER Rep 241 (HL) has stated:
“... Some people may think the policy of the Act unwise and even dangerous
to the community. … But a judicial tribunal has nothing to do with the
policy of any Act which it may be called upon to interpret. That may be a
matter for private judgment. The duty of the court, and its only duty, is
to expound the language of the Act in accordance with the settled rules of
construction.”
15.2. In Council of Civil Service Unions v. Minister for the Civil Service
(1985 AC 374 : (1984) 3 WLR 1174 : (1984) 3 All ER 935 (HL), it was held
that it is not for the courts to determine whether a particular policy or
particular decision taken in fulfilment of that policy are fair. They are
concerned only with the manner in which those decisions have been taken, if
that manner is unfair, the decision will be tainted with what Lord Diplock
labels as “procedural impropriety”.
This Court in M.P. Oil Extraction v. State of M.P. (1997) 7 SCC 592 held
that unless the policy framed is absolutely capricious, unreasonable and
arbitrary and based on mere ipse dixit of the executive authority or is
invalid in constitutional or statutory mandate, court's interference is not
called for.
Reference may also be made of the judgments of this Court in Ugar Sugar
Works Ltd. v. Delhi Admn. (2001) 3 SCC 635, Dhampur Sugar (Kashipur) Ltd.
v. State of Uttaranchal (2007) 8 SCC 418 and Delhi Bar Assn. v. Union of
India (2008) 13 SCC 628.
We are, therefore, firmly of the opinion that we cannot sit in judgment
over the decision taken by the Government of India, NPCIL, etc. for setting
up of KKNPP at Kudankulam in view of the Indo-Russian Agreement.”
When it comes to the judicial review of economic policy, the Courts are
more conservative as such economic policies are generally formulated by
experts. Way back in the year 1978, a Bench of seven Judges of this Court
in Prag Ice & Oil Mills v. Union of India and Nav Bharat Oil Mills v. Union
of India[7] carved out this principle in the following terms:
“We have listened to long arguments directed at showing us that producers
and sellers of oil in various parts of the country will suffer so that they
would give up producing or dealing in mustard oil. It was urged that this
would, quite naturally, have its repercussions on consumers for whom
mustard oil will become even more scarce than ever ultimately. We do not
think that it is the function of this Court or of any court to sit in
judgment over such matters of economic policy as must necessarily be left
to the government of the day to decide. Many of them, as a measure of
price fixation must necessarily be, are matters of prediction of ultimate
results on which even experts can seriously err and doubtlessly differ.
Courts can certainly not be expected to decide them without even the aid of
experts.”
Taking aid from the aforesaid observations of the Constitution Bench, the
Court reiterated the words of caution in Peerless General Finance and
Investment Co. Limited v. Reserve Bank of India[8] with the following
utterance:
“31. The function of the court is to see that lawful authority is not
abused but not to appropriate to itself the task entrusted to that
authority. It is well settled that a public body invested with statutory
powers must take care not to exceed or abuse its power. It must keep
within the limits of the authority committed to it. It must act in good
faith and it must act reasonably. Courts are not to interfere with
economic policy which is the function of experts. It is not the function of
the courts to sit in judgment over matters of economic policy and it must
necessarily be left to the expert bodies. In such matters even experts can
seriously and doubtlessly differ. Courts cannot be expected to decide them
without even the aid of experts.”
It cannot be doubted that the primary and central purpose of judicial
review of the administrative action is to promote good administration. It
is to ensure that administrative bodies act efficiently and honestly to
promote the public good. They should operate in a fair, transparent, and
unbiased fashion, keeping in forefront the public interest. To ensure that
aforesaid dominant objectives are achieved, this Court has added new
dimension to the contours of judicial review and it has undergone
tremendous change in recent years. The scope of judicial review has
expanded radically and it now extends well beyond the sphere of statutory
powers to include diverse forms of 'public' power in response to the
changing architecture of the Government[9]. Thus, not only has judicial
review grown wider in scope; its intensity has also increased.
Notwithstanding the same,
“it is, however, central to received perceptions of judicial review that
courts may not interfere with exercise of discretion merely because they
disagree with the decision or action in question; instead, courts intervene
only if some specific fault can be established – for example, if the
decision was reached procedurally unfair[10].
The raison d'etre of discretionary power is that it promotes decision maker
to respond appropriately to the demands of particular situation. When the
decision making is policy based judicial approach to interfere with such
decision making becomes narrower. In such cases, in the first instance, it
is to be examined as to whether policy in question is contrary to any
statutory provisions or is discriminatory/arbitrary or based on irrelevant
considerations. If the particular policy satisfies these parameters and is
held to be valid, then the only question to be examined is as to whether
the decision in question is in conformity with the said policy.
Keeping in mind the aforesaid parameters of judicial power, we now proceed
to deal with the some specific arguments of the petitioner
(1) Whether process of auction should have been resorted to?
The first argument raised by the petitioner is that in the NIA dated
25.02.2010, when 3G spectrum and BWA spectrum were to be auctioned there
was a specific clause that the spectrum shall not be used for any activity
other than the activities for which the operators has a license. On that
basis, it was argued that there was no reason to allow the migration and
for voice telephony there should have been a separate auction.
This submission lacks substance. During the course of arguments, the
learned Solicitor General successfully demonstrated that what was auctioned
in 2010 was spectrum, namely, 3G spectrum and BWA spectrum. Insofar as 3G
spectrum auction is concerned, it was in blocks of 5 MHz i.e. each block of
2 x 5 MHz whereas BWA auction was in blocks of 20 MHz. The spectrum,
therefore, was of different forms and thus, issuance of license would be
different from spectrum. Moreover, NIA dated 25.02.2010 itself provided
the eligibility conditions for an entity who could bid for BWA spectrum and
further stipulation in this behalf was specifically stated as under:
“Successful Bidders in the BWA Auction that currently hold an ISP-category
'B' licence shall be required to migrate to an ISP-category 'A' licence, by
paying the applicable fees/charges for migration, before they are awarded
the BWA Spectrum. The DoT guidelines stipulate that a UAS license or an
ISP licence can only be awarded to an Indian Company. Hence, any foreign
applicants will need to form, or acquire, an Indian company, to obtain a
UAS licence or an ISP-category 'A' licence. However, they are allowed to
participate in the Auctions directly and apply for or acquire a licence
subsequently through an Indian company, where they hold at least 26% equity
stake.
Services can only be offered subject to the terms and conditions of the
licence obtained by the operator. Award of spectrum does not confer a
right to provide any telecom services, and these are governed by the terms
and conditions of the licence obtained by the operator.”
It becomes apparent from the above that the spectrum was different from
license inasmuch as award of spectrum did not confer a right to provide any
telecom services. Insofar as providing of telecom services are concerned,
these were to be governed by the terms and conditions of the license
obtained by the operator. The learned Solicitor General also handed over a
comparative chart of varying points of view of the different Departments
when the matter regarding migration from UASL to UL regime was being
discussed and contemplated. A perusal thereof would show that there was a
threadbare discussion on the issue wherein pros and cons of migration of
telecom licenses to UL regime were discussed; various apprehensions
expressed were considered; and ultimately consensus emerged for switching
over to this regime. The discussion reveals that the Committee of the DoT
in its comments proceeded on the premise that the BWA spectrum could not be
used for any other purpose other than providing internet services. The
other departments did not share this view. It was ultimately found that the
view of the Committee was contrary to the plain language of the Notice
Inviting Applications and specifically Q&R which was published by the DoT
itself for the purpose of the auction. Difference of point of view of
different departments shows the process of institutional decision making.
The aforesaid discussion leads us to irresistible conclusion that decision
of the Government permitting migration of telecom licenses to UL regime is
valid, legal and without any blemish.
(2) Any undue favour to respondent No.2?
This brings us to another incidental aspect, namely, whether respondent
No.2 could be allowed migration from BWA spectrum to Unified License (UL).
We may observe at the outset that once a policy decision is taken to allow
such a migration to all those who were holding BWA spectrum and this
decision was not taken only for respondent No.2 individually, respondent
No.2 also became entitled to avail the benefit of the said decision.
However, the allegation of the petitioner is that respondent No.2 has been
allowed a 'back door' entry to provide voice services. It is in view of
such an allegation that we are delving on the aforesaid argument.
Some of the important features and aspects which have to be kept in mind,
in order to deal with the aforesaid argument of the petitioner, needs to be
noted in the first instance. It is not in dispute that IBSPL, when it bid
for BWA spectrum, was holding ISP category 'A' license. Further, in terms
of 3G or BWA spectrum, the acquirer thereof is eligible to provide any
service using the spectrum during the period of 20 years during which the
acquirer gets the right to use the spectrum under the auctioned terms.
