Rs. 1000-Crore fine on Loop Telecom for abruptlly disconnecting services to subscribers

By November 18th, 2014 AT 4:01 PM

MNP Fraud TRAI Loop TelecomThe Department of Telecommunications (DoT) might re-impose Rs. 1,000-crore fine on Loop Telecom. This is because Loop Telecom abruptly disconnecting services to subscribers across 21 circles, after the Central Bureau of Investigation’s view that the fine notice will not hurt its probe into the ownership of the company as part of the wider 2G case.

Previously, DoT had decided against slapping the penalty on the premise that it could amount to contempt of the court. On the other hand, according to a copy of document accessed by the paper, CBI has sent an opinion that slapping a penalty on the company for violating the ownership clause based on the probe agency’s investigation does not prima facie appear to impact the proceedings in the special trial court.

DoT has now sought legal opinion on whether it may issue a show cause notice to Loop for imposing a financial penalty of Rs 50 crore for each of the 21 service areas.

Also Read : MNP Fraud ! TRAI to Telcos : Cancel 5923 Mobile Numbers of Loop Telecom Ported Illegally

In the meantime, DoT had issued a show cause notice to the company and warned that it may impose a fine, saying the mobile phone operator had improperly shut down mobile services from June 1, 2012, four months after the 21 mobile permits of the company were annulled by the Supreme Court.

The company had appealed the notice in the apex court, which ruled that the DoT could not impose any fines for the period after June 1, 2012. The DoT then sought legal opinion of senior counsel PP Rao on whether it should review the court order or withdraw the penalty notice.

PP Rao further said that DoT could not levy damages and penalty for the period subsequent to June 1, 2012, for the licensee’s failure to carry on business, which it was doing prior. He further added that DoT’s move to impose any penalty could also be considered ‘contempt of court’ as the apex court had earlier directed the department not to levy any damages on Loop.

Last but not the least, DoT was free to take action for any other breaches in licence terms before June 1, 2012.

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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