Judgment sc-2017-4-972-1036

A The Judgment of the Court was delivered by DIPAK MISRA, J. I. The three transferred cases, namely, Transfer Case (Civil) No. 43 of2015, Transfer Case (Civil) No. 64 of 2015 and Transfer Case (Civil) No. 65 of2015, had their origin in the High Courts of Delhi, Tripura and Karnataka respectively. The High B Courts were moved under Article 226 of the Constitution challenging the terms and conditions ofNotice InvitingApplication-2015 (for short, 'NIA') for allocation of spectrums in various areas. The High C,ourt of Tripura in W.P.(C) No. 52 of 2015 and W.P.(C) No. 53 of 2015 was prayed for grant of interim relief which included extension of permission to the participants in the NIA to be bidded for minimum 4.4 MHz, IN C 900 MHz band in the North East service area. The High Court, while dealing with interim prayer, directed as follows:- "Therefore, at this stage, we feel that only the following order should be passed: Both the petitioners are permitted to submit 2 applications instead of one. One application may be for 4.4. MHz D and the other application will be for a minimum of 5 MHz and may extend up to 8.8, if the petitioners so desire. We have been informed at the Bar that two applications may not be possible to be submitted because it is online. We are not sure whether the same because it may not be possible. Therefore, we direct that it is for the petitioners to decide what application they will submit online but they may also simultaneously submit one application offline in hard copy with the Secretary, Department of Telecommunication, Union of India on or before 16th February,

2015. The Union of India may proceed with the assessment of the applications but no final decision in the matter shall be taken without permission of this Court. Furthermore, any preliminary decision taken shall also be subject to the result of the present writ petition. Admittedly, the licences of the petitioners are expiring only in December, 2015, and, therefore, we would like to ensure that the writ petition is disposed of much earlier."

2Copy pinpoint2. The said orders were assailed by the Union of India in S.L.P. (Civil) Nos. 5735-5736 of2015. This Court issued notice and eventually on 26.2.2015 directed stay of the order passed by the High Court of Tripura at Agartala and permitted the auction to continue on the date fixed, but the same should not be finalized without the leave of the Court. H The Court further directed that the said condition shall be put forth on

.. RELIANCE TELECOM LTD. & ANR. v. UNION Of INDIA & 987 ANR. [DIPAK MISRA, J.] ... the website so that all the bidders are aware of the order of this Court A and no bidder shall claim equity because of his participation or success in the tendering process.

3Copy pinpoint3. It needs to be stated here that by this time, certain transfer petitions were allowed. Transfer cases were taken up on 26.3.2015 wherein this Court passed the following order:- B "Mr. Mukul Rohatgi, learned Attorney Genera!' appearing for the Union of India, has su.bmitted that there has been auction commencing 4th March, 2015 and ending 25th March, 2015, in respect of the bands, namely, 800 MHz, 900 MHz, 1800 MHz and 2100 MHz in respect of all the States and there has been a fierce c and competitive auction and the entire revenue likely to be generated is Rs.1. 09 lac crores. Learned Attorney General would further submit that ifthe order of stay is not modified, the Union of India will be facing grave fiscal difficulty as there is ample possibility of collecting at least Rs.28,000 crores by 3 lst March,

2015. It is urged by him that the auction itself would show that D the "Notice Inviting Tender" has been a workable one and, therefore, sustainable in law. In this backdrop, submits, Mr. Mukul Rohatgi, that the interim order passed on the earlier occasion should be modified granting leave to the Union of India to fin..alize the auction, subject to the final decision of the special leave petition E ,.. and the transferred cases. Mr. P. Chidambaram and Mr. Gopal Jain, learned senior counsel appearing for the contesting respondents, per contra, would contend that the competitive bidding was not really competitive, but a compulsive bidding as parties were obliged to bid because of their F survival. In addition, it is put forth by them that the amount that has to be thought of being collected by the Union of India, is factually incorrect, inasmuch as the bidders who are successful have to deposit the amount within ten days from the completion of date of auction, that is, 25th March, 2015. Learned senior counsel would further submit that the entire design of the "Notice Inviting G .Tender" is gloriously faulty and solely because the auction has taken place and money is likely to be collected, would not be a justification for the modification of the interim order. Having heard learned counsel for the parties, we are inclined to modify the order to the extent that the Union of India would be at H

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A liberty to finalize the auction and proceed thereafter, but all the successful bidders shall be intimated that the said finalization is subject to the final result of the special leave petition, as well as the transferred cases."

4Copy pinpoint4. At that juncture, Mr. Mukul Rohatgi, learned Attorney General B undertook that the competent authority of the Union of India would intimate the successful bidders to get themselves impleaded as parties.

5Copy pinpoint5. It was observed by the Court that the said impleaded parties are entitled to file respective affidavits stating their stand and stance in the said affidavits. On that day itself, the Court disposed of the special c leave petitions as it was felt that nothing really was to be adjudicated in them as the whole controversy was to be addressed in the transferred case. When the matter was heard on the next date, the Court passed the following order:- "In course of hearing certain aspects have been highlighted which, D we think, the competent authority of Union oflndia should put by way of an affidavit so that while deciding finally, this Court may take into consideration certain aspects for issuing appropriate directions or moulding the relief. The affidavit shall cover the following:- E (a) After completion of the present auction, what is the quantum of spectrum available with the Union of India? (b) What-is the possibility of getting the non-vacating spectrum from the defence band and within what time? (c) Whether an auction can be held in respect of the available spectrum, regard being had to what has been stated in (a) and (b) above? (d) Whether in the auction that is going to be held, the concept of capping would still remain and, if so, what would be the formula and how it would be interpreted and applied? While calculating the cap, ifthat exercise is undertaken, whether the commercially available spectrum should be included in the computation of such caps? (e) The successful bidders who have got less than five and in case they fail in the next auction, how they would deal with the H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 989 ANR. [DIPAK MISRA, J.]

spectrum available with them? To elaborate, though they can A surrender or trade the spectrum or share the same as per guidelines, do they have a choice to hold it back or the Union of India would take step's in that regard as per law?" Be it stated, the Union of India filed an affidavit stating the position. The essence of the said affidavit is that:- B (a) After completion of the present auction, what is the quantum of spectrum available with the Union of India?

