Case Note & Summary
The dispute involved a telecom company seeking a refund of an Entry Fee of Rs 1454.94 crores paid for 2G licences across twenty-one service areas, after the Supreme Court quashed those licences in the CPIL judgment due to the Union government's illegal 'First Come First Serve' policy. The appellant had entered into UASL agreements in 2008, which included a non-refundable Entry Fee clause. Following the quashing, the appellant filed petitions before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for refund, which were dismissed in 2015 and 2018, leading to appeals under Section 18 of the Telecom Regulatory Authority of India Act, 1997. The core legal issues were whether the quashing entitled the appellant to restitution under the Indian Contract Act, 1872, particularly Sections 65, 23, and 56, and whether the government's set-off policy, which allowed refund only to entities participating in a fresh auction, violated Article 14 of the Constitution. The appellant argued that the licences were frustrated under Section 56, making them void and entitling restitution under Section 65, and that the set-off policy was arbitrary and discriminatory. The respondent contended that the quashing did not render the contracts void under the Contract Act, and the set-off policy had a rational basis. The court analyzed that the quashing resulted from the government's illegal policy, not a void contract under Sections 23 or 56, thus restitution under Section 65 was unavailable. It applied the in pari delicto principle, noting both parties were at fault. The court also found the set-off policy had intelligible differentia and nexus to its object, upholding it under Article 14. The principle of actus curiae neminem gravabit was deemed inapplicable. The court dismissed the appeals, affirming the TDSAT's judgments and denying the refund claim.
Headnote
A) Contract Law - Restitution and Void Contracts - Sections 65, 23, 56 Indian Contract Act, 1872 - Appellant claimed refund of Entry Fee after 2G licences quashed by Supreme Court in CPIL judgment - Court held quashing due to illegal government policy does not render UASL agreements void under Sections 23 or 56, thus restitution under Section 65 not available - Principle of in pari delicto applied as both parties at fault (Paras 4-5). B) Constitutional Law - Equality and Arbitrariness - Article 14 Constitution of India - Appellant challenged set-off policy allowing refund only to entities participating in fresh auction - Court found policy based on intelligible differentia and nexus to object, not manifestly arbitrary or discriminatory - Held policy valid under Article 14 (Paras 8-9). C) Jurisdiction - Telecom Disputes - Section 18 Telecom Regulatory Authority of India Act, 1997 - Appeals arose from TDSAT judgments dismissing claims for refund - Court upheld TDSAT's jurisdiction and decisions, dismissing appeals (Paras 1-7). D) Legal Principles - Actus Curiae Neminem Gravabit - Appellant invoked principle that no person prejudiced by act of court - Court held principle not applicable as quashing due to government's illegal policy, not court's fault (Para 8). E) Criminal Law - Acquittal Impact - Appellant acquitted of criminal charges by Special Judge, CBI - Court noted acquittal did not alter contractual or restitution claims, as in pari delicto principle still applied (Paras 4-6).
Issue of Consideration
Whether the appellant is entitled to a refund of the Entry Fee paid for 2G licences after they were quashed by the Supreme Court in CPIL judgment, based on principles of restitution, frustration of contract, and constitutional validity of set-off policy
Final Decision
Supreme Court dismissed appeals, upholding TDSAT judgments, denying refund of Entry Fee, and validating set-off policy under Article 14
Law Points
- Restitution under Section 65 of Indian Contract Act
- 1872 requires contract to be void
- quashing of licences by court due to illegal government policy does not render contract void under Sections 23 or 56
- principle of in pari delicto applies where both parties at fault
- actus curiae neminem gravabit principle not applicable when fault lies with government
- set-off policy under Article 14 of Constitution must have intelligible differentia and nexus to object
