TMI Blog2016 (4) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... me. This meant that those having UAS license which permitted data services only were allowed to migrate to Unified License enabling them to provide both data service as well as voice telephony. This was a pure policy decision after due deliberations by the experts in the fields and even TRAI had recommended allowing such migration - Such a policy decision, when not found to be arbitrary or based on irrelevant considerations or mala fide or against any statutory provisions, does not call for any interference by the Courts in exercise of power of judicial review. Such a policy decision, when not found to be arbitrary or based on irrelevant considerations or mala fide or against any statutory provisions, does not call for any interference by the Courts in exercise of power of judicial review. There is one more reason not to interfere with the aforesaid stipulation of SUC. The Government has taken the position that the conditions in the license granted to Respondent No. 2 empower the licenser/Government to change the terms of license and, therefore, whenever it is felt necessary and expedient in public interest, the percentage of SUC can be increased. Petition dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sturbance in the level-playing field between Respondent No. 2 vis-a-vis other operators. The Petitioner has tried to project that unwarranted favouritism is shown to Respondent No. 2 and the decision making process, in this behalf, was also not only faulty but in violation of accepted norms as well. 2. The factual details leading to the aforesaid allegations are averred in the petition which can be summated in the following manner: On 25.02.2010, the Respondent No. 1 issued Notice Inviting Applications (NIA) for the auction of: (i) 3G: Three or 4 blocks each of 5+5 MHz spectrum for 3G services in 2.1 GHz band at a reserve price of ₹ 3,500 crore for a Pan-India license, and (ii) BWA (4G): Two blocks each of 20 MHz spectrum for BWA services in 2.3 GHz band at a reserve price of ₹ 1,750 crore for a Pan-India license. In respect of BWA (4G), as per the NIA conditions, a bidder could be an existing ISP-A licensee or UAS licensee (or obtain any of these licenses later if successful in the bid), but it can provide only such services which are allowed under the license it chooses. For example, an ISP-A licensee cannot provide voice telephony. In this regard, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On that basis, some suspicion is nurtured as to how IBSPL acquired BWA spectrum and thereafter stakes in IBSPL came under the control of RIL. The said IBSPL is now known as Reliance Jio Infocomm Pvt. Ltd. However, we may like to add here itself that the auction of BWA in which IBSPL turned out to be successful bidder resulting into acquisition of Pan-India BWA spectrum in its favour is not the subject matter of dispute and was never questioned by anybody. This auction, as is clear from the above, was held way back in May-June, 2010. Though, there were other prominent companies of repute who participated in the said auction and shared the remaining other Pan-India slot (22 Serve Areas), no competitor of IBSPL challenged BWA auction. The subject matter of challenge in the instant writ petition is the conversion of BWA spectrum to Unified License (UL) i.e. migration of existing BWA spectrum to UL which has been done by Respondent No. 1. 5. In respect of the aforesaid central issue raised, it is pointed out by the writ Petitioner that on 16.04.2012, TRAI submitted its recommendations to Respondent No. 1 on Guidelines for UL and migration of existing license. Thereafter, on 02.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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: (x) It was found that the basis of the decision i.e. payment of entry fee of ₹ 1,658 crore by ISP licensee for a permission to Pan India provision of mobile voice services using BWA spectrum considered by the DoT Committee, Telecom Commission and the MOC IT, was primarily intended to fill the gap between the eligibility criterion stipulated for participation in the 3G/BWA auction in 2010 as UAS/CMTS licensees had paid entry fee of ₹ 1,658 crore while ISP licensees had paid only ₹ 30 lakh. (xi) The DoT Committee, Telecom Commission a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ISP (holding BWA spectrum) to UASL. Instead, according to him, what was needed was to hold independent auction of voice telephony. He submitted that allowing the migration from one type of license to another with added benefits was in the teeth of judgment of this Court in the Presidential Reference on the issue of Alienation of Natural Resources (2012) 10 SCC 1 wherein this Court has held that when precious and scarce natural resources are alienated for commercial pursuits of profit maximizing private entrepreneurs, adoption of means other than those that are competitive and maximize revenue may be arbitrary and face the wrath of Article 14 of the Constitution. 