Decided on April 08,2016

Union of India And Ors. Respondents


- (1.) 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.
(2.) 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.
(3.) 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.;

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