LexUNION OF INDIA versus ASSOCIATION OF UNIFIED TELECOM SERVICE PROVIDERS OF INDIA ETC. ETC.
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A B C D E F G H 541 UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM SERVICE PROVIDERS OF INDIA ETC. ETC. (M.A. (D) No. 9887 of 2020) In (Civil Appeal No. 6328-6399 of 2015) SEPTEMBER 01, 2020 [ARUN MISHRA, S. ABDUL NAZEER AND M. R. SHAH, JJ.] Indian Telegraph Act, 1885 – Definition of Adjusted Gross Revenue (AGR) and dues to be paid thereunder, decided by Supreme Court in Union of India v. Association of Unified Telecom Service Providers of India reported as [2019] 16 SCR 672 – Payment of – Representation by telecom service providers and Indian Banks’ Association – Period of 20 years fixed by Union of India – Held: There shall not be any dispute/re-assessment by any of the Telecom Operators for the demand raised by Department of Telecom (DoT) w.r.t the AGR dues based on the judgment of this Court – However, period of 20 years fixed for payment is excessive – At first instance, Telecom Operators to make payment of 10% of the total dues as demanded by DoT by 31.03.2021 – Telecom Service Provider (TSPs) to make payment in yearly instalments commencing from 01.04.2021 up to 31.03.2031 payable by 31st March of every succeeding financial year – Any default in payment to attract interest as per agreement with penalty and interest on penalty – Directions issued – Insolvency and Bankruptcy Code, 2016 – Indian Wireless Telegraphy Act, 1933 – Telecom Regulatory Authority of India Act, 1997. Insolvency and Bankruptcy Code, 2016 – Payment of Adjusted Gross Revenue (AGR) dues – Telecom Service Providers resorted to insolvency proceedings – Bona fide of – Held: Said question along with several other questions like if spectrum licence can be subjected to such proceedings; dues under the licence can be said to be operational dues etc., being a jurisdictional one requires to be gone [2020] 11 S.C.R. 541 541 A B C D E F G H 542 SUPREME COURT REPORTS [2020] 11 S.C.R. into at this stage itself – To be examined by National Company Law Tribunal (NCLT) – Indian Telegraph Act, 1885. Telecommunication – Spectrum sharing – Past AGR dues of licensee – Liability of – Held: Shared operator Telecom Service Provider (TSPs) cannot be saddled with the liability to pay the past dues of AGR of licensee, that have shared the spectrum with the original licensees. Issuing directions, the Court HELD: 1. The following three questions arise for consideration: (1) Whether spectrum can be subjected to proceedings under the Code? (2) In the case of sharing, how the payment is to be made by the Telecom Service Provider (‘TSP’)? and (3) In the case of trading, how the liability of the seller and buyer is to be determined? [Para 10][555-F] 2.1 In Re. Whether spectrum can be subjected to proceedings under the Code? Whether spectrum can be subjected to proceedings under the Code is a significant question and is required to be gone into. It is a natural resource, and under Section 4 of the Indian Telegraph Act, 1885, the Government has the sovereign right. Section 3(10) of The Insolvency and Bankruptcy Code, 2016defines ‘creditor’. The term ‘debt is defined in Section 3(11). The expression ‘property’ is defined in Section 3(27). ‘Operational creditor’ is defined in Section 5(20) in Part II under the head Insolvency Resolution and Liquidation for Corporate Persons. Section 5(21) defines ‘operational debt’. A question has been raised concerning ownership. Whether TSPs can be said to be the owner based on the right to use the spectrum under licence granted to them? Whether a licence is a contractual arrangement? Whether ownership belongs to the Government of India? Whether spectrum being under contract can be subjected to proceedings under Section 18 of the Code? The question also arises whether the spectrum can be said to be in possession, which arises from ownership. What is the distinction between possession and occupation? Whether possession correlates with the ownership right? A question also arises concerning the A B C D E F G H 543 difference between trading and insolvency proceedings. Whether a licence can be transferred under the insolvency proceedings, particularly when the trading is subjected to clearance of dues by seller or buyer, as the case may be, as provided in Guideline Nos.10 and 11; whereas in insolvency proceedings dues are wiped off. Guideline No.12 is also assumed to be of significance in case spectrum is subjected to insolvency proceedings, which must be considered. It is also required to be examined that when Government has declined the permis
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