Supreme Court of India
UNION OF INDIA AND ANR.versusASSOCIATION OF UNIFIED TELECOM SERVICE PROVIDERS OF INDIA AND ORS.
- Citation
- 2011 INSC 744
- Decided
- 11 October 2011
- Disposal
- Disposed off
- Bench
- R V RAVEENDRAN
Holding
The Tribunal had no jurisdiction to decide the validity of licence terms, including the definition of Adjusted Gross Revenue; its order was a nullity and not binding, and the Union may raise the contentions before the Tribunal, while licencees may challenge specific AGR computations only when a demand is raised against them.
Summary
The Union of India challenged the Telecom Disputes Settlement and Appellate Tribunal’s (TDSAT) orders that defined Adjusted Gross Revenue (AGR) to include only revenue from licensed telecom activities, excluding revenue from non‑licensed activities. The issue was whether the Tribunal and the Telecom Regulatory Authority of India (TRAI) had jurisdiction to decide on the validity of licence terms, including the definition of AGR, and whether the Union could re‑agitate the Tribunal’s earlier decision after the Supreme Court had dismissed its appeal but granted liberty to raise the same contentions before the Tribunal. The Court held that the licence is a contract between the Central Government and the licencee, and the TRAI’s recommendations are merely advisory; the final decision on licence terms rests with the Central Government. Consequently, the Tribunal lacked jurisdiction to adjudicate the validity of the licence terms and its order was a nullity, not binding on the Union. The Court set aside the Tribunal’s impugned order, allowed the appeals, and remitted the matters to the Tribunal for fresh orders consistent with law.
Issues considered
- Whether the Union of India can re‑agitate before the Tribunal the question decided in the Tribunal’s order dated 07.07.2006 that Adjusted Gross Revenue includes only revenue from licensed activities.
- Whether TRAI and the Tribunal have jurisdiction to decide on the validity of the terms and conditions of a licence, including the definition of Adjusted Gross Revenue, finalized by the Central Government.
- Whether the Tribunal’s order dated 07.07.2006 became binding on the Union of India despite the Union not filing an appeal against it.
- Whether a licencee can challenge the computation of Adjusted Gross Revenue, and if so, at what stage and on what grounds.
Legislation cited
- Indian Telegraph Act, 1885s. 4(1)
- Telecom Regulatory Authority of India Act, 1997s. 11(1)(a)(i), s. 11(1)(a)(ii), s. 11(1)(b), s. 11(1)(c), s. 11(1)(d), s. 14(a)(i)
Subjects
Adjusted Gross RevenueTelecom licence feeTRAI recommendationsTribunal jurisdictionTelegraph ActContractual nature of licenceRes judicataTelecom Regulatory Authority of India Act
Judgment
(2011] 14 (ADDL.) S.C.R. 657
UNION OF INDIA AND ANR. A
v.
ASSOCIATION OF UNIFIED TELECOM SERVICE
PROVIDERS OF INDIA AND ORS.
(Civil Appeal No. 5059 of 2007)
B
OCTOBER 11, 2011
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.]
Telecom Regulatory Authority of India Act, 1997:
c
s. 14(a)(i) - Jurisdiction of Tribunal to decide the terms
and conditions of license finalised by the Central Government
and incorporated in the license agreement including the
definition of Adjusted Gross Revenue - Held: Tribunal has
no jurisdiction to decide upon the validity of the terms and 0
conditions incorporated in the license of a service provider,
but it will have jurisdiction to decide "any" dispute between the
licensor and the licensee on interpretation of the terms and
conditions of the license - Once the licensee had accepted
in the license agreement that the license fee would be a E
percentage of gross revenue which would be the total revenue
of the licensee company and had also accepted that the
Government would take a final decision not only with regard
to the percentage of revenue share but also the definition of
revenue for this purpose, the licensee could not have
approached the Tribunal questioning the validity of the F
definition of Adjusted Gross Revenue in license agreement
- The incorporation of the definition of Adjusted Gross
Revenue in the license agreement was part of the terms
regarding payment which had been decided upon by the
Central Government as a consideration for parting with its G
rights of exclusive privilege in respect of telecommunication
activities and having accepted the license and availed the
exclusive privilege of the Central Government to carry on
.657 H
658 SUPREME COURT REPORTS (2011) 14 (ADDL.) S.C.R.
A telecommunication activities, the licensees could not have
approached the Tribunal for an alteration of the definition of
Adjusted Gross Revenue in the license agreement - As the
Central Government has already considered the fresh
recommendations of the TRAI and has not accepted the
B same and is not agreeable to alter the definition of Adjusted
. Gross Revenue, the decision of the Central Government on
the point was final under the first proviso apd the fifth proviso
to s. 11 (1) of the Act - Telegraph Act, 1885.
C s.11(1)(a)- Recommendations of the TRAI under- Held:
TRAI has been conferred with the statutory power to make
recommendations on the terms and conditions of the license
to a service provider and the Central Government is bound
to seek the recommendations of the TRAI on such terms and
conditions at different stages, but the recommendations of the
D TRAI are not binding on the Central Government and the final
decision on the terms and conditions of a license to a service
provider rested with the Central Government - If there is a
difference between the TRAI and the Central Government with
regard to a particular term or condition of a license, the
E recommendations of the TRAI will not prevail and instead the
decision of the Central Government will be final and binding.
s.11(1)(b), (c), (d)- Recommendations of the TRAI under
- Held: The functions of the TRAI under clause (b) of sub-
F section (1) of s.11 of the TRAI Act are not recommendatory.
s.11(1)(a) and s.11(1)(b) - Distinction between -
Discussed.
s.14(a)(i) - Stage when dispute can be raised regarding
G the computation of Adjusted Gross Revenue made by the
licensor - Held: The dispute can be raised by the licensee,
after the license agreement has been entered into and the
appropriate stage when the dispute can be raised is when a
particular demand is raised on the licensee by the licensor -
H When such a dispute is raised against a particular demand,
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 659
SERVICE PROVIDERS OF l~JDIA
the Tribunal will have to go into the facts and materials on the A
basis of which the demand is raised and decide whether the
demand is in accordance with the license agreement and in
particular the definition of Adjusted Gross Revenue in the
license agreement and can also interpret the terms and
conditions of the license agreement. B
Appeal: Whether after dismissal of appeal of the Union
of India against the order of the Tribunal by Supreme Court,
Union of India could re-agitate the question decided in the
order of Tribunal that the Adjusted Gross Revenue will include C
only revenue arising from licensed activities and not revenue
from activities outside the license of the licensee - Held:
While dismissing the appeal, express liberty was granted by
Supreme Court to the appellant that al' contentions raised
before it could be urged before the Tribunal - Therefore,
appellant could urge before the Tribunal all the contentions D
including the contention that the definition of Adjusted Gross
Revenue as given in the license could not be challenged by
the licensee before the Tribunal and will include all items of
revenue mentioned in the definition of Adjusted Gross
Revenue in the license - Telecom Regulatory Authority of E
India Act, 1997
Telegraph Act: s.4(1), proviso - Held: A license granted
in favour of any person under proviso to sub-section (1) of s.4
of the Act is in the nature of a contract between the Central F
Government and the licensee - Consequently, th.e terms and
conditions of the license are part of a contract between the
licensor and the licensee - Telecom Regulatory Authority of
India Act, 1997
The National Telecom Policy 1994 provided for fixed G
license fee which was payable by the service providers
every year. During the period 1994 to 1999, the telecom
licensees made ·representations to the Government. of
India, Ministry of Telecommunications for relief against
H
660 SUPREME COURT REPORTS (2011) 14 (ADDL.) S.C.R.
A the high license fee. The Government of India considered
the representations and offered a new package, known .
as the "National Telecom Policy 1999 - Regime" giving an
option to the licensees to migrate from fixed license fee
to revenue sharing fee. Accordingly, letters dated
s 22.07.1999 were sent to different licensees offering them
a change over to NTP-99 regime.
After receipt of the letter dated 22.07.1999, some of
the service providers took new licenses which provided
C that the licensee would have to pay a certain percentage
of the Gross Revenue as license fee annually. After the
Ministry of Telecommunications finally took the final
decision on the definition of Adjusted Gross Revenue, the
license agreement was amended and signed by the
licensees and the amended license agreement was
D effective from 01.08.1999.
In the year 2003, some of the licensees questioned
the validity of the definition of Adjusted Gross Revenue
'in the license agreement before the Telecom Disputes
E Settlement and Appellate Tribunal. In its order dated
07.07.2006, the Tribunal held that under Section 4 of the
Telegraph Act, the Central Government can take
percentage of the share of gross revenue of a licensee
realised from activities of the licensee under the license
F and, therefore, revenue received by licensee from
activities beyond licensed activities would be outside the
purview of Section 4 of the Telegraph Act; that Section
11 (1 )(a) of the TRAI Act mandates the Central Government
to seek recommendations from the Telecom Regulatory
G Authority (TRAI) on the license fee payable by the licensee
and as no effective constitution had been made by the
TRAI, the matter should be remanded to the TRAI and the
TRAI can consider the matter and send its
recommendations to the Tribunal.
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM ·. 661
SERVICE PROVIDERS OF INDIA
The Union of India challenged the said order before A
the Supreme Court in Civil Appeal No. 84 of 2007 under
Section 18 of the TRAI Act. While this Civil Appeal was
pending before the Supreme Court, the TRAI sent its
recommendations on the incorporation of the Adjusted
Gross Revenue which was sought by the Tribunal by its B
order dated 07.07.2006. Accordingly, when Civil Appeal
No. 84 of 2007 came up for hearing before the Supreme
Court on 19.01.2007, the Court took the view that as the
. TRAI had already submitted its recommendations to the
Tribunal, there was no reason to interfere and dismissed c
·the appeal giving liberty to the Union of India to urge all
the contentio.ns raised in the Civil Appeal before the
Tribunal. In its fresh order dated 30.08.2007, the Tribunal
held that its earlier order dated 07.07.2006 having become
final, it cannot be re-opened after the dismissal of Civil
0
Appeal No.84 of 2007 by the Supreme Court and its
finding in the earlier order dated 07.07.2006 that Adjusted
Gross Revenue will include only revenue arising from
licensed activity and not revenue. from activities outside
the license cannot be re-agitated by• the Union of India. E
The Tribunal in the impugned order considered the
recommendations of the TRAI regarding the heads of
revenue to be included/excluded from the Adjusted Gross
Revenue.
In the instant appeals, the questions which arose for F
consideration were: (i) Whether after dismissal of Civil
Appeal No.84 of 2007 of the Union of India against the
order dated 07.07.2006 of the Tribunal, by the Supreme
Court by order dated 19.01.2007, the Union of India could
re-agitate the question decided in the order dated G
07.Q7.2006 that the Adjusted Gross Reven'tle will include
only revenue arising from licensed activities and not
revenue from activities outside the license of the licensee;
(ii) Whether the TRAI and the Tribunal have jurisdiction
to decide whether the terms and conditions of license H
662 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A which had been finalised by the Central Government and
incorporated in the license agreement including the
definition of Adjusted Gross Revenue; (iii) Whether as a
result of the Union of India not filing an appeal against
the order dated 07.07.2006 of the Tribunal passed in
B favour of some of the licensees, the said order dated
07.07.2006 had not become binding on the Union of India
with regard to the issue that revenue realised from
activities beyond the licensed activities cannot be
included in the Adjusted Gross Revenue; (iv) Whether the
C licensee can challenge the computation of Adjusted
Gross Revenue, and if so, at what stage and on what
grounds.
