# CENTRE FOR PUBLIC INTEREST LITIGATION ' v. UNION OF INDIA & ORS

- **Citation:** [2016] 2 S.C.R. 699
- **Court:** Supreme Court of India
- **Decided:** 2016-04-08
- **Bench:** T.·S. Thakur, A.K. Sikri, R. Banumathi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/centre-for-public-interest-litigation-v-union-of-india-ors-31095
- **Pages:** 42

## Headnote

Telecommunitations:
Conversion of EWA spectrum to UL (Unified Licence) i.e.
migration of existing BWA (Broadband Wireless Access) spectrum
to UL by respondent no.I - Constitutional validity of - Held: The
decision of respondent No.I allowing migration from BWA to US
license was valid and legal - First Telecom Policy was announced
in I994, which was replaced by revised Policy of I999 and thereafter
in the year 2004 and again substituted by Telecom Policy of 20I 2 -
Having regard to such features/developments, in the year 20I 2, the
TRAI started exercise of bringing UL regime -After due deliberations
at appropriate levels, the Government of India issued the National
Telecom Policy-20I 2 and announced approval for introduction of
UL regime - This was followed by the-policy decision of DoT to
allow migration to UL from UASL as well as ISP to UL regime -
Thus, a policy decision was taken by the Government not only with
regard to introduction of UL regime but it also allowed migration to
UL from UASL as well as ISP to UL regime - This meant that those
having UAS license which permitted data services only were allowed
to migrate to UL enabling them Ip provide both data service as well
as voice telephony - This was a pure policy decision after due
deliberations by the experts in the fields and even TRAI had
recommended allowing such migration - Records showed that
various departments discussed pros and cons of migration of telecom
licenses to UL regime; considered various apprehension,s expressed;
and ultimately arrived at consensus for switching over to this regime
- This lead to conclusion that decision of the Government permitting
migration of telecom licenses to UL regime was valid, legal and
without any blemish.
Telecommunications sector - Brief history of the development
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[2016] 2 S.C.R.
in telecommunication and in particular, of mobile/cellular services
and the manner· in which spectrum is licensed from time to time -
Discussed.
Whether migration of EWA spectrum to UL gave undue
advantage to respondent no.2 - Held: A policy decision is taken to
allow such a migration to all those who were holding EWA spectrum
- This decision was not taken, only.for respondent No.2 individually
- Respondent No.2 also became entitled to avail the benefit of the
said decision - IESPL.having acquired the spectrum in the course
of bidding, was not barred from obtaining licenses for various
telecom services issued by the Government from time to time during
the.period of 20 years for which EWA spectrum was given -
Any
other license issued by the Government from time to time, thus, would
make such license holder eligible to provide various services as
allowed under these licenses -
In the said backdrop, when license
was de/inked from the spectrum and having auctioned spectrum by
allowing those who did not possess license to bid, it became
necessary for the Government of India to come out with a regime
for grant of licenses for providing various telecom services - A
policy decision was taken for migration to new telecom service
license, i.e., Unified License (UL) for ISP licensees with EWA
spectrum - This decision facilitated those having data services to
acquire license thereby covering voice-telephony as well - There
was no discrimination on the part of the government authorities
nor it aimed at undue favoritism to responden.t no. 2 - As per the
new policy/regime, respondent no. 2 was eligible to apply for UL
from EWL spectrum - Therefore, it cannot be treated as a case of
back door entry of respondent no.2.
Whether fixation of additional fee of Rs.1658 crores which
was paid by respondent no.2 was abysmally low causing loss to the
public exchequer -.Held: In 2010, when JG and EWA spectrum
were auctioned, the spectrum were de/inked from license - In view
thereof. when the policy decision was taken based on National
Telecom Policy, 2012, whereby migration of UASL to UL was
permitted, the questi

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[2016] 2 S.C.R. 699
CENTRE FOR PUBLIC INTEREST LITIGATION
'
v.
UNION OF INDIA & ORS.
