Case: Union of India &amp; Another Vs. Association of Unified Telecom Service Providers of India &amp; Others

07.07.2006 has been passed and against whom no appeal was filed by the Union of India challenging the order dated 07.07.2006, the order dated 07.07.2006 of the Tribunal could not be re-opened because of the principle of res judicata. In the opening paragraph of the order dated 07.07.2006, the Tribunal has stated: “By this batch of petitions the Association of Unified Telecom Service Providers of India, Cellular Operators Association of India and some individual Telecommunication Service Providers are questioning the validity of the definition of Adjusted Gross Revenue (AGR) in the licenses given to various telecom service providers.” 42. Finally, in the operative part of the order dated 07.07.2006, the Tribunal has directed as follows: “Apart from the principal question whether the State Government can include the gross income of the licensee from non-licensed activity in the AGR; the petitioners have also challenged individually the various components of AGR as enumerated in the licence. In view of the fact we have come to the conclusion that there has not been an effective consultation with the TRAI which is mandatory under the TRAI Act, we think we should not further delve into the exercise of finding out which component of the AGR, as defined by the Government in the conditions of licence, deserves to be retained and which component which the petitioners contend is not derived from the licensed revenue of the licensee should be excluded at this stage. We think it more appropriate that the matter should be remanded to the TRAI which is the 3rd Respondent herein, before whom the Government should produce the material relied by it while rejecting TRAIs recommendation so that TRAI can consider the same and send its conclusions to this Tribunal and thereafter, this Tribunal will have the benefit of a comprehensive recommendation of the TRAI after considering the materials relied upon by the Government. While forming its conclusions the TRAI shall hear the Government as well as the licensees and consider the materials that may be placed before it by either side. In this process it is not necessary for the TRAI to hold fresh consultative proceeding unless it thinks necessary. During this proceeding before the TRAI the petitioners shall place before it their contentions in regard to the various components of AGR which they have challenged before this Tribunal and the TRAI after hearing the Government on this issue also, send its recommendations to this Tribunal preferably within three months of the receipt of this order.Further, while considering the issue now remitted to the TRAI, the TRAI will bear in mind our finding in regard to the inclusion in gross revenue of the licensee revenue derived from non-licensed activities......” 43. Thus, the Tribunal in its order dated 07.07.2006 has not just decided a dispute on the interpretation of Adjusted Gross Revenue in the license, but has decided on the validity of the definition of Adjusted Gross Revenue in the license. As we have already held, the Tribunal had no jurisdiction to decide on the validity of the terms and conditions of the license including the definition of Adjusted Gross Revenue incorporated in the license agreement. Hence, the order dated 07.07.2006 of the Tribunal in so far as it decides that revenue realized by the licensee from activities beyond the license will be excluded from Adjusted Gross Revenue dehors the definition of Adjusted Gross Revenue in the license agreement is without jurisdiction and is a nullity and the principle of res judicata will not apply. In Chandrabhai K. Bhoir and Others vs. Krishna Arjun Bhoir and Others (supra) this Court relying on Chief Justice of A.P. vs. L.V.A. Dixitulu [(1979) 2 SCC 34, Union of India vs. Pramod Gupta [(2005) 12 SCC 1] and National Institute of Technology vs. Niraj Kumar Singh [(2007) 2 SCC 481] has held: “an order passed without jurisdiction would be a nullity. It will be a coram non judice and non est in the eye of the law. Principle of res judicata would not apply to such cases”. 44. We accordingly hold that the order dated 07.07.2006 of the Tribunal was not binding on the Union of India even in those cases in which the Union of India did not file any appeal against the order dated 07.07.2006 before this Court. The last substantial question of law which we have to decide is whether the licensee can challenge the computation of Adjusted Gross Revenue and if so at what stage and on what grounds. Section 14 (a)(i) of the TRAI Act, as we have seen, provides that the Tribunal can adjudicate any dispute between the licensor and the licensee. One such dispute can be that the computation of Adjusted Gross Revenue made by the licensor and the demand raised on the basis of such computation is not in accordance with the license agreement. This dispute however can be raised by the licensee, after the license agreement has been entered into and the