Disposing of the appeals, the Court
D HELD: 1. It is clear from the language of the order
dated 19.01.2007 that while dismissing the appeal, the ·
Court gave liberty to the appellant, namely, Union of India,
to urge the contentions raised in Civil Appeal No.84 of
2007 before the Tribunal. Hence, even if it is held that the
E order dated 07.07.2006 of the Tribunal got merged with
the order dated 19.01.2007 of this Court passed in Civil
Appeal No.84 of 200.7, by the express liberty granted by
this Court in the order dated 19.01.2007, Union of India
could urge before the Tribunal all the contentions
F including the contention that the definition of Adjusted
Gross Reven_ue as given in the license could not be
challenged by the licensee before the Tribunal and will
include all items of revenue mentioned in the definition
of Adjusted Gross Revenue in the license. [Paras 25-26)
G [691-B-D; 693-B]
2.1. A bare perusal of sub-section (1) of Section 4 of
the Telegraph Act shows that the Central Government has
the exclusive privilege of establishing, maintaining and
working telegraphs. This would mean that only the
H Central Government, and no other person, has the right
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 663
SERVICE PROVIDERS C>F INDIA
·. to carry on telecommunication activities. The proviso to A
sub-section (1) of Section 4 of the Telegraph Act,
however, enables the Central Government to part with
this exclusive privilege in favour of any other person by
granting a license in his favour on such conditions and
in consideration of such payments as it thinks fit. A B
license granted in favour of any person under µroviso to
sub-section (1) of Section 4 of the Telegraph Act is in the
nature of a contract between the Central Government and
the licensee. Consequently, the terms and conditions of
the license including the definition of Adjusted Gross c
Revenue in the license agreement are part of a contract
between the licensor and the licensee. [Paras 28,·29] [697-
F-G; 698-D-G-H]
State of Orissa and Others v. Harinarayan Jaiswa/ and
Others (1972) 2 SCC 36: 1972 (3) SCR 784; Har Shankar & D
Ors. v. The Deputy Excise & Taxation Commissioner &
Others (1975) 1 SCC 737: 1975 (3) SCR 254; State of
Punjab & Anr. v. Devans Modern Breweries Ltd. & Ors. (2004)
11 SCC 26: 2003 (5) Suppl. SCR 930; Panna Lal v. State
of Rajasthan (1975) 2 SCC 633: 1976 (1) SCR 219 - relied E
on.
2.2. Section 11 (1 )(a)(ii) of the TRAI Act states that
notwithstanding anything contained in the Telegraph Act,
the TRAI shall have the function to make F
recommendations, either suo motu or on a request from
a licensor on terms an:i conditions of license to a service
provider. The first proviso, however, states that the
recommendations of the TRAI shall not be binding upon
the Central Government. The second, third, fourth and G
fifth provisos deal with the procedure that has to be
followed by the TRAI and the Central Government with
regard to recommendations of the TRAI. At the end .of fifth
proviso, it is stated that after receipt of further
recommendation, if any, the Central Government shall
take the final decision. These provisions in the TRAI Act H
664 SUPREME COURT REPORTS (2011] 14 (ADDL.) S.C.R.
A show that notwithstanding sub-section (1) of Section 4
of the Telegraph Act vesting exclusive privilege on the
Central Government in respect of telecommunication
activities and notwithstanding the proviso to sub-section
(1) of Section 4 of the Telegraph Act vesting in the Central
B Government the power to decide on the conditions of
license including the payment to be paid by the licensee
for the license, the TRAI has been conferred with the
statutory power to make recommendations on the terms
and conditions of the license to a service provider and
c the Central .Government was bound to seek the
recommendations of the TRAI on such terms and
conditions at different stages, but the recommendations
of the TRAI are not binding on the Central Government
and the final decision on the terms and conditions of a
license to a service provider rested with the Central
0
Government. The legal consequence is that if there is a
difference between the TRAI and the Central Government
with regard to a particular term or condition of a license,
as in the present case, the recommendations of the TRAI
will not prevail and instead the decision of the Central
E Government will be final and binding. [Para 31] [699-E-H;
700-A-C]
2.3. In contrast to this recommendatory nature of the
functions of the TRAI under clause (a) of sub-section (1)
F of Section 11 of the TRAI Act, the functions of the TRAI
under clause (b) of sub-section (1) of Sectiqn 11 of the
TRAI Act are not recommendatory. This will be clear from
the very language of clause (b) of sub-section (1) of
Section 11 of the TRAI Act which states that the TRAI
G shall discharge the functions enumerated under sub-
clauses (i), (ii) and (ix) under clause (b) of sub-section (1)
of Section 11 of the TRAI Act. Under clause (c) of sub-
section (.1) of Section 11 of.. the TRAI Act, the TRAI
performs the function of levying fees and other charges
H in respect of different services and under clause (d) of
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 665
SERVICE PROVIDERS OF INDIA
sub-section (1) of Section 11, the Central Government can A
entrust to the TRAI other f\Jnctions. These functions of
the TRAI under clauses (c) and (d) of sub-section (1) of
Section 11 of the TRAI Act are also not recommendatory
in nature. That the functions of the TRAI under clause (a)
are recommendatory while the fuactions of the TRAI B
under clauses (b), (c) and (d) are npt recommendatory will
also be clear from the provisos 1st to 5th which refer to
the recommendations of the TRAI under clause (a) of sub-
section (1) of Section 11 of the TRAI Act and not to
clauses (b), (c) and (d) of sub-section (1) of Section 11 of c
the TRAI Act. The scheme of TRAI Act therefore is that
the TRAI being an expert body discharges
recommendatory functions under clause (a) of sub-
section (1) of Section 11 of the TRAI Act and discharges
regulatory and other functions under clauses (b), (c) and D
· (d) of sub-section (1) of Section 11 of the TRAI Act. TRAI
being an expert body, the recommendations of the TRAI
under clause (a) of sub-section (1) of Section 11 of the
TRAI Act have to be given due weightage by the Central
Government but the recommendations of the TRAI are
not binding on the Central Government. On the· other E
hand, the regulatory and other functions under clauses
(b), (c) and (d) of sub-section (1) of Section 11 of the TRAI
Act have to be performed independent of the Central
Government and are binding on the licensee subject to
only appeal in accordance with the provisions of the TRAI F
Act. [Para 32] [700-D-H; 701:.:A-O] --
2.4, A reading of Section 14 (a)(i) of the TRAI Act
would. show that the Tribunal has the power to adjudicate
any dispute between a licensor and a licensee. A licensor G
has been defined under Section 2(ea) of TRAI Act to mean
the Central Government or the Telegraph Authority who
grants a license under Section 4 of the Telegraph Act and
a licensee has been defined in Section 2(e) of the TRAI
Act to mean any person licensed under sub-section (1) H
666 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A of Section 4 of the Telegraph Act providing spe"cified
telecommunication services. The word 'means' in
Sections 2(e) and 2(ea) of the TRAI Act indicates that the
definitions of licensee and licensor in Sections 2(e) ard
2(ea) of the TRAI Act are exhaustive and therefore would
B not have any other meaning. A dispute between a
licensor and a licensee referred to in Section 14(a)(i) of
the TRAI Act, therefore, is a dispute after a person has
been granted a license by the Central Government or the
Telegraph Authority under sub-section (1) of Section 4 of
c the Telegraph Act and has become a licensee and not a
dispute before a person becomes a licensee under the
proviso to sub-section (1) of Section 4 of the Telegraph
Act. In other words, the Tribunal can adjudicate the
dispute between a licensor and a licensee only after a
0 person had entered into a license agreement and become
a licensee and the word "any" in Section 14(a) of the TRAI
Act cannot widen the jurisdiction of the Tribunal to decide
a dispute between a licensor and a person who had not
become a licensee. The result is that the Tribunal has no
E jurisdiction to decide upon the validity of the terms and
conditions incorporated in the license of a service
provider, but it will have jurisdiction to decide "any"
dispute between the licensor and the licensee on the
interpretation of the terms and conditions of the license.
[para 33) [701-E-H; 702-A-D]
F
'Principles of Statutory Interpretation' 12th Edition -
referred to.
2.5. Clause (iii) of the letter dated 22.07.1999 of the
G Ministry of Communications to the licensees made it clear
that the license fee was payable with effect from
01.08.1999 as a percentage of gross revenue under the
license and the gross revenue for this purpose would be
total revenue of the licensee company excluding the
H PSTN related call charges paid to DOTIMTNL and service
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 667
SERVICE PROVIDERS OF INDIA
tax calculated by the licensee on behalf of the A
Government from the subscribers. It was also made clear
in the said clause (iii) that the Government was to take a
final decision after receipt of the TRAl's recommendation
on not only the percentage of revenue share but also the
definition of revenue, In accordance with this clause (iii) B
the Government took the final decision on the definition
of Adjusted Gross Revenue and incorporated the same
in the license agreement. Once the licensee had accepted
clause (iii} of the letter dated 22.07.1999 that the license
fee would be a percentage of gross revenue which would c
be the total revenue of the licensee company and had
also accepted that the Government would take a fin~:il
decision not only with regard to the percentage of
revenue share but also the definition of revenue for this
purpose, the licensee could not have approached the
0
Tribunal questioning the validity of the definition of
Adjusted Gross Revenue in license agreement on the
ground that Adjusted Gross Revenue cannot include
revenue from activities beyond the license. If th.e wide
definition of Adjusted Gross Revenue so as to include E
revenue beyond the license was in any way going to
affect the licensee, it was open for the licensees not to
undertake activities for which they do not require license
under clause (4) of the Telegraph Act and transfer these
activities to any other person or firm or company. The
incorporation of the definition of Adjusted Gross Revenue F
in the license agreement was part of the terms regarding
payment which had been· decided upon by the Central
Government as a consideration for parting with its rights
of exclusive privilege in respect of telecommunication
activities and having accepted the license and availed the G
exclusive privilege of the Central Government to carry on
telecommunication activities, the licensees could not
have approached the Tribunal for an alteration of the
definition of Adjusted Gross Revenue in the license
agreement. [para 34] [702-E-H; 703-A-E] H
668 SUPREME COURT REPORTS [2011} 14 (ADDL.) S.C.R.
A 2.5. Regarding the recommendations of the TRAI
under Section 11 (1 )(~)(i) of the TRAI Act, the Tribunal in
its order dated 01.01:2006 has held that the opinion of the
renowned. expert in the accountancy that any other
definition of Adjust~d Gross Revenue woul~ lead to
B reduction of license f~ liability by way of accounting
jugglery was not placed before'the TRAI and as a result
there was no proper and effective consultation with the
TRAI and th~ weightage that was due to the
recommendations of the TRAI was not given effect to. If
c the Tribunal found that there was no effective
consultation with the TRAI on the opinion of the expert
on accountancy, the Tribunal could have at best, if it had
the jurisdiction to decide the dispute, directed the TRAI
to consider the opinion of the expert on accountancy and
send its recommendations to the Central Government
D and directed the Central Government to consider such
fresh recommendations of the TRAI as provided in the
provisos to section 11 (1) of the TRAI Act. Instead the
Tribunal has .considered the recommendations of the
TRAI and passed the fresh impugned order dated
E 30.08.2007 contrary to the very provisions of Section
11(1)(a) of the TRAI Act and the provisos thereto. At any
rate, as the Central Government has already considered
the fresh recommendations of the TRAI and has not
accepted the same and is not agreeable to alter the
F definition of Adjusted Gross Revenue, the decision of the
Central Government on the point was final under the first
proviso and the fifth proviso to Section 11(1) of the TRAI
Act, 1997. Once a licensee has accepted the terms and
conditions of a license, he cannot question the validity
G of the terms and conditions of the license before the
Court. The TRAI and the Tribunal had no jurisdiction to
decide on the validity of the definition of Adjusted Gross
Revenue in the license agreement and to· exclude certain
items of revenue which were included in the definition of
H Adjusted Gross Revenue in the license agreement
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 669
SERVICE PROVIDERS OF INDIA
between the licensor and the licensee. [Paras 34, 35] [702- A
G-H; 703-A-H; 704-A-C]
Government of A. P. vs. Mis Anabeshahi Wine &
Distilleries Pvt. Ltd (1988) 2 SCC 25; Assistant Excise
Commissioner & Anr. vs. Issac Peter & Ors. (1994) 4 SCC
104: 1994 (2) SCR 67; State of M.P. & Ors. vs. KCT Drinks· B
Ltd. (2003) 4 SCC 748: 2003 (2) SCR 574 - relied on.
Cellular Operators Association of India & Ors. v. Union
of India & Ors. (2003) 3 SCC 186: 2002 (5) Suppl. SCR 222;
Delhi Science Forum and Others v. Union of india (1996) 2 c
SCC 405: 1996 (2) SCR 767; State of UP. v. Devi Dayal
Singh (2000) 3 SCC 5: 2000 (1) SCR 1205; Union of India
v. Tata Teleservices (Mahrashtra) Ltd. (2007) 7 SCC 517:
2007 (9) SCR 285 - held inapplicable.