Also, as pointed out above, the license is delinked from the spectrum. The
IBSPL having acquired the spectrum in the course of bidding, was not barred
from obtaining licenses for various telecom services issued by the
Government from time to time during the period of 20 years for which BWA
spectrum was given. Any other license issued by the Government from time
to time, thus, would make such license holder eligible to provide various
services as allowed under these licenses.
In the aforesaid backdrop, when license was delinked from the spectrum and
having auctioned spectrum by allowing those who did not possess license to
bid, it became necessary for the Government of India to come out with a
regime for grant of licenses for providing various telecom services. A
policy decision was taken, as discussed in detail above, for migration to
new telecom service license, i.e., Unified License (UL) for ISP licensees
with BWA spectrum. In its wisdom, this decision facilitated those having
data services to acquire license thereby covering voice-telephony as well.
All across the Board holding BWA spectrum became entitled to migrate to UL
and, therefore, there is no discrimination on the part of the government
authorities nor it aims at undue favoritism to respondent no. 2. It is
not in dispute that as per the new policy/regime, respondent no. 2 was
eligible to apply for UL from BWL spectrum. Therefore, it cannot be
treated as a case of back door entry of respondent no.2.
(3) Any loss of public revenue?
The only other issue which needs to be adverted to at this stage is the
fixation of additional fee of Rs. 1,658/- crores which was paid by
respondent no. 2 for migration to UL. The poser is : Whether such a fee
fixed was abysmally low which had resulted in undue advantage to respondent
no. 2, thereby causing loss to the public exchequer.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
WRIT PETITION (C) NO. 382 OF 2014
CENTRE FOR PUBLIC INTEREST LITIGATION .....PETITIONER(S)
VERSUS
UNION OF INDIA & ORS. .....RESPONDENT(S)
J U D G M E N T
A.K. SIKRI, J.
The petitioner herein, viz., Centre for Public Interest
Litigation, is a society registered under the Societies Registration Act,
1860. It claims that the very purpose for which this society was
established was to bring causes to the Superior Courts, which are of grave
public importance, by way of public interest litigation in an organised
manner. In the present writ petition filed under Article 32 of the
Constitution of India, the petitioner challenges the decision of the
Government of India, taken sometime in March 2013, allowing voice telephony
to respondent No. 2 (Reliance Jio Infocomm Ltd.) on payment of Rs.1,658
crores entry fee. Allegation of the petitioner is that the aforesaid
amount at which the license for voice telephony is granted to respondent
No. 2 is a pittance inasmuch as in normal course grant of this license
would have fetched a whopping sum of Rs.25000 crores approximately. This
insinuation is based upon a draft report of the Comptroller and Auditor
General of India (CAG) which report estimated the aforesaid license
fee/entry fee. It is also alleged that respondent No. 1, while allowing
voice telephony to respondent No. 2, has not revised the Spectrum Usage
Charges (SUC) matching with the charges which are paid by other operators
who bought voice telephony. It is stated in the petition that whereas the
other operators pay 3% to 5% revenue annually depending upon quantum of the
spectrum they hold, respondent No. 2 in contrast would be paying just 1% of
the revenue. In this way, alleges the petitioner, an undue favour is given
to respondent No. 2 by charging abysmally less entry fee and demanding much
lesser SUC, thereby causing loss of revenue to the Government over 20 years
license period. It has also resulted in disturbance in the level-playing
field between respondent No. 2 vis-a-vis other operators. The petitioner
has tried to project that unwarranted favouritism is shown to respondent
No. 2 and the decision making process, in this behalf, was also not only
faulty but in violation of accepted norms as well.
The factual details leading to the aforesaid allegations are averred in the
petition which can be summated in the following manner:
On 25.02.2010, the respondent No. 1 issued Notice Inviting
Applications (NIA) for the auction of:
(i) 3G: Three or 4 blocks each of 5+5 MHz spectrum for 3G services in
2.1 GHz band at a reserve price of Rs. 3,500 crore for a Pan-India license,
and
(ii) BWA (4G): Two blocks each of 20 MHz spectrum for BWA services
in 2.3 GHz band at a reserve price of Rs. 1,750 crore for a Pan-India
license.
In respect of BWA (4G), as per the NIA conditions, a bidder could be
an existing ISP-A licensee or UAS licensee (or obtain any of these licenses
later if successful in the bid), but it can provide only such services
which are allowed under the license it chooses. For example, an ISP-A
licensee cannot provide voice telephony. In this regard, reliance is
placed on the following clause of the NIA:
Clause 3.1.2: “Services can only be offered subject to the terms and
conditions of the license obtained by the operator. Award of spectrum does
not confer a right to provide any telecom services, and these are governed
by the terms and conditions of the license obtained by the operator.”
During May-June 2010 the auctions for 3G and BWA were concluded. The
3G auction fetched Rs. 16,750.58 crore for 5+5 MHz spectrum in 2100 MHz (or
2.1 GHz) band. Thus, per MHz price worked out to be Rs. 1,675 crore. This
spectrum price bequeathed the rights to provide both data and voice.
Immediately, after the 3G auction, the BWA auction began which
fetched Rs. 12,847.77 crore for 20 MHz pan-India license in the 2300 MHz
(or 2.3 GHz) band. This works out to be Rs. 642.39 crore per MHz.
Infotel Broadband Services Pvt. Ltd. (IBSPL) emerged as the only
company to have acquired pan-India BWA spectrum. Five other companies viz.
Bharti Airtel (4 Service Areas), Aircel (8 Sas), Qualcomm (4SAs), Tikona (5
Sas) and Augere (1 SA) shared the remaining other Pan India slot (22 Serve
Areas) of BWA spectrum in the country.
It is also averred that IBSPL had an ISP-A license since November 2007 and
had just one subscriber with revenue of Rs. 16.28 lakhs during 2009-10, and
its authorized share capital was Rs. 3 crore and the paid up capital was
Rs. 2.51 crore. Infotel Digicomm Pvt. Ltd. (IDPL) held 99.99% share of the
IBSPL at the time of submission of application in March 2010 for the BWA
auction.
It is alleged in the petition that within hours of completion of BWA
auction on 11.06.2010, IBSPL increased the authorised share capital from
Rs. 3 crore to Rs. 6,000 crore. On 17.06.2010, the company authorised its
Board of Directors to allot 475 crore equity share of Rs. 10 each to
Reliance Industries Ltd. (RIL) and 25 crore equity share of Rs. 10 to
Infotel Digicomm Pvt. Ltd. (IDPL) aggregating to the equity capital of Rs.
5,000 crore. On the same day, the company also decided to change from a
private company to Public Limited Company (Infotel Broadband Services Ltd).
Thus, the company within a week of winning the BWA spectrum disposed off
95% shares to RIL while 5% was retained by IDPL. Much later in March 2013,
the company was renamed as Reliance Jio Infocomm Pvt. Ltd. On that basis,
some suspicion is nurtured as to how IBSPL acquired BWA spectrum and
thereafter stakes in IBSPL came under the control of RIL. The said IBSPL
is now known as Reliance Jio Infocomm Pvt. Ltd.
However, we may like to add here itself that the auction of BWA
in which IBSPL turned out to be successful bidder resulting into
acquisition of Pan-India BWA spectrum in its favour is not the subject
matter of dispute and was never questioned by anybody. This auction, as is
clear from the above, was held way back in May-June, 2010. Though, there
were other prominent companies of repute who participated in the said
auction and shared the remaining other Pan-India slot (22 Serve Areas), no
competitor of IBSPL challenged BWA auction. The subject matter of
challenge in the instant writ petition is the conversion of BWA spectrum to
Unified License (UL) i.e. migration of existing BWA spectrum to UL which
has been done by respondent No.1.
In respect of the aforesaid central issue raised, it is pointed out by the
writ petitioner that on 16.04.2012, TRAI submitted its recommendations to
respondent No. 1 on Guidelines for UL and migration of existing license.
Thereafter, on 02.05.2012, respondent No. 1 sought clarification from TRAI
on migration of ISP licensees having BWA spectrum to UL regime. TRAI in
its response to respondent No. 1 clarified that the spectrum of 3G/BWA was
liberalized and the operators can migrate to UAS license, which meant
allowing voice telephony to them as well on such migration. According to
the petitioner, though TRAI had clarified that the spectrum of 3G/BWA was
liberalized and operators could migrate to UL, a Committee of Department of
Telecommunication (DoT) took the view, sometime around May 2012, that under
ISP licenses, voice telephony cannot be provided. This view was reiterated
by the DoT Committee once again in August, 2012. The allegation of the
petitioner, however, is that on 25.01.2013 another Committee was
constituted under the Chairmanship of Secretary (Telecom), though the order
in this respect was issued only on 11.02.2013, to go into this issue and
suggest the way forward. It is stated that Secretary (Telecom) was made
Chairman of the Committee even when he was due to superannuate two months
later i.e. in March, 2013. This Committee prepared its draft report on
30.01.2013 as per which the said Committee was not ready to make any
recommendations on ISP (holding BWA spectrum) migration to UASL. However,
still in its final report given on 13.02.2013, the Committee recommended
that on payment of Rs.1,658 crores, ISP (holding BWA spectrum) could be
migrated to UASL, thereby permitting voice telephony. This recommendation
was approved by Telecom Commission in its meeting on 18.02.2013. The
official from the Ministry of Finance who also attended this meeting, while
agreeing with the aforesaid proposal, ignored Finance Ministry's own
recommendations on the 2G spectrum issue inasmuch as in the year 2007 when
the then Telecom Minister wanted to award the licenses at Rs.1,658 crores,
the then Finance Secretary had objected to it. After the Telecom
Commission approved the recommendation, the same was forwarded to the
Telecom Minister who gave his final approval on 05.03.2013. It is this
decision of migration of BWA spectrum given to respondent No. 2 into USL
which is termed as totally arbitrary, illegal, unfair, impermissible and
against the public interest.
