BIFR solution for cellular companies

NEW DELHI, July 14: With the Communications Ministry periodically expressing its inability to take any action on the cellular telephone indu...

NEW DELHI, July 14: With the Communications Ministry periodically expressing its inability to take any action on the cellular telephone industry8217;s demands such as extending the moratorium on their licence fees, a novel solution has been proposed to deal with the matter declare the industry sick, and hence suspend all its obligations such as payment of licence fee for two years. Such a declaration, if made, of suspending all obligations and liabilities for a period of two years, incidentally, will be binding notwithstanding anything contained in any other law.

This suggestion, among others, has been proposed by the firm of solicitors, Amarchand amp; Mangaldas amp; Suresh A. Shroff amp; Co, and has been forwarded to the Telecom Secretary A V Gokak and Finance Secretary Montek Singh Ahluwalia.The Department of Telecommunication DoT has, in fact, called for a meeting with the Cellular Operators Association of India COAI this Friday to discuss the issue of a two year moratorium on licence fees as well asextension of the period of cellular licences from the existing 10 years to 15 years.

The solicitors firm8217;s opinion, essentially, gives legal options which will allow the DoT to modify the licence conditions with the minimum risk of litigation it would be recalled that Communications Minister Sushma Swaraj had told the cellular operators that even before she considered their demands, she needed some assurance that there would be no litigation challenging any of the changes in the licence conditions. She had pointed out at that time, that if their licence conditions were relaxed, this would be challenged by other companies in a court of law.

Another suggestion which has been made is that the Telecom Regulatory Authority of India TRAI can, under Sections 11, 12 and 13 of its act, recommend changes in the terms and conditions of a licence. Under Section 12, for instance, it can ask all service providers to submit their books of accounts. Based on this, then an order declaring the industry cellularcompanies sick can be issued. TRAI can then exercise its functions on lines similar to the BIFR under the Sick Industrial Companies Act and get a new contract to substitute the earlier one.

According to the solicitors, if TRAI deals with the issue, the chances of litigation are minimised since this is a quasi-judicial body.