The court ruled that a party facing criminal charges related to acquiring licenses cannot claim restitution for fees paid when the licenses were quashed unless exonerated of those charges under the Indian Contract Act.

ORDER

By Aftab Alam, Chairperson – The Claim: The petitioner, Loop Telecom Limited, seeks a direction to the Union of India in the department of Telecom (hereinafter, DoT) to refund 1 Rs.1454.94 crores paid by it as Entry Fee/Licence Fee for the grant of Unified Access Licences (UAS) (and the spectrum that came coupled with the licences) in twenty one (21) service areas. The petitioner’s twenty one licences were among the one hundred and twenty (122) licences quashed by the Supreme Court by judgment and order dated 2 February 2012 in Centre of Public Interest Litigation Vs. Union of India 2 . In addition, it demands Rs.737.59 crores as interest on the principal amount for the period 10 January 2008 to 31 April 2o12, and further interest on the total sum @ 12% from 1May 2012 till the date of payment. It also seeks a direction for the discharge of the bank guarantees it gave to the DoT in terms of the licence. The bank guarantees submitted by the petitioner expired during the pendency of this petition and by an interim order passed by the Tribunal on 7 February 2014, the

1 In the Petition as it was filed, altogether seven (7) reliefs were sought. Then, by an amendment application, filed on 2 July 2012 three more reliefs were added bringing up the number of reliefs to ten (10). In course of hearing, however, it was stated on behalf of the petitioner that the relief at sr.no. x was given up, those at sr. nos. vii and ix had now become inconsequential, those at sr. nos. iv and v were not being pressed as those now formed the subject of an international arbitration. In regard to the relief at sr. no. iii that asked for refund of liquidated damage deposited by the petitioner to the respondent, it was stated that the tribunal had asked the respondent to re-determine its liquidated damage which the respondent had not done so far; relief at sr. no. iii was also pressed in course of hearing. Relief at sr. no vi is for compensation/damages (of Rs.100crores plus interest) for loss of reputation. No evidence at all was led in support of the claim and this relief too was not pressed in course of hearing. Relief at sr.

no. vii is for any order that the Tribunal might deem fit and proper.

2 (2012) 3 SCC 1

petitioner was permitted to not renew the bank guarantees subject, however, to giving an undertaking that depending upon the outcome of this case it would pay the demands raised by the DoT in connection with the 21 licences.

The background facts:

The facts of the case are simple and can be stated thus. On 6 September 2007 the petitioner applied for UAS licences in twenty one (21) service areas, that is, in all the service areas in the country, excepting Mumbai. Shortly thereafter, the DoT issued a press note on 24 September 2007, announcing the decision that until further orders, new applications for UAS licences would not be accepted after 1 October 2007. Till the date of the press note, 167 applications were received by the government. These included some applications that were submitted in March 2006 but lay unprocessed since then. After publication of the press note, 408 more applications came to be submitted. Thus, by 1 October, government had received 575 applications for UAS licences for the 22 service areas in the country. On 10 January 2008 the DoT issued another press note by which the dead-line for applications for fresh licences was retrospectively advanced to 25 September 2007. The press note further declared that the government was following the policy of first-come-first served under which initially an application that was received first would be processed first and thereafter, the applicant, if found eligible, would be granted Letters of Intent (LoI) and then whosoever complied with the conditions of LoI first would be granted UAS licence. On the same day, at 2.45 pm, another press note was issued asking the applicants, who had submitted their applications on or before 25 September 2007, to come to the DoT head-quarters a