Bombay HC quashes one-time spectrum charge for Vodafone Idea, Bharti Airtel (original) (raw)

The Bombay High Court on Monday set aside the Centre’s decision to levy a one-time spectrum charge retrospectively on telecom operators for spectrum held beyond 6.2 MHz between 2008 and 2012, providing major relief to Bharti Airtel and Vodafone Idea.

The court said that the Centre has failed to justify any authoritative power in levying the charges and altering the financial terms of the telecom licences as an afterthought.

“We have come to a conclusion that the [telcos] have been able to make out a case in their favour seeking quashing and setting aside of the impugned decisions and consequent demand notices. The respondent has not been able to justify the said decisions and its action of levying one-time spectrum charge retrospectively upon the petitioners,” said the judgement, accessed by businessline.

A division bench of Justices Shreeram V. Shirsat and Manish Pitale also directed the government to set aside demand notices and return any related bank guarantees furnished by the telcos. It upheld Bharti Airtel’s and Vodafone Idea’s arguments that the Centre holds no power to retrospectively impose a one-time spectrum charge in 2012 for spectrum held above 6.2 MHz from the year 2008 onwards. It acknowledged that no provision under the Telegraph Act, 1885 and the license agreements for allocation and use of spectrum allowed the government to do so.

Reacting to the news, an Airtel spokesperson said, “We welcome the Bombay High Court’s judgment setting aside the One Time Spectrum Charge (OTSC) demand. This ruling marks an important milestone for India’s telecom sector by eliminating legal and financial uncertainty and creating a more supportive environment for future investments.”

Commenting on the development, Mahesh Uppal, Director at Com First (India) said the judgement corrects an arbitrary DoT decision to recover notional revenue loss due to changing spectrum value.

“DoT tried to project the price discovered in later auctions on prices set by it and paid by licensed operators previously. There was a problem with the methodology as well as the process,” he said.

Long drawn battle

The dispute arose from 1999 when the government announced the National Telecom Policy (NTP-99). Upon realising that the revenue from the cellular mobile networks rollout fell short of the projections, it revised the basis of payment of license fee on a revenue-sharing model under the NTP-99.

The Bench ruled that while the NTP does look at ensuring network coverage everywhere and efficient utilization of spectrum, “revenue maximisation was clearly not an objective or target of NTP-99.” Further, it said the government failed to change the terms of contract beforehand and disallowed the Centre from changing goalposts midway.

In 2013, the high court had rejected these pleas on grounds of maintainability. In the latest ruling, the court dismissed this rationale highlighting the decade long pendency of the issue.

“Considering the long pendency of these petitions, and the specific issues raised on behalf of the rival parties, we do not find any substance in the contention raised on behalf of the respondent that the writ petitions ought not to be entertained and that the petitioners ought to be relegated to alternative remedy,” said the court.

Published on June 8, 2026