ETISALAT DB TELECOM (P) LTD. Vs. UNION OF INDIA[ALONGWITH PETITION NO. 659, 672 AND 722 OF 2012]

JUDGEMENT

(1.) M /s. Unitech Wireless Pvt. Ltd. and M/s. Etisalat D.B. Telecom Pvt. Ltd. have approached the Tribunal seeking a direction to the Central Government in the Department of Telecommunication (DoT) to release the "performance bank guarantees" submitted by them as stipulated in clause 21 of the Unified Access Service licences granted to them by the Union of India under section 4 of the Indian Telegraph Act, 1885. Unitech has filed twenty petitions (Petition nos. 700 to 719 of 2012) in respect of the twenty different service areas/circles for which the performance bank guarantees were furnished by it. Etisalat has filed four petitions (Petition nos. 658, 659, 672 and 722 of 2012) in respect of the four different service areas/circles to which the bank guarantees sought to be released pertain. The DoT does not deny that with the possible exception of one of the circles, namely West Bengal, it has no claim of any liquidated damages against Unitech for non -performance of the roll -out obligations under the terms of the licences in the rest of the nineteen circles for which the performance bank guarantees in question were given. Similarly, in case of Etisalat, the DoT admits that apart from Bihar circle it does not have any claim of liquidated damages against it for non -performance of the roll -out obligations in rest of the three circles for which the bank guarantees were taken from Etisalat. Nevertheless, the DoT refuses to release the bank guarantees in question and insists on holding on to those guarantees on the pretext of securitizing any demands that it might possibly have against the petitioners at some time in future.

(2.) IT is not that the controversy regarding release of the performance bank guarantee is coming to the Tribunal for the first time. It earlier came to the Tribunal and in more than one case the Tribunal held against the DoT but the DoT still refuses to release the performance bank guarantees submitted by the petitioners and tries to justify its stand on the plea that a certain clause of the UAS licence was not properly considered in the earlier decisions of the Tribunal.

(3.) IN order to appreciate the controversy it is necessary to refer to the terms of the UAS licence. The UAS licence is granted on condition of furnishing two kinds of bank guarantees, one "the performance bank guarantee" and the other "the financial bank guarantee". The performance bank guarantee is required to be submitted under sub -clause 1 and the financial bank guarantee is dealt with in the following sub -clauses of clause 21 of the licence. Clause 21 of the UAS licence is as under.