Doubts linger over licence fee refund

The verdict on the 2G licences granted during the tenure of former Telecom Minister A Raja has not only left the affected licencees in a quandary,it has also left most of them guessing about the fate of the money they shelled out for the spectrum in the first place

Written by ENS Economic Bureau | New Delhi | Published:February 3, 2012 1:26 am

The verdict on the 2G licences granted during the tenure of former Telecom Minister A Raja has not only left the affected licencees in a quandary,it has also left most of them guessing about the fate of the money they shelled out for the spectrum in the first place.

The government had realised Rs 12,386 crore from granting licences bundled with spectrum in 2008. With the apex court cancelling the 122 licences and declaring the process “wholly arbitrary and unconstitutional”,the house is divided as to whether the amount garnered would be refunded by the government to the licensees. While a section of the legal fraternity is of the opinion that the money paid by the licensees should have to be refunded when they surrender the spectrum,regulators and the government officials are convinced otherwise. Especially in light of the strong indictment by the apex court of not just the process of award of the licences,but also manner in which the “scarce natural resource… has been grabbed by those who enjoy money power and who have been able to manipulate the system”. If the players themselves were part of the loot,the question of a refund may simply not arise,according to them.

Others differ in their assessment. “It (the refund) will be payable. Licences have been cancelled,money paid can not be forfeited. Licences were given against the spectrum. Now that they are returning it,the government will have to refund,” Hemant Sahai,managing partner of HSA said. Legal experts also opined that the money involved also has component of FDI that came into the country through FIPB route after all the regulatory approvals,and hence cannot be forfeited. “Private players were not a party to the decision of the government. Some private players also got FDI. There may come a situation where these foreign players may take the government to international courts,” Meet Malhotra,senior advocate,SC,said.

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