Holding

The policy decision to permit migration of BWA spectrum to a Unified License, the Rs 1,658 crore migration fee, and the 1% SUC are valid, legal and non‑arbitrary, and the writ petition is dismissed.

Summary

The Supreme Court examined a writ petition challenging the Government's decision to allow migration of Broadband Wireless Access (BWA) spectrum to a Unified License (UL) and the imposition of a Rs 1,658 crore migration fee and a 1% spectrum usage charge (SUC) on Reliance Jio Infocomm Ltd. The petitioners alleged that the policy favoured the respondent, caused loss to the exchequer and violated principles of fairness. The Court held that the migration policy was a legitimate governmental decision, based on extensive deliberations and TRAI recommendations, and was not arbitrary, discriminatory or contrary to law. It further found that the migration fee and SUC were reasonable, reflecting the difference in entry fees and the rural development objective, and that no loss to the public revenue could be established. Consequently, the writ petition was dismissed.

Issues considered

The constitutional validity of the decision allowing migration of BWA spectrum to a Unified License.
Whether the migration fee of Rs 1,658 crore imposed on the respondent is abysmally low and causes loss to the public exchequer.
Whether the fixation of a 1% of Adjusted Gross Revenue as Spectrum Usage Charge for BWA spectrum is valid.
Whether the policy decision amounts to undue favour or discrimination against other operators.

Legislation cited

Constitution of Indias. Article 32
Telecom Regulatory Authority of India Act, 1997

Subjects

telecommunicationsunified licencespectrum auctionmigration feejudicial reviewadministrative lawspectrum usage chargepublic interest litigation

Judgment

[2016] 2 S.C.R. 699

CENTRE FOR PUBLIC INTEREST LITIGATION A
v.
UNION OF INDIA & ORS.
(Writ Petition (Civil) No.382 of2014)
APRIL 08, 2016 B
'
[T.·S. THAKUR, CJI, A.K. SIKRI AND
R. BANUMATHI, JJ.]
Telecommunitations:
Conversion of EWA spectrum to UL (Unified Licence) i.e. c
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 - D
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 E
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 F
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;
G
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
H
699
700 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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
B 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
c 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
D 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
E 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
F 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
G 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 701
INDIA

and the scope for provision of services would be uniform under the A
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
B
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 c
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
D
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 E
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 - F
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 G
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, H
702 SUPREME COURT REPORTS [2016] 2 S .C.R.

A 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.
B
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
c 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
D 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
E 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
F
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.
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 703
INDIA

[Para 10) [717-C-F) A
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. B
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, D
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? E

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 F
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 G
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 H
704 SUPREME COURT REPORTS (2016] 2 S.C.R.

A 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
D 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
E 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,
F not only has judicial review grown wider in scope; its intensity
• 24) [729-A-C]
bas also increased. [Para
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;
G 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
H Finance and Investment Co. Limited v.. Reserve Bank of
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 705
INDIA

India (1992) 2 SCC 343:1992 (1) SCR 406 - relied A
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 B
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 c
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 D
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 E
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. F
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 G
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,
H
706 SUPREME COURT REPORTS [2016) 2 S.C.R.

A legal and without any blemish. [Paras 26, 29 and 30] [729-G; 730-
G-H; 731-A-D]
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?
B 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
c 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
D 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
E 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
F 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
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 707
INDIA

treated as a case of back door entry of respondent no.2. [Paras A
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 B
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 c
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 D
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 E
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 F
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 G
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
H
708 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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
B
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
c 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
D 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
E 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 1Yz times, it is
F 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 E
·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 F
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.
Case Law Reference
2912 (?) SCR 311 referred to Para7
. 29_12 (3) SCR 147 distinguished Paras
H
710 SUPREME COURT REPORTS [2016] 2 S.C.R.

A (2014) 8 sec 804 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
B
1992 (1) SCR 406 relied ou Para 23
'·
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 382
of2014.
Under Article 32 of the Constitution oflndia.
c 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
D 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
E 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
F 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
G 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
H the Spectrum Usage Charges (SUC) matching with the charges which
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 711
INDIA [A.K. SIKRI, J .]

are paid by other operators who bought voice telephony. It is stated in A
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,
B
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. c
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:
D
(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. E
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 F
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 G
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 H
712 SUPREME COURT REPORTS [2016] 2 S.C.R.

A provide both data and voice.
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.
B 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.
c 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.
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.
E 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
F 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.
G 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
H were other prominent companies of repute who participated in the said
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 713
INDIA [A.K. SIKRI, J.]

auction and shared the remaining other Pan-India slot (22 Serve Areas), A
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 B
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 c
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, D
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 E
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 F
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
the Ministry of Finance who also attended this meeting, while agreeing ·
with the aforesaid proposal, ignored Finance Ministry's own G
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 H
714 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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
B 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
C 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:
· "(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
D 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
E 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
F 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
G 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
H par with UAS/CMTS 3G spectrum winners so far as provision of
CENTRE FOR PUBL1C INTEREST LITIGATION v. UNION OF 715
INDIA (A.K. SIKRI, J.]

services are concerned - Voice, Data, etc., and post auction A
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)
B
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 c
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
D
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 E
migration of!SP (holding BWA spectrum) to UASL. lnstead, according
to him, what was needed was to hold independent auction of voice
telephony. He submitted that allowing the migration from one type of
license to another with added benefits· was in the teeth of judgment of
this Court in the Presidential Reference on Ille issue ofAlienation of F
· Natural Resources' wherein this Court has held that when "precious
and scarce natural resources are alienated for commercial pursuits
of profit maximizing private entrepreneurs, adoption of means other
than tliose that are competitive and maximize revenue may be
arbitrary and face the wrath of Article 14 of the Constitution."
G
8. All the three respondents in this petition, namely, Union oflndia
· (R-1), Reliance Jio Infocomin Ltd. (R-2) and TRAI (R-3) have stoutly
contested the stand.taken by the petitioner in this petition by disputin.g
the averments. Apart from putting stiff resistance to the issues raised in

.
1
(2012)10 sec 1 H
716 SUPREME COURT REPORTS [2016] 2 S.C.R.