(Writ Petition (Civil) No.382 of2014)
APRIL 08, 2016
[T.·S. THAKUR, CJI, A.K. SIKRI AND
R. BANUMATHI, JJ.]
Telecommunitations:
Conversion of EWA spectrum to UL (Unified Licence) i.e.
migration of existing BWA (Broadband Wireless Access) spectrum
to UL by respondent no.I - Constitutional validity of - Held: The
decision of respondent No.I allowing migration from BWA to US
license was valid and legal - First Telecom Policy was announced
in I994, which was replaced by revised Policy of I999 and thereafter
in the year 2004 and again substituted by Telecom Policy of 20I 2 -
Having regard to such features/developments, in the year 20I 2, the
TRAI started exercise of bringing UL regime -After due deliberations
at appropriate levels, the Government of India issued the National
Telecom Policy-20I 2 and announced approval for introduction of
UL regime - This was followed by the-policy decision of DoT to
allow migration to UL from UASL as well as ISP to UL regime -
Thus, a policy decision was taken by the Government not only with
regard to introduction of UL regime but it also allowed migration to
UL from UASL as well as ISP to UL regime - This meant that those
having UAS license which permitted data services only were allowed
to migrate to UL enabling them Ip provide both data service as well
as voice telephony - This was a pure policy decision after due
deliberations by the experts in the fields and even TRAI had
recommended allowing such migration - Records showed that
various departments discussed pros and cons of migration of telecom
licenses to UL regime; considered various apprehension,s expressed;
and ultimately arrived at consensus for switching over to this regime
- This lead to conclusion that decision of the Government permitting
migration of telecom licenses to UL regime was valid, legal and
without any blemish.
Telecommunications sector - Brief history of the development
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[2016] 2 S.C.R.
in telecommunication and in particular, of mobile/cellular services
and the manner· in which spectrum is licensed from time to time -
Discussed.
Whether migration of EWA spectrum to UL gave undue
advantage to respondent no.2 - Held: A policy decision is taken to
allow such a migration to all those who were holding EWA spectrum
- This decision was not taken, only.for respondent No.2 individually
- Respondent No.2 also became entitled to avail the benefit of the
said decision - IESPL.having acquired the spectrum in the course
of bidding, was not barred from obtaining licenses for various
telecom services issued by the Government from time to time during
the.period of 20 years for which EWA spectrum was given -
Any
other license issued by the Government from time to time, thus, would
make such license holder eligible to provide various services as
allowed under these licenses -
In the said backdrop, when license
was de/inked from the spectrum and having auctioned spectrum by
allowing those who did not possess license to bid, it became
necessary for the Government of India to come out with a regime
for grant of licenses for providing various telecom services - A
policy decision was taken for migration to new telecom service
license, i.e., Unified License (UL) for ISP licensees with EWA
spectrum - This decision facilitated those having data services to
acquire license thereby covering voice-telephony as well - There
was no discrimination on the part of the government authorities
nor it aimed at undue favoritism to responden.t no. 2 - As per the
new policy/regime, respondent no. 2 was eligible to apply for UL
from EWL spectrum - Therefore, it cannot be treated as a case of
back door entry of respondent no.2.
Whether fixation of additional fee of Rs.1658 crores which
was paid by respondent no.2 was abysmally low causing loss to the
public exchequer -.Held: In 2010, when JG and EWA spectrum
were auctioned, the spectrum were de/inked from license - In view
thereof. when the policy decision was taken based on National
Telecom Policy, 2012, whereby migration of UASL to UL was
permitted, the question of fee that is to be charged is to be looked
into -
TRAI, in its recommendations, had not prescribed any
additional fee to be charged for migration of ISP operators with
EWA spectrum to UL regime - Instead, it had stated that the EWA
H spectrum assignee, whether holding a VAS license or ISP licence
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF
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and the scope for provision of services would be uniform under the
Unified License - It is only entry fee which is prescribed and that
too Rs.15 crores - Notwithstanding the same, the Government decided
io permit migration jroJi ISP licence to UL with.migration fee of Rs.
1,658 crores, calculated as the difference in entry fee of UASL and
that of.ISL license in order to provide a level playing field between
the two classes licenses - The said facts would show that respondent
no:2 has paid spectrum price of Rs. 12,847 crores and also Rs.
1, 658 crores for migration to UL, in addition to entry fee of Rs. 15
crores, which is the prescribed fee - It, therefore, cannot be said
that the fee of Rs. 1, 658 crores charged from respondent no.2 is in
any way less or that it has caused any wrongful loss to the
Government and wrongful gain to respondent no. 2 or that the
Government would have fetched much more price - As respondent
no. 2 paid a fee of Rs. 1, 658 crores, according to the CAG, it has
resulted in the loss . .of Rs. 3,367 crores - However, this assumption
loses sight of the fundamental aspect, namely, in 2001 spectrum
and license were unified which was not the position i11 the year
20 JO when the two were segregated - It is stated that insofar as
auction of BWA spectrum is concerned the same was auctioned at a
price of Rs. 12847 crores which is the most material aspect and has
been totally glossed over - Thus, there was no error in the action of
the· Government in allowing the migration from UASL to UL by
making respondent no. 2 to pay a sum of Rs. 1, 658 crores in this
behalf - Government policy.
