Sources added that DoT was likely to proceed further against the company in the next few days by recovering an additional amount of Rs 20 crore, pledged as financial and performance guarantees by the company. Meanwhile, DoT has informed the Orissa high court that it would take atleast three more weeks to reconnect Koshika's cellular network. DoT has also said that it will consult the law ministry before re-connecting Koshika network.

The encashment is the second major blow to the Vinay Rai-promoted Koshika Telecom, as the DoT, on April 15, 1999, cancelled the company's licence for operating cellular services in Bihar, Orissa and UP on grounds of non-payment of licence fee dues to the tune of Rs 405.93 crore.

Koshika's bank guarantee for the Bihar circlewas Rs 13.66 crore, Rs 8.92 crore for Orissa, Rs 21.09 for UP (East) and Rs 36.93 crore for the UP West circle.

DoT counsel on Tuesday informed the Orissa high court that it would take more time to comply with the order of July 16, 1999 ordering the DoT to reconnect Koshika's cellular network to the DoT landline system latest by July 21.

The department has taken the stand that it would not be possible to reconnect the service immediately as there was a detailed procedure for ensuring the same. DoT will have to reconnect close to 70 point-of-interconnection (PoI) of Koshika.

PoI's are nodes located at certain telephone exchanges where a land-line network is integrated with a cellular network.

However, DoT has not cut the mobile-to-mobile phone call capability of the disconnected networks as yet. A division bench of the Orissa high court had ordered that the restoration of PoI be subject to the condition that the DoT would be able to immediately encash the bank guarantee of Rs 8.9 crore. In addition,Koshika was also directed to pay Rs 8.9 crore to the DoT by August 31, 1999.

The court had further clarified that DoT would only be able to recover licence fee arrears as per law only after August 31, 1999.