Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5059 OF 2007

Union of India & Anr.        …  Appellants

Versus

Association of Unified Telecom Service Providers of India & Ors.                   …  Respondents

WITH

CIVIL  APPEAL  NOs.179-180  OF  2008,  363  of  2008,  1229- 1230 of 2008, 2065 of 2008, 2479 of 2008,  1552  of  2009,  3868 of  2009,  7049 of  2010,  7062 of  2010,  7063-7064 of  2010, 7443 of 2010, 7446 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,  311-314  &  317-318  of  2008, CIVIL APPEAL Nos. 8627-8628 OF 2011 (Arising  out  of  SLP  (C)  Nos.  1786-1787  of  2009)  AND  CIVIL  APPEAL Nos. 8625-8626 OF 2011 (Arising out of SLP (C)  Nos. 6641-6642 of 2010)

J U D G M E N T

A. K. PATNAIK, J.

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:     

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.

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  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 considered the representations and  

after a number of deliberations with the licensees offered  

a new package, known as the “National Telecom Policy  

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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  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.

(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  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  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  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 TRAI’s recommendation and  Government’s  final  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.”

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3. After receipt of the letter dated 22.07.1999, some of  

the  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,  the  license  

agreement was amended and signed by the licensees and  

the  amended  license  agreement  was  effective  from  

01.08.1999.   Clause  19  of  the  amended  license  

agreement,  which  defines  Adjusted  Gross  Revenue,  is  

extracted hereinbelow:

“19. Definition of ‘Adjusted Gross Revenue’: 19.1 Gross Revenue:

The Gross Revenue shall be inclusive of installation  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  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:

I. PSTN  related  call  charges  [Access  Charges] actually paid to other eligible/  

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entitled  telecommunication  service  providers within India;

II. Roaming revenues actually  passed on to  other  eligible/  entitled  telecommunication  service  providers  and;  

III. 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 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”) 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.  ought  not  to  be  included  in  the  Adjusted  Gross  

Revenue for the purpose of computation of license fee.  

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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  

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 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  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, the matter should be remanded to the TRAI  

and  the  TRAI  can  consider  the  matter  and  send  its  

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recommendations to the Tribunal.  The Tribunal however  

made it clear that the TRAI will bear in mind the findings  

of the Tribunal 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 payable by the licensee.  

5. The  Union  of  India,  challenged  the  order  dated  

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  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 before the Tribunal.   

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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  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  

questioned before the Tribunal.   The licensees, on the  

other hand, contended before the Tribunal that as the  

Civil 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  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  

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revenue from activities outside the 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  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  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 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 a licensee by way of deposits from customers  

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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.   

(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 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  that  gains  from  Foreign  Exchange  rates  

fluctuations are also not part of the licensed activity of  

telecom  service  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  and  vendors’  credits  and  held  that  all  these  

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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 it is clearly established that the property is not  

in any way connected with establishing, maintaining and  

working of telecommunication.  

(vii)  The Tribunal accepted the recommendation of the  

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.

(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  

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not form part 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  

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 service should form 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 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 Adjusted Gross Revenue.  

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(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 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 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  

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  

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the Adjusted Gross Revenue on accrual 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.

(xvii)The  Tribunal  did  not  accept  the  

recommendation  of  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 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  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  

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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 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 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  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  

estoppel 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 in Isabella  

Johnson vs.  M.A.  Susai  (Dead)  by  LRs. [(1991)  1  SCC  

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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 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 and was a nullity.  

9. Mr. Sorabjee and Mr. Dwivedi next submitted that  

the  Tribunal  failed  to  appreciate  that  license  fee  or  

payment made 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 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 &  

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Others [(1975) 1 SCC 737],  Government of A.P. vs.  M/s  

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) 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 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  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 Telelink Limited vs.  Union of India [(2010) 10  

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SCC 165]  and  in  Bharti  Cellular  Limited vs.  Union  of   

India & Ors. [(2010) 10 SCC 174] for the proposition that  

a person taking advantage under an instrument 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  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  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  the  TRAI  and  

accepted  most  of  these  recommendations,  

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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.

12.  Mr.  C.S.  Vaidyanathan,  learned  senior  counsel  

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  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  

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 Others [(2005) 5  

SCC 581] in which this Court has held that the reliefs  

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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  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] 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.

