Can Airtel adjust Rs 3000cr against licence fees, HC asks Govt

Delhi High Court today asked the government if it was willing to allow Bharti Airtel to adjust over Rs 3000 crore, which as per the company, is owed by the government towards the disputed licence fees for its Punjab circle for 1996-98 against future licence fees.
A bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal asked the lawyer appearing for the Department of Telecommunications (DoT) to take instructions on whether Airtel will be allowed to adjust the amount, including interest, if the telco agreed to secure the amount.
Airtel, represented by senior advocate Harish Salve, has offered to give a bank guarantee to secure the DoT for the adjusted amount or give an undertaking to refund the money if the government succeeded in the litigation between them over disputed licence fees of Rs 399.92 crore paid by the telecom major in 2001 for its Punjab circle for the years 1996-98.

The telecom major has claimed that the government owed it an amount of over Rs 3000 crore, including interest on the amount of Rs 399.92 crore from 2001 till date.
The court was hearing Airtel's plea challenging a single judge order holding that company was not entitled to refund.
In its plea, the telecom major has contended that it was not liable to pay licence fees for Punjab circle for April 1996 to March 1998 as the government "had of its own accord unilaterally, illegally and without any basis brought about a de-facto suspension of the licence during that period".

It has said that prior to going for arbitration, it had in 2001 deposited the amount with DoT on the understanding that if the company wins, the amount would be refunded.

The arbitrator had dismissed the refund claim of the company against which it came to high court which in 2012 had set aside the arbitral award, Airtel said in its petition.
The 2012 decision was challenged by DoT and is still pending before another bench of Delhi High Court which rejected the government's plea for stay, the company has said.
Airtel told the court today that it can either give a bank guarantee securing the government for the adjusted amount during pendency of DoT's appeal or it can give an undertaking to refund the money if the department succeeds.

In its plea, Airtel has said it had sought refund of the
amount after the High Court had refused to grant DoT a stay, but the department had not returned the money claimed.
Thereafter, the company had moved a writ petition which was decided on May 11, 2016, by the single judge who by referring to some previous verdicts of the high court had refused to grant the relief sought by the company.
As per Airtel's plea, once the arbitral award was set aside and as the order was not stayed on DoT appeal, retaining of the licence fees by the government amounts to "unjust enrichment".