# BHARTI AIRTEL LTD v. UNION OF INDIA

- **Citation:** [2015] 5 S.C.R. 867
- **Court:** Supreme Court of India
- **Decided:** 2015-05-14
- **Case number:** Civil Appeal No.2803of2014
- **Bench:** J. Chelameswar, R.K. Agrawal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bharti-airtel-ltd-v-union-of-india-30860
- **Pages:** 51

## Headnote

A
B
Telecom Regulatory Authority of India Act, 1997- s. C
18 -
Telegraph Act, 1885 -
s. 4, proviso -
Wireless
Telegraphy Act, 1933 - Extension of licence - In 2G case,
grant of licence and allotment of spectrum by Union of India
pursuant to two press release, set aside - Pursuant thereto,
Union of India taking steps to conduct ari auction pertaining D
to the certain operators whose licenses were coming to an
end in 2014 - Stipulation in licences that validity period is of
20 years and Licensor may extend the period for another 10
years subject to certain conditions specified therein -
E
Licensees sought extension/renewal of their licence -
Government of India as also TDSAT rejected the same -
Held: Licensees have no automatic right of renewal/extension
on the expiry of the original tenure of the license - Extension
is at the sole discretion of licensor subject to the conditions F
stated - Licensor's obligations are not simply confined to
the contract/license. They also flow from the Constitution and
the laws of the land- Mandate and wisdom of the executive"
in the matter of choosing the most suitable method of
distribution of natural resources is to be respected - This is G
clearly a matter of an economic policy entailing an intricate
economic choice and the Court lacks necessary expertise
to make such choice - Thus, auction is the only "permissible
and intra vires method for disposal - Impugned decision of
867
H
868
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A the Government, which resulted in huge inflow of revenue in
the auctions conducted during the pendency of this litigation,
cannot be said to be a totally irrational or irrelevant
consideration in the context of the spectrum management,
more particularly, 2G case - Licensees are not compelled to
B pay any specific tariffs fixed by the licensor, for availing the
right to use the spectrum - If the price for securing allocation
of spectrum is likely to go up because of the procedure of
auctioning to have access to spectrum, it goes up because
of the market forces - There are people who are willing to
C acquire such a right paying a higher price on the assessment
that they would be able to carry on the business profitably
even after paying higher amounts for acquisition of spectrum
- Licensees are corporate houses with enormous economic
0 power, which enables them to secure adequate expert advice
in the matter of financial planning - It cannot be believed
that they would make any investment without making a
reasonable assessment of the possible return on such
investment - There is no compulsion by the State in this
E regard.
Dismissing the appeals and writ petitions, the
Court
HELD: 1.1 A license granted under Section 4(1)
F of the Telegraph Act such as the one granted to each of
the LICENSEES is a contract between the LICENSOR
and the LICENSEE. From the language of the relevant
clauses of the licences, it is clear that the LICENSEES
have no automatic right of renewal/extension on the
G expiry of the original tenure of the license. The contract
only provided for extension of the period of license at
the sole discretion of the LICENSOR subject to the
condition that the LICENSEE makes an application
H seeking an extension during the 19th year of the
BHARTI AIRTEL LTD. v. UNION OF INDIA
869
currency of the licence. It appears that all of the A
LICENSEES did make such an application. [Para 37, 39]
[893-H; 894-A, B-D]
1.2 Under the terms of the license, the LICENSOR
is required to extend the license only on "mutually agreed B
terms and conditions", if such an extension is sought in
the 19th year of the currency of the licence. Where the
LICENSEE does not make an application in the 19th year
but makes it just a few days before the expiry of the 20th
year, the LICENSEE still would not have a right of C
consideration because such a claim is plainly
unsupported by the text of the contract and the failure
to seek extension in the 19th year, makes the
continuance of the service to the publ

## Text

_Characters 0–39,794 of 97,634. This is a partial read: ask again with offset=39794 for what follows._

[2015] 5 S.C.R. 867
BHARTI AIRTEL LTD.
v.
UNION OF INDIA
(Civil Appeal No.2803of2014)
MAY 14, 2015
[J. CHELAMESWAR AND R.K. AGRAWAL, JJ.]
