UNION OF INDIA v. ASSOCIATION OF UNIFIED TELECOM SERVICE PROVIDERS OF INDIA ETC.ETC.

A (xvi) In re: Revenue under IP-1 Registration. (xvii) In re: Income from management consultancy services. (xviii) In re: Res Judicata. (xix) In re: Levy of interest, penalty and interest on penalty. B In Re: Definition of Gross Revenue

26. A new package, namely “the National Telecom Policy 1999 Regime,” gave an option to the licensees to migrate from fixed licence fee to revenue sharing fee, which was to the advantage of Telecom Service Providers (for short, ‘the TSPs’). The objective of the C Government was to achieve social and economic goals to provide the service to all uncovered area including rural areas, remote, hilly and tribal areas and to create an efficient infrastructure thereby propelling India into an IT superpower and to increase teledensity from 0.4 to 4 by the year 2010 and to provide internet access to all district D Headquarters by the year 2000. Human resource development training, telecom equipment manufacturer, and remote area telephony were the other objectives.

27. The Central Government has given a liberalised mode of payment by revenue sharing regime, which was the price parting with E the exclusive privilege which the Central Government had. The intendment was to make the Government partner or sharer of gross revenue. Out of the existing gross revenue, the Central Government decided to spend money on remote and uncovered areas, rural, tribal, and hilly areas. The Government incurred a colossal amount of Rs.49.120 crores under the Universal Service Obligation Fund (for short, F ‘the USOF’) and incurred a committed liability of Rs.59,774 crores for ongoing projects including laying of optical fiber cables up to Gram Panchayat areas under “Digital India Mission.” Initially, 15 percent Adjusted Gross Revenue (for short, ‘the AGR’) was fixed as license fee under revenue sharing, which was reduced to 13 percent and lastly G to 8 percent in 2013. Out of the 8 per cent, a substantial portion of 5 per cent is spent by the Central Government under the USOF.

28. The Sector is benefited immensely under the Scheme as apparent from the gross revenue trend from 2004 to 2015. Clause 19.1 defines gross revenue. It came as relief against the high license fee. H The gross revenue for this purpose would be the total revenue of the

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licensee company with certain exceptions provided in Clause 19.2 to A arrive at the figure of AGR. The Policy of 1999 contained the stipulation that the conditions are to be accepted in its entirety, and no dispute concerning the license agreement shall be raised at any future date. The acceptance of the package be deemed full and final settlement, and after that amendment to the license agreement has to be signed. B Following stipulations were mentioned explicitly in the Migration Package: “2. Migration to the NTP-99 on the conditions mentioned above will be permitted on the premise that the aforesaid conditions are accepted as a package in its entirety and simultaneously all legal proceedings in Courts, tribunals or in Arbitration instituted by the license and Associations of Cellular and Basic Service Operators (COAI) & ABTO) against DoT or UOI shall be withdrawn. Further, any dispute with regard to the license agreement for the period up to 31.07.1999 shall not be raised at any future date. The acceptance of the package will be deemed as full and final settlement of all existing disputes whatsoever irrespective of whether they are related with the present package or not.

3. After the terms and conditions of the package are accepted, amendments to the existing license agreement will be signed between the licensor and the licensee.” E

29. To avoid the accounting jugglery, the Department of Telecommunications (for short, ‘the DoT’) sought the advice of experts in the field of accountancy to decide upon the broad definition of the gross revenue. The relevant portion of the experts’ opinion is extracted hereunder: F “1.1 The question of what should constitute ‘revenue’ in the context of the ‘revenue sharing’ policy of the government is a vexed one. Accounting principles seek to measure economic transactions and events in a dynamic and open environment and, therefore, do not G always provide as definitive guidance as one would wish. While keeping these inherent limitations of accounting as a measurement discipline in view, an attempt has been made in this note to articulate a basic set of propositions that may assist in dealing with the issue on hand. Needless to add, these propositions are H

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A presented only as a starting point for discussions and further refinement. 1.2 As far as possible, our definition of ‘revenue’, the principles for its measurement and the procedure for establishing the authenticity of actual figures should be simple and objective. While it is recognised that this is a difficult proposition given the inherent nature of accounting and the diversity in the telecom scenario (which it is recognised that this is a difficult proposition given the inherent nature of accounting and the diversity in the telecom scenario (which is likely to grow at a fast pace), our attempt should be to evolve a system of revenue sharing that does not become as arduous and litigative as some other revenue- generating activities of the government, e.g., income tax, excise duty etc. D 1.3 Defining ‘revenue in a broad, comprehensive and inclusive manner is likely to pose fewer problems of interpretation (and consequently lesser disputes and litigation) than would be the case otherwise. Further, exclusion of certain items from the definition of ‘revenue’ may sometimes encourage companies to design their tariff and payment schemes in such a manner that their license fee liability is reduced to the minimum. Of course, the comprehensiveness of definition of revenue would need to be duly considered in determining the percentage of revenue to be charged as license fee, so that the amount of license fee is appropriate in the context of the present stage of evolution of telecom companies. G 1.4 To ensure consistency, we may lay down uniform accounting policies to be followed by telecom companies for presenting their annual accounts as well as periodical statements of revenue to be sent to the government supporting their payments.” H (emphasis supplied)

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30. The definition of revenue has been taken in a broad, comprehensive, and inclusive manner to pose fewer problems of interpretation, and exclusion of certain items was avoided.

31. On 21.5.2001, the Government of India finalised the concept of gross revenue and AGR.

32. The format of the statement of revenue and license fee payable by the TSPs is appended to the license agreement, which reflected the various heads and components, including any other income/ miscellaneous receipts from the wireline subscribers, which was to be included for the computation of AGR. Provision in Clause 20.2 was made for payment of license fee by the licensee on the basis of actual revenue (on accrual basis). The accrual was necessary irrespective of its realisation at a subsequent date or even its non-realisation.

33. Shri Tushar Mehta, learned Solicitor General of India, appearing on behalf of Union of India submitted that the definition of gross revenue has to prevail over the mode of accounting. Under Clause D 20.4 of the agreement, the licensee must state in the prescribed form as Annexure-II. The format is a part of the license under the title of “Format of Statement of Revenue and Licensee Fee.” It has no connection with the accounting standards prescribed under the Companies Act. The format is the basis for the calculation of the license fee in revenue sharing. The licensees provide the details as per the format Annexure-II along with the certificate of Auditors. The TSP has to provide all the details of gross revenue as per the definition. The accounting standards deal with the broad principles to be followed while maintaining accounts and can never override the definition of gross revenue. Accounting Standard (AS-9) deals with the definition of revenue, but that cannot prevail over the definition of Gross Revenue as defined in the agreement. The provisions of Section 211 (3B) of Companies Act makes it clear that accounting standards are not sacrosanct.

34. The profit and loss account and balance-sheet have to comply with the accounting standards, as provided in Section 211(3A). In case they do not comply, for any deviation, the reasons, and the economic effect have to be disclosed. In Petition No.7 of 2003 filed by AUSPI, the declaration was sought that AGRs can only be related to revenues directly arising out of the telecom operations licenced under Section 4 of the Indian Telegraph Act, 1885. A prayer was made to set aside H

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A the demand letter issued in 2002 and 2003, claiming revenue share on interest income and other miscellaneous heads. In Petition No.82 of 2005, a prayer was made to re-compute and modify the demands as per demand notes dated 28.3.2003 and 13.7.2004 on account of the wrongful entry of gross revenue and AGR, the DoT cannot levy license fee, which result in charge of the license fee twice on the same revenue in the hands of two or more operators/circles. DoT be directed to calculate AGR on realisation basis, not on an accrual basis, and not to include notional revenue income in AGR.

35. Prayer was made to direct DoT to modify the definition of gross revenue and AGR for license fee as also WPC charges under Section 4 of the Indian Telegraph Act, 1885. Prayers were also made to direct DoT to modify the Format of Statement of Gross Revenue, Adjusted Gross Revenue, and License Fee and strike down the definition of gross revenue and AGR. This Court in Union of India v. AUSPI (2011) held that Tribunal has no jurisdiction to exclude certain items of revenue, which were included in the definition of AGR. The licensee could not have approached the Tribunal for the alteration of the definition of AGR in the license agreement. TRAI and Tribunal had no jurisdiction to decide on the validity of the definition AGR in the licence agreement. The licensees are not only precluded to challenge the definition of gross revenue/AGR, but also by the meaning the Government may choose to put to the definition. The Tribunal has travelled beyond its jurisdiction to act contrary to the specific findings and decision in AUSPI v. Union of India.

36. Shri Arvind Datar, Shri C.A. Sundaram, Shri Shyam Divan, F Shri Gopal Jain, Shri Ramji Srinivasan, Dr. Abhishek Manu Singhvi, Shri Kavin Gulati, Shri B. Adinaraynan Rao, Shri U. Hazarika, Shri Chetan Sharma and Shri Siddhartha Dave, learned senior counsel appearing on behalf of TSPs submitted that the meaning of gross revenue has to be determined in accordance with the provisions of AS-9 which only includes gross inflow of cash, receivables that arise out of ordinary activities of the telecom companies. In the definition of gross revenue, only revenue cash inflow as revenue can be included; not all the incomes which is recorded in profit and loss account and non-revenue items cannot be included in the definition of gross revenue within the ambit of accounting standards. Clause 18.2 of the license agreement provides only license fee of 10 per cent of AGR excluding the spectrum

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charges. The gross revenue under Clause 19.1 is not gross income or gross inflow or gross receipts.

