Relief for Airtel and Vi as Supreme Court refuses stay on high court's one-time spectrum charge ruling

The Supreme Court on Friday refused to grant an interim stay on the Bombay High Court's 8 June judgment that quashed the Centre's one-time spectrum charge demands against Bharti Airtel and Vodafone Idea. While the decision provides immediate relief to the telecom operators, the top court agreed to examine the Department of Telecommunications' (DoT) appeal.

A bench comprising Justice B.V. Nagarathna and Justice R. Mahadevan issued notice on the Centre's appeal, but rejected its request to stay the Bombay High Court order directing the release of bank guarantees which the government’s counsel said were worth about ₹3,300 crore.

The 8 June ruling had ended a 13-year legal battle by striking down the Centre's retrospective levy of OTSC on spectrum held beyond 6.2 MHz from 2008 onwards.

Following the Bombay High Court ruling, Bharti Airtel estimated its total relief at approximately ₹8,414 crore, according to a 9 June stock exchange filing. The company’s FY26 annual report also noted an accumulated interest liability of ₹12,137 crore on the original OTSC demand through the end of March.

Vodafone Idea similarly stated in a 9 June exchange filing that the high court order quashed government demand notices for one-time spectrum charges totaling ₹2,113 crore. In its FY26 annual report, the telecom operator recorded an accumulated provision of ₹8,780 crore toward these charges.

Both telecom majors'stocks were in positive territory during afternoon trade on Friday, with Bharti Airtel up around 0.38% at ₹1,955.50 and Vodafone Idea up around 0.55% at ₹12.70 at 3 pm.

What the govt and companies argued

Seeking an interim stay, the Centre argued that spectrum is a precious natural resource that belongs to the people and is held by the government in public trust. "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," the Centre's counsel said while defending the retrospective levy.

During the hearing, the government contended that telecom operators had obtained spectrum at rates much below market value and that the one-time spectrum charge was introduced to recover its true value. "It is a privilege given to telecom companies. They should pay the market rate," the Centre's counsel argued.

The Centre also argued that the Bombay High Court's ruling conflicted with the Madras High Court's 2016 judgment upholding an OTSC demand of about ₹3,273 crore against Aircel, and sought to tag the appeal with pending Supreme Court cases on the retrospective levy.

Senior advocates Mukul Rohatgi, appearing for Vodafone Idea, and Shyam Divan, appearing for Airtel, opposed the Centre's plea, arguing that the Bombay High Court had correctly held there was no statutory or contractual basis for retrospectively imposing the OTSC.

"Five, ten years will go by. It affects our balance sheet," Rohatgi said, arguing that the pending demands continued to burden telecom operators. He added, "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.”

14-year-old dispute

The dispute dates back to 2012, when the Union government decided to levy OTSCs on spectrum holdings beyond 6.2 MHz with retrospective effect from July 2008. The DoT subsequently issued demand notices to telecom operators, including Bharti Airtel and Vodafone Idea, seeking additional payments for spectrum that had already been allotted.

The telecom operators challenged the levy before the Bombay High Court in 2013, arguing that they had already paid the applicable entry fees, licence fees and spectrum usage charges under their licence agreements, and that the government lacked the authority to retrospectively impose a fresh levy.

The high court granted them interim protection in January 2013 and, after 13 years of litigation, quashed the demands in June 2026, holding that neither the licence agreements nor the law permitted the retrospective levy.

The broader OTSC dispute, however, remains pending before the Supreme Court through parallel proceedings. In 2019, Telecom Disputes Settlement and Appellate Tribunal held that OTSC could be imposed prospectively but not retrospectively, a ruling that was challenged by the DoT.