SC declines ADC relief to RCom and TTSL

In a setback for Reliance Communications (RCom) and Tata Teleservices (TTSL), the Supreme Court on Friday declined a plea against Bharat Sanchar Nigam (BSNL) raising a demand of over Rs 800 crore as levy on Walky services between August, 2005, and February, 2006.

BSNL had raised a demand of Rs 431 crore from RCom and Rs 372 crore from TTSL towards levy (known as Access Deficit Charge), along with penalty, for the period from August, 2005, to February, 2006.

In 2005, the Supreme Court had defined Walky services as Wireless In Local Loop (WLL) services, which would attract the ADC levy to be paid to BSNL. Following this, BSNL had raised an ADC demand against RCom and TTSL. This was challenged by RCom and TTSL before telecom tribunal TDSAT, which in April, 2010, held it as valid.

A Bench headed by the Chief Justice S H Kapadia declined to give stay over the order passed by TDSAT allowing BSNL to raise a bill of Rs 431 crore against RCom and Rs 372 crore against TTSL and asked the companies to produce the records of the calls originated from BSNL's network and terminated on their network.

"No stay for the time being over it. Rcom should produce records of call originated from BSNL's network and terminated on RCom's network," said the bench, which also consisted of Justices K S Radhakrishnan and Swatanter Kumar, while admitting the petitions.

Earlier, on April 15, 2010, the Telecom Disputes Settlement and Appellate Tribunal had held that the ADC demanded by BSNL from both companies for providing Walky services between August 26, 2005, and February, 2006, as valid.

During the proceedings, senior advocate Harish Salve, appearing for RCom, submitted that they were not against the ADC, but against the penalty imposed by BSNL against them.

On this, the court asked RCom whether it was challenging "penal rates or actual rates" of ADC, Salve said that at this point of time, he was only against the penalty imposed by BSNL.

He further submitted that BSNL has no right to impose a penalty for alleged wrong routing of calls as per the Interconnect Agreement instead of raising the demand of ADC as per the TRAI regulations.

"They also had similar service (walky) and they also have to pay interconnection charges to us. Why should we pay the entire amount first to them," said Salve.

On this, the bench said, "You (Rcom) also have the similar penalty provision in your agreement. If they are not paying you, then you can impose penalty on them (BSNL)."