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Plea for spectrum term extension dismissed by Supreme Court

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  15 May 2015 12:00 AM GMT

New Delhi, May 14: The Supreme Court on Thursday dismissed the petitions filed by a host of telecom operators, seeking an extension of their existing licences for spectrum, or airwaves, for various service areas across the country. “We see no merit in these appeals and writ petitions. Therefore, all the appeals and writ petitions are dismissed,” said the judgement of a bench of Justices J. Chelameswar and R.K. Agrawal, dismissing the clutch of petitions on similar lines.

The telecom companies, like Bharti Airtel, Idea, Vodafone and Reliance, had moved the court seeking extension of their licences in different circles, which are about to expire. They contended that under the terms of contract, they had a right to have their claim for extension considered. In December this year, seven licences each of Idea Cellular and Reliance Communications, four licences of Bharti Airtel and six licences of Vodafone were set complete their 20-year term after which they hoped to have them renewed. In total, there are 29 licences in 18 service areas, set to expire this fiscal.

The telecom operators maintained that the government was neither entitled to, nor justified, in calling upon them to take part in the recent auction for spectrum and obtain the necessary airwaves to offer their services in their respective licences. Such a decision of the government violated their contractual rights, telecom companies had contended, adding that under the terms of licence, they were entitled to seek an extension but not a “renewal” of the licence.

The telecom companies had said that word “extension” in the licence confers a higher right than the right to seek a renewal. While agreeing with the telecom companies that the licence granted to them under Section 4 of the Indian Telegraph Act, 1885 was a “contract” between the them and the government, the apex court referred to an earlier judgment in 2G matter. This verdict had said that this was clearly a matter of an economic policy, entailing an intricate economic choice and the court lacked the necessary expertise to make such choice.

The apex court also referred to some relevant clauses of the licences. “It is clear that the licencees have no automatic right of renewal/extension on the expiry of the origil tenure of the license,” it observed.

“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 seeking an extension during the 19th year of the currency of the licence.” Having said this, the court said it appeared that all of the licencsees did make such an application. It also said this while examining the question: What are the obligations of the licensor (the government) on receipt of such an application? The obligations of the licensor flow from two sources — from the contract, and from the Constitution of India and the relevant provisions of the Indian Telegraph Act, 1885. In the event of any conflict between the said two sets of obligations, the further question would be which one of the conflicting obligations prevail? (IANS)

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