4. With reference to item (a) above, it is submitted that in the spectrum bands put to auction namely 800 MHz, 900 MHz, 1800 MHz & 2100 MHz in March 2015, the table below indicates the availability of spectrum post auction with the Government of India for commercial use:-

Band Quantum of Quantum Remaining (MHz) Spectrum put provisionally quantum of on Auction won by bidders spectrum (MHz) (MHz) (MHz) 800 108.75 86.25 22.5 900 177.8 168.00 9.8 1800 99.2 93.80 5.4 E 2100 85 70.00 15.0 Total 470.75 418.05 52.7

b) What is the possibility of getting the non-vacating spectrum from the defence band and within wh,at ~me? F

5. With reference to query (b), it is humbly submitted that the Answering Respondent is making all sincere efforts for getting the spectrum vacated from Defence and other users. Historically, all the identified 75 MHz spectrum mobile services in 1800 MHz band in all 22 service areas was with defence and other users G prior to 2001 when it was allocated for the first time for commercial mobile services in India after co-ordination with the then existing users. Spectrum in 1800 MHz band was coordinated by defence on a case to case basis either in the entire service area or in parts of the service area (i.e. District-wise). Based on the coordination H

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A received from Defence, spectrum in 1800 MHz band was allotted, from time to time, for commercial use by Telecom Service Providers. This spectrum is in spots over the complete 75 MHz. in January 2015, it has been decided in consultation with the defence, that, instead of the case by case approach adopted historically, out ofabove referred 75 MHz, 55 MHz will be allotted B to telecom service providers (TSPs) and the rest will be used by defence. Within the 1800 MHz band, the exact frequencies to be allotted to TSPs and that to be used by defence have been earmarked. However, the process of allotting all the frequency identified to TSPs will require some time. This is because at c present, there are operational networks of defence in the segment identified for telecom services in 1800 MHz band. Similarly frequency spots have been allotted to various TSPs in the segments identified for use by defence. The discussions have started with defence for harmonizing the spectrum in 1800 MHz band. TSPs have also been consulted as they also to shift their networks to new spots. The operational network of the defence is required to be continued until alternate arrangements are available for seamless operation of defence networks or else it would compromise the national security. Therefore, in the humble submission of the answering respondent, no time frame can be put as to when the defence would vacate.

6Copy pinpoint6. Telecommuncation sector's evolution is a continuous process world-wide. New bands and technologies are being identified for providing commercial services. For example Wide Band Code Division Multiple Access (WCDMA) technology, commonly known as 3G technology, have been developed and was deployed in our country in 2100 MHz band. 456 MHz spectrum in this band was co-ordinated from defence and got released for telecom commercial services in 2010 and was auctioned. Further, as per the decision of the Governmerit in January 2015 an additional 85 MHz of spectrum in this band was released by defence and was part of the auction conducted in March 2015. It is also submitted that efforts are being made to get released 15 MHz of spectrum in each of22 service areas in 2100 MHz band also from Defence. Although in this case also no t_ime frame can be put as to when it would be made available but it is expected to be released during H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 991 ANR. [DIPAK MISRA, J.]

the process of completion of hannonization of 1800 MHz band A spectrum. This will make 345 MHz of spectmm available in this band. Therefore, it is proposed to be included in the next auction.

7Copy pinpoint7. As a part ofidentifying new brands & technologies and releasing for providing commercial services 880 MHz spectmm in Time Division Duplex (TDD) mode was also included in 2300 MHz B band for auction conducted in 2010 and 320 MHz of spectrum in this band is proposed to be included for the next auction. Similarly 440 MHz spectrum in 2500 MHz band was allocated to BSNL and MTNL in 2007-08. However 160 MHz spectrum was surrendered by them. TRAI has been requested to expedite recommendations for reserve price and associated conditions. A C total quantum of 600 MHz of spectrum in this band, including that surrendered by the BSNL/MTNL is available. It is humbly submitted that channeling plan adopted in India for 2500 MHz band is not as per standard International Mobile Technology (IMT) band considering the issues relating to techno-economic feasibility and availability of commercial eco-systems. The feasibility of inclusion of spectrmn in 2500 MHz band in the forthcoming auction appears to be poor. (All bands other than 2300 MHz and 2500 MHz are in Frequency Duplex Division (FDD) mode). (c) Whether an auction can be held in respect of the available spectrum, regard being had to what has been stated in (a) and (b) above?

8Copy pinpoint8. With reference to query (c), it is submitted that the next auction would be held as and when reasonable quantity of spectrum is available and the answering respondent is making all efforts to make available sufficient quantity of spectrum for auction apart from complying with the statutory process of seeking TRAI's recommendations, where applicable.

9Copy pinpoint9. In the above context, it is submitted that six access service licences of private service providers are expiring in 2017-18. The G details of spectrum wbich will be released by these providers is as follows: 800 MHz band 20.0 MHz 1800MHzband 22.0MHz H

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A It is proposed to include the spectrum in 800 MHz band in the next auction of spectrum. · IO. Further, the Cellular Mobile Service licences ofMahanagar Telephone Nigam Limited (MTN,L) are expiring in 2017-18 and holding 12.4 MHz of spectrum 900 MHz band and 4.4 MHz in B 1800 MHz band. MTNL has represented to the Licensor for extension of effective date of their licences as MTNL could not operate license in the initial period due to various reasons including stay by Telecom Regulatory Authority oflndia (TRAI) in 1997-

98. The representation is under consideration of the Government. c 11. It is respectfully submitted that. 770 MHz spectrum in 700 MHz band is available. However, the feasibility of its inclusion in the proposed auction appears to be poor due to techno-economic feasibility and the current status of commercially available eco- system.

D 12. In addition, TRAI has been requested on 9'h July, 2015 to provide recommendations on applicable reserve price and associated conditions for auction of spectrnm in 700 MHz, 800 MHz, 900 MHz, 1800 MHz and 2100 MHz bands for all the service areas under the terms of Clause ll(l)(a) ofTRAI Act, 1997, as amended and expedite the recommendations on applicable reserve price for 2300 MHz and 2500 MHz bands for all the service areas. Presently, the matter is with TRAI and after consideration of the recommendations of TRAI in respect of the reserve price and associated terms and conditions, the next auction would be conducted and the available spectrum will also be included in the auction.

13. It is humbly re-iterated that the availability ofspectnun in all the bands may vary vis-a-vis the quantum of spectrum indicated above, as a result of harmonization exercise with Defence, taking into consideration the requirements of Defence and/or the policy decisions by the Government on related matters. (d) Whether in the auction that is going to be held, the concept of capping would still remain and, if so, what would its formula and how it would be interpreted and applied? While calculating the cap, if that exercise is undertaken, whether the commercially available spectrum should be H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 993 ANR. [DIPAK MISRA, J.]

included in the computation of such caps? A (e) The successful bidders who have got less than five and in case they fail in the next auction, how they can deal with the spectrum? To elaborate, though they can surrender or trade any spectrum or share the same as per guidelines, they do have a choice to hold it or the Union of India would B take steps in that regard as per law.