Spectrum Jfsage Charges - Fixdtion of 1% of Adjusted Gross
Revenue .(AGR) as SUC -
Validity of - Held: The decision, namely,
SUC be fixed at 1% AGR was based on relevant .considerations -
Not only tRAI had recommended the said charge to be fixed, there
was an in depth examination of this recommendation of the TRAI by
Government before accepting the same - Therefore, no reason to
interfere with the stipulation of sue.
Administrative law: Government policy - Judicial review, scope
- Held: Minimal interference is called for by the Courts, in exercise
of judicial review of a Government policy when the said policy is
the outcome. of deliberations of the technical experts in the fields
inasmuch as Courts are no well-equipped to fathom into such domain
which is left to the discretion of the executive - When it comes to the
iudicial revlei1• of economic policy, the Gour.ts are more conservative,
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as, such economic policies are generally formulated by experts -
When the decision making is policy based, judicial approach to
interfere with such decision making becomes narrower - In such
cases, in the first instance, it is to be examined as to whether policy
in question is contrary to any statutory provisions or is
discriminatory/arbitrary or based on irrelevant considerations.
Government policy:National Telecom Policy 2012 - Held:
Telecommunication has emerged as a key driver of economic and
social development in an increasingly knowledge intensive global
scenario, in which India needs to play a leadership role -
National
Telecom Policy-2012 was designed to ensure that India plays this
role effectively and transforms the socio-economic scenario through
accelerated equitable and inclusive economic growth by laying
special emphasis on providing affordable and quality
telecommunication services in rural and remote areas - Thrust of
this policy is to underscore the imperative that sustained adoption
of technology would offer viable options in overcoming
developmental challe.nges in education, health, employment
generation, financial inclusion and much else - The only purpose
of highlighting these features, particularly in contrasting the growth
between voice-telephony and data traffic, is to show that main
source of revenue for the service providi!rs is from data services
and not voice-telephony - Administrative law.
Dismissing the writ petition, the Court
HELD: 1. Mobile service in India is dominated by private
sector enterprise and the Government religiously followed a
policy of 'managed competition' by licensing more than one
company in Telecom. This led to competition in the mobile
industry, which not only resulted in providing better services but
another direct effect of this competition is lower prices that the
Telecom consumer has to pay. Another significant development
over the years is that though mobile services started with voice
G telephony, there is a gradual growth in data telephony. Mobile
telephones are not used only for making telephone calls. Number
of other services are provided by the service providers on these
phones which are know'D as 'smart phones'. The various policy
decisions are taken at a point of time considering various
technological options, policy objectives and regulatory framework.
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[Para 10) [717-C-F)
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2. Auction of 3G spectrum & BWA spectrum in the year
2010.
Auction for 3G and BWA spectrum was conducted between
May and June, 2010. 10 bidders participated in 3G spectrum
auction and 11 bidders participated in BWA spectrum auction.
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The results ofBWAspectrum were published on 12.06.2010. 'This
occasion was conducted over 16 days and involved 117 round~ o.f
bidding across service areas. In the sai,d occasion, all the 44
blocks that were put for auction across 22 service areas in the
country were sold. Reserve price of BWA spectrum was fixed at · c
Rs.1750 crores. During bidding, highest bid that was given by
IBSPL was Rs.12847.77 crores for one block of Pan-India BWA
spectr~m. In this way, respondent No.2 emerged as successful
in acquiring various BWA frequencies in all 22 service areas
across the country. Though 11 bidders bad participated, none of
the .other bidders. made any complaint about the fairness,
tral!sparency and as well as about the process of bidding. In this
scenario, insofar as IBSPL becoming successful bidder cannot"
be questioned at this stage. [Paras 13, 14) [720-C-F)
3. Whether a decision of respondent No.l allowing the
migration from BWA to UAS license was valid and legal?