A the petition on merits, the respondents have even questioned the bonafides
of the petition by vehemently arguing that it does not serve any public
purpose and on the contrary, the petition is motivated. In the counter
affidavit filed on behalf Qf the Union of India, it is stated that the writ
petition is preferred on an absolutely erroneous footing by misconstruing
and misinterpreting the judgment of this Court in Centre for Public
B
Interest Litigation v. Union of India' (hereinafter referred to as "2G
Case") and also theiprovisions of the TRAI Act. It is stated that entry
fee of Rs. 1,658 crore fixed earlier was for UASL along with spectrum
bundled with it, whereas in the year 2010 for JG and BWA spectrum,
license and spectrum were delinked and it was only the spectrum which
c was 'auctioned. Moreover, the amount of Rs. 1,658 crore is not the
entry fee as alleged by the petitioner but is only migration fee. It is
. further stated that tl1e aforesaid decision of allowing migration was taken
after it was duly permitted by the TRAI and, thus, such a decision was
based on the economic policy of the Government with which the Courts
normally do not interfere unless the same is found to be arbitrary, malafide ·
D
or contrary to the public interest, which is not the case here. A detailed
history from TRAI recommendation to the decision taken by the DoT is
narrated in the counter affidavit with the emphasis that the decision in
question was actuated by valid economic and other relevant
considerations. On that basis, respondent·No. 1 insists that neither the
E manner of allowing migration was irregular or illegal nor fixation of
migration fee of Rs. I ,658 crore was arbitrary or against public interest
or prompted to give any undue favour to respondent No.2. On the similar
lines is the counter affidavit filed by respondent No.2, which has attempted
to explain the factual position in much greater detail and reference thereto
shall be made at the appropriate stage.
F
9. Oral arguments on behalf of Union oflndia were addressed by
Mr. Ranjit Kumar, learned Solicitor General whereas Mr. Harish Salve,
senior advocate put up the defence on behalf of respondent No.2. Ms.
Niranjana Singh appeared for TRAI. It is not necessary to separately
take note of their respective arguments as we intend to refer to those
G submissions during our deliberations on the various· facets of the case.
I 0. Before we embark on the specific areas of /is which need to
be examined, it may be apposite to make some introductory remarks
pertaining to Telecommunications sector and the manner in which
H '<2012)3sec1
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 717
INDIA (A.K. S!KR!, J.]

spectrum is licensed from 'time to time. To put it pithily, it is well known A
that Telecommunication is a sector with fast changing technologies. Each
technology has its features, compatibility and market adaptability. Some
technologies which are at a horizon today may not be even commercially
successful as updated and other technology become available before
commercial deployment of thattechnology at affordable rates for common
B
man in India. In the year 1991, India had 5 million telephone subscribers.
At the end of July, 2007 this number increased to 233 million and as on
July, 2015 it has touched 1006.96 million subscribers. This phenomenal
growth has not been achieved in any country, other than China. The
primary reason for this growth is the introduction of mobile services
coupled with privatization of the Telecom sector. Mobile service in c
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, result whereofwhich not only resulted in providing better services
but another direct effect ofthis competition is lower prices that the Telecom
D
consumer has to pay. A call charge of Rs. I6/- per minute in the year
J 998 has come down to few paisa per minute. Another significant
development over the years, which is a result of technological development
influenced by market economic considerations is that though mobile
services started with voice telephony, there is a gradual growth in data
telephony. Mobile telephones are not used only for making telephone E
calls. Number of other services are provided by the service providers on
these phones' which are known as 'smart phones'. The various policy
decisions are taken at a point of time considering various technological
options, policy objectives and regulatory f~amework.
Auction of 3G spectrum & BWA spectrum. in the year 2010 F
11. It is in this context we have to keep iri mind that when notice
dated 25.02.2010 was issued inviting applications (NIA), though it was
for both 30 spectrum as well as BWA spectrum, there is a significant
difference in the characteristics of both the spectrums, namely, 30 on
the one hand and BWA on the other hand. It may be mentioned that 30 G
spectrum is in Frequency Division Duplex (FDD) mode whereas the
Broadband Wireless Access (BWA) spectrum as per TRAI
recommendations as well as Guidelines issued by DoT is in Time Division
Duplex (TDD) mode. Distinct and different fe~Jures of both are
highlighted in the following manner:
H
718 SUPREME COURT REPORTS [2016] 2 S.C.R.

A a. FDD needs fewer base stations than TDD
Since FDD devices achieve desired cell edge rates at farther
distances, the number of base stations required to achieve a given area
of coverage is reduced.
b. In a coverage-limited system comparison using the same
B frequency band, the TDD system required 31 % more base stations than
FDD when using a I: I TDD system and 65% more base stations when
using a 2: I TDD system. Higher frequency bands required even more
base stations.
c. FDD incurs lower costs
c
Capital expenditure (CAP EX) and operating expenditure (OPEX)
costs are associated with each base station. These costs are independent
of the type of duplexing technique used (FDD or TDD). Since FDD
requires fewer base stations for the same coverage, it incurs lower
deployment and operating costs.
D
d. FDD/TDD: Basic difference
FDD is implemented on a paired spectrum where downlink and
uplink transmissions. are sent on separate frequencies. This provides
simultaneous exchange of information and reduces interference between
the uplink and downlink. Therefore FDD is more suitable for Voice
E
systems that require continuous duplex working.
TDD is implemented on an unpaired spectrum, implying the usage
of only one frequency for both downlink and uplink transmissions. It is
suitable for asymmetric transmission demands and in cases where paired
frequency is not available while Voice services are symmetric
F
transmission.
e. Efficiency ofuse:
FDD has higher frequency usage efficiency. There i,s.,wastage of
spectrum in TDD as it requires more accurate timing & greater guard
G bands.
f. Range:
TDD has a lower range (area covered) due to fact that guard band
timing needs to be met.
g. Carrier Aggregation:
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 719
INDIA [A.K. SJKRI, J.]

