Supreme Court Judgement: Dismissal of Appeal for Refund of Excess Amounts by Union and RCL/RTL

A recent Supreme Court judgement has resulted in the dismissal of an appeal concerning the refund of excess amounts between the Union and RCL/RTL. The case delves into the intricacies of financial transactions and legal obligations between the parties involved. Stay updated with the full details of the judgement.


  • The Union did not refund the excess sums to RCL and RTL, leading to economic problems for the telecom service providers.
  • The appeal was heard with the consent of the parties’ counsel.
  • The Union published NIA 2013 on 30.01.2013 for spectrum auction.
  • Modified payment terms for deferred spectrum charges were issued on 19.03.2018.
  • Encashment of bank guarantees due to non-payment of charges by RCL and RTL on 11.05.2018.
  • RCL and RTL approached TDSAT seeking return of excess amounts and release of bank guarantee.
  • TDSAT directed the Union to return 104.34 crores lying unadjusted to RCL and RTL.
  • RCL and RTL submitted fresh bank guarantees of 774.25 crores for deferred spectrum liability.
  • TDSAT partly allowed RCL’s application despite Union’s objections.
  • RCL decided to exit from strategic debt restructuring and monetize assets, including spectrum licenses.
  • RCL approached TDSAT due to financial crunch and sought extension of time for deferred spectrum charges.
  • TDSAT declined reliefs claimed in certain petitions by RCL.
  • Civil Appeal No.4432-4433/2018 was filed and granted time extension for payment.
  • Sistema merged with RCL as part of a Scheme for Amalgamation under Companies Act, 1956.
  • Union disputes TDSAT’s order citing discrepancies with NIA 2013 and 2015 clauses.
  • Union accepted fresh bank guarantees, leading to asset transfer to RCL.
  • Bank guarantees were encashed for 908.91 crores instead of 774.25 crores due from RCL.

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  • The Union contends that the respondents went into liquidation and continuously defaulted in spectrum deferred payments.
  • The default amount is stated to be 21.53 crores with overdue interest of 27.63 crores as of 03.03.2019.
  • The Union argues that due to the defaults, the question of refunding excess amounts retained by the respondents does not arise.
  • The Union asserts that it has no right over the excess money directed to be refunded by the Tribunal.
  • It is contended that these issues should have been addressed in substantive proceedings and not in execution proceedings.
  • The respondents claim that the Union’s refusal to refund the money amounts to unjust enrichment at their cost.
  • Encashment of bank guarantees for default of deferred spectrum instalments was stayed by NCLAT.
  • Moratorium was revived for the Respondents, leading to Union seeking remedy under IBC.
  • Union filed claim for deferred spectrum instalments with resolution professional.
  • Union cannot claim adjustment of unlawfully encashed amount towards subsequent liabilities.
  • Telecom service providers faced financial stress, prompting policy modification by Union.
  • Union refused to refund money despite TDSAT directions.
  • Union cannot withhold excess amount refund despite judicial order.
  • Respondents contend subsequent default of deferred spectrum instalment for 2019 is separate cause of action with Union having remedies in law.
  • Despite seeking relief from TDSAT, respondents could not fulfill license conditions regarding payment of deferred spectrum charges.
  • Respondents approached TDSAT on 19.03.2018 without success.

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  • Union has no rationale to resist the demand for refund of excess amounts.
  • Total amount realized upon encashment of bank guarantees was 908.91 crores.
  • TDSAT’s order does not call for interference.
  • Union did not furnish bank guarantees for the later periods, leading to TDSAT’s direction in execution proceedings.
  • TDSAT exercised discretion by issuing direction for 104.34 crores out of 134.66 crores claimed.
  • Union invoked guarantees upon default in payment of charges.
  • Appeals to the court extended the time for making payment.
  • Logic and merit in the contention of RCL/RTL for refund of excess amounts.
  • Union’s arguments of subsequent defaults or short payments are insubstantial.
  • Despite furnishing guarantees, excess amounts had to be refunded to RCL/RTL.
  • The appeal lacks merit and is dismissed.
  • No costs are awarded in this dismissal.

Also Read: Legal Analysis on Admissions and Document Consideration in Insolvency Case


Case Number: C.A. No.-000032-000032 / 2020

Click here to read/download original judgement

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