It would be pertinent to mention at the outset that in the writ petition,
the petitioner has specifically accepted that it has not made any
representation to the Government before approaching the Court in the form
of present writ petition. Reason given is that the CAG itself has
investigated this matter and in its draft report dated 07.11.2013 adversely
commented upon the manner in which the aforesaid migration is allowed to
respondent No. 2 at the cost of exchequer resulting into whopping loss of
public revenue thereby giving undue advantage of Rs.22,842 crores to
respondent No. 2. Thus, heavy reliance is placed on the said CAG report by
the petitioner in support of its contention and following part of the said
report is specifically referred to:
“(x) It was found that the basis of the decision i.e. payment of entry fee
of Rs. 1,658 crore by ISP lincensee for a permission to Pan India provision
of mobile voice services using BWA spectrum considered by the DoT
Committee, Telecom Commission and the MOC&IT, was primarily intended to
fill the gap between the eligibility criterion stipulated for participation
in the 3G/BWA auction in 2010 as UAS/CMTS licensees had paid entry fee of
Rs. 1,658 crore while ISP licensees had paid only Rs. 30 lakh.
The DoT Committee, Telecom Commission and the MOC&IT however ignored the
fact that the quantum of entry fee i.e. Rs. 1,658 crore was basically
discovered in 2001 through the bidding for the 4th Cellular licenses.
Market conditions since then have changed drastically, and this price
needed to be modified to reflect the present value. Neither the DoT
Committee/TC under the Chairmanship of the Secretary DoT nor the MOC&IT
felt the need for revision of the price discovered in 2001 as the entry fee
for UASL in 2013, even when the Hon'ble Supreme Court of India had
cancelled 122 licenses granted in 2008 on the basis of the same entry fee
stating that it was impossible for them to approve the action of the DoT.
9. Therefore, by permitting ISPs to provide mobile voice service using BWA
spectrum won in 2010 auction post-auction, the government has brought ISP
licensees with BWA spectrum at par with UAS/CMTS 3G spectrum winners so far
as provision of services are concerned – Voice, Data, etc., and post
auction interpretation of such vital nature would appear to be arbitrary,
inconsistent and not appropriate. Hence, IBSPL, now Reliance Jio Infocomm,
appeared to have been accorded undue advantage of Rs. 22,842 crore i.e. the
difference of the proportionate prices for 20 MHz block size in 2.1 GHz
spectrum band (3G spectrum) and 2.3 GHz spectrum band (BWA spectrum) plus
the Net Present Value of the entry fee for UASL at the end of FY 2009-10
(Rs. 20,653 crore plus Rs. 3,847 crore – Rs. 1,658 crore). Besides, the
sanctity of the entire auction process has been rendered vitiated due to
post auction interpretations and interventions after three years. It was
therefore no surprise that Reliance Jio Infocomm was among the first group
of companies which applied for UL immediately after introduction of the
scheme and obtained the Letter of Intent (LOI). Had the spectrum blocks
been specified and declared as liberalised spectrum blocks i.e. open for
all technology/services in the NIA in February 2010, there was no doubt
that bidders would have taken informed decision for putting up their bid
and the market discovered price would have been significantly different for
3G and BWA spectrum.”
Mr. Prashant Bhushan, at the time of arguments, pointed out the aforesaid
procedural and other alleged irregularities and the comments of CAG
thereupon. He submitted that there was no reason to allow migration of ISP
(holding BWA spectrum) to UASL. Instead, according to him, what was needed
was to hold independent auction of voice telephony. He submitted that
allowing the migration from one type of license to another with added
benefits was in the teeth of judgment of this Court in the Presidential
Reference on the issue of Alienation of Natural Resources[1] wherein this
Court has held that when “precious and scarce natural resources are
alienated for commercial pursuits of profit maximizing private
entrepreneurs, adoption of means other than those that are competitive and
maximize revenue may be arbitrary and face the wrath of Article 14 of the
Constitution.”
All the three respondents in this petition, namely, Union of India (R-1),
Reliance Jio Infocomm Ltd. (R-2) and TRAI (R-3) have stoutly contested the
stand taken by the petitioner in this petition by disputing the averments.
Apart from putting stiff resistance to the issues raised in the petition on
merits, the respondents have even questioned the bonafides of the petition
by vehemently arguing that it does not serve any public purpose and on the
contrary, the petition is motivated. In the counter affidavit filed on
behalf of the Union of India, it is stated that the writ petition is
preferred on an absolutely erroneous footing by misconstruing and
misinterpreting the judgment of this Court in Centre for Public Interest
Litigation v. Union of India[2] (hereinafter referred to as “2G Case”) and
also the provisions of the TRAI Act. It is stated that entry fee of Rs.
1,658 crore fixed earlier was for UASL along with spectrum bundled with it,
whereas in the year 2010 for 3G and BWA spectrum, license and spectrum were
delinked and it was only the spectrum which was auctioned. Moreover, the
amount of Rs. 1,658 crore is not the entry fee as alleged by the petitioner
but is only migration fee. It is further stated that the aforesaid
decision of allowing migration was taken after it was duly permitted by the
TRAI and, thus, such a decision was based on the economic policy of the
Government with which the Courts normally do not interfere unless the same
is found to be arbitrary, malafide or contrary to the public interest,
which is not the case here. A detailed history from TRAI recommendation to
the decision taken by the DoT is narrated in the counter affidavit with the
emphasis that the decision in question was actuated by valid economic and
other relevant considerations. On that basis, respondent No. 1 insists
that neither the manner of allowing migration was irregular or illegal nor
fixation of migration fee of Rs. 1,658 crore was arbitrary or against
public interest or prompted to give any undue favour to respondent No.2.
On the similar lines is the counter affidavit filed by respondent No.2,
which has attempted to explain the factual position in much greater detail
and reference thereto shall be made at the appropriate stage.
Oral arguments on behalf of Union of India were addressed by Mr. Ranjit
Kumar, learned Solicitor General whereas Mr. Harish Salve, senior advocate
put up the defence on behalf of respondent No.2. Ms. Niranjana Singh
appeared for TRAI. It is not necessary to separately take note of their
respective arguments as we intend to refer to those submissions during our
deliberations on the various facets of the case.
Before we embark on the specific areas of lis which need to be examined, it
may be apposite to make some introductory remarks pertaining to
Telecommunications sector and the manner in which spectrum is licensed from
time to time. To put it pithily, it is well known that Telecommunication
is a sector with fast changing technologies. Each technology has its
features, compatibility and market adaptability. Some technologies which
are at a horizon today may not be even commercially successful as updated
and other technology become available before commercial deployment of that
technology at affordable rates for common man in India. In the year 1991,
India had 5 million telephone subscribers. At the end of July, 2007 this
number increased to 233 million and as on July, 2015 it has touched 1006.96
million subscribers. This phenomenal growth has not been achieved in any
country, other than China. The primary reason for this growth is the
introduction of mobile services coupled with privatization of the Telecom
sector. Mobile service in India is dominated by private sector enterprise
and the Government religiously followed a policy of 'managed competition'
by licensing more than one company in Telecom. This led to competition in
the mobile industry, result whereof which not only resulted in providing
better services but another direct effect of this competition is lower
prices that the Telecom consumer has to pay. A call charge of Rs.16/- per
minute in the year 1998 has come down to few paisa per minute. Another
significant development over the years, which is a result of technological
development influenced by market economic considerations is that though
mobile services started with voice telephony, there is a gradual growth in
data telephony. Mobile telephones are not used only for making telephone
calls. Number of other services are provided by the service providers on
these phones which are known as 'smart phones'. The various policy
decisions are taken at a point of time considering various technological
options, policy objectives and regulatory framework.
