Interest fee

Supreme Court Rejects Loop’s Request for 2G License Entry Fee Reimbursement | Latest India News

NEW DELHI: The Supreme Court on Thursday denied a motion by Loop Telecom seeking reimbursement of 1,400 crore paid as an entry fee for acquiring 2G licenses for 21 service areas in 2008 after his acquittal in the case by the Magistrates Court in December 2017.


A three-judge panel headed by Judge Dhananjaya Y Chandrachud said: “The acquittal of the promoters (Essar Group) of the appellant (Loop Telecom) from the criminal charges does not erase or erase the findings contained in the final judgment of this Center for Public Interest Litigation court in 2012 (by which 122 2G spectrum licenses were revoked).

Loop went to court against an order issued by the Telecommunications Dispute Settlement Appeals Tribunal (TDSAT) in 2018 dismissing the company’s claim. The company had questioned the decision to refund entry fees to telecom service providers whose spectrum licenses were canceled by the 2012 SC judgment, but who were willing to bid again in the subsequent transparent auction 2G licenses.


The company further claimed that despite being charged in the 2G spectrum scam, the CBI Special Court on December 21, 2017 acquitted the claimant of the criminal charges. Although an appeal against this decision is still pending in the Delhi High Court, the claimant company has sought the benefit of the acquittal to seek reimbursement.

The bench, which also includes Judges Surya Kant and Vikram Nath, said: “It is important to note that the criminal trial before the special judge, CBI, was limited to the question of whether the promoters of the appellant had misled the DoT by providing a false representation of its compliance with the Unified Access Service Licensing (UASL) guidelines, as it was allegedly controlled by the Essar Group.


Reviewing the order of acquittal, the Supreme Court held that the Crown was unable to prove that Department of Telecommunications (DoT) officers considered the representation of the appellant (Loop) to be untrue or that the appellant was engaged in a fictitious transaction or that the appellant was in fact controlled by the Essar group.

“As the beneficiary and accomplice to the fraud, the appellant cannot be assisted by this court in obtaining reimbursement of the entry fee,” the bench said, while denying Loop’s motion.

The 2012 ruling declared the government’s first-come, first-served policy in granting 2G licenses illegal. Accordingly, the UASLs were cancelled.

The bench said: ‘The appellant was the beneficiary of a manifestly arbitrary policy which was adopted by the Union Government and which was set aside in this Court’s decision in CPIL. However, the appellant would not be entitled to reimbursement of entry fees, even on the principle of restitution enshrined in section 65 of the Indian Contracts Act. »


The court further noted that the registration fee was meant to be a one-time, non-refundable payment and that after the licenses were revoked, the appellant would not have the right to appeal for reimbursement of the registration fee. ‘registration. The judgment noted that the higher court had imposed costs of 5 crore on a set of licensees and 50 lakh on another platter, after assessing their culpability of wrongfully benefiting from the totally arbitrary and unconstitutional exercise of spectrum license and allocation.

Loop applied for Unified Access Service licensing for 21 service areas in September 2007. It paid Circle Wise’s entry fee of 1.1 crore and the licensing agreements came into effect in January 2008. Shortly after the judgment in the CPIL case, the appellant contacted TDSAT for reimbursement of the registration fee, but the same has was dismissed in September 2015. The company approached the Supreme Court but withdrew and later filed a subsequent refund claim with TDSAT after being acquitted by the trial court.


By its judgment of December 11, 2018, TDSAT rejected Loop Telecom’s second plea, finding that it was a second attempt to claim the same relief that had previously been rejected.

The court disapproved of Loop’s conduct in withdrawing its earlier appeal to the higher court and said, “A party should not be permitted to conduct litigation in this manner. Such a course of action is subject to serious abuse because it lays bare an effort at forum-shopping and selectively deciding where and before whom it would pursue its remedies. For the above reasons, we are of the view that the TDSAT correctly concluded that the appellant’s application for reimbursement of the registration fees could not have been granted. »


During oral argument, Loop presented a report from the group of empowered ministers held on October 18, 2012, which decided to award entry fee compensation to Telewings (formerly Uninor), Videocon, Idea Cellular Limited and Sistema Shyam. Telewings, according to the appellant, obtained this benefit despite serious criminal charges in the 2G scam case.

The court said the appellant did not challenge this compensation policy at this stage nor did he attempt to enter the fray at this stage when a new auction took place. . “Under these circumstances, the policy decision taken by the Union Government cannot be challenged at the request of the Appellant who requested a simplicitor refund in proceedings before the TDSAT.”