14. The Telecom Regulatory Authority was also consulted with reference to query (d) and (e) as posed by the Hon'ble Court in the order dated 14.5.2015. The TRAI had furnished its comments upon the same vide its letter dated 2"d July 2015. The relevant c extracts are reproduced below:-· "1.14 The Authority examined the views of all the TSPs and the provisions of various NIA issued till date. The Authority is of the opinion that at present there is no need to modify the existing spectrum cap (50% of the spectrum assigned in each D of the 800/900/1800/2100/2300/2500 MHz and 25% of the total spectrum assigned in all these bands put together in each service area). 1.15 On the methodology of calculating the spectrum cap, the Authority is of the opinion that all spectrum assigned to the E TSPs including any spectrum which was put to an auction but remains unsold, spectrum which was assigned but subsequently surrendered by the TSP or taken back by the Licensor and spectrum put to auction should be counted. However, any spectrum out of the above will not be taken into calculation, if the Government assigns it for non-commercial purpose e.g. F assignment to Defence. 1.16 The Authority is also of the view that the spectrum which may become available to the WPC/DoT for commercial use after its reframing from other users such as Defence at different point of time should not be counted for determining G the spectrum caps until it is put to auction by the DoT. 1.17 The Authority is also of the view that telecom being an evolving sector, review of such policy decisions such as spectrum cap is a continuous process. The Authority may review it at an H

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A appropriate time like introduction of new spectrum bands, .additional spectrum released for commercial purpose or if any major development takes place. 1.22 The Authority is of the opinion that Licensees should be able to decide for themselves whether or not there is a business B case for them to hold on to the spectrum. Moreover, once the guidelines of the spectrum sharing and spectrum trading are notified by the Government, the TSPs will have alternate options to manage their spectrum holding. Therefore, the Authority is of the opinion that the Government should not take back spectrum assigned to TSP even ifit is less than 5 MHz in any c band."

15. The above comments ofTRAI are under consideration of the answering respondent.

16. In the above context with reference to query (d), it is humbly submitted that before the next auction, the answering respondent will take a considered decision on the comments of TRAI as stated above with reference to the methodology of calculating the CAP for future periods.

17. With reference to query (e), it is humbly submitted that as already indicated that the successful bidders who l:ave got less than 5 MHz of spectrum and in case they fail in the next auction, they can share the spectrum or trade the spectrum, the guidelines for which are being formulated and likely to be in place shortly. At present, there is no rule/statute to take back the spectrum which has been awarded after participating in a competitive process and as per commercial decisions of the bidder taking into consideration the techno-economic requirements in a service area. Presently, the aforesaid comments ofTRAI are under consideration of t,he Government oflndia." G The said affidavit that was filed meeting the issues framed by the Court was countered by the petitioners stating, inter alia, that the respondent No. 1 has, in its affidavit, remained silent on the Chart which was submitted by the petitioners and by not responding to the chart/table of the petitioners, the respondent No. 1 has really not met the issue. It is put forth that the respondent No. 1 does not dispute the submission of

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 995 ANR. [DIPAK MISRA, J.]

the petitioners that out of the 75 MHz of Spectrum, 55 MHz has been earmarked for commercial use and it is also apparent that the respondent No. 1 has not consulted Telecom Regulatory Authority oflndia (TRAI) on the availability of spectrum, especially since TRAI's recommendation dated 15.10.2014 contained a statement on the availability of spectrum which contradicts the statement made by the respondent No.1 in the affidavit.

6. Eventually, the matter was heard at length and learned counsel for the parties had filed the written notes of submission.

7. At this juncture, it is necessary to state that learned counsel for the respondent in the transferred cases have separately put forth written c submissions but we shall enumerate them together as we are disposed to think that there is commonality of grievance and attack on the Notice Inviting Application (NIA) is also similar. The submissions, which are separately set forth qua each transferred case, if required, shall be adverted to at the appropriate stage. D

8. Learned counsel appearing for the petitioners have raised various contentions and for appropriate appreciation, it is necessary to enumerate them.

10Copy pinpoint10. The NIA dated 9. l.2015 suffers from over-classification between different categories of bidders inasmuch as the minimum bidding criteria for different classes of bidders, as has been set out in the NIA, H •

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A has no nexus with the object which the NIA seeks to achieve. The criteria adopted by the DoT is in stark contrast to the TRAI recommendations dated 15.10.2014, which recommended that the minimum quantity that a bidder is required to bid for should be kept as 2 x 3.6 MHZ in the LSA where spectrum availability is 10 MHz or more in the 900 MHz band; and the minimum quantity may be kept as 2 x 2.4 B MHz in the remaining LSAs which would be applicable for expiring licen~ees as well as new entrants. Though these recommendations were reiterated by TRAI in its response dated 24.11.2014 to the back- refercnce received from DoT on the recommendations ofTRAI dated

15. l 0.2014, yet they were not accepted without any fathomable reason. C The NIA has fixed different minimum bidding criteria for different spectrum bands and classified the bidders into "existing licensees", "expiring licensees" and "new entrants" and fixed different bidding criteria for each category and such classification does not indicate that there is any intelligible or discernible basis for the fixation of the criteria and there is no nexus between the criteria and the object sought to be achieved through the auction and, hence, the criteria is a case of "suspect classification". It is so because no reason or justification has been furnished in support of the innumerable classes created by the criteria; and it is a case of classification and micro-classification which will inevitably favour one or more bidders in certain service areas and disfavour other bidders. In this regard, learned counsel for the petitioners has relied on Reliance Energy Ltd. and another v. Maharashtra State Road Development Corpn. Ltd. and others 1, Association of Unified Tele Services Providers and others v. Union of India and other~·2 and Natural Resources Allocation, In re, Special Reference No. 1 of 2012 3 • F

11Copy pinpoint11. The auction of spectrum ought not to have been conducted with inadequate spectrum in a scarcity-driven situation in defiance of the TRAI recommendations dated 15.10.2014. The Government holds spectrum in public trust and, hence, cannot hoard spectrum (which is an inexhaustible resource) depriving the public of its use. It is obligatory for G the authorities to disclose the quantity ofunutilized spectrum it holds and why the whole quantity was not put to auction. 1 (2007) s sec 1 2 c2014) 6 sec 110 '(2012) 10 sec 1 H

RELIANCE TELECOM LTD. & ANR. v. UN10N OF INDIA & 997 ANR. [DIPAK MISRA, J.]

