DoT sources said, "We were left with no option other than issuing a notice to the company as it had failed to meet contractual obligations and failed to pay up licence fee arrears of Rs 348 crore including interest."

Meanwhile, DoT sources said that Reliance Telecom had paid up Rs 16.42 crore as 20 per cent of outstanding licence fee on Monday. Sources said that the company, which had cases pending in the Telecom Regulatory Authority of India (TRAI), had come forward on its own to pay up the dues.

Earlier, on Monday JT Mobiles moved the Delhi High Court seeking a stay on the DoT notice. After a brief hearing, justice MK Sharma adjourned the case for April21.

Counsel for JT Mobiles Shanti Bhushan said that the company should not be forced to pay the licence fee for the period they have not been able to actually operate the service because of DoT's failure to grant certain permissions.

Bhushan said the department had granted permission to Evergrowth Ltd, a wholly owned subsidiary of JT Mobiles, to operate mobile services in Punjab in 1996 which was cancelled in 1997 and later restored in 1998 leading to delays.

DoT counsel Rakesh Tiku said the permission to Evergrowth Ltd to operate cellular service on behalf of JT Mobiles was conditional and was withdrawn by the department following the company's failure to fulfil those conditions.