REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICITION

CIVIL APPEAL NO.7026 OF 2003

Bharti Cellular Limited …Appellant

Versus

Union of India & Ors. …Respondents

J U D G M E N T

T.S. THAKUR, J.

1. This appeal under Section 18 of the Telecom Regulatory  

Authority  of  India  Act,  1997  is  directed  against  an  order  

dated  23rd May,  2003  passed  by  the  Telecom  Disputes  

Settlement  Appellate  Tribunal,  New  Delhi,  whereby  the  

Tribunal  has  dismissed  in  part  the  petition  filed  by  the

appellant under Section 14 (a)(I) of the Act and upheld the  

computation of  licence fee demanded and realized by the  

respondent-Union  of  India  in  terms  of  the  Licence  

Agreement executed between the parties.  

2. The  appellant-company  holds  a  licence  to  provide  

cellular mobile telephone services for Delhi Metro area.  The  

Licence Agreement executed between the appellant on the  

one hand and the Government of India on the other, inter  

alia, provided for payment of fixed amount towards licence  

fee for the first three years of the licence period. From the  

fourth year onwards the licence fee payable was to be on  

the basis of number of subscribers of the service provider  

subject to the minimum stipulated in the agreement. Clause  

19  of  the  Licence  Agreement  in  particular  dealt  with  this  

aspect and, inter alia, provided that for the first three years  

a lump sum licence fee shall be chargeable annually and that  

the year shall be reckoned as the period of twelve months  

beginning with the date of commissioning of the services or  

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completion of twelve months from the date of the signing of  

the licence whichever is earlier.

3. The  appellant’s  case  before  the  Tribunal  was  that  

although it had a provisional operational clearance from the  

respondent  effective  from  29th August,  1995  and  an  

interface/service  approval  from  26th September,  1995,  it  

could  commence  commercial  services  only  from  15th  

November,  1995 meaning  thereby  the  Licence  Agreement  

should be deemed to have become operative only from 15th  

November,  1995.  The  respondents,  however,  treated  26th  

September  1995  i.e.  the  date  when  the  interface/service  

clearance was given as the date of commencement of the  

Licence  Agreement  and  computed  the  licence  fee  dues,  

interest,  penal  interest,  liquidated  damages  etc.  with  

reference to the said date. The appellant also questioned the  

method  of  computing  the  number  of  subscribers  for  

determining  the  licence  fee  payable  from the  fourth  year  

onwards contending that the term “subscribers” should be  

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understood  to  be  such  as  have  activated  cellular  mobile  

telephone  connection  from  the  appellant  and  as  are  

currently activated and used by a person for which bills are  

issued  by  the  appellant.  A  few  other  disputes  were  also  

raised by the appellant in the petition filed on its behalf. One  

of  them  related  to  the  alleged  illegality  and  arbitrary  

computation  of  the  advance  payment  stipulated  for  the  

entire  quarter  as  due  in  the  month  of  June  itself  and  

calculation of the interest and penal interest on the overdue  

amount. One other grievance of the appellant was regarding  

the  Unit  Call  Rate  for  the  purpose  of  calculation  of  the  

licence fee.  It was contended by the appellant that in terms  

of  the Licence Agreement  the rate of  Rs.5 lakhs per  100  

subscribers was based on the Unit Call Rate of Rs.1.10. This  

rate was revised by the respondent to Rs.6.023 lakhs per  

100 subscribers or part thereof on 30th July 1998 based on  

the Unit Call Rate of Rs.1.40 prevalent at that time. Unit Call  

Rate was then reduced to Rs.1.20 from 1st May, 1999. The  

appellant,  therefore,  claimed  that  the  calculation  of  the  

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licence fee payable for the period from 1st May, 1999 to 31st  

July, 1999 should be on the basis of the then Unit Call Rate  

prevalent, namely, Rs.1.20 only.   

4. The  respondent  contested  the  petition  on  several  

grounds giving rise to the following four issues which the  

Tribunal framed for determination:                                 

(i)   Whether the methodology adopted by the Respondent  

for arriving at the number of subscribers from the 4th  

year of the Licence Agreement was in order?  

(ii)  Whether the Respondent could charge interest on the  

licence fee payable by the Petitioner as demanded by  

the Respondent in letters dated 10th August 1999 and  

6th March 2000?   

(iii)  Whether  the  Petitioner  is  entitled  to  the  benefit  of  

reduction in the unit call rate with effect from 1st May  

1999 for calculating the per subscriber licence fee?

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(iv) Whether the respondent can levy penal interest on the  

licence fee from 1st February 2000 till the actual date of  

payment?

5. In  so  far  as  issue  No.(i)  above  is  concerned,  the  

Tribunal took the view that the respondents had clarified to  

the appellant and other cellular operators that the basis for  

calculating the number  of  subscribers  for  determining the  

licence fee shall  be the  total  figure  of  IMSI  in  the Home  

Location  Register.  The  Tribunal  found  that  the  

representation  made  on  the  subject  by  the  petitioner-

appellant on 1st April, 1999 was rejected by the respondent  

on  23rd April,  1999 and the  appellant  offered a  Migration  

Package on 22nd July,  1999 which,  inter  alia,  contained a  

clause that no dispute relating to the Licence Agreement for  

the period upto 31st July 1999 shall be raised at any future  

date. The appellant gave its unconditional acceptance to the  

entire Migration package on 27th July, 1999. Having done so,  

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the appellant was not entitled to raise any issue that related  

to the pre-migration period.   

