Madras High Court upholds spectrum charge on Aircel


The Madras High Court has upheld the levy of Rs. 3,273 crore towards One Time Spectrum Charges (OTSC) on Aircel Cellular Limited by the Department of Telecom.The court held as valid Section 4 of the Telegraph Act, 1885 which grants exclusive privilege to Central government on telegraphs, and confers the power to grant licences.Dismissing a batch of petitions filed by Aircel Cellular Limited, Aircel Limited and Dishnet Wireless Limited, challenging the OTSC and the validity of Section 4 of the Telegraph Act, the court said the DoT shall issue fresh notice to Aircel and two others within one month quantifying the amount and the companies shall pay the same within the next month.“In case of any grievance with regard to the quantification of the amount, it is open to the petitioners to approach the Tribunal / Supreme Court,” a Division Bench of Justices Huluvadi G. Ramesh and M.V. Muralidharan saidThe petitioners had also prayed for a declaration that the DoT could claim a share only from revenue earned from licensed telecom activities and not non-telecom activities of the petitioners, as per the original licensing terms.Rejecting this, the court held: “The petitioners have no vested right to carry on telegraph activity (telecom), but for the licence, which has been granted by the exclusive privilege holder – the Central government.”This being the case, if the Centre thought it fit to impose OTSC on the service providers in addition to revenue sharing, it could not be deemed to be against the vested rights of the service providers, as no vested rights accrued to them on grant of licence to carry on the licensed activities, the Bench added.In 1994, Aircel Cellular Limited was granted Cellular Mobile Telephone Service (CMTS), for Chennai metro service area and the Rest of Tamil Nadu Circle (RoTN) license was granted to Aircel Limited for 10 years from 1998.Under the National Telecom Policy, 1999, migration of all existing licensees of cellular and basic telecom services was proposed, and licence extended to 20 years. The policy envisaged a one-time entry fee and percentage of gross revenue as license fee.The petitioners said the percentage of gross revenue as license fee should be only on activities in the licence and not on all activities of the licensee, which included non-telecom activities.The petitioners said the share sought by DoT on the revenue from non-telecom activities was violative of Constitutional rights.

The Bench, said, “The petitioners, with open eyes, having accepted the extension of term from 10 years to 20 years and also accepted that the licence fee will be a percentage of share of the revenue, without any embargo, cannot now come before this court and plead that what is accepted by them is violative of the Constitution.”

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