37. It is further submitted on behalf of the licensees that revenue has not been defined under the license. Clauses 20.6 and 22 of the license agreement provided as to how the licensees are obliged to prepare their accounts. Section 211(3A) read with Section 211(3C) of the Companies Act, 1956, casts an obligation on companies to maintain their books of account following accounting standards recommended by the Institute of Chartered Accountants of India constituted under the Chartered Accountants Act.

38. They have insisted to adopt fair valuation method relying on decision in J.K. Industries Limited v. Union of India, (2007) 13 SCC 673.

39. It is further submitted that accounting standards have been made mandatory. The DoT has admitted in their counter affidavit dated 11.7.2003 in Petition No.7 of 2003 that definition of term revenue is in line with AS-9. The Government cannot resile from the stand that revenue definition is in line with AS-9 and cannot take a contradictory stand at different stages of the case. The party cannot be permitted to approbate and reprobate on the same aspect.

40. It is submitted on behalf of licensees. that in order to compute the adjusted gross revenue would constitute (a) it must be revenue; (b) E it is gross and not net revenue; and (c) it would be adjusted revenue, but adjustment can be made only by deductions as provided under Clause 19.2. Revenue has to be interpreted in keeping with commercial and financial parlance. The contract itself recognise the applicability of the accounting standards as apparent from Clauses 20.6 and 22.7. The F accounts have to be maintained as per the accounting standards. The purpose of accounting standards is to ensure that there is clarity, uniformity in dealing with the financial terms to give definitiveness and clarity to such financial expressions. Accounting standards are mandatory. Revenue had not been defined in the commercial license agreement and this being a commercial contract and the accounting G standards having been incorporated by reference in the license agreement as such the basis on which the license fee has to be decided, the same would prevail. 41.It is further submitted that all receipts would not form part of AGR. The use of the word inclusive under Clause 19.2 does not make H

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A the definition of AGR expansive though the definition is not exhaustive as the provision of value-added services is different and provided in other clauses and service is to mean service in a licensed service area. Thus, license fee has to be confined in respect of business carried on to provide the services under the license. A single company may hold five licenses for five different service areas. The license fee at 10 B percent cannot be levied on the same revenue cannot be charged to license fee more than once, as apparent from Clause 20.4 of the license read with Appendix-II to Annexure-II to it, which is the prescribed format by the licensor indicating the streams of revenue required by a licensee to be disclosed. The miscellaneous receipts provided under each head are not meant to include any and every receipt received by the company. 42.It should be held that such revenue from non-licensed revenue was not part of AGR at all. Contra proferentum rule requires clauses 19.1 and 19.2 to be interpreted against the maker and to prefer the interpretation which is favourable to the licensees. 43.The service providers submitted that basic principles to decide what constitutes revenue have to be followed. The receipt must be having the nature of revenue, and it cannot be subjected to double charge. No one can generate revenue from oneself, and someone else’s E revenue cannot be treated as that of others. 44.When we consider the submissions as observed there was a paradigm shift in Telecom Policy of 1999 from the fixed licence fee to the revenue sharing basis regime, which was advantageous to the Telecom Service Providers. Under the new regime, the Central F Government shared the privilege under section 4 of the Indian Telegraph Act with the TSPs. It came as a relief against the high licence fee, which used to be charged under the 1999 policy. The migration package contained the stipulation as to no dispute to be raised as to working out sharing of revenue. Experts were consulted in the field of accountancy, and it was their advice that the actual figures should be simple and objective to evolve a system of revenue sharing that does not become as arduous one and litigative, had been evolved. Revenue has been defined in a broad, comprehensive, and inclusive manner not to pose problems of interpretation and to protect from the accounting jugglery. Gross revenue has been defined to be inclusive of specific items mentioned in clause 19.1 and any other miscellaneous revenue, without

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any set-off for related items of expense, etc. All the licensees accepted the migration package and have signed the agreements. It has turned out to be a substantial financial booster in favour of the licensees as is apparent from figures of the gross revenue earned by them mentioned above. When under a contract signed by the parties, gross revenue and AGR have been given the meaning coupled with the format and the annexures which form part of the contract. Format is contained in appendix to Annexure-II which is part of the agreement in which requisite information has to be furnished. The meaning in clause 19 of the gross revenue and the format mentioned above have to prevail.

45. No doubt about it that the accounts have to be maintained as per the AS-9 regime prevalent at the relevant time. The definition of the contract has to prevail and not what is generally revenue, as defined in AS-9.

46. The question as to what constitute Gross Revenue has been agitated, though concluded in earlier decision in 2011, by the TSPs. again by raising the submission that we have to follow the definition of revenue as defined in AS-9, it would be the revenue as generated by activities under the licence; whereas the definition of gross revenue includes the income from non-licensing activities also as part of the gross revenue, which we have to discard. E

47. The definition of ‘gross revenue’ in clause 19.1 is inclusive, and it includes explicitly: (i) installation charges; (ii) Late fees; (iii) sale proceeds of handsets; F

(iv) sale proceeds of any other terminal equipment, etc. (v) revenue on account of interest; (vi) revenue on account of dividend; G (vii) value-added services; (viii) supplementary service as fixed charges; (ix) access or interconnection charges; (x) roaming charges; H

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A (xi) revenue from permissible sharing of infrastructure; and (xii) any other miscellaneous revenue.

48. No set-off can be claimed for related items of expense etc. on any of the items mentioned above of the inclusive definition and on B the miscellaneous revenue.

49. Clause 19.2 of the agreement excludes certain items from gross revenue to arrive at the figure of AGR, which are (a) PSTN/ PLMN related charges (access charges) actually paid to other eligible service providers within India; (b) roaming revenue passed on to the C TSPs through service tax paid to the Government, if gross revenue had included the component of service tax and sales tax.

50. In Union of India v. AUSPI (2011), this Court has held that the terms and conditions of the licence, including the definition of gross revenue in the licence agreement, are part of the contract. The Central D Government alone has the right to define revenue and has parted with the privilege under section 4 of the Telegraph Act. A licence granted under section 4(1) of the Telegraph Act is in the nature of the contract between the Central Government and the licensee. The provisions of the TRAI Act do not affect the specific exclusive privilege of the E Central Government to carry on telecommunication activities, nor do they alter the contractual nature for the licence granted under the proviso to section 4(1) of the Telegraph Act. After TRAI makes the recommendation, the Central Government shall take a final decision under section 11(1)(a)(ii) of the TRAI Act. The TRAI shall have the function to make a recommendation. In case of difference between TRAI and Central Government with regard to particular terms or conditions of the licence, the recommendation of TRAI cannot prevail, and it is the decision of the Central Government, which is to be final and binding. The tribunal has no jurisdiction to decide upon the validity of terms and conditions incorporated in a licence; it has jurisdiction to decide any dispute between the licensor and the licensee on the interpretation. It has also been observed to make a final decision on the definition of the gross revenue in the licence agreement, the Government has the competence. The licence fee would be a percentage of gross revenue, which would be the total revenue of the licensee company.

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51Copy pinpoint51. This Court has held in Union of India v. AUSPI (2011) that the licensing company had accepted in the letter dated 22.7.1999 that the licence fee would be a percentage of the gross revenue, which should be the total revenue of the licensee company. The licensee agreed that the Government has to take a final decision not only concerning the percentage of revenue share but also the definition of revenue for this purpose. The licensee could not have approached the tribunal to question the validity of the definition of adjusted gross revenue in the licence agreement on the ground that the adjusted gross revenue cannot include revenue from activities beyond the licence.

52Copy pinpoint52. It is submitted on behalf of the licensees that the term revenue has nowhere been defined under the licence. As such, it would be necessary to find out what is the meaning of revenue in AS-9. The submission that revenue has to be related to the activities of the licensee company, a reference has been made to the definition of revenue as given in clause 4.1 of AS-9, which reads as under: D “4.1 Revenue is the gross inflow of cash, receivables, or other consideration arising in the course of the ordinary activities of an enterprise from the sale of goods, from the rendering of services, and from the use by others of enterprise resources yielding interest, royalties, and dividends. Revenue is measured E by the charges made to customers or clients for goods supplied and services rendered to them and by the charges and rewards arising from the use of resources by them. In an agency relationship, the revenue is the amount of commission and not the gross inflow of cash, receivables, or other consideration.” F

53Copy pinpoint53. The explanation contained in clause 5 of AS-9 relating to revenue recognition is extracted hereunder: “Explanation Revenue recognition is mainly concerned with the timing of recognition of revenue in the statement of profit and loss of an G enterprise. The amount of revenue arising on a transaction is usually determined by agreement between the parties involved in the transaction. When uncertainties exist regarding the determination of the amount or its associated costs, these uncertainties may influence the timing of revenue,” H

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54Copy pinpoint54. Clauses 20.6, 20.7, and 22 of the licence agreement have also been referred. They are extracted hereunder: “20.6 Final adjustment of the Licence Fee for the year shall be made based on the gross revenue figures duly certified by the AUDITORS of the LICENSEE in accordance with the provision of Companies Act, 1956. 20.7 A reconciliation between the figures appearing in the quarterly statements submitted in terms of the clause 20.4 of the agreement with those appearing in annual accounts shall be submitted along with a copy of the published annual accounts audit report and duly audited quarterly statements, within 7 (seven) Calendar days of the date of signing of the audit report. The annual financial account and the statement as prescribed above shall be prepared following the norms as prescribed in Annexure. D xxx