3. The Tribunal in its order dated 07.07.2006 has not D
just decided a dispute on the interpretation of Adjusted
Gross Revenue in the license, but has decided on the
validity of the definition of Adjusted Gross Revenue in the
license. The Tribunal had no jurisdiction to decide on the
validity of the terms and conditions of the license E
including the definition of Adjusted Gross Re.venue
incorporated in the license agreement. Hence, the order
dated 07.07.2006 of the Tribunal in so far as it decides that
revenue realized by the licensee from activities beyond
the license will be excluded from Adjusted Gross F
Revenue dehors the definition of Adjusted Gross
Revenue in the license agreement is without jurisdiction
and is a nullity and the principle of res judicata will not
apply. The order dated 07.07.2006 of the Tribunal was not
binding on the Union of India even in those cases in G
which the Union of India did not file any appeal against
the order dated 07.07.2006 before this Court. [Para 41]
[709-A-F]
Chandrabhai K. Bhoir and Others v. Krishna Arjun Bhoir
and Others (2009) 2 SCC 315: 2008 (15) SCR 652; Chief H
670 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A Justice of A.P. v. L. V.A. Dixitulu (1979) 2 SCC 34: 1979 (1)
SCR 26; Union of India v. Pramod Gupta (2005) 12 SCC 1:
2005 (3) Suppl. SCR 48; National Institute of Technology v.
Niraj Kumar Singh (2007) 2 SCC 481: 2007 (2) SCR 184 -
relied on.
B 4. Section 14(a)(i) of the TRAI Act provides that the
Tribunal can adjudicate any dispute between the licensor
and the licensee. One such dispute can be that the
computation of Adjusted Gross Revenue made by the
licensor and the demand raised on the basis of such
C computation is not in accordance with the license
agreement. This dispute however can be raised by the
licensee, after the license agreement has been entered
into and the appropriate stage when the dispute can be
raised is when a particular demand is raised on the
D licensee by the licensor. When such a dispute is raised
against a particular demand, the Tribunal will have to go
into the facts and materials on the basis of which the
demand is raised and decide whether the demand is in ,'
accordance with the license agreement and in particular
E the definition of Adjusted Gross Revenue in the license
agreement and can also interpret the terms and
conditions of the license agreement. It is apparent from
the order dated 07.07.2006 that instead of challenging any
demands made on them, the licensees have questioned
F the validity of the definition of Adjusted Gross Revenue
in the licenses given to them and the Tribunal has finally
decided in its order dated 30.08.2007 as to what items of
revenue would be part of Adjusted Gross Revenue and
what items of revenue would not be part of Adjusted
G Gross Revenue without going into the facts and materials
relating to the demand on a particular licensee. [para 42)
[709-G-H; 710-A-D]
Isabella Johnson vs. M.A. Susai (Dead) by LRs. (1991)
1 SCC 494: 1990 (2) Suppl. SCR 213; Shyam Tele/ink
H Limited vs. Union of India (2010) 10 SCC 165: 2010 (12) SCR
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 671
SERVICE PROVIDERS OF INDIA
927; Bharti Cellular Limited vs. Union of India & Ors. (2010) A
10 SCC 174: 2010 (12) SCR 725; K. Vidya Sagar v. State
of UP. and Others (2005) 5 SCC 581; Indian Oil Corporation
Limited v. Collector of Central Excise, Baroda (2007) 13 SCC
803; Kam/a Bakshi v. Khairati Lal (2000) 3 SCC 681: 2000
(2) SCR 773; P. V. George v. State of Kera/a (2007) 3 SCC B
557: 2007 (1) SCR 1198; Kunhay Ahmed & Ors. v. State of
Kera/a & Anr. (2000) 6 SCC 359: 2000 (1) Suppl. SCR 538;
Supreme Court Employees' Welfare Association v. Union of
India & Anr. (1989) 4 SCC 187: 1989 (3) SCR 488; State of
Manipur v. Thingujam Brojen Meetei (1996) 9 SCC 29: 1996 c
(2) Suppl. SCR 738; Medley Pharmaceuticals Limited v.
Commissioner of Central Excise and Customs (2011) 2 SCC
601: 2011 (1) SCR 741 - referred to.
Case Law Reference:
D
1990 (2) Suppl. SCR 213 referred to Para 8
2008 (15 ) SCR 652 relied on Para 8
1975 (3) SCR 254 relied on Para 9,
28,40, E
(1988) 2 sec 25 relied on Para 9,
40,
1994 (2) SCR 67 relied on Para 9,40
2003 (2) SCR 574 relied on Para 9,40 F
2003 (5) Suppl. SCR 930 relied on Para 9,
29,40
2010 (12) SCR 927 referred to Para 10,
40 G
2010 (12) SCR 725 referred to Para 10,
40
(2005) 5 sec 581 referred to Para 12
H
672 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A (2007) 13 sec so3 referred to Para 12
2002 (5) Suppl. SCR 222 held inappli~able Para
13,24,36
2000 (1) SCR 1205 held inapplicable Para 13,
B 38
·1996 (2) SCR 767 held inapplicable Para 14,
37
2000 (2) SCR 773 referred to Para 15
c 2007 (9) SCR 285 held inapplicable Para 17,
39
2007 (1) SCR 1198 referred to Para 22
2000 (1) Suppl. SCR 538 referred to Para 23
D
1989 (3) SCR 488 referred to Para 23
1996 (2) Suppl. SCR 738 referred to Para 23
2011 (1) SCR 741 referred to Para 23
E 1972 (3) SCR 784 relied on Para 28
1976 (1) SCR 219 relied on Para 29
1979 (1) SCR 26 relied on Para 41
F 2005 (3) Suppl. SCR 48 relied on Para 41
2007 (2) SCR 184 relied on Para 41
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5059 of 2007.
G
From the Judgment & Order dated 30.8.2007 of the
Telecom Disputes Settlement & Appellate Tribunal, New Delhi
in Petition No. 7 of 2003.
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 673
SERVICE PROVIDERS OF INDIA
WITH A
Civil Appeal Nos. 179-180, 363, 1229-1230, 2065, 2479, 311-
314 & 317-318 of 2008, 1552, 3868 of 2009, 7049, 7062,
7063-7064, 7443, 7446, 7126, 7444, 7445, 9646-9661 of
2010, 2030,2031, 2270, 3245, 5450-5451, 8627-8628, 8625~
8626 of 2011. B
Meet Malhotra, D.S. Mahra, Abhijat P. Medh, Meenakshi
Arora, Rajiv Mehta, B.V. Bairam Das, Lawyer's Knit & C0, Bina
Gupta, Shiraz Contr(ictor Patodia, Anil Katiyar, B. Krishna
Prasad, Binu Tamta, Arvind Kumar Sharma, Naveen, Arun c
Kumar Beriwal, Sunil Kumar Jain, Sumita Hazarika, Rajan
Narain, Gaurav Kejriwal for the appearing parties.
The Judgment of the Court was delivered by
A.K. PATNAIK, J. D
Civil Appeal Nos. 5059 of 2007, 179-180 of 2008. 311-314,
317-318 of 2008, 363 of 2008, 2065 of 2008, 1229-1230 of
. 2008 and 3868 of 2009:
E
1. These are appeals under Section 18 of the Telecom
Regulatory Authority of India Act, 1997 (for short "the TRAI Act")
against the common judgment and order dated 30.08.2007 of
the Telecom Disputes Settlement and Appellate Tribunal, New
Delhi (for short "the Tribunal") in Petition No. 7 of 2003.
F
2. The relevant facts very briefly are that with the
introduction of the National Telecom Policy, 1994 liberalizing
the Telecom Sector, telecom licenses were issued to different
service providers. The licenses granted to the service providers
stipulated a fixed license fee, which was payable by the service G
providers every year. During the period 1994 to 1999, the
licensees defaulted in payment of license fee and made a
representation to the Government of India, Ministry of
Telecommunications for relief against the high license fee for
the survival of the telecom industry. The Government of India H
674 SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R.
A considered the representations and after a number of
deliberations with the licensees offered a new package, known
as the "National Telecom Policy 1999 - Regime" giving an
option to the licensees to migrate from fixed license fee to
revenue sharing fee. Accordingly, letters dated 22.07.1999 were
s sent to different licensees offering them a change over to NTP-
99 regime, which inter alia stated:
"(i) The cut off date for change over to NTP-99 regime will
be 01.08.1999.
c (ii) The licensee will be required to pay one time Entry Fee
and License Fee as a percentage share of gross revenue
under the license. The Entry Fee chargeable will be the
license fee dues payable by existing licensees upto
31.07.1999, calculated upto this date duly adjusted
D consequent upon notional extension of effective date as in
para (ix) below, as per the conditions of existing license.
(iii) The license fee as percentage of gross revenue under
the license shall be payable w.e.f. 01.08.1999. The
Government will take a final decision about the quantum
E
of the revenue share to be charged as license fee after
obtaining recommendations of the Telecom Regulatory
Authority of India (TRAI). In the meanwhile, Government
have decided to fix 15% of the gross revenue of the
Licensee as provisional license fee. The gross revenue for
F
this purpose would be the total revenue of the licensee
company excluding the PSTN related call charges paid to
DOT/MTNL and service tax collected by the licensee on
behalf of the Government from their subscribers. On receipt
of TRAl's recommendation and Government's final
G decision, final adjustment of provisional dues will be
effected depending upon the percentage of revenue share
and the definition of revenue for this purpose as may be
finally decided."
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 675
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
3. After receipt of the letter dated 22.07.1999, some of the A
service providers applied and took new licenses which
provided that the licensee will have to pay a certain percentage
of the Gross Revenue as license fee annually. After the
Government of India, Ministry of Telecommunications finally took
the final decision on the definition of Adjusted Gross Revenue, B
the license agreement was amended and signed by the
licensees and the amend~d license agreement was effective
from 01.08.1999. Clause 19 of the amended license
agreement, which defines Adjusted Gross Revenue, is extracted
he rain~~: c
"19. D~finition of 'Adjusted Gross Revenue':
19.1 Gross Revenue:
The Gross Revenue shall be inclusive of installation D
charges, late fees, sale proceeds of handsets [or any other
terminal equipment etc.', revenue on account of interest,
dividend, value added services, supplementary services,
access or interconnection charges, roaming charges,
revenue from permissible sharing of infrastructure and any E
other miscellaneous revenue, without any setoff for related
item of expense, etc.
19.2 For the purpose of arriving at the 'Adjusted Gross
Revenue [AGR]' the following shall be excluded from the
Gross Revenue to arrive at the AGR: F
I. PSTN related call charges [Access Charges]
actually paid to other eligible/ entitled
telecommunication service providers within
India; G
II. · Roaming revenues actually passed on to
other eligible/ entitled telecommunication
service providers and;
H
676 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A Ill. Service Tax on provision of service and
Sales Tax actually paid to the Government if -
gross revenue had included as component
of Sales Tax and Service Tax."
4. In the year 2003, some of the licensees questioned the
B
validity of the definition of Adjusted Gross Revenue in the
license agreement before the Tribunal and contended that
Adjusted Gross Revenue can only relate to the revenue directly
arising out of telecom operations licensed under Section 4 of
the Indian Telegraph Act, 1885 (for short "the Telegraph Act")
c after adjustment of expenses and write offs and revenues
directly not attributable to the licensed telecom activities. They
also contended that miscellaneous and other items including
interest income, and dividend income, value of rebates,
discounts, free calls and reimbursement from USO fund etc.
