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Bharat Sanchar Nigam Ltd. & Ors. vs M/S Tata Communications Ltd. & Ors.

Civil Appeal · 2022 INSC 996Decided 22 Sept 2022
Civil Appeal Nos. 1699-1723 of 2015
Ajay Rastogi · B.V. Nagarathna

Background

BSNL provided infrastructure facilities (building space, power, tower space, ducts) to licensed telecom operators like Tata Communications under Interconnection Agreements, charging fees revised periodically by circular. A 2012 circular purported to revise these "Active Link" infrastructure charges retroactively from 1 April 2009, even though operators paid these charges upfront each year in advance. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) held the retrospective revision from 2009 unsustainable and ruled the new rates could only apply from 1 April 2013 onward, without any notional 10% annual increase compounding from 2009; BSNL appealed to the Supreme Court challenging the denial of the notional increase.

Decision Breakdown

The Supreme Court agreed with the Tribunal that administrative circulars, unlike legislation, cannot be given retrospective effect unless expressly authorized by statute, so BSNL could not retroactively charge the higher 2012 rates back to 2009. However, the Court disagreed with the Tribunal on the second point: since BSNL's authority to revise infrastructure charges was never actually challenged, BSNL was entitled to notionally compute what the rate would have been with a 10% annual increase from 2009 onward and apply that notionally-escalated rate prospectively from 1 April 2013, even though it could not collect the extra amount for the earlier years. The appeals were therefore partly allowed, modifying the Tribunal's order to permit BSNL to bill the notionally-increased rates from 1 April 2013 onward.

Lesson Learnt

Government or public-sector administrative circulars generally cannot be applied retrospectively to impose fresh financial liability unless a law expressly permits it, but where an authority's underlying power to fix or revise rates is undisputed, it may still use past periods only to notionally calculate a prospective rate increase.

Official source (sci.gov.in)View Judgment (PDF)

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