HC to centre: Will you adjust Airtel’s licence fee against future payments?

Airtel says willing to furnish Rs2,495 crore bank guarantee so that government exchequer won’t suffer if court decides firm is not entitled to licence fee refund


At the time of arbitration, Bharti Airtel had deposited the licence fee amount inclusive of interest on the understanding that the amount would be refunded in case the dispute is decided in its favour. Photo: Mint
At the time of arbitration, Bharti Airtel had deposited the licence fee amount inclusive of interest on the understanding that the amount would be refunded in case the dispute is decided in its favour. Photo: Mint

New Delhi: The Delhi high court on Thursday asked the Centre if it was willing to consider adjusting Rs.2,495.87 crore, paid by Bharti Airtel Ltd to the telecom department under an arbitral award on a licence fee dispute, against the future licence fee payable by the company.

The total refund amount of Rs.2,495.87 crore sought by Airtel includes an interest component of Rs.399.92 crore.

Harish Salve, representing Airtel, told the court that the company was willing to furnish a bank guarantee for the same amount so that the government exchequer would not suffer in the event that the court finally decides that the company is not entitled to the licence fee refund.

A bench headed by chief justice of Delhi high court, G. Rohini asked the Centre to take a stand on Bharti Airtel’s offer by the next hearing.

The court was hearing the telecom company’s appeal against an order passed by justice Rajiv Sahai Endlaw on 11 May under which Airtel was denied a refund of the licence fee it paid for the Punjab telecom circle from April 1996 to March 1998.

Airtel had initially refused to deposit the fee amount for the 1996-98 period as it claimed that the centre had “arbitrarily and illegally terminated its licence during that period,” following which it opted for arbitration with DoT.

At the time of arbitration, the company had deposited the licence fee amount inclusive of interest on the understanding that the amount would be refunded in case the dispute is decided in its favour.

The arbitrator dismissed Airtel’s refund claim, a ruling against which the company moved the Delhi high court.

On 14 September 2012, the arbitral award was set aside. This has been challenged by DoT and is being heard by another bench.

As the arbitral award had been set aside, Airtel sought a refund of the licence fee, which was denied under justice Endlaw’s order of 11 May.

The contention of the telecom company is that the order setting aside the arbitral award operated as a money decree was rejected and it was refused refund of the licence fee.

The case will be heard next on 23 October.

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