With 3G and LTE big advantage is carrier aggregation, which allows A
receiving handsets to make better use of the fragmented bands that a
carrier may have, in order to download data faster. This was not available
in WiMAX at that time since the complete mobility was not available.
h. Network Evolution:
A clear roadmap to move to a new technology was available for B
3G but it was not there for broadband networks in terms of mobility,
carrier aggregation, etc.
These are some of the comparisons of 3G spectrum .which was
based on FDD mode and TDD based digital Broadband Wireless Access
(BWA) systems which are drawn by the learned Solicitor General on c
tli'e basis of which it is stated that there was distinct advantage, clearly
discernible, of 3G spectrum over BWA spectrum that was understood
by TRAI & DoT and hence the pricing had to be differentiated on this
oasis. The only technology available at that time in 2.3 GHz band was
WiMax as LTE (Long Term Evolution) was not available. Although in D
theory any packet based network core can be used for Voice or data still
there are requirements to ensure smooth and contiguous reception of
packets which puts a extra burden on allocation of resources. Moreover,
LTE was available only post 2012 and that too.VOLTE (Voice over
LTE) was experimental technology over LTE core.
E
12. It will also be pertinent to note some of the queries and responses
for auction of3G and BWA spectrum which were published by DoT on
25.02.20 I 0 i.e. simultaneously with the issuance ofNIA, wherein it was
specifically clarified that usage of spectrum including BWA spectrum is
linked to the license held or to be acqaired by the bidder. It was, thus,
envisaged that BWA spectrum can be used for all telecom services F
including voice telephony linked to the relevant license, as can be gaged
from some oftpe queries and responses thereto which are as under:
"Question 34: Does the BWA license allow use cif voice to be
offered by the BWA operators? Even in V0 1P form?
G
Answer 34: There is no BWA license. Service conditions including
allowing Internet Telephony will depend on whether the winner ·
of the BWA spectrum holds UAS or ISP license.
Question 7 I: Spectrum usage rights shall be awarded separately
for specific service areas. Please clarify.
H
720 SUPREME COURT REPORTS [2016] 2 S.C.R.

A Answer 71: Spectrum usage rights are based on the provisions of
the applicable license and the licenses are specific to a service
area. The auction is for the award of spectrum only, while award
of license is a separate process.
Question 72: To which entity BWA license will be given in case a
B company has both 'UAS' & ISP- Category A license?
Answer 72: The successful bidder will be allowed to determine
the license that it wishes to use for award of BWA spectrum."
13. Auction for 30 and BWA spectrum was conducted between
May and June, 2010. 10 bidders participated in 30 spectrum auction
c and 11 bidders participated in BWA spectrum auction. The results of
BWAspectrum were published on 12.06.2010. It is emphasized by the
respondents, and to which there is no denial, that this occasion was
conducted over 16 days and involved 117 rounds of bidding across service
areas. In the said occasion, all the 44 blocks that were put for auction
D across 22 service areas in the country were sold. Reserve price of
BWA spectrum was fixed at Rs.1750 crores. During bidding, highest
bid that was given by IBSPL was Rs.1284 7. 77 crores for one block of
Pan-India BWA spectrum. In this way, respondent No.2 emerged as
successful in acquiring various BWA frequencies in all 22 service areas
across the country. Further, as already noted in the earlier part of this
E judgment, though 11 bidders had participated, none of the other bidders
make any complaint about the fairness, transparency and as well as
about the process of bidding.
14. Jn this scenario, insofar as IBSPL becoming successful bidder
cannot be questioned at this stage. No doubt, the petitioner has alleged
F that shortly after acquiring Pan-India BWA spectrum, IBSPL increased
its authorized capital from Rs.3 crores to Rs.6,000 crores and question
the manner in which control of this company is taken over by RIL.
However, thai cannot be the subject of scrutiny in these proceedings
inasmuch as it has no causal connection with the validity of the auction
G of BWA spectrum in the year 2000. We may stated that respondent
· No.2 has specifically denied such allegations and has endeavor to explain
that promoters of IBSPL did not derive in unfair gains and also that they
did not divest or sell their equity to RIL, it is for our reasons recorded
above. It is not necessary to delve into this aspect any further as that is
neither the subject matter of controversy nor any relief claimed by the
H petitioner in this behalf. If at all, there is a reference to the same by the
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 721
INDIA [A.K. SIKRI, J.]

petitioner in the chain of submissions on the central issue which pertains A
to post-auction permission to provide voice services on BWA spectrum.
Migration from BWA to UAS licence
15. Without much ado, therefore, we would like to address the
aforesaid central issue that arises for consideration viz. whether a decision
of respondent No.1 allowing the migration from BWA to UAS license B
was valid (Ind legal and 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.
16. As highlighted above, there have been technological
developments in telecommunication are taking place at abnormal pace. c
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 the such
technological advancements coupled by commercial and economic
considerations. It can be supported by the fact that first Telecom Policy D
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
Policyof2012.
17. Having regard to such features/developments, in the year 2012,
the TRAI started exercise of bringing Unified Licensing regime. On E
10.02.2012, it issued a consultation paper on Draft Guidelines for Unified
License/Class License and migration ofexisting licenses. It was followed
by the statement of the Ministry for Telecommunication and IT on
15.02.2012 on Spectrum Management and Licensing Framework. This
statement broadly indrcated that there would be no more licenses linked F
with Spectrum and issuance of licenses and allocation of spectrum will
be completely delinked. Thereafter, on 16.04.2012, TRAI addressed.a'
letter to the Secretary, DoT enclosing its recommendations for Unified
License/Class License and migration of existing licenses. After due
deliberations at appropriate levels, the-,Government of India issued on
31.05.2012 the National Telecom Policy-2012 and announced approval G
for introduction of Unified Licensing regime. This was followed by the
policy decision ofDoT dated 13.03.2013 to allow migration to UL from
UASL as well as ISP to UL regime. The detailed background in taking
this policy decision is stated in the counter affidavit filed by the Union of
India and the position stated therein is not in dispute. These details are H
722 SUPREME COURT REPORTS (2016] 2 S.C.R.

A required to be noted, whi'ch are as follows:
"I. The Department of Telecommunications (DoT) vide their
D.O. letter No. L- 14047/09/2005-NTG dated May 22, 2006 sought
recommendations from the Telecom Regulatory Authority oflndia
(TRAI) on the methodology for allotment of spectrum for 3G
B services and its pricing aspects.
2. TRAI gave the recommendations on 27th Sept 2006 after
following the procedure of consultation and conducting open house
discussion to have understanding of views of stakeholders.
3. TRAI while replying to DoT in recommendations said:
c
"The Authority is committed to the view that the consumers must
get the benefit of new technology and variety of services. It also
believes thatthe telecom service providers should have the flexibility
to choose from the range of technologies available and the
regulatory policies must not restrict the choice of the operator.
D Therefore, the Authority considered it appropriate to offer its
recommendations both on 3G technology and on broadband
wireless access (BWA) systems at the same time. It would also
ensure that the spectrum issues are considered in a holistic manner
and piecemeal or ad-hoc solutions do not find place in future
E planning. The Authority has also made suggestions on the wider
issue management of spectrum, which is now a scarce resource
in the country. The future growth in telecom would largely depend
on the way we manage our spectrum."
4. While forwarding 'its recommendations TRAI, inter-alia,
considered the following:
F
· Band identification for 3G services
· Allocation methodology and pricing for 3G spectrum
· Band identification, and allocation and pricing ofBWAspectrum
as well as Spectrum Management
G
· Allocation methodology and pricing for BWA spectrum
· Spectrum Pricing
· Spectrum for BWA
5. The DoT examined the recommendations and had referred
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 723
INDIA [A.K. SIKRI, J.]

