TDSAT grants temporary relief to Aircel, bars DoT from encashing telco's bank guarantees

NEW DELHI: The telecom tribunal has temporarily barred the telecom department from encashing bank guarantees of Aircel amounting to more Rs 1,200 crore, in a partial relief to the troubled telecom operator.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Monday extended a stay on encashment of both financial and performance-based bank guarantees of Aircel, saying it will wait till the Supreme Court hears a separate matter on one-time spectrum charges in a case involving Aircel and DoT in two weeks.

On Monday, Aircel also apprised the apex court of its bankruptcy filing in the National Company Law Tribunal (NCLT), Mumbai.


"We have been informed that a SLP (civil appeal) 2280 by Aircel against DoT (on one-time spectrum charge) is before the Supreme Court, and today, same has been adjourned for two weeks... we will like to hear this matter after two weeks, when it has been considered by the Supreme Court," TDSAT chairperson SK Singh said on Monday.

The matter will now be heard on April 19.

Aircel and its units Dishnet Wireless and Aircel Cellular have filed for bankruptcy after over four months of attempts to settle with lenders. The company has debt of about Rs 50,000 crore.

Earlier this month, the DoT had sought to encash guarantees given by various banks on behalf of Aircel and its two companies on the grounds that the Chennai-headquartered company had filed for insolvency without giving advance notice to DoT and had not deposited spectrum usage charge and license fee of the last quarter. This, it said, was a "major breach of terms and conditions" of the license.

Aircel approached TDSAT, seeking a stay on DoT’s directions, pointing out that the tribunal or other courts had already stayed furnishing of several bank guarantees in other cases.

On March 6, TDSAT accepted Aircel’s request, and said, "... no further encashment of bank guarantee of the petitioner (Aircel) shall take place till the next date."

The tribunal also asked Aircel and DoT to file affidavits giving details of the issue at hand, including what Aircel owes the telecom department.

During arguments on Monday, senior lawyer Dhruv Tamta representing DoT said Aircel owed the government a minimum of about Rs 6,500 crore, including Rs 722 crore in one-time spectrum charges, spectrum usage charge, license fee and other charges.

"The bank guarantee revocation letter has been issued by the respondent (DoT) as per the terms and conditions of the license agreement... That the petitioner has filed for bankruptcy on 28.2.2018 in NCLT Mumbai, without giving any prior intimation to the respondent," DoT has said in its affidavit filed with the tribunal, parts of which were read out during the hearing.