Auction of 3G spectrum & BWA spectrum in the year 2010
It is in this context we have to keep in mind that when notice dated
25.02.2010 was issued inviting applications (NIA), though it was for both
3G spectrum as well as BWA spectrum, there is a significant difference in
the characteristics of both the spectrums, namely, 3G on the one hand and
BWA on the other hand. It may be mentioned that 3G spectrum is in
Frequency Division Duplex (FDD) mode whereas the Broadband Wireless Access
(BWA) spectrum as per TRAI recommendations as well as Guidelines issued by
DoT is in Time Division Duplex (TDD) mode. Distinct and different features
of both are highlighted in the following manner:
a. FDD needs fewer base stations than TDD
Since FDD devices achieve desired cell edge rates at farther
distances, the number of base stations required to achieve a given area of
coverage is reduced.
b. In a coverage-limited system comparison using the same frequency
band, the TDD system required 31% more base stations than FDD when using a
1:1 TDD system and 65% more base stations when using a 2:1 TDD system.
Higher frequency bands required even more base stations.
c. FDD incurs lower costs
Capital expenditure (CAPEX) and operating expenditure (OPEX) costs
are associated with each base station. These costs are independent of the
type of duplexing technique used (FDD or TDD). Since FDD requires fewer
base stations for the same coverage, it incurs lower deployment and
operating costs.
d. FDD/TDD: Basic difference
FDD is implemented on a paired spectrum where downlink and uplink
transmissions are sent on separate frequencies. This provides simultaneous
exchange of information and reduces interference between the uplink and
downlink. Therefore FDD is more suitable for Voice systems that require
continuous duplex working.
TDD is implemented on an unpaired spectrum, implying the usage of
only one frequency for both downlink and uplink transmissions. It is
suitable for asymmetric transmission demands and in cases where paired
frequency is not available while Voice services are symmetric transmission.
e. Efficiency of use:
FDD has higher frequency usage efficiency. There is wastage of
spectrum in TDD as it requires more accurate timing & greater guard bands.
f. Range:
TDD has a lower range (area covered) due to fact that guard band
timing needs to be met.
g. Carrier Aggregation:
With 3G and LTE big advantage is carrier aggregation, which allows
receiving handsets to make better use of the fragmented bands that a
carrier may have, in order to download data faster. This was not available
in WiMAX at that time since the complete mobility was not available.
h. Network Evolution:
A clear roadmap to move to a new technology was available for 3G but
it was not there for broadband networks in terms of mobility, carrier
aggregation, etc.
These are some of the comparisons of 3G spectrum which was based on
FDD mode and TDD based digital Broadband Wireless Access (BWA) systems
which are drawn by the learned Solicitor General on the basis of which it
is stated that there was distinct advantage, clearly discernible, of 3G
spectrum over BWA spectrum that was understood by TRAI & DoT and hence the
pricing had to be differentiated on this basis. The only technology
available at that time in 2.3 GHz band was WiMax as LTE (Long Term
Evolution) was not available. Although in theory any packet based network
core can be used for Voice or data still there are requirements to ensure
smooth and contiguous reception of packets which puts a extra burden on
allocation of resources. Moreover, LTE was available only post 2012 and
that too VOLTE (Voice over LTE) was experimental technology over LTE core.
It will also be pertinent to note some of the queries and responses for
auction of 3G and BWA spectrum which were published by DoT on 25.02.2010
i.e. simultaneously with the issuance of NIA, wherein it was specifically
clarified that usage of spectrum including BWA spectrum is linked to the
license held or to be acquired by the bidder. It was, thus, envisaged that
BWA spectrum can be used for all telecom services including voice telephony
linked to the relevant license, as can be gaged from some of the queries
and responses thereto which are as under:
“Question 34: Does the BWA license allow use of voice to be offered by the
BWA operators? Even in VOIP form?
Answer 34: There is no BWA license. Service conditions including allowing
Internet Telephony will depend on whether the winner of the BWA spectrum
holds UAS or ISP license.
Question 71: Spectrum usage rights shall be awarded separately for specific
service areas. Please clarify.
Answer 71: Spectrum usage rights are based on the provisions of the
applicable license and the licenses are specific to a service area. The
auction is for the award of spectrum only, while award of license is a
separate process.
Question 72: To which entity BWA license will be given in case a company
has both 'UAS' & ISP – Category A license?
Answer 72: The successful bidder will be allowed to determine the license
that it wishes to use for award of BWA spectrum.”
Auction for 3G and BWA spectrum was conducted between May and June, 2010.
10 bidders participated in 3G spectrum auction and 11 bidders participated
in BWA spectrum auction. The results of BWA spectrum were published on
12.06.2010. It is emphasized by the respondents, and to which there is no
denial, that this occasion was conducted over 16 days and involved 117
rounds of bidding across service areas. In the said occasion, all the 44
blocks that were put for auction across 22 service areas in the country
were sold. Reserve price of BWA spectrum was fixed at Rs.1750 crores.
During bidding, highest bid that was given by IBSPL was Rs.12847.77 crores
for one block of Pan-India BWA spectrum. In this way, respondent No.2
emerged as successful in acquiring various BWA frequencies in all 22
service areas across the country. Further, as already noted in the earlier
part of this judgment, though 11 bidders had participated, none of the
other bidders make any complaint about the fairness, transparency and as
well as about the process of bidding.
In this scenario, insofar as IBSPL becoming successful bidder cannot be
questioned at this stage. No doubt, the petitioner has alleged that
shortly after acquiring Pan-India BWA spectrum, IBSPL increased its
authorized capital from Rs.3 crores to Rs.6,000 crores and question the
manner in which control of this company is taken over by RIL. However,
that cannot be the subject of scrutiny in these proceedings inasmuch as it
has no causal connection with the validity of the auction of BWA spectrum
in the year 2000. We may stated that respondent No.2 has specifically
denied such allegations and has endeavor to explain that promoters of IBSPL
did not derive in unfair gains and also that they did not divest or sell
their equity to RIL, it is for our reasons recorded above. It is not
necessary to delve into this aspect any further as that is neither the
subject matter of controversy nor any relief claimed by the petitioner in
this behalf. If at all, there is a reference to the same by the petitioner
in the chain of submissions on the central issue which pertains to post-
auction permission to provide voice services on BWA spectrum.
Migration from BWA to UAS licence
Without much ado, therefore, we would like to address the aforesaid central
issue that arises for consideration viz. whether a decision of respondent
No.1 allowing the migration from BWA to UAS license was valid and legal and
whether such a decision has unduly benefited respondent No.2 who is charged
a sum of Rs.1,658 crores for this purpose, which according to the
petitioners, is abysmally low.
As highlighted above, there have been technological developments in
telecommunication are taking place at abnormal pace. Various policy
decision taken at one point of time may, therefore, require a re-look
necessitating modifications and changes therein and the circumstances may
even mandate change of existing policy altogether by substituting with new
policy decision depending upon the such technological advancements coupled
by commercial and economic considerations. It can be supported by the fact
that first Telecom Policy was announced in the year 1994, which was
replaced by revised Policy of 1999 and thereafter in the year 2004 and
again substituted by Telecom Policy of 2012.
Having regard to such features/developments, in the year 2012, the TRAI
started exercise of bringing Unified Licensing regime. On 10.02.2012, it
issued a consultation paper on Draft Guidelines for Unified License/Class
License and migration of existing licenses. It was followed by the
statement of the Ministry for Telecommunication and IT on 15.02.2012 on
Spectrum Management and Licensing Framework. This statement broadly
indicated that there would be no more licenses linked with Spectrum and
issuance of licenses and allocation of spectrum will be completely
delinked. Thereafter, on 16.04.2012, TRAI addressed a letter to the
Secretary, DoT enclosing its recommendations for Unified License/Class
License and migration of existing licenses. After due deliberations at
appropriate levels, the Government of India issued on 31.05.2012 the
National Telecom Policy-2012 and announced approval for introduction of
Unified Licensing regime. This was followed by the policy decision of DoT
dated 13.03.2013 to allow migration to UL from UASL as well as ISP to UL
regime. The detailed background in taking this policy decision is stated
in the counter affidavit filed by the Union of India and the position
stated therein is not in dispute. These details are required to be noted,
which are as follows:
“1. The Department of Telecommunications (DoT) vide their D.O. letter No.
L- 14047/09/2005-NTG dated May 22, 2006 sought recommendations from the
Telecom Regulatory Authority of India (TRAI) on the methodology for
allotment of spectrum for 3G services and its pricing aspects.
TRAI gave the recommendations on 27th Sept 2006 after following the
procedure of consultation and conducting open house discussion to have
understanding of views of stakeholders.
