TDSAT directs DoT to return Videocon Telecom's bank guarantee

Last Updated: Tuesday, October 30, 2012 - 22:53

New Delhi: Telecom tribunal TDSAT has directed the government to return the Performance Bank Guarantee (PBG) submitted by Videocon Telecom at the time of spectrum allotment in five circles.

The TDSAT said: "this Tribunal is of the opinion that the Respondent (DoT) cannot take advantage of its own wrong".

"These petitions are, therefore, allowed. The Respondent (DoT) is hereby directed to return the PBGs, in respect of the aforementioned circles," said the Telecom Disputes Settlement and Appellate Tribunal.

The circles are Himachal Pradesh, Orissa, Rajasthan, UP (West) and Karnataka. Videocon was alloted licences for 22 circles.

The firm had approached the TDSAT for revision of its bank guarantee after completing its roll-out obligations.

According to the company, it has completed the mandatory 50 percent and PBG should be reduced. However, because it was not done, it approached the TDSAT.

TDSAT said the DoT can not keep the bank guarantee alive for years after years as the operators have to incur certain expenditures. "Failure on its part to do so cannot be taken into consideration for opining that the Petitioner (Videocon) would not be rendered just relief to which it is entitled to," said the TDSAT bench headed by Justice S B Sinha.

It further said that Telecom Enforcement, Resource and Monitoring (TERM) Cells of DoT has already issued certificate from July, 2010 till May, 2012.

"It is also not in dispute that the TERM cell while issuing the said certificate would send a copy thereof to the DOT. The DOT was to act thereupon. It has an obligation to act within a reasonable time," TDSAT said.

It also said it did not agree with the submissions of the DoT that the Central Government is required to take a final decision in bank guarantee issue, hence, it could not be mere returned after getting report from TERM Cell.

"Keeping in view the fact that it had an obligation under the licence agreement, which is a contract within the meaning of the provisions of the Indian Contract Act, DoT was required to discharge its contractual liabilities, in absence of a time fixed within a reasonable period.

"It is difficult to comprehend that why in certain cases, as indicated heretobefore, it could not complete its verification as regards fulfilment of the roll out obligation process by the Petitioner for a period of more than two years or three years," said TDSAT.


First Published: Tuesday, October 30, 2012 - 22:53

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