22. Preparation of Accounts. 22.1 The LICENSEE will draw, keep and furnish independent accounts for the SERVICE and shall fully comply orders, directions, or regulations as may be issued from time to time, by the LICENSOR or TRAI as the case may be. 22.2 The LICENSEE shall be obliged to: a) Compile and maintain accounting records, sufficient to show and explain its transactions in respect of each completed quarter of the Licence period or of such lesser periods as the LICENSOR may specify, fairly presenting the costs (including capital costs), revenue and financial position of the LICENSEE’s business under the LICENCE including a reasonable assessment of the assets employed in and the liabilities attributable to the G LICENSEE’S business, as well as, for the quantification of Revenue or any other purpose. b) Procure in respect of each of those accounting statements prepared in respect of a completed financial year, a report by the LICENSEE’s Auditor in the format H prescribed by the LICENSOR stating inter alia whether

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in his opinion the statement is adequate for the purpose of this condition and thereafter deliver to the LICENSOR a copy of each of the accounting statements not later than three months at the end of the accounting period to which they relate. c) Send to the LICENSOR a certified statement on an affidavit by authorised representative of the company, containing full account of Revenue as defined in condition 19 for each quarter separately along with the payment for the quarter. 22.3 (a) The LICENSOR or the TRAI, as the case may be, shall have a right to call for and the LICENSEE shall be obliged to supply and provide for examination any books of accounts that the LICENSEE may maintain in respect of the business carried on to provide the service(s) under the Licence at any time without recording any reasons thereof. 22.3 (b) LICENSEE shall invariably preserve all billing and all other accounting records (electronic as well as hard copy for a period of THREE years from the date of publishing of duly audited & approved Accounts of the company and any dereliction thereof shall be treated as a material breach independent of any other breach, sufficient to give a cause for cancellation of the LICENCE. 22.4 The records of the LICENSEE will be subject to such scrutiny as may be prescribed by the LICENSOR so as to facilitate independent verification of the amount due to the LICENSOR as its share of the revenue. 22.5 The LICENSOR may, on forming an opinion that the statements or accounts submitted are inaccurate or misleading, order Audit of the accounts of the LICENSEE by appointing auditor at the cost of the LICENSEE and such auditor(s) shall have the same powers which the statutory auditors of the company enjoy under Section 227 of the Companies Act, 1956. The remuneration of the Auditors, as fixed by the LICENSOR, shall be borne by the LICENSEE. H

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A 22.6 The LICENSOR may also get conducted a Special Audit of the LICENSEE company’s accounts/records by “Special Auditors,” the payment for which at a rate as fixed by the LICENSOR shall be borne by the LICENSEE. This will be in the nature of auditing the audit described in para 22.5 above. The Special Auditors shall also be provided the same facility and have B the same powers as of the companies’ auditors as envisaged in the Companies Act, 1956. 22.7 The LICENSEE shall be liable to prepare and furnish the company’s annual financial accounts, according to the accounting principles prescribed and the directions given by the LICENSOR C or the TRAI, as the case may be, from time to time.”

55Copy pinpoint55. The clauses mentioned above provided as to how the licensees are obliged to prepare the accounts. There is a statutory obligation cast under the Companies Act. Section 211(3A) read with section 211(3C) of the Companies Act provides to maintain their books of accounts following the accounting standards and for which reliance has been placed upon J & K Industries v. Union of India (supra) in which the Court has emphasised upon the fair valuation principles. They have relied upon the following observations: “124. On the other hand, fair valuation principles are important in the context of valuing derivatives and other investments. If one were to describe one single change in accounting practice over the last few years, it would be the use of fair valuation principles. Today, the object behind the enactment of AS, which are now made mandatory under Section 211(3-A) of the F Companies Act, is to shift from historical method of accounting to fair valuation. In the case of mergers and acquisitions, which is common today in the world of globalisation, fair valuation principles have important role to play. Mergers and acquisitions are sometimes undertaken to defer revenue expenditure over future years by invoking the matching concept, which results in putting fictitious assets on the balance sheet. This is one reason why fair valuation principles are accepted.

125. AS are established rules relating to recognition, measurement, and disclosures, thereby ensuring that all enterprises that follow them are comparable and that their financial statements are “true and fair.” Measurements and

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disclosures based on fair value are becoming increasingly A important. Fair valuation is generally used in valuation and disclosure of financial instruments, derivatives, conversions, auctions in a bond, business combinations, impairment of assets, retirement obligations, transactions involving exchange of assets without monetary consideration, transfer pricing, etc.” B

56Copy pinpoint56. The accounting standards are mandatory to be followed by the companies, and DOT has admitted in the counter affidavit of 11.7.2003 in Petition 7 of 2003 that the definition of the term revenue in the agreement is in line with AS-9 under the accounting standards. Thus, they cannot approbate and reprobate. Thus, identification of revenue would come within the purview of gross revenue, is the sole C test that it should conform with the definition of revenue as provided in AS-9, and the golden thread is the phrase arising in the course of the ordinary activities of the enterprise.

57Copy pinpoint57. Revenue is a ‘Term of Art’ as per Chapter 4.08 Kim Lewison, the Interpretation of Contract, Sweet & Maxwell, 1997, D wherein it has been observed as under: “Where a document contains a legal term of art, the court should give it its technical meaning in law, unless there is something in the context to displace the presumption that it was intended to carry its technical meaning.” E

(emphasis added)

58Copy pinpoint58. The Technical meaning as to the gross expression revenue does not mean inflows that are not revenue and other miscellaneous revenue cannot have a broader meaning. It must qualify as revenue. F It is not miscellaneous inflow and miscellaneous receipts. The items of the revenue must be interpreted as per the doctrine of ejusdem generis, as observed in Maharashtra University of Health Sciences v. Satchikitsa Prasarak Mandla, (2010) 3 SCC 786. Following observations have been made: G “27. The Latin expression “ejusdem generis” which means “of the same kind or nature” is a principle of construction, meaning thereby when general words in a statutory text are flanked by restricted words, the meaning of the general words are taken to be restricted by implication with the meaning of the restricted words. This is a principle which arises “from the linguistic H

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A implication by which words having literally a wide meaning (when taken in isolation) are treated as reduced in scope by the verbal context.” It may be regarded as an instance of ellipsis, or reliance on implication. This principle is presumed to apply unless there is some contrary indication [see Glanville Williams, The Origins and Logical Implications of the Ejusdem Generis Rule, 7 Conv B (NS) 119].”

59Copy pinpoint59. Thus, as per licensees the miscellaneous revenue has to be revenue as defined in AS-9. The miscellaneous revenue only serves the purpose of capturing such other revenue that satisfies common characteristics of the preceding word. C

60Copy pinpoint60. As per licensees, the revenue pertained only to the licensed activities and was specific to activities under the licensing agreement in the designated area on the services rendered to the customers. The rule of interpretation of a commercial contract is that when the provision is not exclusively defined, it is to look at how the parties would understand the same by their subsequent conduct as observed in Godhra Electricity Co. Ltd. v. State of Gujarat, (1975) 1 SCC 199 thus: “11. In the process of interpretation of the terms of a contract, the court can frequently get great assistance from the interpreting statements made by the parties themselves or from their conduct in rendering or in receiving performances under it. Parties can, by mutual agreement, make their own contracts; they can also by mutual agreement remake them. The process of practical interpretation and application, however, is not regarded by the parties as a remaking of the contract; nor do the courts so regard it. Instead, it is merely a further expression by the parties of the meaning that they give and have given to the terms of their contract previously made. There is no good reason why the courts should not give great weight to these further expressions by the parties, in view of the fact that they still have the same freedom of contract that they had originally. The American Courts receive subsequent actings as admissible guides in interpretation. It is true that one party cannot build up his case by making an interpretation in his own favour. It is the concurrence therein that such a party can use against the other party. This concurrence may be evidence by the other party’s express assent thereto, by

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his acting in accordance with it, by his receipt without objection A of performances that indicate it, or by saying nothing when he knows that the first party is acting on reliance upon the interpretation (see Corbin on Contracts, Vol. 3, pp.249 & 254- 56).

12. The rule that obtains in other jurisdictions is also the same: B “In France construction of a contract is within the sole province of the judges of fact who are entirely free to use whatever material seems relevant to them... The rule is the same in Germany, where since 1888, it is established that even statements made by one of the contracting parties to a third person about the content of the contractual intentions are admissible guides to interpretation... In Italy, Article 1362(2) provides in impressively succinct language... The Vienna Convention on the law of Treaties of 1969 (which to a large extent merely codifies earlier international practice) enjoins the interpreter of a treaty to take into account ‘any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation’: Article 31(3)(b) [see Notes by P.A. Mann on L. Schuler A.G. v. Wickman Machine Tool Sales Ltd., (1973) 2 WLR 683, Law Quarterly Review, Vol. 89, pp. 464-65]. The real reason against taking into account the subsequent conduct of the parties is the rule which excluded extrinsic evidence in the construction of a written contract.

