LexASSOCIATION OF UNIFIED TELE SERVICES PROVIDERS & OTHERS versus UNION OF INDIA
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A B [2014] 9 S.C.R. 780 ASSOCIATION OF UNIFIED TELE SERVICES PROVIDERS & OTHERS V. UNION OF INDIA (Civil Appeal No. 4591 of 2014) APRIL 17, 2014 [K.S. RADHAKRISHNAN AND VIKRAMAJIT SEN, JJ.] Telecom Regulatory Authority of India, Service Providers C (Maintenance of Books of Accounts and other Documents) Rules, 2002 - r.3 and 5 - Telecom Regulatory Authority of India Act, 1997 - Scope and ambit of the powers and duties of the Comptroller and Auditor General of India (GAG), the Telecom Regulatory Authority of India (TRAI) and the D Department of Telecommunications (Do T) in relation to proper computation and quantification of Revenue in determining the licence fee and spectrum charges payable to Union of India under Unified Access Services (UAS) Licences entered into between Do T and the private service providers - Powers of E the GAG to conduct the revenue audit of all accounts drawn by the licensees - Accounts of the licensee, in relation to the revenue receipts, if can be said to be the accounts of the Central Government and, thus, subjl3ct to a revenue audit, as per s. 16 of the 1971 Act - Legal position explained - F Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971 - ss. 13, 16 and 18 - Constitution of India, 1950 - Arts. 148, 149 and 266. Dismissing the appeals filed by the Service Providers and allowing the appeals filed by the DoT and others, the G Court HELD:1. The licensee is obliged to maintain the accounts relating to licence agreement and particularly the revenue received by it because it has to share the revenue H 780 ASSOCIATION OF UNIFIED TELE SERVICES PROVIDERS v. 781 UNION OF INDIA with the Union, which has to be calculated with reference A to the Gross Revenue Receipts. [Para 29] [813-D] 2. Duties and powers conferred by the Constitution on the CAG under Article 149 cannot be taken away by the Parliament, being the basic structure of our 8 Constitution, like Parliamentary democracy, independence of judiciary, rule of law, judicial review, unity and integrity of the country, secular and federal character of the Constitution, and so on. [Para 34] [817- 8, C] c 3. When the executive deals with the natural resources, like spectrum, which belongs to the people of this country, Parliament should know how the nation's wealth has been dealt with by the executive and even by the UAS Licence holders and the quantum of the D Revenue generated out of the use of the spectrum and whether the same has been properly assessed, collected and accounted for by the Union and the UAS Licence holders. When nation's wealth, like spectrum, is being dealt with either by the Union, State or its E instrumentalities or even the private parties, like service providers, they are accountable to the people and to the Parliament. Parliamentary democracy also envisages, inter alia, the accountability of the Council of Ministers to the Legislature. [Para 37] [818-E-G] F 4. Parliament has an obligation to ascertain whether the entire receipts by way of licence fee, spectrum charges, have been realized by the Union of India and credited to the Consolidated Fund of India (CFI). Article 266 says, all the public moneys received by or on behalf G of the Government of India shall be credited to CFI. CAG can carry out examination into the economy, efficacy and effectiveness with which the Union of India has used its resources, and whether it has realized the entire licencee fee, spectrum charges and also whether the Union of H 782 SUPREME COURT REPORTS (2014] 9 S.C.R. A India has correctly carried out the audit under Clauses 22.5 and 22.6 of UAS Licence Agreement. CAG's examination of the accounts of the Service Providers in a Revenue Sharing Contract is extremely important to ascertain whether there is an unlawful gain to the Service B Provider and an unlawful loss to the Union of India, because the revenue generated out of that has to be credited to the Consolidated Fund of India. [Para 41] [820- A-D] 5. "Spectrum", a natural resource, belongs to the C people, therefore, people of this country, through Parliament should know how its natural resources have been dealt with by the Union, State or its instrumentalities or even by UAS licence holders. Instances are not rare, where even the Executive, at times, acts hand in glove D with licence holders, who deal with the natural resources, hence, necessity of prop
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