Bharti Cellular Ltd vs Union Of India & Ors

Bharti Cellular Limited ...Appellant

Versus

Union of India & Ors. ...Respondents

J U D G M E N T

T.S. THAKUR, J.

1. This appeal under Section 18 of the Telecom Regulatory

Authority of India Act, 1997 is directed against an order

dated 23rd May, 2003 passed by the Telecom Disputes

Settlement Appellate Tribunal, New Delhi, whereby the

Tribunal has dismissed in part the petition filed by the

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appellant under Section 14 (a)(I) of the Act and upheld the

computation of licence fee demanded and realized by the

respondent-Union of India in terms of the Licence

Agreement executed between the parties.

2. The appellant-company holds a licence to provide

cellular mobile telephone services for Delhi Metro area. The

Licence Agreement executed between the appellant on the

one hand and the Government of India on the other, inter

alia, provided for payment of fixed amount towards licence

fee for the first three years of the licence period. From the

fourth year onwards the licence fee payable was to be on

the basis of number of subscribers of the service provider

subject to the minimum stipulated in the agreement. Clause

19 of the Licence Agreement in particular dealt with this

aspect and, inter alia, provided that for the first three years

a lump sum licence fee shall be chargeable annually and that

the year shall be reckoned as the period of twelve months

beginning with the date of commissioning of the services or

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completion of twelve months from the date of the signing of

the licence whichever is earlier.

3. The appellant's case before the Tribunal was that

although it had a provisional operational clearance from the

respondent effective from 29th August, 1995 and an

interface/service approval from 26th September, 1995, it

could commence commercial services only from 15th

November, 1995 meaning thereby the Licence Agreement

should be deemed to have become operative only from 15th

November, 1995. The respondents, however, treated 26th

September 1995 i.e. the date when the interface/service

clearance was given as the date of commencement of the

Licence Agreement and computed the licence fee dues,

interest, penal interest, liquidated damages etc. with

reference to the said date. The appellant also questioned the

method of computing the number of subscribers for

determining the licence fee payable from the fourth year

onwards contending that the term "subscribers" should be

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understood to be such as have activated cellular mobile

telephone connection from the appellant and as are

currently activated and used by a person for which bills are

issued by the appellant. A few other disputes were also

raised by the appellant in the petition filed on its behalf. One

of them related to the alleged illegality and arbitrary

computation of the advance payment stipulated for the

entire quarter as due in the month of June itself and

calculation of the interest and penal interest on the overdue

amount. One other grievance of the appellant was regarding

the Unit Call Rate for the purpose of calculation of the

licence fee. It was contended by the appellant that in terms

of the Licence Agreement the rate of Rs.5 lakhs per 100

subscribers was based on the Unit Call Rate of Rs.1.10. This

rate was revised by the respondent to Rs.6.023 lakhs per

100 subscribers or part thereof on 30th July 1998 based on

the Unit Call Rate of Rs.1.40 prevalent at that time. Unit Call

Rate was then reduced to Rs.1.20 from 1st May, 1999. The

appellant, therefore, claimed that the calculation of the

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licence fee payable for the period from 1st May, 1999 to 31st

July, 1999 should be on the basis of the then Unit Call Rate

prevalent, namely, Rs.1.20 only.

4. The respondent contested the petition on several

grounds giving rise to the following four issues which the

Tribunal framed for determination:

(i) Whether the methodology adopted by the Respondent

for arriving at the number of subscribers from the 4th

year of the Licence Agreement was in order?

(ii) Whether the Respondent could charge interest on the

licence fee payable by the Petitioner as demanded by

the Respondent in letters dated 10th August 1999 and

6th March 2000?

(iii) Whether the Petitioner is entitled to the benefit of

reduction in the unit call rate with effect from 1st May

1999 for calculating the per subscriber licence fee?

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(iv) Whether the respondent can levy penal interest on the

licence fee from 1st February 2000 till the actual date of

payment?

5. In so far as issue No.(i) above is concerned, the

Tribunal took the view that the respondents had clarified to

the appellant and other cellular operators that the basis for

calculating the number of subscribers for determining the

licence fee shall be the total figure of IMSI in the Home

Location Register. The Tribunal found that the

representation made on the subject by the petitioner-

appellant on 1st April, 1999 was rejected by the respondent

on 23rd April, 1999 and the appellant offered a Migration

Package on 22nd July, 1999 which, inter alia, contained a

clause that no dispute relating to the Licence Agreement for

the period upto 31st July 1999 shall be raised at any future

date. The appellant gave its unconditional acceptance to the

entire Migration package on 27th July, 1999. Having done so,

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the appellant was not entitled to raise any issue that related

to the pre-migration period.