The technological developments in telecommunication are
taking place at abnormal pace. Various policy decision .taken at
one point of time may, therefore, require a re-look necessitating
modifications and changes therein and the circumstances may
even mandate change of existing policy altogether by substituting
with new policy decision depending upon such technological
advancements coupled by commercial and economic
considerations. It can be supported by the fact that first Telecom
Policy was announced in the year·1994, which was replaced by
revised Policy of 1999 and thereafter in the year 2004 and again
substituted by Telecom Policy of 2012. Having regard to such
features/developments, in the year 2012, the TRAI started
exercise of bringing Unified Licensing regime. After due
deliberations at appropriate 'levels, the Government of India
issued the National Telecom Policy-2012 and announced approval
for introduction of Unified Licensing regime. This was followed
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by the policy decision of DoT dated 13.03.2013 to allow migration
to UL from UASL as well as ISP to UL regime. Thus, a policy
decision was taken by the Government not only with regard to
introduction of Unified Licensing regime but also including
allowing migration to UL from UASL as well as ISP to UL regime.
B This' meant that those having UAS license which permitted data
services only were allowed to migrate to Unified License enabling
them to provide both data service as well as voice telephony.
This was a pure policy decision after due deliberations by the
experts in the fields and even TRAI bad recommended allowing
such migration. Such a policy decision, when not found to be
C arbitrary or based on irrelevant considerations or ma/a fide or
against any statutory provisions, does not call for any interference
by the Courts in exercise of power of judicial review. [Paras 15
to 19) [721-B-E, G; 724-G-H; 725-A-B)
4.1 It cannot be dcrnbted that the primary and central
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purpose of judicial review of the administrative action is to
promote good administration. It is to ensure that administrative
bodies act efficiently and honestly to promote the public good.
They should operate in a fair, transparent, and unbiased fashion,
keeping in forefront the public interest. To ensure that the said
dominant objectives are achieved, this Court bas added new
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dimension to the contours of judicial review and it bas undergone
tremendous change in recent years. The scope of judicial review
bas expanded radically and it now extends well beyond the sphere
of statutory powers to include diverse forms of 'public' power in
response to.the changing architecture of the Government. Thus,
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not only has judicial review grown wider in scope; its intensity
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bas also increased. [Para 24) [729-A-C]
Jal Mahal Resorts (P) Ltd. v. KP. Sharma (2014) 8 SCC
804;, Narmada Bachao Ando/an v. Union of India
(2000) 10 sec 664:2000 (4) Suppl. scR 94;
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Federation of Railway Officers Assn. v. Union of India
(2003) 4 sec 289: 2003 (2) SCR 1085; G.
Sundarrajan v. Union of India (2013) 6 SCC 620:2013
(8) SCR 631; Prag Ice & Oil Mills & Anr.v. Union of
India and Nav Bharat Oil Mills v. Union of India (1978)
3 SCC 459: 1978 (3) SCR 293; Peerless General
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CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF
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India (1992) 2 SCC 343:1992 (1) SCR 406 - relied
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on.
4.2 The raison d'etre of discretionary power is that it
promotes decision maker to respond appropriately to the demands
of particular situation. When the decision making is policy based
judicial approach tp interfere with such decision making becomes
narrower. In such cases, in the first instance, it is to be examined
as to whether policy in question is contrary to any-statutory
provisions or is discriminatory/arbitrary or based on irrelevant
considerations. If the particular policy satisfies these parameters
and is held to be valid, then the only question to be examined is
as to whether the decision in question is in conformity with the
said policy. [Para 25] [729-E-F]
5. (1) Whether process of auction should have been resorted
to?
The spectrum was different from license inasmuch as award
of spectrum did not confer' a right to provide any telecom si:rvices.
Insofar as providing of telecom services are concerned, these
were to be governed by the terms and conditions of the license
obtained by the operator. A perusal of comparative chart of varying
points of view of the different Departments when the matter
regarding migration from UASL to UL regime was being
discussed and contemplated would show that there was a
threadbare discussion on the issue wherein pros and cons Qf
migration of telecom licenses to UL regime were discussed;
various apprehensions expressed were considered; and
ultimately· consensus emerged for switching over to this regime.
The discussion reveals that the Committee of the DoT proceeded
on the premise that the BWA spectrum could not be nsed for any
other purpose other than providing internet services. The other
departments did not share this view. It was ultimately found that
the view of the Committee was contrary to the plain language of
the Notice Inviting Applications and specifically Q&R which was
published by the DoT itself for the purpose of the auction.
Difference of point of view of different departments shows the
process of institutional decision making. The said discussion leads
to irresistible conclusion that decision of the Government
permitting migration of telecom licenses to UL regime is valid,
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legal and without any blemish. [Paras 26, 29 and 30] [729-G; 730G-H; 731-A-D]
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6. Whether such a decision has unduly benefited respondent
No.2 who is charged a sum of Rs.1,658 crores for this purpose,
which according to the petitioners, is abysmally low?
