In what may lead to a face-off with the department of telecommunications (DoT), AV Birla group company, Idea Cellular has termed the show cause notice served on for paying liquidated damages for delayed roll out of services in Delhi circle in 2002, as “one-sided”.
The company has sought the withdrawal of the show cause notice and requested a personal hearing on the case.
In a letter written by the company’s managing director, Sanjeev Aga to the DoT secretary, DS Mathur, the company while expressing “surprise” and ‘dismay” at receiving the notice has said, “when the DoT as the licensor on the one hand, is party to a contract, and on the other hand is also the government, it has the responsibility of being even handed. In the specific case, the action seem one sided”.
“Our objection is not only because the principle is flawed but also because this case is different from normal delayed roll out obligations,” Aga has said.
As reported by FE earlier, DoT had rejected the company’s claims of a compensation of Rs 836.33 million from it on account of various delays in granting it spectrum and other clearances for the Delhi circle in 2002, which delayed the launch of the services of the company.
Later, Idea had modified its demand seeking adjustment of interest on entry fee of Rs 171.6 crore for five months at SBI PLR prevailing from May/June 2002 to October 2002 and waiver of all liquidated damage charges.
While rejecting the demands, DoT had charged Idea of not complying with the licence conditions and obtaining a certificate from the telecom engineering centre (TEC) of starting the services within a year of being granted the licence. DoT had said that it would levy liquidated damages on the company for the violation. S ticking to its stand, Aga has written that, “the licence represents a contract with mutual obligations. If there is a breach, it is to be determined which of the contracting parties is the cause of the breach and which party suffered as a consequence. It is clear that inability of obtaining TEC approval in time was a direct consequence of delays caused by the licensor. It is also clear that the delay in launch of commercial operations in Delhi has caused a large and enduring loss to Idea, which if valued correctly would run into very large sums”.