some of them back to TRAI as required by TRAI Act and took A
final views based on TRAI recommendations and Do T's internal
discussions.
6. The TRAI issued another consultation paper "On Allocation
and Pricing for2.3-2.4 GHz, 2.5-2.69 GHz& 3.3-3.6 GHz bands"
on 2nd May 2008 and issued its recommendations on 11th July, B
2008.
7. The TRAI was clear that spectrum in 2.3-2.4 GHz band could
be used for mobile services as mentioned in the preface of these
recommendations itself which is reproduced as below:
"During the period of September, 2006 to October, 2007, there c
have been significant changes in the international scenario. The
International Telecommunications Union-Raciio (ITU-R) has
identified 2.3-2.4 GHz band also as !MT (International Mobile
Technology) band (spectrum in the band of 2.5-2.69 GHz band
was already identified as IMT-2000 band). The use of 2.3-2.4 D
GHz and 2.5-2.69 GHz band offers significant scope for innovation
with the potential for induction of new technologies, services,
applications and devices. With the availability of mobile services
in this band, it provides an important opportunity for the introduction
ofnext generation mobile technologies (BWA).
E
8. Even TRAI in its recommendations admit that there could be
different technologies by which BWA could be provided and stated
that:
"5.12 During the consultation process, the respondents stated
that there are various versions ofBWA technology applications.
F
The Authority also recognizes that given the wide range of possible
technologies, it is essential that any policy concerned with
identification and allocation of spectrum for BWA must be
technology-neutral and flexible to permit co-existence of all types
of BWA technologies ....."
"5:72 ... .The average price for allocations comes to $0.65 (Rs.30) G
per Hz including South Korea, and $0.08 (Rs.3.75} per Hertz
excluding South Korea ...."
The final reserve price in NIA as issued by DoT was @Rs.87.5
per Hz. (Rs. 1750 crores for 20 MHz) .which is much higher than
recommended by TRAI. H
724 SUPREME COURT REPORTS (2016] 2 S.C.R.

A In view of that Guidelines were followed in allowing Reliance Jio
lnfocomm RJIO to offer Mobile services which has been done
after following due process of law by taking TRAI
recommendations on the issue and considering the same in DoT
·and approving Unified License (UL) guidelines wherein ISP could
migrate to UL.
B
9. The TRAI recommendations of April, 2012 on UL had
recommendations on Guidelines for UL/Class License and
migration ofexisting licenses. TRAI recommended that all present
licenses be migrated to UL and in future only UL be issued. TRAI
had recommended that all existing Basic/CMSP/UASUISP without
c spectrum/ISP with spectrum be allowed to migrate to UL. As
per this an ISP after migration will have all India UL after payment
as required.
10. It is pertinent to note that NTP 2012 states that National
Telecom Policy- 2012 recognizes that the evolution from analog
D to digital technology has facilitated the conversion of voice, data
and video to the digital form. Increasingly, these are now being
rendered through single networks bringing about a convergence
in networks, se..Vices and also devices. Hence, it is now imperative
to move towards convergence between various services, networks,
E platforms, technologies and overcome the existing segregation of
licensing, registration and regulatory mechanisms in these areas
to enhance affordability, increase access, delivery of multiple
services and reduce cost.
11. Further, it envisages providing secure, reliable, affordable and
F high quality converged telecommunication services anytime,
anywhere for an accelerated inclusive socio-economic
development. One of the objectives of the National Telecom
Policy-2012 is "Strive to create One Nation -One License" across
services and service areas ..."

G 18. From the aforesaid, it follows that a policy decision was taken
by the Government not only with regard to introduction of Unified
Licensing regime but it also including allowing 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
Unified License enabling them to provide both data service as well as
H voice telephony. This was a pure policy decision after due deliberations
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 725
!NOIA [A.K. SIKRI, J.]

by the experts in the fields and even TRAI had recommended allowing A
such migration.
19. Such a policy decision, when not found to be 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. This principle oflaw is ingrained in stone B
which is stated and restated time and again by this Court on numerous
occasions. In Jal Mafia/ Resorts (P) Ltd. v. K.P. Sflarma', the Court
underlined the principle in the following manner:
116. From this, it is clear that although the courts are expected
very often to enter into the technical and administrative aspects c
of the matter, it has its own limitations and in consonance with the
theory and principle of separation of powers, reliance at least to
some extent to the decisions of the State authorities, specially if it
is based on the opinion of the experts reflected from the project
report prepared by the technocrats, accepted by the entire
hierarchy of the State administration, acknowledged, accepted D
and approved by one Government after the other, will have to be
given due credence and weightage. In spite of this if the court
chooses to overrule the correctness of such administrative decision
and merits of the view of the entire body including the
administrative, technical and financial experts by taking note of . E
hair splitting submissions at the instance of a PIL petitioner without
any evidence in support thereof, the PIL petitioners shall have to
be put to strict proof and cannot be allowed to function as an
extraordinary and extra-judicial ombudsmen questioning the entire
exercise undertaken by an extensive body which include
administrators, technocrats and financial experts. In our considered F
view, this might lead to a friction ifnot collision among the three
organs of the State and would affect the principle of governance
ingrained in the theory of separation of powers. In fact, this Court
in MP. Oil Extraction v. State of MP., ( 1997) 7 SCC 592 at p.
611 lias unequivocally observed that: G
"41. The power ofjudicial review of the executive and legislative
action must be kept within the bounds of constitutional scheme so
that there may not be any occasion to entertain misgivings about

'(2014) s sec so4 H
726 SUPREME COURT REPORTS [2016] 2 S.C.R.

