No favour was done to RCom, says Sibal

Communications & IT Minister Kapil Sibal today denied any favour was done to Anil Ambani’s Reliance Communications, saying the imposed penalty of over Rs 5 crore was in line with the agreement between the universal service obligation (USO) fund and the company.

The minister was reacting to a public interest suit filed yesterday by an NGO in the Supreme Court, alleging Sibal had reduced the Rs 650-crore penalty on RCom to Rs 5 crore for violation of unified access service licence (UASL) pact.

The NGO alleged that a penalty of Rs 50 crore per circle should have been imposed for “violation of the terms and conditions of the Universal Service Obligation Fund (USOF) agreement and UASL agreement by voluntary, unilateral and unauthorised switching-off/closure of services to subscribers from USOF sites without any notice”.

Rebuffing the charges, Sibal said the PIL was “malicious, motivated and defamatory” and should not be used to settle personal scores. He also questioned the basis for computing the penalty of Rs 650 crore, as the USO Fund itself had recommended a penalty of up to Rs 50 crore only.

The services of the company were switched off in November 2010 and a showcause notice was issued to the company on December 21 threatening imposition of a Rs 50-crore penalty.

“The notice of Rs 50-crore penalty was to pressure Rcom... the services were restored on February 16 this year and the company paid a penalty of Rs 5.5 crore,” he said. The minister said when the file reached him on February 18 this year that RCom had already restored the services two days before that.