2012 (9) TMI 1148 - AT - Indian Laws

Summary

Issues Involved:
1. Violation of ILD license conditions.
2. Breach of principles of natural justice.
3. Legality of agreements with foreign operators.
4. Imposition of penalties.

Summary:

1. Violation of ILD License Conditions:
The Petitioners, holders of ILD licenses granted u/s 4 of the Indian Telegraph Act, 1985, entered into agreements with foreign operators like M/s Singapore Telecom Ltd. (STL) under the OSS and FCS modules. The Respondent issued show cause notices alleging that the Petitioners enabled STL to illegally sell IPLC circuits directly to Indian customers, violating the Act and specific clauses of the ILD license agreement.

2. Breach of Principles of Natural Justice:
The Petitioners contended that the impugned orders were passed in violation of natural justice principles. The first Committee allowed the Petitioners to make presentations and explain their agreements, but the second Committee, which imposed penalties, did not provide a hearing. The Tribunal emphasized that higher charges necessitate stricter adherence to natural justice principles, and the Petitioners were prejudiced by the lack of a hearing.

3. Legality of Agreements with Foreign Operators:
The agreements were based on ITU recommendations, which the Respondent argued were not accepted by the DoT. However, the Tribunal found no evidence that the agreements per se were illegal or violated any statute or license conditions. The Tribunal noted that the ILD licenses allowed agreements for providing IPLC services and that the customers involved were bona fide.

4. Imposition of Penalties:
The second Committee imposed a penalty of Rs. 50 crores on each Petitioner without providing reasons or detailing how the license conditions were violated. The Tribunal held that the imposition of penalties without a hearing and detailed reasoning violated the principles of natural justice. The Tribunal cited the necessity of assigning reasons as part of natural justice and found that the Petitioners were prejudiced by the process followed.

Conclusion:
The Tribunal set aside the impugned orders, allowing the Petitioners an opportunity to be heard, and emphasized the need for compliance with natural justice principles. No order as to costs was made.