The Supreme Court on Tuesday dismissed the appeal of the department of telecommunications against the Telecom Dispute Settlement Appellate Tribunal order and asked it to modify its demand regarding the interest on licence fee collected, following the adoption of the migration regime in 1999.

The court said: "We direct the department to modify the demand issued to the cell operators to the extent it is found to charge higher amount of licence fee or interest on principles set out in the order."

"The excess amount which is liable to be refunded to the cell operators will be adjusted towards the outstanding or future dues and if still any amount becomes due to them, the same shall be refunded at the relevant bank rates. In other respects, the directions given by the tribunal are maintained."

The Bench comprising Justice Rajendra Babu and Justce A R Lakshmanan, thus practically upheld the tribunal's order directing the government to refund the interest on licence fee collected by it from four operators following their migration from the licence fee to the revenue sharing regime.

The companies which will benefit from the order are Birla AT & T Communication, BPL Mobile, Escotel Mobile and Fascel. The extent of the refund is estimated to be around Rs 150 crore (Rs 1.50 billion).

According to the migration package, the effective date of commencement of the licence was extended notionally by six months. The government granted relief to the extent of the licence fee for six months.

But while computing the dues, the department took into account these six months' licence fees for determining the interest due on arrears and charged at the rate of 5 per cent.

The tribunal held that when the principal amount, being the licence fee for six months, has been waived, no interest can be charged. The Supreme Court has accepted this view.