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 on 10.10.2000.   He  

20

submitted that this Court had held in Cellular Operators   

Association  of  India  &  Ors. v.  Union  of  India  &  Ors.  

[(2003)  3  SCC  186]  that  the  TRAI’s  recommendations  

have  to  be  given  weightage  because  the  TRAI  was  a  

specialized body and if the Central Government rejected  

the 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  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 to Section 4 of the Telegraph Act,  

the Central Government has the power to determine the  

conditions including the payment 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  

21

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,  interpreted  

Section 2 of the Indian Tolls Act, 1851 which enables the  

State Government to levy toll at such rates ‘as it thinks  

fit’ and held that it is 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  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 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 to Section 4 of the Telegraph Act has to be  

22

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 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 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.   

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  Adjusted  Gross  Revenue  as  

23

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  

submission he  relied on  Kamla 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.   

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 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,  

submitted  that  the  Union  of  India  is  not  right  in  its  

24

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  

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  (Mahrashtra)  Ltd.  

[2007)  7 SCC 517]  in support  of  this  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.  

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  

25

recommendation  cannot  be  accepted  or  needs  

modification, it shall refer the recommendation back to  

the  TRAI  for  its  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  

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  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 from the licensed activities.  

He  submitted  that  the  Tribunal  in  its  order  dated  

07.07.2006  has  further  found  that  this  second  

26

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  

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  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 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  

27

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-II of the License Agreement) to show that the  

licensee is required to give information in a statement on  

various items which are not truly 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  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 the  

relief  should be effective from the date of  the demand  

and  not  from  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  

28

filed Civil Appeal Nos.179-180 of 2008.  He vehemently  

argued that the Tribunal ought to have granted 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 M/s  

Bharti  Broadband,  submitted  that  the  Tribunal  in  its  

order dated 07.07.2006 had already decided Petition No.  

98 of 2005 of M/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.  

Sunil  Kumar  Vaish  & Ors.  in  Civil  Appeal  No.5374  of  

2005 saying that there must be finality to litigation.  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  

29

had been finally decided by the order 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  to  the  

licensee  will  be  effective  from  the  date  the  licensee  

approached the Tribunal.   He relied on  P.V.  George v.  

State of Kerala [(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  to  the  reliefs  with  effect  

from the date of demand i.e. 05.08.2005.  

23.   Mr. Vikas Singh, learned counsel appearing for M/s  

Bharti Airtel, submitted that the order dated 07.07.2006  

of  the  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  

30

19.01.2007 passed in Civil  Appeal  No.84 of  2007.   In  

support of the submission, he relied on the decisions of  

this Court in Kunhay Ahmed & Ors. v. State of Kerala &  

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 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  doctrine  of  

merger.

24.  We  have  considered  the  submissions  of  learned  

counsel  for  the  parties  and  we  find  that  in  Cellular  

Operators Association of India & Ors. v. Union of India &  

Ors. (supra)  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  

31

have  therefore  formulated  the  following  substantial  

questions  of  law  which  arise  for  decision  in  these  

appeals:

(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 this Court by order dated  

19.01.2007,  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  

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  

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  favour  of  some  of  the  

licensees, the said order dated 07.07.2006 had  

not become binding on the Union of India with  

32

regard to  the  issue that  revenue  realised from  

activities beyond the licensed activities cannot be  

included in the Adjusted Gross Revenue.

(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 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 of  the  

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  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:

“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  appeal  is  dismissed.   The  appellant  is,  however,  

33

given  liberty  to  urge  the  contentions  raised  in  this  petition before the TDSAT.” (Emphasis Supplied)

It  will  be  clear  from the  language  of  the  order  dated  

19.01.2007 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 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.  

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.

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 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  

34

had been 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’ 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,  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  thinks  fit  and  appropriate.”

Thus,  as  per  the  express  language of  the  order  dated  

19.01.2007 of 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 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  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  

35

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.

27.    The second substantial question of law which we  

have 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 4(1)  of  the  

Telegraph Act and the proviso thereto and the relevant  

provisions of the TRAI Act which are quoted hereinbelow:

Section 4 (1) of the Telegraph Act:

“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:

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.”