appropriate stage when the dispute can be raised is when a particular demand is raised on the licensee by the licensor. When such a dispute is raised against a particular demand, the Tribunal will have to go into the facts and materials on the basis of which the demand is raised and decide whether the demand is in accordance with the license agreement and in particular the definition of Adjusted Gross Revenue in the license agreement and can also interpret the terms and conditions of the license agreement. We, however, find from the order dated 07.07.2006 that instead of challenging any demands made on them, the licensees have questioned the validity of the definition of Adjusted Gross Revenue in the licenses given to them and the Tribunal has finally decided in its order dated 30.08.2007 as to what items of revenue would be part of Adjusted Gross Revenue and what items of revenue would not be part of Adjusted Gross Revenue without going into the facts and materials relating to the demand on a particular licensee.45.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]35. Regarding the recommendations of the TRAI under Section 11(1)(a)(i) of the TRAI Act, we find that the Tribunal in its order dated 07.07.2006 has held that the opinion of the renowned expert in the accountancy that any other definition of Adjusted Gross Revenue would lead to reduction of license fee liability by way of accounting jugglery was not placed before the TRAI and as a result there was no proper and effective consultation with the TRAI and the weightage that was due to the recommendations of the TRAI was not given effect to. In our considered opinion, if the Tribunal found that there was no effective consultation with the TRAI on the opinion of the expert on accountancy, the Tribunal could have at best, if it had the jurisdiction to decide the dispute, directed the TRAI to consider the opinion of the expert on accountancy and send its recommendations to the Central Government and directed the Central Government to consider such fresh recommendations of the TRAI as provided in the provisos to section 11(1) of the TRAI Act. Instead the Tribunal has considered the recommendations of the TRAI and passed the fresh impugned order dated 30.08.2007 contrary to the very provisions of Section 11(1)(a) of the TRAI Act and the provisos thereto. At any rate, as the Central Government has already considered the fresh recommendations of the TRAI and has not accepted the same and is not agreeable to alter the definition of Adjusted Gross Revenue, the decision of the Central Government on the point was final under the first proviso and the fifth proviso to Section 11(1) of the TRAI Act, 1997.36. We may now deal with the authorities relied upon by the Tribunal and learned counsel for the parties. In Cellular Operators Association of India & Ors. v. Union of India & Ors. (supra), the Cellular Operators Association of India approached the Tribunal under Section 14 of the TRAI Act challenging the decisions of the Government permitting the fixed service providers to offer WLL with limited mobility and the recommendations of the TRAI in this regard. The Tribunal dismissed the application and the Cellular Operators filed an appeal under Section 18 of the TRAI Act before this Court. This Court held that WLL with limited mobility as recommended by the TRAI could be permitted if the question of level playing field of the Cellular Operators was duly considered and they were duly compensated but the Tribunal had not considered the relevant materials on this issue and had only arrived at a bald conclusion that the Cellular Operators have already been compensated in various ways. With these findings, this Court set aside the decision of the Tribunal and remitted the matter to the Tribunal for reconsideration with special emphasis on the question of level playing field on the basis of the materials already on record. In this decision, this Court was not called upon to consider whether a licensee having accepted the terms of the license could challenge before the Tribunal the validity of a clause in the terms of license and whether the Tribunal would have jurisdiction to decide such a challenge.37. In Delhi Science Forum and Others v. Union of India (supra) after the National Telecom Policy, 1994 was announced for inducting the private sector into basic telephone services and notice was published inviting tenders from private parties and tenders were submitted for different circles, but before licenses could be granted by the Central Government, writ petitions were filed in different High Courts as well as in this Court and all the writ petitions filed before different High Courts were transferred to this Court and heard together. The Writ Petitioners questioned the validity and propriety of the new telecom policy saying that it shall endanger the national security of the country and shall not serve the economic interest of the nation. This Court while upholding the new Telecom Policy held that the proviso to sub-section (1) of Section 4 of the Telegraph Act enables the Central Government to grant license to private bodies, but such power should be exercised on well-settled principles and norms which can satisfy the test of Article 14 of the Constitution. Thus, this is not a case like the present one, in which the licensees having accepted the terms of the license have challenged the definition of Adjusted Gross Revenue incorporated in the terms of the license.38. In State of U.P. v. Devi Dayal Singh (supra), a truck owner, Devi Dayal Singh, challenged the right of the State Government to recover by way of toll under Section 2 of the Tolls Act, 1851, an amount for the actual construction of the bridge. This Court held that Section 2 of the Tolls Act, 1851 which enables the State Government to levy toll at such rates `as it thinks fit and the only restriction is latent in the worditself. This was therefore not a case of dispute between the Government and the contractor where the contractor had challenged a stipulation of the contract. In the present case, on the other hand, the licensees had accepted the terms of the license and after having taken the benefits of the license is now trying to wriggle out from the terms of the license and in particular the definition of the Adjusted Gross Revenue.39. In Union of India v. Tata Teleservices (Mahrashtra) Ltd. (supra) cited by Mr. Srinivasan, a letter of intent was issued to Tata Teleservices and this was accepted by Tata Teleservices but ultimately the contract did not come into being and the license was not actually granted. The Union of India suffered a considerable loss because Tata Teleservices had walked out of the obligation undertaken by the acceptance of the letter of intent. The Additional Solicitor General appearing for the Union of India submitted that such a dispute would also come within the purview of Section 14 of the TRAI Act, going by the definition of licensee and the meaning given to it in the notice inviting tenders. The Tribunal held that expressionoccurring in Section 14 (a)(i) of the TRAI Act would not exclude a person who had been given a letter of intent and who had accepted the letter of intent but was trying to negotiate some further terms of common interest before a formal contract was entered into and the work was to be started. This was thus a case where this Court treated a person who had accepted the letter of intent of the licensor as a licensee, although a formal contract had not entered into. In this case this Court has not held that a licensee could dispute the validity of a term or condition which was incorporated in the license agreement.40. On the other hand, we find from the long line of decisions in Har Shankar & Ors. vs. The Deputy Excise & Taxation Commissioner & Others (supra), Government of A.P. vs. M/s Anabeshahi Wine & Distilleries Pvt. Ltd (supra), Assistant Excise Commissioner & Anr. vs. Issac Peter & Ors. (supra), State of Orissa & Ors. vs. Narain Prasad & Ors. (supra), State of M.P. & Ors. vs. KCT Drinks Ltd. (supra), State of Punjab & Anr. vs. Devans Modern Breweries Ltd. & Ors. (supra), Shyam Telelink Limited vs. Union of India (supra) and in Bharti Cellular Limited vs. Union of India & Ors. (supra), that this Court has consistently taken a view that once a licensee has accepted the terms and conditions of a license, he cannot question the validity of the terms and conditions of the license before the Court. We, therefore, hold that the TRAI and the Tribunal had no jurisdiction to decide on the validity of the definition of Adjusted Gross Revenue in the license agreement and to exclude certain items of revenue which were included in the definition of Adjusted Gross Revenue in the license agreement between the licensor and the licensee.41. The next substantial question of law which we have to decide is whether as a result of Union of India not filing an appeal against the order dated 07.07.2006 in favour of some of licensees, the order dated 07.07.2006 had not become binding on the Union of India with regard to issues which had been decided by the Tribunal in the said order dated 07.07.2006. According to the learned counsel for the licensees in whose favour order dated 07.07.2006 has been passed and against whom no appeal was filed by the Union of India challenging the order dated 07.07.2006, the order dated 07.07.2006 of the Tribunal could not be re-opened because of the principle of res judicata. In the opening paragraph of the order dated 07.07.2006, the Tribunal has stated:this batch of petitions the Association of Unified Telecom Service Providers of India, Cellular Operators Association of India and some individual Telecommunication Service Providers are questioning the validity of the definition of Adjusted Gross Revenue (AGR) in the licenses given to various telecom servicein the operative part of the order dated 07.07.2006, the Tribunal has directed as follows:from the principal question whether the State Government can include the gross income of the licensee from