Once a policy decision is taken to allow such a migration to
all those who were holding BWA spectrum and this decision was
not taken only for respondent No.2 individually, respondent No.2
also became entitled to avail the benefit of the said decision.
However, the allegation of the petitioner is that respondent No.2
has been allowed a 'back door' entry to provide voice services.
It is not in dispute that IBSPL, when it bid for BWA spectrum,
was holding ISP category 'A' license. Further, in terms of 3G or
BWA spectrum, the acquirer thereof is eligible to provide any
service using the spectrum during the period of 20 years during
which the acquirer gets the right to use the spectrum under the
auctioned terms. Also, the license is delinked from the spectrum.
The IBSPL having acq·uired the spectrum in the course of bidding,
was not barred from obtaining licenses for various telecom
services issued by the Government from time to time during the
period of 20 years for which BWA spectrum was given. Any other
license issued by the Government from time to time, thus, would
make such license holder eligible to provide various services as
allowed under these licenses. In the said backdrop, when license
was delinked from the spectrum and having auctioned spectrum
by allowing those who did not possess license to bid, it became
necessary for the Government of India to come out with a regime
for grant of licenses for providing various telecom services. A
policy decision was taken for migration to new telecom service
license, i.e., Unified License (UL) for ISP licensees with BWA
spectrum. In its wisdom, this decision facilitated those having
data services to acquire license thereby covering voice-telephony
G as well. All across the Board holding BWA spectrum became
entitled to migrate to UL and, therefore, there was no
discrimination on the part of the government authorities nor it
aims at undue favoritism to respondent no. 2. It is not iii dispute
that as per the new policy/regime, respondent no. 2 was eligible
to apply for UL from BWL spectrum. Therefore, it cannot be
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treated as a case of back door entry of respondent no.2. [Paras
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31 to 33, 34) [731-E-H; 732-A-D)
7. Any loss of public revenue? Whether such a fee fixed
was abysmally low which had resulted in undue advantage to
respondent no. 2, thereby causing loss to the public exchequer.
In the present case, auction of 3G spectrum as well as.BWL
spectrum held. in 2010 was not challenged by anybody and no
fault has even been found in the same. It is the spectrum which
is a vital resource and that was duly auctioned. The decision now
taken, which is the subject matter of controversy in the present
case, pertains to license, namely, switching over from UASL to
UL, validity whereof has already been upheld. The foundation of
the petitioner's allegation is draft report of CAG However, that
was only a draft report. Many queries and doubts in the said draft
report were addressed and answered by the Government. The
final report of CAG is materially different from the draft report.
It-appears that in the draft report, CAG proceeded on the wrong
premise that the license was also to be auctioned. In fact, as far
as 2G2 case is concerned, in that matter licenses along with
bundles spectrum were awarded at a pre-determined price on a
first 1:ome first serve basis and, thus, spectrum was bundled along
with the license. However, in 2010, when 3G and BWA spectrum
were auctioned, the spectrum were delinked from license. In
this backdrop, when the policy decision had now been taken based
on National Telecom Policy, 2012, whereby migration of UASL
. licence to UL was permitted, the question of fee that is to be
charged is to be looked into. TRAI, in its recommendations, had
not prescribed any additional fee to be charged for migration of
ISP operators with BWS spectrum to UL regime. Instead, it had
Stated that the BWA spectrum assignee, whether holding a UAS
license or ISP licence and the scope .for provision of services
would be uniform under the Unified License. It is only entry fee
which is prescribed and that too Rs.15 crores. Notwithstanding
the same, the Government decided to permit migration from ISP
licence to UL license with migration fee of Rs. 1,658 crores,
calculated as the difference in entry fee of UASL and that of ISL
license in order to provide a level playing field between the two
class of licenses. These facts would show that respondent no. 2
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has paid spectrum price of Rs. 12,847.7? crores and also Rs.
1,658 crores for migration to UL, in addition to entry fee of Rs.
15 crores, which is the prescribed fee. It, therefore, cannot be
said that the fee of Rs. 1,658 crores charged from respondent
no.2 is in any way less or that it has caused any wrongful loss to
the Government and wrongful gain to respondent no. 2 or that
the Government would have fetched much more price. [Paras
38, 40] [733-H; 734-A-B, D-H; 735-A-B]
8. The service providers are providing number of other
services on these phones which are known as 'smart phones'.
These services include video streaming, music streaming, social
networking, instant messaging, download and save, emails,
playing online games, browse/search, banking, bill payments,
navigation, e-commerce and cloud storage etc. Even feature films
can be downloaded and watched. TV programmes can be seen.