A the role ofjudiciary in outstepping its limit by unwarranted judicial
activism being very often talked of in these days. The democratic
set-up to which the polity is so deeply committed cannot function
properly unless each of the three organs appreciate the need for
mutual respect and supremacy in their respective fields."
B 11 7. However, we hasten to add and do not wish to be
misunderstood so as to infer that howsoever gross or abusive
may be an administrative action or a decision which is writ large
on a particular activity at the instance of the State or any other
authority connected with it, the Court should remain a passive,
inactive and a silent spectator. What is sought to be emphasised is
c that there has to be a boundary line or the proverbial "laxman
rekha" while examining the correctness of an administrative
decision taken by the State or a central authority after due
deliberation and diligence which do not reflect arbitrariness or
illegality in its decision and execution. If such equilibrium in the
D matter of governance gets disturbed, development is bound to be
slowed down and disturbed specially in an age of economic
liberalisation wherein global players are also involved as per policy
decision."
20. Minimal interference is called for by the Courts, in exercise of
E judicial review ofa Government policy when the said policy is the outcome
of deliberations of the technical experts in the fields inasmuch as Courts
are not well-equipped to fathom into such domain which is left to the
discretion of the execution. It was beautifully explained by the Court in
Narmada Bachao Ando/an v. Union of lndill' and reiterated in
Federation of Railway Officers Assn. v. Union of India' in the
F following words:
"12. In examining a question of th is nature where a policy is
evolved by the Government judicial review thereof is limited.
When policy according to which or the purpose for which discretion
is to be exercised is clearly expressed in the statute, it cannot be
G said to be an unrestricted discretion. On matters affecting policy
and requiring technical expertise the court woul~ leave the matter
for decision of those who are qua( ified to address the issues.

• (2000) JO sec 664
H '(2003) 4 sec 2s9
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 727
INDIA [A.K. SIKRI, J .)

Unless the policy or action is inconsistent with the Constitution A
and the laws or arbitrary or irrational or abuse of power, the court
will not interfere with such matters."
21. Limits of the judicial review were again reiterated, pointing out
the same position by the Courts in England, in the case of G Sundarrajan
v. Union ofIndia" in the following manner: B
"1.5.1. Lord MacNaughten in Vacher & Sons Ltd. v. London Society
of Compositors (1913 AC I 07 : (1911-13) All ER Rep 241 (HL)
has stated:
" ... Some people may think the policy of the Act unwise and even
dangerous to the community.... But a judicial tribunal has nothing c
to do with the policy of any Act which it may be called upon to
interpret. That may be a matterfor privatejudgment. The duty
of the court, and its only duty, is to expound the language of the
Act in accordance with the settled rules of construction."
15.2. In Council of Civil Service Unions v. Minister for the Civil D
Service (1985 AC 374: (1984) 3 WLR 1174: (1984) 3 All ER 935
(HL), it was held that it is not for the courts to determine whether
a particular policy or particular decision taken in fulfilment of that
policy are fair. They are concerned only with the manner in which
those decisions have been taken, if that manner is unfair, the E
decision will be tainted with what Lord Diplock labels as
"procedural impropriety".
15.3. This Court in M.P. Oil Extraction v. State ofM.P. (1997) 7
sec 592 held that unless the policy framed is absolutely capricious,
unreasonable and arbitrary and based on mere ipse dixit of the
F
executive authority or is invalid in constitutional or statutory
mandate, court's interference is not called for.
I 5.4. Reference may also be made of the judgments of this Court
in Ugar Sugar Works Ltd. v. Delhi Admn. (2001) 3 SCC 635,
Dhampur Sugar (Kashipur) Ltd. v. State ofUttaranchal (2007) 8
G
SCC 418 and Delhi Bar Assn. v. Union of India (2008) 13 SCC
628.
15.5. We are, therefore, firmly of the opinion that we cannot sit in
judgment over the decision taken by the Government of India,
----
• (2013) 6 sec 620 H
728 SUPREME COURT REPORTS (2016] 2 S.C.R.

A NPCIL, etc. for setting up of KKNPP at Kudankulam in view of
the Indo-Russian Agreement."
22. When it comes to the judicial review of economic policy, the
Courts are more conservative as such economic policies are generally
formulated by experts. Way back in the year 1978, a Bench of seven
B Judges of this Court in Prag Ice & Oil Miffs v. Union of India and
Nav Bllarat Oil Mills v. Union of India' carved out this principle in
the following terms:
"We have listened to long arguments directed at showing us that
producers and sellers of oil in various parts of the country will
c suffer so that they would give up producing or dealing in mustard
oil. It was urged that this would, quite naturally, have its
repercussions on consumers for whom mustard oil will become
even more scarce than ever ultimately. We do not think that it is
the function of this Court or of any court to sit in judgment over
such matters of economic policy as must necessarily be left to the
D government of the day to decide. Many of them, as a measure of
price fixation must necessarily be, are matters of prediction of
ultimate results on which even experts can seriously err and
doubtlessly differ. Courts can certainly not be expected to decide
them without even the aid of experts."
E 23. Taking aid from the aforesaid observations of the Constitution
Bench, the Court reiterated the words of caution in Peerless General
Finance and Investment Co. Limited v. Reserve Bank of India'
with the following utterance:
"31. The function of the court is to see that lawful authority is not
F abused but not to appropriate to itself the task entrusted to that
authority. It is well settled that a public body invested with statutory
powers must take care not to exceed or abuse its power. It must
keep within the limits of the authority committed to it. It must act
in good faith and it must act reasonably. Courts are not to interfere
with economic policy which is the function of experts. It is not the
G
function of the courts to sit in judgment over matters of economic
policy and it must necessarily be left to the expert bodies. In such
matters even experts can seriously and doubtlessly differ. Courts
cannot be expected to decide them without even the aid of experts."
----
7(1978)3SCC459:AIR 1978SC 1296: 1978CriLJ 1281
H '(1992) 2 sec 343
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION· OF 729
INDIA [A.K. SIKRI, J.]

24. It cannot be doubted that the primary and central purpose of A .
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 aforesaid dominant objectives are achieved, this Court
8
has added new dimension to the contours of judicial review and it has .
undergone tremendous change in recent years. The scope of judicial
. review has 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 arcl\itecture of the Government'. Thus, not only has
judicial review grown wider in scope; its intensity has also increased. C
Notwithstanding the same, ·
"it is, however, central to received perceptions ofjudicial review
that courts may not interfere with exercise_of discretion merely
because they disagree with the decision or action in question;
instead, courts intervene only if some specific fault can be D
established- for example, ifthe decision was reached procedurally
unfair' 0 •
25. 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 to E
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 F
policy.
26. Keeping in mind the afores11id parameters of judicial power,
we now proceed to deal with the some specific arguments of th~
petitioner
G
(1) Whether process of auction should have been resorted to?
27. The first argument raised by the petitioner is that in the NIA
9
(See; Administrative Law: Text and Materials (4th Edition) by Beatson, Matthews,
and Elliott)
" Ibid . H
730 SUPREME COURT REPORTS (2016] 2 S.C.R.