D ought not to be included in the Adjusted Gross Revenue for the
purpose of computation of license fee. The Union of India filed
its reply before the Tribunal contending that the licensees having
unconditionally accepted the migration package and having
taken the benefit of the same are bound by the terms and
E conditions of the license agreement and cannot be permitted
to resile from the same. In its order dated 07.07.2006, the
Tribunal rejected the contentions of the Union of India and held
that under Section 4 of the Telegraph Act, the Central
Government can take percentage of the share of gross revenue
F of a licensee realised from activities of the licensee under the
license and therefore revenue received by a licensee from
activities beyond licensed activities would be outside the
purview of Section 4 of the Telegraph Act. The Tribunal further
held that Section 11 (1) (a) of the TRAI Act mandates the
G Central Government to seek recommendations from the
Telecom Regulatory Authority (for short 'the TRAI') on the license
fee payable by the licensee and as no effective constitution had
been made by the TRAI, t.he matter should be remanded to the
i:RAI and the TRAI can consider the matter and send its
recommendations to the Tribunal. The Tribunal however made
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 677
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
it clear that theTRAI will bear in mind the findings of the Tribunal A
that revenue of the licensee derived from non-license activities
will not be included in the Adjusted Gross Revenue for the
purpose of determining the license fee p::iyable by the licensee.
'
5. The Union of India, challenged the order dated 8
07.07.2006 of the Tribunal before this Court in Civil Appeal No.
84 of 2007 under Section 18 of the TRAI Act. While this Civil
Appeal was pending before this Court, the TRAI sent its
recommendations on the incorporation of the Adjusted Gross
Revenue which had been sought by the Tribunal by its order C
dated 07.07.2006. Accordingly, when Civil Appeal No. 84 of
2007 came up for hearing before this Court on 19.01.2007, this
Court took the view that as the TRAI had already submitted its
recommendations to the Tribunal, there was no reason to
interfere and dismissed the appeal giving liberty to the Union
of India to urge all the contentions raised in the Civil Appeal 0
before the Tribunal.
6. When the Tribunal heard the parties on the
recommendations of the TRAI, the Union of India contended
that as this Court had given liberty to urge all the contentions E
raised in the Civil Appeal before the Tribunal, the Union of India
was entitled to re-open the issue whether the validity of the
definition of Adjusted Gross .Revenue in the license agreement
could be quoestioned before the Tribunal. The licensees, on the
other hand, contended before the Tribunal that as the Civil F
Appeal;of Union of India has been dismissed by this Court, the
Union of India was not entitled to argue the matter de novo and
the earlier order dated 07.07.2006 of the Tribunal had become
final. In its fresh order dated 30.08.2007 (for short 'the impugned
order') the Tribunal held that its earlier order dated 07.07.2006 G
having become final, it cannot be re-opened after the dismissal
of Civil Appeal No.84 of 2007 by this Court. The Tribunal held
that its finding in the earlier order dated 07.07.2006 that
Adjusted Gross Revenue will include only revenue arising from
licensed activity and not revenue from activities outside the H
678 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A license cannot be re-agitated by the Union of India.
7. Having held that Adjusted Gross Revenue will include
only revenue arising from licensed activity, the Tribunal in the
impugned order considered the recommendations of the TRAI
8 regarding the heads of revenue to be included and the heads
of revenue to be excluded from the Adjusted Gross Revenue
and decided as follows:
(i) The Tribunal accepted the recommendation of the TRAI
that income from dividend even though part of the revenue
c does not represent revenue from licensed activity and,
therefore, cannot be included in the Adjusted Gross
Revenue.
(ii) The Tribunal accepted the recommendation of the TRAI .
D that interest earned on investment of savings made by a
licensee after meeting all liabilities including liability on
account of the share of the Government in the gross
revenue cannot be included in the Adjusted Gross
Revenue, but, interest on investment of funds received by
E
a licensee by way of deposits from customers on account
of security against charges and on account of concessions
given in the charges payable for using the telecom services
have to be included in the Adjusted Gross Revenue as
these are related to telecom service, which is part of the
licensed activity.
F
(iii) The Tribunal did not fully accept the recommendation
of the TRAI on capital gains and held that sale of assets
of a licensee such as immovable properties, securities,
warrants or debt instruments are not part of the licensed
G activity and, therefore, capital gains earned by a licensee
on such sale of assets cannot form part of the Adjusted
Gross Revenue.
(iv) The Tribunal accepted the recommendation of the TRAI
H
that gains from Foreign Exchange rates fluctuations are
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 679
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
also not part of the licensed activity of telecom service A
providers and, therefore, cannot constitute part of the
Adjusted Gross Revenue,
(v) The Tribunal did not fully accept the recommendation
of the TRAI on reversal of provisions like bad debts, taxes 8
and vendors' credits and held that all these reversals have
to be excluded from the Adjusted Gross Revenue.
(vi) The Tribunal also accepted the recommendation of the
TRAI that rent from property owned by the licensee should
be excluded from the Adjusted Gross Revenue, provided C
it is clearly established that the property ie not in any way
connected with establishing, maintaining and working of
telecommunication.
(vii) The Tribunal accepted the recommendation of the D
TRAI that income from renting and leasing of passive
infrastructures like towers, dark fibre, etc. should be part
of the Adjusted Gross Revenue as they are parts of the
licensed activity of the licensee.
E
(viii) The Tribunal accepted the recommendation of the
TRAI that revenue from sale of tenders, directories, forms,
forfeiture of deposits/earnest money in relation to telecom
service should form part of the Adjusted Gross Revenue,
but held that management fees, consultancy fees and
training charges from telecom service should not form part F
of the Adjusted Gross Revenue as these activities do not
require a license.
(ix) The Tribunal held that payments received on behalf of
third party should not form part of the Adjusted Gross G
Revenue and did not accept the recommendation of the
TRAI in this regard.
(x) The Tribunal did not accept the recommendation of the
TRAI that the revenue from TV up-linking and Internet H
680 SUPREME COURT REPORTS
_.
[2011] 14 (ADDL.) S.C.R.
A service should for~ part of the Adjusted Gross Revenue
as these activities are covered under a separate license.
(xi) The Tribunal accepted the recommendation of the TRAI
that sale of handsets or telephone equipment bundled with
telecom service should be part of the Adjusted Gross
B
Revenue because such sale comes within the licensed
activity.
(xii) The Tribunal accepted the recommendation of the TRAI
that receipts from USO Fund will not form part of the
c Adjusted Gross Revenue.
(xiii) The Tribunal accepted the recommendation of the
TRAI that revenue receipts on account of ADC (Access
Deficit Charge) should form part of the Adjusted Gross
D Revenue.
(xiv) The Tribunal accepted the recommendation of the TRAI
that costs on account of port charges, interconnection set-
up charges, leased lines sharing of infrastructure, roaming
signaling charges and content charges should form part of
E the Adjusted Gross Revenue.
(xv) The Tribunal did not accept the recommendation of the
TRAI that bad debts, waivers and discounts should form
part of the Adjusted Gross Revenue and held that such
F losses incurred by a licensee should be excluded from the
Adjusted Gross Revenue.
(xvi) The Tribunal accepted the recommendation of the TRAI
that service tax payable by the licensee should be included
or excluded from the Adjusted Gross Revenue on accrual
G
basis and also accepted the recommendation of the TRAI
that interconnection usage should also be included or
excluded from the Adjusted Gross Revenue on accrual
basis. ·
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 681
SERVICE PROVIDERS OF INDIA [A.K. PATNAIK, J.]
· (xvii) The Tri):mnal did not accept the recommendation of A
the TRAI that its recommendations with regard to items,
· Which are to be included or excluded from the gross
revenue, should be effective from a prospective date and
instead held that the findings of the Tribunal with regard to
items, which are included or excluded from the Adjusted B
Gross Revenue, will be effective from the date the licensee
approached the Tribunal.
8. Mr. Soli Sorabjee and Mr. Rakesh Dwivedi, learned
senior counsel appearing for the Union of India in the different C
Civil Appeals before us submitted that the Union of India had
. challenged the order dated 07.07.2006 of the Tribunal before
this Court in Civil Appeal No.84 of 2007 and this Court while
disposing of the Civil Appeal gave liberty to the Union of India
to urge all the contentions raised in the Civil Appeal before the
Tribunal. They submitted that the Tribunal was thus not correct D
in coming to the conclusion that Union of India could not re-
open the issue decided in the order dated 07.07.2006 that
revenue realised from activities beyond the licensed activities
cannot form part of the Adjusted Gross Revenue when the said
issue had been raised by the Union of India in the Civil Appeal E
before this Court. They further submitted that in any case the
Union of India had taken a specific ground in ground No.4 of
the Memorandum of Appeal in Civil Appeal No.84 of 2007 that
the Tribunal had no jurisdiction or power to examine the
correctness of the terms of the license which had been F
unconditionally accepted and acted upon the licensee. They·
submitted that it is well settled by decisions of this Court that
· the rule of res judicata or estoppe/ is not applicable to pure
question of law relating to the jurisdiction of the court and in
support of their submissions cited the decisions of this Court G
in Isabella Johnson vs. M.A. Susai (Dead) by LRs. ((1991) 1
SCC 494] and Chandrabhai K. Bhoir and Others vs. Krishna
Arjun Bhoir and Others [(2009) 2 SCC 315] in which this Court
has taken a view that an order without jurisdiction is a nullity
and it is not binding on the parties. They argued that as the H
682 SUPREME COURT REPORTS (2011] 14 (ADDL.) S.C.R.
A order dated 07.07.2006 of the Tribunal questioned the definition
of Adjusted Gross Revenue in the license agreement, the order
of the Tribunal was without jurisdiction an.d was a nullity.
9. Mr. Sorabjee and Mr. Dwivedi next submitted that the
Tribunal failed to appreciate that license fee or payment made
8
under the license agreement is really in the nature of price or
consideration for parting with the exclusive privilege of the
Central Government and is binding on the Central Government
and the licensee and the licensee having signed' the contract
C and agreed to the terms and conditions therein including the
payment to be made cannot question the terms of the payment
before the Tribunal. They submitted that this Court has
consistently taken this view while deciding matters of exclusive
privilege of the Government in Har Shankar & Ors. vs. The
Deputy Excise & Taxation Commissioner & Others [(1975) 1
D SCC 737], Government of A.P. vs. Mis Anabeshahi Wine &
Distilleries Pvt. Ltd [(1988) 2 SCC 25], Assistant Excise
Commissioner & Anr. vs. Issac Peter & Ors. ((1994) 4 SCC
104], State of Orissa & Ors. vs. Narain Prasad & Ors.[(1996)
5 SCC 740], State of M.P. & Ors. vs. KCT Drinks Ltd. [(2003)
E 4 SCC 748] and State of Punjab & Anr. vs. Devans Modern
Breweries Ltd. & Ors. [(2004) 11 SCC 26)
10. Mr. Sorabjee and Mr. Dwivedi further submitted that
the definitions of Gross Revenue and Adjusted Gross Revenue
F are part of the package comprising the terms and conditions
of the license and a licensee cannot take the license on the one
hand and dispute the definitions of Gross Revenue and
Adjusted Gross Revenue on the other hand. They submitted that
if the licensee wants to operate the telecom license he has to
G accept the definitions of Gross Revenue and Adjusted Gross
Revenue for the purpose of computing the fee that he will have
to pay for the license to the Central Government. They relied
. on the decisions of this Court in Shyam Tele/ink Limited vs .
. Union of India [(2010) 10 SCC 165] and in Bharti Cellular
H Limited vs. Union oflndia & Ors. [(2010) 10SCC174] for the
,
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 683
SERVICE PROVIDERS OF INDIA [AK PATNAIK, J.]
proposition that a person taking advantage under an instrument A
which both grants a benefit and imposes the burden, cannot
· · take the benefit without discharging the burden.
