Official sources said the law ministry's opinion, which was vetted by minister M Thambi Durai himself, has once again raised the spectre of litigations against the government's decision to extend the licence period by five years.

Communications minister Sushma Swaraj had announced the decision to grant an extension on September 18. The cabinet had cleared the extension of the licence period from 10 years to 15 years on September 17 but the government did not accede to the cellular operators' demand for a two-year moratorium on payment of licence fee.

In its note to the communications ministry, the law ministry has stated that "deviation from conditions of the tender document would amount to modification of the agreement/terms of the tender which may be struck down on thegrounds that others could have also competing terms and conditions if it was made known to them that the term of the licence fee would be extendable in spite of any default or breach of any terms and conditions of the licence agreement/tender".

The law ministry cited the judgment of the Supreme Court in a case between Poddar Steel Corporation and Ganesh Engineering Works and others in 1991, to strengthen its opinion.

The ministry has stated in its note that the Supreme Court also took the same view in a case between RD Shetty and International Airports Authority of India in 1979. The apex court had held that essential conditions of the agreement/tender must be complied with, otherwise the action would amount to illegal discrimination.

The terms and conditions for the extension of licence period would be decided by the Telecom Regulatory Authority of India (TRAI). Though about a dozen operators are yet to clear their outstandings with the government, most of them may do so after TRAI decides the termsand conditions since the minister made it clear that defaulters would not be granted any extension.

Companies which have defaulted on payment include Aircell Digilink (Haryana, Rajasthan and Uttar Pradesh (east)), JT Mobiles (Andhra Pradesh, Karnataka, Punjab), Koshika Telecom (Bihar, Orissa, UP (east and west)), Fascel Ltd (Gujarat) and Modicom (Karnataka and Punjab).

Though the industry has welcomed the extension of the licence period, it is disappointed over the government's refusal to grant a two-year moratorium on the payment of licence fee. The finance ministry is understood to have put its foot down on the issue of granting a two-year moratorium.