TRAI while replying to DoT in recommendations said:
“The Authority is committed to the view that the consumers must get the
benefit of new technology and variety of services. It also believes that
the telecom service providers should have the flexibility to choose from
the range of technologies available and the regulatory policies must not
restrict the choice of the operator. Therefore, the Authority considered
it appropriate to offer its recommendations both on 3G technology and on
broadband wireless access (BWA) systems at the same time. It would also
ensure that the spectrum issues are considered in a holistic manner and
piecemeal or ad-hoc solutions do not find place in future planning. The
Authority has also made suggestions on the wider issue management of
spectrum, which is now a scarce resource in the country. The future growth
in telecom would largely depend on the way we manage our spectrum.”
While forwarding its recommendations TRAI, inter-alia, considered the
following:
Band identification for 3G services
Allocation methodology and pricing for 3G spectrum
Band identification, and allocation and pricing of BWA spectrum as well as
Spectrum Management
Allocation methodology and pricing for BWA spectrum
Spectrum Pricing
Spectrum for BWA
The DoT examined the recommendations and had referred some of them back to
TRAI as required by TRAI Act and took final views based on TRAI
recommendations and DoT's internal discussions.
The TRAI issued another consultation paper “On Allocation and Pricing for
2.3-2.4 GHz, 2.5-2.69 GHz & 3.3-3.6 GHz bands” on 2nd May 2008 and issued
its recommendations on 11th July, 2008.
The TRAI was clear that spectrum in 2.3-2.4 GHz band could be used for
mobile services as mentioned in the preface of these recommendations itself
which is reproduced as below:
“During the period of September, 2006 to October, 2007, there have been
significant changes in the international scenario. The International
Telecommunications Union-Radio (ITU-R) has identified 2.3-2.4 GHz band also
as IMT (International Mobile Technology) band (spectrum in the band of 2.5-
2.69 GHz band was already identified as IMT-2000 band). The use of 2.3-2.4
GHz and 2.5-2.69 GHz band offers significant scope for innovation with the
potential for induction of new technologies, services, applications and
devices. With the availability of mobile services in this band, it
provides an important opportunity for the introduction of next generation
mobile technologies (BWA).
Even TRAI in its recommendations admit that there could be different
technologies by which BWA could be provided and stated that:
“5.12 During the consultation process, the respondents stated that there
are various versions of BWA technology applications. The Authority also
recognizes that given the wide range of possible technologies, it is
essential that any policy concerned with identification and allocation of
spectrum for BWA must be technology-neutral and flexible to permit co-
existence of all types of BWA technologies.....”
“5.72 ….The average price for allocations comes to $0.65 (Rs.30) per Hz
including South Korea, and $0.08 (Rs.3.75) per Hertz excluding South Korea
….”
The final reserve price in NIA as issued by DoT was @Rs.87.5 per Hz. (Rs.
1750 crores for 20 MHz) which is much higher than recommended by TRAI.
In view of that Guidelines were followed in allowing Reliance Jio Infocomm
RJIO to offer Mobile services which has been done after following due
process of law by taking TRAI recommendations on the issue and considering
the same in DoT and approving Unified License (UL) guidelines wherein ISP
could migrate to UL.
The TRAI recommendations of April, 2012 on UL had recommendations on
Guidelines for UL/Class License and migration of existing licenses. TRAI
recommended that all present licenses be migrated to UL and in future only
UL be issued. TRAI had recommended that all existing Basic/CMSP/UASL/ISP
without spectrum/ISP with spectrum be allowed to migrate to UL. As per
this an ISP after migration will have all India UL after payment as
required.
It is pertinent to note that NTP 2012 states that National Telecom Policy –
2012 recognizes that the evolution from analog to digital technology has
facilitated the conversion of voice, data and video to the digital form.
Increasingly, these are now being rendered through single networks bringing
about a convergence in networks, services and also devices. Hence, it is
now imperative to move towards convergence between various services,
networks, platforms, technologies and overcome the existing segregation of
licensing, registration and regulatory mechanisms in these areas to enhance
affordability, increase access, delivery of multiple services and reduce
cost.
11. Further, it envisages providing secure, reliable, affordable and high
quality converged telecommunication services anytime, anywhere for an
accelerated inclusive socio-economic development. One of the objectives of
the National Telecom Policy-2012 is “Strive to create One Nation – One
License” across services and service areas...”
From the aforesaid, it follows that a policy decision was taken by the
Government not only with regard to introduction of Unified Licensing regime
but it also including allowing migration to UL from UASL as well as ISP to
UL regime. This meant that those having UAS license which permitted data
services only were allowed to migrate to Unified License enabling them to
provide both data service as well as voice telephony. This was a pure
policy decision after due deliberations by the experts in the fields and
even TRAI had recommended allowing such migration.
Such a policy decision, when not found to be arbitrary or based on
irrelevant considerations or mala fide or against any statutory provisions,
does not call for any interference by the Courts in exercise of power of
judicial review. This principle of law is ingrained in stone which is
stated and restated time and again by this Court on numerous occasions. In
Jal Mahal Resorts (P) Ltd. v. K.P. Sharma[3], the Court underlined the
principle in the following manner:
116. From this, it is clear that although the courts are expected very
often to enter into the technical and administrative aspects of the matter,
it has its own limitations and in consonance with the theory and principle
of separation of powers, reliance at least to some extent to the decisions
of the State authorities, specially if it is based on the opinion of the
experts reflected from the project report prepared by the technocrats,
accepted by the entire hierarchy of the State administration, acknowledged,
accepted and approved by one Government after the other, will have to be
given due credence and weightage. In spite of this if the court chooses to
overrule the correctness of such administrative decision and merits of the
view of the entire body including the administrative, technical and
financial experts by taking note of hair splitting submissions at the
instance of a PIL petitioner without any evidence in support thereof, the
PIL petitioners shall have to be put to strict proof and cannot be allowed
to function as an extraordinary and extra-judicial ombudsmen questioning
the entire exercise undertaken by an extensive body which include
administrators, technocrats and financial experts. In our considered view,
this might lead to a friction if not collision among the three organs of
the State and would affect the principle of governance ingrained in the
theory of separation of powers. In fact, this Court in M.P. Oil Extraction
v. State of M.P., (1997) 7 SCC 592 at p. 611 has unequivocally observed
that:
“41. The power of judicial review of the executive and legislative action
must be kept within the bounds of constitutional scheme so that there may
not be any occasion to entertain misgivings about the role of judiciary in
outstepping its limit by unwarranted judicial activism being very often
talked of in these days. The democratic set-up to which the polity is so
deeply committed cannot function properly unless each of the three organs
appreciate the need for mutual respect and supremacy in their respective
fields.”
117. However, we hasten to add and do not wish to be misunderstood so as to
infer that howsoever gross or abusive may be an administrative action or a
decision which is writ large on a particular activity at the instance of
the State or any other authority connected with it, the Court should remain
a passive, inactive and a silent spectator. What is sought to be emphasised
is that there has to be a boundary line or the proverbial “laxman rekha”
while examining the correctness of an administrative decision taken by the
State or a central authority after due deliberation and diligence which do
not reflect arbitrariness or illegality in its decision and execution. If
such equilibrium in the matter of governance gets disturbed, development is
bound to be slowed down and disturbed specially in an age of economic
liberalisation wherein global players are also involved as per policy
decision.”
Minimal interference is called for by the Courts, in exercise of judicial
review of a Government policy when the said policy is the outcome of
deliberations of the technical experts in the fields inasmuch as Courts are
not well-equipped to fathom into such domain which is left to the
discretion of the execution. It was beautifully explained by the Court in
Narmada Bachao Andolan v. Union of India[4] and reiterated in Federation of
Railway Officers Assn. v. Union of India[5] in the following words:
“12. In examining a question of this nature where a policy is evolved by
the Government judicial review thereof is limited. When policy according
to which or the purpose for which discretion is to be exercised is clearly
expressed in the statute, it cannot be said to be an unrestricted
discretion. On matters affecting policy and requiring technical expertise
the court would leave the matter for decision of those who are qualified to
address the issues. Unless the policy or action is inconsistent with the
Constitution and the laws or arbitrary or irrational or abuse of power, the
court will not interfere with such matters.”
Limits of the judicial review were again reiterated, pointing out the same
position by the Courts in England, in the case of G. Sundarrajan v. Union
of India[6] in the following manner:
“15.1. Lord MacNaughten in Vacher & Sons Ltd. v. London Society of
Compositors (1913 AC 107 : (1911-13) All ER Rep 241 (HL) has stated:
“... Some people may think the policy of the Act unwise and even dangerous
to the community. … But a judicial tribunal has nothing to do with the
policy of any Act which it may be called upon to interpret. That may be a
matter for private judgment. The duty of the court, and its only duty, is
to expound the language of the Act in accordance with the settled rules of
construction.”
15.2. In Council of Civil Service Unions v. Minister for the Civil Service
(1985 AC 374 : (1984) 3 WLR 1174 : (1984) 3 All ER 935 (HL), it was held
that it is not for the courts to determine whether a particular policy or
particular decision taken in fulfilment of that policy are fair. They are
concerned only with the manner in which those decisions have been taken, if
that manner is unfair, the decision will be tainted with what Lord Diplock
labels as “procedural impropriety”.