Relevant Provisions of the TRAI Act:  

36

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  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);

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  reception of signs, signals, writing images and sounds or  intelligence of any nature, by wire, radio, visual or other  electromagnetic  means  but  shall  not  include  broadcasting services:  

[provided that the Central Government may notify other  service  to  be  telecommunication  service  including  broadcasting services.]

“11(1).  Functions  of  Authority.—(1)  Notwithstanding  anything  contained in the  Indian Telegraph Act,  1885  (13 of 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;  

(ii) terms and conditions of license to a service provider;  

(iii) revocation of license for non-compliance of terms and  conditions of license;

(iv)   measures  to  facilitate  competition  and  promote  efficiency in the operation of telecommunication services  so as to facilitate growth in such services;

37

(v) technological improvements in the services provided  by the service providers;  

(vi)   type  of  equipment  to  be  used  by  the  service  providers  after  inspection  of  equipment  used  in  the  network;

(vii) measures for the development of telecommunication  technology  and  any  other  matter  relatable  to  telecommunication industry in general;

(viii)  efficient management of available spectrum;

(b) discharge the following functions, namely, :-

(i)  ensure compliance of terms and conditions of licence;  

(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;  

(iii)  ensure  technical  compatibility  and  effective  inter- connection between different service providers;  

(iv)  regulate  arrangement amongst  service  providers  of  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  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 different service providers;  

38

(vii)  maintain register of interconnect agreements and of  all  such  other  matters  as  may  be  provided  in  the  regulations;  

(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  obligations;  

(c)   levy fees and other  charges at  such rates and in  respect  of  such  services  as  may  be  determined  by  regulations;  

(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  specified in clause (a)  of  this  sub-section shall  not  be  binding upon the Central Government.

Provided further that the Central Government shall seek  the  recommendations  of  the  Authority  in  respect  of  matters 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  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  (a) of this sub-section and that Government shall supply  such  information  within  a  period  of  seven  days  from  receipt of such request:

39

Provided also that the Central Government may issue a  license to a service provider if no recommendations are  received from the Authority within the period specified in  the  second  proviso  or  within  such  period  as  may  be  mutually agreed upon between the Central Government  and the Authority:

Provided  also  that  if  the  Central  Government  having  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 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.”

“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—

(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 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  

40

under the State Excise Act to sell liquor, this 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  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  –  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   

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 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 alone has the  

41

right to part with this privilege in favour of any person  

by granting a license in his favour on such conditions  

and in consideration 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  Government  and  the  

licensee.  A Constitution Bench of this Court in State of   

Punjab & Anr. v.  Devans Modern 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  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  

licensor and the licensee.   

30. We  have  to,  however,  consider  whether  the  

enactment  of  the  TRAI  Act  in  1997  has  in  any  way  

42

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 mean  

any 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 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  

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.   

43

31. 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  

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, 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 provisions in the TRAI Act  

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  Government  the  power  to  decide  on  the  

conditions of license including the payment to be paid by  

44

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 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 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.

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 of clause (b) of sub-section (1) of  

45

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  

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 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 (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  

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-

46

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.  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 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.

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 grants a license under Section  

4 of the Telegraph Act and a licensee has been defined in  

47

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 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:

“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  

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 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  

48

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  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.    

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  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 charges paid to  

DOT/MTNL and service tax calculated by the licensee on  

behalf of the Government from the subscribers.  It was  

49

also  made  clear  in  the  aforesaid  clause  (iii)  that  the  

Government was to take a final decision after receipt of  

the TRAI’s recommendation on not only the percentage  

of revenue 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 license fee would be  

a 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 definition of Adjusted Gross Revenue  in  

license  agreement  on 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  

50

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 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  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.   

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 renowned expert in the accountancy that  

any other  definition of  Adjusted Gross Revenue would  

lead  to  reduction  of  license  fee  liability  by  way  of  

51

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 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  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  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 the  

same  and  is  not  agreeable  to  alter  the  definition  of  

52

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  

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 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 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  

53

Operators  have  already  been  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  upon  to  consider  whether  a  licensee  

having accepted the terms of the license could challenge  

before the Tribunal the validity 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  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 Court and all the  

writ  petitions  filed  before  different  High  Courts  were  

transferred to this Court and heard together.  The Writ  

54

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 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, 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  

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 thinks fit’ and  

55

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 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 Teleservices (Mahrashtra)   

Ltd. (supra) cited by Mr. Srinivasan, a letter of intent was  

issued  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 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  

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given to it  in the notice inviting tenders. The Tribunal  

held that expression “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  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  license  

agreement.

