BHARTI AIRTEL LTD AND ANR vs UNION OF INDIA on 2 May 2019

ORDER

**By S.K. Singh, Chairperson** – Both the parties have been heard at length in respect of interim relief sought by the petitioner.

2. Petitioner is aggrieved by some of the conditions subject to which the respondent has conveyed to the petitioner through letter dated 10.4.2019 (Annexure I) approval of the competent authority to take on record the transfer /

merger of the de-merged undertaking of M/s. Tata Teleservices Maharashtra Ltd (TTML), transferor company to M/s. Bharti Airtel Limited (BAL), transferee company. The petitioner has made an interim prayer for staying operation of the impugned conditions being conditions (c), (e), (f) and (g) to the letter dated 10.4.2019.

3. Learned senior counsel for the petitioner submits that in similar circumstances this Tribunal has placed reliance upon interim order of High Court of Bombay dated 28.1.2013 and passed interim orders such as one dated 10.4.2018 in T.P.No.55 of 2018 (Bharti Airtel Limited Vs. Union of India) and another dated 30.8.2018 in T.P.No.181 of 2018 (Bharti Airtel Limited & Anr Vs. Union of India) [(parts of Annexure P-4 (colly))]. He also pointed out that those orders also refer to some other interim orders passed by this Tribunal such as order dated 9.2.2015 and 25.1.2017 wherein the interim order of High Court of Bombay had been noticed and referred to. He submits that similar conditions such as in (c) requiring submission of Bank Guarantee towards OTSC have been stayed in many cases on account of stay orders passed by Bombay High Court and other High Courts. In respect of condition (e), the submission is that the vague condition requiring payment of all demands including OTSC in respect of erstwhile A circular stamp or seal containing the letters 'TR' in a stylized font. The stamp is located at the bottom center of the page.

Chennai LSA is prima-facie bad because demands which have been stayed by Courts or which cannot be realized as per undertaking given to Courts cannot be forced to be paid by way of a general condition. Similar is the grievance in respect of conditions (f) and (g) requiring undertakings.

4. So far as requirement of undertaking as per condition (f) & (g) is concerned, this Tribunal has also asked the petitioners in other cases to submit the undertaking but with a clarification.

5. So far as conditions (c), (f) and (g) are concerned, there is no difficulty in following the various interim orders available on record and we shall order accordingly in this matter also. However, condition no.(e) is materially different in as much as it includes an OTSC demand of Rs.1287.97 crores raised upon M/s.BAL, through a letter dated 26.6.2018 (Annexure P-3), for the extended period of licence from 30.11.2014 to 27.9.2021 in respect of erstwhile Chennai LSA. This condition requires payment of this entire amount before grant of approval of transfer / merger by the competent authority.

6. Learned senior counsel for the petitioner has submitted that the second prayer in this petition is for quashing of the aforesaid demand notice dated 26.6.2018 and there is a separate interim prayer for staying the operation of this A circular stamp or seal, likely a court or tribunal stamp, is located at the bottom center of the page. It contains some text and a central emblem, but the details are difficult to discern due to the image quality.

notice. This demand has been assailed on large number of grounds including delay, estoppels, lack of clear policy decision by the Government for raising such a demand and that the demand has been calculated in absence of any rational basis because after merger of Chennai LSA with Tamil Nadu LSA in 2007 without any condition for OTSC, there has not been any auction determined prices for Chennai LSA which ceased to exist since 2007 on account of Government's own policy decision taken in public interest.

7. In reply, learned counsel for the respondent has submitted that the earlier interim orders were passed in respect of similar conditions which have been impugned by the petitioner also, but the demand of OTSC for the erstwhile Chennai LSA is different and justified in the light of general decision of the Central Government to demand OTSC in the event of fresh licence or extension of old licence. He placed reliance upon text of a press statement on the policy for spectrum assignment and prices dated 29.1.2011. He also submitted that the demand is justified in the light of judgment of the Hon'ble Supreme Court in what is known as '2G' case. On instructions, he submitted that against a similar demand M/s.Aircel Ltd could not get any relief from Madras High Court and although the matter is sub-judice before the Hon'ble Supreme Court, M/s. Aircel A circular official stamp or seal, likely from a government or court authority, is positioned at the bottom center of the page. It contains some text and a central emblem, though the details are not clearly legible.

Ltd has paid Rs. 250 crores as a part of the said demand. M/s. Vodafone Essar Cellular Ltd., by volition has paid Rs.2000 crores for meeting partially a similar condition including a demand of OTSC for the extended period of Tamil Nadu LSA for Rs.939 crores.

8. In reply learned senior counsel for the petitioner has submitted that for the entire Tamil Nadu LSA which includes Chennai LSA since 2007, the petitioner was served with a demand for OTSC which is subject matter of writ petition pending in the Hon'ble Bombay High Court in which interim protection is operating in favour of the petitioner. According to him, if OTSC as a basic concept is struck-down, the demand for erstwhile Chennai LSA will have to go. According to him, the demand is arbitrary and without any basis and further, its quantification is equally baseless in absence of availability of any market driven price of the spectrum for the erstwhile Chennai LSA.

9. Considering the case of both the parties in respect of demand of OTSC for the erstwhile Chennai LSA, in our considered view, petitioner has made out a prima-facie case for interference, at least in part. This demand, which appears as a part of the condition no.(e) which requires its immediate payment before approval, shall remain stayed until further orders provided the petitioner.

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furnishes with the Registry of this Tribunal Bank Guarantees for 50 per cent of the said demand within four weeks.

10. In the light of aforesaid discussions, we direct the concerned authorities of the Union of India to take the merger of two companies and licence on record, subject to undermentioned conditions and final result of this petition:

1. The petitioner will abide by rest of the terms of the conditions imposed upon it by the impugned notification contained in Annexure P-1 subject to the following modifications:

- (i) The stipulation as made in condition (c) of the letter will remain stayed because it appears contrary to the interim order passed by the Bombay High Court.

- (ii) The condition no. (e) will relate to demands which are enforceable and not stayed by any Court of law. So far as OTSC demand of Rs.1287.97 crores in respect of erstwhile Chennai LSA is concerned, the same will remain stayed provided the petitioner complies with the condition and files with the Registry of this Tribunal Bank Guarantees for 50 per cent of the said amount within four weeks' from today.

- (iii) The petitioner will submit the undertaking as demanded in conditions (f) and (g) of the impugned letter. But it is made clear that any condition of the undertakings or any omissions therefrom shall be without prejudice to the rights and contentions of the A circular stamp or seal, likely a signature or official mark, located at the bottom center of the page. It appears to be a circular stamp with some text or a logo inside, though the details are not clearly legible.

parties before the Tribunal and the validity of the conditions of the undertakings / omissions therefrom will abide by the final outcome of the petition.

1. 11. Reply may be filed within four weeks. Rejoinder, if any, may be filed within two weeks thereafter.

2. 12. Put up the matter before the Registrar's Court on 18.7.2019 for completion of pleadings and for passing necessary orders to make the case ready for hearing.

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..... (S. K. Singh, J) Chairperson

..... (A.K. Bhargava) Member

/pkb/

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