This Court in M.P. Oil Extraction v. State of M.P. (1997) 7 SCC 592 held
that unless the policy framed is absolutely capricious, unreasonable and
arbitrary and based on mere ipse dixit of the executive authority or is
invalid in constitutional or statutory mandate, court's interference is not
called for.
Reference may also be made of the judgments of this Court in Ugar Sugar
Works Ltd. v. Delhi Admn. (2001) 3 SCC 635, Dhampur Sugar (Kashipur) Ltd.
v. State of Uttaranchal (2007) 8 SCC 418 and Delhi Bar Assn. v. Union of
India (2008) 13 SCC 628.
We are, therefore, firmly of the opinion that we cannot sit in judgment
over the decision taken by the Government of India, NPCIL, etc. for setting
up of KKNPP at Kudankulam in view of the Indo-Russian Agreement.”
When it comes to the judicial review of economic policy, the Courts are
more conservative as such economic policies are generally formulated by
experts. Way back in the year 1978, a Bench of seven Judges of this Court
in Prag Ice & Oil Mills v. Union of India and Nav Bharat Oil Mills v. Union
of India[7] carved out this principle in the following terms:
“We have listened to long arguments directed at showing us that producers
and sellers of oil in various parts of the country will suffer so that they
would give up producing or dealing in mustard oil. It was urged that this
would, quite naturally, have its repercussions on consumers for whom
mustard oil will become even more scarce than ever ultimately. We do not
think that it is the function of this Court or of any court to sit in
judgment over such matters of economic policy as must necessarily be left
to the government of the day to decide. Many of them, as a measure of
price fixation must necessarily be, are matters of prediction of ultimate
results on which even experts can seriously err and doubtlessly differ.
Courts can certainly not be expected to decide them without even the aid of
experts.”
Taking aid from the aforesaid observations of the Constitution Bench, the
Court reiterated the words of caution in Peerless General Finance and
Investment Co. Limited v. Reserve Bank of India[8] with the following
utterance:
“31. The function of the court is to see that lawful authority is not
abused but not to appropriate to itself the task entrusted to that
authority. It is well settled that a public body invested with statutory
powers must take care not to exceed or abuse its power. It must keep
within the limits of the authority committed to it. It must act in good
faith and it must act reasonably. Courts are not to interfere with
economic policy which is the function of experts. It is not the function of
the courts to sit in judgment over matters of economic policy and it must
necessarily be left to the expert bodies. In such matters even experts can
seriously and doubtlessly differ. Courts cannot be expected to decide them
without even the aid of experts.”
It cannot be doubted that the primary and central purpose of judicial
review of the administrative action is to promote good administration. It
is to ensure that administrative bodies act efficiently and honestly to
promote the public good. They should operate in a fair, transparent, and
unbiased fashion, keeping in forefront the public interest. To ensure that
aforesaid dominant objectives are achieved, this Court has added new
dimension to the contours of judicial review and it has undergone
tremendous change in recent years. The scope of judicial review has
expanded radically and it now extends well beyond the sphere of statutory
powers to include diverse forms of 'public' power in response to the
changing architecture of the Government[9]. Thus, not only has judicial
review grown wider in scope; its intensity has also increased.
Notwithstanding the same,
“it is, however, central to received perceptions of judicial review that
courts may not interfere with exercise of discretion merely because they
disagree with the decision or action in question; instead, courts intervene
only if some specific fault can be established – for example, if the
decision was reached procedurally unfair[10].
The raison d'etre of discretionary power is that it promotes decision maker
to respond appropriately to the demands of particular situation. When the
decision making is policy based judicial approach to interfere with such
decision making becomes narrower. In such cases, in the first instance, it
is to be examined as to whether policy in question is contrary to any
statutory provisions or is discriminatory/arbitrary or based on irrelevant
considerations. If the particular policy satisfies these parameters and is
held to be valid, then the only question to be examined is as to whether
the decision in question is in conformity with the said policy.
Keeping in mind the aforesaid parameters of judicial power, we now proceed
to deal with the some specific arguments of the petitioner
(1) Whether process of auction should have been resorted to?
The first argument raised by the petitioner is that in the NIA dated
25.02.2010, when 3G spectrum and BWA spectrum were to be auctioned there
was a specific clause that the spectrum shall not be used for any activity
other than the activities for which the operators has a license. On that
basis, it was argued that there was no reason to allow the migration and
for voice telephony there should have been a separate auction.
This submission lacks substance. During the course of arguments, the
learned Solicitor General successfully demonstrated that what was auctioned
in 2010 was spectrum, namely, 3G spectrum and BWA spectrum. Insofar as 3G
spectrum auction is concerned, it was in blocks of 5 MHz i.e. each block of
2 x 5 MHz whereas BWA auction was in blocks of 20 MHz. The spectrum,
therefore, was of different forms and thus, issuance of license would be
different from spectrum. Moreover, NIA dated 25.02.2010 itself provided
the eligibility conditions for an entity who could bid for BWA spectrum and
further stipulation in this behalf was specifically stated as under:
“Successful Bidders in the BWA Auction that currently hold an ISP-category
'B' licence shall be required to migrate to an ISP-category 'A' licence, by
paying the applicable fees/charges for migration, before they are awarded
the BWA Spectrum. The DoT guidelines stipulate that a UAS license or an
ISP licence can only be awarded to an Indian Company. Hence, any foreign
applicants will need to form, or acquire, an Indian company, to obtain a
UAS licence or an ISP-category 'A' licence. However, they are allowed to
participate in the Auctions directly and apply for or acquire a licence
subsequently through an Indian company, where they hold at least 26% equity
stake.
Services can only be offered subject to the terms and conditions of the
licence obtained by the operator. Award of spectrum does not confer a
right to provide any telecom services, and these are governed by the terms
and conditions of the licence obtained by the operator.”
It becomes apparent from the above that the spectrum was different from
license inasmuch as award of spectrum did not confer a right to provide any
telecom services. Insofar as providing of telecom services are concerned,
these were to be governed by the terms and conditions of the license
obtained by the operator. The learned Solicitor General also handed over a
comparative chart of varying points of view of the different Departments
when the matter regarding migration from UASL to UL regime was being
discussed and contemplated. A perusal thereof would show that there was a
threadbare discussion on the issue wherein pros and cons of migration of
telecom licenses to UL regime were discussed; various apprehensions
expressed were considered; and ultimately consensus emerged for switching
over to this regime. The discussion reveals that the Committee of the DoT
in its comments proceeded on the premise that the BWA spectrum could not be
used for any other purpose other than providing internet services. The
other departments did not share this view. It was ultimately found that the
view of the Committee was contrary to the plain language of the Notice
Inviting Applications and specifically Q&R which was published by the DoT
itself for the purpose of the auction. Difference of point of view of
different departments shows the process of institutional decision making.
The aforesaid discussion leads us to irresistible conclusion that decision
of the Government permitting migration of telecom licenses to UL regime is
valid, legal and without any blemish.
(2) Any undue favour to respondent No.2?
This brings us to another incidental aspect, namely, whether respondent
No.2 could be allowed migration from BWA spectrum to Unified License (UL).
We may observe at the outset that once a policy decision is taken to allow
such a migration to all those who were holding BWA spectrum and this
decision was not taken only for respondent No.2 individually, respondent
No.2 also became entitled to avail the benefit of the said decision.
However, the allegation of the petitioner is that respondent No.2 has been
allowed a 'back door' entry to provide voice services. It is in view of
such an allegation that we are delving on the aforesaid argument.
Some of the important features and aspects which have to be kept in mind,
in order to deal with the aforesaid argument of the petitioner, needs to be
noted in the first instance. It is not in dispute that IBSPL, when it bid
for BWA spectrum, was holding ISP category 'A' license. Further, in terms
of 3G or BWA spectrum, the acquirer thereof is eligible to provide any
service using the spectrum during the period of 20 years during which the
acquirer gets the right to use the spectrum under the auctioned terms.
Also, as pointed out above, the license is delinked from the spectrum. The
IBSPL having acquired the spectrum in the course of bidding, was not barred
from obtaining licenses for various telecom services issued by the
Government from time to time during the period of 20 years for which BWA
spectrum was given. Any other license issued by the Government from time
to time, thus, would make such license holder eligible to provide various
services as allowed under these licenses.
In the aforesaid backdrop, when license was delinked from the spectrum and
having auctioned spectrum by allowing those who did not possess license to
bid, it became necessary for the Government of India to come out with a
regime for grant of licenses for providing various telecom services. A
policy decision was taken, as discussed in detail above, for migration to
new telecom service license, i.e., Unified License (UL) for ISP licensees
with BWA spectrum. In its wisdom, this decision facilitated those having
data services to acquire license thereby covering voice-telephony as well.
