The Supreme Court on February 20, 2026, held that telecom operator Sistema Shyam Teleservices Limited is liable to pay the reserve price fixed for the November 2012 2G spectrum auction from February 2, 2012, the date on which its licence stood quashed, and not from February 15, 2013 as held by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), while restricting the levy of interest to December 8, 2014 due to delay on the part of the Department of Telecommunications (DoT).
Case Title: Union of India v. Sistema Shyam Teleservices Limited
Court: Supreme Court of India
Bench: Justice Sanjay Kumar and Justice K. Vinod Chandran
Date of Judgment: February 20, 2026
Citation: 2026 INSC 174
Case Number: Civil Appeal No. 12219 of 2018
Aftermath of the 2G Spectrum Judgment
The dispute traces its origin to the landmark judgment dated February 2, 2012, in Centre for Public Interest Litigation v. Union of India, wherein the Supreme Court declared illegal the grant of Unified Access Service licences and allocation of 2G spectrum to several telecom operators, including Sistema Shyam Teleservices Limited, and quashed the licences.
Although the licences were quashed, the Court allowed them to continue operations for four months in order to prevent disruption of telecom services to the general public.
The intent was not to benefit the licensees but to safeguard consumers while the Telecom Regulatory Authority of India conducted fresh auctions .
However, as fresh auctions could not be concluded within the stipulated period, the DoT sought multiple extensions. Eventually, on February 15, 2013, the Supreme Court passed a crucial order directing:
“Such of the licensees, who continued operation after 2.2.2012, whether or not they gave bid in the auction conducted on 12.11.2012 and 14.11.2012, shall pay the reserve price fixed by the Government for the purpose of conducting auction in November 2012.”
This direction became the fulcrum of the present litigation.
DoT’s Demand and TDSAT’s Interpretation
Pursuant to the February 15, 2013 order, the DoT issued a show-cause notice dated November 17, 2014, and later demand notices quantifying the reserve price and interest liability running into hundreds of crores of rupees.
Sistema challenged these notices before the TDSAT, which by its order dated May 10, 2018,held that while the company was liable to pay the reserve price, such liability would commence only from February 15, 2013, the date of the Supreme Court’s direction, and not from February 2, 2012.
The TDSAT reasoned that since the licensees had been allowed to continue operations under interim extensions, no levy could be imposed prior to February 15, 2013. It also restricted the levy period up to April 30, 2013, for eight circles where Sistema succeeded in the March 2013 auction, and up to March 23, 201,3 for the remaining thirteen circles.
On interest, the TDSAT held that it would be payable only from December 8, 2014, the expiry of 21 days from the show-cause notice, and not from 2013.
Aggrieved by the interpretation regarding the commencement date of liability, the Union of India approached the Supreme Court.
Supreme Court: Liability Commences from February 2, 2012
Justice Sanjay Kumar, writing for the Bench, found the TDSAT’s interpretation “wholly erroneous”.
The Court categorically rejected the TDSAT’s view that the February 15, 2013, order did not specify a starting date.
It held that the language of the order clearly indicated that liability commenced from February 2, 2012, the date of quashing of licences.
The judgment observed:
“This Court specifically directed that those licensees who had continued their operations ‘after 02.02.2012’ should pay the reserve price fixed for the auction held in November, 2012, and it is manifestly clear from the context that such liability commenced from 02.02.2012 itself.”
The Court emphasized that had the intention been to impose liability from February 15, 2013, it would have expressly stated so. The reference to February 2, 2012, in the operative order left no scope for interpretative dilution.
It further underlined that the continuation of operations after the quashing of licences was only to protect public interest and not to confer any benefit upon the licensees.
The levy of reserve price was described as a “premium” imposed upon those who continued to
“garner the benefit of the licences illegally granted to them”
End Date of Liability
While disagreeing with the TDSAT on the commencement date, the Supreme Court upheld its finding regarding the concluding date.
The Court noted that Sistema had emerged successful in the March 11, 2013, auction for eight circles and was issued a Letter of Intent (LoI) on April 30, 2013. The LoI clearly stipulated that the 20-year term of spectrum allocation would commence from the date of issuance of the LoI.
Accordingly, the Court held that the levy of reserve price could not continue beyond April 30, 2013, for those eight circles. For the remaining thirteen circles, liability would run only until March 23, 2013, the date when operations ceased.
Interest Liability
On the question of interest, the Supreme Court concurred with the TDSAT that the DoT could not claim interest for the period during which it remained inactive.
The Bench observed:
“Having slept over the matter for that length of time, the DoT cannot take advantage of its own lassitude and seek to mulct upon the respondent interest liability for that period.”
Since the show-cause notice was issued only on November 17, 2014, and granted 21 days’ time, interest would be payable only from December 8, 2014.
Final Directions of the Supreme Court
Allowing the appeal in part, the Supreme Court held that Sistema is liable to:
- Pay the reserve price fixed for the November 2012 auction from February 2, 2012, to April 30, 2013, for eight circles;
- Pay the reserve price from February 2, 201,2 to March 23, 201,3 for the remaining thirteen circles;
- Pay interest at SBI’s Prime Lending Rate only from December 8, 2014;
- Adjust the amount already paid against the total liability.
- Clear the balance within three months from receipt of fresh demand.
The Court directed parties to bear their own costs.
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