8. All the three Respondents in this petition, namely, Union of India (R-1), Reliance Jio Infocomm Ltd. (R-2) and TRAI (R-3) have stoutly contested the stand taken by the Petitioner in this petition by disputing the averments. Apart from putting stiff resistance to the issues raised in the petition on merits, the Respondents have even questioned the bonafides of the petition by vehemently arguing that it does not serve any public purpose and on the contrary, the petition is motivated. In the counter affidavit file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icensed from time to time. To put it pithily, it is well known that Telecommunication is a sector with fast changing technologies. Each technology has its features, compatibility and market adaptability. Some technologies which are at a horizon today may not be even commercially successful as updated and other technology become available before commercial deployment of that technology at affordable rates for common man in India. In the year 1991, India had 5 million telephone subscribers. At the end of July, 2007 this number increased to 233 million and as on July, 2015 it has touched 1006.96 million subscribers. This phenomenal growth has not been achieved in any country, other than China. The primary reason for this growth is the introduction of mobile services coupled with privatization of the Telecom sector. Mobile service in India is dominated by private sector enterprise and the Government religiously followed a policy of 'managed competition' by licensing more than one company in Telecom. This led to competition in the mobile industry, result whereof which not only resulted in providing better services but another direct effect of this competition is lower prices tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f information and reduces interference between the uplink and downlink. Therefore FDD is more suitable for Voice systems that require continuous duplex working. TDD is implemented on an unpaired spectrum, implying the usage of only one frequency for both downlink and uplink transmissions. It is suitable for asymmetric transmission demands and in cases where paired frequency is not available while Voice services are symmetric transmission. e. Efficiency of use: FDD has higher frequency usage efficiency. There is wastage of spectrum in TDD as it requires more accurate timing greater guard bands. f. Range: TDD has a lower range (area covered) due to fact that guard band timing needs to be met. g. Carrier Aggregation: With 3G and LTE big advantage is carrier aggregation, which allows receiving handsets to make better use of the fragmented bands that a carrier may have, in order to download data faster. This was not available in WiMAX at that time since the complete mobility was not available. h. Network Evolution: A clear roadmap to move to a new technology was available for 3G but it was not there for broadband networks in terms of mobility, carrier aggreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10 bidders participated in 3G spectrum auction and 11 bidders participated in BWA spectrum auction. The results of BWA spectrum were published on 12.06.2010. It is emphasized by the Respondents, and to which there is no denial, that this occasion was conducted over 16 days and involved 117 rounds of bidding across service areas. In the said occasion, all the 44 blocks that were put for auction across 22 service areas in the country were sold. Reserve price of BWA spectrum was fixed at ₹ 1750 crores. During bidding, highest bid that was given by IBSPL was ₹ 12847.77 crores for one block of Pan-India BWA spectrum. In this way, Respondent No. 2 emerged as successful in acquiring various BWA frequencies in all 22 service areas across the country. Further, as already noted in the earlier part of this judgment, though 11 bidders had participated, none of the other bidders make any complaint about the fairness, transparency and as well as about the process of bidding. 14. In this scenario, insofar as IBSPL becoming successful bidder cannot be questioned at this stage. No doubt, the Petitioner has alleged that shortly after acquiring Pan-India BWA spectrum, IBSPL increased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Ministry for Telecommunication and IT on 15.02.2012 on Spectrum Management and Licensing Framework. This statement broadly indicated that there would be no more licenses linked with Spectrum and issuance of licenses and allocation of spectrum will be completely delinked. Thereafter, on 16.04.2012, TRAI addressed a letter to the Secretary, DoT enclosing its recommendations for Unified License/Class License and migration of existing licenses. After due deliberations at appropriate levels, the Government of India issued on 31.05.2012 the National Telecom Policy-2012 and announced approval for introduction of Unified Licensing regime. This was followed by the policy decision of DoT dated 13.03.2013 to allow migration to UL from UASL as well as ISP to UL regime. The detailed background in taking this policy decision is stated in the counter affidavit filed by the Union of India and the position stated therein is not in dispute. These details are required to be noted, which are as follows: 1. The Department of Telecommunications (DoT) vide their D.O. letter No. L-14047/09/2005-NTG dated May 22, 2006 sought recommendations from the Telecom Regulatory Authority of India (TRAI) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (spectrum in the band of 2.5-2.69 GHz band was already identified as IMT-2000 band). The use of 2.3-2.4 GHz and 2.5-2.69 GHz band offers significant scope for innovation with the potential for induction of new technologies, services, applications and devices. With the availability of mobile services in this band, it provides an important opportunity for the introduction of next generation mobile technologies (BWA). 8. Even TRAI in its recommendations admit that there could be different technologies by which BWA could be provided and stated that: 5.12 During the consultation process, the Respondents stated that there are various versions of BWA technology applications. The Authority also recognizes that given the wide range of possible technologies, it is essential that any policy concerned with identification and allocation of spectrum for BWA must be technology-neutral and flexible to permit co-existence of all types of BWA technologies..... 