All across the Board holding BWA spectrum became entitled to migrate to UL
and, therefore, there is no discrimination on the part of the government
authorities nor it aims at undue favoritism to respondent no. 2. It is
not in dispute that as per the new policy/regime, respondent no. 2 was
eligible to apply for UL from BWL spectrum. Therefore, it cannot be
treated as a case of back door entry of respondent no.2.
(3) Any loss of public revenue?
The only other issue which needs to be adverted to at this stage is the
fixation of additional fee of Rs. 1,658/- crores which was paid by
respondent no. 2 for migration to UL. The poser is : Whether such a fee
fixed was abysmally low which had resulted in undue advantage to respondent
no. 2, thereby causing loss to the public exchequer.
We may keep in mind that while taking this position, namely, respondent no.
2 is given undue advantage by allowing it to migrate from UAS license to UL
with payment of so-called meager amount of Rs. 1,658 crores, the petitioner
rested its case entirely on the draft report of CAG. This is so accepted
and admitted in writ petition itself. It is pointed out that CAG's draft
report had put the loss on this account at Rs. 22,842 crore besides
significant loss of revenue on Spectrum Usage Charges (SUC). The
petitioner had put both these benefits at about Rs. 40,000 crore, out of
which about Rs. 17,000 crore was towards SUC. In its final report,
however, the CAG has revised the loss figure to Rs. 3,367.29 crores,
besides SUC on which it reiterated “significant loss of revenue to the
government”.
On that basis, submission of the petitioner is that that had there been an
independent auction of UL, the Government would have generated
substantially higher revenue. It is also argued that granting of UL by
adopting the methodology of conversion from existing UAS to UL, instead of
putting it to auction, is also contrary to the judgment of this Court in
2G2 case. Though we have already dealt with this aspect of the argument,
we are addressing the issue now in the context of frontal attack made on
the fixation of fee of Rs. 1,658 crores which is charged from respondent
no. 2 while allowing the migration from UAS to UL.
In the first instances, we may observe that once the policy decision of the
Government allowing migration from BWA spectrum to UL is found to be
justified in the circumstances already noted above, the argument of the
petitioner predicated on the judgment of this Court in 2G2 case does not
hold good. Even otherwise the decision in the said case is based on
altogether different backdrop. Judgment in the said case would reveal that
in 2001, in order to increase competition from then existing two private
players plus one PSU player per telecom circle, the Government introduced
the 4th telecom operator in each circle. At this time, there was an
auction conducted for grant of licenses and this license carried with it
4.4 + 4.4 MHz to start up spectrum and an assurance that further spectrum
availability would be given to the licenses subject to availability (by
2010 the TRAI had suggested the grant of a minimum spectrum of 6.2 MHZ to
each licensee as contracted spectrum). The Government had decided in 2001
when bids were invited for the 4th license that all future grants should be
on market price. However, in a departure from this even in year 2007-08 the
then Telecom Minister (following certain processes which was found to be
flawed) invited applications for license based on a pre-determined license
fee. This license fees was the same as the fee that was paid in 2001 by
those who applied for the 4th telecom license. This Court found that the
manner in which this decision had been arrived at was flawed and smacked of
arbitrariness. It was also held that this spectrum is an extremely
valuable natural resource and must only be made available at market price.
The Court found that the license itself had no value, in that the real
value was that of the spectrum.
On the other hand, insofar as present case is concerned, auction of 3G
spectrum as well as BWL spectrum held in 2010 was not challenged by anybody
and no fault has even been found in the same. It is the spectrum which a
vital resource and that was duly auctioned. The decision now taken, which
is the subject matter of controversy in the present case, pertains to
license, namely, switching over from UASL to UL, validity whereof has
already been upheld.
Insofar as fee of Rs. 1,658 crores that is charged from respondent no. 2 is
concerned, it was pointed out by the learned counsel for the respondents at
the Bar that migration/grant of unified license available today is at
paltry fee of Rs. 15 crores. As against this, respondent no. 2 has paid
Rs. 1,658 crores, much higher than fee fixed. One cannot lose sight of the
fact that insofar as auction of BWA spectrum is concerned, it fetched a
whopping price of Rs. 12,847.77 crores. On the other hand, license is
acquired separately at a fixed license fee over and above the price of
spectrum which requires a fee of Rs. 15 crores insofar as switch over from
UASL to UL is concerned.
The foundation of the petitioner's allegation is draft report of CAG.
However, that was only a draft report. Many queries and doubts in the
said draft report were addressed and answered by the Government. The final
report of CAG is materially different from the draft report. It appears
that in the draft report, CAG proceeded on the wrong premise that the
license was also to be auctioned. In fact, as far as 2G2 case is
concerned, in that matter licenses along with bundles spectrum were awarded
at a pre-determined price on a first come first serve bases and, thus,
spectrum was bundled along with the license. However, in 2010, when 3G and
BWA spectrum were auctioned, the spectrum were delinked from license. In
this backdrop, when the policy decision had now been taken based on
National Telecom Policy, 2012, whereby migration of UASL licence to UL was
permitted, the question of fee that is to be charged is to be looked into.
TRAI, in its recommendations, had not prescribed any additional fee to be
charged for migration of ISP operators with BWS spectrum to UL regime.
Instead, it had stated that the BWA spectrum assignee, whether holding a
UAS license or ISP lincence and the scope for provision of services would
be uniform under the Unified License. It is only entry fee which is
prescribed and that too Rs. 15 crores. Notwithstanding the same, the
Government decided to permit migration from ISP licence to UL license with
migration fee of Rs. 1,658 crores, calculated as the difference in entry
fee of UASL and that of ISL license in order to provide a level playing
field between the two classes licenses. The aforesaid facts would show
that respondent no. 2 has paid spectrum price of Rs. 12,847.77 crores and
also Rs. 1,658 crores for migration to UL, in addition to entry fee of Rs.
15 crores, which is the prescribed fee. It, therefore, cannot be said that
the fee of Rs. 1,658 crores charged from respondent no.2 is in any way less
or that it has caused any wrongful loss to the Government and wrongful gain
to respondent no. 2 or that the Government would have fetched much more
price.
We have already traced brief history of the development in
telecommunication and, in particular, that of mobile/cellular services.
Most significant development which is pointed out is as to how
technological development has led to the growth of data telephony from mere
voice telephony. As already stated, number of other services are provided
by the service providers on these phones which are known as 'smart phones'.
These services include video streaming, music streaming, social
networking, instant messaging, download and save, emails, playing online
games, browse/search, banking, bill payments, navigation, e-commerce and
cloud storage etc. Even feature films can be downloaded and watched. TV
programmes can be seen. It serves as camera as well. Smart Phone is able
to serve the purpose of a computer as well to a significant extent. It has
become a “miraculous devise” for the consumers which caters to all most all
necessary and day to day telecom needs. A peep into the graph growth of
total global monthly data and voice traffic would reveal that in the year
2007-2008 voice and data traffic was almost equal. However, by the end of
2010, traffic generated from mobile data was twice that for voice. In five
years time, the data traffic has gone ahead of voice traffic by leaps and
bounds and it is almost seven times more than voice traffic. Another trend
which is visible from the available figures is that whereas in voice
traffic growth from 2010-2015 is hardly 1½ times, it is more than seven
times insofar as mobile data traffic is concerned. Between first quarter
of 2014 and first quarter of 2015 itself mobile data traffic registered a
growth of 55%. Future forecast of data traffic is expected @30% per year.
In India itself, monthly mobile data consumption is expected to increase 18
fold by the year 2020 over current levels. In the aforesaid scenario,
Telecommunication has emerged as a key driver of economic and social
development in an increasingly knowledge intensive global scenario, in
which India needs to play a leadership role. National Telecom Policy-2012
was designed to ensure that India plays this role effectively and
transforms the socio-economic scenario through accelerated equitable and
inclusive economic growth by laying special emphasis on providing
affordable and quality telecommunication services in rural and remote
areas. Thrust of this policy is to underscore the imperative that
sustained adoption of technology would offer viable options in overcoming
developmental challenges in education, health, employment generation,
financial inclusion and much else.
The only purpose of highlighting the aforesaid features, particularly in
contrasting the growth between voice-telephony and data traffic, is to show
that main source of revenue for the service providers is from data services
and not voice-telephony. In fact, Mr. Salve even claimed that voice-
telephony for mobile companies, insofar as income generation is concerned,
does not remain that attractive and in near future, there is a possibility
of a situation when voice-telephony services may be provided free of charge
to those using mobile data services by paying for those services. Whether
this happens or not is anybody's guess. However, what cannot be disputed
is that main source of income for mobile companies is data services and not
voice telephone services. This needs to be borne in mind while testing the
argument of the petitioner.
