In a significant ruling revisiting the aftermath of the 2G spectrum case, the Supreme Court of India has clarified when telecom operator Sistema Shyam Teleservices Limited became liable to pay the reserve price for spectrum.
Allowing the Union Government’s appeal, the Court ruled that Sistema must pay the auction reserve price from February 2, 2012 - the very date on which its earlier licence was quashed - and not from February 15, 2013 as held by the telecom tribunal.
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The judgment was delivered by a bench of Justice Sanjay Kumar and Justice K. Vinod Chandran on February 20, 2026 .
Background of the Case
The dispute traces back to the landmark 2G spectrum judgment in Centre for Public Interest Litigation v. Union of India, where the Supreme Court had cancelled 122 telecom licences issued in 2008, including those granted to Sistema.
Although the licences were declared illegal on February 2, 2012, operators were allowed to continue for a limited period so that telecom services to the public were not abruptly disrupted. The Court expected fresh auctions to be completed within four months.
However, the auction process was delayed multiple times at the request of the Department of Telecommunications (DoT). During this extended period, operators continued providing services.
On February 15, 2013, the Supreme Court directed that all licensees who continued operations after February 2, 2012 must pay the reserve price fixed for the November 2012 auction.
The DoT later issued demand notices to Sistema, calculating dues of hundreds of crores. Sistema challenged the demand before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
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What TDSAT Decided
In 2018, TDSAT held that Sistema’s liability to pay the reserve price would start from February 15, 2013 - the date of the Supreme Court’s clarification order - and not from February 2, 2012.
The tribunal reasoned that the operators were permitted to continue operations through successive extensions, and therefore no payment could be demanded for the earlier period.
TDSAT also held that:
- For 8 telecom circles where Sistema later won fresh spectrum, liability would end on April 30, 2013 (date of Letter of Intent).
- For the remaining 13 circles, liability would end on March 23, 2013 (date operations stopped).
- Interest would be payable only from December 8, 2014, after expiry of the show-cause notice period.
The Union of India challenged this interpretation before the Supreme Court.
Supreme Court’s Observations
The bench disagreed with TDSAT’s reading of its earlier order.
The Court noted that the February 15, 2013 order clearly stated that licensees who continued operations “after 02.02.2012” must pay the reserve price.
“The understanding of the TDSAT that this order did not indicate the ‘starting date’ is factually incorrect,” the bench observed.
The Court emphasised that February 2, 2012 was specifically mentioned in the earlier order. Therefore, the liability began from that very date.
The judges made it clear that operators were allowed to continue services only in public interest - not for their own benefit.
“The expectation of this Court that the process of a fresh auction would only take four months proved illusory,” the bench noted, adding that extensions were granted to protect telecom users, not to shield licensees from financial consequences .
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On the End Date of Liability
However, the Supreme Court agreed with TDSAT on the end date of payment.
For the 8 circles where Sistema successfully bid in the March 2013 auction, liability would end on April 30, 2013 - the date of the Letter of Intent.
For the remaining 13 circles, it would end on March 23, 2013, when operations ceased.
The Court clarified that once the Letter of Intent was issued, starting a fresh 20-year term, it would be incorrect to continue charging reserve price beyond that date.
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On Interest
The bench upheld TDSAT’s ruling on interest.
It noted that the DoT issued the show-cause notice only in November 2014, despite the Supreme Court’s direction in February 2013.
Having delayed action for over a year, the government could not claim interest for that earlier period.
“Having slept over the matter for that length of time, the DoT cannot take advantage of its own lassitude,” the Court observed .
Accordingly, interest will apply only from December 8, 2014.
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The Final Decision
Allowing the Union of India’s appeal, the Supreme Court held:
- Sistema must pay the November 2012 reserve price
- From February 2, 2012 to April 30, 2013 (for 8 circles)
- From February 2, 2012 to March 23, 2013 (for 13 circles)
- Interest at SBI’s Prime Lending Rate will apply only from December 8, 2014
- Amount already paid will be adjusted
- The balance must be cleared within three months of fresh demand
Parties were directed to bear their own costs .
Case Title: Union of India vs Sistema Shyam Teleservices Limited
Case No.: Civil Appeal No. 12219 of 2018
Decision Date: February 20, 2026