It serves as camera as well. Smart Phone is able to serve the
purpose of a computer as well to a significant extent. It has
become a "miraculous devise" for the consumers which caters
to all most all necessary and day to day telecom needs. A peep
into the graph growth of total global monthly data and voice traffic
would reveal that in the year 2007-2008 voice and data traffic
was almost equal. However, by the end of 2010, traffic generated
from mobile data was twice that for voice. In five years time, the
data traffic has gone ahead of voice traffic by leaps and bounds
and it is almost seven times more than voice traffic. Another
trend which is visible from the available figures is that whereas
in voice traffic growth from 2010-2015 is hardly 1 Yz times, it is
more than seven times insofar as mobile data traffic is concerned.
Telecommunication has emerged as a key driver of economic
and social development in an increasingly knowledge intensive
global scenario, in which India needs to play a leadership role. ·
National Telecom Policy-2012 was designed to ensure that India
plays this role effectively and transforms the socio-economic
G scenario through accelerated equitable and inclusive economic
growth by laying special emphasis on providing affordable and
quality telecommunication services in rural and remote" areas.
Thrust of this policy is to underscore the imperative that sustained
adoption of technology would offer viable options in overcoming
H developmental challenges in education, health, employment
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF
709
INDIA
generation, financial inclusion and much else. The only purpose
A
of highlighting these features is to show that main source of
revenue for the service providers is from data services and not
voice-telephony. [Paras 41, 42) [735-D-H; 736-A-C].
9. The basic error committed by eAG was to compare 3G
and BWA (4G) spectrum which mistake was realised in preparing
8
the final report. It appears that these calculations are made by
taking migration fee of Rs. 1,658 crores which were pr.evalent in
the year 2001 and on that basis it arrived at a figure of Rs. 5025.29
crores which, according to eAG, should have been fixed. As
respondent no. 2 paid a fee of Rs. 1,658.57 crores, according to
the eAG, it has resulted in the loss of Rs. 3,367.29 crores.
C
However, this assumption loses sight of the fundamental aspect,
namely, in 2001 spectrum and license were unified which was not
the position in the year 2010 when the two were segregated. It
is stated that insofar as auction of BWA spectrum is concerned
the same was auctioned at a price of Rs. 12847.77 crores which
0
is the most material aspect and has been totally glossed over.
Thus, there was no error in the action of the Government in
allowing the migration from UASL to UL by making respondent
no. 2 to pay a sum of Rs. 1,658 crores in this· behalf. [Para 43)
[736-F-H; 73~-Al
10. The decision, namely, SUe be fixed at 1 % AGR was based
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·on relevant considerations. Not only TRA:I had recommended
the said charge to be fixed, there was an in-depth examination of
this recommendation of the TRAI by Government before
accepting the same. Furthermore, on the basis of said decision,
specific provisions were incorporated in the NIA for SUe for BWA
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spectrum. [Para 48) [738-C-D)
Centre for Public Interest Litigation v. Union of India
(2G case) (2012) 3 SCC 1: 2012 (3) SCR 147 -
distinguished.
Presidential Reference on the issue of Alienation of
G
Natural Resources (2012) 10 SCC 1:2012 (9) SCR 311
- referred to.
2912 (?) SCR 311
.. 29_12 (3) SCR 147
Case Law Reference
referred to
distinguished
Para7
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relied on
Para 19
2000 ( 4 ) Suppl. SCR 94
relied on
Para 20
2003 (2) SCR 1085
relied on
Para 20
2013 (8) SCR 631
relied on
Para 21
1978 (3) SCR 293
relied on
Para 22
1992 (1) SCR 406
'·
relied ou
Para 23
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 382
of2014.
Under Article 32 of the Constitution oflndia.
Prashant Bhushan, Pranav Sachdeva, Advs. for the Petitioner.
Ranjit Kumar, S.G., Harish N. Salve, Nageshwar Rao, Ramji
Sreenivasan, Sr. Advs. Ms. Binu Tamta, D. L. Chidanand,Ajay Sharma,
Ms. Movita, Ajay Kumar Singh, D. S. Mahra, K. R. Sasiprabhu, Biju P.
Raman, Vishu Sharma, Somiran Sharma, Shivraj Gaonkar, Gaurav Mithra,
Hiten Sampath, Bhavuk Aggarwal, Mayank Pandey, Ms. Deepali
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Dwivedi, Aswin Dave, Goutam Shivashankar, Ms. Shelly Saluja, V. C.
