P.R. Dasgupta, Member - (1.) THIS is a petition (Petition No. 17 of 2002) filed by Sterling Cellular Ltd. and others under Section 14A(1) read with Section 14(a)(i) and other applicable provisions of the Telecom Regulatory Authority of India Act, 1997. The petitioner is challenging the incorrect levy of interest charged by the respondent, i.e., Department of Telecommunications, on a non-existent and a notional amount of licence fee for the period 1.8.1999 to 20.9.1999. Copies of the impugned demand notes dated 10.8.1999 and 6.3.2000 have been annexed with the petition.
(2.) The brief facts of the case are that the petitioners had submitted their bids in response to the notice inviting tender bearing No. 44-24/91-MMC issued on 20.1.1992 for introducing cellular mobile telephone services in selected metres in India. The petitioners were awarded separate licences for establishing, maintaining and operating cellular mobile telephone services in their respective service areas. Under the metro licence agreement, the cellular operators were required to pay a fixed amount of licence fee per annum for the first three years of the licence period, the year being reckoned as 12 months beginning with the date of commissioning of services or completion of 12 months from the date of signing of the licence agreement, whichever is earlier. From the 4th year onward, the metro cellular operators were required to pay the licence fee on per subscriber basis. Keeping in view the objectives of the New Telecom Policy, 1999, which were to ensure equal opportunity and level playing field for all players and to redefine the competitive nature of the industry, the Government offered the existing metro cellular operators to changeover from New Telecom Policy 1994 (NTP-1994) to New Telecom Policy, 1999 (NTP-1999) which imply in terms of Clause 3.1.1 of NTP-1999 that the metro cellular operators would pay one time entry fee and the payment of licence fee would be based on revenue sharing basis. The said offer was contained in a migration package dated 22.07.1999 which was duly accepted by the petitioners. Clause 1(ii) of the said migration package provides, inter alia, that the licensee will be required to pay one time entry fee and a licence fee as a percentage share of gross revenue under the licence. The entry fee chargeable will be the licence fee dues payable by the existing licensee upto 30.7.1999 calculated upto this date. It was further provided in Clause 1(iii) of the migration package that the licence fee as a percentage of gross revenue under the licence shall be payable with effect from 1.8.1999. The implication of the migration package was that no licence fee on per subscriber basis would be payable after 31.7.1999. On 10.8.1999, respondent No. 3, namely, Director (LF), Licensing Finance Cell, Department of Telecommunications, raised demand notes on all the metro cellular operators in terms of the said migration package and asked them to pay the licence fee together with interest thereon as computed by the Government. This demand note stated that at least upto 35% of the total amount of licence fee plus interest should be paid by 15.8.1999 and the balance was required to be paid on or before 31.1.2000 together with interest calculated upto the actual date of payment. The petitioner No. 1 informed the Government vide its letter dated 30 November, 1999, that it had already paid licence fee on revenue share basis for the quarters beginning August, 1999, and November, 1999, amounting to Rs. 13 crores and nothing was outstanding towards quarterly licence fee. Further, the petitioner No. 1 also deposited an amount of Rs. 24,51,73,116 towards the total outstanding dues as on 31 July, 1999. However; Department of Telecommunications [DoT] issued another demand note dated 6.3.2000 to all metro cellular operators demanding additional amount which in case of petitioner No. 1 was Rs. 13,66,57,679. Even though the basis of DoT's computation was not clear to petitioner No. 1 for which DoT was requested to provide details, the petitioner No. 1 paid a sum of Rs. 17,68,12,056 on 15 March, 2000, in order to meet the deadline for the payment. The petitioner No. 1 continued to write to DoT regarding details of the computation of the amounts mentioned in DoT's demand note dated 6 March, 2000. DoT, however, clarified in its letter dated 3.4.2000 that on two occasions in the past details regarding the method of calculation were explained to the two officials of petitioner No. 1. The DoT further asked petitioner No. 1 to get back to them in case it had any specific point of doubt. The case of the petitioner is that the licence fee for the 5th year was payable only upto 31.7.1999 since the cut-off date for entry fee was 31.7.1999 and, after 1.8.1999, the licence fee on a revenue share basis was required to be paid. However, the DoT while calculating interest for the period from 1.8.1999 to 31.1.2000 calculated the same for the whole quarter, i.e., 1.7.1999 to 30.9.1999 instead of calculating for the period, the licence fee was actually due and payable, i.e., 1.7.1999 to 31.7.1999. The petitioner have drawn attention to the order dated 9.4.2002 of this Tribunal in petition No. 10 of 2001 [Cellular Operators Association of India and Ors. v. Department of Telecommunications and Anr. (2002) 2 Comp LJ 338 (TDSAT)] wherein it was held that the consequence of notional extension of effective date in case of circle cellular operators was not only to reduce the amount of licence fee payable but also to reduce the quantum of interest payable on outstanding licence fee for that period. In other words, no interest can be levied on amounts which are not due. The petitioner No. 1 also apprised the DoT vide its letter dated 15 July, 2002, of the position emerging from the above judgment regarding alleged incorrect calculation of interest for the quarter commencing 1.7.1999. The contention of