11. Mr. Sorabjee and Mr. Dwivedi finally submitted that
under Section 11(1)(a)(ii) of the TRAI Act, 1977, the TRAI makes
8
recommendations, either suo motu or on a request from the
licensor, on the terms and conditions of license to a service
provider and the first proviso to Section 11 (1) of the TRAI Act
clearly states that such recommendations of the TRAI shall not
be binding upon the Central Government. They submitted that C
the recommendations of the TRAI with regard to what heads
of revenue should be included and what heads of revenue
should be excluded from the Adjusted Gross Revenue,
therefore, are not binding on the Central Government. They
submitted that notwithstanding the aforesaid clear statutory
provision the Tribunal has considered the recommendations of D
the TRAI and accepted most of these recommendations,
notwithstanding the fact that the Central Government filed its
objections to the recommendations of the TRAI before the·
Tribunal and hence the impugned order of the Tribunal is not
sustainable in law. E
12. Mr. C.S. Vaidyanathan, learned senior t'.!ounsel
appearing for the Cellular Operators Association, which is an
association of some of the licensees, submitted that the
Tribunal in its earlier order dated 07.07.2006 had merely F
interpreted the definition of Adjusted Gross Revenue to cover
revenue from all activities of the licensee under the license and
that the finding in its order dated 07.07.2006 that revenue
realized from activities of the licensee which are beyond the
licensed activities cannot form part of the Adjusted Gross G
Revenue for the purpose of license fee could not be re-agitated
after Civil Appeal No.84 of 2007 filed by the Union of India
against the order dated 07.07.2006 of the Tribunal had been.
dismissed by this Court on 19.01.2007. In support of the
submission, he relied on K. Vidya Sagar v. State of U.P. and H
684 SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R.
A Others [(2005) 5 SCC 581) in which this Court has held that
the reliefs claimed by the petitioner under Article 32 of the
Constitution cannot be granted if he had claimed the same
reliefs in a writ petition filed in the High Court under Article 226
of the Constitution and the writ petition had been dismissed and
s the Special Leave Petition preferred against the decision of the
High Court had also been disposed of by this Court with the
directions that he may ventilate his grievance in accordance
with law. He also relied on Indian Oil Corporation Limited v.
Collector of Central Excise, Baroda [(2007) 13 SCC 803)
c wherein this Court has held that if the Revenue had not
appealed against an earlier order or not pressed an earlier
appeal involving an identical issue, it was disentitled from
pressing the appeal involving the same question in a
subsequent case.
D 13." Mr. Vaidyanathan next submitted that the TRAI had
opined that Adjusted Gross Revenue for the purpose of levy of
license fee shall mean the Gross Revenue accruing to the
licensee by way of operations mandated under the license, but
the Central Government had rejected this opinion of the TRAI
E on 10.10.2000. He submitted that this Court had held in
Cellular Operators Association of India & Ors. v. Union of India
& Ors. [(2003) 3 sec 186) that the TRAl's recommendations
have to be given weightage because the TRAI was a
specialized body and if the Central Government rejected the
F recommendation of the TRAI, it has to be based on logical and
concrete reasoning. He submitted that the recommendations
of the TRAI that only revenues arising out of the activities
carried out under the license cannot be found fault with and,
therefore, the revenue realized from non-telecom activities
G cannot form part of the Adjusted Gross Revenue. He submitted
that the view taken by the Tribunal that the revenue realized from
activities outside the license of the licensee cannot be included
in the Adjusted Gross Revenue for the purpose of levy of license
fee is absolutely correct. He submitted that under the proviso
H to Section 4 of the Telegraph Act, the Central Government has
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM . 685
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
the power to determine the conditions including the payment A
for grant of license 'as it thinks fit', but the expression 'as it
thinks fit' does not give a carte blanche to the Central
Government to levy license fee on non-telecom activities. He
cited State of U.P. v. Devi Dayal Singh [(2000) 3 SCC 5] in
which Ruma Pal, J. writing the judgment for the Court, B
interpreted Section 2 of the Indian Tolls Act, 1851 which enables
the State Government to levy toll at such ,-ates 'as it thinks fit'
and held that itis only with reference to the meaning of the word
'toll' that the State Government must justify the levy on the public
by the construction of the bridge. Mr. Vaidyanathan argued that c
the expression 'as it thinks fit' in the proviso to Section 4 of the
Telegraph Act would therefore have to be interpreted in the
context of the license granted by the Central Government under
Section 4 of the Telegraph Act for telecom activities and as the
license granted under Section 4 of the Telegraph ·Act is only D
for carrying on telecom activities, revenues realized from non-
/ telecom activities cannot be included in the Adjusted Gross
Revenue for the purpose of levy of license fee.
14. Mr. Vaidyanathan next submitted that in any case the
discretion vested in the Central Government under the proviso E
to Section 4 of the Telegraph Act has to be exercised in
accordance with law and in a reasonable manner. In support
of the submission, he cited the decision in Delhi Science
Forum and Others v. Union of India [(1996) 2 SCC 405] in
which this Court interpreting the first proviso to Section 4(1) of F
the Telegraph Act held that the power to grant license on such
conditions and for such considerations mentioned in the proviso
to Section 4(1) of the Telegraph Act can be exercised by the
Central Government only on well-settled principles and norms
which can satisfy the test of Article 14 of the Constitution. He G
vehemently argued that the judgments of this Court for grant of
exclusive privilege for liquor license cited by Mr. Sorabjee and
Mr. Dwivedi have no application to grant of a license under the
proviso to Section 4 of the Telegraph Act.
H
686 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A 15. Mr. Vaidyanathan submitted that the appellants have
filed Civil Appeal Nos.1229-1230 of 2008 against the
impugned order of the Tribunal because they are mainly
aggrieved with the conclusion of the Tribunal in the impugned
order that the items which are to included or excluded from the
B Adjusted Gross Revenue as recommended by the TRAI and
as accepted by the Tribunal would be effective from the date
the licensee approached the Tribunal. He submitted that the
reliefs granted by the Tribunal to the licensees should relate
back to the date of wrongdoing and in support of this
c submission he relied on Kam/a Bakshi v. Khairati Lal ((2000)
3 SCC 681). He submitted that the Tribunal does not possess
the power of prospective overruling and, therefore, the
impugned order of the Tribunal should relate back to the date
of the license agreement.
D 16. Mr. Shyam Diwan, learned counsel appearing for the
Reliance Communications Ltd. in Civil Appeal Nos. 9946-9961
of 2010 submitted that the orders dated 07.07.2006 and
30.08.2007 are really declaratory in nature and are within the
powers of the Tribunal and all licensees are entitled to benefit
E from the aforesaid orders of the Tribunal and this would ensure
a level playing field for all the licensees.
17. Mr. Ramji Srinivasan, learned counsel appearing for
the Association of Telecom Service Providers of India,
F submitted that the Union of India is not right in its contention
that the Tribunal did not have the jurisdiction to pass the order
dated 07.07.2006 holding that revenue realized from activities
by the licensee which are beyond the licensed activities cannot
form part of the Adjusted Gross Revenue for the purpose of
G license fee. He argued that Section 14 (a)(i) of the TRAI Act
conferred power on the Tribunal to adjudicate "any" dispute
between a licensor and a licensee and it is in exercise of this
power conferred by Section 14(a)(i) of the TRAI Act that the
Tribunal has passed the order dated 07.07.2006. He relied on
the decision of this Court in Union of India v. Tata Teleservices
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 687
SERVICE PROVIDERS OF INDIA [A.K. PATNAIK, J.]
(Mahrashtra) Ltd. [2007) 7 SCC 517) in support of this A
contention. He submitted that the order dated 07.07.2006 of
the Tribunal was within the powers of the Tribunal and had
become final after the dismissal of Civil Appeal No.84 of 2007
of the Union of India by this Court on 19.01.2007.
B
18. Mr. Srinivasan next submitted that the fifth proviso to
Section 11 (1) of the TRAI Act states that if the Central
Government having considered the recommendation of the
TRAI, comes to a prima facie conclusion that such
recommendation cannot be accepted or needs modification,
it shall refer the recommendation back to the TRAI for its C
reconsideration and the TRAI may, within fifteen days from the
receipt of such reference, forward to the Central Government
its recommendation after considering the reference made by
the Central Government and it is only after receipt of such
further recommendation, if any, of the TRAI that the Central D
· Government shall take a final decision. He submitted that the
Tribunal in its order dated 07.07.2006 has found that the initial
recommendation of the TRAI to include only revenue derived
from the licensee from the licensed activities as part of the
gross revenue was not acceptable to the Central Government E
and hence the Central Government referred the issue back to
the TRAI and the TRAI, after considering the views of the Central
Government, made some changes but in principle again
recommended that the gross revenue should be only that
revenue which was derived fro1J11he licensed. activities. He F
submitted that the Tribunal in its order dated 07.07.2006 has
further found that this second recommendation of the TRAI was
not accepted by the Central Government because it had
obtained the opinion of a renowned expert in accountancy, who
advised the Central Government that the definition of Adjusted G
Gross Revenue should be such as to be less prone to reduction
of license fee liability by way of accounting jugglery and
; something which is easy to verify. He submitted that the Tribunal .
held in the order dated 07.07.2006 that this recommendation
of the renowned expert was not communicated to the TRAI and H
688 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A as a result, the TRAI could not consider this opinion of the
renowned expert and give its views. He argued that the Tribunal ·
rightly held in the order dated 07.07.2006 that the opinion of
the renowned expert in accountancy not having been placed
before the TRAI has vitiated the proceedings contemplated
B under Section 11 (1)(a) of the TRAI Act, which mandates the
Central Government to seek recommendations of the TRAI.
19. Mr. Srinivasan next submitted that the definition of
Adjusted Gross Revenue in the license agreement so as to
include in gross revenue items, which according to the
C Accounting Standard 9 (nine), do not come within the definition
of revenue. He referred to the Format of Statement of Revenue
and License Fee (Appendix-II to Annexure-11 of the License
Agreement) to show that the licensee is required to give
information in a statement on various items which are not truly
D of a revenue nature and which fall totally outside the licensed
activities of the telecom license.
20. Mr. Srinivasan submitted that since the Tribunal in the
impugned order confined the relief to the licensees who had
E approached the Tribunal and that too with effect from the date
the licensees approached the Tribunal, the Association of
Telecom Service Providers of India filed a Review Application
before the Tribunal praying that the relief granted by the Tribunal
should be extended to all members of the Association and that
F the relief should be effective from the date of the demand and
notfrom the date the licensee approached the Tribunal, but by
order dated 14.09.2007 the Tribunal dismissed the Review
Application and, therefore, the Association of Telecom Service
Providers of India have filed Civil Appeal Nos.179-180 of 2008.
He vehemently argued that the Tribunal ought to have granted
G the relief to all members of the Association and should have
made the relief effective from the date of the agreement and
not from the date when the licensee approached the. Tribunal.
21. Mr. Gopal Jain, learned counsel appearing for Mis
H Bharti Broadband, submitted that the Tribunal in its order dated
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 689
SERVICE PROVIDERS OF INDIA [A.K. PATNAIK, J.]
07.07.2006 had already decided Petition No. 98 of 2005 of M/ A
s Bharti Broadband and the Union of India had not filed any
appeal against M/s Bharti Broadband and, therefore, the order
dated 07 .07 .2006 of the Tribunal so far as M/s Bharti -
Broadband is concerned, had become. final. He relied on a
recent judgment of this Court in State of Uttaranchal & Anr. v. B
Suni/ Kumar Vaish & Ors. in Civil Appeal No.5374 of 2005
saying that there must be finality to litipation. He argued that
general principles of res judicata should apply in a proceeding
before the Tribunal and the Union of India cannot be permitted
to raise the issues which had been finally decided by the order c
dated 07.07.2006 of the Tribunal.
22. Mr. Jain next submitted that M/s Bharti Broadband has
filed Civil Appeal No.2065 of 2008 against the impugned order
because it is aggrieved by the conclusion of the Tribunal in the
impugned order that the reliefs granted in the impugned order D
to the licensee will be effective from the date the licensee
approached the Tribunal. He relied on P. V. George v. State of
Kera/a [(2007) 3 SCC 557] to contend that the Tribunal does
not have the power to give prospective effect to its judgment.
He argued that Bharti Broadband should, therefore, be entitled E
to the reliefs with effect from the date of demand i.e.
05.08.2005.
23. Mr. Vikas Singh, learned counsel appearing for Mis
Bharti Airtel, submitted that the order dated 07.07.2006 of the F
Tribunal had merged with the order dated 19.01.2007 of this
Court in Civil Appeal No.84 of 2007 by which the Civil Appeal
was dismissed and therefore that in these appeals this Court
cannot re-open the issues which had been closed by the order
dated 19.01.2007 passed in Civil Appeal No.84 of 2007. In G
support of the submission, he relied on the decisions of this
Court in Kunhay Ahmed & Ors. v. State of Kera/a & Anr.
