Vodafone Idea on Tuesday said the Bombay High Court has quashed one-time spectrum charge (OTSC) demands raised by the Department of Telecommunications (DoT) against the company and its erstwhile subsidiary Spice Communications, providing relief of Rs 2,113 crore.


In a stock exchange filing, the telecom operator said the court also ordered the return of bank guarantees furnished to the DoT in connection with the dispute.

The case relates to DoT’s decision to levy one-time spectrum charges on telecom operators for spectrum holdings beyond 6.2 MHz. In January 2013, the department had raised demands on erstwhile Idea Cellular Ltd. and Spice Communications for spectrum held beyond 6.2 MHz during the retrospective period from July 1, 2008 to December 31, 2012, as well as for spectrum held beyond 4.4 MHz from January 1, 2013 onwards until licence expiry.

Idea Cellular, which is now Vodafone Idea following a merger with Vodafone India, had challenged the demands before the Bombay High Court, arguing that they amounted to a retrospective alteration of the financial terms of telecom licences granted years earlier.

The High Court had granted interim protection in January 2013, restraining the DoT from taking coercive action against the company over the disputed dues.

According to Vodafone Idea, the dispute became more complicated after the DoT approved the merger of Vodafone India Ltd. and Vodafone Mobile Services Ltd. with Idea Cellular in 2018. At the time, the department revised the spectrum charge demands to Rs 3,322 crore and sought bank guarantees from the company to secure the disputed amount.

Vodafone Idea furnished the bank guarantees under protest and subsequently challenged the requirement before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which granted relief to the company. The DoT later secured a stay on the TDSAT order from the Supreme Court.

In its latest filing, Vodafone Idea said the Bombay High Court on June 8 quashed the original demand notices issued to Idea Cellular and Spice Communications aggregating to Rs 2,113 crore and directed the return of the bank guarantees submitted to the DoT.

The ruling comes as part of a wider judgment in which the Bombay High Court held that the government could not retrospectively impose one-time spectrum charges on telecom operators without legal backing in the licence agreements or under the Indian Telegraph Act.