KOSHIKA TELECOM LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition under Section 9 of the Arbitration and Conciliation Act, 1996 (for short the Act), the petitioner, carrying on business of cellular-mobile telephone services, seeks to restraint the Department of Telecommunications (for short the DoT) from terminating the public switched telephone network (PSTN ), connecting licence for UP(East ) circle, allotted to them on 12/12/1995, pending arbitration on the disputes/differences, which are stated to have arisen between them. During the course of hearing learned counsel for the petitioner had stated that the petitioner was not pressing for the second relief with regard to UP(West) circle, prayed for in the petition.

(2.) . The material facts, leading to the filing of this petition, are: The DoT issued tender dated 29/12/1994 for cellular mobile telephone services in different regions in India, divided into telecom circles. The bids submitted by the petitioner for the UP(West), UP(East), Bihar and Orissa circles were accepted. Licence agreements in respect of UP(West), UP(East) and Orissa circles were signed on 12/12/1995 and the same was the effective date of the licences. However, in the case of Bihar, the agreement was signed on 22/10/1996 but the effective date in this case was also 12/12/1995, which was subsequently changed to 23/08/1996. The period for payment of licence fee and time available for delivery of stipulated coverage was to start from the effective date. The petitioner submitted the required financial bank guarantees to the DoT in respect of each of the circles.

(3.) . According to the petitioner the targeted coverage could not be achieved within the expected period of 12 months from the effective date and in fact the implementation of the project itself was considerably delayed on account of procedural delays at various stages, including delays at the government level in according sanctions, resulting in default by the petitioner in making payment of the licence fees for all the four circles. The petitioner claims to have made various representations, highlighting its problems and reasons for defaults in payment of licence fee. However, on account of the said defaults, petitioner's licences for UP(west), Bihar and Orissa were terminated from 22/05/1999, which action of the DoT was challenged by the petitioner in this Court by filing a petition under Section 9 of the Act (OMP 157/99) .