LexBHARTI AIRTEL LTD. versus UNION OF INDIA
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[2015] 5 S.C.R. 867 BHARTI AIRTEL LTD. v. UNION OF INDIA (Civil Appeal No.2803of2014) MAY 14, 2015 [J. CHELAMESWAR AND R.K. AGRAWAL, JJ.] A B Telecom Regulatory Authority of India Act, 1997- s. C 18 - Telegraph Act, 1885 - s. 4, proviso - Wireless Telegraphy Act, 1933 - Extension of licence - In 2G case, grant of licence and allotment of spectrum by Union of India pursuant to two press release, set aside - Pursuant thereto, Union of India taking steps to conduct ari auction pertaining D to the certain operators whose licenses were coming to an end in 2014 - Stipulation in licences that validity period is of 20 years and Licensor may extend the period for another 10 years subject to certain conditions specified therein - E Licensees sought extension/renewal of their licence - Government of India as also TDSAT rejected the same - Held: Licensees have no automatic right of renewal/extension on the expiry of the original tenure of the license - Extension is at the sole discretion of licensor subject to the conditions F stated - Licensor's obligations are not simply confined to the contract/license. They also flow from the Constitution and the laws of the land- Mandate and wisdom of the executive" in the matter of choosing the most suitable method of distribution of natural resources is to be respected - This is G clearly a matter of an economic policy entailing an intricate economic choice and the Court lacks necessary expertise to make such choice - Thus, auction is the only "permissible and intra vires method for disposal - Impugned decision of 867 H 868 SUPREME COURT REPORTS [2015] 5 S.C.R. A the Government, which resulted in huge inflow of revenue in the auctions conducted during the pendency of this litigation, cannot be said to be a totally irrational or irrelevant consideration in the context of the spectrum management, more particularly, 2G case - Licensees are not compelled to B pay any specific tariffs fixed by the licensor, for availing the right to use the spectrum - If the price for securing allocation of spectrum is likely to go up because of the procedure of auctioning to have access to spectrum, it goes up because of the market forces - There are people who are willing to C acquire such a right paying a higher price on the assessment that they would be able to carry on the business profitably even after paying higher amounts for acquisition of spectrum - Licensees are corporate houses with enormous economic 0 power, which enables them to secure adequate expert advice in the matter of financial planning - It cannot be believed that they would make any investment without making a reasonable assessment of the possible return on such investment - There is no compulsion by the State in this E regard. Dismissing the appeals and writ petitions, the Court HELD: 1.1 A license granted under Section 4(1) F of the Telegraph Act such as the one granted to each of the LICENSEES is a contract between the LICENSOR and the LICENSEE. From the language of the relevant clauses of the licences, it is clear that the LICENSEES have no automatic right of renewal/extension on the G expiry of the original tenure of the license. The contract only provided for extension of the period of license at the sole discretion of the LICENSOR subject to the condition that the LICENSEE makes an application H seeking an extension during the 19th year of the BHARTI AIRTEL LTD. v. UNION OF INDIA 869 currency of the licence. It appears that all of the A LICENSEES did make such an application. [Para 37, 39] [893-H; 894-A, B-D] 1.2 Under the terms of the license, the LICENSOR is required to extend the license only on "mutually agreed B terms and conditions", if such an extension is sought in the 19th year of the currency of the licence. Where the LICENSEE does not make an application in the 19th year but makes it just a few days before the expiry of the 20th year, the LICENSEE still would not have a right of C consideration because such a claim is plainly unsupported by the text of the contract and the failure to seek extension in the 19th year, makes the continuance of the service to the public uncertain. The Government of India cannot afford to remain waiting D without making alternative arrangements, because the disruption in the communication in the modern world may lead to many undesirable consequences apart from causing inconvenience to the public. The alt
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