Centre need not refund the entry fee to telcos: Attorney General

The highest law official in the country has reiterated that Centre need not refund the entry fee paid by mobile phone companies whose permits were quashed by the apex court last year, if these firms had failed to secure new licenses by participating in the recent airwaves sales. 

Last year, Attorney General Goolam E Vahanvati, had said that foreign investors in mobile phone companies whose licences were cancelled by the Supreme Court in its February 2012 orders cannot sue the Indian government or claim damages under bilateral investment protection pacts. But subsequently, the panel of ministers on spectrum, headed by finance minister P Chidambaram, decided that mobile operators whose permits were quashed, but had taken part in spectrum auctions to secure new licenses could avail the provision to set-off the entry fee they had paid in 2008. This had resulted in the Norway's Telenor, Videocon, Idea Cellular 3.62 % and Sistema, all adjusting the fee they paid in 2008, against charges for airwaves they had won in the recent auctions. Companies such as Etisalat, S Tel, Tata Tele (in three circles) and Loop which lost their permits exited the sector, and did not take part in the subsequent auctions. 

Following the November 2012 auctions, the telecom department again sought the attorney general's opinion again and had asked Vahanvati to clarify whether the Centre must refund those operators who did not participate in the sale process, but had sent notices to the Indian government to reimburse the investments here. 

Vahanvati, in his response said that licence agreement stated that entry fee was non-refundable, and added that the principle of restitution incorporated in Section 65 of the Indian Contract Act could not be applied here as these mobile phone companies 'had operated from January 2008 to early 2013 and thereby received benefits from the same'. 

He also pointed out that the panel of ministers had allowed mobile phone companies to offset their 2008 licence fee against their bid amounts in the recently concluded auctions. 

Aggrieved global investors, including Norway's Telenor, Russia's Sistema, Capital Global and Kaif Investment, both Mauritius based-investors in Loop Telecom, and Malaysia-headquartered Axiata Group, which owns about 20% stake in Idea Cellular had all served notices to the Indian government for alleged breach of bilateral investment protection agreements after the apex court quashed their mobile permits.

Source: http://cablequest.org/news/telecom-news/item/2273-centre-need-not-refund-the-entry-fee-to-telcos-attorney-general.htmlSource: http://cablequest.org/news/telecom-news/item/2273-centre-need-not-refund-the-entry-fee-to-telcos-attorney-general.html