16. We are not certain that if evidence of subsequent acting under a document is admissible, it might have the result that a contract would mean one thing on the day it is signed, but by reason of subsequent event, it would mean something a month or year later. Subsequent “interpreting” statements might not always change the meaning of a word or a phrase. A word or a phrase is not always crystal clear. When both parties subsequently say that by the word or phrase which, in the context, is ambiguous, they meant this, it only supplies a glossary as to the meaning of the word or phrase. After all, the inquiry is as to what the intention of the parties was from the language used. And, why is it that parties cannot clear the latent ambiguity in the language by a subsequent interpreting statement? If the meaning of the word or phrase or sentence is clear, extrinsic evidence is not H

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A admissible. It is only when there is latent ambiguity that extrinsic evidence in the shape of interpreting statement in which both parties have concurred should be admissible. The parties themselves might not have been clear as to the meaning of the word or phrase when they entered into the contract. Unanticipated situation might arise or come into the contemplation B of the parties subsequently which would sharpen their focus and any statement by them which would illuminate the darkness arising out of the ambiguity of the language should not be shut out. In the case of an ambiguous instrument, there is no reason why subsequent interpreting statement should be inadmissible. C “The question involved is this: Is the fact that the parties to a document, and particularly to a contract, have interpreted its terms in a particular way and have been in the habit of acting on the document in accordance with that interpretation, any admissible guide to the construction of the document? In the case of an unambiguous document, the answer is ‘No.’ (See Odgers’ Construction of Deeds and Statutes, 5th Edn. by G. Dworkin, pp. 118-19).” But, as we said, in the case of an ambiguous one, the answer must be “yes.” In Lamb v. Goring Brick Co., a selling agency contract contained the words “the price shall be mutually agreed.” Documents showing the mode adopted for ascertaining the price were put in evidence without objection. In the court of appeal Greer, L.J. said: “In my opinion, it is not necessary to consider how this contract was acted on in practice. If there had been an ambiguity, and the intention of the parties had been in question at the trial, I think it might have been held that the parties had placed their own construction on the contract and, having acted upon a certain view, had thereby agreed to accept it as the true view of its meaning.”” G (emphasis supplied)

61Copy pinpoint61. The submission raised for adopting fair valuation method relying on S.K. Synthetics (supra) is based upon misconception of method applicable to A.S-9. The argument is crafted to get rid of AS- H 9 and the definition of gross revenue in the agreement. We have to

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consider valuation method of accounting standards which are laid time A to time to find an answer to the submission. The ICAI issued the AS- 9 revenue recognition standard in the year 1985. In the initial years, it was recommendatory for only Level-I enterprises but was made mandatory for all enterprises from 1.4.1983. The meaning of enterprise is as defined in section 3 of the Companies Act, 1956. The IND AS- B 18 regime has been introduced later on. In AS-9, revenue recognition is at “nominal” value; whereas IND AS-18, the revenue recognition is at a “fair” value. The barter transactions are included in Ind AS-18, whereas this aspect is not covered in AS-9. In AS-9 revenue recognition, interest income is recognised on a time proportion basis, whereas in Ind AS-18, interest income is recognised using an effective interest rate method. AS-9 recognises revenue as per the completed service method or percentage completion method, whereas Ind AS-18 only recognises revenue as per the percentage of completion method. Thus, there is a fundamental difference. The fair value concept has no place in AS-9 as per which the accounts are to be maintained and submitted for determination of gross revenue. AS-9 revenue recognition regime states that the amount of revenue shall be measured by the gross inflow of cash, receivables, or other consideration received. There is no concept of fair valuation. Thus, the submission raised based on a fair valuation method based on the decision in J.K. Industries v. Union of India (supra) cannot be accepted as the decision is on consideration of different accounting standard which adopts fair valuation method i.e., Ind AS-18 and not relevant for the AS-9 accounting standard.

62Copy pinpoint62. The submission is wholly devoid of substance. It is not only barred by the principle of constructive res judicata but also indicates that the licensees are raising the similar objections which they have raised earlier and were not entertained by this Court and were rejected. Again precisely, the same attempt is made by submitting; revenue should be taken as defined in AS-9, not in Clause 19.1 of the agreement, submission runs contrary to the decision of the Court, as held in para 48 of the 2011 judgment, which operates as res judicata inter se parties. The meaning of revenue is apparent that it has to be gross revenue, and the licence fee would be a percentage of the same. Thus, the licensees have made a futile attempt to submit that the revenue to be considered would be derived from the activities under the licence; whereas it has been held in 2011 that the revenue from activities beyond the licence have to be included in adjusted gross revenue, is binding. H

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63Copy pinpoint63. Even otherwise, on merit, the submission raised is baseless. The contractual definition of gross revenue is binding. This Court has observed that it was open for the licensee not to undertake activities for which they do not require licence under section 4 of the Telegraph Act and transfer these activities to any other firm or company. However, they cannot avoid the consequences of the contractual definition which has been accepted by the parties, and they are bound to make payment of licence fee on the basis of gross revenue, which would be the total revenue of the licensing company. As the Government has not accepted the TRAI’s recommendations, the decision of the Central Government on the point of definition of adjusted gross revenue was final and binding. This Court has also held that TRAI and tribunal had no jurisdiction to decide on the validity of the definition of adjusted gross revenue under the licence agreement and to exclude certain items of revenue which were included in the definition of gross revenue in the licence agreement between the licensor and licensee. The tribunal had no jurisdiction to exclude certain items on the ground of the validity of the definition of adjusted gross revenue. The finding of the tribunal in the order dated 7.7.2006 insofar as it decided that the revenue realised by the licensee from activities beyond the licence to be excluded from adjusted gross revenue in the licence agreement is without jurisdiction and is a nullity. The matter was sent back to TDSAT for computation of adjusted gross revenue. It was also observed if a dispute is raised that computation is not following licence agreement, the tribunal has to go into facts and material on which demand is raised and to decide demand is following the licence agreement and in particular, the definition of adjusted gross revenue. It can also interpret the terms and conditions of the licence agreement. The tribunal did not go into the facts and material relating to the demand as to the particular licence. The tribunal can go into the question of whether the demand is under the licence agreement and in particular, the definition of adjusted gross revenue.

64Copy pinpoint64. Under clause 20.6, certification of accounts by auditors appointed under the Companies Act is stipulated under the licence. The G preparation of accounts under clause 22 of the licence agreement is an independent head. The definition of gross revenue given under the agreement in Clause 19.1 and that is the total revenue. In our considered opinion, when there is a contractual definition as to what would be the gross revenue that would be the revenue and also the total revenue, H the revenue as mentioned in the mode of accounting AS-9 cannot

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govern the definition. The general definition of revenue in the mode of accounting cannot govern the contractual definition of gross revenue.

65Copy pinpoint65. As per clause 20.4, a licensee must make quarterly payment in the prescribed format as Annexure-II showing the computation of revenue and licence fee payable. The Format is part of the licence and is independent of accounting standards and is in tune with the definition of gross revenue, and is the basis for the calculation of licence fee. It is only for uniformity that the account has to be maintained as per accounting standards AS-9 which are prescribed from time to time. Once the licensee provides the details to the Government in format Annexure-II along with accounts certified by the auditor, the reconciliation has to take place. The accounting standard AS-9 is relevant only for whether the figure given by the licensee as to gross revenue is maintained in proper manner once gross revenue is ascertained, then after certain deductions, adjusted gross revenue has to be worked out. The accounting standard provided in AS-9 cannot override the definition of gross revenue, which is the total revenue for licence and the finding in Union of India v. AUSPI (2011) in this regard is final, binding, and operative. The accounting standard AS-9 makes it clear that same is in the form of guidelines, it is not comprehensive and does not supersede the practice of accounting. It only lays down a system in which accounts have to be maintained. Accounting standards make it clear that it does not provide for a straight-jacket formula for accounting but merely provide for guidelines to maintain the account books in systematic manner.

66Copy pinpoint66. Though the definition of revenue given in clause 4.1 of AS- 9 cannot govern the contract, the contractual definition of gross revenue which is the gross revenue under Clause 19.1 and total revenue for the purpose of the agreement for which an independent definition has been carved out under the statutory power while parting with the privilege under section 4 by the Central Government, once the contract has been entered into, the definition of gross revenue is binding, and the licensees cannot try to wriggle out of the decision by making impermissible attempts to depart from it. The plea is barred by res judicata, and on merits the objection is wholly untenable. The definition of revenue in clause 4.1 of AS-9 provides that the revenue is the gross inflow of cash, receivables, or other consideration arising in the course of the ordinary activities. When the revenue in AS-9 is the gross inflow H

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A of cash and the amount which is receivable, not the amount received, which is realised or other consideration arising, can also be taken into consideration as per accounting standard AS-9. The definition of revenue in AS-9 rather than supporting the cause of the licensees defeats the same. They cannot bank upon the expression in clause 4.1 in the course of ordinary activities of an enterprise is only to be included in gross B revenue as that is what has been expressly negated in Union of India v. AUSPI (2011). Given the definition of gross revenue, the same includes revenue from activities beyond the licence. Explanation to clause 5 of AS-9 also makes it clear that the agreement between the parties would determine the amount of revenue arising on a transaction.

