Indian Kanoon - Search engine for Indian Law

It would be pertinent to mention at the outset that in the writ petition, the petitioner has specifically accepted that it has not made any representation to the Government before approaching the Court in the form of present writ petition. Reason given is that the CAG itself has investigated this matter and in its draft report dated 07.11.2013 adversely commented upon the manner in which the aforesaid migration is allowed to respondent No. 2 at the cost of exchequer resulting into whopping loss of public revenue thereby giving undue advantage of Rs.22,842 crores to respondent No. 2. Thus, heavy reliance is placed on the said CAG report by the petitioner in support of its contention and following part of the said report is specifically referred to:

The only other issue which needs to be adverted to at this stage is the fixation of additional fee of Rs. 1,658/- crores which was paid by respondent no. 2 for migration to UL. The poser is : Whether such a fee fixed was abysmally low which had resulted in undue advantage to respondent no. 2, thereby causing loss to the public exchequer.

We may keep in mind that while taking this position, namely, respondent no. 2 is given undue advantage by allowing it to migrate from UAS license to UL with payment of so-called meager amount of Rs. 1,658 crores, the petitioner rested its case entirely on the draft report of CAG. This is so accepted and admitted in writ petition itself. It is pointed out that CAG's draft report had put the loss on this account at Rs. 22,842 crore besides significant loss of revenue on Spectrum Usage Charges (SUC). The petitioner had put both these benefits at about Rs. 40,000 crore, out of which about Rs. 17,000 crore was towards SUC. In its final report, however, the CAG has revised the loss figure to Rs. 3,367.29 crores, besides SUC on which it reiterated “significant loss of revenue to the government”.

The foundation of the petitioner's allegation is draft report of CAG. However, that was only a draft report. Many queries and doubts in the said draft report were addressed and answered by the Government. The final report of CAG is materially different from the draft report. It appears that in the draft report, CAG proceeded on the wrong premise that the license was also to be auctioned. In fact, as far as 2G2 case is concerned, in that matter licenses along with bundles spectrum were awarded at a pre-determined price on a first come first serve bases and, thus, spectrum was bundled along with the license. However, in 2010, when 3G and BWA spectrum were auctioned, the spectrum were delinked from license. In this backdrop, when the policy decision had now been taken based on National Telecom Policy, 2012, whereby migration of UASL licence to UL was permitted, the question of fee that is to be charged is to be looked into. TRAI, in its recommendations, had not prescribed any additional fee to be charged for migration of ISP operators with BWS spectrum to UL regime. Instead, it had stated that the BWA spectrum assignee, whether holding a UAS license or ISP lincence and the scope for provision of services would be uniform under the Unified License. It is only entry fee which is prescribed and that too Rs. 15 crores. Notwithstanding the same, the Government decided to permit migration from ISP licence to UL license with migration fee of Rs. 1,658 crores, calculated as the difference in entry fee of UASL and that of ISL license in order to provide a level playing field between the two classes licenses. The aforesaid facts would show that respondent no. 2 has paid spectrum price of Rs. 12,847.77 crores and also Rs. 1,658 crores for migration to UL, in addition to entry fee of Rs. 15 crores, which is the prescribed fee. It, therefore, cannot be said that the fee of Rs. 1,658 crores charged from respondent no.2 is in any way less or that it has caused any wrongful loss to the Government and wrongful gain to respondent no. 2 or that the Government would have fetched much more price.

Much is said on the veracity of CAG draft report by respondent no. 1 as well as respondent no. 2 in their attempt to show that the very basis of making calculation of alleged undue advantage of Rs. 22,842 crores (in the draft report) or Rs. 3,367.29 crores (in the final report). However, having regard to the aforesaid discussion, it may not be necessary to delve into this aspect in much greater details. It would be suffice to point out that the basic error committed by CAG was to compare 3G and BWA (4G) spectrum which mistake was realised in preparing the final report. It appears that these calculations are made by taking migration fee of Rs. 1,658 crores which were prevalent in the year 2001 and on that basis it arrived at a figure of Rs. 5025.29 crores which, according to CAG, should have been fixed. As respondent no. 2 paid a fee of Rs. 1,658.57 crores, according to the CAG it has resulted in the loss of Rs. 3,367.29 crores. However, the aforesaid assumption loses sight of the fundamental aspect, namely, in 2001 spectrum and license were unified which was not the position in the year 2010 when the two were segregated. It is stated at the cost of repetition that insofar as auction of BWA spectrum is concerned the same was auctioned at a price of Rs. 12847.77 crores which is the most material aspect and has been totally glossed over. We, thus, do not find any error in the action of the Government in allowing the migration from UASL to UL by making respondent no. 2 to pay a sum of Rs. 1,658 crores in this behalf.