5.72 ....The average price for allocations comes to $0.65 (Rs. 30) per Hz including South Korea, and $0.08 (Rs. 3.75) per Hertz excluding South Korea .... The final reserve price in NIA as issued by DoT was @Rs. 87.5 per Hz. (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng such migration. 19. Such a policy decision, when not found to be arbitrary or based on irrelevant considerations or mala fide or against any statutory provisions, does not call for any interference by the Courts in exercise of power of judicial review. This principle of law is ingrained in stone which is stated and restated time and again by this Court on numerous occasions. In Jal Mahal Resorts (P) Ltd. v. K.P. Sharma (2014) 8 SCC 804, the Court underlined the principle in the following manner: 116. From this, it is clear that although the courts are expected very often to enter into the technical and administrative aspects of the matter, it has its own limitations and in consonance with the theory and principle of separation of powers, reliance at least to some extent to the decisions of the State authorities, specially if it is based on the opinion of the experts reflected from the project report prepared by the technocrats, accepted by the entire hierarchy of the State administration, acknowledged, accepted and approved by one Government after the other, will have to be given due credence and weightage. In spite of this if the court chooses to overrule the correctness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy is the outcome of deliberations of the technical experts in the fields inasmuch as Courts are not well-equipped to fathom into such domain which is left to the discretion of the execution. It was beautifully explained by the Court in Narmada Bachao Andolan v. Union of India (2000) 10 SCC 664 and reiterated in Federation of Railway Officers Assn. v. Union of India (2003) 4 SCC 289 in the following words: 12. In examining a question of this nature where a policy is evolved by the Government judicial review thereof is limited. When policy according to which or the purpose for which discretion is to be exercised is clearly expressed in the statute, it cannot be said to be an unrestricted discretion. On matters affecting policy and requiring technical expertise the court would leave the matter for decision of those who are qualified to address the issues. Unless the policy or action is inconsistent with the Constitution and the laws or arbitrary or irrational or abuse of power, the court will not interfere with such matters. 21. Limits of the judicial review were again reiterated, pointing out the same position by the Courts in England, in the case of G. Sundarrajan v. Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y will suffer so that they would give up producing or dealing in mustard oil. It was urged that this would, quite naturally, have its repercussions on consumers for whom mustard oil will become even more scarce than ever ultimately. We do not think that it is the function of this Court or of any court to sit in judgment over such matters of economic policy as must necessarily be left to the government of the day to decide. Many of them, as a measure of price fixation must necessarily be, are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide them without even the aid of experts. 23. Taking aid from the aforesaid observations of the Constitution Bench, the Court reiterated the words of caution in Peerless General Finance and Investment Co. Limited v. Reserve Bank of India (1992) 2 SCC 343 with the following utterance: 31. The function of the court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is well settled that a public body invested with statutory powers must take care not to exceed or abuse its power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid parameters of judicial power, we now proceed to deal with the some specific arguments of the Petitioner. (1) Whether process of auction should have been resorted to? 27. The first argument raised by the Petitioner is that in the NIA dated 25.02.2010, when 3G spectrum and BWA spectrum were to be auctioned there was a specific Clause that the spectrum shall not be used for any activity other than the activities for which the operators has a license. On that basis, it was argued that there was no reason to allow the migration and for voice telephony there should have been a separate auction. 28. This submission lacks substance. During the course of arguments, the learned Solicitor General successfully demonstrated that what was auctioned in 2010 was spectrum, namely, 3G spectrum and BWA spectrum. Insofar as 3G spectrum auction is concerned, it was in blocks of 5 MHz i.e. each block of 2 x 5 MHz whereas BWA auction was in blocks of 20 MHz. The spectrum, therefore, was of different forms and thus, issuance of license would be different from spectrum. Moreover, NIA dated 25.02.2010 itself provided the eligibility conditions for an entity who could bid for BWA spectrum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of institutional decision making. 30. The aforesaid discussion leads us to irresistible conclusion that decision of the Government permitting migration of telecom licenses to UL regime is valid, legal and without any blemish. (2) Any undue favour to Respondent No. 2? 