The Supreme Court on Sunday refused to stay the spectrum auction which is starting on Monday. The apex court refused to interfere with the order of a telecom tribunal, which dismissed the pleas of Bharti Airtel, Vodafone, Loop and Idea.
These companies had called for a stay on the auction and sought extension of their licenses by another 10 years.
In an extraordinary urgent hearing on Sunday, a bench comprising justice AR Dave and justice SA Bobde admitted the appeals filed by Airtel and Vodafone challenging the January 31 order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
"The appeal is admitted and hearing is expedited," the bench said after the Centre opposed the appeals saying "any observation from you (apex court) can scare away other bidders and can take away the vibrancy of the spectrum auction".
Senior advocates Mukul Rohatgi and Abhishekh Singhvi, appearing for Airtel and Vodafone respectively, contended the existing licences for the spectrum to them should be extended instead of putting them on auction.
Rohatgi submitted that the apex court should ask the telecom department not to declare the result of the auction till it decides the appeals.
Singhvi contended that Vodafone was having the licence for 20 years since 1994, so it has the right over the spectrum and the licence should be extended for another 10 years.
However, the bench observed that "it does not mean that you should have a monopoly".
Telecom companies made arguments in the apex court identical to those before the tribunal saying they have made huge investments ranging into several crores of rupees and hence had the legitimate expectation for the extension.
Any such denial was "illegal and unreasonable", they said adding that it would also result in the discontinuance of service to its subscribers.
The TDSAT had rejected their plea saying "the petitioners have failed to establish their right for extension in terms of the relevant provisions in their licenses, the matter ends there".
The tribunal had held that it was satisfied with the reason based on which the Department of Telecom (DoT) had denied extension and had asked telcom companies to participate in the spectrum auction starting February 3.
"Denial of extension of the licenses to the petitioners is based on good reasons as envisaged under clause 4.1 of the UAS license and the relevant provision in the CMTS license and the petitioners can claim no right for extension of their licenses under the aforesaid provisions of their licenses," TDSAT had said in its order.
The Supreme Court had, on 2 February 2012, cancelled 122 telecom licences and spectrum allocated to nine companies in January 2008, saying the process of allocation was flawed.
The court further ordered that the spectrum be auctioned and gave the affected operators time till the conclusion of the auction to operate.