New Delhi: Telecom tribunal TDSAT has quashed the additional penalty of Rs 38.35 crore imposed on Sistema Shyam Teleservices Ltd (SSTL) by the DoT for allegedly delaying network roll-out in nine telecom circles.
A Telecom Disputes Settlement and Appellate Tribunal bench headed by Justice S B Sinha termed the additional penalty imposed on SSTL as violation of principal of natural justice.
"Demands raised towards additional LD (liquidated damages) has been quashed as the same have been issued in violation of principles of natural justice," TDSAT said in its order.
SSTL, a joint venture between the Sistema of Russia and India's Shyam Group, offers mobile and data services under the MTS brand. Sistema owns 56.68 percent stake, Russian Government represented by Rosimushchestvo (Federal Agency for State Property Management) 17.14 percent stake and Indian company Shyam Telelink has 26.05 percent stake in SSTL.
DoT had raised a total demand of around Rs 69 crore through various notices till January 2011 for SSTL allegedly failing to meet network roll-out obligation in various circles. These penalties were quashed by TDSAT in January, 2012.
In December 2011, DoT had imposed additional liquidated damages of Rs 38.35 crore on SSTL for alleged non-fulfilment of first year roll out obligations within the stipulated time frame for 9 circles.
These circles were - Orissa, UP(East), UP(West), Jammu and Kashmir, Punjab, Himachal Pradesh, North East, Gujarat and Madhya Pradesh.
SSTL had challenged the imposition of additional liquidated damages by approaching and filing petitions before TDSAT in January, 2012.
As per licence terms, a operator has to comply with its roll-out obligations in two phases.
In the first phase, 10 percent of the circle area should be covered within a year from the date of allocation of spectrum and 50 percent within a period of 3 years, failing which penalty is imposed.