Shukla, Ms. Niranjana Singh, Ms. Sangeeta Singh,Advs. with them for
the Re~pondents.
The Judgment of the Court was delivered by
A.K. SIKRI, J. I. The petitioner herein, viz., Centre for Public
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Interest Litigation, is a society registered under the Societies Registration
Act, 1860. It claims that the very purpose for which this socie'y 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
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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
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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 oflndia(CAG) which report estimated
the aforesaid license fee/entry fee. It is also alleged that respondent No.
I, while allowing voice telephony to respondent No. 2, has not revised
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the Spectrum Usage Charges (SUC) matching with the charges which
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF
INDIA [A.K. SIKRI, J .]
are paid by other operators who bought voice telephony. It is stated in
the petition that whereas the other operators pay 3% to 5% revenne
annually depending upon quantum of the spectrum they hold, respondent
No. 2 in contrast w.ould be paying just l % 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 sue,
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. I 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 ·a Hz 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 tenns.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(or2.l GHz) band. Thus, per MHz price worked
out to be Rs. 1,675 crore. This spectrum price bequeathed the rights to
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provide both data and voice.
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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.
Infotei 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 (I 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. I 6.28
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
o application in March 2010 for the BWAauction.
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4. It is alleged in the petition that within hours of completion of
BWAauction on I 1.06.2010, IBSPL increased the authorised share capital
from Rs. 3 crore to Rs. 6,000 crore. On 17.06.2010, the company.
authorised its Board of Directors to allot 475 crore equity share of Rs.
IO each to Reliance Industries Ltd. (RIL) and 25 crore equity share of
Rs. 10 to lnfotei Digicomm Pvt. Ltd. (IDPL) aggregating to the equity
capital of Rs. 5,000 crore. On the same day, the company also decided
to change from a private company to Public Limited Company (Infotel
Broadband Services Ltd). Thus, the company within a week of winning
the BWAspectrum disposed off95%sharestoRIL while5% was retained
by IDPL. Much later in March 20 I 3, the company was renamed as
Reliance Jio Infocomm Pvt. Ltd. On that basis, some suspicion is
nurtured as to how IBSPLacquired BWA spectrum and thereafter stakes
in IBSPL came under the control ofRIL. The said IBSPL is now known
as Reliance Jio lnfocomm Pvt. Ltd.
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However, we may like to add here itself that the auction ofBWA in
which IBSPL turned out to be successful bidder resulting into acquisition
-0f Pan-India BWA spectrum in its favour is· not the subject matter of
dispute and was never questioned by anybody. This auction, as is clear
from the above, was held way back in May-June, 2010. Though, there
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were other prominent companies of repute who participated in the said
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF
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INDIA [A.K. SIKRI, J.]
auction and shared the remaining other Pan-India slot (22 Serve Areas),
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no competitor of JBS PL challenged BWA auction. The subject matter
of challenge in the instant writ petition is the conversion ofBWA spectrum
to Unified License (UL) i.e. migration of existing BWAspectrum to UL
which has been done by respondent No. I.
5. In respect of the aforesaid central issue raised, it is pointed out
by the writ petitioner that on 16.04.2012, TRAI submitted its
recommendations to respondent No. 1 on Guidelines for UL and migration
of existing license. Thereafter, on 02.05.2012, respondent No. 1 sought
clarification from TRAl on migration of ISP licensees having BWA
spectrum to UL regime. TRAI in its response to respondent No. I
clarified that the spectrum of3G/BWA was liberalized and the operators
can migrate to UAS license, which meant allowing voice telephony to
them as well on such migration. According to the petitioner, though
TRAI had clarified that the spectrum of3G/BWA was liberalized and
operators could migrate to UL, a Committee of Department of
Te!ecommunication (DoT) took the view, sometime around May 2012,
that under ISP licenses, voice telephony cannot be provided. This view
was reiterated by the DoT Committee once again in August, 2012. The
allegation of the petitioner, however, is that on 25.01.2013 another
Committee was constituted under the Chairmanship of Secretary
(Telecom), though the order in this respect was issued only on 11.02.2013,
to go into this issue and suggest the way forward. It is stated that
Secretary (Telecom)was made Chairman of the Committee even when
he was due to superannuate two months later i.e. in March, 2013. This
Committee prepared its draft report on 30.01.2013 as per which the said
Committee was not ready to make any recommendations on ISP (holding
BWA spectrum) migration to UASL. However, still in its final report
given on 13.02.2013, the Committee recommended that on payment of
Rs.1,658 crores, ISP(holding BWAspectrum) could be migrated to UASL,
thereby permitting voice telephony. This recommendation was approved
by Telecom Commission in its meeting on 18.02.2013. The officiaifrom
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the Ministry of Finance who also attended this meeting, while agreeing ·
with the aforesaid proposal, ignored Finance Ministry's own
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recommendations on the 2G spectrum issue inasmuch as in the year
2007 when the"then Telecom Minister wanted to award the licenses at
Rs. l ,658 crores, the then Finance Secretary had objected .to it, After
the Telecom Commission approved the recommendation, the same was
forwarded to the Telecom Minister who gave his final approval o_n
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05.03.2013. It is this decision of migration ofBWA spectrum given to
respondent No. 2 into USL which is termed as totally arbitrary, illegal,
unfair, impermissible and against the public interest.
