Days before finance minister Arun Jaitley presents the Union Budget, the fate of around Rs 33,000-crore revenue accruing to it in the current fiscal from spectrum auctions hangs in the balance. This is because the Supreme Court on Thursday, while allowing the department of telecommunications to go ahead with the auctions from March 4, restrained it from declaring the results till the next hearing on March 26.
Since March 26 is the date of next hearing and not the final order and the court will go through the bidding details etc, there’s every possibility that the money does not flow into the government’s coffer during the current fiscal, thereby upsetting its budget maths.
The government is expecting around Rs 100,000 crore from the auction of spectrum in the bands of 800, 900, 1800 and 2100 Mhz. Since the operators are required to pay only a third of the amount in the first year as part of the deferred payment mechanism, the government could have netted around Rs 33,000 crore in its books for the current fiscal. However, now this stands at risk and a certainty can only come on March 26.
The Supreme Court on Monday said the government cannot declare auction results till March 26 and no company can claim equity till then just because they had won a bid in the auction.
A bench, comprising Justices Dipak Misra and Adarsh Kumar Goel, passed the order on a transfer petition filed by the government which had objected to mobile operators approaching different high courts to change auction tender conditions (notice inviting applications). The SC restrained all high courts from interfering in the auction process till it decides the government’s pleas against courts interfering in tender conditions on March 26.
Brushing aside all pleas for staying the auction for a few days, a bench said it would be inappropriate for it to interfere with the tender process at present. “Let the auction go on and let us see what emerges from it,” it said, posting the matter for March 26.
It clarified that payments made by telecom firms to the government for successful bidding will not create any rights and the latter should inform bidders about the court order, which should be published on the website to avoid such claims. Telecom companies participating in the auction shall not claim any benefit on the basis of equities, it said.
Various mobile operators had moved different high courts challenging various components of the NIA. For instance, Bharti Airtel and Reliance Telecom had got a relief from the Tripura High Court where they had challenged that they be allowed to bid for a minimum block of 4.4 Mhz of spectrum in the north-east circle instead of 5 Mhz stipulated in the NIA. The plea was that since the circle had only 8.8 Mhz of spectrum, a minimum block could create space for two players against 5 Mhz in which case there won’t be nay taker for the balance 3.8 Mhz.
Though the SC has stayed the operationalisation of the HC’s order, any final order by it will have ramifications on the entire NIA, therefore it has restrained the government from announcing the final results.