DoT payment: Govt says it has exclusive power over licence conditions

The Union government is the sole repository of all resources in the country and also has the exclusive power to determine the licence conditions at which it parts with its exclusive right to the resources. The government made this written submission in the Supreme Court in the matter of Union of India versus Association of Unified Telecom Operators of India in the matter of payment to the DoT on the basis of annual gross revenues (AGR).

"When the Central government has 'exclusive privilege', which it is parting with in favour of a private party, the Central government can charge consideration for parting with the exclusive privilege and, therefore, has a wide discretion in laying down the terms and conditions 'as it thinks fit'.

"The State is a trustee of natural resources and is obliged not only to hold it for the benefit of its citizens, but also ensure equitable distribution to 'subserve the common good' under article 39 of the Constitution of India", it said.

Section 4 of the Indian Telegraph Act recognizes the exclusive privilege of the Central Government to grant a licence on such conditions and in consideration of such payments "as it thinks fit."

The Central government submitted that Section 4 must therefore be interpreted to further the principle as has been enunciated by the Supreme Court in its judgement on Natural Resources Allocation.

"Therefore, 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 its exclusive right to the resources so as to maximize revenue and translate the worth of its resources into benefits for the sector and those who cannot afford it, thereby meeting the distributive goals enshrined in the Constitution", the government said.

In its concluding submission on AGR, the Centre said the parties have voluntarily consented to the terms of the licence agreement and are therefore bound by it.

"They cannot be permitted to therefore open the floodgates by challenging the definition of AGR, which was announced subsequent to the deliberations held by the government with the stakeholders of TSPs. The TSPs having taken benefit under the licence agreements cannot resile from the burden provide therein", it said.