TDSAT stays Rs 50 cr penalty on Idea Cellular

The sectoral tribunal TDSAT today stayed Rs 50 crore penalty imposed by Department of Telecom (DoT) on Idea Cellular for violating licence conditions by merging the Aditya Birla group firm with Spice Telecom.

Passing an interim order, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) said that the penalty would not be effective till its further order.

"We are of the opinion that the impugned order need not be given any effect till further order," said the TDSAT bench headed by chairman Justice S B Sinha.

The tribunal also observed that the Idea Cellular has raised a prima facie case, which needs to be looked into by it.

"We are of the opinion that the petitioner has raised a triable issue," said the tribunal.

TDSAT's direction came over a petition of Idea Cellular challenging the penalty.

The DoT had on February 24, 2011 slapped a penalty of Rs 50 crore on Idea Cellular for not providing requisite information about its merger with Spice Telecom despite several requests.

However, it was opposed by Idea Cellular, which said the regulator did not provide it opportunity to present its case before imposing the penalty.

As per the terms of the licence, the licensee can not merge or amalgamate with any other company or create any third party interest till three years of licence.

It also provides that a person can't buy  10% or more stake in more than one telecom licensee.

The Idea Cellular has 41.09% stake in Spice Telecommunication since October 17, 2008.

On Jan 31, 2011 Idea Cellular had moved telecom tribunal TDSAT seeking directions to DoT to issue it 3G spectrum in Punjab & Haryana circle, where the allocation has been pending because of Idea's merger with Spice Telecom.

It also had sought directions to the DoT for making necessary amendments in the licence terms so as to make Idea Cellular a licensor of 3G spectrum in Punjab.

However, the tribunal stayed its proceedings after the Supreme Court restrained all courts from passing any order on cases related to allocation of spectrum.

Later, on March 16, an apex court two-member bench of Justice G S Singhvi and Justice A K Ganguly asked TDSAT to take a decision on the plea of Idea.

"It is related with 3G spectrum allocation and it should be dealt with separately," the Supreme Court had said on the application moved by the Idea Cellular.

The High courts of Gujarat and Delhi have approved the merger of Spice Communications with Idea. They sanctioned the scheme of amalgamation of the two companies.