New Delhi: The Delhi high court on Friday stayed an order imposing a penalty of Rs290 crore on AT&T Global Network Services India Pvt. Ltd for unpaid licence fees between 2002-2005 by its affiliate AT & T Communication Services India Pvt. Ltd.
Both AT&T Global Network Services and AT&T Communication Services India are subsidiaries of AT&T Global Network Holdings LLC.
Based on a show cause notice issued to AT & T Communication Services India Pvt. Ltd in August 2005, the Department of Telecommunication (DoT) passed an order on 5 April imposing the penalty for unpaid license fee on AT & T Global Network Services India.
Justice Sanjeev Sachdeva questioned the validity of imposing penalty on a company which had not been issued a notice or given a chance to be heard in the first place.
Rajiv Nayyar, counsel for AT & T, told the court that AT & T Global Network Services was incorporated in 2005 and could not be penalized for breaches committed earlier.
He added that AT&T Communication Services India had been involved in the proceedings from the very beginning, and yet the demand was levied on AT&T Global Network Services, which had not been a party to the dispute.
Nayyar told the court that the 5 April order was “cryptic, bad in law, arbitrary and against the principles of natural justice” and was passed by a committee comprising members who were different from those who had heard the entire issue.
AT & T Global Network Services sought for the order to be set aside and contended that the although it belonged to the AT & T group, it was economically and operationally independent from AT&T Communication Services India.
The matter will be heard next on 19 May.