[(2000) 6 SCC 359], Supreme Court Employees' Welfare
Association v. Union of India & Anr. [(1989) 4 SCC 187] and
State of Manipur v. Thingujam Brojen Meetei [(1996) 9 SCC H
690 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A 29]. He also relied on the decision of this Court in Medley
Pharmaceuticals Limited v. Commissioner of Central Excise
and Customs [(2011) 2 SCC 601] for the proposition that
dismissal of an appeal under Article 136 of the Constitution
after grant of leave by a non-speaking order attracted the
B doctrine of merger.
24. We have considered the submissions of learned
coun~el for the parties and we find that in Cellular Operators
Association of India & Ors. v. Union of India & Ors. (supra)
C this Court considered the scope of the appeal under Section
18 of the TRAI Act and held that an appeal ·under Section 18
of the TRAI Act before this Court has to be confined to only
substantial questions of law which arise out of the order of the
Tribunal. We have therefore formulated the following substantial
questions of law which arise for decision in these appeals:
D
(i) Whether after dismissal of Civil Appeal No.84 of 2007 ·
of the Union of India against the order dated 07.07.2006
0
of the Tribunal, by this Court by order dated 19.01.2007,
the Union of India can re-agitate the question decided in
E the order dated 07.07.2006 that the Adjusted Gross
Revenue will include only revenue arising from licensed
activities and not revenue from activities outside the
license of the licensee.
(ii) Whether the TRAI and the Tribunal have jurisdiction to
F decide whether the terms and conditions of license which
had been finalised by the Central Government and
incorporated in the license agreement including the
definition of Adjusted Gross Revenue.
G (iii) Whether as a result of the Union of India not filing an
· appeal against the order dated 07.07.2006 of the Tribunal
passed in favour of some of the licensees, the said order
dated 07.07.2006 had not become binding on the Union
of India with regard to the issue that revenue realised from
H activities beyond the licensed activities cannot be included
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 691
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
in the Adjusted Gross Revenue. A
(iv) Whether the licensee can challenge the computation
of Adjusted Gross Revenue, and if so, at what stage and
on what grounds.
25. The first substantial question of law which we have to B
decide is whether after dismissal of Civil Appeal No.84 of 2007
of the Union of India by this Court on 19.01.2007 against the
order dated 07.07.2006 ofthe Tribunal, the Union of India can
re-agitate the question decided in the order dated ·07.07.2006
that the Adjusted Gross Revenue will include only revenue C
arising from licensed activities and not revenue from activities
outside the license of the licensee. For deciding this question,
we must first look at the language of the order dated
19.01.2007 of this Court in Civil Appeal No.84 of 2007. The
order dated 19.01.2007 is quoted hereinbelow: o
"Heard the parties.
Pursuant to the direction of the TDSAT in the impugned
order, a fresh recommendation has been made by the
TRAI. In view thereof, we see no reasons to interfere. The E
appeal is dismissed. The appellant is, however, given
liberty to urge the contentions raised in this petition
before the TDSA T." (Emphasis Supplied)
It will be clear from the language of the order dated 19.01.2007 F
that while dismissing the appeal, the Court has given liberty to
the appellant, namely, Union of India, to urge the contentions
raised in Civil Appeal No.84 of 2007'.
26. In Civil Appeal No.84 of 2007, the Union of India has
urged 22 Grounds and Ground Nos.1 to 6 of the Memorandum G
of Appeal are extracted hereibelow :
1; Because the judgment and order dated 7. 7 .2006
passed by the Hon'ble TDSAT is wrong, erroneous,
contrary to law and deserves to be set aside. H
692 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A 2. Because the Hon'ble TDSAT failed to appreciate
that the migration package accepted and acted
upon by the respondents herein itself provided for
definition of Gross Revenue and Adjusted Gross
Revenue.
B 3. Because the Hon'ble TDSAT failed to appreciate
that the license unconditionally accepted the
migration package, exploited the licenses on the
terms and conditions mentioned therein and
thereafter challenged the definition of Adjusted
c Gross Revenue.
4. Because the Hon'ble TDSAT failed to appreciate
that it had no jurisdiction or power to examine the
correctness of terms of the license which had been
D unconditionally accepted and acted upon by the
licensee. '
5. Because the Hon'ble TDSAT failed to appreciate
that in fact some licensee obtained new license
which contains the definition of 'Gross Revenue'
E and 'Adjusted Gross Revenue' which has been
unconditionally accepted by the appellants.
6. Because the Hon'ble TDSAT failed to appreciate
that under Section 4 of the Indian Telegraph Act,
F 1885 it is the exclusive privilege of the Central
Government to establish, maintain and work
telegraph/telecom and this privilege can be given
to the private parties by granting licenses on such
terms and conditions as the Central Government
G thinks fit and appropriate."
Thus, as per the express language of the order dated
19.01.2007 oj this Court in Civil Appeal No.84 of 2007, Union
of India could raise each of the grounds extracted above before
the Tribunal. Hence, even if we hold that the order dated
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 693
SERVICE PROVIDERS OF INDIA [A.K. PATNAIK, J.]
07.07.2006 of the Tribunal got merged with the order dated A
19.01.2007 of this Court passed in Civil Appeal No.84 of 2007,
by the express liberty granted by this Court in the order dated
19.01.2007, Union of India could urge before the Tribunal all
, the contentions covered under Ground Nos.1 to 6 extracted
above including the contention that the definition of Adjusted B
Gross Revenue as given in the license could not be challenged .
by the licensee before the Tribunal and will include all items of
revenue mentioned in the definition of Adjusted Gross Revenue
in the license.
27. The second substantial question of law which we have
c
to decide is whether the TRAI and the Tribunal had jurisdiction
to decide on the validity of the terms and conditions of license
including the definition of Adjusted Gross Revenue finalised by
the Central Government and incorporated in the license. For
deciding this question, we must look at the provisions of Section D
4(1) of the Telegraph Act and the proviso thereto and the
relevant provisions of the TRA! Act which are quoted
hereinbelow:
Section 4 (1) of the Telegraph Act: E
"4. Exclusive privilege in respect of telegraphs, and power
to grant licenses.-· (1) Within India, the Central
Government shall have the exclusive privilege of
establishing, maintaining and working telegraphs:
F
Provided that the Central Government may grant a license,
on such conditions and in consideration of such payments
as it thinks fit, to any person to establish, maintain or work
a telegraph within any part of India."
G
Relevant Provisions of the TRAI Act:
Section 2(e) "licensee" means any person licensed under
sub-Section (1) of Section 4 of.the Indian Telegraph Act,
1885 (13 of 1885) for providing specified public
H
694 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A telecommunication services;
2 (ea) "licensor" means the Central Government or the
telegraph authority who grants a license under Section 4
of the Indian Telegraph Act, 1885 (13 of 1885);
B 2 (k) "telecommunication service" means service of ,any
description (including electronic mail, voice mail, data
services, audio tax services, video tax services, radio
paging and cellular mobile telephone services) which is
made available to users by means of any transmission or
c reception of signs, signals, writing images and sounds or
intelligence of any nature, by wire, radio, visual or other
el.ectromagnetic means but shall not include broadcasting
services:
D [provided that the Central Government may notify other
service to be telecommunication service including·
broadcasting services.]
"11 (1 ). Functions of Authority.-(1) Notwithstanding
• enything contained in the Indian Telegraph Act, 1885 (13
E ol 1885), the functions of the Authority shall be to-
(a) make recommendations, either suo motu or on a
request from the licensor, on the following matters, namely:-
(i) need and timing for introduction of new service provider;
F
(ii) terms and conditions of license to a service provider;
(iii) revocation of license for non-compliance of terms and
conditions of license;
G
(iv) measures to facilitate competition and promote
efficiency in the operation of telecommunication services
so as to facilitate growth in such services;
(v) technological improvements in the services provided by
H the service providers;
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 695
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
(vi) type of equipment to be used by the service providers A
after inspection of equipment used in the network;
(vii) measures for the development of telecommunication
technology and any other matter relatable to I
telecommunication industry in general;
B
. (viii) efficient management of availaqle spectrum;
(b) discharge the following functions, namely, :-
(i) ensure compliance of terms and conditions of licence; C
(ii) notwithstanding anything contained in the terms and
conditions of the license granted before the
commencement of the Telecom Regulatory Authority of
India (Amendment) Act, 2000, fix the terms and conditions
of inter-connectivity between the service providers; D
(iii) ensure technical compatibility and effective inter-
connection between different service providers;
(iv) regulate arrangement amongst service providers of E
sharing their revenue derived from providing
telecommunication services;
(v) lay down the standards of quality of service to be
provided by the service providers and ensure the quality
of service and conduct the periodical survey of such F
service provided by the service providers so as to protect
interest of the consumers of telecommunication service;
(vi) lay down and ensure the time period for providing local
and long distance circuits of telecommunication between G
differentservice providers;
i
(vii) maintain register of interconnect agreements and of
all such other matters as may be provided in the
regulations;
H
696 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A (viii) keep register maintained under clause (vii) open for
inspection to any member of public on payment of such
fee and compliance of such other requirements as may be
provided in the regulations;
(ix) ensure effective compliance of universal service
8
obligations;
(c) levy fees and other charges at such rates and in respect
of such services as may be determined by regulations;
c (d) perform such other functions including such
administrative and financial functions as may be entrusted
to it by the Central Government or as may be necessary
to carry out the provisions of this Act.
Provided that the recommendations of the Authority
D specified in clause (a) of this sub-section shall not be
binding upon the Central Gov~rnment.
Provided further that the Central Government shall seek the
recommendations of the Authority in respect of matters
E specified in sub-clauses (i) and (ii) of clause (a) of this
sub-section in respect of new license to be issued to a
service provider and the Authority shall forward its
recommendations within a period of sixty days from the
date on which that Government sought the
F recommendations:
Provided also that the Authority may request the Central
Government to furnish such information or documents as
may be necessary for the purpose of making
recommendations under sub-clauses (i) and (ii) of clause
G (a) of this sub-section and that Government shall supply
such information within a period of seven days from receipt
of such request:
Provided also that the Central Government may issue a
H license to a service provider if no recommendations are
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 697
SERVICE PROVIDERS OF INDIA [A.K. PATNAIK, J.)
received from the Authority within the period specified in A
the second proviso or within suet! period as may be
mutually agreed upon between the C~ntral Government and · ·
the Authority: ·
Provided. also that if the Central Government having 8
considered that recommendation of the Authority, comes
to a prima facie conclusion that such recommendation
cannot be accepted or needs modification, it shall refer the
recommendation back to the Authority for its
reconsideration, and the Authority may, within fifteen days C
from the date of receipt of such reference, forward to the
Central Government its recommendation after considering
the reference made by that Government. After receipt of
further recommendation, if any, the Central Government
shall take a final decision."
D
"14(a)(i). Establishment of Appellate Tribunal.- The
Central Government shall, by notification, establish an
Appellate Tribunal to be known as the Telecom Disputes
Settlement and Appellate Tribunal to-
E
(a) adjudicate any dispute-
(i) between a licensor and a licensee."
28. A bare perusal of sub-section (1) of Section 4 of the
Telegraph Act shows that the Central Government has the F
exclusive privilege of establishing, maintaining and working
telegraphs. This would mean that only the Central Government,
and no other person, has the right to carry on telecommunication
activities. Interpreting the expression "exclusive privilege" of
State Government under the State Excise Act to sell liquor, this G
Court has held in State of Orissa and Others v. Harinarayan
Jaiswal and Others [(1972) 2 SCC 36):
"the fact that the Government was the seller does not
change the legal position once its exclusive right to deal
H
698 SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R.
A with those privileges is conceded. If the Government is the
exclusive owner of those privileges, reliance on Article
19(1)(g) or Article 14 becomes irrelevant. Citizens cannot
have any fundamental right to trade or carry on business
in the properties or rights belonging to the Government -
B nor can there be any infringement of Article 14, if the
Government tries to get the best ·available price for its
valuable rights."
This position of law has been reiterated by this Court in Har
Shankar & Ors. v. The Deputy Excise & Taxation
C Commissioner & Others (supra) and in subsequent decisions
of this Court.
