A bench headed by Justice J S Khehar said the central government would approve the merger as soon as the amount is paid to it by the firm. The court order added that if Vodafone succeeded in its petitions before the TDSAT, the government should refund the amount to the company with interest determined by the tribunal.
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The Court after hearing the arguments proposed that Vodafone pay Rs. 2000 crore to DoT for approving the merger.
The dispute was taken to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which in late October this year sided with Vodafone. The Supreme Court made it a round figure of Rs 2,000 crore. Vodafone chose the first option, fearing further delays in the merger.
Additional Solicitor General PS Narasimha appeared for the Central government along with Advocate Asha Gopalan Nair. Explaining the rationale of the order, Nair said the court had treated Rs 1,773 crore as the base value of the deal.
Vodafone India Ltd, the country’s second-biggest mobile phone carrier by customers and revenue, is contesting at a telecoms tribunal government charges of about $1.1 billion for merging the businesses. In 2012, with its eye on an IPO, Vodafone embarked on a plan to merge Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services. The company also says that the merger will just change the holding structure and there will not be change in services post it.
Vodafone first proposed the amalgamation in 2012 in connection with a proposed initial public offering (IPO). The telco later dropped the proposal citing weak market conditions, regulatory uncertainty and the ongoing Rs.20,000-crore tax case being fought between its parent company and the Indian government.
However, the telecom company says that dues sought by DoT are already under litigation and that the merger should not invite such charges. This meant Vodafone needed to pay market-linked prices for airwaves in those circles which fell under the units.
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The merger has been approved by the respective high courts but the DoT has still not approved it because it treats it under its merger and acquisition norms for which the company needs to pay for spectrum charges as per auction-determined rates in addition to the one-time charges for spectrum in excess of 4.4 MHz.
