The licences were issued by former minister A Raja, who is accused of mis-selling bandwidth in what has been called India’s biggest corruption scandal. Mr Raja denies wrongdoing.
Government auditors say the scandal cost the country about $40bn (£24.5bn).
The judges also ordered a court to decide whether Home Minister P Chidambaram should be investigated.
Opposition MPs accuse Mr Chidambaram of failing to prevent the scandal when he was finance minister. He denies any wrongdoing.
Mr Raja is currently on trial for fraud.
India is one of the world’s fastest growing markets for mobile telephones with 893 million connections.
Reports say Thursday’s verdict is likely to affect about 5% of connections used by mobile phone customers.
India’s telecom regulator says the affected subscribers can be transferred to other mobile operators.
Correspondents say the ruling is a setback for the government which has been hit by a series of corruption scandals in recent months.