67Copy pinpoint67. Section 211 of the Companies Act, 1956 deals with the obligation of the company to comply with accounting standards. In case they do not comply, it has to be disclosed in its profit and loss account, the deviation, reasons for such deviation, and financial effect. Sections 211(3A) and 211(3B) are quoted hereunder: D “211 (3A) Every profit and loss account and balance-sheet of the company shall comply with the accounting standards. (3B) Whether the profit and loss account and the balance-sheet of the company do not comply with the accounting standards, such companies shall disclose in its profit and loss account and E balance-sheet, the following, namely:- (a) the deviation from the accounting standards; (a) the reasons for such deviation; and (b) the financial effect, if any, arising due to such deviation.”

68Copy pinpoint68. Thus, it is apparent that accounting standard AS-9 is a method to maintain accounts and, deviation if made, has to be reflected separately.

69Copy pinpoint69. Prayer made in Petition No.7/2003 filed by AUSPI v. Union of India was to declare that ‘gross revenue’ can only relate to revenue directly arising out of telecom operations licensed under section 4 of the Indian Telegraph Act, and items indicated in the DOT letter dated 26.7.2001 including interest income and the dividend income, value of rebates, discounts, free calls and reimbursement from the USO fund, etc. ought not to be excluded in the adjusted gross revenues. It was also prayed that revenue share on interest income and other incomes be set aside.

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70Copy pinpoint70. In Petition No.82/2005, demand was dated 28.3.2003 and A 13.7.2004, etc. and refund on account of wrongful application and implementation of gross revenue and adjusted gross revenue was sought along with interest. Prayer was made that licence fee or WPC charges on any non-telecom revenue, i.e., the revenues which are not derived from the licensed activities under the licence/revenues which do not relate to or do not have a direct nexus to the establishment, maintenance and working of Telegraph, cannot be levied. DOT cannot collect what is not revenue. Prayer was also made to direct DOT to calculate adjusted gross revenue on a realisation basis and not accrual basis, and not to include any notional revenue/income in the adjusted gross revenue. Prayer was made to direct DOT to modify the definitions of gross revenue and also adjusted gross revenue, bring them in conformity with the migration package. Prayer was also made to suitably modify the format of statement of gross revenue, adjusted gross revenue and licence fee in accordance with the correct definitions, and to strike down the definitions of gross revenue, and adjusted gross revenue contained in DOT’s licence amendment dated 11.4.2001 as being unfair, unjust, unreasonable and arbitrary.

71Copy pinpoint71. Thus, it is apparent that right from the beginning, the licensees were aware of the precise terms and conditions and their obligations as contained in the letter dated 26.7.2001and purport of the definitions of gross revenue and adjusted gross revenue. Notional revenue has to be charged. The order of TDSAT excluding certain items of revenue, which were included in the definition of AGR by declaring the definition of gross revenue to be invalid, was set aside by this Court in Union of India v. AUSPI (supra) and this Court held that items are to be included in definition of gross revenue. F

72Copy pinpoint72. The rule of interpretation of contra proferentum has also been pressed into service. As observed in United India Insurance Co. Ltd. v. Pushpalaya Printers, 2004 (3) SCC 694 thus: “6. ….If the word “impact” is interpreted narrowly, the question G of impact by any rail would not arise as the question of a rail forcibly coming to the contact of a building or machinery would not arise. In the absence of specific exclusion and the word “impact” having more meanings in the context, it cannot be confined to forcible contact alone when it includes the meanings “to drive close”, “effective action of one thing upon another” and H

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A “the effect of such action”, it is reasonable and fair to hold in the context that the word “impact” contained in clause 5 of the insurance policy covers the case of the respondent to say that damage caused to the building and machinery on account of the bulldozer moving closely on the road was on account of its “impact”. It is also settled position in law that if there is any ambiguity or a term is capable of two possible interpretations, one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. Although there is no ambiguity in the expression “impact,” even otherwise applying the rule of contra preferentem, the use of the word “impact” in clause 5 in the instant policy must be construed against the appellant. Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contracts of insurance, and clause 5 of the insurance policy, even after reading the entire policy in the present case, should be construed against the insurer. A Constitution Bench of this Court in General Assurance Society Ltd. v. Chandmull Jain AIR 1966 SC 1644 has expressed that (AIR p. 1649, para 11) “in a contract of insurance there is requirement of uberrima fides, i.e., good faith on the part of the assured and the contract is likely to be construed contra proferentem, that is, against the company in case of ambiguity or doubt.” (emphasis supplied)

73Copy pinpoint73. As observed in Industrial Promotion & Investment F Corporation of Orissa Ltd. v. New India Assurance Co. Ltd., (2016) 15 SCC 315 thus: “10. We proceed to deal with the submission made by the counsel for the appellant regarding the rule of contra proferentem. The Common Law rule of construction “verba chartarum fortius G accipiuntur contra proferentem” means that ambiguity in the wording of the policy is to be resolved against the party who prepared it. MacGillivray on Insurance Law1 deals with the rule of contra proferentem as follows: 1 Legh-Jones, Longmore et al (Eds.) MacGillivray on Insurance Law (9 th Edn., Sweet H and Maxwell, London 1997) at p.280.

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“The contra proferentem rule of construction arises only where there is a wording employed by those drafting the clause which leaves the court unable to decide by ordinary principles of interpretation which of two meanings is the right one. ‘One must not use the rule to create the ambiguity — one must find the ambiguity first.’ The words should receive their ordinary and natural meaning unless that is displaced by a real ambiguity either appearing on the face of the policy or, possibly, by extrinsic evidence of surrounding circumstances.” (footnotes omitted)

11. Colinvaux’s Law of Insurance 2 propounds the contra proferentem rule as under: “Quite apart from contradictory clauses in policies, ambiguities are common in them, and it is often very uncertain what the parties to them mean. In such cases, the rule is that the policy, being drafted in language chosen by the insurers, must be taken most strongly against them. It is construed contra proferentes, against those who offer it. In a doubtful case, the turn of the scale ought to be given against the speaker because he has not clearly and fully expressed himself. Nothing is easier than for the insurers to express themselves in plain terms. The assured cannot put his own meaning upon a policy, but, where it is ambiguous, it is to be construed in the sense in which he might reasonably have understood it. If the insurers wish to escape liability under given circumstances, they must use words admitting of no possible doubt. F But a clause is only to be contra proferentes in cases of real ambiguity. One must not use the rule to create an ambiguity. One must find the ambiguity first. Even where a clause by itself is ambiguous if, by looking at the whole policy, its meaning becomes clear, there is no room for the application of the doctrine. So also G where if one meaning is given to a clause, the rest of the policy becomes clear, the policy should be construed accordingly.” (emphasis supplied)

2 Robert and Merkin (Eds.), Colinvaux’s Law of Insurance (6 th Edn., 1990) at p.42. H

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74Copy pinpoint74. In our opinion, the rule mentioned above of contra proferentem does not apply to the present case as there is no ambiguity or doubt in the definition of gross revenue in the agreement.

75Copy pinpoint75. It is further submitted that for identifying the revenue, the sole test is that it should conform with the definition of revenue as B provided in AS-9. For interpreting the scope of the provisions, the principle of noscitur a sociis has to be applied which provides that when definition includes various heads and while they may not be exhaustive as a rule of interpretation, what is being included within the definition, would be an aid to interpreting the scope of the provisions. For applying the said principle, reliance has been placed on, C (A) Vania Silk Mills v. C.I.T., Ahmedabad, 1991 (4) SCC 22, on observation:- “11. It is true that the definition of “transfer” in Section 2(47) of the Act is inclusive, and therefore, extends to events and transactions which may not otherwise be “transfer” according to its ordinary, popular and natural sense. It is this aspect of the definition which has weighed with the High Court and, therefore, the High Court has argued that if the words “extinguishment of any rights therein” are substituted for the word “transfer” in Section 45, the claim or compensation received from the insurance company would be attracted by the said section. The High Court has, however, missed the fact that the definition also mentions such transactions as sale, exchange etc. to which the word “transfer” would properly apply in its popular and natural import. Since those associated words and expressions imply the existence of the asset and of the transferee, according to the rule of noscitur a sociis, the expression “extinguishment of any rights therein” would take colour from the said associated words and expressions, and will have to be restricted to the sense analogous to them. If the legislature intended to extend the definition to any extinguishment of right, it would not have included the obvious instances of transfer, viz., sale, exchange etc. Hence the expression “extinguishment of any rights therein” will have to be confined to the extinguishment of rights on account of transfer and cannot be extended to mean any extinguishment of right independent of or otherwise than on account of transfer.”

