The Department of Telecommunications (DoT) has instructed all telecom companies and Internet Service Providers (ISPs) not to accept any new bank guarantees from Axis Bank.
In a letter dated March 16, a copy of which is available with The Hindu , the DoT said that Axis Bank was in “serious breach of trust and contract” with the Government of India (GOI).
“Axis Bank has failed to invoke the Bank Guarantee issued by them on behalf of Aircel Group of Companies. This action by Axis Bank is a serious breach of trust and contract with the Government of India,” DoT said in the letter.
“In view of this, you are hereby directed not to accept any new bank guarantee from Axis Bank, including renewals. This [is issued] with the approval of competent authority.”
TDSAT order
The amount of bank guarantee given by Axis Bank on behalf of Aircel could not be independently verified. To an emailed query, an Axis Bank spokesperson said, “The bank guarantees have been issued by us on behalf of Bharti Airtel. Payment of the said guarantees, at present, will be in violation of the orders of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
“Once the order is vacated, the Bank will be pleased to honour the said guarantees, as per the underlying terms. This matter has been communicated to the Dept. of Telecom (DoT).”
‘Bankruptcy filing’
Aircel had filed for bankruptcy with the Mumbai bench of NCLT citing high unsustainable debt, price wars and legal and regulatory challenges. The company has ₹15,000 crore of dues to lenders and ₹35,000 crore in dues to operational creditors.
Aircel has spectrum in the 900MHz, 1800MHz and 2100MHz bands, respectively. According to current rules, Aircel is not entitled to any refund if it surrenders its spectrum to DoT.
