3 weeks ago
SC refuses spectrum charge stay, giving Airtel and Vi relief
The government asked two phone companies, Airtel and Vodafone Idea, to pay extra money for radio waves they had already bought years ago.
The extra charges were for old years going back to 2008.
The companies said the government could not ask for more money after the rules were already agreed.
A court in Bombay agreed with the companies and stopped the government's demands.
It also said bank guarantees worth about ₹3,300 crore must be given back.
The government took the case to the Supreme Court, the highest court in India.
The Supreme Court said the Bombay court's decision can stay in place while the fight continues.
Airtel says it could save about ₹8,414 crore, and Vodafone Idea about ₹2,113 crore.
The Supreme Court will also decide whether to hear this case together with the Aircel case, where another court sided with the government.
After the news, both companies' shares went up a little.
The Supreme Court refused an interim stay on the Bombay High Court's 8 June judgment quashing the Centre's retrospective one-time spectrum charge (OTSC) demands against Bharti Airtel and Vodafone Idea.
The bench of Justices B.V. Nagarathna and R. Mahadevan issued notice on the Centre's appeal but rejected its request to stay the release of bank guarantees worth about ₹3,300 crore.
The Department of Telecommunications raised demand notices in 2013 under a 2012 Union Cabinet decision levying OTSC retrospectively on spectrum held beyond 6.2 MHz from July 2008, with industry-wide demands of about ₹22,000 crore.
Bharti Airtel estimated its total relief at approximately ₹8,414 crore, while Vodafone Idea said the ruling quashed demand notices totaling ₹2,113 crore.
The Centre asked the court to hear its appeal with the Aircel case, citing the Bombay High Court's conflict with the Madras High Court's 2016 judgment upholding a ₹3,273 crore OTSC demand against Aircel.
- Who
- The Supreme Court bench of Justices B.V. Nagarathna and R. Mahadevan, the Centre represented by Additional Solicitor General Vikramjit Banerjee, and telecom operators Bharti Airtel and Vodafone Idea.
- What
- The Supreme Court refused an interim stay on the Bombay High Court's 8 June judgment quashing the retrospective one-time spectrum charge demands against Bharti Airtel and Vodafone Idea, and issued notice on the Centre's appeal.
- Where
- The Supreme Court of India, reviewing the Bombay High Court's ruling; a conflicting Madras High Court judgment in the Aircel case is also under consideration.
- When
- At Friday's hearing before the Supreme Court; the Bombay High Court ruled on 8 June 2026, ending a 13-year legal battle, and the dispute dates to a 2012 Union Cabinet decision with demand notices issued in 2013.
- Why
- The Bombay High Court held that neither the licence agreements nor the law permitted the retrospective levy; the Centre appealed, arguing that telecom operators should pay the market value of spectrum held in public trust.
Telecom operators' view
Government's view
Legality of the retrospective levy
Telecom operators' view
Operators argue there is no statutory or contractual basis for the retrospective OTSC — senior advocate Mukul Rohatgi said the phrase 'one time spectrum charge' appears nowhere in their contracts or in the law, and that they had already paid entry fees, licence fees and spectrum usage charges.
Government's view
The Centre argues spectrum is a precious natural resource held in public trust, that operators obtained it at rates below market value, and that the one-time charge was introduced to recover its true value, so operators should pay the market rate.
Financial burden on operators
Telecom operators' view
Operators say fresh liabilities years after spectrum was allotted undermine certainty in commercial arrangements and burden their balance sheets — 'five, ten years will go by. It affects our balance sheet.'
Government's view
The Centre contends telecom companies make 'humongous profits' and, having been given the privilege of spectrum, should bear the cost of the precious resource.
Key facts
- Court
- Supreme Court of India, bench of Justices B.V. Nagarathna and R. Mahadevan
- Impugned ruling
- Bombay High Court judgment of 8 June 2026 quashing OTSC demands against Bharti Airtel and Vodafone Idea
- Bank guarantees at stake
- Approximately ₹3,300 crore
- Bharti Airtel estimated relief
- Approximately ₹8,414 crore
- Vodafone Idea demands quashed
- ₹2,113 crore
- Industry-wide levy
- Approximately ₹22,000 crore
- Aircel OTSC demand upheld by Madras High Court (2016)
- Approximately ₹3,273 crore
- Market reaction
- Bharti Airtel up 0.38% at ₹1,955.50; Vodafone Idea up 0.55% at ₹12.70
Quotes
Centre counsel
Government counsel arguing for the OTSC levy
“"These are telecom companies. This is a precious natural resource. We hold the spectrum in public trust. We are acting on behalf of the government. They make humongous profits."”
livemint.com
“"It is a privilege given to telecom companies. They should pay the market rate."”
livemint.com
Mukul Rohatgi
Advocate for Bharti Airtel and Vodafone Idea
“"Five, ten years will go by. It affects our balance sheet. We have been paying for spectrum. Suddenly, demands running into thousands of crores are raised under a 'one time spectrum charge'. There is no such phrase in our contract. There is no such phrase in the law."”
livemint.com
Sources
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