Bombay High Court Quashes Retrospective Spectrum Charges on Airtel, Vodafone Idea

The telecom companies challenged the demands, contending that they had already paid licence fees, entry fees and spectrum usage charges under the revenue-sharing regime introduced through the National Telecom Policy, 1999. They argued that the government had no contractual or statutory basis to retrospectively impose an additional spectrum acquisition charge.

Rejecting the government’s defence, the High Court held that while radio spectrum is a scarce natural resource held by the State in public trust, the government remains bound by the terms of licences executed under statutory authority. The court said public interest considerations cannot be used to override contractual commitments or justify unilateral retrospective levies that are unsupported by law.

Airtel and Vodafone Idea Bank Guarantees Asked to be Returned

The court held that the Centre had failed to justify the retrospective levy of the one-time spectrum charge (OTSC) and set aside the Cabinet decisions dated November 8 and December 28, 2012, along with the consequent demand notices. It also directed the return of bank guarantees and quashed all measures taken pursuant to the notices.

The Bench also reportedly noted that the telecom policy framework evolved over time with a focus on expanding affordable telecom services, improving rural connectivity and ensuring efficient spectrum management, rather than maximising government revenue. It observed that earlier policy documents and regulatory recommendations largely contemplated recurring spectrum usage charges based on revenue sharing and did not envisage retrospective one-time charges for spectrum holdings up to 10 MHz.

The court noted that under the National Telecom Policy of 1999, telecom operators had migrated to a revenue-sharing regime and were already paying higher spectrum usage charges as additional spectrum was allotted. It observed that the government had itself allocated spectrum beyond 6.2 MHz by charging additional revenue share and later attempted to impose a separate one-time charge.

“Consequently, the bank guarantees, if any, given by the petitioners shall be returned and they would not be required to keep them alive in future. Any steps that may have been taken by the respondent in pursuance of the impugned decisions and demand notices also stand quashed and set aside,” the court said in its judgement.

The judgment does not mention the total value of the demands raised. According to their latest annual reports, Airtel had recorded a contingent liability of Rs 16,000 crore, while Vodafone Idea had recorded dues of Rs 7,581 crore in connection with the matter, according to multiple media reports.

“This ruling marks an important milestone for India’s telecom sector by eliminating legal and financial uncertainty and creating a more supportive environment for future investments,” Airtel said in a statement, according to an Economic Times report dated June 9, 2026.