2019 (8) TMI 1245 - AT - Insolvency and Bankruptcy

Tribunal stays actions over telecom violation, directs impleading, sets appeal date

Punit Garg, Satish Seth And Suresh Madihally Rangachar Versus Ericsson India Pvt. Ltd. And Anr

The Tribunal stayed actions based on show-cause notices and a letter from the Department of Telecommunications, noting potential violation of an interim ... Withdrawal of appeal - Initiation of CIRP - Default in payment - The appeal was filed against the order initiating ‘Corporate Insolvency Resolution Process’ against ‘Reliance Communication Limited’. In the said appeal, initially an interim order was passed, in view of the subsequent development, on behalf of the Appellant, prayer was made to allow the Appellants to withdraw the appeal. This Appellate Tribunal instead of allowing the Appellant to withdraw the appeals. HELD THAT:- It appears that the show-cause notices dated 14th March, 2019, 15th March, 2019 and letter dated 20th March, 2019 addressed by Department of Telecommunications, Ministry of Communications, Government of India, New Delhi is against the direction of this interim order passed by this Appellate Tribunal dated 4th February, 2019. However, to decide whether such show-cause notices and letter aforesaid are against the interim order or not, we intend to hear the Secretary, Department of Telecommunications, Ministry of Communications, Government of India. We direct the Appellant- Punit Garg to implead the Secretary, Department of Telecommunications, Ministry of Communications, Government of India (Wireless Planning and Finance Wing), Sanchar Bhawan, 20, Ashoka Road, New Delhi – 110001 as Party Respondent - The impleading application No. 1075 of 2019 filed by Appellant- Punit Garg is allowed. Issues:1) Clarification of the order dated 4th February, 20192) Challenge against show-cause notices for default in payment3) Violation of interim order by Department of Telecommunications4) Impleading Axis Bank Limited as a party RespondentAnalysis:1) The Appellant filed an Interlocutory Application (IA) seeking clarification of the order dated 4th February, 2019. Another IA challenged show-cause notices issued to a company for default in payment and breach of license agreement. The Axis Bank was asked to invoke a guarantee, which was also challenged.2) The show-cause notices dated 14th and 15th March, 2019 were issued to the company for default in payment of spectrum deferred installments and breaching the license agreement. The Appellant argued that these notices violated the order prohibiting the sale or transfer of any property without permission.3) The Counsel for the Appellant contended that the Department of Telecommunications' actions, including the letter dated 20th March, 2019, were in violation of the interim order passed by the Appellate Tribunal on 4th February, 2019.4) An IA was filed to implead Axis Bank Limited as a party Respondent due to the letter addressed to the bank. The Counsel for Axis Bank argued that the Department of Telecommunications could not issue directions to invoke the guarantee as per the interim order.5) The Tribunal noted that the show-cause notices and the letter from the Department of Telecommunications seemed to contravene the interim order. It decided to hear the Secretary of the Department to determine the compliance with the order.6) The Tribunal directed the Appellant to implead the Secretary of the Department of Telecommunications and allowed the impleading of Axis Bank Limited as a party Respondent. Notices were to be issued to the newly impleaded parties, and further proceedings were scheduled for a later date.7) Pending further orders, the Tribunal stayed any actions based on the show-cause notices and the letter dated 20th March, 2019. The main appeal was set to be listed for further proceedings on 8th April, 2019.