6. There is, in our opinion, no legal infirmity in the view  

taken  by  the  Tribunal.  Once  the  petitioner-appellant  had  

specifically  and  unconditionally  agreed  to  accept  the  

Migration  Package  and  given  up  all  disputes  relating  to  

Licence Agreement for the period upto 31st July 1999, it was  

not open to it to turn around and agitate any such dispute  

after  availing  of  the  Migration  Package.  A  party  who has  

unconditionally  accepted  the  package  cannot  after  such  

acceptance  reject  the  conditions  subject  to  which  the  

benefits were extended to him under the package.  It cannot  

reject  what  is  inconvenient  and  onerous  while  accepting  

what is beneficial to its interests. The package having been  

offered subject to the conditions that all disputes relating to  

the Licence Agreement for the period ending 31st July 1999  

shall stand abandoned by the operators there was no room  

going back on that representation.  

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7. Relying  upon  the  decision  of  this  Court  in  City  

Montessori School  v. State of Uttar Pradesh and Ors.  

2009 (14) SCC 253, New Bihar Biri Leaves Co.  v. State  

of Bihar 1981 (1) SCC 537 and R.N. Goswain v. Yashpal  

Dhir AIR 1993 SC 352, this Court has in Civil Appeal No.  

7236 of 2003 - Shyam Telelink now Sistema Shyam  

Teleservices Ltd. v. Union of India  held that no one can  

approbate and reprobate and anyone who has accepted with  

full  knowledge  or  notice  of  facts,  benefits  under  a  

transaction  which  he  might  have  rejected  or  contested,  

cannot question the transaction or take up an inconsistent  

position qua the same.  We have said:

“The maxim qui approbat non reprobat (one  who approbates  cannot  reprobate)  is  firmly  embodied in English Common Law and often  applied by Courts in this country.  It is akin  to the doctrine of benefits and burdens which  at its most basic level provides that a person  taking advantage under an instrument which  both grants a benefit and imposes a burden  cannot  take  the  former  without  complying  with the latter.  A person cannot approbate  and reprobate or accept and reject the same  instrument.”

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8. In  the  light  of  the  above,  the  view  taken  by  the  

Tribunal is legally unexceptionable.   

9. That brings us to the second issue formulated by the  

Tribunal for determination. The Tribunal has answered this  

issue  in  favour  of  the  appellant  holding  that  while  

respondent was entitled to recover licence fee together with  

interest from the earlier unpaid amounts upto and for the  

month  of  July  1999,  it  was  not  entitled  to  recover  both  

advance quarterly licence fee for July-September 1999 and  

revenue-sharing fees for August 1999 and September 1999  

in terms of the Migration Package. This part of the order of  

the  Tribunal  has  not  been  assailed  before  us  by  the  

appellant obviously because the view taken by the Tribunal  

has gone in its favour and the matter remitted back for re-

working  the  dues  along  with  interest  by  the  end  of  July  

1999,  keeping  in  view  the  observations  made  by  the  

Tribunal in para 23 of its order. It is noteworthy that the  

Government has also not assailed the said part of the order.

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       10. The  third  issue  which  had  been  taken  up  by  the  

Tribunal for consideration related to the Unit Call Rate and  

the effect  of  any revision in such rates.  Condition 19.1(f)  

which is relevant in this context reads:   

“19.1(f):  The  rate  of  Rs.five  lakhs  per  hundred subscribers or part thereof is based  on the unit call rate of Rs.1.10.  Fourth year  onwards,  as  defined  in  clause  19.1(d),  the  rate of Rs.five lakhs will be revised based on  the unit call rate. The revision will be limited  to 75% of the overall increase in the unit rate  during the period preceding such revisions.”  

11. Relying on the above provisions Tribunal held that even  

though there is no specific exclusion of downward revision in  

the clause extracted above, the limiting of  the revision is  

confined to increase only. The expression  “revision will  be  

limited  to  75% of  the  overall  increase  in  the  unit  rate”  

appearing in clause 19.1(f) (supra) is indicative of the fact  

that revision was envisaged only in the case of increase in  

Unit Call Rate and not in the case of fluctuation resulting in a  

decrease in the said rate. That apart, the Tribunal has rightly  

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held that the petitioner-appellant had not led any evidence  

before it and that the question regarding Unit Call Rate was  

raised by it at any stage either before or after the licence  

was issued for the year 1994 and that the issue relating to  

the Licence Agreement could not be agitated being a pre-

migration package.  

12. That  leaves  us  with  issue  no.4  formulated  by  the  

Tribunal relating to the levy of interest on the licence fee  

from  1st January  2000  till  actual  date  of  payment.  The  

Tribunal has taken the view, and in our opinion rightly so,  

that the respondents were entitled to recover not only the  

outstanding licence dues but also interest due on the same  

for the period of default. The Tribunal has rightly held that  

to  the  extent  condition  stipulated  a  deadline  i.e.  31st  

January,  2000  it  was  open  to  the  respondent  to  charge  

simple  interest  on  the  overdue  amount  for  keeping  the  

licence valid instead of terminating the same on the ground  

of default.   

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13. In the totality of the above circumstances, we see no  

reason to interfere with the order passed by the Tribunal nor  

do  we see  any  legal  flaw in  the  directions  issued by the  

Tribunal for re-working the dues along with interest keeping  

in view the observations made in the order under appeal.

14. There  is  no  merit  in  this  appeal  which  is  hereby  

dismissed but without any order as to costs.

……………………………J. (MARKANDEY KATJU)

……………………………J. (T.S. THAKUR)

New Delhi October 5, 2010

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