12Copy pinpoint12. The bidding criteria and the scheme of auction as a whole are A not consistent with the mandate oflaw. As a result of the flawed approach of the Government keeping the minimum bidding criteria in the 900 MHz band as 5 MHz for new entrants/expiring licences, 4.6 MHz of spectrum in the Bihar service area remained unsold as the existing operator bid for only 1.6 MHz, whereas the total spectrum available in the area was B 6.2 MHz. Similarly, in the West Bengal service area, 4.4 MHz was the minimum bidding criteria for new entrants/expiring licensees but the existing operators could bid for 0.6 MHz of spectrum. In North East service area also, the total spectrum put up for auction was 8.8 MHz, but because of the condition of bidding for a minimum of 5 MHz, only one successful bidder would have been able to win the bid and others were bound to be unsuccessful.

13Copy pinpoint13. Ifminimum bidding criteria is different for different categories, it will create a dent in the level playing field. For example, where the minimum bid for Bidder Ais 0.6 MHz and the Bidder B, it is 5 MHz and the block size is 0.2 MHz, Bidder A can enter the arena with funds sufficient to bid for 3 blocks (3 x 0.2 MHz), whereas Bidder B can enter the arena only if he has funds to bid for 25 blocks (25 x 0.2 MHz). Bidder A can also artificially push up the price per block because he will have to pay for only 4 blocks. As such, Bidder B will be forced to match the price of Bidder A or quit the race, which brings out the arbitrariness and discrimination in the minimum bid criterion as stipulated in the NIA. E

14Copy pinpoint14. Spectrum is a natural resource which is held by the Government in public trust for the benefit of the people. The Government is obliged under law to ensure that there is most efficient utilization of the spectrum available as has been held in Centre/or Public Interest Litigation and others v. Union of India and others4 • A corollary of this is that the F Government should disclose the spectrum that is available with it and that too with specific reference to each service area. Rule ·of'law and the principle of transparency demand that the Government should make public the time schedule and the periodicity with which it intends to hold the auction. As per the spectrum chart for 1800 MHz furnished by the G petitioners and not objected to by the Government, there was 216.4 MHz spectrum in the 1800 MHz commercial band which had been unaccounted for, which is neither lying with the Defence nor with the Telecom Operators and such an action is contrary to law. DoT itself admitted in • (2012) 3 sec 1 H

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15Copy pinpoint15. TRAI has requested the information in terms of the proviso to B Section 11 of the Telecom Regulatory Authority of India Act, 1997 (for short, "TRAI Act") regarding 'reserve price and associated conditions for the auction of spectrum', which has not been made available despite the fact that the proviso to Section 11 mandates supply of information within seven days. Under the scheme of Section 11 of the TRAl Ad, certain pa~ameters have to be satisfied by the Government while acting c on the recommendations ofTRAI, especially keeping in view the first, third and fifth proviso to Section 11 and Section 11(4) of the TRAL.\d.

16Copy pinpoint16. The aforesaid submissions have been resisted by Mr. Roh:ltgr, learned Attorney General for India and Mr. Ranjit Kumar, learned Solicit()r General oflndia appearing for the Union oflndia and their submissions are encapsulated to sustainability of the combat.

17Copy pinpoint17. The grievance raised by the petitioners do not survive as they have participated in the auction and have been successful in some of the areas and the question of alteration of bid condition does not survive. The present petitions have been deliberately kept alive by the telecom service providers only to retain their dominant positions to the detriment of the market and the subscribers. The challenge by the petitioners pertaining to tender conditions formulated by the Union oflndia invoking the power of judicial review is not tenable as no valid grounds for interference, as postulated in Tata Cellular v. Union of Jndia 5 and F Delhi Science Forum and others v. Union of India and another6, have been made out.

18Copy pinpoint18. The statutory requirement of seeking TRAI's recommendations and the procedure to be followed is set out in Section 11 of the TRAI Act. The proviso to Section 11 has been interpreted by G this Court in Association of Unified Tele Services Providers (supra) wherein it has been held that the recommendations of TRAl are not binding on the Government. In the case at hand, the Government, after deliberating on the recommendations of TRAI and sending it back to TRAI for reconsideration, has chosen not to accept the reconunendations '(1994)6SCC651 H ' (1996) 2 sec 405

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 999 ANR. [DIPAK MISRA, J.]

of TRAI. Keeping in view the concept of minimum availability of spectrum with a bidder and regard being had to allow space to the new entrants to compete, it is urged that Government has always given due weightage to the recommendations ofTRAI. Further, the Government of India does not want to compromise quality to be offered by the service providers in consumer interest and, therefore, did not accept the recommendations ofTRAI. The endeavour of the Government contained ~· in the NIA for the auction conducted in March, 2015 is not based on any classification except that all service providers must have a minimum of 5 MHz if they want to deploy any mobile technology benefitting the consumer and even TRAI concurred with the view that minimum 5 MHz quantum was the appropriate minimum quantum to be set. c Reduction of minimum quantum cf spectrum to 3 MHz instead of 5 MHz for new entrants would be contrary to TRAI's own recommendations on the issue of spectrum auction, wherein TRAI has been consistently holding that 5 MHz is the minimum amount of spectrum required to ensure that any technology can be deployed with the allocated spectrum..

19Copy pinpoint19. Fragmented spectnun allocation to address the present issues in few service areas will only be a short term solution but will have long term negative impact for the sector as the objective is to have broadband solution that offers the most affordable devices and ecosystem to connect · the billion people and as such, the minimum quantum of spectrum is prescribed as 5 MHz. After deliberating on the recommendations of TRAI, the Government differed with the view of TRAI and kept the minimum bid quantity at 5 MHz on the grounds that the present and future technology scenarios and the need for making the spectrum contiguous would only benefit the consumer which is the essential objective of the National Telecom Policy (NTP); that in the previous three auctions, new entrants/licensees whose licences were expiring were required to bid for minimum 5 MHz spectrum; that there was no substantial change in the market and eco-system scenario since the last auction of February, 2014; that there is a need to induct new technologies to meet the requirements of the ever growing demand for data; and the number of mobile users stands at approximately 960 million constuners whose need has to be catered keeping in view the development of technology in next twenty years. Thus, taking a long-term view, the decision of the Government after giving due weightage to the H

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A recommendations ofTRAI is justified. The plea that the auction is non- competitive and security driven has no basis.