A
B
Telecom Regulatory Authority of India Act, 1997- s. C
18 -
Telegraph Act, 1885 -
s. 4, proviso -
Wireless
Telegraphy Act, 1933 - Extension of licence - In 2G case,
grant of licence and allotment of spectrum by Union of India
pursuant to two press release, set aside - Pursuant thereto,
Union of India taking steps to conduct ari auction pertaining D
to the certain operators whose licenses were coming to an
end in 2014 - Stipulation in licences that validity period is of
20 years and Licensor may extend the period for another 10
years subject to certain conditions specified therein -
E
Licensees sought extension/renewal of their licence -
Government of India as also TDSAT rejected the same -
Held: Licensees have no automatic right of renewal/extension
on the expiry of the original tenure of the license - Extension
is at the sole discretion of licensor subject to the conditions F
stated - Licensor's obligations are not simply confined to
the contract/license. They also flow from the Constitution and
the laws of the land- Mandate and wisdom of the executive"
in the matter of choosing the most suitable method of
distribution of natural resources is to be respected - This is G
clearly a matter of an economic policy entailing an intricate
economic choice and the Court lacks necessary expertise
to make such choice - Thus, auction is the only "permissible
and intra vires method for disposal - Impugned decision of
867
H
868
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A the Government, which resulted in huge inflow of revenue in
the auctions conducted during the pendency of this litigation,
cannot be said to be a totally irrational or irrelevant
consideration in the context of the spectrum management,
more particularly, 2G case - Licensees are not compelled to
B pay any specific tariffs fixed by the licensor, for availing the
right to use the spectrum - If the price for securing allocation
of spectrum is likely to go up because of the procedure of
auctioning to have access to spectrum, it goes up because
of the market forces - There are people who are willing to
C acquire such a right paying a higher price on the assessment
that they would be able to carry on the business profitably
even after paying higher amounts for acquisition of spectrum
- Licensees are corporate houses with enormous economic
0 power, which enables them to secure adequate expert advice
in the matter of financial planning - It cannot be believed
that they would make any investment without making a
reasonable assessment of the possible return on such
investment - There is no compulsion by the State in this
E regard.
Dismissing the appeals and writ petitions, the
Court
HELD: 1.1 A license granted under Section 4(1)
F of the Telegraph Act such as the one granted to each of
the LICENSEES is a contract between the LICENSOR
and the LICENSEE. From the language of the relevant
clauses of the licences, it is clear that the LICENSEES
have no automatic right of renewal/extension on the
G expiry of the original tenure of the license. The contract
only provided for extension of the period of license at
the sole discretion of the LICENSOR subject to the
condition that the LICENSEE makes an application
H seeking an extension during the 19th year of the
BHARTI AIRTEL LTD. v. UNION OF INDIA
869
currency of the licence. It appears that all of the A
LICENSEES did make such an application. [Para 37, 39]
[893-H; 894-A, B-D]
1.2 Under the terms of the license, the LICENSOR
is required to extend the license only on "mutually agreed B
terms and conditions", if such an extension is sought in
the 19th year of the currency of the licence. Where the
LICENSEE does not make an application in the 19th year
but makes it just a few days before the expiry of the 20th
year, the LICENSEE still would not have a right of C
consideration because such a claim is plainly
unsupported by the text of the contract and the failure
to seek extension in the 19th year, makes the
continuance of the service to the public uncertain. The
Government of India cannot afford to remain waiting D
without making alternative arrangements, because the
disruption in the communication in the modern world
may lead to many undesirable consequences apart from
causing inconvenience to the public. The alternative
pos~ibility of the LICENSEE not making an application E
for extension at all because he is not interested in the
extension, the LICENSOR cannot insist that the
LICENSEE should continue to offer the service either
on the same economic considerations or otherwise. The F
language of the contract-"mutually agreed terms"-clearly
indicates so. Under the contract neither the LICENSOR
nor the LICENSEE has a right to insist that other party
should continue with the contract even if such other
party is not willing to continue except on such terms and G
conditions on which the other party may desire to
continue. Such terms and conditions obviously include
terms and conditions regarding the economic
stipulations subject to which either of the parties is
willing to be in the contract. However, the LICENSOR H
being the Union of India, its discretion to stipulate terms
870
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A to act whimsically. The authority of the Union is fettered
by two constitutional limitations; firstly, that any decision
of the State to grant access to natural resources, which
belong to the people, must ensure that the people are
adequately compensated and, secondly, the process by
B which such access is granted must be just, non-arbitrary
and transparent, vis-a-vis private parties seeking such
access. [Para 41, 42, 44) [894-F-H; 895-A-G; 896-E-F]
1.3 By a statutory declaration made under Section
C 4 and its proviso, it can be seen that no person other
than the Government of India has any right to establish,
maintain and work telephones. It is the exclusive
privilege of the Government oi indla, which could be
permitted to be exercised by others by a grant from the
D Government of India. Such licences are in the nature of
largesse from the State. No doubt, the authority of the
State to distribute such largess is always subject to the
condition that the State must comply with the conditions
of Article 14 of the Constitution i.e. the distribution must
E be on the basis of some rational policy. Even the
language of the proviso to Section 4, which stipulates
that the grant of license should be "on such conditions
and in consideration of such payments as it thinks fit",
F must necessarily be understood that the conditions must
be rational and the payments forming the consideration
for the grant of license must be non-discriminatory. The
conditions contained in the licenses stipulate that the
term of the license could be extended on mutually agreed
G terms, if the Government of India deems it expedient. The
obligations of the Government of India flowing from the
Constitution as well as a statute necessarily require the
Government of India to grant licences only in public
interest and for public good. [Paras 45, 46] [897-A-F]
H 1.4 The decision of the LICENSOR to conduct an auction
BHARTI AIRTEL LTD. v. UNION OF INDIA
871
for granting access to spectrum, obviously, complies A
with the second of the requirements specified by this
Court in 2G Case. The adequacy of compensation which
the Government of India seeks to derive by holding an
auction for allowing access to spectrum is just and fair
in the circumstances. [Para 53] [899-8-C]
B
1.5 The LICENSEES would necessarily have to
pass on their burden to the ultimate consumers. That
need not necessarily mean that there should be an
enhancement in the tariffs. There is always a possibility C
of maintaining the tariffs at a lower level if the consumers
base is sufficiently large, i.e. more the consumers base,
more the turnover. Therefore, the possibility of avoidance
of the need to increase the tariffs, all depends upon the
facts and figures. Adjudicating the issue without concrete D
facts and figures in this regard only on some
hypothetical basis is neither permissible nor justified.
