Union Of India & Anr vs Assn.Of Unified Telecom S.P.Of ...

2. The relevant facts very briefly are that with the introduction of the National Telecom Policy, 1994 liberalizing the Telecom Sector, telecom licenses were issued to different service providers. The licenses granted to the service providers stipulated a fixed license fee, which was payable by the service providers every year. During the period 1994 to 1999, the licensees defaulted in payment of license fee and made a representation to the Government of India, Ministry of Telecommunications for relief against the high license fee for the survival of the telecom industry. The Government of India considered the representations and after a number of deliberations with the licensees offered a new package, known as the "National Telecom Policy 3 1999 - Regime" giving an option to the licensees to migrate from fixed license fee to revenue sharing fee.

Accordingly, letters dated 22.07.1999 were sent to different licensees offering them a change over to NTP-99 regime, which inter alia stated:

The Union of India filed its reply before the Tribunal contending that the licensees having unconditionally accepted the migration package and having taken the benefit of the same are bound by the terms and conditions of the license agreement and cannot be permitted to resile from the same. In its order dated 07.07.2006, the Tribunal rejected the contentions of the Union of India and held that under Section 4 of the Telegraph Act, the Central Government can take percentage of the share of gross revenue of a licensee realised from activities of the licensee under the license and therefore revenue received by a licensee from activities beyond licensed activities would be outside the purview of Section 4 of the Telegraph Act. The Tribunal further held that Section 11 (1) (a) of the TRAI Act mandates the Central Government to seek recommendations from the Telecom Regulatory Authority (for short `the TRAI') on the license fee payable by the licensee and as no effective constitution had been made by the TRAI, the matter should be remanded to the TRAI and the TRAI can consider the matter and send its 7 recommendations to the Tribunal. The Tribunal however made it clear that the TRAI will bear in mind the findings of the Tribunal that revenue of the licensee derived from non-license activities will not be included in the Adjusted Gross Revenue for the purpose of determining the license fee payable by the licensee.

(iv) regulate arrangement amongst service providers of sharing their revenue derived from providing telecommunication services;

Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new license to be issued to a service provider and the Authority shall forward its recommendations within a period of sixty days from the date on which that Government sought the recommendations:

The result is that the Tribunal has no jurisdiction to decide upon the validity of the terms and conditions incorporated in the license of a service provider, but it will have jurisdiction to decide "any" dispute between the licensor and the licensee on the interpretation of the terms and conditions of the license.

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.

43. In the result, we allow these appeals and set aside the impugned order dated 30.08.2007 of the Tribunal.

There shall be no order as to costs.

The orders impugned in these appeals are, therefore, set aside and the matters are remitted to the Tribunal to pass fresh orders in accordance with law.

3. The appeals stand disposed of accordingly with no order as to costs.

3. If the demands have been raised, we grant two months' time to the licencees to raise the dispute before the Tribunal against the demands and during this period of two months, the demands will not be enforced.