6. There is, in our opinion, no legal infirmity in the view

taken by the Tribunal. Once the petitioner-appellant had

specifically and unconditionally agreed to accept the

Migration Package and given up all disputes relating to

Licence Agreement for the period upto 31st July 1999, it was

not open to it to turn around and agitate any such dispute

after availing of the Migration Package. A party who has

unconditionally accepted the package cannot after such

acceptance reject the conditions subject to which the

benefits were extended to him under the package. It cannot

reject what is inconvenient and onerous while accepting

what is beneficial to its interests. The package having been

offered subject to the conditions that all disputes relating to

the Licence Agreement for the period ending 31st July 1999

shall stand abandoned by the operators there was no room

going back on that representation.

8 7. Relying upon the decision of this Court in City

Montessori School v. State of Uttar Pradesh and Ors.

2009 (14) SCC 253, New Bihar Biri Leaves Co. v. State

of Bihar 1981 (1) SCC 537 and R.N. Goswain v. Yashpal

Dhir AIR 1993 SC 352, this Court has in Civil Appeal No.

7236 of 2003 - Shyam Telelink now Sistema Shyam

Teleservices Ltd. v. Union of India held that no one can

approbate and reprobate and anyone who has accepted with

full knowledge or notice of facts, benefits under a

transaction which he might have rejected or contested,

cannot question the transaction or take up an inconsistent

position qua the same. We have said:

"The maxim qui approbat non reprobat (one

who approbates cannot reprobate) is firmly

embodied in English Common Law and often

applied by Courts in this country. It is akin

to the doctrine of benefits and burdens which

at its most basic level provides that a person

taking advantage under an instrument which

both grants a benefit and imposes a burden

cannot take the former without complying

with the latter. A person cannot approbate

and reprobate or accept and reject the same

instrument."

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8. In the light of the above, the view taken by the

Tribunal is legally unexceptionable.

9. That brings us to the second issue formulated by the

Tribunal for determination. The Tribunal has answered this

issue in favour of the appellant holding that while

respondent was entitled to recover licence fee together with

interest from the earlier unpaid amounts upto and for the

month of July 1999, it was not entitled to recover both

advance quarterly licence fee for July-September 1999 and

revenue-sharing fees for August 1999 and September 1999

in terms of the Migration Package. This part of the order of

the Tribunal has not been assailed before us by the

appellant obviously because the view taken by the Tribunal

has gone in its favour and the matter remitted back for re-

working the dues along with interest by the end of July

1999, keeping in view the observations made by the

Tribunal in para 23 of its order. It is noteworthy that the

Government has also not assailed the said part of the order.

10 10. The third issue which had been taken up by the

Tribunal for consideration related to the Unit Call Rate and

the effect of any revision in such rates. Condition 19.1(f)

which is relevant in this context reads:

"19.1(f): The rate of Rs.five lakhs per

hundred subscribers or part thereof is based

on the unit call rate of Rs.1.10. Fourth year

onwards, as defined in clause 19.1(d), the

rate of Rs.five lakhs will be revised based on

the unit call rate. The revision will be limited

to 75% of the overall increase in the unit rate

during the period preceding such revisions."

11. Relying on the above provisions Tribunal held that even

though there is no specific exclusion of downward revision in

the clause extracted above, the limiting of the revision is

confined to increase only. The expression "revision will be

limited to 75% of the overall increase in the unit rate"

appearing in clause 19.1(f) (supra) is indicative of the fact

that revision was envisaged only in the case of increase in

Unit Call Rate and not in the case of fluctuation resulting in a

decrease in the said rate. That apart, the Tribunal has rightly

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held that the petitioner-appellant had not led any evidence

before it and that the question regarding Unit Call Rate was

raised by it at any stage either before or after the licence

was issued for the year 1994 and that the issue relating to

the Licence Agreement could not be agitated being a pre-

migration package.

12. That leaves us with issue no.4 formulated by the

Tribunal relating to the levy of interest on the licence fee

from 1st January 2000 till actual date of payment. The

Tribunal has taken the view, and in our opinion rightly so,

that the respondents were entitled to recover not only the

outstanding licence dues but also interest due on the same

for the period of default. The Tribunal has rightly held that

to the extent condition stipulated a deadline i.e. 31st

January, 2000 it was open to the respondent to charge

simple interest on the overdue amount for keeping the

licence valid instead of terminating the same on the ground

of default.

12 13. In the totality of the above circumstances, we see no

reason to interfere with the order passed by the Tribunal nor

do we see any legal flaw in the directions issued by the

Tribunal for re-working the dues along with interest keeping

in view the observations made in the order under appeal.

14. There is no merit in this appeal which is hereby

dismissed but without any order as to costs.

.................................J.

(MARKANDEY KATJU)

.................................J.

(T.S. THAKUR)

New Delhi

October 5, 2010