[Para 55] [900-A-C]
.
1.6 It was submitted that the question of extension E
of license must be decided by the Government on the ·
basis of objective and rational criteria by taking into
account relevant materials, cannot be accepted. The
submission must carry a great weight if the LICENSOR'S
(Government of India) obligations are regulated purely F
by the terms of the contract. But LICENSOR'S
obligations are not simply confined to the contract/
license. They also flow from the Constitution and the laws
of the land. Obviously, the obligations flowing from the
Constitution stand on a higher footing and it· is the G
Government of India's duty to satisfy the obligations
flowing from the Constitution and the laws of the land in
preference to obligations flowing from a contract It is a
well settled principle of law that where there is a conflict H
between obligations flowing from a contract and those
872
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A flowing from the law, the obligations flowing from the
contract must necessarily yield to obligations flowing
from the Constitution and laws. [Para 57,58) [901"8, DE; 902-A-8]
B
1.7 The submission of the licensees that they have
made in the for the purpose of providing services to its
customers , such infrastructure is created by borrowing
from various banks and financial institutions and if
licences of the licencees is not extended, it would result
C in huge wastage of the national financial and material
resources, is rejected on the ground that it is too vague
and without any basis in the pleadings. [Para 58) [8918-C; 902-8-C)
o
1.8 In view of the statement in the policy
announced on 15.02.2012, the LICENSEES submitted
that the only clear decisions taken are that (i) in future
only unified licences will be granted and (ii) the allocation
of spectrum will be delinked from the licence. It is clear
E that no final policy decision was taken by the
Government regarding the method and manner of
allocation of spectrum even with respect to licences to
be granted in future. Insofar as the existing licences are
concerned, the policy of the Government is that they are
F required to extended for another 10 years as per the
provisions of the "extant licensing regime with suitable
terms and conditions" etc. Therefore, the decision of the
Government of India to auction the right of spectrum in
the· cases of those areas where the LICENSEES held
G licences so far is not only inconsistent with the terms
and conditions of the policy announced on 15.02.2012
as the impugned decision is not only in consistent with
the "extant licensing regime" but also a decision is taken
H without consulting TRAI - a requirement which is
mandatory u/s. 11(1)(a)(ii). The TRAI Act mandates that
BHARTI AIRTEL LTD. v. UNION OF INDIA
873
the
Government of India "shall seek the A
recommendations of the Authority" while stipulating the
"terms and conditions to a service provider" and TRAI
failed to discharge its functions stipulated under Section
11(1)(b)(i) which calls upon TRAI to "ensure compliance
of terms and conditions of licence". [Para 69] [906-C-G; B
907-A]
1.9 The LICENSEES submitted that the impugned
decision of the Government of India to allocate spectrum
by conducting an auction is contrary to the C
recommendations of the TRAI dated 15.10.2014 and also
contrary to the policy statement of the Minister dated
15.02.2012. The tenor of the policy is clear that the
delinking of spectrum from licence would only be with
reference to future and the extension of the existing D
licence is required to be on the basis of the "extant
licensing regime". In other words, the policy is only
prospective and applying the same to existing
LICENSEES would not only be contrary to the tenor of
the policy statement but also make it retrospective in E
operation. Further the impugned action cannot be faulted
because the policy statement insofar as it seeks to apply
only for the allocation of spectrum in future would be
contrary to the decision of this Court in 2G case and void F
to that extent. [Para 70, 72] [907-B; 908-A-B, G]
1.10 Even assuming for the sake of arguments that
the recommendations of TRAI are final, the G~vernment
of India is not bound by the same in view of the first
proviso to Section 11(1) of TRAI Act. TJie obligation of G
the Government of India arising under the second
proviso thereof to seek opinion of TRAI is only to ensure
that there is a rational process of decision-making where
the factors relevant are examined by an expert body H
before the Government takes a final decision on any one
874
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A of the matters enumerated under Section 11(1)(a). As
pointed out by Subodh Kumar Committee, the
Government is required to address the multiple goals
. for spectrum management such as efficient utilisation,
optimal revenue generation, sufficient competition,
B obviously to avoid monopoly in the telecom market etc.
