Supreme Court rejects telecom companies' pleas for licence extension

NEW DELHI: The Supreme Court on Thursday rejected the plea of a bunch of telecom companies for extension of licences,citing its inability to sit in judgement over executive decisions on policy matters. The court said also it didn’t have the expertise to make such decisions. Bharti Airtel, Vodafone India, Idea Cellular, Loop Mobile and Reliance Telecom, which held airwaves to provide telecom services under permits valid for 20 years, applied to extend their licences as the terms were coming to a close in 2014 and 2015. The government rejected the demand and decided to allocate the airwaves through auction.

The companies,which held spectrum in the 900 MHz band, claimed that the original contracts allowed renewal. They also claimed that they had invested thousands of crores in infrastructure on borrowed money and any decision not to extend the licences would adversely affect them as they might not get back the spectrum. The companies first moved the Delhi High Court, which asked the government to consider their demand. They approached the top court after the government again rejected their plea. The 900 MHz band has since been auctioned along with other bands,mopping up huge revenue for the government.

A Supreme Court bench comprising Justices Jasti Chelameswar and RK Agrawal referred to a presidential reference on allocation of natural resources in the 2G case and said the court “respects the mandate and wisdom of the executive” in the matter of choosing the most suitable method of distribution of natural resources.

“At least in the matter of disposal of spectrum, auction is the only ‘permissible and intravires method for disposal’,” the bench said,while rejecting the companies’ petition. The companies had also contended that the government violated policy suggestions made by the telecom regulation while auctioning off the spectrum. The government said the companies had no vested right for either renewal or extension of licences.

Under the terms and conditions of the licences, the licensees were only entitled for a consideration of their claim for extension, Solicitor General Ranjit Kumar told the court.