TDSAT stays Rs 250-cr penalty on Idea

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Tuesday passed an interim order restraining the Department of Telecommunications (DoT) from imposing a penalty of Rs 250 crore on Idea Cellular.

The tribunal said non-filing of some documents cannot be a ground for refusing relief to Idea. “Non-compliance of the provisions of the code of civil procedure, in any event, by itself cannot be a ground to deny a just relief to the petitioner,” it said while directing the company to give all relevant documents to the DoT. It also said Idea was not a 'fly by night' company.

The penalty for holding overlapping licences in five circles could be as much as Rs 50 crore per licence. This amount was suggested by additional solicitor general A S Chandiok, who also represents the ministry.

The tribunal further observed that since the matter regarding transfer of licences was expected to be decided by the Delhi High Court by the end of this month, the penalty of Rs 250 crore should be stayed.

The battle between Idea Cellular and the department began after the latter went to the Delhi High Court asking it to stay the merger of the company with Spice Communications in 2008. DoT alleged Idea held extra licences in six circles after the acquisition of 41.09 per cent of Spice Communications. This was against the mergers and acquisition guidelines of the industry where an operator should hold less than 10 per cent in a competitor, in the same circle.

Earlier, a similar demand notice of a penalty of Rs 50 crore was raised with regards to the Punjab circle, and was stayed by TDSAT.

Yesterday, Idea suffered a set back after the Delhi High Court passed an order asking the company to transfer the overlapping licences of Spice to DoT. It said DoT could pass any order on breach and said the merger approval was based on suppression of facts.

"An interim order has been granted on Idea's plea against DoT's demand notice issued to Idea in June, 2011. Earlier, TDSAT had also ruled against DoT's demand notice imposing a penalty of Rs 50 crore for Punjab circle," Idea Cellular said in a statement on Tuesday.

Idea’s share price went down by 2.16 per cent to close at Rs 77 per share on the Bombay Stock Exchange.