40. On the  other  hand,  we  find  from the  long  line  of  

decisions in Har Shankar & Ors. vs. The Deputy Excise &  

Taxation Commissioner & Others (supra),  Government of   

A.P. vs.  M/s  Anabeshahi  Wine  &  Distilleries  Pvt.  Ltd  

(supra),  Assistant Excise Commissioner & Anr. vs.  Issac   

Peter & Ors. (supra),  State  of Orissa & Ors. vs.  Narain   

Prasad  &  Ors.  (supra),  State  of  M.P.  &  Ors. vs.  KCT  

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Drinks Ltd. (supra),  State  of  Punjab & Anr. vs.  Devans  

Modern  Breweries  Ltd.  & Ors. (supra),  Shyam Telelink  

Limited vs.  Union of India (supra) and in Bharti Cellular   

Limited vs. Union of India & Ors. (supra), 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  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 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  become  binding  on  the  Union  of  India  with  

regard to issues which had been decided by the Tribunal  

in the said order dated 07.07.2006.  According to the  

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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  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  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 Tribunal has directed as follows:

“Apart  from  the  principal  question  whether  the  State  Government can include the gross income of the licensee  from non-licensed  activity  in  the  AGR;  the  petitioners  have  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 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 be excluded at this stage.  We think it  more appropriate that the matter should be remanded to  

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the  TRAI  which  is  the  3rd Respondent  herein,  before  whom  the  Government  should  produce  the  material  relied  by  it  while  rejecting  TRAI’s  recommendation  so  that  TRAI  can  consider  the  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 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  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  recommendations  to  this  Tribunal preferably within three months of the receipt of  this order.

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…...”

Thus, the Tribunal in its order dated 07.07.2006 has not  

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.  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  definition  of  

Adjusted  Gross  Revenue  incorporated  in  the  license  

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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  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.  

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  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 cases in which the Union of India did not file  

any appeal  against  the  order  dated 07.07.2006 before  

this Court.

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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 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  

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  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  and  can  also  interpret  the  terms  and  

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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  

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.

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 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 (C) Nos. 6641-6642 OF 2010:

Leave granted in Special Leave Petitions.

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2. In  these  appeals,  different  orders  of  the  Tribunal  

have been impugned.  The orders of the Tribunal, which  

have  been  impugned,  are  based  on  the  order  dated  

30.08.2007  of  the  Tribunal  which  we  have  set  aside.  

The orders impugned in 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  

order as to costs.  

.……………………….J.                                                            (R. V. Raveendran)

………………………..J.                                                            (A. K. Patnaik) New Delhi, October 11, 2011.     

Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5059 OF 2007

Union of India & Anr.        …     Appellants

Versus

Association of Unified Telecom Service Providers of India & Ors.         … Respondents

WITH

CIVIL APPEAL NOs.179-180 OF 2008, 363 of 2008, 1229- 1230 of 2008, 2065 of 2008, 2479 of 2008, 1552 of  2009, 3868 of 2009, 7049 of 2010, 7062 of 2010, 7063- 7064 of 2010, 7443 of 2010, 7446 of 2010, 7126 of  2010, 7444 of 2010, 7445 of 2010, 9646-9661 of 2010,  

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2030 of 2011, 2031 of 2011, 2270 of 2011, 3245 of  2011, 5450-5451 of 2011, 311-314 & 317-318 of 2008,  CIVIL APPEAL Nos. 8627-8628 OF 2011 (Arising out of  SLP (C) Nos. 1786-1787 of 2009) AND CIVIL APPEAL Nos.  8625-8626 OF 2011 (Arising out of SLP (C) Nos. 6641- 6642 of 2010)

SUPPLEMENTARY ORDER

We have delivered today the judgment in these  

cases  and  while  answering  the  last  substantial  

question of law, we have 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  the  definition  of  

Adjusted Gross Revenue in the license 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 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.

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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.

  ......................J.             ( R.V. RAVEENDRAN )

New Delhi;      ......................J. October 11, 2011.         ( A.K. PATNAIK )

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