20Copy pinpoint20. The classification of entities is on the basis of whether an entity is a new entrant or an existing service provider as the Government has always been consistent with the trend that new entrants would have to bid a minimum of 5 MHz and the existing service providers have to 'top up' (capacity enhancement) their present holding of spectrum to achieve a goal of maximizing efficiency and avoid any restraint for the consumers and the service providers. In the NIA for auction of spectrum in2015, across all bands, anew entrant is required to bid for aminimum of 5 MHz and this requirement has always been the same for earlier auctions also conducted in 2012, 2013 and 2014. The minimum bid quantum is reduced only in those cases where 5 MHz is not available in a LSA or contiguous 5 MHz is not available. An existing licensee has to bid for a minimum of0.6 MHz of spectrum in order to 'top up' so as to come to the level of 5 MHz (as minimum administratively allocated spectrum in 900 MHzJl 800 MHz band is 4.4 MHz) and be in a position to provide services compatible with new technology. Moreover, the existing licensee, who will be bidding for a minimum of0.6 MHz so that he may come to the level of 5 MHz, may also bid for more than that. The idea would be that he has to bid as a new entrant for the next time E . when his licence would expire and his allocated 4.4 MHz spectrum is put to auction. ·21. The endeavour ofDoT is that everybody should have minimum 5 MHz as less than 5 MHz will not be good for the consumer keeping in view the evolution and innovation and in order.to achieve the same, DoT has to be far-sighted as the spectrum is being allotted for a period of 20 F years. Assuming that there is classification, then, that is based on an intelligible differentia between two sets of people, i.e., ( 1) new entrants including the expiring licensees and (2) existing licensees, both of whom ought to have minimum 5 MHz so as to be able to deploy on any mobile technology. An existing licensee may not require 5 MHz to meet the G traffic requirements and only a fraction of 5 MHz would meet the requirements, and small chunk addition would improve traffic handling capabilities and reduce call drops due to congestion. Moreover, in case an existing licensee chooses to only retain what it has in terms of spectrum before, then it will, as aforesaid, only be able to provide the bare 2G service and no more and, therefore, he would lose out on his consumers H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDiA & 1001 ANR. [DIPAK MISRA, J.]

who can change to a better service provider in terms of number portability. A Therefore, the classification, if any, contained in the NIA for the auctions conducted in March, 2015 is based on intelligible differentia hav!ng a nexus with the object sought to be achieved and there is no violation of Article 14.

22Copy pinpoint22. There was no spectrum in 900 MHz band prior to the auction in March, 2013. The only existing licensees in 900 MHz band were MTNL/BSNL who did not participate in the auction (but paid the au-::tion determined price since 2010) and, as such, practically, there was no existing licensee in Delhi, Mumbai and Kolkata. Therefore, there was no requirement to deal with existing licensees in 900 MHz band in March, 2013 auction & February 2014 auction. The argument of the petitioners that there are many operators across the country who are left with less than 5 MHz of spectrum and there is no obligation on the part of every service provider to being forced to purchase or top up to 5 MHz is unacceptable as it does not take into account why a service provider is required to have more than 5 MHz, and the fact that with the innovation D . in technology and the scientific development that may take place in the next 20 years, if a service provider is satisfied with the technology that it is presently using and such.service provider does not want to give to its customers/consumers better services, then he would remain within the realm of the already allotted spectrum without wanting to top up or go up to 5 MHz, in which case not only is he likely to suffer but his customers E are also likely to suffer. The argument that the petitioner was 'knocked out' ofavailability ofonly 8.8 MHz in the North East and due to the term of minimum of 5 MHz for a new entrant including expiring licensees is incorrect. In the North East, while 8.8 MHz was available in 900 band, there were other spectrum available, i.e., 800 band (13.75 MHz), 900 F band (8.8 MHz), 1800 band (8.4 MHz) and 2100 band (5 MHz) out of which the writ petitioner-Reliance has won 5 MHz in 800 band and 5 MHz in 1800 band at the auction as it already had spectrum in 2100 band. The trendofthe 2015 auctions has shown that this company has substituted its 900 band with 1800/800 band in most circles where the bid was lower than the 900 band and it has also bid for the 900 band G spectrum and remained unsuccessful, and that cannot form the basis to · assert that there is any discrimination caused or that there is a flaw in the NIA. That apart, the investment already made in the past 20 years is an investment which will be used even with the 1800/800 band H

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A technologies and any future investment.according to the needs of the time will be made by them in their commercial wisdom and to say that they were "knocked out of the auction because of the NIA design" is totally fallacious as they purchased spectrum in other bands. The submission that thousands of crores of investment have been made entirely overlooking the lakhs of crores revenue generated which is one of the fundamental purposes of auction especially of spectrum.

23Copy pinpoint23. As regards the submission of the petitioners for moulding of the relief and for laying down principles for the future, the prayers do not remotely so indicate and, furthermore, the policy of auction in such matters is a complex phenomenon, and the Court may not think of laying down guidelines for future. The argument that in case of a renewal of a licenre, the licensee would have the legitimate expectation to be able to get back what it was surrendering is contradictory, for a renewal and surrender will not happen simultaneously since these licences are deemed to have been over by efflux of time and there is no renewal of licence because spectrum is required to be purchased in the open market. Hence, there is no renewal leading to any legitimate expectation.

24Copy pinpoint24. In the auction, the entire available spectrnm for commercial use in the 800, 900, 1800 and 2100 MHz bandwas put to action and the spectrum which could not be sold in this auction shall be included in the next auction. The submission that the Union of India has flouted the decision in Centre for Public Interest Litigation (supra) is entirely unfounded as the grievance raised was that the entire spectrum available on the cancellation of the licences which were the subject matter of that PIL were required to be put up for auction and the PIL related to grant oflicences in the 1800 band category only and the spectrum that would have been released consequent upon the cancellation of the licence was required to be a part of the auction to be held after February 2013 in its totality. The issue of allotment of spectrum in the 900 band was n ,t the subject matter of consideration of the said writ petition. The objectives of the present auction are in consonance with the National G Telecom Policy-2012 (NTP-2012). These objectives are the same as in the previous auctions conducted in November 2012, March 2'.>13 and February 2014. The objectives state that the primary objective of the NTP-2012 is maximizing public good by making available affordable, reliable and secure telecommunication and broadband services across the entire country. The main thrust of the Policy is on the multiplier H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 1003 ANR. [DIPAK MISRA, J.)

