Even BSNL and MTNL acted the same way as us on licence fee: Bharti Airtel

Telco says BSNL and MTNL, which are arms of DoT, also paid licence fee on the same basis

In its petition to the Supreme Court, Bharti Airtel has said it was not involved in any ‘wilful default’ of its licence fee dues. It was responding to the court’s ruling last week ordering Bharti and four other telcos to pay Rs 147,000 crores as dues with interest, penalty, and interest on penalty. The court order effectively upheld the Department of Telecommunications’ (DoT) calculation of the licence fee and the demand that it be paid.

Last week, Bharti filed a review petition against the Supreme Court order and asked for a waiver of the interest, penalty, and the interest on penalty imposed on it. 

Of the total of Rs 147,000 crores, nearly 75 per cent comprises interest, penalty and interest on penalty. Along with the other operators, Bharti is asking for a waiver given the the financial hardship being faced by the industry because of mounting losses. 

In its petition, seen by Business Standard, the company points out that even the two state-owned telecom companies, BSNL and MTNL, were making licence fee payments on the same basis.

It reiterated that these PSUs were arms of the Department of Telecommunications (DoT), not private companies, and yet even they had followed and understood the earlier judicial orders, which were in favour of the telecom service providers, in the same spirit and manner as Bharti Airtel.

In its order, the Supreme Court has also asked BSNL and MTNL to pay Rs 2,098 crore and Rs 2537 crore, respectively, as licence fee dues.

Bharti has argued that, in the present case, there was no legal certainty inasmuch as the dispute was pending before various forums. This lack of certainty, it said, was not restricted to itself but extended to the, DOT, BSNL and MTNL. These government companies are also signatories to the United Access Service Licence Agreement (UASLA).

Bharti points out that its bona fide exercise of its legal rights under the TRAI Act cannot per se lead to wilful default; that there is a catena of unequivocal judgements that say that the imposition of a penalty, interest and interest on penalty can only be for wilful, deliberate, and conscious evasion and avoidance; and that this evasion’ is the antithesis of launching a legal challenge.

The company says the interpretation of gross revenue has always been disputed in various expert bodies and courts since 2003 but since all the judgements that emerged from the debates were in favour of Bharti, it acted accordingly.

The plea adds that a party cannot be penalised for an act of court, when it has succeeded in all the earlier rounds of litigation. What this means is that Bharti should not be penalised for the delays that happened owing to the  DoT deciding to go in for further litigation. 

Had Bharti failed in the first round of legal action, the DoT would have been awarded no more than the principal amount, it says in the petition. 

However, its very success in the courts ironically led to proactive litigation by the DoT as the losing party. Despite this, the latest Supreme Court order gives the DoT more than 300 per cent of the benefits that it would have originally received if it had won the first round of litigation.

Finally, Bharti’s petition says the various judgements of the Telecom Disputes Settlement and Appellate Tribunal in its favour constitute ‘force majeure’ as defined under the UASL licence. 

Therefore, all demands to the contrary stand quashed and ceased to exist. Further, the company pointed out that it continues to make payments towards the licence fee based on the judgements that various tribunals have given in its favour.