Govt challenges TDSAT order against penalty on 12 telcos

The government today moved the Supreme Court challenging the orders of telecom tribunal TDSAT which has set aside penalty imposed by the Department of Telecommunications (DoT) against 12 telecom operators, including Bharti Airtel and Idea Cellular, for non-payment of licence fee.

The telecoms involved also include Bharti Hexacom, Reliance Telecom and Vodafone Essar.

The petition was heard before a bench headed by Chief Justice S H Kapadia, which directed the matter to list after 4 weeks for further hearing.

The DoT in its petition had contended that these companies were liable to pay penalty and interest over non- payment of licence fee for the period between February 1999-December 2001.

On November 11, 2009, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had set aside the DoT demand for penalty on the ground that it had acted "without the authority of law".

The tribunal had observed that the agreement signed between the DoT and the operators did not contain any provision for levy of interest and penalty.

Opposing TDSAT's observation, DoT submitted before the apex court that as per Clause 13 of the Service Licence Agreement signed with DoT in 1995, the telcos were to pay interest at the rate of 15 per cent, besides penalty for non- payment of licence fee.

"The order passed by tribunal is wrong and liable to be set aside as clause 13 of the agreement signed in the year 1995 deals with penalty and gives the omnibus Right to the Licensor to impose any penalty as it may deem fit," said DoT in its petition.

It further said that "TDSAT had failed to appreciate the fact that respondent had no right to unilaterally withhold the payment of government dues indefinitely, without becoming liable to payment of compensatory interest and penalty to the public exchequer".