A dated 25.02.2010, when 3G spectrum and BWA spectrum were to be
auctio.ned there was a specific clause that the spectrum shall not be
used for any activity other than the activities for which the operators has
a license. On that basis, it was argued that there was no reason to allow
the migration and for voice telephony there should have been a separate
auction.
B
28. This submission lacks substance. During the course of
arguments, the learned Solicitor General successfully demonstrated that
what was auctioned in 2010 was spectrum, namely, 3G spectrum and
BWAspectrum. Insofar as 3G spectrum auction is concerned, it was in
blocks of 5 MHz i.e. each block of2 x 5 MHz whereas BWA auction
c was in blocks of 20 MHz. The spectrum, therefore, was of different
forms and thus, issuance of license would be different from spectrum.
Moreover, NIA dated 25.02.2010 itself provided the eligibility conditions
for an entity who could bid for BWA spectrum and further stipulation in
this behalf was specifically stated as under:
D "Successful Bidders in the BWA Auction that currently hold an
!SP-category 'B' licence shall be required to migrate to an !SP-
category 'A' licence, by paying the applicable fees/charges for
migration, before they are awarded the BWA Spectrum. The DoT
guidelines stipulate that a UAS license or an ISP licence can only
E be awarded to an Indian Comp~y. Hence, any foreign applicants
will need to form, or acquire, an Indian company, to obtain a UAS
licence or an ISP-category 'A' licence. However, they are allowed
to participate in the Auctions directly and apply for or acquire a
licence subsequently through an Indian company, where they hold
at least 26% equity stake.
F
Services can only be offered subject to the terms and conditions
of the licence obtained by the operator. Award of spectrum does
not confer a right to provide any telecom services, and these are
governed by the terms and conditions of the licence obtained by
the operator."
G
29. It becomes apparent from the above that the spectrum was
different from license inasmuch as award of spectrum did not confer a
right to provide any telecom services. 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. The learned Solicitor
H General also handed over a comparative chart of varying points of view
CENTRE FOR PUBLIC INTERE:ST LITIGATION v, UNION OF .731
INDIA [A.K. SIKRI, J.]

of the different Departments when the matter regarding migration from A
UASL to UL regime ~as being discussed and contemplat~d. A perusal
thereof would show that there was .a threadbare discussio"O on the issue
wherein pros and cons of 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
B
discussion reveals that the Committee of the DoT in its comments
proceeded on the premise that the BWA spectrum could not be used 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 c
DoT itself for the purpose of the auction. Difference of point of view of
different departments shows the process ofinstitutional decision m'aking.
30. The aforesaid discussion leads us to 'irresistible conclusion thaf
decision of the Government permitting migration oftelecom licenses to'
UL regime is valid, legal and without any blemish. D
(2) Any undue favour to respondent No.2?
•
31. This brings us to another incidental aspect, namely, whether
respondent No.2 could be allowed migration from BWA spectrum to
Unified License (UL). We may observe at the outset that once a policy
decision is taken to allow such a migration to all those who were holding E
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 in view of such an allegation that we are delving on the F
aforesaid argument.
32. Some of the important features and aspects which have to be
kept in mind, in order to deal with the aforesaid argument of the petitioner,
needs to be noted in the first instance. It is not in dispute that IBSPL,
when it bid for BWA spectrum, was holding ISP category 'A' license.
G
Further, in terms of3G or BWA spectrum, the acquirerthereof is eligible
to provide any service using the spectrum during the period of20 years
during which the acquirer gets the righUo use the spectrum under the
auctioned terms. Also, as pointed out above, the license is delinked from
the spectrum. The IBSPL having acquired the spectrum in the course of
biddirtg,·was not barred from obtaining licenses for various telecom H
732 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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.
B 33. In the aforesaid.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 oflndia
to come out with a regime for grant of licenses for providing various
telecom services. A policy decision was taken, as discussed in detail
above, for migration to new telecom service license, i.e., Unified License
c (UL) for ISP licensees with BWA spectrum. In its wisdom, this decision
facilitated those having data services to acquire license thereby covering
voice-telephony as well All across the Board holding BWA spectrum
became entitled to migrate to UL and, therefore, there is no discrimination
on the part of the government authorities nor it aims at undue favoritism
D to respondent no. 2. It is not in dispute that as per the new policy/regime,
respondent no. 2 was eligible to apply for UL from BWL spectrum.
Therefore, it cannot be treated as a case of back ctoor entry of respondent
no.2.
(3) Any loss of public revenue?
. ·E 34. lhe only other issue which needs to be adverted to at this stage
is the fixation of additional fee of Rs. 1,658/-crores which was paid by
respondent no. 2 for migration to UL. The poser is : 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.
F 35. We may keep in mind that while taking this position, namely,
respondent no. 2 is given undue advantage by allowing it to migrate from
UAS license to UL with payment of so-called meager amount of Rs.
1,658 crores, the petitioner rested its case entirely on the draft report of
CAG. This is so accepted and admitted in writ petition itself. It is pointed
G out that CAG 's draft report had put the loss on this account at Rs. 22,842
crore besides significant loss of revenue on Spectrum Usage Charges
(SUC). The petitioner had put both these benefits at about Rs. 40,000
crore, out of which about Rs. 17,000 crore was towards SUC. In its
final report, however, the CAG has revised the loss figure to Rs. 3,367 .29
crores, besides sue on which it reiterated "significant loss of revenue
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 733
INDIA [A.K. SJKRI, J.]