non-licensed activity in the AGR; the petitioners have also challenged individually the various components of AGR as enumerated in the licence. In view of the fact we have come to the conclusion that there has not been an effective consultation with the TRAI which is mandatory under the TRAI Act, we think we should not further delve into the exercise of finding out which component of the AGR, as defined by the Government in the conditions of licence, deserves to be retained and which component which the petitioners contend is not derived from the licensed revenue of the licensee should be excluded at this stage. We think it more appropriate that the matter should be remanded to the TRAI which is the 3rd Respondent herein, before whom the Government should produce the material relied by it while rejecting TRAIs recommendation so that TRAI can consider the same and send its conclusions to this Tribunal and thereafter, this Tribunal will have the benefit of a comprehensive recommendation of the TRAI after considering the materials relied upon by the Government. While forming its conclusions the TRAI shall hear the Government as well as the licensees and consider the materials that may be placed before it by either side. In this process it is not necessary for the TRAI to hold fresh consultative proceeding unless it thinks necessary. During this proceeding before the TRAI the petitioners shall place before it their contentions in regard to the various components of AGR which they have challenged before this Tribunal and the TRAI after hearing the Government on this issue also, send its recommendations to this Tribunal preferably within three months of the receipt of this order.Further, while considering the issue now remitted to the TRAI, the TRAI will bear in mind our finding in regard to the inclusion in gross revenue of the licensee revenue derived from non-licensedThus, the Tribunal in its order dated 07.07.2006 has not just decided a dispute on the interpretation of Adjusted Gross Revenue in the license, but has decided on the validity of the definition of Adjusted Gross Revenue in the license. As we have already held, the Tribunal had no jurisdiction to decide on the validity of the terms and conditions of the license including the definition of Adjusted Gross Revenue incorporated in the license agreement. Hence, the order dated 07.07.2006 of the Tribunal in so far as it decides that revenue realized by the licensee from activities beyond the license will be excluded from Adjusted Gross Revenue dehors the definition of Adjusted Gross Revenue in the license agreement is without jurisdiction and is a nullity and the principle of res judicata will not apply. In Chandrabhai K. Bhoir and Others vs. Krishna Arjun Bhoir and Others (supra) this Court relying on Chief Justice of A.P. vs. L.V.A. Dixitulu [(1979) 2 SCC 34,  Union of India vs. Pramod Gupta [(2005) 12 SCC 1] and National Institute of Technology vs. Niraj Kumar Singh [(2007) 2 SCC 481] hasorder passed without jurisdiction would be a nullity. It will be a coram non judice and non est in the eye of the law. Principle of res judicata would not apply to suchaccordingly hold that the order dated 07.07.2006 of the Tribunal was not binding on the Union of India even in those cases in which the Union of India did not file any appeal against the order dated 07.07.2006 before this Court.The last substantial question of law which we have to decide is whether the licensee can challenge the computation of Adjusted Gross Revenue and if so at what stage and on what grounds. Section 14 (a)(i) of the TRAI Act, as we have seen, provides that the Tribunal can adjudicate any dispute between the licensor and the licensee. One such dispute can be that the computation of Adjusted Gross Revenue made by the licensor and the demand raised on the basis of such computation is not in accordance with the license agreement. This dispute however can be raised by the licensee, after the license agreement has been entered into and the appropriate stage when the dispute can be raised is when a particular demand is raised on the licensee by the licensor. When such a dispute is raised against a particular demand, the Tribunal will have to go into the facts and materials on the basis of which the demand is raised and decide whether the demand is in accordance with the license agreement and in particular the definition of Adjusted Gross Revenue in the license agreement and can also interpret the terms and conditions of the license agreement. We, however, find from the order dated 07.07.2006 that instead of challenging any demands made on them, the licensees have questioned the validity of the definition of Adjusted Gross Revenue in the licenses given to them and the Tribunal has finally decided in its order dated 30.08.2007 as to what items of revenue would be part of Adjusted Gross Revenue and what items of revenue would not be part of Adjusted Gross Revenue without going into the facts and materials relating to the demand on a particular licensee.