2017 Supreme(SC) 43

SUPREME COURT OF INDIA
Dipak Misra, Prafulla C. Pant, JJ.
Reliance Telecom Ltd. & Anr. – Petitioners
Versus
Union of India & Anr. – Respondents
TRANSFER CASE (CIVIL) NO. 43 OF 2015 WITH TRANSFER CASE (CIVIL) NO. 64 OF 2015 TRANSFER CASE (CIVIL) NO. 65 OF 2015
Decided On :12-01-2017

IMPORTANT POINTS
Recommendation of TRAI is not binding on the Government.
Classification of entities and capping principle is not violative of Article 14.
Policy of auction in such matters being a complex phenomenon, it is not for the Court to lay down guidelines for future.
In case of difference of opinion about interpretation of a clause in the NIA, interpretation of the party offering the offer ought to be adopted.
Legitimate expectation has no role in State action as public policy or in public interest.
Interference by the Courts based upon any perception in matters relating to complex auction procedure having enormous financial ramification is not permissible except on ground of strict scrutiny.

Headnote:(a) Telecom Regulatory Authority of India Act, 1997 – Section 11 – Recommendation of TRAI – Not binding on the Government – Instantly, the Government, after deliberating on the recommendations of TRAI and sending it back to TRAI for reconsideration, has chosen not to accept the recommendations. (Para 18, 52)

       (2014) 6 SCC 110 – Relied upon

       (b) Telecom Policy – Spectrum auction – DoT classifying bidders into two: new entrants, and existing licensees – Specifying different minimum bid of spectrum: 5 MHZ for new entrants and 0.6 MHZ for existing players having band of 4.4 MHZ – Rationale of this classification being to bring all players at the threshold of 5 MHZ for better service to consumers – Classification having nexus with the objective of providing better service to consumers keeping pace with future technological developments – No violation of Article 14. (Para 21)

       (c) Spectrum auction – Petitioner participating in auction – Purchasing spectrum in 1800/800 bands – Becoming unsuccessful in 900 band – Cannot allege discrimination or faulty NIA design. (Para 22)

       (d) Administration of justice – Judicial review – Moulding of relief and laying down principles for future – No such prayer in pleadings – Further, policy of auction in such matters being a complex phenomenon, it is not for the Court to lay down guidelines for future. (Para 23)

       (2012) 3 SCC 1 – Distinguished

       (e) Cap on bid band – Consistently applied since 2012 – Has a rationale – Spectrum cap not challenged – Once the policy is held valid, method of implementation thereof would not be supervised by the Court and no mandamus can be issued in that regard. (Para 25, 27)

       (f) Interpretation of NIA – Rules of interpretation of contract would apply – Clause 5.3.1 of NIA unambiguous – Must be interpreted literally. (Para 28)

       (g) Interpretation of NIA – Clause 5.3.1 – Not challenged – Interpretation cannot deviate from literal meaning without consent of the parties – In case of difference of opinion about interpretation of the clause, interpretation of the party offering the offer ought to be adopted – The Court can, in judicial review, can only issue writ of certiorari striking down the clause as being arbitrary – It cannot issue writ of mandamus requiring the State to interpret the Clause in a given way and make an offer in accordance with the interpretation given by the Court – Article 32, Constitution of India. (Para 29)

       (h) Legitimate expectation – State action as public policy or in public interest – Legitimate expectation has no role – Maximization of revenue and subserving of the public interest at large require change – Not including surrendered spectrum in 2015 auction in contrast to earlier auctions – Does not give rise to legitimate expectation – Court does not interfere with the discretion of the public authority empowered to take the decisions under law. (Para 32)

       (i) Administration of justice – Judicial review – No mala fides alleged – Competing considerations can be balanced by directing remedial and forward-looking reliefs, even while preserving past actions – Declining to quash the auction exercise as a whole – Not detrimental to public interest. (Para 33)

       (2012) 3 SCC 1 – Distinguished

       (j) Spectrum auction – NIA – Clause 5.3 – Classification of bidders in “existing licensees”, “expiring licensees” and “new entrants” – Capping rule – Petitioners cannot insist for re-writing the terms of the tender conditions – They cannot demand that the whole thing should be put to auction and no capping rule can be applied. (Para 47)

       (2015) 12 SCC 1; (2011) 10 SCC 543 – Relied upon

       (2012) 3 SCC 1 – Distinguished

       (k) Government contract – Terms of invitation to tender – Not amenable to judicial scrutiny – Wednesbury principle of reasonableness – Article 14, constitution of India. (Para 54)

       (1994) 6 SCC 651; (1999) 1 SCC 492; (2000) 5 SCC 287; (2003) 3 SCC 186; (2003) 5 SCC 437; (2004) 4 SCC 19; (2005) 1 SCC 625; (2005) 4 SCC 435; (2005) 6 SCC 138; (2012) 8 SCC 216; (2014) 3 SCC 760; (2015) 2 SCC 796 – Relied upon

       (1996) 9 SCC 709; (2007) 14 SCC 517; (2012) 6 SCC 464 – Referred

       (l) Spectrum auction – Capping – NIA stipulating capping and simultaneously allowing certain categories to bid for a lesser quantum to enhance the existing spectrum with them to reach a particular level – A minimum spectrum is determined to enhance the efficiency and capability of the service providers so that the arrangement can be beneficial to the consumers – Licensees not having specific quantum permitted to bid for the balance – Providing a minimum for a particular area or zone having regard to the necessity and the interest of the consumers subserves larger public interest – No illegality. (Para 67)

       (m) Spectrum auction – Classification – Not allowing some bidders to participate in respect of certain areas – Decision based upon certain norms and parameters – Subserving consumers’ interest – Decision to conduct the auction in such a manner cannot be considered to be mala fide or based on extraneous considerations. (Para 70)

       (n) Legitimate expectation – Principle of “legitimate expectation” can never override public interest Question of legitimate expectation does not arise when there is larger public interest – Instantly, auction held in respect of spectrum after taking into consideration certain range of facts and circumstances founded on economic and social policy factors – Difficult to unsettle the NIA by judicial review. (Para 71)

       2016 (10) SCALE 69; 2016 (8) SCALE 765; 2016 (10) SCALE 50; (1997) 1 SCC 738; \ – Relied upon

       (o) Administration of justice – Judicial review – Matters relating to complex auction procedure having enormous financial ramification – Interference by the Courts based upon any perception – Not permissible except on ground of strict scrutiny. (Para 76)

       Facts of the case:

       This case relates to auction of spectrum.

       The three High Courts of Delhi, Tripura and Karnataka were moved under Article 226 of the Constitution challenging the terms and conditions of Notice Inviting Application-2015 for allocation of spectrums in various areas.

       The High Court passed interim order which was stayed by Supreme Court.

       Certain interim direction s were issued.

       Finding of the Court:

       There is no infirmity in the auction of spectrum.

       Result: Transfer petitions dismissed.