Supreme Court Requests Input from Airtel and Vodafone on Spectrum Charge Appeal
In a significant legal development, the Supreme Court has issued a notice to Bharti Airtel and Vodafone Idea, seeking their responses to an appeal filed by the Indian government. This appeal challenges a decision by the Bombay High Court that had nullified the retrospective imposition of one-time spectrum charges (OTSC) on these telecom giants.
The case, titled Union of India v. Airtel, was heard by a bench comprising Justices BV Nagarathna and R Mahadevan. The dispute stems from a 2012 government directive aimed at levying a one-time charge on spectrum holdings above 6.2 MHz from July 1, 2008, to December 31, 2012, at the prices determined by the 2012 spectrum auction.
Airtel and Vodafone Idea opposed this move, contending that such retrospective financial demands were not authorized by Section 4 of the Indian Telegraph Act, 1885, nor by their existing license agreements. This past June, the Bombay High Court, through a bench consisting of Justices Manish Pitale and Shreeram V Shirsat, sided with the telecom companies. The court quashed the government’s demands, ruling that the licenses under Section 4 of the Telegraph Act are contracts, and thus, the government could not impose unexpected financial burdens not outlined in these agreements.
Furthermore, the High Court instructed the government to refund the bank guarantees provided by the telecom companies related to these disputed charges. In the recent Supreme Court hearing, Additional Solicitor General Vikramjit Banerjee defended the government’s stance by asserting, “Spectrum belongs to the people. I hold it in trust. It’s a privilege which is given to them. They are telecom companies. They should give market rate.” He also highlighted the significant financial stakes involved, with over ₹3,300 crore at issue.
On the other hand, the telecom companies emphasized the necessity of business certainty and argued against imposing substantial financial liabilities long after spectrum allocation and payment. The government noted a contrasting judgment by the Madras High Court, which had upheld the OTSC levy in a related case involving Aircel. Appeals against this decision are already before the Supreme Court, prompting the Centre to request a consolidated hearing due to the differing conclusions of the Bombay and Madras High Courts.
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The Supreme Court has yet to make a determination on whether to merge these appeals. A decision regarding the consolidation of these cases is expected at the next hearing.
Representing Vodafone were Senior Advocates Mukul Rohatgi and Balbir Singh, while Airtel was represented by Senior Advocate Shyam Divan.