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(B) Swiss Ribbons v. Union of India, 2019 (4) SCC 17, A “109. We are of the view that persons who act jointly or in concert with others are connected with the business activity of the resolution applicant. Similarly, all the categories of persons mentioned in Section 5(24-A) show that such persons must be “connected” with the resolution applicant within the meaning of B Section 29-A(j). This being the case, the said categories of persons who are collectively mentioned under the caption “relative” obviously need to have a connection with the business activity of the resolution applicant. In the absence of showing that such person is “connected” with the business of the activity of the resolution applicant, such person cannot possibly be disqualified under Section 29-A(j). All the categories in Section 29-A(j) deal with persons, natural as well as artificial, who are connected with the business activity of the resolution applicant. The expression “related party,” therefore, and “relative” contained in the definition sections must be read noscitur a sociis with the categories of persons mentioned in Explanation I, and so read, would include only persons who are connected with the business activity of the resolution applicant.” (C) South Gujarat Roofing Tiles Manufacturers v. State of Gujarat, 1976 (4) SCC 601, E

3. The question turns on a true construction of the explanation to entry 22 which says that for the purpose of this entry potteries industry “includes” the manufacture of the nine “articles of pottery” specified therein. Pottery in a wide sense will take in all objects that are made from clay and hardened by fire, from crude earthen pots to delicate porcelain. Mr Patel appearing for the respondent, State of Gujarat, contends that the explanation indicates that potteries industry in Entry 22 is intended to cover all possible articles of pottery including Mangalore pattern roofing tiles. Referring to the well-known use of the word ‘include’ in interpretation clauses to extend the meaning of words and phrases occurring in the body of the statute, Mr. Patel submits that the explanation, when it says that potteries industry “includes” the nine named objects, what is meant is that it includes not only these objects but other articles of pottery as well. It is true that “includes” is generally used as a word of extension, but the H

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A meaning of a word or phrase is extended when it is said to include things that would not properly fall within its ordinary connotation. We may refer to the often quoted observation of Lord Watson in Dilworth v. Commissioner of Stamps that when the word “include” is used in interpretation clauses to enlarge the meaning of words or phrases in the statute B “these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include.” C Thus where “includes” has an extending force, it adds to the word or phrase a meaning which does not naturally belong to it. It is difficult to agree that “includes” as used in the explanation to Entry 22 has that extending force. The explanation says that for the purpose of Entry 22, potteries industry includes the manufacture of the nine “articles of pottery” specified in the explanation. If the objects specified are also “articles of pottery”, then these objects are already comprised in the expression “potteries industry”. It hardly makes any sense to say that potteries industry includes the manufacture of articles of pottery, if the intention was to enlarge the meaning of potteries industry in any way.

4. We are also unable to agree with Mr Patel that the articles specified in the explanation may have been mentioned out of abundant caution to emphasize the comprehensive character of the entry, to indicate that all varieties of pottery are included therein. This argument, though more plausible, does not also seem acceptable. It is possible that one might have doubts whether things like refractories or electrical or textile accessories would pass under the description pottery as that word is used in common parlance, but the explanation also mentions crockery and toys regarding which there could be hardly any doubt. The G inclusion in the list of objects which are well-recognised articles of pottery makes it plain that the explanation was added to the entry not by way of abundant caution.

5. The contention of Mr. Tarkunde for the appellants is that the articles mentioned in the explanation were intended to be H exhaustive of the objects covered by Entry 22. According to Mr,

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Tarkunde if the legislature wanted to bring within the entry all possible articles of pottery then there was hardly any point in mentioning only a few of them by way of explanation. To this Mr Patel’s reply is that it is well-known that where the legislature wants to exhaust the significance of the term defined, it uses the word “means” or the expression “means and includes”, and that if the intention was to make the list exhaustive, the legislature would not have used the word “includes” only. We do not think there could be any inflexible rule that the word ‘include’ should be read always as a word of extension without reference to the context. Take for instance Entry 19 in the schedule which also has an explanation containing the word “includes”. Entry 19 is as follows: “Employment in any tobacco processing establishment, not covered under Entry 3. Explanation.—For the purpose of this entry, the expression D ‘processing’ includes packing or unpacking, breaking up, sieving, threshing, mixing, grading, drying, curing or otherwise treating the tobacco (including tobacco leaves and stems) in any manner.” Entry 3 to which Entry 19 refers reads: E “Employment in any tobacco (including bidi making) manufactory.” It is clear from the explanation to Entry 19 that there could be no other way or manner of “processing” besides what is stated as included in that expression. Though “include” is generally used in interpretation clauses as a word of enlargement, in some cases the context might suggest a different intention. Pottery is an expression of very wide import, embracing all objects made of clay and hardened by heat. If it had been the legislature’s intention to bring within the entry all possible articles of pottery, it was quite unnecessary to add an explanation. We have found that the explanation could not possibly have been introduced to extend the meaning of potteries industry or the articles listed therein added ex abundanti cautela. It seems to us therefore that the legislature did not intend everything that the potteries industry turns out to be covered by the entry. What then could H

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A be the purpose of the explanation. The explanation says that, for the purpose of Entry 22, potteries industry “includes” manufacture of the nine articles of pottery named therein. It seems to us that the word “includes” has been used here in the sense of ‘means’; this is the only construction that the word can bear in the context. In that sense it is not a word of extension, but limitation; it is B exhaustive of the meaning which must be given to potteries industry for the purpose of Entry 22. The use of the word “includes” in the restrictive sense is not unknown. The observation of Lord Watson in Dilworth v. Commissioner of Stamps which is usually referred to on the use of “include” as a C word of extension, is followed by these lines: “But the word ‘include’ is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or D expressions defined. It may be equivalent to ‘mean and include’, and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions.” It must therefore be held that the manufacture of Mangalore E pattern roofing tiles is outside the purview of Entry 22.” (emphasis supplied)

76Copy pinpoint76. The definition of gross revenue is crystal clear in the agreement. How the adjusted gross revenue to be arrived at is also evident. It cannot be submitted that the revenue has not been defined in the contract. Once the gross revenue is defined, one cannot depart from it and the very meaning is to be given to the revenue for the agreement. Overall revenue, has to be taken into account for determination of licence fees without set off, as provided in the agreement. The same was defined to simplify it to rule out the litigation, disputes, and accounting myriads. The submission raised that the term revenue has to be interpreted as the consideration payable in keeping with commercial and financial parlance is what is intended to be avoided. Raising of such submission is a futile attempt that has been made to wriggle out of the definition of gross revenue, which has been held to be binding in the previous judgment in Union of India v. AUSPI (2011).

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The submission that the contract recognises the applicability of accounting standards, in our opinion, it is only to maintain books of accounts. To a certain extent, it cannot be disputed that to have clarity, uniformity, and definitiveness; the accounting standards lay down guidelines with respect to financial terms. However, when the financial terms in the agreement are clear in the form of definition of gross revenue governed by Clause 19.1 of the agreement, the definition of Accounting Standard-9 cannot supersede it which is a general one.

77Copy pinpoint77. The submission has been made that the accounting standards themselves make it clear what should be included as revenue and accounting standards have been incorporated in the agreement and incorporated by reference in the licence agreement. For this, reliance has been placed on General Assurance Society Ltd. v. Chandmull Jain, AIR 1966 SC 1644, wherein it is observed: “11. A contract of insurance is a species of commercial transactions, and there is a well-established commercial practice to send cover notes even prior to the completion of a proper proposal or while the proposal is being considered or a policy is in preparation for delivery. A cover note is a temporary and limited agreement. It may be self-contained, or it may incorporate by reference the terms and conditions of the future policy. When the cover note incorporates the policy in this manner, it does not have to recite the term and conditions, but merely to refer to a particular standard policy. If the proposal is for a standard policy and the cover note refers to it, the assured is taken to have accepted the terms of that policy. The reference to the policy and its terms and conditions may be expressed in the proposal or the cover note or even in the letter of acceptance, including the cover note. The incorporation of the terms and conditions of the policy may also arise from a combination of references in two or more documents passing between the parties. Documents like the proposal, cover note, and the policy are commercial documents, and to interpret them, commercial habits and practice cannot altogether be ignored. During the time the cover note operates, the relations of the parties are governed by its terms and conditions, if any, but more usually by the terms and conditions of the policy bargained for and to be issued. When this happens, the terms of the policy are incipient, but after the period of H

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A temporary cover, the relations are governed only by the terms and conditions of the policy unless insurance is declined in the meantime. Delay in issuing the policy makes no difference. The relations even then are governed by the future policy if the cover notes give sufficient indication that it would be so. In other respects there is no difference between a contract of insurance and any other contract except that in a contract of insurance there is a requirement of uberrima fides i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem that is against the company in case of ambiguity or doubt. A contract is formed when there is an unqualified acceptance of the proposal. Acceptance may be expressed in writing, or it may even be implied if the insurer accepts the premium and retains it. In the case of the assured, a positive act on his part by which he recognises or seeks to enforce the policy amounts to an affirmation of it. This position was clearly recognised by the assured himself, because he wrote, close upon the expiry of the time of the cover notes, that either a policy should be issued to him before that period had expired or the cover note extended in time. In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties because it is not for the court to make a new contract, however reasonable if the parties have not made it themselves. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover flood, cyclone etc. had come into being.” F

78Copy pinpoint78. In M.R. Engineers & Contractors Pvt. Ltd. v. Som Datt Builders Ltd., (2009) 7 SCC 696, the Court held: “24. The scope and intent of Section 7(5) of the Act may therefore be summarised thus: G (i) An arbitration clause in another document, would get incorporated into a contract by reference, if the following conditions are fulfilled: (1) the contract should contain a clear reference to the H documents containing arbitration clause,

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(2) the reference to the other document should clearly indicate an intention to incorporate the arbitration clause into the contract, (3) the arbitration clause should be appropriate, that is capable of application in respect of disputes under the contract and should not be repugnant to any term of the contract. (ii) When the parties enter into a contract, making a general reference to another contract, such general reference would not have the effect of incorporating the arbitration clause from the referred document into the contract between the parties. The arbitration clause from another contract can be incorporated into the contract (where such reference is made), only by a specific reference to arbitration clause. D (iii) Where a contract between the parties provides that the execution or performance of that contract shall be in terms of another contract (which contains the terms and conditions relating to performance and a provision for settlement of disputes by arbitration), then, the terms of the referred contract in regard to execution/performance alone will apply, and not the arbitration agreement in the referred contract, unless there is special reference to the arbitration clause also. (iv) Where the contract provides that the standard form of terms and conditions of an independent trade or professional institution (as for example the standard terms and conditions of a trade association or architects association) will bind them or apply to the contract, such standard form of terms and conditions including any provision for arbitration in such standard terms and conditions, shall be deemed to be incorporated by reference. Sometimes the contract may also say that the parties are familiar with those terms and conditions or that the parties have read and understood the said terms and conditions. H

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A (v) Where the contract between the parties stipulates that the conditions of contract of one of the parties to the contract shall form a part of their contract (as for example the general conditions of contract of the Government where the Government is a party), the arbitration clause forming part of such general conditions of contract will apply to the contract between the parties.”

