TDSAT directs government to return Etisalat's bank guarantees

New Delhi: Telecom tribunal TDSAT has directed the government to return within a week the Performance Bank Guarantees (PBGs) submitted by Etisalat DB at the time of allocation of spectrum for 11 circles.

Etisalat had submitted PBGs of Rs 160 crore at the time of allocation of licences and airwaves.

"The Respondent (DoT) is hereby directed to return the PBG in respect of the circles in question within one week from date. This petition is allowed to the aforementioned extent," said the TDSAT bench, headed by its Chairman Justice S B Sinha.

The circles are - Andhra Pradesh, Gujarat, Karnataka, Kerala, Punjab, Rajasthan, Uttar Pradesh (East), Uttar Pradesh (West), Maharashtra, Haryana and Tamil Nadu.

Etisalat has contended that it had completed the roll-out obligations and as per the license conditions, its PBG should be refunded.

TDSAT also rejected the submission of DoT that licences of Etisalat have been quashed by the Supreme Court of India and it should not pass any order at this stage.

"The said submission is stated to be rejected," said TDSAT adding that Trai as well as DoT say, on the one hand, that the licences having been kept valid till September 7, 2012 and thus the rules are binding on the licensee. On the other hand, DoT contends that it need not comply with its obligations.

"It, therefore, does not lie in the mouth of the licensor that although the licences are valid, it need not perform its part of contractual obligations," said TDSAT.

On May 15, passing an interim order, the tribunal had reduced Etisalat's PBG by 50 per cent submitted before DoT.

Etisalat DB is a joint venture between Etisalat of United Arab Emirates and Dynamix Balwas Group of India. The JV got telecom services licence to operate in 15 circles through its predecessor Swan.

However, the Supreme Court on February 2 this year cancelled 122 licences of new operators including Etisalat in the 2G spectrum allocation case.

Following that the firm said it has written off $ 827 million value of its Indian operations, by way of impairment charge and closed its operation in India.