The Subodh Kumar Committee rightly observed that
these goals are simultaneously "synergistic as well as
conflicting". Therefore, the Parliament stipulated that
such issues are initially examined by an expert body
C leaving it open to the Government to take a final decision
as to which one of these various 'synergistic as well as
conflicting' factors must outweigh by the other factors.
Apart from that, from the language of the 2nd proviso
0 the obligation to consult TRAI arises only in the case of
"new licence" but not the renewal/extension of an
existing licence. [Para 76] [912-B-F]
1.11 The impugned decision of the Government,
which in fact resulted in huge inflow of revenue in the
E auctions conducted during the pendency of this
litigation, cannot be said to be a totally irrational or
irrelevant consideration in the context of the spectrum
management, more particularly, in the light of decision
F of this Court in 2G case. [Para 77] [912-G]
1.12 The LICENSEES are not compelled to pay any
specific tariffs fixed by the LICENSOR (Union of India),
for availing the right to use the spectrum. If the price for
securing allocation of spectrum is likely to go up
G because of the procedure of auctioning to have access
to spectrum, it goes up because of the market forces.
Because there are people who are willing to acquire such
a right paying a higher price on the assessment that they
H would be able to carry on the business profitably even
BHARTI AIRTEL LTD. v. UNION OF INDIA
875
after paying higher amounts for acquisition of spectrum. A
The LICENSEES are corporate houses with enormous
economic power, which enables them to secure
adequate expert advice in the matter of financial
planning. It cannot be believed thatthey would make any
investment without making a reasonable assessment of B
the possible return on such investment. There is no
compulsion by the State in this regard. [Para 82) [915-EG]
1.13 In 2G case, this Court observed that this C
Court "respects the mandate and wisdom of the
executive" in the matter of choosing the most suitable
method of distribution of natural resources. This Court
noted that this is clearly a matter of an economic policy
entailing an intricate economic choice and the Court D
lacks necessary expertise to make such choice. In the
light of the observation that at least in the matter of
disposal of spectrum, auction is the only "permissible
and intra vi res method for disposal". Therefore, the
submission of the LICENSEES that auction is not the E
only method of disposal of natural resources is rejected.
[Para 84) [917-E-F]
Centre for Public Interest Litigation & Others v. Union
of India & Others 2012 (3) SCR 147 : (2012) 3 SCC 1;
Natural Resources Allocation, In Re. Special
Reference No. 1 of 2012 2012 (9) SCR 311 : (2012) 10
SCC 1; Union of India & Another v. Association of
Unified Telecom Service Providers of India & Others
2011 (14) SCR 657 : (2011) 10 SCC 543; State of
Punjab & Another v. Devans Modem Breweries Ltd. &
Another 2003 (5) Suppl. SCR 930 : (2004) 11 SCC
26; Har Shankar & Others v. The Dy. Excise and
Taxation Commissioner & Others 1975 (3) SCR 254:
F
G
H
876
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A
(1975) 1 SCC 737; Panna Lal & Others v. State of
Rajasthan & Others 1976 (1) SCR 219: (1975) 2 SCC
633; Hotel Sea Gull v. State of West Bengal & Others
2002 (2) scR 576 : (2002) 4 sec 1
B
Kera/a State Electricity Board v. Mis. S.N. Govinda
Prabhu and Bros. & Others 1986 (3) SCR 628 : (1986)
4 sec 198- held inaaplicable.
c
D
E
F
G
H
Case Law Reference
2012 (3) SCR 147 :
Referred to
Para 2
2012 (9) SCR 311
Referred to
Para 30
(2011) 10 sec 543
Referred to
Para 36
2003 (5) Suppl. SCR 930
Referred to
Para 36
1975 (3) SCR 254
Referred to
Para 36
1976 (1) SCR 219
Referred to
Para 36
2002 (2) SCR 576
Referred to
Para 57
1986 (3) SCR 628
Held inapplicable. Para 81,82
CIVILAPPELLATE JURISDICTION: Civil Appeal No.
2803of2014
From the Judgment and Order dated 31.01.2014 of the.
Telecom Disputes SettlementAppellate Tribunal in Petition No.
458of2013.
WITH
Civil Appeal Nos. 1969, 2072, 5376, 9116 of2014.
Writ Petition (C) Nos. 1056, 971 of2014.
BHARTI AIRTEL LTD. v. UNION OF INDIA
877
~
A
Writ Petition (C) No. 180 of2015.
K. K. Venugopal, Gopal Jain, Tarun Gulati, Manjul
Bajpai, Sparsh Bhargava, Kishore Kunal, Anupam Mishra, B
Shashi Mathews, Neil Hildreth,AnkurTalwar, Shashwat Bajpai,
R. Chadrachud, Kartikey Boddh, Percival Billimoria, Atul N.,
Vishur Bhatia, Stephanie Sonawane, N. Ganpathy, Yoginder
Handoo, Lakshmesh Karnath, Mahesh Agarwal, Rishi
· Agarwala, E. C.Agarwala, Shelly Bhasin, ParasAnand,Ayushi c
Chad ha for the Appellant.
