Airtel Arm Bharti Hexacom Gets Rs 473-Crore Relief After Bombay HC Order In Spectrum Case

Bharti Hexacom has received significant relief after the Bombay High Court set aside a Rs 473.7 crore one-time spectrum charge (OTSC) demand raised by the Department of Telecommunications (DoT), according to an exchange filing by parent company Bharti Airtel.

The relief comes as part of a wider judgment in favour of Bharti Airtel and Vodafone Idea, with the court striking down the Centre's retrospective levy of one-time spectrum charges imposed on telecom operators.

Bharti Airtel had challenged a DoT demand notice dated Jan. 8, 2013, seeking Rs 5,201.2 crore towards one-time spectrum charges. The demand was subsequently revised to Rs 8,414 crore in 2018. Included in the demand was Rs 473.7 crore relating to Bharti Hexacom's spectrum holdings in the Rajasthan and North East Service Area (NESA) telecom circles.

In its judgment on Monday, a division bench of Justice M.S. Sonak and Justice Jitendra Jain allowed Airtel's petition and quashed the impugned demand notices. The judgment was uploaded on the Bombay High Court's website on Monday evening.

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The dispute dates back to 2012, when the government introduced a one-time spectrum charge on spectrum holdings exceeding 6.2 MHz. While the policy was announced in 2012, the Department of Telecommunications sought to apply it retrospectively from July 1, 2008, resulting in substantial demands on telecom operators.

The court held that the government lacked any identifiable statutory or contractual authority to impose the charge retrospectively. It observed that telecom licences are contractual arrangements and the financial terms governing them cannot be altered unilaterally years after operators had accepted and acted upon those terms.

According to the judgment, telecom operators had already paid for spectrum through the revenue-sharing framework established under the National Telecom Policy, 1999. Imposing an additional levy years later effectively altered the original commercial arrangement and amounted to changing the terms of the contract after the fact.

The bench also rejected the government's argument that the levy was justified in the interest of maximising revenue. The court noted that revenue maximisation alone cannot be equated with public interest and cannot serve as a basis for imposing charges without legal authority.

Further, the judges disagreed with a view previously taken by the Madras High Court in a similar matter and concluded that the retrospective demands lacked legal backing.

The court also directed authorities to return bank guarantees furnished by the telecom companies pursuant to interim orders during the litigation.

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