Much is said on the veracity of CAG draft report by respondent no. 1 as
well as respondent no. 2 in their attempt to show that the very basis of
making calculation of alleged undue advantage of Rs. 22,842 crores (in the
draft report) or Rs. 3,367.29 crores (in the final report). However,
having regard to the aforesaid discussion, it may not be necessary to delve
into this aspect in much greater details. It would be suffice to point out
that the basic error committed by CAG was to compare 3G and BWA (4G)
spectrum which mistake was realised in preparing the final report. It
appears that these calculations are made by taking migration fee of Rs.
1,658 crores which were prevalent in the year 2001 and on that basis it
arrived at a figure of Rs. 5025.29 crores which, according to CAG, should
have been fixed. As respondent no. 2 paid a fee of Rs. 1,658.57 crores,
according to the CAG it has resulted in the loss of Rs. 3,367.29 crores.
However, the aforesaid assumption loses sight of the fundamental aspect,
namely, in 2001 spectrum and license were unified which was not the
position in the year 2010 when the two were segregated. It is stated at
the cost of repetition that insofar as auction of BWA spectrum is concerned
the same was auctioned at a price of Rs. 12847.77 crores which is the most
material aspect and has been totally glossed over. We, thus, do not find
any error in the action of the Government in allowing the migration from
UASL to UL by making respondent no. 2 to pay a sum of Rs. 1,658 crores in
this behalf.
With this, we address ourselves to the remainder issue, namely, fixation of
1% AGR as SUC for the use of BWA. As noticed above, the contention of the
petitioner in this behalf is that when the respondent No. 1 allowed second
respondent-Reliance Jio to offer voice telephony (by allowing their
migration to UL regime), first respondent should insist for payment of SUC
for level playing field like those offering voice telephony on BWA
spectrum. So far as various operators who are offering voice services are
paying SUC at 3% to 8% depending on the quantum of the spectrum they hold.
The prevailing slab rates are shown in the rejoinder filed by the
petitioner as under:-
|SUC (as a % of Revenue) |
|Spectrum quantum |Before |DoT Order |
| |01.04.2010 |25.02.2010 |
|2x4.4 |2 |3 |
|2x6.2 |3 |4 |
|2x8 |4 |5 |
|2x10 | |6 |
|2x12.5 |5 |7 |
|2x15 |6 |8 |
The justification/explanation which is given by the Union of India is that
it was the TRAI which submitted its recommendation dated 27.09.2006 on
'Allocation and Pricing of Spectrum for 3G and BWA services' wherein
additional 1% SUC was recommended.
It is also pointed out that TRAI reiterated that SUC be fixed at 1% AGR in
its subsequent recommendations dated 11.07.2008 on 'Allocation and Pricing
for 2.3-2.4 GHz, 2.5-2.69 GHz & 3.3-3.6 GHz bands'.
The learned Solicitor General argued that after receipt of the above TRAI
recommendations, there were a lot of deliberations in the Department,
consultations were held with other Ministries i.e., Department of Economic
Affairs, Department of Industrial Promotion and Policy on the various
issues relating of auction of 3G and BWA Spectrum. The submission is that
all aspects, relevant to the issue were thoroughly examined and deliberated
upon. It was noted that since BWA spectrum will be used for rural
development, the SUC is kept at 1% of AGR. Further, it was also noted that
since spectrum is being auctioned and the price discovery is through a
market mechanism, the bidders will factor in the annual charges in their
bids. Therefore, keeping BWA annual spectrum charge at 1% will have no
adverse revenue implications. The aforesaid is the rationale given for
fixation of 1% of AGR as SUC.
On going through the records, we find that the decision, namely, SUC be
fixed at 1% AGR was based on relevant considerations. Not only TRAI had
recommended the aforesaid charge to be fixed, there was an in depth
examination of this recommendation of the TRAI by Government before
accepting the same. Furthermore, it is also pertinent to note that on the
basis of aforesaid decision, specific provisions were incorporated in the
NIA for SUC for BWA spectrum. Clause 3.5 of the NIA, in this behalf, is as
under:
|“3.5 |Spectrum usage charges |
| |Licensees using BWA Spectrum need to pay 1% of AGR |
| |from services using this spectrum as annual spectrum |
| |charge irrespective of the licence held by them. |
| |Such revenue would be required to be reported |
| |separately.” |
The aforesaid discussion, thus, demonstrates that the main consideration
that prevailed with the Government in keeping the SUC at 1% of AGR was that
BWA spectrum was to be used for rural development. It also needs to be
highlighted that in line with the objective of rural development, more
rural oriented roll out obligations for BWA spectrum in category A, B and C
service areas, were prescribed, as can seen from the following clauses:
|“3.4.2 |Roll-out obligations for BWA Spectrum |
| |Category A, B and C service areas |
| | |
| |The licensee to whom the spectrum is assigned shall |
| |ensure that at least 50% of the rural SDCAs are |
| |covered within five years of the Effective Date using|
| |the BWA Spectrum. Coverage of a rural SDCA would |
| |mean that at least 90% of the area bounded by the |
| |municipal/local body limits should get the required |
| |street level coverage. |
| | |
| |The Effective Date shall be the later of the date |
| |when the right to use awarded spectrum commercially |
| |commences and the date when the UAS licence or the |
| |ISP category 'A' licence, if and as applicable, is |
| |granted to the operator … ...” |
Mr. Ranjit Kumar, learned Solicitor General further demonstrated that the
country has been divided into 3 metro service areas, namely Delhi, Mumbai
and Kolkata and 18 Service areas which have been further designated as
category A, B and C. SDCA stands for Short Distance Charging Area which
comprises typically of one to two tehsils. The country has 2647 SDCAs out
of which 2470 SDCAs has been designated as rural SDCAs. All operators
including M/s Reliance Jio Infocomm Ltd who were awarded BWA Spectrum in
2010 and whose time period of 5 years for roll-out obligation was completed
in 2015, have submitted proof of compliance of roll out obligations by
registering with Telecom Enforcement and Resource Monitoring (TERM) Cell of
Department of Telecom before the due date in all the 22 service areas. The
date of registering the TERM Cell is taken as the date of completion of
roll out obligation on successful testing. In this case, testing is in
progress and is likely to be completed in next few months. It was, thus,
pointed out that less rural coverage is stipulated for 3G spectrum which
factor influenced the policy makers to fix SUC at 1% of AGR.
Apart from the above, there is one more reason not to interfere with the
aforesaid stipulation of SUC. The Government has taken the position that
the conditions in the license granted to respondent No. 2 empower the
licenser/Government to change the terms of license and, therefore, whenever
it is felt necessary and expedient in pubic interest, the percentage of SUC
can be increased. However, the matter, for increase of SUC, was even
examined after the recommendation of TRAI in the year 2013 that SUC be
charged at an average rate instead of slab rate for various spectrum
holdings as given in NIA of 2010 and subsequent NIAs of 2012 and January,
2013. The Telecom Commission considered this aspect and debated three
options which could be considered for holders of BWA auction in the year
2010, namely:
|(i) |SUC be raised to 3%; |
|(ii) |SUC be kept at 1% and reported separately; or |
|(iii) |SUC for standalone BWA be kept at 1%, but if combined|
| |with spectrum bought in fresh auctions then the |
| |charge be the weighted average of acquired spectrum |
| |at 3% and BWA at 1%. |
Before taking a final decision as to which option be resorted to, the
Telecom Commission recommended that a legal opinion be sought from the
learned Attorney General. Matter was referred to the then Attorney General
who opined that SUC charge be retained at 1% for BWA operators and on that
basis, final decision in this behalf was taken. It is further pointed out
that on the issue of revenue segregation, a committee had been formed which
has submitted its report. The report is under consideration and decision
on the report is likely in two months. After considering the report of the
committee on the revenue segregation, appropriate action will be taken
whether separate revenue reporting to continue or not or an increase in SUC
is required for the proper conduct of telegraph as provided in the License
Agreement. The decision on the report is expected in two months. In view
of the aforesaid developments, for the time being, we leave the matter to
the Government to take an appropriate decision in this behalf.
We find no merit in this writ petition which is, accordingly, dismissed.
.............................................CJI.
(T.S. THAKUR)
.............................................J.
(A.K. SIKRI)
.............................................J.
(R. BANUMATHI)
NEW DELHI;
APRIL 08, 2016.
-----------------------
[1] (2012) 10 SCC 1
[2] (2012) 3 SCC 1
[3] (2014) 8 SCC 804
[4] (2000) 10 SCC 664
[5] (2003) 4 SCC 289
[6] (2013) 6 SCC 620
[7] (1978) 3 SCC 459 : AIR 1978 SC 1296 : 1978 Cri LJ 1281
[8] (1992) 2 SCC 343
[9] (See : Administrative Law: Text and Materials (4th Edition) by
Beatson, Matthews, and Elliott)
[10] Ibid