79Copy pinpoint79. Submission though attractive, but is again an attempt by taking a rigmarole to get rid of the definition of ‘gross revenue’. Earlier the validity of definition was questioned to confine the meaning of gross revenue how the revenue is sought to be confined to activities under the licence by way of AS-9. The reliance has been placed on statement made by DOT in the reply filed in 2003 that the definition of gross revenue is in line with AS-9, it is by way of explaining and cannot have the effect of changing the definition of gross revenue given in the agreement. The definition in agreement is unambiguous, clear, and beyond the pale of doubt, and there is no confusion in the definition of gross revenue, which is the basis for realisation of the licence fee. Licensees have made a futile attempt to wriggle out of the definition in an indirect method, which was rejected directly in the decision of 2011 between the parties and it was held that these very heads form part of gross revenue.

80Copy pinpoint80. The submission has been raised on the ground of approbation and reprobation relying on Suzuki Parasrampuria Suitings Private Limited v. Official Liquidator of Mahendra Petrochemicals Limited, (2018) 10 SCC 707. The observations made are extracted hereunder: F “12. A litigant can take different stands at different times but cannot take contradictory stands in the same case. A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands. The untenability of an inconsistent stand in the same case was considered in Amar G Singh v. Union of India, (2011) 7 SCC 69, observing as follows: (SCC p. 86, para 50) “50. This Court wants to make it clear that an action at law is not a game of chess. A litigant who comes to court and invokes its writ jurisdiction must come with clean hands. He H cannot prevaricate and take inconsistent positions.”

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13. A similar view was taken in Joint Action Committee of Air A Line Pilots’ Assn. of India v. DGCA, (2011) 5 SCC 435, observing: (SCC p. 443, para 12) “12. The doctrine of election is based on the rule of estoppel—the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by-election B is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity. … Taking inconsistent pleas by a party makes its conduct far from satisfactory. Further, the parties should not blow hot and cold by taking inconsistent stands and prolong proceedings unnecessarily.” C

81Copy pinpoint81. In Jal Mahal Resorts Private Limited v. K.P. Sharma, (2014) 8 SCC 866, the Court observed: “4. However, in spite of withdrawal of the special leave petitions, if the petitioner State is taking a diametrically opposite stand which it had taken before the High Court D as also before this Court when the arguments were concluded, we surely have reservations in permitting the learned Senior Counsel to take an opposite stand now and advance arguments exactly the opposite of what was submitted in the High Court as also before this E Court through the earlier counsel being the Attorney General.

5. However, the learned Senior Counsel submitted that the State is a respondent in other special leave petitions also which have been preferred by the other petitioners and, therefore, as a respondent therein, they are eligible to advance their arguments.

6. There is no doubt that the impleaded respondent may advance his arguments before the Court as he has been impleaded as a party-respondent but under the garb of advancing arguments a stand which was taken before the High Court earlier is changed at the stage of special leave petition, cannot be permitted especially when the counsel, as already stated, has withdrawn the special leave petitions preferred by the State. He may, however, advance submissions as a respondent in other matters, H

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A which he is at liberty to make within a period of two weeks, which, however, shall be subject to its acceptance.”

82Copy pinpoint82. In A.P. Dairy Development Corporation Federation v. B. Narasimha Reddy, (2011) 9 SCC 286, the following observations were B made: “40. In the matter of the Government of a State, the succeeding Government is duty-bound to continue and carry on the unfinished job of the previous Government, for the reason that the action is that of the “State”, within the meaning of Article 12 of the C Constitution, which continues to subsist and therefore, it is not required that the new Government can plead contrary to the State action taken by the previous Government in respect of a particular subject. The State, being a continuing body can be stopped from changing its stand in a given case, but where after holding enquiry it came to the conclusion that action was not in conformity with D law, the doctrine of estoppel would not apply. Thus, unless the act done by the previous Government is found to be contrary to the statutory provisions, unreasonable or against policy, the State should not change its stand merely because the other political party has come into power. “Political agenda of an individual or E a political party should not be subversive of rule of law.” The Government has to rise above the nexus of vested interest and nepotism, etc. as the principles of governance have to be tested on the touchstone of justice, equity and fair play. The decision must be taken in good faith and must be legitimate. (Vide Onkar Lal Bajaj v. Union of India, (2003) 2 SCC 673, State of F Karnataka v. All India Manufacturers Organisation, (2006) 4 SCC 683 and State of T.N. v. K. Shyam Sunder, (2011) 8 SCC 737.)”

83Copy pinpoint83. In our considered opinion, it cannot be said that DOT has taken inconsistent stands at different stages of the same litigation. Their G stand is apparent that the gross revenue has been clearly defined in the agreement. Parties have agreed to various inclusions in the agreement and have willingly switched over to revenue- sharing regime under the 1999 policy and same is apparent from the stand and the reliefs prayed in the petitions filed in 2003 and 2005 extracted above. H The licensees were aware of items specifically included in the

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agreement. TSPs agreed to interpretation and accepted it as held by this Court in 2011 judgment. Licensees are taking inconsistent stands, earlier they have taken the stand that all these items concerning which disputes have been raised, had been included illegally in the definition of gross revenue, the definition may be declared ultra vires, invalid, and be struck down. They have also contended that revenue from activities under the licence cannot be included in gross revenue, which submission has been negated by this Court in 2011, it was held that the gross revenue would include the revenue generated from non-licensing activities. Licensees cannot be permitted to approbate and reprobate and to take inconsistent stands that they are not included in gross revenue as per AS-9. The stand taken rather than buttressing the submissions raised by them, counters and militates against their own interest and paves the way in favour of DOT.

84Copy pinpoint84. A submission has been raised that the definition of gross revenue is not exhaustive. It only includes those streams which are specifically included in the definition of AGR. If it is an inclusive definition of AGR, and all receipts were ipso facto part of AGR, then there was no occasion to further provide in clause 2.2 (b)(ii) that the revenue from value-added services was to be treated as part of AGR. Further, the licensee was obliged to maintain separate account for service defined in Annexure 1 to the licence in clause 55 to mean service in a licensed service area. By the fact that separate provision is made for value-added services, a separate account has to be maintained as per clauses 22.1, 22.2 and 22.3 that is for arriving at the figure of revenue and step in aid, to clarify how the licensee has to operate, that would not change the definition of gross revenue which is the meaning of revenue itself is apparent, same is gross inflow of the cash, and the amount which is receivable as provided in AS-9 also. Thus, the submission raised that the definition is not wide, cannot be accepted, and stands repelled. Clauses 22.1, 22.2 and 22.3 cast obligation upon the licensee to draw, keep and furnish independent accounts for the service. Under clauses 22.1 and 22.2, the licensee has to maintain records quarterly. Accounts have to be audited and can be called for by the licensor or the TRAI, as provided in Clause 22.3. The format of gross revenue is supportive of definition of gross revenue as defined in the agreement. Clause 22 is a rider upon the licensee to maintain the records of activities and other matters such as financial position as enumerated therein. H

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85Copy pinpoint85. Clause 18.1 of the agreement has also been pressed into service. The submission raised that a single company may hold 5 licences for 5 different service areas; the AGR as suggested by the DOT, cannot be followed as it may end up in paying the licence fee at the rate of 5 times. As the licence fee cannot be charged more than once, there is no room to entertain the submission. It is not what is B contemplated in the definition. While computing the licence fee, the gross revenue has to be taken into consideration under a particular licence for which it is being determined. The argument had been raised on a hypothetical basis without foundational facts to raise the same is thus, liable to be and is rejected at the threshold.