29. The proviso to sub-section (1) of Section 4 of the
Telegraph Act, however, enables the Central Government to part
D with this exclusive privilege in favour of any other person by
granting a license in his favour on such conditions and in
consideration of such payments as it thinks fit. As the Central
Government owns the exclusive privilege of carrying on
telecommunication activities and as the Central Government
E alone has the right to part with this privilege in favour of any
person by granting a license in his favour on such conditions
and in co.nsideration of such terms as it thinks fit, a license
granted under proviso to sub-section (1) of Section 4 of the
Telegraph Act is in the nature of a contract between the Central
F Government and the licensee. A Constitution Bench of this
Court in State of Punjab & Anr. v. Devans Modem Breweries
Ltd. & Ors. (supra), relying on Har Shankar's case and Panna
Lal v. State of Rajasthan ((1975) 2 SCC 633], has held in para
121 at page 106 that issuance of liquor license constitutes a
contract between the parties. Thus, once a license is issued
G under proviso to sub-section (1) of Section 4 of the Telegraph
Act, the license becomes a contract between the licensor and
the licensee. Consequently, the terms and conditions of. the ,
license including the definition of Adjusted Gross Revenue in
the license agreement are part of a contract between the
H licensor and the licensee.
~-.
UNION OF INDIA v, ASSOCIATION OF UNIFIED TELECOM•. 699
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
30. We have to, however, consider whether the enactment A
_of the TRAI Act in 1997 has in any way affected the exclusive
privilege of the Central Government in respect of the
telecommunication activities and altered the contractual nature
of the license granted to the licensee under the proviso to sub-
section (1) of Section 4 of the Telegraph .
. . Act. Section 2(e) of
the TRAI Act quoted above defines "licensee" to"'r'nean any
B
person licensed under sub-Section (1) of Section 4 of the
Telegraph Act for providing specified public telecommunication
services and Section 2(ea) defines "licensor" to mean the
Central Government or the telegraph authority who grants a c
license under Section 4 of the Telegraph Act. Sub-section 2(k)
defines "telecommunication services" very widely so as to
include all kinds of telecommunication
.., activities. These
provisions under the TRAI Act do not affect the exclusive
privilege of the Central Government to "carry on
0
telecommunication activities nor do they alter the contractual
nature of the license granted under the proviso to sub-section
(1) of Section 4 of the Telegraph Act. ; ,. ' ·
31. Section 11 (1 )(a)( ii) of the TRAI Act states that
notwithstanding anything contained in the Telegraph Act, the E
TRAI shall have the function to make recommendations, either
suo motu or on a request from a licensor on terms and
conditions of license to a service provider. The first proviso,
however, states that the recommendations of the TRAI shall not
be binding upon the Central Government.. The second, third, F
fourth and fifth provisos deal with the procedure that has to be
followed by the TRAI and the Central Government with regard
to recommendations of the TRAI. At the end of fifth proviso, it
is stated that after receipt of further recommendation, if any, the
Central Government shall take the ·final decision. These G
provisions in the TRAI Act show that notwithstandin°g sub:..
section (1) of Section 4 of the Telegraph Act vesting exclusive
privilege on the Central Government in respect of
telecommunication activities and notwithstanding the proviso to
sub-section (1) of Section 4 of the Telegraph Act vesting in the H
700 SUPREME COURT REPORTS [2011] 14 (ADDL.) s·.c.R.
A Central Government the power to decide on the conditions of
license including the payment to be paid by the licensee for the
license, the TRAI has been conferred with the statutory power
to make recommendations on the terms and conditions of the
license to a service provider and the Central Government was
B bound to seek the recommendations of the TRAI on such terms
and conditions at different stages, but the recommendations of
the TRAI are not binding on the Central Government and the
final decision on the terms and conditions of a license to a
service provider rested with the Central Government. The legal
c consequence is that if there is a difference between the TRAI
and the Central Government with regard to a particular term or
condition of a license, as in the present case, the
recommendations of the TRAI will not prevail and instead the
decision of the Central Government will be final and binding.
D 32. In contrast to this recommendatory nature of the
functions of the TRAI under clause (a) of sub-section (1) of
Section 11 of the TRAI Act, the functions of the TRAI under
clause (b) of sub-section (1) of Section 11 of the TRAI Act are
not recommendatory. This will be clear from the very language
E of clause (b) of sub-section (1) of Section 11 of the TRAI Act
which states that the TRAI shall discharge the functions
enumerated under sub-clauses (i), (ii) and (ix) under clause (b)
of sub-section (1) of Section 11 of the TRAI Act. Under clause
(c) of sub-section (1) of Section 11 of the TRAI Act, the TRAI
F performs the function of levying fees and other charges in
respect of different services and under clause (d) of sub-section
(1) of Section 11, the Central Government can entrust to the
TRAI other functions. These functions of the TRAI under clauses
(c) and (d) of sub-section (1) of Section 11 of the TRAI Act are
G also not recommendatory in nature. That the functions of the
TRAI under clause (a) are recommendatory while the functions
of the TRAI under clauses (b), (c) and (d) are not
recommendatory will also be clear from the provisos 1st to 5th
which refer to the recommendations of the TRAI under clause
H (a) of sub-section (1) of Section 11 of the TRAI Act and not to
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 701
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
. clauses (b), (c) and (d) of sub-section (1) of Section 11 of the A
TRAI Act. The scheme of TRAI Act theref9re is that the TRAI
being an expert body discharges recommendatory functions
under clause (a) of sub-section (1) of Section 11 of the TRAI
Act and discharges regulatory and other functions under clauses
(b), (c) and (d) of sub-section (1) of Section 11 of the TRAI Act. B
TRAI being an expert body, the recommendations of the TRAI
under clause (a) of sub-section (1) of Section 11 of the TRAI
Act have to be given due weightage by the Central Government
but the recommendations of the TRAI are not binding on the
Central Government. On the other hand, the regulatory and c
other functions under clauses (b), (c) and (d) of sub-section (1)
of Section 11 of the TRAI Act have to be performed
independent of the Central Government and are binding on the
licensee subject to only appeal in accordance with the
provisions of the TRAI Act.
D
33. A reading of Section· 14 (a)(i) of the TRAI Act would
show that the Tribunal has the power to adjudicate any dispute
between a licensor and a licensee. A licensor, as we have
seen, has been defined under Section 2(ea) of TRAI Act to
mean the Central Government or the Telegraph Authority who E
grants a license under Section 4 of the Telegraph Act and a
licensee has been defined in Section 2(e) of the TRAI Act to
mean any person licensed under sub-section (1) of Section 4
of the Telegraph Act providing specified telecommunication
services. The word 'means' in Sections 2(e) and 2(ea) of the F
TRAI Act indicates that the definitions of licensee and licensor
in Sections 2(e) and 2(ea) of the TRAI Act are exhaustive and
therefore would not have any other meaning. As Justice G.P.
Singh puts it in his book ~Principles of Statutory Interpretation'
12th Edition at pages 179-180: G
"when a word is defined to 'mean' such and such, the
definition is prima facie restrictive and exhaustive ... .".
A dispute between a licensor and a licensee referred to in
H
702 SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R
A Section 14(a)(i) of the TRAI Act, therefore, is a dispute after a
person has been granted a license by the Central Government
or the Telegraph Authority under sub-section (1) of Section 4
of the Telegraph Act and has become a licensee and not a
dispute before a person becomes a licensee under the proviso
s to sub-section (1) of Section 4 of the Telegraph Act. In other
words, the Tribunal can adjudicate the dispute between a
licensor and a licensee only after a person had entered into a
license agreement and become a licensee and the word "any"
in Section 14(a) of the TRAI Act cannot widen the jurisdiction
c of the Tribunal to decide a dispute between a licensor and a
person who had not become a licensee. The result is that the
Tribunal has no jurisdiction to decide upon the validity of the
terms and conditions incorporated in the license of a service
provider, but it will have jurisdiction to decide "any" dispute
between the licensor and the licensee on the interpretation of
0
the terms and conditions of the license.
34. Coming now to the facts of the cases before us, clause
(iii) of the letter dated 22.07, 1999 of the Government of India,
Ministry of Communications, Department of
E Telecommunications, to the licensees quoted above made it
clear that the license fee was payable with effect from
01.08.1999 as a percentage of gross revenue under the license
and the gross revenue for this purpose would be total revenue
of the licensee company excluding the PSTN related call
F charges paid to DOT/MTNL and service tax calculated by the
licensee on behalf of the Government from the subscribers. It
was also made clear in the aforesaid clause (iii) that the
Government was to take a final decision after receipt of the
TRAl's recommendation on not only the percentage of revenue
G share but also the definition of revenue. In accordance with this
clause (iii) the Government took the final decision on the
definition of Adjusted Gross Revenue and incorporated the
same in the license agreement. Once the licensee had
accepted clause (iii) of the letter dated 22 .07 .1999 that the
H license fee would be a percentage of gross revenue which
UNlON OF INDIA v; ASSOCIATION OF UNIFIED TELECOM 703
- SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
would be the total revenue of the licensee company and had A
_also accepted that the Government would take a final decision
not only with regard to the percentage of revenue share but also
the definition of revenue for this purpose, the licensee could not
have approached the Tribunal questioning the validity of the
definition of Adjusted Gross Revenue in license agreement on B
the ground that Adjusted Gross Revenue cannot include revenue
from activities beyond the license. If the wide definition of
Adjusted Gross Revenue so as to include revenue beyond the
license was in any way going to affect the licensee, it was open
for the licensees not to undertake activities for which they do c
not require license under clause (4) of the Telegraph Act and
transfer these activities to any other person or firm or company.
The incorporation of the definition of Adjusted Gross Revenue
· ih the license agreement was part of the terms regarding
payment which had been decided upon by the Central 0
Government as a consideration for parting with its rights of
exclusive privilegE; in respect of telecommunication activities
and having accepted the license and availed the exclusive
privilege of the Central Government to carry on
telecommunication activities, the licensees could not have E
approached the Tribunal for an alteration of the definition of
Adjusted Gross Revenue in the license agreement.
35. Regarding the recommendations of the TRAI under
Section 11 (1 )(a)(i) of the TRAI Act, we find that the Tribunal in
its order dated 07.07.2006 has held that the opinion of the F
renowned expert in the accountancy that any other definition of
Adjusted Gross Revenue would lead to reduction of license fee
liability by way of accounting jugglery was not placed before the
TRAI and as a result there was no proper and effective
consultation with the TRAI and the weightage that was due to G
the recommendations of the TRAI was not given effect to. In our
considered opinion, if the Tribunal found that there was no
effective consultation with the TRAI on the opinion of the expert
on accountancy, the Tribunal could have at best, if it had the
jurisdiction to decide the dispute, directed the TRAI to consider H
704 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A the opinion of the expert on accountancy and send its
recommendations to the Central Government and directed the
Central Government to consider such fresh recommendations
of the TRAI as provided in the provisos to section 11 (1) of the
TRAI Act. Instead the Tribunal has considered the
B recommendations of the TRAI and passed the fresh impugned
order dated 30.08.2007 contrary to the very provisions of
Section 11 ( 1)(a) of the TRAI Act and the provisos thereto. At
any rate, as the Central Government has already considered
the fresh recommendations of the TRAI and has not accepted
c the same and is not agreeable to alter the definition of Adjusted
Gross Revenue, the decision of the Central Government on the
point was final under the first proviso and the fifth proviso to
Section 11 (1) of the TRAI Act, 1997.
36. We may now deal with the authorities relied upon by
D the Tribunal and learned counsel for the parties. In Cellular
Operators Association of India & Ors. v. Union of India & Ors.
(supra), the Cellular Operators Association of India approached
the Tribunal under Section 14 of the TRAI Act challenging the
decisions of the Government permitting the fixed service
E providers to offer WLL with limited mobility and the
recommendations of the TRAI in this regard. The Tribunal
dismissed the application and the Cellular Operators filed an
appeal under Section 18 of the TRAI Act before this Court. This
Court held that WLL with limited mobility as recommended by
F the TRAI could be permitted if the question of level playing field
of the Cellular Operators was duly considered and they were
duly compensated but the Tribunal had not considered the
relevant materials on this issue and had only arrived at a bald
conclusion that the Cellular Operators have already been
G compensated in various ways. With these findings, this Court
set aside the decision of the Tribunal and remitted the matter
to the Tribunal for reconsideration with special emphasis on the
question of level playing field on the basis of the materials
already on record. In this decision, this Court was not called
H upon to consider whether a licensee having accepted the terms
LJNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 705
SERVICE PROVIDERS OF INDIA [AK PATNAIK, J.]
of the license could challenge before the Tribunal the validity A
of a clause in the terms of license and whether the Tribunal
would have jurisdiction to decide such a challenge.
