01:59 pm - Saturday 18 November 2017

TDSAT directs DoT to return bank financial guarantee submitted by Loop

By Parvina Purkayastha - Thu Oct 11, 4:03 pm

Telecom tribunal Telecom Disputes Settlement Appellate Settlement Tribunal (TDSAT) has directed the government to return the Financial bank Gurantee (FBG) submitted by the Loop Telecom in 2006 for its National Long Distance (NLD) licence and asked it to pay Rs 50,000 as litigation cost to the operator.

The Department of Telecommunications (DoT) had ordered Loop Telecom to clear due spectrum charges of one of its sister firms, Loop Mobile India, as a precondition of surrender and release of FBG of its National Long Distance (NLD) licence.

The Telecom Disputes Settlement and Appellate Tribunal was of view that DoT cannot go beyond its licence conditions by asking Loop Telecom to pay the dues of another UASL license holder, Loop Mobile.

The licensor (DoT) cannot go beyond the terms of the license to claim a sum payable by another licensee (Loop Mobile) by way of pre-condition to accept the offer of surrender made by the licensee (Loop Telecom).

It further said: “DoT shall also pay and bear the costs of this petition to the Loop Telecom. Advocate’s fees assessed at Rs 50,000.”

Yesterday, TDSAT had directed DoT to release half of the Rs 540 crore FBG submitted by Loop for allotment of spectrum for 21 circles.

Loop was granted a NLD licence in 2006. It, however, was not allocated any spectrum and as a result it could not start services.

The company surrendered its NLD licence on September 8, 2010 stating that no services were ever launched by Loop and hence mandatory notice period should be waived off.

As per the regulations, a operator has to give 30 days and 60 days advance notice to its subscribers and licensor (DoT).

However, it was not accepted by the government and the Wireless Planning and Finance Wing (WPF) of DoT — which deals with spectrum usage charges — refused to grant “No Dues Certificate”.

The DoT said one of its subsidiary unit Loop Mobile (India) had dues of Rs 3.72 crore and asked Loop to renew its bank guarantees on September 29, 2010.

Later, Loop offered to pay the dues and asked the DoT for re-calculation of the amount on April 25, 2011. In reply, the DoT demanded a total sum of Rs 6.17 crore.

Following it, Loop approached the TDSAT contending that there does not exist any clause in the licence agreement which mandates it to pay the dues of another company or even its sister concern.

It also contended that Loop Mobile has a separate Unified Access Service Licence (UASL).

The tribunal said DoT “should have released the bank guarantees on the expiry of 60 days from the offer of surrender, that is by November 8, 2010. It did not do so it raised a demand only in March, 2011.”

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