UNION OF INDIA (Transfer Case (Civil) No. 43 of 2015) JANUARY 12 & Anr. v. UNION OF INDIA & ANR. policy decision which subserves the consumers' interest & Ors.

3.5 The argument that the petitioner was 'knocked out' of availability of only 8.8 MHz in the North East and due to the term of minimum of 5 MHz for a new entrant including expiring licensees is incorrect. In the North East, while 8.8 MHz was available in 900 band, there were other spectrum available, i.e. F 800 band (13.75 MHz), 900 band (8.8 MHz), 1800 band (8.4 MHz) and 2100 band (5 MHz) out of which the writ petitioner-Reliance has won 5 MHz in 800 band and 5 MHz in 1800 band at the auction as it already had spectrum in 2100 band. The trend of the 2015 auctions has shown that this company has substituted its 900 band with 1800/800 band in most circles where the bid was lower than the 900 band and it has also bid for the 900 band spectrum and remained unsuccessful, and that cannot form the basis to assert that there is any discrimination caused or that there is a flaw in the NIA. That apart, the investment already made in the past 20 years is an investment which will be used even with the 1800/ H 800 band technologies and any future investment according to G RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & ANR. 981 the needs of the time will be made by them in their commercial A wisdom and to say that they were "knocked out of the auction because of the NIA design" is totally fallacious as they purchased spectrum in other bands. [Para 22] [1001-E-H; 1002-AJ

4.1 There are various factors that the DoT is required to take into account while determining the auction structure. B Ultimately, the DoT should be permitted to determine the auction structure consistent with the scheme of the TRAI Act (as has been done in the earlier auctions and the instant one). It cannot be left to the option of the telecom service providers and their narrower self interest to determine the structure and timing of C auctions. Capping has been kept in vogue to have a bigger field and it is based on a rational principle. For arriving at the cap, only two parameters are to be seen - (a) the total spectrum assigned in that service area; and (b) the total spectrum being put to auction. There is nothing mentioned in the definition as explained by the notes that the surrendered spectrum is also D required to be added because there is no definition of a surrendered spectrum. Even if some capping rule is required to be altered, the Court would be required to go into the basis why a capping rule was provided for and why the TRAI and the Department have consistently followed the capping rule. That is because no monopoly should be created and a healthy competitive E bidding should be available. The relief of removal of the cap is only to enable the petitioners who are 'big players' to serve their cause but not the public interest and the Government has been reviewing its policy from time to time. TRAI has made recommendations regarding compilation of the cap in future, and F such recommendations are under consideration by the Government of India. [Para 25) (1003-D-H; 1004-AJ

4.2 The NIA, being an invitation to offer, and Clause 5.3.1 being one of the Clauses thereof, and the said Clause not being under challenge, any meaning other than the literal meaning of G the said Clause would have to be by consent of both the parties. Furthermore, the NIA, being an invitation to offer, the rules of interpretation of contracts would apply and not the rules that may be applied in the case of interpretation of statutes. It is not open to one party to unilaterally, at the stage of NIA, seek an H 982 SUPREME COURT REPORTS [2017) 4 S.C.R. A B interpretation of a Clause in a manner of their choice and if there is a difference of opinion in the manner of interpretation, it is the interpretation of the party who is offering the contract that ought to be adopted. Should there be cause for the Court interpreting or thereby requiring, through mandamus, the Offering Party (i.e., the State) to interpret the Clause contrary to their way of· interpretation or literal interpretation, this would only be done on the very limited grounds of judicial review, in which case, while a certiorari would issue to strike down the Clause as being arbitrary (which issue is not put in question before the Court), a mandamus will not issue to require the State to interpret the C Clause in a given way and make an offer in accordance with the interpretation given by the Court, which is what the petitioners seek. [Para 29] [1004-F-H; 1005-A-B)

4.3 Clause 5.3.1, in 'No uncertain terms', provides for only two categories of spectrum, namely, (i) spectrum currently held D by.the operators; and (ii) spectrum put to auction by the Licensor/ Respondent, to be counted/considered while calculating the Spectrum cap. This being the position under the Clause (both accepted and understood by all the operators), the contention that the surrendered spectrum of BSNL/MTNL and not currently held by the existing operators should have been included (whether or not put to auction) is clearly contrary to the unequivocal terms of Clause 5.3.1. The contention that the surrendered spectrum (which is neither assigned/held by any operator nor put to auction) ought to be included for calculating · the Spectrum cap in the present auction is an effort to include/ F add another category of spectrum (i.e., surrendered spectrum not put to auction) which is not provided in Clause 5.3.1, and thereby effectively seek amendment of the Tender/NIA terms which is totally impermissible in law. [Para 30) [1005-B-D) E

4.4 The objective behind Spectrum capping is to ensure G competition in the market by preventing large/big operators from acquiring large amount of spectrum, which they may not require but only hoard to prevent the small operators from effectively competing in the market, and that is why, TRAI has recommended on 02.07.2015 that the basic objective of prescribing a spectrum cap is to prevent a TSP from acquiring large holdings of spectrum H RELIANCE TELECOM LTD. & ANR. v. UNION OF INDIA & ANR. 983 through auction, M&A or trading, as it may lead to non-level A playing field thereby disturbing the competition in the market. It cannot be left to the market forces alone to decide the maximum spectrum holding as a TSP and, hence, the provision of cap should continue on the spectrum holding that a TSP may acquire or otherwise. The argument that the Respondent should have B notionally included the spectrum surrendered by BSNL/MTNL would result in creating a situation where though the spectrum put to auction remains the same (i.e., limited), yet a large/big player will be able to bid for the entire spectrum (which it otherwise could not have done due to Clause 5.3.1) thereby effectively giving a tool to the large/big operators to deprive/ C starve small operators, who quite avowedly, cannot match the buying power of larger operators of spectrum. [Para 31) [1005- E-H; 1006-A]

#5. There cannot be any legitimate expectation based on the terms and conditions relating to NIA more so, in the sphere D of auction of spectrum. The 2013 auction included the spectrum allegedly surrendered by BSNL/MTNL in calculating the Spectrum cap, while it has not been done so in the present auction (i.e., 2015 auction), and the fact that the surrendered spectrum was included earlier and not in the present year does not give rise to legitimate expectation, for it does not bind the State to E follow the same because the fundamental principles of maximization of revenue and subserving of the public interest at large require change. The concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse F of power. The court does not interfere with the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard that leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. [Para 321 [1006-A-Dl

#6. The grievance raised by the petitioners is that the design of the auction skewed price discovery and resulted in artificial inflation of the price of spectrum. This grievance is to be viewed in the context in which the policy of auction- of spectrum came to be implemented. This Court having held that public interest is G H 984 SUPREME COURT REPORTS (2017] 4 S.C.R. A served by maximizing the benefit to the public exchequer, a challenge premised on the admission that the method adopted by the State, in fact, maximized the generation of revenue from the auction of spectrum cannot succeed. [Para 33) [1006-D-F)