The Department of Telecom (DoT) is looking to the communication minister Kapil Sibal in a case of Rs 600 crore penalty on Reliance Communications and its unit, Reliance Telecom, Reports Economic Times.

These companies had violated shared mobile infrastructure regulations by shutting down coverage in 12 states between November 16, 2010 and January 20, 2011.

The Access Services (AS) wing of the Department of Telecom (DoT), which looks into all operational issues linked with the sector, has recommended that Reliance Communications Ltd be slapped with the maximum possible penalty of Rs 450 crore and its subsidiary Reliance Telecom Ltd (RTL) be fined Rs 150 crore for the alleged violation.

According to First Post, Sibal overruled the ‘strong’ recommendations of his Director (Telecom), Advisor (Finance), Member (Finance) and Secretary (Telecom), all of whom had proposed a penalty of Rs 50 crore on RCom in one circle. Under the Unified Access Service Licence (UASL) conditions, penalties for violation of licence conditions can go upto Rs 50 crore per circle. Since RCom had shut off services unilaterally in 12-13 circles, the actual fine could have gone upwards of Rs 600 crore.

Earlier this month, the Attorney General, G.E. Vahanvati, had said that the Communication and IT Minister, Kapil Sibal, cannot be faulted for penalising Reliance Communication as per the terms and conditions of the USO fund agreement.

Questions were raised by lawyers of the Centre for Public Interest Litigation, before the Supreme Court, about Sibal's decision to base the penalty amount on the USO fund agreement instead of Unified Access licence agreement.

Under the USO fund agreement, defaulters are charged Rs 500 for each day of violation while under the licence agreement the penalty amount is much higher at Rs 50 crore per circle.

In the case of RCom, Sibal's decision meant a penalty of around Rs 6 crore compared to Rs 650 crore if the punitive measure was imposed on a circle basis.

“There was a specific provision in the USO fund agreement to deal with the situation at hand and the view that resort to another provision under the UASL agreement would not commensurate is reasonable and justified,” Vahanwati said in his comments sent to the Department of Telecom.

The controversy had arisen because the USO fund administrator had earlier issued a notice to the company in which it was stated that the penalty amount would be Rs 50 crore per circle but then later when the file was put up for approval, the Telecom Minister changed the penalty amount as per the terms of the USO agreement. The DoT then sought the AG's view on the matter.