Penalties imposed upon Airtel and Vodafone by Department of Telecommunications, set aside

Telecom Disputes Settlement and Appellate Tribunal (TDSAT): Rs 650 crore fine on Bharti Airtel as well as Rs 100 crore on Vodafone imposed by Department of Telecommunications, has been set aside by TDSAT as the Tribunal found the penalties disproportionate to the violations of the terms of the Licence. Earlier, said penalties were imposed upon the companies by DoT in July and August 2013 in a case pertaining to subscriber local dialing service. Under subscriber local dialling service, a subscriber while roaming could prefix a code before dialing a number and could forgo payment of roaming charges. DoT accused Airtel and Vodafone of causing loss to BSNL, whom they would have to otherwise pay charges. DoT claimed that it caused loss to the government exchequer and state-run Bharat Sanchar Nigam Ltd (BSNL) across 13 service areas. The service was carried on by Hutch for slightly over a year from 12 December 2002 to 31 December 2003, and by Airtel for over two years from 5 October 2002 to 11 January 2005. After perusal of all material on record, TDSAT held that there was no loss to BSNL due to these services by Airtel and Vodafone. While coming down heavily upon DoT, TDSAT held that the imposition of penalty of Rs.650 crores on Airtel and Rs.100 crores on Hutch defies all sense of proportionality. “We are constrained to observe that the DoT must learn that imposition of penalty is not a means for generation of revenue and to meet the financial targets,” TDSAT noted. (Vodafone Mobile Services Ltd. v. Union of India, 2014 SCC OnLine TDSAT 212, decided on December 9, 2014)