Union of India vs Tech Mahindra Business Services Ltd. (formerly known as Hutchison Global Services Ltd.)

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 8732/2015

UNION OF INDIA APPELLANT(S)

VERSUS

TECH MAHINDRA BUSINESS SERVICES LTD. (FORMERLY KNOWN AS HUTCHINSON GLOBAL SERVICES LTD.) RESPONDENT(S)

J U D G M E N T

KURIAN, J.

The whole dispute in this case stems out of a

show cause notice issued to the respondent on

27.02.2013, which was challenged before the High

Court of Bombay leading to judgment in Writ Petition

No.529 of 2013. The relevant paragraph of the

judgment reads as follows:-

“4. If the petitioner is directed to

deposit the amounts determined to be

the loss to the DoT/Government of India

due to the unauthorized telecom Signature Not Verified resources being used, it would be bound Digitally signed by NARENDRA PRASAD Date: 2018.10.10 14:14:55 IST Reason: to do so and its failure to do so would

be met with the consequences as per

1 law. There can however, be no question

of the petitioner being directed to

furnish the undertaking to deposit the

said amount as directed by the impugned

order dated 27th February, 2013

unconditionally. That would deprive

the petitioner the right to challenge

the orders if any this regard. The

petitioner is at liberty to challenge

any order passed by the respondents

including an order, if any, regarding

the loss on account of the

circumstances mentioned above in the

impugned order. The impugned order

would be subject to orders, if any, of

the Court or Tribunal before which it

is challenged.

5. The petitioner therefore shall not

be required to furnish an unconditional

undertaking as demanded. The

undertaking shall be subject to the

orders, if any, that may be passed in

proceedings that the petitioner may

adopt to challenge the same.

6. Needless to clarify therefore that

the show-cause notice dated 20th

January, 2013 remains outstanding.

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7. The respondents have acceded to the

petitioner’s request of a personal

hearing in respect of the show-cause

notice. No coercive action shall be

taken for a period of two weeks after

the service of the order pursuant to

the show-cause notice, if adverse to

the petitioner.”

2. Pursuant to the judgment of the High Court, the

appellant passed a fresh order, after hearing the

parties, on 14.07.2014. The relevant portions of the

order read as follows:-

“Establishing end to end bandwidth

is licensed through UASL, IP-II, NLD &

ILD licenses. Therefore, the company

is liable to pay the loss incurred to

Government of India due to unauthorized

establishment and operation of end to

end bandwidth, by the company.

Therefore, M/s. Tech Mahindra

Business Services Ltd (erstwhile

Hutchison Global Services Pvt. Ltd.) is

directed to pay a sum of

Rs.6,11,73,460/- (Rupees Six Crore

Eleven Lakh Seventy Three Thousand Four

Hundred and Sixty only) towards loss

3 incurred to Government of India. This

includes license fee, penalty and

interest charges as prescribed in UASL

license for the period April 2007 to

June 2014. Ready reckoner ceiling

tariff for STMs notified by TRAI vide

notification no.312-7/2004-Eco. Dated

25th April, 2005 has been considered to

calculate the license fee payable.

Interest (compounded monthly) has been

charged @ SBI PLR as on 1st April of the

financial year concerned + 2%.

Calculation sheet is annexured.

The amount shall be paid to CAO,

CCA Maharashtra, BSNL Administrative

Complex, Juhu Road, Santacruz (West),

Mumbai, within 21 days from the date of

issue of this demand note and details

of payment shall be intimated to this

office.”

3. This order was challenged before the Telecom

Disputes Settlement and Appellate Tribunal (for

short, ‘TDSAT’), leading to the order dated

01.07.2015, which is under challenge in this appeal.

It has been categorically held in the order

that ..”the respondent has erred in calculating the

4 loss using the ceiling rate provided in an order

issued in 2005 in a regime where the rates have been

continuously falling. Further, it is not fair to use

the highest percentage prescribed under the UASL

License to calculate the licensee fee as well as the

interest and penalty provided in a UASL license to

calculate the total loss. We may note here that if

an ordinary subscriber had made a similar mistake,

the respondent-DoT could only have imposed fine as

provided in the Telegraph Rules. Just because the

petitioner happens to have an OSP registration, we do

not see how interest and penalties as provided in a

UASL license can be imposed on it”.

4. Though such a finding was rendered, in order to

put a quietus, the Tribunal took the view that “…

interest of justice will be subserved if the

respondent was to calculate the loss assuming the

same payments as made by the petitioner to M/s. Tata

Communications Ltd., for the same bandwidth. For the

period prior to the year 2010, the highest payment

made for any year (Rs.12,96,056/- for the year 2012)

may be used for all the years. The license fee that

M/s. Tata Communications Ltd., would have paid on

this amount may be taken as the loss of licensee fee.

The respondent may charge an interest of 10% from the

date such license fee would have become due”.

5. We have heard Ms. V. Mohana, learned senior

5 counsel appearing for the appellant and Mr. Meet

Malhotra, learned senior counsel appearing for the

respondent(s) extensively.

6. Ultimately, the whole issue revolves round the

authority of the appellant to levy penalty and

interest. According to the learned senior counsel

for the appellant, there are valid notifications in

that regard having force of law and also on the

quantum. However, we do not find that any such

material was available before the Tribunal. Bereft

of such information only, the Tribunal ultimately

passed the impugned order in the interest of justice.

7. In case there are such materials having the force

of law, it is for the appellant to approach the

Tribunal and seek review. The appeal is disposed of.

8. Having regard to the pendency of the appeal

before us, we grant a period of thirty days from

today to the appellant to do the needful. In case,

no review is filed within thirty days from today, the

amounts deposited by the respondent, after adjusting

the amount already awarded by the Tribunal, shall be

refunded to the respondent with the same rate of

interest i.e. @ 10% per annum, within another fifteen

days. In case such a review is filed, we request the

Tribunal to dispose of the same expeditiously and

preferably within six months. We make it clear that

we have not otherwise considered the matter on merits

6 and hence all contentions available to both the sides

are left open. Liberty is also available to the

appellant in terms of the judgment in Vinod Kumar v.

State of Goa and Others, reported in (2012) 12 SCC

378.

9. Pending applications, if any, shall stand

disposed of.

10. There shall be no orders as to costs.

.......................J. [KURIAN JOSEPH]

.......................J. [A.M. KHANWILKAR] NEW DELHI;

OCTOBER 03, 2018.

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