Centre For Public Interest Litigation vs U.O.I.& Ors

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:

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.

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.

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.

We find no merit in this writ petition which is, accordingly, dismissed.

.............................................CJI.

APRIL 08, 2016.