DoT Gets Legal Nod To Challenge Order On Rs 7000 Crore Bank Guarantees

The Department of Telecommunications (DoT) has got legal clearance to challenge a tribunal order staying its demands from Bharti Airtel and Tata Teleservices for bank guarantees of over Rs 7,000 crore before approving the merger.

The green light comes from the Assistant Solicitor General’s office, which has said in its opinion sought by the DoT, that the dues from the carriers should be demanded, which in turn means challenging the order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) that had allowed the carriers to utilise airwaves and asked DoT to approve the merger.

“The opinion says that we should challenge the (TDSAT) order… the case will be filed within two to three weeks in the Supreme Court,” a DoT official said, adding that department had taken its time on the matter since the process requires extensive legal vetting. The official added that the ASG had “sided with the department’s internal view” of challenging the tribunal’s order.

TDSAT had in May partially stayed DoT’s demand for about Rs 8,300 crore in bank guarantees in one-time spectrum charges (OTSC) on the grounds that similar demands have been stayed in other merger cases in the industry by courts, including the Bombay High Court. The tribunal had asked DoT to take on record the merger of Bharti Airtel Ltd and Bharti Hexacom Ltd with de-merged consumer mobile services business of Tata Teleservices.

The tribunal had asked Airtel to submit half of the Rs 1,287.97 crore demand raised by DoT as OTSC for Chennai circle licence extension from November 30, 2014, to September 27, 2021. But it allowed the merging companies to “operationalise the spectrum and undertake other consequential activities”.

The merger on July 1 was operationalised by both companies, in line with the TDSAT order, and the Registrar of Companies (RoC) has already taken the merger on record, even before the DoT asked it not to do so.

Airtel has been using 71.25 Mhz of TTSL’s 4G liberalised spectrum in 1800 MHz, 2100 MHz and 850 MHz from July 1, and around 10 million TTSL customers, barely 1% of whom were active.―Business Telegraph