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Delhi HC stops transfer of six Spice licences to Idea Cellular

Delhi HC stops transfer of six Spice licences to Idea Cellular
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First Published: Tue, Jul 05 2011. 01 15 AM IST
Updated: Tue, Jul 05 2011. 10 36 AM IST
New Delhi: In a setback to Aditya Birla Group’s Idea Cellular Ltd, the Delhi high court said on Monday that six overlapping licences of Spice Communications Ltd won’t be transferred to it as the company did not comply with licence and merger guidelines.
The court said the licences and spectrum would now revert to the department of telecommunications (DoT).
Four out of the six overlapping licences of Spice were not operational, while those for Karnataka and Punjab were in use.
Idea now has to apply afresh to DoT to merge its licences with those of Spice.
The court also imposed a fine of Rs 1 crore on Idea for suppression of facts and directed that till the department gives its permission to Idea to use the licences of Spice Communications, the “overlapping licences of Spice shall forthwith stand transferred with DoT”.
The court said Idea had not supplied the rejection letters issued by DoT on the licence mergers when it applied to the high court for permission to absorb them in 2008.
“It is directed that notwithstanding anything stated in the sanctioned scheme and in the order dated 5 February 2010, the six overlapping licences of the Spice would not stand transferred or vested with Idea till prior permission of DoT is obtained,” said justice Manmohan, who uses only one name, in his 51-page order.
“Idea followed process as advised by the DoT,” the company said in a release.
“Idea stands upright, has not suppressed anything at all, let alone wilfully, and will appeal for what it believes is right,” the release said.
The company had approached DoT regarding the merger of overlapping licences, or their surrender, Idea said.
Both options would have led to the “same outcome, i.e., the spectrum returns to the government and no benefit to Idea,” the company said. “This was because the overlapping licences were non-operational and had no attached subscribers.”
The court said that it was “of the view that costs should be imposed on Idea for not bringing to the notice of this court the rejection letters dated 7 January 2010 and 18 January 2010 issued by DoT and for not placing on record relevant and material documents like licence, merger guidelines and correspondence exchanged between the parties.”
Idea was directed to pay the fine to the department within six weeks.
“The suppression of documents was not an innocent act especially in view of petitioner’s own understanding of licences and merger guidelines as reflected in the contemporaneous correspondences,” ruled the court.
“The spectrum allocated for such overlapping licences shall also forthwith revert back to DoT,” the court said.
Idea said that the merger sanctioned on 5 February 2010 “now stands reaffirmed. Certain clauses relating to an earlier contemplated demerger have been deleted, and overlapping Spice licences to revert to the DoT. While imposing costs on the company of Rs 1 crore for suppression, the option to challenge the order is allowed”.
The court said that as Idea used the overlapping licences without any prior permission of the department from 5 February 2010 till date “in contravention of the licence and merger guidelines, it is directed that it shall be open to DoT to pass any order for such breach”.
The court also directed DoT to ensure that the customers of two circles—Punjab and Karnataka—where the licences of Spice were operational, shall not suffer due to interruption of service.
The high court’s order came over an application filed by DoT, requesting it to recall and stay its earlier order allowing the amalgamation of Spice Communications with Idea Cellular.
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First Published: Tue, Jul 05 2011. 01 15 AM IST