Union Of India & Ors vs Centre For

4. After independence, Government of India took complete control of the telecom sector and brought it under the Post & Telegraph Department. One major step taken for improving telecommunication services in the country was the establishment of a modern telecommunication manufacturing facility at Bangalore under the Public Sector, in the name of "Indian Telephone Industries Ltd." The reforms in the telecommunication sector started in 1984 when the Centre for Development of Telematics (C-DoT) was set up for developing indigenous technologies and permissions were given to the private sector to 5 manufacture subscriber-equipment. In 1986, Mahanagar Telephone Nigam Ltd., (MTNL) and Videsh Sanchar Nigam Ltd., (VSNL) were set up.

6. National Telecom Policy 1994 (NTP 1994) was announced on 13.5.1994. This was the first major step towards deregulation, liberalization and private sector participation. The objectives of the policy were:

7. In furtherance of NTP 1994, licences were granted to eight Cellular Mobile Telephone Service (CMTS) operators, two in each of the four metropolitan cities of Delhi, Mumbai (Bombay), Kolkata (Calcutta) and 7 Chennai (Madras). In the second phase, in December 1995, after following a competitive bidding process, 14 CMTS licences were awarded in 18 state circles, 6 Basic Telephone Services (BTS) licences were awarded in 6 state circles and paging licences were awarded in 27 cities and 18 state circles. However, this did not yield the intended results apparently because revenue realised by the cellular and basic operators was less than the projections and the operators were unable to arrange finances for their projects. New Telecom Policy 1999

8. On the directions of the Prime Minister, a high level Group on Telecommunications (GoT) was constituted on 20.11.1998 to review the existing telecom policy and suggest further reforms. On the basis of the report of the GoT, a draft New Telecom Policy 1999 (NTP 1999) was formulated. After its approval by the Cabinet, NTP 1999 was announced to be effective from 1.4.1999. NTP 1999 had the following objectives:

10. The policy on spectrum management as enumerated in NTP 1999 was as under:

11. On 11.4.1989, the Council of Ministers passed a resolution and decided to establish the Telecom Commission. The relevant portions of that resolution are extracted below:

14. After its establishment, TRAI made various recommendations either suo motu or on the request of the licensor, i.e., the Central Government or the 18 Telegraph Authority. On a reference made by the Ministry of Communications and Information Technology on four issues including the issues of appropriate level of entry fee, basis of selection of new operators and entry of 4th cellular operator, TRAI made its recommendations, which were communicated to Secretary, DoT vide D.O. No. 250-14/2000-Fin (DF) (Vol. II) dated 23.6.2000. Paragraphs 4.1 to 4.3, 4.5 to 4.6 and 4.11 to 4.15 of that letter are extracted below:

30. It is borne out from the record that Vodafone Essar Spacetel Ltd. (respondent No.12) had made an application for UAS Licence in 2004 and 3 others, namely, Idea Cellular Ltd. (respondent No.8), Tata Teleservices Ltd. (respondent No.9) and M/s. Aircel Ltd. (respondent No.11) had made similar applications in 2006. However, the same were not disposed of by the DoT and they were included in the figure of 167. Between 24.9.2007 and 1.10.2007, over 300 applications were received for grant of UAS Licences. Member (Technology), Telecom Commission and Ex-officio Secretary to Government of India sent a letter dated 26.10.2007 to Secretary, Department of Legal Affairs, Ministry of Law and Justice seeking the opinion of the Attorney General of India/Solicitor General of India on the issue of the mechanism to deal with what he termed as an unprecedented situation created due to receipt of large number of applications for grant of UAS Licence. The statement of case 41 accompanying the letter of Member (Technology) contained as many as 14 paragraphs. Paragraph 11 outlined the following four alternatives:

However, those who fulfil the conditions of LoI within stipulated time, their seniority of license/spectrum will be on the basis of their application date. The compliance of eligibility conditions as on the date of issue of LoI may be accepted. No relaxation of this time limit will be given and LoI shall stand terminated after the stipulated time period (however, the applicant may have the right to apply for new UAS Licence again as and when the window for submission of new UAS Licence is opened again). Subsequent applications may be considered for issue of LoI if the spectrum is available. 42 (II) LoIs to all those who applied by 25.9.2007 (date on which the cut-off date for receipt of applications were made public through press) may be issued in each service area as it is expected that only serious players will deposit the entry fee and seniority for license/spectrum be based on (i) the date of application or (ii) the date/time of fulfilment of all LoI conditions. (III) DoT may issue LoIs to all eligible applications simultaneously received up to cut-off date. Since LoIs will clearly stipulate that spectrum allocation is subject to availability and is not guaranteed, the LoI holders are supposed to pay the entry fee if their business case permits them top wait for spectrum allocation subject to availability an initial roll out using wire line technology. (IV) Any other better approach which may be legally tenable and sustainable for issue of new licences.

(underlining is ours)

(underlining is ours)

47. The Union of India challenged the judgment of the Division Bench in SLP(C) No.33406/2009. During the pendency of the special leave petition, some compromise appears to have been reached between the writ petitioner and the authorities and, therefore, an additional affidavit was filed along with agreed minutes of order before this Court on 12.3.2010. In view of this development, the Court disposed of the appeal arising out of the special leave petition but specifically approved the findings recorded by the High Court with regard to the cut-off date by making the following observations:

ARGUMENTS

There is no provision for issue of advertisement notifying obligations for grant of licence and allocation of spectrum and any person who makes an application becomes entitled to get licence and spectrum.

62. We shall now consider the questions enumerated in the opening paragraph of the judgment.

63. Question No.1:

73. Question No.2:

76. Question Nos.3 and 4:

81. In the result, the writ petitions are allowed in the following terms:

loaded their stakes for many thousand crores in the name of fresh infusion of equity or transfer of equity shall pay cost of Rs.5 crores each. Respondent Nos. 4, 6, 7 and 10 shall pay cost of Rs.50 lakhs each because they too had been benefited by the wholly arbitrary and unconstitutional exercise undertaken by the DoT for grant of UAS Licences and allocation of spectrum in 2G band. We have not imposed cost on the respondents who had submitted their applications in 2004 and 2006 and whose applications were kept pending till 2007.

(vi) Within four months, 50% of the cost shall be deposited with the Supreme Court Legal Services Committee for being used for providing legal aid to poor 94 and indigent litigants. The remaining 50% cost shall be deposited in the funds created for Resettlement and Welfare Schemes of the Ministry of Defence.

(vii) However, it is made clear that the observations made in this judgment shall not, in any manner, affect the pending investigation by the CBI, Directorate of Enforcement and others agencies or cause prejudice to those who are facing prosecution in the cases registered by the CBI or who may face prosecution on the basis of chargesheet(s) which may be filed by the CBI in future and the Special Judge, CBI shall decide the matter uninfluenced by this judgment. We also make it clear that this judgment shall not prejudice any person in the action which may be taken by other investigating agencies under Income Tax Act, 1961, Prevention of Money Laundering Act, 2002 and other similar statutes.

February 02, 2012.

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