Reserve Price Liability for Quashed 2G Licences Runs from 02.02.2012: Supreme Court Clarifies Commencement and Interest

Case Name: Union of India v. Sistema Shyam Teleservices Limited

Citation: 2026 INSC 174; Civil Appeal No. 12219 of 2018

Date of Judgment/Order: 20 February 2026

Bench: Hon’ble Mr. Justice Sanjay Kumar and Hon’ble Mr. Justice K. Vinod Chandran

Held: The Supreme Court held that licensees whose 2G licences were quashed by judgment dated 02.02.2012 in Centre for Public Interest Litigation v. Union of India are liable to pay the reserve price fixed for the November 2012 auction from 02.02.2012 itself, if they continued operations thereafter. The Telecom Disputes Settlement and Appellate Tribunal erred in treating 15.02.2013 as the commencement date, as the Supreme Court’s earlier order expressly referred to continuation “after 02.02.2012,” clearly fixing the starting point. However, the Court upheld the Tribunal’s view that liability in respect of circles where the respondent was successful in the March 2013 auction ceased on 30.04.2013, being the date of issuance of the Letter of Intent, and that interest would run only from the expiry of the 21 days granted in the show-cause notice dated 17.11.2014.

Summary: The appeal arose from an order of the Telecom Disputes Settlement and Appellate Tribunal interpreting directions issued by the Supreme Court on 15.02.2013 in continuation of the landmark 2G judgment dated 02.02.2012, whereby Unified Access Service licences and allocation of 2G spectrum were quashed. Although licences stood invalidated, operators were permitted to continue temporarily in public interest pending fresh auction. The order dated 15.02.2013 directed that licensees who had continued operations after 02.02.2012 should pay the reserve price fixed for the November 2012 auction. The Department of Telecommunications issued demand notices to the respondent for reserve price and interest. The Tribunal held that liability commenced only from 15.02.2013 and limited the period of levy accordingly. Before the Supreme Court, the Union of India contended that the Tribunal had misread the binding direction of 15.02.2013. The Court analysed the context of the extension orders, emphasised that continuation of operations was only to protect public interest and not to benefit the licensees, and held that the liability clearly commenced from 02.02.2012, the date of quashing. However, the Court agreed that once the Letter of Intent was issued on 30.04.2013 to the respondent in respect of eight circles, the levy could not continue beyond that date, and for the remaining thirteen circles it would end on 23.03.2013, when operations ceased. On the question of interest, the Court found that the Department’s delay in issuing the show-cause notice disentitled it from claiming interest for the earlier period.

Decision: The appeal was allowed in part; it was held that the respondent is liable to pay the reserve price from 02.02.2012 till 30.04.2013 for eight circles and till 23.03.2013 for the remaining thirteen circles, with interest at SBI’s Prime Lending Rate payable only from 08.12.2014; amounts already paid shall be adjusted, and the balance shall be paid within three months of the fresh demand, with parties bearing their own costs.