effect and transformational impact of such services on the overall A economy. It recognizes the role of such services in furthering the national development agenda while enhancing equity and inclusiveness. Availability of affordable and effective communication for the citizens is at the core of the vision and goal of the NTP-2012, at the same time as being investor friendly ~d attracting additional investments. The NTP-2012 B also recognizes the predominant role of the private sector in this field and the consequent policy imperative of ensuring continued viability of service providers in a competitive environment. Pursuant to the NTP- 2012, these principles have guided the decisions needed to strike a balance between the interest of users/consumers, service providers and government revenue. Revenue maximization is not the sole objective of C the Government as alleged by the TSPs. The auction terms have been structured in a way keeping in mind the public interest and the fact that the TSPs have to serve the public (consumers) for the years to c:>me, i.e., the spectrum is allotted in a transparent manner for a period of 20 years. D

25Copy pinpoint25. There are various factors that the DoT is required to take into account while determining the auction structure. Ultimately, the DoT should be permitted to determine the auction structure consistent with the scheme of the TRAI Act (as has been done in the earlier auctions and the instant one). It cannot be left to the option of the telecom service providers and their narrower self interest to determine the structure and E timing of auctions. Capping has been kept in vogue to have a bigger field and it is based on a rational principle. For arriving at the cap, only two parameters are to be seen - (a) the total spectrum assigned in that service area; and (b) the total spectrum being put to auction. There is nothing mentioned in the definition as explained by the notes that the f surrendered spectrum is also required to be added because there is no definition of a surrendered spectrum. Even if some capping rule is required to be altered, the Court would be required to go into the basis why a capping rule was provided for and why the TRAI and the Department have consistently followed the capping rule not from today but from 2012 itself. Thai is because no monopoly should be created G and a healthy competitive bidding should be available. The relief of removal of the cap is only to enable the petitioners who are 'big players' to serve their cause but not the public interest and the government has been reviewing its policy from time to time. TRAI has made H

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A recommendations regarding compilation of the cap in future, and such recommendations are under consideration by the Government of India.

26Copy pinpoint26. It is apt to note here, as has been earlier stated, after 'certain bi.dders became successful in the auction, their cases were withdrawn and they were permitted to be imp leaded in these Transfer Cases. They B have also filed their written notes of submissions. Though separate written notes have been filed, yet we are inclined to enumerate the contentions raised in a composite manner.

27Copy pinpoint27. None of the operators have challenged the Spectrnm Cap Clause [Clause 5.3.1.] in the N1A2015. In the absence of such challenge, c anything which flows out from that clause including the methodology/ calculation cannot be questioned and/or not open to challenge :ind as a natural corollary, the arguments pertaining to the clause being arbitrary, discriminatory or contrary to public policy cannot be raised. Once the policy itself cannot be faulted, the method of implementation thereof would not be supervised by the Court and no mandamus can be issued in that regard. The methodology of ensuring the capping has to be left to the State and no direction should be issued as to how the capping is to be iJ!ipleJ11ented.

28Copy pinpoint28. So far as the interpretation of clause 5.3.1 is concerned, the said clause, as it stands, is unambiguous and clear, and therefore, the said clause ought to be literally interpreted. Furthermore, the NIA, being an invitation to offer, the rnles of interpretation of contracts would apply and not the rnles that may be applied in the case of interrretation of statutes.

29Copy pinpoint29. The NIA, being an invitation to offer, and Clause 5.3.1 being one of the Clauses thereof, and the said Clause not being under challenge, any meaning other than the literal meaning of the said Clause would have to be by consent of both the parties. It is not open to one party to unilaterally, at the stage of NIA, seek an interpretation of a Clause in a manner of their choice and if there is a difference of opinion in the manner of interpretation, it is the interpretation of the party who is offering tlie contract that ought to be adopted. Should there be caus~ for the Court interpreting or thereby requiring, through mandamus, the Offering Party (i.e., the State) to interpret the Clause contrary to their way of interpretation or literal interpretation, this would only be done on the very limited grounds ofjudicial review, in which case, while a certiorari H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 1005 ' · ANR. [DIPAK MISRA, J.]

would issue to strike down the Clause as being arbitrary (which issue is not put in question before the Court), a mandamus will not issue to require the State to interpret the Clause in a given way and make an offer in accordance with the interpretation given by the Court, which is what the petitioners seek.

30Copy pinpoint30. Clause 5.3.1, in 'No uncertain terms', provides for only two categories of spectrum, namely, (i) spectrum currently held by the operators; and (ii) spectrum put to auction by the Licensor/Respondent, to be counted/considered while calculating the Spectrum cap. This being the position under the Clause (both accepted and understood by all the operators), the contention that the surrendered spectrnm ofBSNL/MTNL and not currently held by the existing operators should have been included C (whether or not put to auction) is clearly contrary to the unequivocal terms of Clause 5.3 .1. The contention that the surrendered spectrum (which is neither assigned/held by any operator nor put to auction) ought to be included for calculating the Spectrum cap in the present auction is an effort to include/add another category of spectrum (i.e., surrendered spectrum not put to auction) which is not provided in Clause 5.3.1, and thereby effectively seek amendment of the Tender/NIA terms which is totally impermissible in law.

31Copy pinpoint31. The objective behind Spectrum capping is to ensure compedtion · in the market by preventing large/big operators from acquiring large amount of spectrum, which they may not require but only hoard to prevent the small operators from effectively competing in the market, and that is why, TRAI has recommended on 02.07.2015 that the basic objective of prescribing a spectrum cap is to prevent a TSP from acquiring large holdings of spectrum through auction, M&A or trading, as it may lead to non-level playing field thereby disturbing the competition in the muket. F It cannot be left to the market forces alone to decide the maximum spectrum holding as a TSP and, hence, the provision of cap should continue · on the spectrum holding that a TSP may acquire or otherwise. The argument that the Respondent should have notionally included the spectrum surrendered by BSNL/MTNL would result in creating a situation G where though the spectrum put to auction remains the same (i.e., limited), yet a large/big player will be able to bid for the entire spectrum.(which it otherwise could not have done due to Clause 5.3.1) thereby effectively giving a tool to the large/big operators to deprive/starve small open.tors, who quite avowedly, cannot match the buying power oflarger operators H

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A of spectrum.

32Copy pinpoint32. There cannot be any legitimate expectation based on the terms and conditions relating to NIA more so, in the sphere of auction of spectrum. The 2013 auction included the spectrum allegedly surrendered by BSNL/MTNL in calculating the Spectrum cap, while it has 11ot been 8 done so in the present auction (i.e., 2015 auction), and the fact that the surrendered spectrum was included earlier and not in the present year does not give rise to legitimate expectation, for it does not bind the State to follow the same because the fundamental principles of maximization ofrevenue and subserving of the public interest at large require change. It is well settled that the concept oflegitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. The court does not interfere with the discretion of the public· authority which is empowered to take the decisions under law and the court is expected to apply an objective standard that leaves to the deciding authority the full range of choice which the legislature is presumed to have intended.

