Vodafone Idea (Vi) informed the stock exchanges through a regulatory filing on Tuesday that the Bombay High Court has quashed the one-time spectrum charge (OTSC) demand raised by the Department of Telecommunications (DoT) against the company and its erstwhile subsidiary, Spice Communications, providing relief of Rs 2,113 crore.
According to Vi, the Bombay High Court has also directed the return of bank guarantees furnished to the DoT after it levied one-time spectrum charges for radio spectrum holdings beyond 6.2 MHz.
In its filing, Vi stated that the court quashed the original demand notices issued to Idea Cellular and Spice Communications on June 8, amounting to Rs 2,113 crore, and ordered the return of the bank guarantees submitted by the companies to the DoT.
The ruling forms part of a broader judgment in which the Bombay High Court held that the government could not retrospectively impose a one-time spectrum charge on telecom operators without legal backing in either the licence agreements or the Indian Telegraph Act.
The case dates back to January 2013, when the DoT raised a one-time spectrum charge demand against the erstwhile Idea Cellular Ltd and Spice Communications for radio spectrum held beyond 6.2 MHz during the retrospective period from July 1, 2008, to December 31, 2012, as well as for spectrum held beyond 4.4 MHz from January 1, 2013, onwards until the expiry of their licences.
However, Idea Cellular, which later became part of Vodafone Idea following its merger with Vodafone India, challenged the demands before the Bombay High Court. The company argued that the DoT’s OTSC demand amounted to a retrospective alteration of the financial terms of telecom licences granted years earlier.
Acting on the plea, the Bombay High Court granted interim protection to the company in January 2013 and restrained the DoT from taking coercive action to recover the OTSC amount.
The matter became more complex after the DoT approved the merger of Vodafone India Ltd and Vodafone Mobile Services Ltd with Idea Cellular in 2018. Following the merger, the DoT increased its OTSC demand to Rs 3,322 crore and sought fresh bank guarantees from the company.
Consequently, Vi furnished the bank guarantees while simultaneously challenging the revised demand before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Although TDSAT granted relief to the company, the DoT subsequently secured a stay on the tribunal’s order from the Supreme Court.