to the government". A
36. On that basis, submission of the petitioner is that that had there
been an independent auction of UL; the Government would have
generated substantially higher revenue. It is also argued that granting of
UL by adopting the methodology of conversion from existing UAS to
UL, instead of putting it to auction, is also contrary to the judgment of B
this Court in 2G2 case. Though we have already dealt with this aspect
of the argument, we are addressing the issue now in the context of
frontal attack made on the fixation of fee of Rs. 1,658 crores which is
charged from respondent no. 2 while allowing the migration from UAS
to UL.
c
37. In the first instances, we may observe that once the policy
.decision of the Government allowing migration from BWA spectrum to
UL is found to be justified in the circumstances already noted above, the
argument of the petitioner predicated on the judgment of this Court in
2G2 case does not hold good. Even otherwise the decision in the said
case is based on altogether different backdrop. Judgment in the said D
case would reveal that in 200 I, in order to increase competition from
then existing two private players plus one PSU player per telecom circle,
the Government introduced the 4"' telecom operator in each circle. At
this time, there was an auction conducted for grant of licenses and this
license carried with 'it 4.4 + 4.4 MHz to start up spectrum and an E
assurance that further spectrum availability would be given to the licenses
subject to availability (by 20 I 0 the TRAI had suggested the grant of a
minimum spectrum of6.2 MHZ to each licensee as contracted spectrum).
The Government had decided in 200 I when bids were invited for the 4"'
license that all future grants should be on market price. However, in a
departure from this even in year 2007-08 the then Telecom Minister F
(following certain processes which was fo~nd to be flawed) invited
applications for license based on a pre-determined license fee. This
license fees was the same as the fee that was paid in 200 I by those who
applied for the 4'" telecom license. This Court found that the manner in
which this decision had been arrived at was flawed and smacked of G
arbitrariness. It was also held that this spectrum is an extremely valuable
natural resource and must only be made available at market price. The
Court found thatthe license itself had no value, in that the real value was
· that of the spectrum.
38. On the other hand, insofar as present case is concerned, auction H
_734 SUPREME COURT REPORTS [2016] 2 S.C.R.

A of3G spectrum as well as BWL spectrum held in 2010 was not challenged
by a,i1ybody and no fault has even been found in the same. It is the.
spectrum which 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, switchi1~g over from-UASL to
UL, validity whereof has already beenupheld. •
B
39. Insofar as fee of Rs. 1,658 crores that is charged from respondent
no. 2 is concerned, it was pointed out by the learned counsel fo'r the
respondents at the Bar that migration/grant ofunified license available
today is_at paltry fee of Rs. 15 crores. As against this, respondent no. 2
has paid Rs. 1,658 crores, much higher than fee fixed. One cannot lose
c sight of the fact that insofar as auction ofBWA spectrum i·s concerned,
it fetched !l whopping price of Rs. 12,847.77 crores. On the other hand,
license is acquired separately at a fixed license fee over and above the
price of spectrum which requires a fee of Rs. 15 crores insofar as switch
over from UASL to UL is concerned.
D 40. The foundation of the petitioner's allegation is draft report of
CAO. 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 ofCAG is materially different from the draft report. It
appears that in the draft report, CAG proceeded on the wrong premise
E that the license was also to be auctioned. In fact, as far as 2G' case is
concerned, in (hat matter licenses along with bundles spectrum were
awarded at a pre-determined price on a first come first serve bases 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
F 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 ofISP operators
with BWS spectrum to UL regime. Instead, it had stated that the BWA
G, __ spectrum assignee, whether holding a UAS license or ISP lincence 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 fri>m ISP licenc~ to UL license with migration fee of Rs. 1,658
crores, calculated as the ·difference in entry fee of UASL and that of
·H ISL license in order to provide a level playing field between the two
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 735
INDIA [A.K. SIKRI, J.]
,,
classes licenses. The aforesaid facts would show that respondent no. 2 A
has paid spectrum price of Rs. 12,847.77 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
B
respondent no. 2 or that the Government would have fetched much more
price.
41.. We have already traced brief history of the development in
telecommunication and, in particular, that of mobile/cellular services.
Most significant development which is pointed out is as to how
technological development has led to the growth of data telephony from
c
mere voice telephony. As already stated, number of other services are
provided by the service providers 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- D
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 · E
voice traffic would reveal that in the year 2007-2008 voice and data
traffic was almost equal. However, by the end of2010, 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 F
from the available figures is that whereas in voice traffic growth from
2010-2015 is hardly 1Y2 times, it is more than seven times insofar as
mobile data traffic is concerned. Between first quarter of2014 and first
quarter of 2015 itself mobile data traffic registered a growth of 55%.
Futur~ forecast of data traffic is expected @30% per year. In India
itself, monthly mobile data consumption is expected to increase 18 fold G
by the year 2020 over current levels. In the aforesaid scenario,
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 H
736 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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 challenges in education, health, employment generation,
B
financial inclusion and much else.
42. The only purpose of highlighting the aforesaid features,
. particularly in contrasting the growth between voice-telephony and data
traffic, is to show that main source of revenue for the service providers
is from data services and not voice-telephony. In fact, Mr. Salve even
c claimed that voice-telephony for mobile companies, insofar as income
generation is concerned, does not remain that attractive and in near
future, there is a possibility of a situation when voice-telephony services
· may be provided free of charge to those using mobile data services by
paying for those services. Whether this happens or not is anybody's
D guess. However, what cannot be disputed is that main source of income
for mobile companies is data services and not voice telephone services.
This needs to be borne in mind while testing the argument of the petitioner.
43. Much is said on the veracity ofCAG draft report by respondent
no. 1 as well as respondent no. 2 in their attempt to show that the very
E basis of making calculation of alleged undue advantage of Rs. 22,842
crores (in the draft r~port) or Rs. 3,367.29 crores (in the final report).
However, having regard to the afor~said discussion, it may not be
necessary to delve into this aspect in much greater details, It would be
suffice to point out that the basic error committed by CAG was to
compare 3G and BWA (4G} spectrum which mistake was realised in
F preparing the final report. It appears that these calculations are made·
by taking migration foe of Rs. 1,658 crores which were prevalent in the
yea.r 2001 and on that basis it arrived at a figure of Rs. 5025.29 crores
which, according to CAG, should have been fixed. As respondent no. 2
paid a fee of Rs. 1,658.57 crores, according to the CAG it has resulted
G in the loss of Rs. 3,367.29 crores. However, the aforesaid assumption
loses sight ofth~ 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 at the cost of repetition that insofar
as auction ofBWA spectrum is concerned the same was auctione.d at a
price. of Rs. 12847.77 crores which is the most material aspect and has
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 737
INDIA [A.K. SIKRI, J.)

been totally glossed over. We, thus, do not find any error in the action of A
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.
44. With this, we address ourselves to the remainder issue, namely,
fixation of 1% AGR as SUC for the use ofBWA. As noticed above, the
contention of the petitioner in this behalf is that when the respondent
No. I allowed second respondent-Reliance Jio to offer voice telephony
(by atlowing their migration to UL regime), first respondent should insist
for payment of sue for level playing field like those offering voice
telephony on BWA spectrum. So far as various operators who are offering
voice services are paying SUC at J% to 8% depending on the quantum
of the spectrum they hold. The prevailing slab rates are shown in the
c
rejoinder filed by the petitioner as under:-
sue (as a 0/o ofRC\'enue)
Spectrum quantun1 Before DoT Order
01.04.2010 25.02.2010
2x4.4 2 3 D
2x6.2 3 4
2x8 5
4
2xl0 · 6
2xl2.5 5 7
2xlS 6 8
E

