Decided on February 04,2004



D.P.Wadhwa, - (1.)THIS petition is filed under Section 14(a)(i) of the Telecom Regulatory Authority of India Act, 1997 (for short the TRAI Act). The petitioner a licensee of two Internet (ISP) licences seeks the following reliefs :
"63. The petitioner, therefore, prays that:

(a) THIS Hon'ble Tribunal may be pleased to pass a decree/order declaring that recovery of any amount from respondent No. 2 bank by respondent No. 1 -- Union of India under the said performance bank guarantees [PBG] is illegal, unjustified and unauthorised in the facts and circumstances of this case.

(b) THIS Hon'ble Tribunal may be pleased to pass a decree/order directing refund of the amount of Rs. 6,34,000 in respect of the said PBGs by respondent No. 1 Union of India to respondent No. 2 bank or to the petitioner with interest at the rate of 12% till the date of refund.

(c) THIS Hon'ble Tribunal may be pleased to order costs of this petition to be paid to the petitioner company in respect of this petition.

(d) THIS Hon'ble Tribunal may be pleased to grant such other relief or reliefs as may be found just and proper in the nature and circumstances of this case."

(2.)There are two respondents. First respondent is the Department of Telecommunication [the licensor [DoT)] in the Ministry of Telecommunication and Information Technology, and the second respondent is the bank, namely, the Surat Peoples' Cooperative Bank Ltd. The record of the case is rather voluminous though the issue involved is quite simple.
These two ISP licences were granted to the petitioner on 4.12.1998 for the cities of Baroda and Surat (service area 'C'). Under the terms of these two licences, the petitioner furnished performance bank guarantee (PBG) for Rs. 6 lakhs by the 2nd respondent bank. Petitioner was to commence telecom service within 18 months from the effective date of the licences and offer the services on demand to its customers. The petitioner failed in providing service, even though the first respondent had reminded it by its letter, dated 1.5.2000. On the failure of the petitioner to provide the service, the performance bank guarantee was invoked. The second respondent also paid Rs. 34,000 towards interest for its delay in encashing the performance bank guarantee. Petitioner by its letter, dated 15.5.2000, surrendered the licences, which was also in terms of the licences. Bank guarantee was, however, invoked and payment received by DoT, the first respondent. Surrender of the licences was accepted by the first respondent by its letter dated 17.11.2000, and the petitioner was informed that the licences were terminated for 'convenience' with effect from 15.6.2000.

(3.)DISPUTE arose between the petitioner and the first respondent in respect of the right of the first respondent to invoke and encash the bank guarantee in the circumstances of the case. Petitioner filed a civil suit in Surat Court which was transferred to this Tribunal by the order of the Gujarat High Court. It is this very petition. Petitioner also filed a suit in the Gujarat High Court seeking a stay on the encashment of the bank guarantee. Since there was no stay, the bank guarantee was encashed which led the petitioner to seek amendment of the petition before us and thus the prayers in the petition aforesaid. In the meantime, the first respondent came out with a policy for ISPs which was stated to be published sometime in February 2002. This Exit Policy is as under:
"The Department of Telecom (DoT) has finalised a simplified Exit Policy, which permits internet service providers (ISPs) to surrender the ISP licence with out starting the service, by paying surrender charges. The surrender charges would be equivalent to 5% of the performance bank guarantee (PBG) amount. The companies desirous of surrendering their licences under the above policy shall be required to submit following documents :

(a) A demand draft equivalent to 5% of the performance bank guarantee in the name of Pay and Accounts Officer, Department of Telecom (HQ), New Delhi, payable at Delhi.

(b) Board of directors' resolution indicating company's decision to surrender the licence under the Exit Policy.

All communications in this regard should be addressed to ADG(LR-I), Room No. 1021, Department of Telecommunication, Sanchar Bhawan, New Delhi.

Vinod Vaish, Chairman Department of Telecommunication, New Delhi.

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