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Telecom department barred from encashing Aircel’s bank guarantees

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has given temporary relief to bankrupt telco Aircel, as it barred the Department of Telecom from encashing bank guarantees of Aircel amounting to more Rs 1,200 crore. The telecom tribunal has said it will wait for the Supreme Court to hear another matter involving the two parties.

The Department of Telecom moved to encash guarantees given by banks on behalf of Aircel and its two companies, alleging “major breach of terms and conditions” as Aircel filed for insolvency without giving an advance notice to the department. The DoT also said that the telco did not pay spectrum usage charge and license fee last quarter.

The Supreme Court will hear a matter on one-time spectrum charges involving DoT and Aircel in two weeks on April 19.

Last month, Aircel filed for bankruptcy with the National Companies Law Tribunal (NCLT) citing “deep financial stress”.

Recovering dues

Separately, Swedish company Ericsson has moved the Delhi High Court to recover dues worth Rs 251.40 crore from Aircel. This comes after the NCLT accepted Aircel’s petition for bankruptcy albeit saying that the company had scope for revival.

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Ericsson is the third company to take the legal course for recovering dues from Aircel, after tower companies GLT Infra and American Tower Corp moved Delhi HC for payment of Rs 912 crore and Rs 224 crore respectively. GTL Infra also turned off at least one-third of their total sites used by Aircel. Other operators have also stopped accepting incoming calls from Aircel numbers due to unpaid interconnection fee.

This is the second such case by Ericsson against an Indian telco for recovering dues. Recently, it also appealed in an arbitration court against Reliance Communication (RCom) for an unpaid charge of Rs 11.55 billion for services. Ericsson’s Indian subsidiary had signed a deal in 2014 to operate and manage RCom‘s nationwide network for seven years. RCom is another financially troubled telco, which has been incurring major losses in the past quarters. The company also planned to sell a large part of its infrastructure to Jio in an attempt to curb losses.

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