Ranjit Kumar, SG, Guru Krishna Kumar, Jaideep Gupta,
Mukul Gupta, Shailender Saini, Shankar Divate, Ajay Sharma,
Binu Tamta; Dhruv Tamta, Ritin Rai, D. S. Mahra, Moh it Paul, 0
Amit Bansal for the Respondent.
The Judgment of the Court was delivered by
CHELAMESWAR, J. 1.
These five civil appeals
under Section 18 of the Telecom Regulatory Authority of India E
Act, 1997 (hereinafter referred to as the ''TRAI Act") and three
writ petitions raise common questions. Each of the appellants.
or the petitioners, as the case may be, in these matters
(hereinafter collectively referred to as 'LICENSEES') is a
licensee holding a licence granted under Section 4 of the Indian F
Telegraph Act, 1885 for providing TELEGRAPH services in
the various earmarked service areas.
2. It appears from the judgment of this Court in Centre
for Public Interest Litigation & Others v. Union of India & G
Others, (2012) 3 SCC 1, hereinafter referred to as 2G case,
that the first telegraph link in India was experimented in 1839
between Calcutta and Diamond Harbor separated by a
distance of21 miles. By an act of the British Parliament, known
as the Indian Telegraph Act, 1885, the privilege of"establishing, H
878
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A maintaining and working of telegraphs" within the territory of
British India was exclusively conferred under Section 4 upon
the Central Government - an expression which bore different
meanings at different points of time in this country, the details
of which may not be necessary for the purpose of this case.
B However, proviso to the said section enabled the Central
Government to licence any person to exercise the privilege
which is otherwise exclusive to the Central Government.
3. The advancement of technology made wireless
C communication1 possible which led to the enactment of the
Indian Wireless Telegraphy Act, 1933.
4. On 28th January, 1882, Major E. Baring, Member of
the Governor General's Council declared open three
o telephone2 exchanges in Calcutta, Bombay and Madras,
marking the beginning of telephone communications in India.
Over the next 133 years, there has been a mind boggling
advancement in the telecommunication technology. Strangely,
there is no enactment in this country dealing with the
E establishment and working of telephones. The 160 year old
telegram system in this country was officially closed on 14th
July, 2013. Ironically, the Indian Telegraph Act, 1885 and the
Indian Wireless Telegraphy Act, 1933 still continue on the
F
1· Section 2.(1)
'wireless communication
• means any transmission, omission or reception of signs, signals, writing, images and
sounds, or intelligence of any nature by means of electricity, magnetism, or Radio
waves or Hertzian waves, without the use of wires or other continuous electrical
conductors between the transmitting and the receiving apparatus;
G
2 Alexander Graham Bell is commonly credited with the invention of telephone. He
obtain_ed a patent in 1876 for an apparatus for transmitting vocal or other sounds
electrically. There is some controversy as to who was the real inventor of telephone.
There is a very strong claim by an Italian scientist called Antonio Meucci. A resolution
was passed by the United States House of Representatives in 2002 recognising that
Meucci did pioneering work on the development of telephone and "if Meucci had been
H
able to pay$ 10 fee to maintain a caveat after 1874, no patent could have been issued
to Bell".
BHARTI AIRTEL LTD. v. UNION OF INDIA .
879
[CHELAMESWAR, J.]
statute book. By virtue of the various amendments made from A
time to time, these two enactments still continue to govern the
entire activity of establishment, maintenance and working of
telephones and various other telecommunication services.
Electromagnetic Radiation - Waves - Frequencies -
B
Spectrum
5. 'Electromagnetic (EM) radiation is a phenomenon
which occurs in the universe. Sunlight is a familiar example of
EM radiation. So is the light from stars. EM radiation travels c
in waves at different frequencies. Frequency of a wave and
its length are inversely proportional. Generally, EM radiation
is classified on the basis of wavelength into radio wave,
microwave, terahertz (or sub-millimeter) radiation, infrared, the
visible region is perceived as light, ultraviolet, X-rays and o
gamma rays. Waves with frequencies ranging from 300 GHz
to 3 kHz (corresponding wave length ranging from 1 millimeter
to 100 kilometers) are called radio waves. Radio waves have
the longest wave lengths in the electromagnetic spectrum. The
entire range of frequencies in EM radiation is called EM E
spectrum.
"EM radiation interacts with matter in different ways across
the spectrum. These types of interaction are so different
that historically different names have been applied to
F
different parts of the spectrum, as though these were
different types of radiation.
Thus, although these
"different kinds" of EM radiation form a quantitatively
continuous spectrum of frequencies and wavelengths, the
spectrum remains divided for practical reasons related
G
to these qualitative interaction differences."
