Case: 1. BPL Mobile Cellular Limited and Anr. and Bharti Broadband Limited, 2. IDEA Cellular Limited and Videsh Sanchar Nigam Limited, 3. Essel Shyam Communication Ltd. (ESCL) Vs 1. Department of Telecommunications, 2. Union of India (UOI) and Anr., 3. Department of Telecommunications (DoT) and Ors.. TDSAT (Telecom Disputes Settlement & Appellate Tribunal)
| Judges | S.B. Sinha, J. (Chairperson) and G.D. Gaiha, Member |
| Issue | Media and Communication |
| Judgement Date | February 11, 2010 |
| Court | TDSAT (Telecom Disputes Settlement & Appellate Tribunal) |
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JUDGMENT S.B. Sinha, Chairperson, (< xml:namespace prefix = st1 />
Introduction 1. The petitioners, in this batch of petitions, inter-alia, question the validity and/or legality of the provisions contained in the respective license agreements entered into by them with the Department of Telecommunications of the Union of India, in terms whereof the latter claims itself to be entitled to levy penalty at the rate of 150% of the shortfall in payment of the license fee for different years. 2. The petitioners furthermore question the justifiability or otherwise of such a levy in each of these petitions. 3. We, therefore, are required to take into consideration for factual aspects involved in each case separately. 4. BPL Mobile Cellular Ltd Case (Petition No. 8/03 and Petiton No. 27/05) 5. The parties entered into license agreements with the respondent for establishing cellular mobile services in the State of 6. BPL Mobile Cellular Ltd entered into a similar agreement for the Mumbai Metro on 30.11.1994. 7. A Migration Package was offered by the Department of Telecommunication (DOT) of Union of India to the petitioner and the same was accepted. 8. The Telecom Regulatory Authority of 9. Recommendations were also made by TRAI with regard to insertion of penalty clauses in the NLD license on or about 15.5.2000, stating that while considering insertion thereof; the same should be made operational only in cases of deliberate under-declaration. 10. Fresh agreements were entered into by and between the parties hereto on or about 3.4.2002 on the basis of revenue sharing. It also did not contemplate imposition of penalty. Respondent, however, sought to introduce the penalty clause by way of Clause 1.8 in the license agreement, in terms whereof, 150% penalty was to be levied for short deposit of license fee. 11. It reads as under: 1.8 In case, the total amount paid on the self assessment of the LICENSEE as quarterly LICENCE Fee for the 4 (Four) quarters of the financial year, falls short by more than 10% of the payable LICENCE Fee, it shall attract a penalty of 150% of the entire amount of short payment. This amount of short payment along with the penalty shall be payable within 15 days of the date of signing the audit report on the annual accounts, failing which interest shall be further charged as per terms of Condition 3.5. However, if such short payment is made good within 60 days from the last day of the financial year, no penalty shall be imposed. 12. The petitioners contend that in view of the Orders passed by this Tribunal in Petition No. 10 of 2001 on 9.4.2002 with regard to wrong interpretation of ADC Charge payable to the respondent, huge amounts of refund became payable by the respondent to it with interest. The petitioner asked for refund of a sum of Rs. 87.03 crores as on the date of the judgment in terms of a letter dated 17.5.2002. A request for adjusting all the claims of the respondents towards payment of license fees for all the licenses was also made by the petitioner by its letter dated 20.5.2002 which was not responded to. 13. Only on or about 3.12.2002, penalty for a sum of Rs. 1.49 crores was imposed in respect of Kerala Circle, the details whereof are as under: (Amount in Rupees) ____________________________________________________________________________________ PERIOD AGR Revenue Revenue Difference Interest Penalty Share Due Share Paid on delayed payment upto 31.10.02 ____________________________________________________________________________________ (A) (B) (C) (D) (E) (F) (G) ____________________________________________________________________________________ 1999-00 314060351 47109053 37260000 9849053 423549 (Aug 99 to March 00) ____________________________________________________________________________________ 2000-01 591165489 82910763 91200000 -8289237 1309704 ____________________________________________________________________________________ 2001-02 689799388 68979939 59040000 9939939 4013889 14909909 ____________________________________________________________________________________ Total 1595025228 198999755 187500000 11499755 5747142 14909909 14. The petitioner objected to imposition of the said penalty amount as also levy of interest thereupon by its letter dated 6.1.2003. 