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NGO files charges against Sibal with CVC, CBI

Last updated on: July 26, 2011 20:19 IST

NGO accuses Sibal of favouring Reliance


NGO files a detailed documented complaint against Telecom Minister Kapil Sibal for reducing the penalty of Anil Ambani-controlled Reliance from Rs 50 crore to only Rs 5 crore. Sheela Bhatt reports.

Union Telecom Minister Kapil Sibal, trouble-shooter for the Congress/Prime Minister's Office in the 2G scam-related issues, is in trouble himself.

NGO Telecom Watchdog, one of the petitioners in the 2G case, has filed a detailed documented complaint against Sibal for reducing the penalty of Anil Ambani-controlled Reliance from Rs 50 crore to only Rs 5 crore against the unanimous recommendation of all the officers of the Department of Telecommunication.

The complaints have been received by the Central Bureau of Investigation and the Central Vigilance Commission. They have been addressed to CBI Director A P Singh and newly-appointed Central Vigilance Commissioner Pradeep Kumar.

"The Supreme Court on July 11 had asked the petitioners against Sibal to avail other legal remedies to get the matter investigated, since the matter was not related to the 2G case. In this light, the Telecom Watchdog has filed these complaints," said Advocate Pranav Sachdeva, who is assisting Advocate Prashant Bhushan, who has fought the 2G case for the non-government organisation Centre for Public Interest Litigation.

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Image: Union Telecom Minister Kapil Sibal


'The minister has deliberately favoured Reliance Communication Ltd and Reliance Telecom Ltd'

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Anil Kumar of Telecom Watchdog has argued that by waiving off a penalty on the Reliance group by overruling the officers of DoT and by deciding to levy a penalty, which is very nominal Sibal is, "cleverly converting a serious willful violation of license conditions" to a normal violation of "disruption in service".

"This way the minister has deliberately favoured Reliance Communication Ltd and Reliance Telecom Ltd. This decision has not only caused a substantial loss to the government but also set a wrong precedent that a private company can stop essential services like telecom unilaterally and without any prior notice. As such, this action is also against the national security," he said.

The petition while giving facts of the case says RCL and RTL have been providing telecom services across the country under Universal Access Service licenses granted to them by the DoT. While continuing with these UAS licenses, DoT's other arm --- Universal Service Obligation Fund Administrator -- executed another agreement with RCL & RTL for providing telecom services in rural and remote areas where the fixed and wireless telephone services had not reached. Both, UASL and USOF agreements had different level of penalties for delays in the rollout.

However, only UASL had prescribed Rs 50 crore (per service area) penalty for serious violations of the license agreements. This penalty of Rs 50 crore was also applicable to services provided under the USOF agreement since the termination and suspension of services was prohibited.

The clauses of the agreement are so clear that violation (especially deliberate and unilateral serious violations) of the license agreement by a licensee gives a right to the government to either cancel the license or impose penalty of Rs 50 crore per circle or both.

Image: Anil Ambani heads Reliance Communications

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'Sibal saved RCL and RTL from a big penalty'

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Only in case where the government moves to cancel the licence, a notice of 60 days has to be given. Since RCL and RTL discontinued the service at various places in rural India unilaterally, without notice to either the government or to the subscribers, it was a serious violation. These places were spread across 13 telecom circles across India, hence Reliance had violated its 13 license agreements (since there is a separate license agreement for each circle), and all its 13 licenses were liable for termination and a maximum penalty of Rs 650 crore could and should have been imposed.

Although, enough evidence against Reliance is available, the petition says,  "For unknown reasons, Sibal saved RCL and RTL from this penalty."

On December 7, 2010, Reliance wrote a letter stating that it had switched off its services effective from November 22, 2010. Hence, Reliance had simply shut down its services unilaterally and without any notice. This is a serious violation of license agreement, argues Kumar in his petition. Importantly, the advisor finance and member finance of DoT and the telecom secretary who is also the chairman of the telecom commission, approved the levy of the said penalty of Rs 50 crore per circle.

The file reached Sibal's office on February 9, 2011. On February 16, Reliance wrote a letter to Sibal that it had restored the services. Based on this letter, Sibal on February 18 treated this serious violation by Reliance as a mere "interruption" of services. While rejecting DoT's stand of levying Rs 50 crore penalty Sibal had stated that UASL agreement clauses should not be invoked and penalty under USOF agreement for "interruption" should be imposed.


Image: Reliance Communications logo

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The ball is in CVC Pradeep Kumar's court

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The petitioner has asked the following questions: Why did Sibal not insist on a proper reply by Reliance to the showcause notice by the DoT first? Why did he call it "interruption" when it was a clear case of closure/discontinuation of service? Why did he not wait for a proper verification as to whether Reliance had indeed restored services in all the clusters where it had switched off?

Why did he state that UAS licence agreement is not applicable and department must only proceed under USOFA? Why did he not send the matter back to the USOF cell and to the department after the receipt of the letter from Reliance? If there was a legal issue involved, why did he not refer the matter to the law ministry? Why did he not take the advice of telecom regulator TRAI, which is a statutory body to protect the interests of consumers? Why did Sibal not impose the penalty of Rs 50 crore per circle and let Reliance challenge it in Telecom Disputes Settlement & Appellate Tribunal if it felt aggrieved?

"Sibal ignored the fact that his duty is to promote public welfare and safeguard the interests of consumers who in this case were poor people in the rural and remote parts of India, who could not have even approach courts against Reliance," the petitioner said.

He has demanded legal action against Sibal. The ball is now CVC Kumar's court.

Image: CVC Pradeep Kumar

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