the petitioner has been that since no licence fee on fixed basis is payable from 1.8.1999 to 31.9.1999, no interest for the said period can be charged. DoT was again requested by the petitioner No. 1 to correctly compute the interest payable by them and also provide details of computation. The petitioner No. 1 maintains that an amount of Rs. 1.71 crores has been incorrectly calculated and charged from the petitioner as interest on an imaginary principal amount which principal amount was not payable by them for the period August, 1999, to September, 1999. The petitioner No. 1 requested to DoT to refund the said amount together with interest thereon at SBI prime lending rate + 5% calculated till the date of refund. An other point mentioned by the petitioner No. 1 in the petition relates to Clause IV of the migration package dated 22.7.1999 which provides, inter alia, that the balance dues will have to be paid on or before 31.1.2000 along with interest calculated upto the actual date of payment. In terms of this payment, it has been stated that the DoT was required to intimate on 10.8.1999 itself which could have enabled the cellular operators to make the payment on time to avoid interest liability thereon. The DoT, how ever, raised only part demand on 10.8.1999 and did not raise any other demand until the expiry of the last date of payment, i.e., 31.1.2000. It was only on 6.3.2000 that DoT raised an additional demand of licence fee pertaining to the period prior to 31.7.1999 wherein it also charged interest thereon upto 15.3.2000, i.e., the date stipulated for making the payment. The petitioner also mentions that the other petitioners had also accepted the migration package ; but they have also been charged excess interest. Copies of the impugned demand notes in case of other petitioners have also been attached with the petition. These petitioners also wrote to DoT after this Tribunal's order dated 9.4.2002 [Cellular Operators Association of India and Ors. v. Department of Telecommunications and Anr. (2002) 2 Comp L] 338 (TDSAT)], referred to earlier, asking for refund of the excess amount charged by DoT. According to the petitioner, the details of incorrectly calculated interest in respect of some petitioners when no licence fee on the subscriber base was payable are mentioned as hereunder : xxxxx 2.1 It has also been submitted by the petitioner that Clause 2 of the migration package which prohibits raising of disputes for the period prior to 31.7.1999 is not applicable in the present case as neither the present dispute pertains to the period prior to 31.7.1999 nor was it an existing dispute. Hence, the petitioners have prayed that the demand notes of 10.8.1999 and 6.3.2000 issued to the respective petitioners be modified to the extent it is found to charge higher amount of interest for the period after 31.07.1999 when no licence fee was payable on per subscriber basis. It has also been prayed that the respondents be asked to refund all the excess amount charged to the respective petitioners together with interest thereon at the prevalent SBI prime lending rate + 5% per annum (compounded monthly) till the dale of such refund. The counsel for respondents submitted that in the migration package offered to various licensees vide offer letter dated 27.7.1999 -- no concession has been granted for either on the interest dues or for the liquidated damages. In this connection the counsel referred to Clauses (ii), (iv) and (ix) of the migration package which read as follows: "(ii) The licensee will be required to pay one time entry fee and licence fee as a per centage share of gross revenue under the licence. The entry fee chargeable will be the licence fee dues payable by existing licensees upto 31.7.1999, calculated upto this date duly adjusted consequent upon notional extension of effective date as in para (ix) below, as per the conditions of existing licence. (iv) A total of at least 35% of outstanding dues including interest payable as on 31.7.1999 and LD charges in full will have to be paid on or before 15.8.1999. The amount paid, if any, against the earlier demand sent under letter dated 25.1.1999 for paying 20% or more of the outstanding dues, may be adjusted at licensee's option. The balance dues will have to be paid on or before 31.1.2000 along with interest calculated upto the actual date of payment. (ix) For the purpose of calculation of outstanding licence fee upto 31.7.1999, the effective date of all the licences of cellular telecom circles and basic telephone services will be notionally extended by a period of six months. This does not apply to metro cellular licences (emphasis added). This is with the further condition that where extension of effective date has been given earlier due to whatever circumstances, further extension will be given after deducting the period of extension already given subject to the total extension period not exceeding six months. In cases where extension of period of more than six months has already been given, there will be no further change."
(3.) IT was maintained that this package was accepted unconditionally by all the petitioners. Such being the position, demand notices were issued vide letter dated 10.8.1999 seeking payment of dues calculated on the basis of no remission of interest amount payable. This demand note was raised based on the number of subscribers intimated by the licensees. The licensees were also informed that the licence fee for the 4th and 5th year were provisional and subject to revision after receipt and confirmation of subscribers figures for each completed months of 4th and 5th year of licence upto 31.7.1999. Since on verification, vast difference was found in the figures given by the petitioner as regards the number of subscribers, the respondent subsequently raised a supplementary demand on 6.3.2000. The petitioners thereafter paid the amount without any demur or protest.;