Claim of Loop Telecom Ltd. seeking refund of 2G licences entry fee, rejected

Telecom Disputes Settlement and Appellate Tribunal (TDSAT): A petition filed by Loop Telecom Ltd. seeking a refund of Rs 2,231 crore paid by it as entry fee/licence fee and interest for the grant of Unified Access Licences in Year 2008, has been rejected by TDSAT on the ground that as criminal trial is pending against Loop Telecom Ltd. in connection with the grant of 2G licences, the Tribunal cannot issue any direction in its favour under Contract Act until the company is relieved from charges that it is facing under the trial. “Moreover, a direction for refund outside the purview of the Contract Act and in exercise of Constitutional powers is clearly beyond the authority of this Tribunal,” TDSAT added in its order. Earlier, Loop Telecom Ltd. paid Rs.1454.94 crores as entry fee/licence fee for the grant of Unified Access Licences (UAS) (and the spectrum that came coupled with the licences) in twenty one service areas. As petitions were filed before Supreme Court alleging that gross irregularities, amounting to criminality, were committed in grant of UAS licences, Supreme Court got the matter of grant of licences investigated by the CBI under court monitoring and declared all the one hundred and twenty two licenses granted on or after 10 January 2008 as illegal and quashed them vide judgment and order dated February 2, 2012 in Centre of Public Interest Litigation v. Union of India, (2012) 3 SCC 1. The petitioner’s twenty one licences were among the one hundred and twenty two licences quashed by the Supreme Court. After perusal of the material on record, TDSAT observed that the criminal trial in which the petitioner was one of the accused casts a cloud over its claim for refund and until that cloud was removed the petitioner cannot invoke Section 65 of the Contract Act to its aid.  “No direction for refund in terms of Section 65 Contract Act can be made in favour of the petitioner by the Tribunal at least until the possibility of its being in pari delicto is completely removed; in other words, until the petitioner is exonerated of the charges in the criminal trial,” the Tribunal noted. “Moreover, a direction for refund outside the purview of the Contract Act and in exercise of Constitutional powers is clearly beyond the authority of this Tribunal and in that regard the petitioner must approach the Court that quashed its licences, that is, the Supreme Court and seek appropriate reliefs,” TDSAT further noted. [Loop Telecom Ltd. v. Union of India, 2015 SCC OnLine TDSAT 99, decided on September 16, 2015]

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