The government is considering withdrawing legal cases against telecom companies, involving disputes of about ₹40,000 crores, according to a source. The Department of Telecom has already filed an affidavit before the Supreme Court in a case against Anil Ambani-promoted Reliance Communications to take an informed decision whether to proceed with the present appeal or not, the source said.
It has sighted representation from the Indian Banks' Association that adverse developments in the telecom sector may lead to failures, vanishing competition, duopoly, unsustainable operations, and severe loss for the banking system which has huge exposure to this sector.
"...the central government is desirous of reviewing and/or reconsidering its decision to proceed with the present proceedings of appeal. It is submitted that considering the nature of the issue involved, this decision will have to be taken after the scrutiny at various levels which may consume some reasonable time," the affidavit dated October 4 said.
According to the government, the amount involved in the cases imposes financial liability to the tune of ₹40,000 crores approximately on various telecom operators. DoT has asked the Supreme Court for three weeks' time to enable "the central government to take an informed decision whether to proceed with the present appeal or not" and requested that the case be adjourned for a period of four weeks.
DoT said the decision was taken to promote the public interest, protect government revenue, and more particularly encourage competition amongst telecom operators by preventing a situation where the viability of some of the service providers becomes unsustainable resulting in monopolistic situations and another adverse impact on the economy.
Cyril Amarchand Mangaldas partner Sameer Chugh said DoT seeking time from the Supreme Court to review and reconsider its decision to proceed with the appeal against the order of the TDSAT in case of RCom seems yet another step to rectify the past anomalies.