33Copy pinpoint33. The grievance raised by the petitioners is that the design of the auction skewed price discovery and .resulted in artificial infiation of the price of spectrum. This grievance is to be viewed in the context in which the policy of auction of spectrum came to be implemented. This E Court having held that public interest is served by maximizing th<:< benefit to the public exchequer, a challenge premised on the admission that the method adopted by the State, in fact, maximized the generation of revenue from the auction of spectrum cannot succeed, Further, the present case may be usefully contrasted with the Center for Public Interest Litigation (supra) in which this Court quashed the licences issued to different telecom operators on a finding that the policy of 'first come first serve' (FCFS) was constitutionally suspect for the reason that it failed to maximize revenue. Additionally, it was found that the procedure for grant of licences was, in any event, vitiated by arbitrary application of the FCFS policy and by grant oflicences to ineligible applicants. In such circumstances, the requirements of public interest were held to mandate a declaration that the process as a whole was legally non est. In the present case, declining to quash the auction exercise as a whole would occasion no detriment to the public interest since the competing considerations can be balanced by directing remedial and forward-looking reliefs, even while preserving past actions. Further, there is neither H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 1007 ANR. [DIPAK MISRA, J.)

allegation of any mala fide in the conduct of the auction, nor has it been alleged that the policy was structured so as to convey benefit to a particular player/players over others.

34Copy pinpoint34. Having noted the contentions of the parties, we think it necessary to refer to the earlier decisions that have been rendered in the context of spectrum and the principle to be adhered to while disposing it by way of granting licence. The litigation relating to spectrum had a beginning. In Centre/or Public Interest Litigation (supra), be it noted, the controversy had arisen in a different canvas. But it is necessary to allude to it. The two-Judge Bench framed five questions:- "(i) Whether the Government has the right to alienate, transfer or c distribute natural resources/national assets otherwise than by following a fair and transparent method consistent with the fundamentals of the equality clause enshrined in the Constitution? (ii) Whether the recommendations made by the Telecom Regulatory Authority of India ("TRAI'') on 28-8-2007 for grant D ofUnifiedAccess Service licence (for short "UAS licence") with 2G Spectrum in 800, 900 and 1800 MHz at the price fixed in 2001, which were approved by the Department ofTelecommunications (DoT), were contrary to the decision taken by the Council of Ministers on 31-10-2003? E (iii) Whether the exercise undertaken by DoT from September 2007 to March 2008 for grant of UAS licences to the private respondents in terms of the recommendations made by TRAI is vitiated due to arbitrariness and mala fides and is contrary to public interest? F (iv) Whether the policy of first-come-first-served followed by DoT fo!" grant oflicences is ultra vires the provisions of Article !4 of the Constitution and whether the said policy was arbitrarily changed by the Minister of Communications and Information Technology (hereinafter referred to as "the Minister of Communications and Information Technology"), without consulting TRAI, with a view G to favour some of the applicants? ( v) Whether the licences granted to ineligible applicants and those who failed to fulfil the terms and conditions of the licence are liable to be quashed?" H

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A · 35. The Court referred to the new economic policy of India that was announced on 24.fl991 which was aimed at meeting India's competitiveness in the global market, rapid growth of exports, attracting foreign direct investment and stimulating domestic investments. With a view to achieve standards comparable to international facilities, the sub- sector of Value Added Services was opened up to private investment in B July 1992 for the services, namely, (a) electronic mail; (b) voicemail; (c) data services; (d) audio text services; (e) video text services; (j) video conferencing; (g) radio paging; and (h) cellular mobile telephone. The Court referred to the National Telecom Policy, 1994, New Telecom Policy, 1999, Establishment of Telecom Regulatory Authority of India, Policy c on Spectrum Management as enumerated in NTP 1999, the role cfTRAI, the factual matrix in hand, the stand of the respondent, the manner in which the allotments were made and, in that context, opined as follows:- "85. As natural resources are public goods, the doctrine of equality, which emerges from the concepts of justice and fairness, must guide th~ State in determining the actual mechanism for distribution of natural resources. Jn this regard, the doctrine of equality has two aspects: first, it regulates the rights and obligations of the State vis-a-vis its people and demands that the people be granted equitable access to natural resources and/or its products and that they are adequately compensated for the transfer of the resource to the private domain; and second, it regulates the rights and obligations of the State vis-a-vis private parties seeking to acquire/ use the resource and demands that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly placed private parties. F xxxxxxxxxx

89. In conclusion, we hold that the State is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles including the do-::trine of G equality and larger public good."

36Copy pinpoint36. Answering the question nos. 3 and 4, the Court held:- "9 5. This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 1009 ANR. [DIPAK MISRA, J.]

all eligible persons get a fair opportunity of competition. To ;:mt it A differently, the State and its agencies/ instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy applicants. When it comes to alienation of scarce natural resources like spectrum, etc. it is the burden of the State to ensure that a non- 8 discriminatory method is adopted for distribntion and alienation, which would necessarily result in protection of national/p~1blic interest.

96. In our view, a duly publicised auction conducted fairly and · impaitially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect fer the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty-bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process. xxxxxxxxxx 99· In majority of the judgments relied upon by the learned Attorney General and the learned counsel for the respondents, it has been held that the power of judicial review should be exercised with great care and circumspection and the Court should not ordinarily interfere with the policy decisions of the Government in financial matters. There cannot be any quarrel with the proposition that the Court cannot substitute its opinion for the one formed by the experts in the particular field and due respect should be given to the wisdom of those who are entrusted with the task of framing the policies. We are also conscious of the fact that the Court should not interfere with the fiscal policies of the State. However, when it is clearly demonstrated that the policy framed by the State or its agency/instrumentality and/or its implementation is contrary to public interest or is violative of the constitutional principles, it is the duty of the Court to exercise its jurisdiction in larger public interest and reject the stock plea of the State that the scope of judicial review should not be exceeded beyond the recognised parameters. H

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A xxxxxxxxxx

101. Before concluding, we consider it imperative to observe that but for the vigilance of some enlightened citizens who held important constitutional and other positions and discharged their duties in larger public interest and non-governmental organisations B who have been constantly fighting for clean governance and accountability of the constitutional institutions, unsuspecting citizens and the Nation would never have known how the scarce natural resource spared by the Army has been grabbed by those who enjoy money power and who have been able to manipulate the system., c We are not referring to the directions given therein as we are not really concerned with the said directions in the present case.