6. Any EM radiation (including radio waves) travels with
the speed of light in vacuum i.e. 299,792,458 meters per
second. The distance is called the wavelength of a Hertz radio
H
880
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A signal (HZ). Megahertz (MHz) radio signal has a wavelength
of 984 feet. Wave length of radio waves is measured in units
called Hertz -a name given to the unit after Heinrich Hertz a
. German scientist who in 1887 demonstrated the reality of radio
waves the existence of which was theoretically predicted
B earlier in 1867 by James Clerk Maxwell (a Scottish
mathematical physicist).
7. Radio waves can be generated artificially and used
forthe transmission of sound or for passing information. Radio
C frequencies are divided into groups called bands which have
similar characteristics. Artificially generated radio waves are
used for fixed and mobile radio communication broadcasting,
radar and other navigation systems, communication satellites,
D
computer networks etc.
8. To prevent interference between different users, the
artificial generation and use of radio waves is strictly regulated
by law, coordinated by an international body called the
International Telecommunications Union (ITU). The radio
E spectrum is divided into a number of bands on the basis of
frequency and allocated to different users.
9. Till 1991, the activity of establishment, maintenance
and working of telephones was completely controlled by the
F . Government of India. Pursuant to the New Economic Policy
announced by the Government of India on 24. 7 .1991, some of
the services in telecommunication sector were opened up to
the private investment in 1992.
G
H
" .......... the following services: (a) Electronic Mail; (b)
Voice Mail; (c) Data Services; (d)Audio Text Services;
(e) Video Text Services; (f) Video Conferencing; (g) Radio
Paging; and (h) Cellular Mobile Telephone. In respect of
services (a) to (f), the companies registered in India were
permitted to operate under a licence on non-exclusive
BHARTI AIRTEL LTD. v. UNION OF INDIA
881
[CHELAMESWAR, J.]
basis. For services covered by (g) and (h) mentioned ·
A
above, keeping in view the constraints on the number of
companies that could be allowed to operate, a policy of
selection through a system of tendering was followed for
grant of licences."
[Para 5 of 2G case (supra)]
B
10. All services, which were opened up to private
investment referred to above, are EM wave based services.
Therefore, they fall within the definition of the expression c
"TELEGRAPH"3 occurring under Section 3(1)(AA) of the
Telegraph Act. Since the privilege to conduct the activity of
establishment, maintenance and working of a TELEGRAPH
could be permitted by the Government by private parties under
a licence, there arose a need to regulate utilization of D
frequencies by the LICENSEES for carrying on the business
in TELEGRAPHS.
11. Some of the frequencies are exclusively reserved
for th_e defence and security operations of India which, for E
obvious reasons, cannot be made accessible to private
parties.
12. The New Telecom Policy 1994 (NTP 1994) was
announced by the Government of India on 13.5.1994. In
F
furtherance of the said Policy, 22 Cellular Mobile Telephone
Service (CMTS); 6 Basic Telephone Service (BTS) licences
were granted to operators:
3· 3.(1AA) 'telegraph' means any appliance, instrument, material or apparatus used or
capable of use for transmission or reception of signs, signals, writing, images and
sounds or intelligence of any nature by wire, visual or other electro-magnetic emissions,
radio waves or Hertzian waves, galvanic, electric or magnetic means.
Explanation. -'Radio waves' or 'Hertzian waves' means electromagnetic waves of
frequencies lower than 3,000 giga-cycles per second propagated in space without
artificial guide;
-Substituted and re-numbered for Section 3(1) by the Act 15 of 1961
G
H
882
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A
13. In addition, paging licences were awarded in 27
cities and 18 State circles.
14. These licences were bundled with spectrum within
which a licensee was entitled to operate. The licences were
B granted on the basis of selection through a system of tendering.
15. On 2Qlh November 1998, a Group was constituted
by the Government of India to review the then existing telecom
policy and suggest reforms. Based on the report of the said
C Group, the New Telecom Policy 1999 (NTP 1999) was
formulated which became effective from 1.4.1999.
D
E
F
G
H
16. It took note of the fact situation as it existed on that
day in the following words:
'
.f
"The Government invited private sector participation in a
phased manner from the early nineties, initially for value
added services such as Paging Services and Cellular
Mobile Telephone Services (CMTS) and thereafter for
Fixed Telephone Services (FTS). After a competitive
bidding process, licenses were awarded to a CMTS
operators in the four metros, 14 CMTS operators in 18
state circles, 6 BTS operators in 6 state circles and to
paging operators in 27 cities and 18 state circles. VSAT
services were liberalized for providing data services to
closed user groups. Licences were issued to 14
operators in the private sector out of which only nine
licencees are operational. The Government has recently
announced the policy for Internet Service Provision (ISP)
by private operators and has commenced licensing of
the same. The Government has also announced opening
up of Global Mobile Personal Communications by
Satellite (GMPCS) and has issued one provisional
license. Issue of licenses to other prospective GM PCS
BHARTI AIRTEL LTD. v. UNION OF INDIA
883
[CHELAMESWAR, J.]
operators is under consideration."
