In a ruling arising out of the 2G spectrum litigation, the Supreme Court has held that telecom operator Sistema Shyam Teleservices Limited is liable to pay the reserve price fixed for the November 2012 spectrum auction from February 2, 2012, the date on which its licence was quashed, and not from February 15, 2013 as earlier interpreted by the telecom tribunal.
The Bench of Justices Sanjay Kumar and K. Vinod Chandran allowed the appeal filed by the Department of Telecommunications (DoT), partly setting aside the interpretation adopted by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
The dispute traces back to the landmark judgment dated February 2, 2012 in Centre for Public Interest Litigation v. Union of India, reported in (2012) 3 SCC 1, where the Supreme Court declared illegal the grant of Unified Access Service licences and allocation of 2G spectrum to several operators, including Sistema Shyam.
Although the licences were quashed, the Court allowed operators to continue services temporarily to avoid disruption to telecom consumers, while directing fresh auctions.
Over the next year, multiple extensions were granted as the auction process was delayed. Eventually, on February 15, 2013, the Court directed that all spectrum released due to quashing must be auctioned without delay. Licensees who continued operations after February 2, 2012 must pay the reserve price fixed for the November 2012 auction. Operators who failed in the auction must discontinue operations.
Following the February 15, 2013 order, the DoT issued a show-cause notice in November 2014 and later raised demands exceeding ₹900 crore, seeking payment of reserve price along with interest.
Sistema challenged the demand before TDSAT.
The TDSAT ruled that while Sistema was liable to pay the reserve price, the liability would commence only from February 15, 2013 — the date of the Supreme Court’s clarificatory order — and not from February 2, 2012. It also restricted the levy period based on when Letters of Intent (LoIs) were issued after the fresh auction.
Aggrieved, the Union of India approached the Supreme Court.
The Supreme Court categorically rejected TDSAT’s interpretation, holding that the starting date for levy of the reserve price was clearly February 2, 2012.
The Court observed that its February 15, 2013 order specifically referred to licensees who had continued operations “after 02.02.2012.” Therefore, the liability was intended to commence from that date itself.
The Bench emphasized that the continued operation of licensees after quashing was only to protect public interest, not to benefit the operators. The direction to pay the reserve price imposed a premium on operators who continued to operate despite their licences having been declared illegal. TDSAT erred in reading into the order a later commencement date of February 15, 2013.
The Court held that such a binding direction, having attained finality, could not be diluted by interpretative logic.
However, the Supreme Court agreed with TDSAT on the “end date” for levy.
Sistema had emerged as the successful bidder in the March 2013 auction for 800 MHz spectrum in eight circles. A Letter of Intent (LoI) was issued on April 30, 2013, which stipulated that the 20-year term would commence from the date of LoI.
The Court held that once the LoI was issued the liability to pay reserve price under the February 15, 2013 order ceased from April 30, 2013 for those eight circles. For the remaining 13 circles, liability would continue only until March 23, 2013, when operations were discontinued.
Thus, the Court ruled that Sistema must pay the reserve price from February 2, 2012 to April 30, 2013 for eight circles; and from February 2, 2012 to March 23, 2013 for the remaining 13 circles.
On the issue of interest, the Court upheld TDSAT’s view that interest would be payable only from December 8, 2014 — the date of expiry of 21 days from the show-cause notice dated November 17, 2014.
The Bench noted that the DoT had delayed action for over a year after the February 15, 2013 order and could not take advantage of its own inaction by claiming interest for that earlier period.
Interest was directed to be calculated at SBI’s Prime Lending Rate.
The Court directed that the amount already paid by Sistema shall be adjusted. The balance amount must be paid within three months from receipt of fresh demand. Parties shall bear their own costs.
Case Details
Case Title: UOI Versus Sistema Shyam Teleservices Limited
Citation: JURISHOUR-67-SC-2026
Case No.: Civil Appeal No. 12219 Of 2018
Date: 20/02/2026
