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

The 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.

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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.

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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.