A
17. The NTP 1999 took note of the existence of various
licences granted under the NTP 1994 and made a policy
statement that the Government intends to resolve the problems
of existing operators in a manner ''which is consistent with their B
contractual obligations and is legally tenable".4
18. Pursuant to the policy statement, the Government
of India devised a scheme for the migration of existing
LICENSEES under the NTP 1994 to the new regime under c
the NTP 1999. The Scheme known as Package for Migration
of Existing LICENSEES of Cellular and Basic Telecom
Services to New Telecom Policy. The terms of the policy insofar
as relevant for our purpose are as follows:-
" ..... the following Package is proposed to migration of
the existing Cellular (Metros and Telecom Circle) and
Basic Telecom Service Operators to NTP-99 regime:~
(i) The cut off date for change over to NTP-99 regime
will be 1.8.1999.
(ii) The licensee will be required to pay one time Entry
fee and License Fee as a percentag9 share of gross
revenue under the license. The Entry Fee chargeable
will be licence fee dues payable by existing LICENCEES
upto 31.07.1999, calculated upto this date duly adjusted
consequent upon notional extension of effective date as
4· Resolution of problems of existing operators
D
E
F
The New Policy Framework which seeks to significantly redefine the G
competitive nature of industry, would be applicable to new LICENCEES.
There are, however, multiple licences that have been issued by the
Government for cellular mobile services, basic services, radio paging services, internet
services etc. It is the Government's intention to satisfactorily resolve the problems
being faced by existing operators in a manner which is consistent with their contractual
obligations and is legally tenable.
H
884
A
B
c
D
E
F
SUPREME COURT REPORTS
[2015] 5 S.C.R.
in para (ix) below, as per the conditions of existing
licence.
(iii) The Licence fee as a percentage of gross revenue
under the licence shall be payable w.e.f. 1.8.99. The
Government will take a final decision about the quantum
of the revenue share to be charged as licence fee after
obtaining recommendations of the Telecom Regulatory
Authority of India (TRAI). In the meanwhile, Government
have decided to fix 15% of the gross revenue of the
Licensee as provisional license fee. The gross revenue
for the purpose would be the total revenue of the Licensee
company excluding the PSTN related call charges paid
to DOT/MTNL and service tax collected by the licensee
on behalf of the Government from their subscribers. On
receipt of TRAl's recommendation and Government's
final decision, final adjustment of provisional dues will
be effected depending upon the percentage of revenue
share and the definition of revenue for this purpose as
may be finally decided.
xxx
xxxx
xxxx
xxxx
(xi) The period of licence shall be 20 years starting from
the effective date of the existing licence agreement."
19. In the year 2003, the Central Government came out
with an Office Memorandum dated 11.11.2003 which
contained guidelines for Unified Access (Basic & Cellular)
Services Licence (UAS Licences). The relevant portion of the
G document reads as follows:-
H
"Government, in the public interest in general and
consumer interest in particular and for the proper conduct
of telegraphs and telecommunications services, has
decided to move towards a Unified Access Services
Licensing regime. As a first step, as recommended by
BHARTI AIRTEL LTD. v. UNION OF INDIA
885
[CHELAMESWAR, J.]
TRAI, Basic and Cellular services shall be unified within
A
the service area. In pursuance of this decision, the
following shall be the broad Guidelines for the Unified
Access Services License.
(i) The existing operators shall have an option to
B
continue under the present licensing regime( with present
terms & conditions) or migrate to new Unified Access
Services Licence (UASL) in the existing service areas,
with the existing allocated/ contracted spectrum.
(ii) The license fee, service area, rollout obligations and
performance bank guarantee under the Unified Access
Services Licence will be the same as for Fourth Cellular
Mobile Service Providers (CMSPs)."
20.
Some of the LICENSEES migrated to the UAS
Licensing regime. Even under the said regime, the validity of
licence was initially for a period of 20 years from the effective
date and extendible by 10 years. 5
c
D
21.
Under the National Telecom Policy-2012 (for short "NTPE
2012"), the Government of India decided to "de-link" licence
and the spectrum for the purpose of grant of fresh licences.
22.
In the meanwhile, the grant of licence and allotment of
spectrum by the Union of India pursuant to the two press F
releases issued on 10.01.2008 became subject matter of
litigation before this Court which eventually culminated into 2G
Case. By the said judgment, this Court set aside all the
licences granted pursuant to the abovementioned press
G
5· 3. Duration of Licence
3.1 This LICENCE shall be valid for a period of 20 years from the effective date unless
revoked earlier for reasons as specified elsewhere in the document.
4. Extension of Licence
4.1 The LICENSOR may extend, if deemed expedient, the period of LICENSE by 10
years at one time, upon request of the LICENSEE, if made during 19'h year of the H
License period on terms mutua lly agreed. The decision of the LICENSOR shall be final
in regard to the grant of extension.
886
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A releases.
