Telecom tribunal TDSAT has criticised state owned MTNL for deducting Rs 88 lakh claiming dues from Tata Communications it based on the demand notices issued in June 2012.

The two companies had tied up with each other to offer ILD services for Mumbai and Delhi circles but due to some dispute the Tata group firm moved Telecom Disputes Settlement and Appellate Tribunal for recovery of Rs 88 lakh from MTNL.

"It was expected of a public sector undertaking which is a 'State' within the meaning of Article 12 of the Constitution of India to seek leave of this Tribunal before any such deduction was made", said the tribunal. It said that the money owed by Tata was a public money and recovery should not be stayed.

The tribunal said that there should not be a stay of recovery of public money by way of adjustments of the bills, in our opinion, cannot prima facie be accepted. If the MTNL was so much concerned about the public money it ought to have taken steps to recover the same at an early date.

The contention of Tata Communications was that Rs 80 lakh adjusted by MTNL was barred by limitation and deduction was made on the pretext of old demands ranging from May, 2005 to August 2008. TDSAT agreed with the PSU on this.

TDSAT Chairman Justice S B Sinha said that prima facie bills which are sought to be enforced are apparently barred under the law of limitation.

While Tata's petition remained pending, MTNL deducted Rs 88 claiming dues from it based on the demand notices issued in June 2012.

Tata group firm in another petition before the TDSAT had said that deduction was made on the pretext of old demands ranging from May, 2005 to August 2008, which are also time barred under the laws of limitation.