86Copy pinpoint86. DOT has urged that the Central Government has exclusive privilege under section 4 of the Telegraph Act; thus, it is bound to get the best price for natural resources. To part with the exclusive privilege under the revenue sharing regime is extremely beneficial to the licensees. Thus, the State must get the price for its valuable right as mandated under Article 14. In our opinion, there is no doubt that the State is a trustee of the natural resources and is obliged to hold it for the benefit of the citizens but also to ensure equal distribution to sub- serve the common good as observed under Article 39 of the Constitution of India in Re : Natural Resources Allocation, 2012 (10) SCC 1. The Government being the sole repository of all the resources in the country, also has the exclusive power to determine the licence conditions at which it parts with the exclusive right to the resources. Government has to make an effort to get the best price for its valuable rights and cannot throw them away, and there would be no arbitrariness in the same as observed in State of Orissa & Ors. v. Harinarayan Jaiswal F & Ors., (1972) 2 SCC 36, thus: “13. Even apart from the power conferred on the Government under Sections 22 and 29, we fail to see how the power retained by the Government under clause (6) of its order, dated January 6, 1971, can be considered as unconstitutional. As held by this G Court in Cooverjee B. Bharucha case, one of the important purpose of selling the exclusive right to sell liquor in wholesale or retail is to raise revenue. Excise revenue forms an important part of every State’s revenue. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. Hence quite naturally, the Legislature has H empowered the Government to see that there is no leakage in

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its revenue. It is for the Government to decide whether the price offered in an auction sale is adequate. While accepting or rejecting a bid, it is merely performing an executive function. The correctness of its conclusion is not open to judicial review. We fail to see how the plea of contravention of Article 19(1)(g) or Article 14 can arise in these cases. The Government’s power to sell the exclusive privileges set out in Section 22 was not denied. It was also not disputed that those privileges could be sold by public auction. Public auctions are held to get the best possible price. Once these aspects are recognised, there appears to be no basis for contending that the owner of the privileges in question who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate. There is no concluded contract till the bid is accepted. Before there was a concluded contract, it was open to the bidders to withdraw their bids — see Union of India v. Bhimsen Walaiti Ram, (1970) 2 SCR 594. By merely giving bids, the bidders had not acquired any vested rights. The fact that the Government was the seller does not change the legal position once its exclusive right to deal with those privileges is conceded. If the Government is the exclusive owner of those privileges, reliance on Article 19(1)(g) or Article 14 becomes irrelevant. Citizens cannot have any fundamental right to trade or carry on business in the properties or rights belonging to the Government—nor can there be any infringement of Article 14, if the Government tries to get the best available price for its valuable rights. ….” (emphasis supplied) F

87Copy pinpoint87. Similar is the case law laid down in Har Shankar v. Excise & Taxation Commissioner, 1975 (1) SCC 737; Government of A.P. v. Anabeshahi Wine & Distilleries (P) Ltd., (1988) 2 SCC 25; Excise Commissioner v. Issac Peter, (1994) 4 SCC 104; State of Orissa v. Narain Prasad (1996) 5 SCC 740, State of M.P. v. KCT Drinks Ltd., (2003) 4 SCC 748 and State of Punjab v. Devans Modern Breweries G Ltd., (2004) 11 SCC 26.

88Copy pinpoint88. A licence granted under section 4(1) is in the nature of a contract. DOT has relied upon Khardah Company Ltd. v. Raymond & Co. (India) Pvt. Ltd., 1963 (3) SCR 183 in which it has been observed that once a contract has been reduced to writing, terms have H

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A to be ascertained from the agreement. It may be relevant to look into the circumstances in case need arises, which resulted in the inclusion of the definition of AGR in the licence agreement. The deliberations were held with the licensees, experts, and then finally migration package, revenue sharing regime is being consented to, was worked out in which the definition of adjusted gross revenue as a part of the financial condition of the licence is mentioned. As to the provisions of gross revenue there had been consensus ad idem between the parties. The licensees are bound by it as they have executed the licence agreement. A party is free to enter into a contract with a State, there is no compulsion, it is voluntary on both sides and binding and cannot be termed to be unfair as observed in Assistant Excise Commissioner & Ors. v. Issac Peters & Ors. (1994) 4 SCC 104, thus: “26. …..We are, therefore, of the opinion that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts. It must be remembered that these contracts are entered into pursuant to public auction, floating of tenders or by negotiation. There is no compulsion on anyone to enter into these contracts. It is voluntary on both sides. There can be no question of the State power being involved in such contracts. It bears repetition to say that the State does not guarantee profit to the licensees in such contracts. There is no warranty against incurring losses. It is a business for the licensees. Whether they make a profit or incur a loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going to pay more to the State in case they make substantial profits. We reiterate that what we have said hereinabove is in the context of contracts entered into between the State and its citizens pursuant to public auction, floating of tenders or by negotiation. It is not necessary to say more than this for the purpose of these cases. What would be the position in the case of contracts entered into otherwise than by public auction, floating of tenders or negotiation, we need not express any opinion herein.”

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89Copy pinpoint89. The licensees who have taken the advantage under the licence, carry certain obligations. The licensee is bound to discharge the obligation while taking benefit under the licence of migration package, for this purpose as held in Shyam Telelink Ltd. v. Union of India, 2010 (10) SCC 165, thus: “21. The unconditional acceptance of the terms of the package and the benefit which the appellant derived under the same will estop the appellant from challenging the recovery of the dues under the package or the process of its determination. No dispute has been raised by the appellant and rightly so in regard to the payment of outstanding licence fee or the interest due thereon. The controversy is limited to the computation of liquidated damages of Rs. 8 crores out of which Rs. 7.3 crores was paid by the appellant in the beginning without any objection followed by a payment of Rs. 70 lakhs made on 29-5-2001.

22. Although the appellant had sought waiver of the liquidated damages yet upon rejection of that request it had made the payment of the amount demanded which signified a clear acceptance on its part of the obligation to pay. If the appellant proposed to continue with its challenge to demand, nothing prevented it from taking recourse to appropriate proceedings and taking the adjudication process to its logical conclusion before exercising its option. Far from doing so, the appellant gave up the plea of waiver and deposited the amount which clearly indicates acceptance on its part of its liability to pay especially when it was only upon such payment that it could be permitted to avail of the migration package. Allowing the appellant at this stage to question the demand raised under the migration package would amount to permitting the appellant to accept what was favourable to it and reject what was not. The appellant cannot approbate and reprobate.

23. The maxim qui approbat non reprobat (one who approbates cannot reprobate) is firmly embodied in English common law and often applied by courts in this country. It is akin to the doctrine of benefits and burdens which at its most basic level provides that a person taking advantage under an instrument which both grants a benefit and imposes a burden cannot take the former without complying with the latter. A person cannot approbate and reprobate or accept and reject the same instrument. H

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A 28. For the reasons set out by us hereinabove, we have no hesitation in holding that the appellant was not entitled to question the terms of the migration package after unconditionally accepting and acting upon the same.”

90Copy pinpoint90. After the introduction of the migration package policy, 1999, B there is an exponential growth of the telecom sector. In Bharti Cellular Ltd. v. Union of India, 2010 (10) SCC 174, this Court held that acceptance of benefits under the package precluded them from questioning the terms of the same. The Court observed: “8. There is, in our opinion, no legal infirmity in the view taken by the Tribunal. Once the appellant-petitioner had specifically and unconditionally agreed to accept the migration package and given up all disputes relating to licence agreement for the period up to 31-7-1999, it was not open to it to turn around and agitate any such dispute after availing of the migration package. A party which has unconditionally accepted the package cannot after such acceptance reject the conditions subject to which the benefits were extended to it under the package. It cannot reject what is inconvenient and onerous while accepting what is beneficial to its interests. The package having been offered subject to the conditions that all disputes relating to the licence agreement for the period ending 31-7-1999 shall stand abandoned by the operators, there was no room for going back on that representation.” (emphasis supplied)

91Copy pinpoint91. The terms and conditions cannot be said to be oppressive as submitted on behalf of the licensees on the strength of Central Inland Water Transport Corporation v. Brojo Nath Ganguly, 1986 (3) SCC 156, it cannot be said that DOT was in a dominant position, or possessed wholly disproportionate and unequal bargaining power. In the matter of commercial contracts, the doctrine of unconscionable bargaining is not applicable as held with respect to migration package in S.K. Jain v. State of Haryana, 2009 (4) SCC 35, thus: “8. There is, in our opinion, no legal infirmity in the view taken by the Tribunal. Once the appellant-petitioner had specifically and unconditionally agreed to accept the migration package and given up all disputes relating to licence agreement for the period up to

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31-7-1999, it was not open to it to turn around and agitate any such dispute after availing of the migration package. A party which has unconditionally accepted the package cannot after such acceptance reject the conditions subject to which the benefits were extended to it under the package. It cannot reject what is inconvenient and onerous while accepting what is beneficial to its interests. The package having been offered subject to the conditions that all disputes relating to the licence agreement for the period ending 31-7-1999 shall stand abandoned by the operators, there was no room for going back on that representation.” (emphasis supplied) C

92Copy pinpoint92. Once benefit has been drawn, the licensees cannot deny validity or binding effect of contract. In Cauvery Coffee Traders, Mangalore v. Hornor Resources (International) Co. Ltd., (2011) 10 SCC 420) it was observed: D “A party cannot be permitted to “blow hot and cold”, “fast and loose” or “approbate and reprobate”. Where one knowingly accepts the benefits of a contract or conveyance or an order, is estopped to deny the validity or binding effect on him of such contract or conveyance or order. This rule is applied to do equity, E however, it must not be applied in a manner as to violate the principles of right and good conscience.”

93Copy pinpoint93. In R.N. Gosain v. Yashpal Dhir, AIR 1993 SC 352, it was held: F “10. Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that ‘a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only G be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage’.”

94Copy pinpoint94. Submissions have been raised in respect of various revenue heads not being revenue cannot be included within the purview of gross revenue. We propose to deal with each of them under separate heads. H

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