Madras HC upholds Centre's power to modify terms

Chennai: The Madras high court has upheld the power of the Central government to modify terms and conditions specified in the license granted to service providers for establishment of telecom activities.

A Division Bench comprising Justices Huluvadi G.Ramesh and M.V.Muralidaran dismissed the appeals and petitions filed by Aircel Cellular Ltd, Aircel Ltd and Dishnet Wireless Ltd, against the imposition of share on Adjusted Gross Revenue (AGR) even on income earned in relation to non-telecom activities and levy of One Time Spectrum Charge (OTSC).

The Bench said in the present case, unilateral variation has been permitted under clause 13 (ii) of the license agreement entitling the licensor to modify the terms of the license agreement. Such being the case, the petitioners having accepted the said clause with open eyes and also further accepted changes made to the contract, including extension of term and change in the prescription of license fee, cannot cry out loud at this point of time pleading denial of rights vested on them under the contract, the court said.

The Bench said, “The petitioners have no vested right to carry on telegraph activity, but for the license, which has been granted by the exclusive privilege holder viz., the Central government. Such being the case, if the central government thought it fit to impose OTSC on the service providers, it cannot be deemed to be against the vested rights of the service providers, as no vested rights accrue to them on the grant of license to carry on the licensed activities”.

After additional solicitor-general G.Rajagopalan informed the court that more than Rs 3,273 crore was due from the petitioners to DoT, the Bench directed DoT to issue fresh notice within one month, quantifying the amount and the petitioners should pay the same within one month.

Originally, Aircel Cellular Limited (ACL) and Aircel (AL) were granted license for Chennai Metro and rest of Tamil Nadu regions respectively for 10 years. With the introduction of National Telecom Policy, 1999, migration package for all existing licensees of cellular and basic telecom services was proposed. Accordingly, the petitioner applied for merger. While it was pending, they also filed the present petitions.