6. It would be pertinent to mention at the outset that in the writ
-petition, the petitioner has specifically accepted that it has not made any
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representation to the Government before approaching the Court in the
form of present writ petition. Reason given is that the CAG itself has
investigated this matter and in its draft report dated 07.11.2013 adversely
commented~pon the manner in which the aforesaid migration is allowed
to respondent No. 2 at the cost of exchequer resulting into whopping
loss of public revenue thereby giving undue advantage of Rs.22,842 crores
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to respondent No. 2. Thus, heavy reliance is placed on the said CAG
report by the petitioner in support of its contention and following part of
the said report is specifically referred to:
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· "(x) It was found that the basis of the decision i.e. payment of
entry fee of Rs. J ,658 crore by ISP lincensee for a permission to
Pan India provision of mobile voice services using BWA spectrum
considered by the DoT Committee, Telecom Commission and the
MOC&IT, was primarily intended to fill the gap between the
eligibility criterion stipulated for participatioff in the 3G/BWA
auction in 2010 as UAS/CMTS licensees had paid entry fee of
Rs. 1,658 crore while ISP licensees had paid only Rs. 30 Jakh.
(xi) The DoT Committee, Telecom Commission and the MOC&IT
however ignored the fact that the quantum of entry fee i.e. Rs.
1,658 crore was basically discovered in 200 I through the bidding
for the 4th Cellular licenses. Market conditions since then have
changed drastically, and this price needed to be modified to reflect
the present value. Neither the DoT Committee/TC under the
Chairmanship of the Secretary DoT nor the MOC&IT felt the
need for revision of the price discovered in 200 I as the entry fee
for UASL in 2013, even when the Hon'ble Supreme Court of
India had cancelled 122 licenses granted in 2008 on the basis. of
the same entry fee stating that it was impossible for them to approve
the action of the DoT.
9. Therefore, by permitting ISPs to provide mobile voice service
using BWA spectrum won in 2010 auction post-auction, the
government has brought ISP licensees with BWA spectrum at
par with UAS/CMTS 3G spectrum winners so far as provision of
CENTRE FOR PUBL1C INTEREST LITIGATION v. UNION OF
INDIA (A.K. SIKRI, J.]
services are concerned - Voice, Data, etc., and post auction
interpretation of such vital nature would appear to be arbitrary,
inconsist.ent and not appropriate. Hence, IBSPL, now Reliance
Jio Infocomm, appeared to have been accorded undue advantage
of Rs. 22,842 crore i.e. the difference of the proportionate prices
for 20 MHz block size in 2.1 GHz spectrum band {JG spectrum)
and2.3 GHz spectrum band (BWA spectrum) plus the Net Present
Value of the entry fee for UASL at the end of FY 2009-10 (Rs.
20,653 crore plus Rs. 3,847 crore - Rs .. 1,658 crore). Besides,
the sanctity of the entire auction process has been rendered vitiated
due to post auction interpretations and interventions after three
years. It was therefore no surprise that Reliance Jio Infocomm
was among the first group of companies which applied for UL
immediately after introduction of the scheme .and obtained the
Letter oflntent (LOI). Had the spectrum blocks been specified
and declared as liberalised spectrum blocks i.e. open for all
technology/services in the NIA in February 20 I 0, there was no
doubt that bidders would have taken informed decision for putting
up their bid and the market discovered price would have been
significantly different for 3G and BWA spectrum."
7. Mr. Prashant Bhushan, at the time of arguments, pointed out
the aforesaid procedural and other alleged irregularities and the comments
of CAG thereupon. He submitted that there was no reason to allow
migration of!SP (holding BWA spectrum) to UASL. lnstead, according
to him, what was needed was to hold independent auction of voice
telephony.