Give time to Loop Telecom to clear dues: TDSAT to BSNL

Telecom tribunal TDSAT has directed state-owned BSNL to give at least a week's time to Loop Telecom to clear dues before encashing its bank guarantee to settle the network interconnect usage charges.

The Telecom Disputes Settlement and Appellate Tribunal told the PSU that Loop "has a right to get reasonable time to satisfy the demand raised".

It also said the effect of the cancellation of Loop's licence by the Supreme Court "has to be gone into". "I am of the opinion that end of justice will be sub-served if the respondent (BSNL) is directed to give a reasonable time, not less than seven working days, to the petitioner for making payment for the demand raised by the respondent before resorting to encashment of the bank guarantees," said a vacation bench of the TDSAT.

It asked to list the matter on Loop for further hearing before the main bench on July 17.

Earlier this month, TDSAT had stayed BSNL from encashing the bank guarantee given by Loop in Madhya Pradesh and J&K circles until further orders.

Loop, which has entered into interconnect agreement with the PSU had submitted a list of 23 Bank Guarantees for different circles in its application.

While its four bank guarantees were valid up to July 15, 2012 the rest were valid up to October 2012 and April 2013. Loop had contended that its guarantees were encashed by BSNL without giving any notice and came to know about it only after it was informed by SBI through a letter on June 15. It further contended that BSNL was encashing entire amount of the guarantee, though the dues were far less.

Citing one example, Loop's counsel Meet Malhotra said that for a simple demand of Rs 50,000 a guarantee of Rs 2.5 crore was encashed.

Malhotra further contended that Loop should have at least an opportunity to see the demand before any invocation of guarantee is done by BSNL.

Loop has disputed the interconnection charges to BSNL as its licence has been cancelled. It was issued 2G spectrum with licences for 21 circles in 2008 during the tenure of the then Telecom Minister A Raja.

The Supreme Court on February 2 held that the process of allocating all the 122 second generation (2G) licences, including those to Loop, was 'arbitrary and unconstitutional' and cancelled all of them.

Last month, Loop had filed another petition before TDSAT seeking Rs 1,000 crore compensation from the government for issuing faulty licence and spectrum.