45. The justification/explanation which is given by the Union of
India is that it was the TRAI which submitted its recommendation dated
27.09.2006 on 'Allocation and Pricing of Spectrum for JG and BWA
services' wherein additional 1% SUC was recommended.
F
46. It is also pointed out that TRAI reiterated that SUC be fixed at
I% AGR in its subsequent recommendations dated l I .07.2008 on
'Allocation and Pricing for 2.3-2.4 GHz, 2.5-2.69 GHz & 3.J-J.6 GHz
bands'.
47. The learned Solicitor General argued that after receiptufthe G
above TRAl recommendations, there were a lot of deliberations in the
Department, consultations were held with other Ministries i.e.,.
Department of Economic Affairs, Department of Industrial Promotion
and Policy on the various issues relating 'of auction of JG and BWA
Spectrum. The submission is that all aspects, relevant to the issue were'
H
738 SUPREME COURT REPORTS [2016] 2 S.C.R.

A thoroughly examined and deliberated upon. It was noted that since BWA
spectrum will be used for rural development, the SUC is kept at 1% of
AGR. Further, it was also noted that since spectrum is being auctioned
and the price discovery is through a market mechanism, the bidders will
factor in the annual charges in their bids. Therefore, keeping BWA
annual spectrum charge at I% will have no adverse revenue implications.
B
The aforesaid is the rationale given for fixation of I% of AGR as SUC.
48. On going through the records, we find _that the decision, namely,
SUC be fixed at I% AGR was based on relevant considerations. Not
only TRAI had recommended the aforesaid charge to be fixed, there
was an in depth examination of this recommendation of the TRAI by
c Government before accepting the same. Furthermore, it is also pertinent
to note that on the basis of aforesaid decision, specific provisions were
incorporated in the NIA for SUC for BWA spectrum. Clause 3.5 of the
NIA, in this behalf, is as under:
"3 .5 Spectrum usage charges
D Licensees using B \VA Spectrum n ced to pay 1% of AG R
from services using this spectrum as a nn ua I spectrum
charge irrespective of the licence held by them. Such
revenue \vould be required to be reported separately."

49. The aforesaid discussion, thus, demonstrates that the main
consideration that prevailed with the Government in keeping the SUC at
E I% of AGR was that BWA spectrum was to be used for rural
development. It also needs to be highlighted that in line with the objective
ofrural development, more rural oriented roll out obligations for BWA
spectrum in category A; Band C service areas, were prescribed, as can
seen from the following clauses:
F "3 .4 .2 Roll-out obligations forB\VA Spectrum

Category A, B '"d c service are as
The licensee lo whom the sp.ectrum ; s assigned sh a 11
ensure th a I I east S 0 Ofct 0 f the r u ra I S D C A's a re
"
covered with in five years of the Effective Date using
the BWA Spectrum. Coverage 0 f a r u r a I SDCA
G W OU Jd mean that at least 90% of the are a bounded by
the m unicipa\/!_ocal body Jim its , should gel the
required street level coverage.

The Effective Date sh a 11 be the later 0 f the date
when the right lo awarded spectrum
""
commercially commences and the date when the
U AS licence or the ISP category 'A' licence, if and as
applicable, is granted lo the operator ...
H
CENTRE FOR PUBLIC INTEREST LITIGATION v. UNION OF 739
!NOIA [A.K. SIKRI, J.]

, 50. Mi. Ranjit Kumar, learned Solicitor General further demonstrated A
· tnat the country has beell divided into '3 metro service areas, namely
Delhi, Mumbai and Kolkata and 18 Service areas which have been
further designated as category A, .B and C. SDCA stands for Short
Distance Charging Area which comprises typically of olle to two tehsils.
The country has 264 7 SDCAs out of which 24 70 SDCAs has been
B
designated as rural SDCAs. All operators including Mis Reliance J io
Infocomm Ltd ·who were awarded BWA Spectrum in 2010 and whose
time period of 5 years for roll-out obligation was completed in 2015,
have submitted proof of compliance ofroll out obligations by registering
with Telecom Enforcement and Resource Monitoring (TERM) Cell of
Department of Telecom before the due date in all the 22 service areas. c
The date of registering the TERM Cell is taken as the date ofcompletion .
of roll out obligation on successful testing. In this case, testing is in
progress and is likely to be completed in next few months. It was, thus,
pointed out that less rural coverage is stipulated for 3G spectrum which
factor·influenced the policy makers to fix SUC at 1% of AGR.
D
51. Apart from the above, there is one more reason not to interfere
with the aforesaid stipulation of SUC. The Government has taken the
position that the conditions in the license granted to respondent No. 2
empower the licenser/Government to change the terms of license and,
therefore, whenever it is felt necessary and expedient in pubic interest,
the percentage of SUC can be increased. However, the matter, for E
increase of SUC, was even examined after the recommendation ofTRAl
in the year 2013 that sue be charged at an average rate instead of slab
rate for various spectrum holdings as given in NIA of2010 and subsequent
N!As of2012 and January, 2013. The Telecom Commission considered
this aspect and debated three options which could be considered for F
holders of BWA auction in the year 2010, namely:
(i) sue be raised to 3%;
(ii) sue be kept at I% and reported separately; or
(iii) SUe for standalone BWA be kept at 1%, but if
combined with spectrum bought in fresh auctions
then the_\;harge be the weighted average of
G
acquired spectrum at 3% and B WA at I%.

52. Before taking a final decision as to which option be resorted to,
the Telecom Commission recommended that a legal opinion be sought
from the learned Attorney General. Matter was referred to the then
H
740 SUPREME COURT REPORTS [2016] 2 S.C.R.

A Attorney General who opined that SUC charge be retained at I% for
BWA operators and on that basis, final decision in this behalf was taken.
It is further pointed out that on the issue of revenue segregation, a
committee had been formed which has submitted its report. The report
is under consideration and decision on the report is likely in two months.
After considering the report of the committee on the revenue segregation,
B
appropriate action will be taken whether separate revenue reporting to
continue or not or an increase in SUC is required for the proper conduct
of telegraph as provided in the License Agreement. The decision on the
report is expected in two months. In view of the aforesaid developments,
for the time being, we leave the ' matter to the Government to take an
c appropriate decision in this behalf.
53. We find no merit in this writ petition which is, accordingly,
dismissed.
Devika Gujral Writ petition dismissed.

D