Reliance Communications (RCom) has moved the telecom tribunal with a plea to quash an earlier Department of Telecommunications order that threatened to cancel the operator’s plans to sell its spectrum to Reliance Jio Infocomm (RJio), unless it pays ₹774 crore in bank guarantees.
Further, the Anil Ambani-led company has also asked the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) to direct DoT not to act in “furtherance” of the show-cause notices and restrain DoT from restraining or revoking its licences or spectrum.
RCom and its subsidiary Reliance Telecom had moved TDSAT, challenging the show-cause notice dated June 19 and June 22, last week and the petition was heard today. The case is now posted for hearing on August 10.
In its petition, RCom said the payment of ₹774 crore, for which the licensor had raised a demand, was made to DoT though encashment of bank guarantees. Now, RCom needs to renew encashed bank guarantees, payable in 2019. Earlier this month, the Tribunal directed DoT to release ₹2,540 crore of bank guarantees provided by RCom in 2016 for spectrum.
The company had approached the Tribunal contesting the demand for bank guarantees for one-time spectrum charges (OTSC) due towards payment of market-linked prices for excess spectrum held by a telco, which DoT raised in late 2015.
RCom was also of the opinion that DoT held bank guarantees worth ₹2,540 crore, despite the Tribunal’s order to return it, even as it raised a fresh ₹774-crore demand.
In its notice dated June 19, DoT had directed RCom to show-cause within 21 days as to why its telecom licences for 14 service areas should not be terminated or revoked for “wilful” breach of the terms and conditions of the licence agreement.
Spectrum instalments
The fresh demand from DoT was towards deferred spectrum instalments (for radio waves acquired through auction held in 2013 and 2015) was satisfied by money received from encashment of the petitioner’s bank guarantees. In the show-cause notice dated July 22, DoT had sought reasons for not revoking spectrum assigned to the company in the auctions ended in 2013 and 2015.
“Despite having recovered well in excess of the amount due towards the deferred spectrum liabilities, the purposed action of the respondent (DoT) in terminating the licences and revoking the spectrum is arbitrary, irrational, unreasonable and illegal and violative of the terms of the license agreements,” RCom, said in the petition, adding revocation of spectrum would be disproportionate to the curable breach alleged to have been committed. “Therefore, any coercive action at this stage is unwarranted,” it added.