15. An appeal in the meanwhile had been filed by the respondent against the said judgment of this Tribunal dated 17.5.2002 before the Supreme Court of India which was dismissed by a judgment dated 4.3.2003. 16. By reason of a letter dated 18.3.2003, the respondent unilaterally contended that penalty clause would operate retrospectively. Validity of the said letter was also questioned by the petitioner in terms of its letter dated 18.3.2003. Insertion of Clause 3.8 of the license agreement was also objected to by the petitioner by a letter dated 21.3.2003. 17. The respondent adjusted the amount which was lying at its hands pursuant to the judgment of this Tribunal as also that of the Supreme Court of India dated 4.3.2003 after a delay of more than 63 days. The purported penalty imposed for a sum of Rs. 1.49 crores was also adjusted from the amount lying in its hands. No Show Cause Notice, however, was issued prior thereto. 18. The matter relating to wireless spectrum charges were indisputably governed by a separate license. The petitioner by a letter dated 12.5.2003 requested that the amount remaining with DoT be adjusted towards the license fees in respect of the 19. The matter relating to refund was the subject matter of a petition before this Tribunal marked as Petition No. 17 of 2002 in this Tribunal. By a judgment and Order dated 13.5.2003, this Tribunal directed that refunds which were to be made to the petitioner No. 2 should be adjusted from the outstanding dues. Whereas according to the respondent, the refundable amount was Rs. 1.34 crores, according to the petitioner No. 2, the amount was much higher. The said refundable amount was however adjusted against dues as outstanding on 13.5.2003. The petitioner in terms of a letter to the respondent raised a grievance that adjustments had wrongly been made and the respondent was not entitled thereto, as amounts refundable to the petitioner as on 3.4.2002 should have been adjusted. 20. It is at that stage, the Petition No. 8 was filed. 21. Respondent invoked the bank guarantee furnished by the petitioner to the extent of Rs. 25.9 crores and on 19.6.2003, recovered the entire outstanding license fees of Rs. 19.45 crores alongwith the interest payable thereupon viz a sum of Rs. 3.08 crores. 22. On an application filed by the petitioner, the Tribunal stayed the levy of the amount of penalty by an Order dated 20.6.2003. 23. On the same date, the respondent imposed penalty for a sum of Rs. 29,18,42,155/- for purported delay in payment of Rs. 19,45,61,437/- towards license fee by encashment of the bank guarantee. 24. Idea Cellular (Petition No. 22/05 and Petition No. 27/05) 25. The petitioner was granted a license by the DoT in December, 1995 for the States of Andhra Pradesh, Gujarat and Maharashtra. Clause 19.2 of the said licenses provided for payment of license fees in advance every quarter. 26. The Union of India evolved a new Telecom Policy in the year 1999, pursuant whereto and in furtherance whereof, all the licensees were offered to switch-over to Migration Package, in terms whereof, in stead and place of a fixed sum the license fee became payable on a revenue sharing basis. Such an offer was made to the petitioner on 22.7.1999, by reason whereof, the license fee on revenue sharing basis was to be paid within 10 days in advance for the relevant year with effect from 1.4.2000. Payment of license fee, thereafter, was to be made on quarterly basis. In terms of the said license agreement, no audited statement was required to be filed. 27. It may be placed on record that in the 1995 agreement, there was no provision for levy of penalty for non-payment of the license fees within the stipulated time. 28. Respondent, however, amended the terms of the license on or about 6.3.2002, pursuant whereto and in furtherance whereof, license fee became payable in four quarterly advances within 15 days of commencement of the relevant quarter on self-assessment basis. 29. As per the new arrangement, the petitioner was to pay license fees for the quarter April-June 2002 on or before 15.4.2002. 30. This Tribunal in the AGR matter by a judgement dated 9.4.2002 passed in Petition No. 10 of 2001 directed the respondent to refund the excess amount recovered from the... |
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