RAM DASS, J. - (1.) This Court passed judgment and order in C.A. Nos.6328-6399 of 2015 - Union of India v. Association of Unified Telecom Service Providers of India and other civil appeals decided by a common judgment and order dated 24.10.2019. The Court decided regarding the definition of the 'AGR' and dues to be paid thereunder.
(2.) The concept of AGR arose in the light of the provisions contained in the policy framed by the Government of India and the provisions of the Indian Telegraph Act. Under section 4(1) of the Telegraph Act, the Central Government has the exclusive privilege of establishing, maintaining, and working telegraphs. Section 4 of the Telegraph Act enables the Central Government to part with the exclusive privilege in favour of any other person by granting a licence on such conditions and considering such terms as it thinks fit. The licence issued under section 4(1) becomes a contract between a licensor and a licensee. This Court considered the provisions of the Telegraph Act in AUSPI (I) matter - (2011) 10 SCC 543 in this very case, thus: "37. A bare perusal of sub-section (1) of Section 4 of the Telegraph Act shows that the Central Government has the exclusive privilege of establishing, maintaining and working telegraphs. This would mean that only the Central Government, and no other person, has the right to carry on telecommunication activities, xxx 39. The proviso to sub-section (1) of Section 4 of the Telegraph Act, however, enables the Central Government to part with this exclusive privilege in favour of any other person by granting a licence in his favour on such conditions and in consideration of such payments as it thinks fit. As the Central Government owns the exclusive privilege of carrying on telecommunication activities and as the Central Government alone has the right to part with this privilege in favour of any person by granting a licence in his favour on such conditions and in consideration of such terms as it thinks fit, a licence granted under the proviso to sub-section (1) of Section 4 of the Telegraph Act is in the nature of a contract between the Central Government and the licensee. 40. A Constitution Bench of this Court in State of Punjab vs. Devans Modern Breweries Ltd., (2004) 11 SCC 26, relying on Har Shankar case, (1975) 1 SCC 737 and Panna Lal vs. State of Rajasthan, (1975) 2 SCC 633, has held in para 121 at p. 106 that issuance of liquor licence constitutes a contract between the parties. Thus, once a licence is issued under the proviso to sub-section (1) of Section 4 of the Telegraph Act, the licence becomes a contract between the licensor and the licensee. Consequently, the terms and conditions of the licence including the definition of adjusted gross revenue in the licence agreement are part of a contract between the licensor and the licensee. We have to, however, consider whether the enactment of the TRAI Act in 1997 has in any way affected the exclusive privilege of the Central Government in respect of the telecommunication activities and altered the contractual nature of the licence granted to the licensee under the proviso to sub-section (1) of Section 4 of the Telegraph Act. 41. Section 2(e) of the TRAI Act quoted above defines "licensee" to mean any person licensed under sub-section (1) of Section 4 of the Telegraph Act for providing specified public telecommunication services and Section 2(ea) defines "licensor" to mean the Central Government or the telegraph authority who grants a licence under Section 4 of the Telegraph Act. Sub-section 2(k) defines "telecommunication service" very widely so as to include all kinds of telecommunication activities. These provisions under the TRAI Act do not affect the exclusive privilege of the Central Government to carry on telecommunication activities nor do they alter the contractual nature of the licence granted under the proviso to sub-section (1) of Section 4 of the Telegraph Act." (emphasis supplied)
(3.) During consideration of the matter, concerning the M.A. filed by the Union of India for extension of time to make the payment, it was pointed out that several telecom service providers were under insolvency proceedings under The Insolvency and Bankruptcy Code, 2016 (for short "the Code"). This Court passed an order on 20.7.2020, and the same is extracted hereunder: "We have heard the learned counsel appearing for the parties at length with respect to the prayer made by the Central Government and the time frame for making the payment as per the order passed by this Court. During course of hearing, again an attempt was made to wriggle out of our judgment and orders, which were passed by this Court under the guise of reassessment and recalculation. That is not at all permissible. In view of decision, there is no scope of raising any further dispute with respect to any item or to raise fresh dispute. No dispute can be raised with respect to dues and they have to be paid. New round of litigation is prohibited. In the second inning, we have heard the same after remand of the issues to the TDSAT. Thereafter, there is no question of entertaining any kind of dispute with respect to the payment and dues worked out. No dispute shall be entertained. The calculations which have been given and the amount to be recovered at pages 180-181 of M.A.D. No. 9887 of 2020 (application for modification) in C.A. No. 6328-6399 of 2015 are taken to be as final amount and there can be no dispute raised about it. No recalculation and self-assessment can be undertaken. The calculations are as under:- "AMOUNTS RECOVERABLE FROM MAJOR TSPs AS PER PRILIMINARY ASSESSMENTS JUDGEMENT_5_LAWS(SC)9_2020.html Note: 1. Total Demands are inclusive of Principal, Interest, Penalty and Interest on Penalty. 2. Total Demands have been calculated generally up to FY 2016-17. On these outstanding amounts, Interest/Penalty/Interest on Penalty is calculated up to October, 2019. 3. All dues are subject to further revisions due to departmental assessments, CAG audits, Special Audits, Court Cases etc." However, when we consider the dues of Telecom Service Providers under insolvency, we find that there are several companies which have dues to the extent of Rs. 38,964.27 crores, which have gone under liquidation. Since the dues are huge, we propose to examine the bonafides of the initiation of the proceedings under the IBC. Let all the documents of the companies viz. Aircel Group of Companies, Reliance Communication/Reliance Telecom Limited, Sistema Shy am Teleservices Ltd. and Videocon Telecommunications Ltd. relating to liquidation and orders passed in proceedings be placed on record within 10 days from today. We have closed the matter with respect to the prayer made for making the payment in installments and the offer made by the Government, the time frame thereto and how to secure the amount. The order is reserved on that aspect. However, we will hear the matter separately with respect to the companies under liquidation and test the bonafides of their action and how to ensure that the amount is recovered. Let all the documents be placed on record within 10 days from today and the matter be listed for hearing about these companies on the above aspect on 10.08.2020. Written submissions and the reply, if any, be filed on or before 07.08.2020." This Court wanted to examine the bona fides of the telecom service providers who have resorted to the process of insolvency, hence, invited them to file their response. Before the initiation of insolvency proceedings, most of the telecom service providers who are under the insolvency proceedings had applied to the Department of Telecommunications to grant permission for trading of licence. The Central Government objected on the ground that it would not be possible for it to grant permission. It declined the permission. There were huge arrears concerning the spectrum licence, which were required to be paid, as a pre-condition to such permission. Various sharing arrangements made inter se telecom service providers with respect to the spectrum also came to the fore. ;