37Copy pinpoint37. After delivery of the said judgment, the President oflndia, on 12.4.2002, made a reference under Article 143(1) of the Constitution, D which was answered in Natural Resources Allocation, In re, Special Reference No.J of 2012 (supra). The issue of maintainability of reference was raised and the Court answered that the reference was maintainable as long as the lis in 2G case, inter parties, is left unaffected. On merits, the majority proceeded to hold as follows:-

E "129. Hence, it is manifest that there is no constitutional mandate in favour of auction under Article 14. The Government has repeatedly deviated from the course of auction and this Court has repeatedly upheld such actions. The judiciary tests such deviations on the limited scope of arbitrariness and fairness under Article 14 and its role is limited to that extent. Essentially, whenever the object of policy is anything but revenue maximisation, the executive is seen to adopt methods other than auction.

130. A fortiori, besides legal logic, mandatory auction may be contrary to economic logic as well. Different resources may require different treatment. V~ry often, exploration and exploitation contracts are bundled together due to the requirement of heavy capital in the discovery of natural resources. A concern would risk undertaking such exploration and incur heavy costs only if it was assured utilisation of the resource discovered: a prudent business venture would not like to incur the high costs involved in exploration activities and then compete for that resource in an H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 1011 ANR. [DIPAK MISRA, J.]

open auction. The logic is similar to that applied in patents. Firms A are given incentives to invest in research and development with the promise of exclusive access to the market for the sale of that invention. Such an approach is economically and legally sound and sometimes necessary to spur research and development. Similarly, bundling exploration and exploitation contracts may be necessary to spur growth in a specific industry.

131. Similar deviation from auction cannot be ruled out when the object of a State policy is to promote domestic development of an industry, like in Kasturi Lal case 7, discussed above. However, these examples are purely illustrative in order to demonstrate that auction cannot be the sole criterion for alienation of all natural resources.

38Copy pinpoint38. Elaborating further, the Court held:- "146. To summarise in the context of the present Reference, it needs to be emphasised that this Court cannot conduct a D comparative study of the various methods of distribution of natural resources and suggest the most efficacious mode, ifthere is one universal efficacious method in the first place. It respects the mandate and wisdom of the executive for such matters. The methodology pertaining to disposal of natural resources is clearly an economic policy. It entails intricate economic choices and the E Court lacks the necessary expertise to make them. As has been repeatedly said, it cannot, and shall not, be the endeavour of this Court to evaluate the efficacy of auction vis-a-vis other methods of disposal of natural resources. The Court cannot mandate one method to be followed in all facts and circumstances. Therefore, F auction, an <economic choice of disposal of natural resources, is not a constitutional mandate. We may, however, hasten to add that the Court can test the legality and constitutionality of these methods. When questioned, the courts are entitled to analyse the legal validity of different means of distribution and give a constitutional answer as to which methods are ultra vire~ and G intra vires the provisions of the Constitution. Nevertheless, it cannot .and will not compare which policy is fairer than the other, bui, if a policy or Jaw is patently unfair to the extent that it falls foul of the ' (1980) 4 sec 1 H

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A fairness requirement of Article 14 of the Constitution, the Court would not hesitate in striking it down.

147. Finally, market price, in economics, is an index of the value that a market prescri.bes to a good. However, this valuation is a function of several dynamic variables: it is a science and not a B law. Auction is just one of the several price discove1y mechanisms. Since multiple variables are involved in such valuations, auction or any other form of competitive bidding, cannot constitute even an economic mandate, much less a constitutional mandate.

148. In our opinion, auction despite being a more preferable method c of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or!imitation for alienation of all natural resources and therefore, every method other than auction cannot be struck down as ultra vires the constitutional mandate.

149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy, decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means ot!ler than those that are competitive and maximise revenue may be arbitrary and face the wrath ofArticle 14 of the Constitution. Hence, rather than prescribing or proscribing a method, we believe, a judicial scrutiny of methods of disposal of natural resources should depend on the facts and circumstances of each case, in consonance with the principles which we have culled out above. Failing which, the Court, in exercise of power of judicial review, shall term the executive action as arbitrary, unfair, unreasonable and capricious due to its antimony with Article 14 of the Constitution." .

39Copy pinpoint39. Be it noted, pursuant to the judgment in 20 case, the Union of India had taken steps to conduct an auction of 900 MHz and 1800 MHz insofar as they pertained to certain operators whose licences were coming to an end in 2014. The licences had been granted in favour of certain licensees, namely, Vodafone Mobile Service Ltd., Loop Mobi:e India, Bharti Airtel Ltd. and Idea Cellular Ltd. who had Cellular Mobile H

RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & 1013 ANR. [DIPAK MISRA, J.]

Telephone Service licence (CMTS licence) and some had Unified Access A Service licence (UAS licence) and they approached the Government of India seeking extension/removal of the licence. They approached the High Court of Delhi which directed the Government of India to dispose of the application within a stipulated time frame. Pursuant to the directions given by the High Court, the applications of the licensees were considered B and rejected by the Government of India. Aggrieved by the said rejection, the licensees approached TDSAT, which dismissed the petitions vide order dated 31.1.2014.

40Copy pinpoint40. After appeals were dismissed, the appellants therein preferred appeals under Section 18 of the TRAI Act. The grievance related to seeking of an extension of the period of licence. The Court in Bharti C Airtel Limited v. Union of India 8, relying on Union of India and another v. Assn. of Unified Telecom Service Providers of India and others9, came to hold that it is a settled position of law that a licence granted,under Section 4(1) of the Telegraph Act such as the one granted to each of the licensees herein is a contract between the licensor and D the licensee. Thereafter, the Court posed the question, whether there was any right of extension of licence granted in favour of the licensee under the contract. Analysing the terms of the clauses in the contract, referring to various passages from the 2G case and considering the view ofTRAI and the pronouncement in Natural Resources Allocation, In Re (supra), the two-Judge Bench answered thus:- E

"In para 82 of Natural Resources Allocation, In re (supra), this Cot\ft was categorical that the findings of 2G Case (supra) were limited to the case of spectrum. Similarly, in para 146, this Court observed that this Court "respects the mandate and wisdom of the executive" in the matter of choosing the most suitable mtthod of distribution of natural resources. This Court noted that this is clearly a matter of an economic policy entailing an intricate economic choice and the Court lacks necessary expertise to make such choice. In the light of the observation in para 82 that at least in the matter of disposal of spectrum, auction is the only "permissible and intra vires method for disposal". Therefore, the submission of the licensees is required to be rejected."

41Copy pinpoint41. Having adumbrated to the previous litigations, we shall presently • (2015) 12SCC 1 '(2011) 10 sec 543 H

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