37. In Delhi Science Forum and Others v. Union of India
(supra) after the National Telecom Policy, 1994 was announced 8
for inducting the private sector into basic telephone services
and notice was published inviting tenders from private parties
and tenders were submitted for different circles, but before
licenses could be granted by the Central Government, writ
· petitions were filed in different High Courts as well as in this C
Court and all the writ petitions filed before different High Courts
were transferred to this Court and heard t0gether. The Writ
Petitioners questioned the validity and propriety of the new
telecom policy saying that it shall endanger the national security
of the country and shall not serve the economic interest of the
nation. This Court while upholding the new Telecom Policy held . D
that the proviso to sub-section (1) of Section 4 of the Telegraph'
Act enables, the Central Government to grant license to private
bodies, but such power should be exercised on well-settled .
principles and norms which can satisfy the test of Article 14 of
the Constitution. Thus, this is not a case like the present one, E
in which the licensees having accepted the terms of the license
have challenged the definition of Adjusted Gross Revenue
incorporated in the terms of the license.
38. In State of U.P. v. Devi Dayal Singh (supra), a truck F
owner, Devi Dayal Singh, challenged the right of the State
Government to recover by way of toll under Section 2 of the Tolls
Act, 1851, an amount for the actual construction of the bridge.
This Court held that Section 2 of the Tolls Act, 1851 which
enables the State Government to levy toll at such rates 'as it G
thinks fit' and the only restriction is latent in the word "toll" itself.
This was therefore not a case of dispute between the
Government and the contractor where the contractor had
challenged a stipulation of the contract. In the present case, on
the other hand, the licensees had accepted the terms of the
H
706 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A license and after having taken the benefits of the license is now
trying to wriggle out from the terms of the license and in-
particular the definition of the Adjusted Gross Revenue.
39. In Union of India v. Tata Te/eservices (Mahrashtra)
Ltd. (supra) cited by Mr. Srinivasan, a letter of intent was issued
8 to Tata Teleservices and this was accepted by Tata
Teleservices but ultimately the contract did not come into being
and the license was not actually granted. The Union of India
suffered a considerable loss because Tata Teleservices had
walked out of the obligation undertaken by the acceptance of
C the letter of intent. The Additional Solicitor General appearing
for the Union of India submitted that such a dispute would also
come within the purview of Section 14 of the TRAI Act, going
by the definition of licensee and the meaning given to it in the
notice inviting tenders. The Tribunal held that expression
D "licensor" or "licensee" occurring in Section 14 (a)(i) of the TRAI
Act would not exclude a person who had been given a letter of
intent and who had accepted the letter of intent but was trying
to negotiate some further terms of common interest before a
formal contract was entered into and the work was to be
E started. This was thus a case where this Court treated a person
who had accepted the letter of intent of the licensor as a
licensee, although a formal contract had not entered into. In this
case this Court has not held that a licensee could dispute the
validity of a term or condition which was incorporated in the
F license agreement.
40. On the other hand, we find from the long line of
decisions in Har Shanker & Ors. vs. The Deputy Excise &
Taxation Commissioner & Others (supra), Government of A.P.
vs. Mis Anabeshahi Wine & Distilleries Pvt. Ltd (supra),
G Assistant Excise Commissioner & Anr. vs. Issac Peter & Ors.
(supra), State of Orissa & Ors. vs. Narain Prasad & Ors.
(supra), State of MP. & Ors. vs. KCT Drinks Ltd. (supra), State
of Punjab & Anr. vs. Devans Modem Breweries Ltd. & Ors.
(supra), Shyam Tele/ink Limited vs. Union of India (supra) and
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 707
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
. in Bharti Cellular Limited vs. Union of India & Ors. (supra), A
that this Court has consistently taken a view that once a
licensee has accepted the terms and conditions of a license,
he cannot question the validity of the terms and conditions of
the license before the Court. We, therefore, hold that the TRAI
and the Tribunal had no jurisdiction to decide on the validity of B
the definition of Adjusted Gross Revenue in the license
agreement and to exclude certain items of revenue which were
included in the definition of Adjusted Gross Revenue in the
license agreement between the licensor and the licensee.
41. The next substantial question of law which we have to C
decide is whether as a result of Union of India not filing an
appeal against the order dated 07.07.2006 in favour of some
of licensees, the order dated 07.07.2006 had not bec<;>me
binding on the Union of India with regard to issues which had
been decided by the Tribunal in the said order dated D
07.07.2006. According to the learned counsel for the licensees
in whose favour order dated 07.07.2006 has been passed and
against whom no appeal was filed by the Union of India
challenging the order dated 07.07.2006, the order dated
07.07.2006 of the Tribunal could not be re-opened because of E
the principle of res judicata. In the opening paragraph of the
order dated 07.07.2006, the Tribunal has stated:
"By this batch of petitions the Association of Unified
Telecom Service Providers of India, Cellular Operators F
Association of India and some individual
Telecommunication Service Providers are questioning the
validity of the definition of Adjusted Gross Revenue (AGR)
in the licenses given to various telecom service providers."
Finally, in the operative part of the order dated 07.07.2006, the G
Tribunal has directed as follows:
"Apart from the principal qLoestion whether the State
Government can include the gross income of the licensee
from non-licensed activity in the AGR; the petitioners have H
708 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A also challenged individually the various components of
AGR as enumerated in the licence.
In view of the fact we have come to the conclusion that
there has not been an effective consultation with the TRAI
which is mandatory under the TRAI Act, we think we should
B
not further delve into the exercise of finding out which
component of the AGR, as defined by the Government in
the conditions of licence, deserves to be retained and
which component which the petitioners contend is not
derived from the licensed revenue of the licensee should
c be excluded at this stage. We think it more appropriate
that the matter should be remanded to the TRAI which is
the 3rd Respondent herein, before whom the Go-.rernment
should produce the material relied by it while rejecting
TRAl's recommendation so that TRAI can consider the
D same and send its conclusions to this Tribunal and
thereafter, this Tribunal will have the benefit of a
comprehensive recommendation of the TRAI after
considering the materials relied upon by the Government.
While forming its conclusions the TRAI shall hear the
E Government as well as the licensees and consider the
materials that may be placed before it by either side. In
this process it is not necessary for the TRAI to hold fresh
consultative proceeding unless it thinks necessary. During
this proceeding before the TRAI the petitioners shall place
F before it their contentions in regard to the various
components of AGR which they have challenged before this
Tribunal and the TRAI after hearing the Government on this
issue also, send its reco.mmendations to this Tribunal
preferably within three months of the receipt of this order.
G
Further, while considering the issue now remitted to the
TRAI, the TRAI will bear in mind our finding in regard to
the inclusion in gross revenue of the licensee revenue
derived from non-licensed activities ...... "
H
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 709
SERVICE PROVIDERS OF INDIA [A.K. PATNAIK, J.]
Thus, the Tribunal in its order dated 07.07.2006 has not just A
decided a dispute on the interpretation of Adjusted Gross
Revenue in the license, but has decided on the validity of the
definition of Adjusted Gross Revenue in the license. As we have
already held, the Tribunal had no jurisdiction to decide on the
validity of the terms and conditions of the license including the B
definition of Adjusted Gross Revenue incorporated in the
license agreement. Hence, the order dated 07.07.2006 of the
Tribunal in so far as it decides that revenue realized by the
licensee from activities beyond the license will be excluded from
Adjusted Gross Revenue dehors the definition of Adjusted c
Gross Revenue in the license agreement is without jurisdiction
and is a nullity and the principle of res judicata will not apply.
In Chandrabhai K. Bhoir and Others vs. Krishna Arjun Bhoir
and Others (supra) this Court relying on Chief Justice of A.P.
vs. L. V.A. Dixitulu [(1979) 2 SCC 34, Union of India vs. D
Pramod Gupta [(2005) 12 SCC 1] and National Institute of
Technology vs. Niraj Kumar Singh [(2007) 2 SCC 481] has
held:
"an order passed without jurisdiction would be a nullity. It
will be a coram non judice and non est in the eye of the E
law. Principle of res judicata would not apply to such
cases".
We accordingly hold that the order dated 07.07.2006 of
the Tribunal was not binding on the Union of India even in those F
cases in which the Union of India did not file any appeal against
the order dated 07.07.2006 before this Court.
42. The last substantial question of law which we have to
decide is whether the licensee can challenge the computation
of Adjusted Gross Revenue and if so at what stage and on what G
grounds. Section 14 (a)(i) of the TRAI Act, as we have seen,
provides that the Tribunal can adjudicate any dispute between
the licensor and the licensee. One such dispute can be that the
computation of Adjusted Gross Revenue made by the licensor
and the demand raised on the basis of such computation is not H
710 SUPREME COURT REPORTS (2011] 14 (ADDL.) S.C.R.
.A in accordance with the license agreement. This dispute
however can be raised by the licensee, after the license
agreement has been entered into and the appropriate stage
when the dispute can be raised is when a particular demand
is raised on the licensee by the licensor. When such a dispute
B is raised against a particular demand, the Tribunal will have to
go into the facts and materials on the basis of which the
demand is raised and decide whether the demand is in
accordance with the license agreement and in particular the
definition of Adjusted Gross Revenue in the license agreement
c and can also interpret the terms and conditions of the license
agreement. We, however, find from the order dated 07.07.2006
that instead of challenging any demands made on them, the
licensees have questioned the validity of the definition of
Adjusted Gross Revenue in the licenses given to them and the
0 Tribunal has finally decided in its order dated 30.08.2007 as
to what items of revenue would be part of Adjusted Gross
Revenue and what items of revenue would not be part of
Adjusted Gross Revenue without going into the facts and
materials relating to the demand on a particular licensee.
E 43. In the result, we allow these appeals and set aside the
impugned order dated 30.08.2007 of the Tribunal. There shall
be no order as to costs.
CIVIL APPEAL Nos. 2479 of 2008, 1552 of 2009, 7049 of
2010, 7062 of 2010, 7063-7064 of 2010, 7443 of 2010, 7446
F of 2010, 7126 of 2010, 7444 of 2010, 7445 of 2010, 9646-
9661 of 2010, 2030 of 2011. 2031 of 2011, 2270 of 2011,
3245 of 2011, 5450-5451 of 2011, CIVIL APPEALS
ARISING OUT OF SLP (C) Nos. 1786-1787 OF 2009 AND
CIVIL APPEALS ARISING OUT OF SLP CC) Nos. 6641-6642
G OF 2010:
Leave granted in Special Leave Petitions.
2. In these appeals, different orders of the Tribunal have
been impugned. The orders of the Tribunal, which have been
H impugned, are based on the order dated 30.08.2007 of the
UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM 711
SERVICE PROVIDERS OF INDIA [AK. PATNAIK, J.]
Tribunal which we have set aside. The orders impugned in A
these appeals are, therefore, set aside and the matters are
remitted to the Tribunal to pass fresh orders in accordance with
law.
3. The appeals stand disposed of accordingly with no
8
order as to costs.
SUPPLEMENTARY ORDER
We have delivered today the judgment in these cases and
while answering the last substantial question of law, we have c
held that when a particular demand is raised on a licencee, the
licensee can challenge the demand before the Tribunal and the
Tribunal will have to go into the facts and materials on the basis
of which the demand is raised and decide whether the demand
is in accordance with the license agreement and in particular D
the definition of Adjusted Gross Revenue in the 1.icense
agreement and can also interpret the terms and conditions of
the license agreement.
2. It is stated by Mr. C.S. Vaidyanathan, learned senior
counsel for some of the licencees that demands have already· E
been raised on them. He submitted that two months' time be
granted to the licencees to raise their disputes before the
Tribunal and in the meanwhile the demands should not be
enforced.
F
3. If the demands have been raised, we grant two months'
time to the licencees to raise the dispute before the Tribunal
against the demands and during this period of two months, the
demands will not be enforced.
G
D.G. Appeals disposed of.
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