DEPARTMENT OF TELECOMMUNICATION AND ANR. versus CELLULAR OPERATORS ASSOCIATION OF INDIA AND ORS.

Citation: [2003] 2 S.C.R. 547 · Decided: 04-03-2003 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed
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Judgment (excerpt)

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DEPARTMENT OF TELECOMMUNICATION AND ANR. 
A 
v. 
CELLULAR OPERATORS ASSOCIATION OF INDIA AND ORS. 
MARCH 4, 2003 
[S. RAJENDRA BABU AND DR. AR. LAKSHMANAN, JJ.] 
B 
New Telecom Policy, 1999: 
Licence granted to Cellular Operators on terms and conditions- c 
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Charging of interest on late payment of advance licence fee-Postponement 
of ejfer;tive date-Demand of interest by the Authority for extended period-
Challenge to-Tribunal allowed the appeal directing the Autilority to modify 
demands-On appeal, held, since licence fee becoming due from a particular 
date and interest is depending on ·the licence fee, the interest on licence fee 
would not accrue from a date prior to the effective date of payment of fee- D 
Authority to modify demands by adjusting excess amount of interest towards 
outstanding/future dues-Directions issued. 
Appellant-Authority had granted licence to respondents-Cellular 
Operators on certain terms and conditions. The licensees were required 
E 
to pay licence fee in advance by the due date/effective date and in case of 
failure to make payment of fee on due date, interest thereon would be 
charged. 
Appellant had introduced the New Telecom Policy, 1999 whereby 
effective date of payment of fee was extended by certain period. However, 
appellant had raised demand of interest from the prior effective date which F 
was challenged by the respondents before the Telecom Disputes Settlement 
and Appellate Tribunal. Tribunal allowed the appeal with certain 
directions on refund of interest charged for the extended period. Hence 
the present appeal. 
G 
Disposing of the appeal, the Court 
HELD: I. I. The licence fee becomes due and payable from the 
effective date. When the effective date stood postponed by a period of six 
months then that is the date from which the licence fee will have to be 
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547 
H 
548 
SUPREME COURT REPORTS 
[2003] 2 S.C.R. 
A reckoned and appropriate calculation made both for purposes of licence 
fee and interest. Unless the licence fee becomes due the question of 
payment of interest will not arise. 1551-D-EI 
1.2. The payment of interest is dependent upon the licence fee 
becoming due. Interest is not independent of the licence fee and when the 
B licence fee had to be paid from a par!icular date, the interest would not 
accrue from a date prior to the licence fee becoming due for payment. 
1551-F-GJ 
1.3. The appellants should modify the demand issued to the 
C respondents to the extent it is found to charge higher amount of licence 
fee or interest on the principles set out in this order. The excess amount 
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which is liable to be refunded to the respondents shall be adjusted towards 
outstanding or future dues and if still any amount becomres due to them 
the same shall be refunded at the relevant bank rates. (551-H; 552-AJ 
D 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5050 of 2002. 
From the Judgment and Order dated 9.4.2002 of the Telecom Disputes 
Settlement & Appellate Tribunal, New Delhi in P.No. 10 of 2001. 
E 
Mukul Rohtagi, Additional Solicitor General and Navin Chawla for the 
Appellants. 
F 
P. Chidambaram and C.S. Vadiyanathan, Manjul Bajpai, Ms. Bina Gupta, 
Praveen Thomas, Ms. Divya Roy, Ms. Shaily Yogi, Ms. Garima Dewan and 
R.K. Sharma for the Respondents. 
·The Judgment of the Court was delivered by 
RAJENDRA BABU, J. Pursuant to a tender notice issued on 16.1.1995 
the appellants granted licences to various cellular operators on terms and 
conditions mentioned therein. The Licence Agreement provided that the 
G licencee has to pay the prescribed fee in advance in terms of Schedule B 
thereof and the period of licence was initially for 10 years. The licencee was 
obliged to install and run the system within 12 months of the effective date 
which is defined in the licence. The Agreement also provided that in case of 
failure to pay the licence fee within the prescribed time interest shall be 
H charged on the amount due at certain rate. 
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) 
DEPT. OF TELECOMMUNICATION 1·. CELLULAR OP. ASSON. OF INDIA [S. RAJENDRA BABU.).] 549 
The New Telecom Policy (1999] NTP 99 was introduced thereafter A 
which was known as 'migration package' and was offered to various licencees 
as set out in their letter dated 22.7.1999 which was accepted unconditionally 
by the members of respondent No.I and other licencees on 26.7.1999. In the 
NTP, under the migration package it was stated that the effective date is 
postponed by about six months for payment of licence
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