23. Union of India announced the NTP-2012 in which it
sought to de-link the licences and allocation of spectrum in
respect offuture licences. Shortly thereafter on 2.2.2012, the
B judgment of this Court in 2G case was pronounced. On
15.02.2012, the Minister of Telecommunication & Information
Technology issued a statement. Insofar as the existing UAS,
CMTS and Basic Services Licences are concerned, it is stated
therein that (i) no more UAS licences linked with spectrum will
C be awarded, (ii) all future licences will be Unified Licences,
(iii) allocation of spectrum will be delinked from the licence,
(iv) The validity of existing UAS (& CMTS and Basic services)
licences may be extended for another 10 years at one time,
as per the provisions of the extant licensing regime with
D suitable Terms & Conditions so as not to imply automatic
continuance of existing licence and related conditions including
quantum and price of any spectrum allocated. The relevant
portion of the full text of the statement would be considered
later in this judgment.
E
24. The licences granted to the various LICENSEES
are due to expire on various dates in 2014-2015.
25. Pursuant to the judgment in 2G case, the Union of
F India took steps to conduct an auction of the 900 MHz band
and 1800 MHz band insofar as they pertain to the certain
operators whose licenses were coming to an end in 2014.
26. Each bf the LICENSEES herein hold licences for
G different service areas. It appears from the impugned order
of the TDSAT dated 31.01.2014, which is a common order in
the four petitions filed by four different LICENSEES (Vodafone
Mobile Service Ltd., Loop Mobile India, Bharti Airtel Ltd. &
Idea Cellular Ltd.). Some of the LICENSEES hold Cellular
H Mobile Telephone Service licence (CMTS licence) while others
BHARTI AIRTEL LTD. v. UNION OF INDIA
887
[CHELAMESWAR, J.]
hold Unified Access Service license (UAS licence). Both the A
classes of licences stipulated that the licences are valid for a
period of 20 years and provide that the Licensor may extend ·
the period of licence for another 10 years subject to certain
conditions specified in the licence. The relevant conditions
contained in both the classes of licences are broadly similar B
with certain minor variations in the language employed.
CMTS
UM
PEJiod cl Licerce: The i:ericx! of The LICENSE shall be valid
license shall be t\\enty years for a period cl 20 years fi'om
from tra effecti1.e dcie of the the effective date uness
existirg
license
ageerralt re1.0ked earlier for reasors as
unless teminated for tra reasors spa:;ified elseWiere in the
stated tha-ein The Licenser m:tf dccurralt.lhe
LICENSffi
extend the i:ericx! of license, if rray
extend,
if doored
rElluesta::t during 19" ~ar fraTI eiq:>edient,
the
i:eriod cl
the effa;tive date fcr a pEJiod of LU CENCE by 10 years a
10 years ci a time 01 m.tually one time, upon reqJest of the
~rea:l tffmS and oorditiais. LICENSEE, if rrade during
The decision of licenser shall be 19h year of the Licenre period
final
in regard to gant of on terms rrutualy ageed.
extensi01.
The
decision
of
the
LICENSOR shall be fina in
regard
to
the
grant ri
extension
c
D
E
Whether the minor variations in the language employed by the F
LICENSOR make any difference in the context of the right of
the LICENSEES to seek an extension of a licence is one of
the aspects which is required to be examined by us.
27. Since both the classes of licences contemplate G
seeking of an extension by the LICENSEE during the 1 gth year
of the currency of the licence, the LICENSEES approached
the Government of India seeking an extension/renewal of their
licences. Alleging that there was no response from the
Government of India, some of the LICENSEES went to the H
888
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A Delhi High Court filing writ petitions seeking appropriate
directions to the Government of India. The said writ petitions
were disposed of by an order dated 22.02.2013 of the Delhi
High Court directing the Government of India to dispose of the
applications of the writ petitioners within a stipulated time
B frame. The High Court also observed that in the event of the
Government of India's decision going adverse to the interest
of the petitioners, the petitioners would be "at liberty to take
recourse to appropriate remedy".
C
28. Pursuant to the directions of the Delhi High Court,
the applications of the petitioners were considered and rejected
by the Government of India on different dates. Aggrieved by
the same, the LICENSEES approached the TDSAT. Their
petitions were dismissed by an order dated 31.01.2014.
D Hence, the appeals under Section 18 of the TRAI Act. Some
of the LICENSEES approached this court directly without
going to the TDSAT by filing writ petitions invoking the
jurisdiction of this court underArticle 32 of the Constitution of
India.
E
29. TDSAT recorded that "the right to extension of the
licence is undeniably a valuable right of the licensee" but held
that such a right is not an absolute right. If the LICENSOR
(Union of India) does not deem it expedient to grant such
F licence, it is under no such obligation to grant such extension.
The expression 'expedient' in the context of the licences only
means "public interest and for public good". Therefore, the
•
tribunal opined that it is open to the Central Government to
refuse the extension if it is of the opinion that the grant of
G extension would not be in public interest or sub-serve public
good. The tribunal also opined that" ..... for the purpose of
grant of extension it is Central Government alone that is the
judge of public interest and public good. The Central
H Government may frame a policy or revise and existing policy
BHARTI AIRTEL LTD. v.