Department of Telecommunications (DoT) has been ordered by telecom tribunal TDSAT to return the Performance Bank Guarantees submitted by Etisalat DB at the time of allocation of spectrum for 11 circles. DoT has been directed to do so within a week.

The circles in question are Gujarat, Karnataka, Punjab, Rajasthan, Uttar Pradesh (East), Uttar Pradesh (West), Maharashtra, Haryana and Tamil Nadu and Andhra Pradesh and Kerala.  

Earlier, the tribunal on May 15 had reduced Etisalat’s performance bank guarantee by 50 per cent submitted before DoT in its interim order. Etisalat had submitted performance bank guarantees of Rs 160 crore at the time of allocation of licences and airwaves.

The TDSAT Bench, headed by its Chairman, Justice S.B. Sinha said, “The Respondent (DoT) is hereby directed to return the performance bank guarantees in respect of the circles in question within one week from date. This petition is allowed to the aforementioned extent.”

The argument of Etisalat was that its bank guarantees should be refunded, as it had completed the rollout obligations and as per the licence conditions.  

TDSAT also rejected the submission of the DoT that licences of Etisalat have been quashed by the Supreme Court of India and it should not pass any order at this stage.

“The said submission is stated to be rejected,” said TDSAT, adding that TRAI as well as DoT say, on the one hand, that the licences having been kept valid till September 7, 2012, and thus the rules are binding on the licensee. On the other hand, the DoT contends that it need not comply with its obligations.

“It, therefore, does not lie in the mouth of the licensor that although the licences are valid, it need not perform its part of contractual obligations,” said TDSAT.

Etisalat which acquired telecom services licence to operate in 15 circles through its predecessor Swan, DB is a joint venture between Etisalat of United Arab Emirates and Dynamix Balwas Group of India.

But following the cancellation of its spectrum licences by the Supreme Court on February 2 this year said it has written off $827 million value of its Indian operations, by way of impairment charge and closed its operations in India.