Vodafone Idea moves TDSAT to recover bank guarantees

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Vodafone Idea officially starts operation as largest Indian telco

MUMBAI: Vodafone Idea, the nation’s prime Telecom operator, has moved the Telecom tribunal to recover bank guarantees price Rs 3,322.44 crore that was paid ‘under protest’ to get the federal government’s nod for the merging of Vodafone India and Idea cellular. The bank assure was supplied to the division of Telecommunications (DoT) on account of one-time spectrum fees (OTSC) as a precondition for approving the merger.

In its petition to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), Vodafone Idea has additionally sought quashing of a clause within the merger and acquisition guidelines which says that in case of judicial intervention, DoT can search bank guarantees for an quantity equal to the demand it has made on a telco in the direction of OTSC. ET has seen a replica of the petition. Vodafone Idea has argued that the demand of bank guarantees was “arbitrary, discriminatory, illegal and unenforceable”. “Direct DoT to forthwith return each and all bank guarantees which have been wrongly demanded /collected /received by DoT ought not to have been demanded/collected /received, by DoT,” mentioned the interim prayers of the corporate. TDSAT will subsequent hear the matter on October 20.

ET had reported in September that Vodafone Idea was headed for a authorized battle with the Telecom division. Its tussle with DoT began when the division demanded OTSC and different spectrum-related dues from Vodafone India and Idea cellular in July as a precondition for approving their merger. OTSC refers to market value of non-auctioned airwaves, much less the entry payment paid on the time of spectrum allotment. This cost has been a bone of rivalry between DoT and Telecom operators, with the issues pending in courts. The barely two-month previous Vodafone Idea has additionally written twice — as soon as earlier than the merger and as soon as later — to DoT, requesting recalculation of its dues. However, after the primary letter and no change in DoT’s stances, Vodafone and Idea had paid Rs 3,926.34 crore in money and a bank assure price `3,322.44 crore, respectively, so as to get a speedy approval for the merger, which was cleared finish of August.

In September, Vodafone Idea once more wrote to the Telecom division to recalculate the spectrum dues of Rs 3,926.34 crore it had paid to get approval for the merger. It pointed to the distinction of opinion with DoT in indexation fees and costs the merging entities paid for spectrum in sure circles like Himachal Pradesh, Tamil Nadu and Bihar.

Indexation cost is a calculation performed to deliver the spectrum price to present market worth. Vodafone Idea, in its second letter, has additionally steered that there was double calculation for spectrum associated dues for Chennai and remainder of Tamil Nadu, the place DoT had charged the same quantity for each circles. However, in accordance to Vodafone Idea, the dues for Chennai needs to be primarily based on inhabitants and due to this fact can’t be the identical as Tamil Nadu. Typically, it has been seen that if the TDSAT ruling isn’t in favour, then the aggrieved celebration approaches the Supreme Court.

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