31. This brings us to another incidental aspect, namely, whether Respondent No. 2 could be allowed migration from BWA spectrum to Unified License (UL). We may observe at the outset that once a policy decision is taken to allow such a migration to all those who were holding BWA spectrum and this decision was not taken only for Respondent No. 2 individually, Respondent No. 2 also became entitled to avail the benefit of the said decision. However, the allegation of the Petitioner is that Respondent No. 2 has been allowed a 'back door' entry to provide voice services. It is in view of such an allegation that we are delving on the aforesaid argument. 32. Some of the important features and aspects which have to be kept in mind, in order to deal with the aforesaid argument of the Petitioner, needs to be noted in the first instance. It is not in dispute that IBSPL, when it bid for BWA spectrum, was holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ₹ 22,842 crore besides significant loss of revenue on Spectrum Usage Charges (SUC). The Petitioner had put both these benefits at about ₹ 40,000 crore, out of which about ₹ 17,000 crore was towards SUC. In its final report, however, the CAG has revised the loss figure to ₹ 3,367.29 crores, besides SUC on which it reiterated significant loss of revenue to the government . 36. On that basis, submission of the Petitioner is that that had there been an independent auction of UL, the Government would have generated substantially higher revenue. It is also argued that granting of UL by adopting the methodology of conversion from existing UAS to UL, instead of putting it to auction, is also contrary to the judgment of this Court in 2G2 case. Though we have already dealt with this aspect of the argument, we are addressing the issue now in the context of frontal attack made on the fixation of fee of ₹ 1,658 crores which is charged from Respondent No. 2 while allowing the migration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the Respondents at the Bar that migration/grant of unified license available today is at paltry fee of ₹ 15 crores. As against this, Respondent No. 2 has paid ₹ 1,658 crores, much higher than fee fixed. One cannot lose sight of the fact that insofar as auction of BWA spectrum is concerned, it fetched a whopping price of ₹ 12,847.77 crores. On the other hand, license is acquired separately at a fixed license fee over and above the price of spectrum which requires a fee of ₹ 15 crores insofar as switch over from UASL to UL is concerned. 40. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulous devise for the consumers which caters to all most all necessary and day to day telecom needs. A peep into the graph growth of total global monthly data and voice traffic would reveal that in the year 2007-2008 voice and data traffic was almost equal. However, by the end of 2010, traffic generated from mobile data was twice that for voice. In five years time, the data traffic has gone ahead of voice traffic by leaps and bounds and it is almost seven times more than voice traffic. Another trend which is visible from the available figures is that whereas in voice traffic growth from 2010-2015 is hardly 1 1/2 times, it is more than seven times insofar as mobile data traffic is concerned. Between first quarter of 2014 and first quarter of 2015 itself mobile data traffic registered a growth of 55%. Future forecast of data traffic is expected @ 30% per year. In India itself, monthly mobile data consumption is expected to increase 18 fold by the year 2020 over current levels. In the aforesaid scenario, Telecommunication has emerged as a key driver of economic and social development in an increasingly knowledge intensive global scenario, in which India needs to play a leadership role ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id 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 ₹ 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 ₹ 1,658 crores in this behalf. 44. With this, we address ourselves to the remainder issue, namely, fixation of 1% AGR as SUC for the use of BWA. As noticed above, the contention of the Petitioner in this behalf is that when the Respondent No. 1 allowed second Respondent-Reliance Jio to offer voice telephony (by allowing their migration to UL regime), first Respondent should insist for payment of SUC for level playing field like those offering voice telephony on BWA spectrum. So far as various operators who are offering voice services are paying SUC at 3% to 8% depending on the quantum of the spectrum they hold. The prevailing slab rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g clauses: 50. Mr. Ranjit Kumar, learned Solicitor General further demonstrated that the country has been divided into 3 metro service areas, namely Delhi, Mumbai and Kolkata and 18 Service areas which have been further designated as category A, B and C. SDCA stands for Short Distance Charging Area which comprises typically of one to two tehsils. The country has 2647 SDCAs out of which 2470 SDCAs has been designated as rural SDCAs. All operators including M/s. Reliance Jio Infocomm Ltd. who were awarded BWA Spectrum in 2010 and whose time period of 5 years for roll-out obligation was completed in 2015, have submitted proof of compliance of roll out obligations by registering with Telecom Enforcement and Resource Monitoring (TERM) Cell of Department of Telecom before the due date in all the 22 service areas. The date of registering the TERM Cell is taken as the date of completion of roll out obligation on successful testing. In this case, testing is in progress and is likely to be completed in next few months. It was, thus, pointed out that less rural coverage is stipulated for 3G spectrum which factor influenced the policy makers to fix SUC at 1% of AGR. 51. Apart from the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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