The department of telecom has issued a show cause notice to Etisalat DB for closing down its operations in violation of licence conditions.

Etisalat DB licences were cancelled by supreme court in February 2 but are valid till September 7.

"Its network stopped working even before the supreme court order from January 19. This is against licence conditions. As per SC order, the companies licences are valid till September 7 but it has not followed the process to close down operations," a DoT official told PTI.

In the notice, the DoT is learnt to have said that it can impose penalty of Rs 50 crore, apart from liquidated damages, for violation of terms and conditions of licence agreement.

A Etisalat spokesperson declined to offer any comment on the matter.

The company had announced shutting down of its operations due to cancellation of its licence by the apex court. However, its performance bank guarantee is still with the government.

UAE-based Etisalat also alleged that non-cooperation by promoter of its Indian partner in the telecom joint-venture, Majestic Infracon, as one of the reasons behind closing down operations.

Etisalat DB's network was switched off by Reliance Infratel from midnight of January 19 with whom the company entered in to infrastructure sharing agreement, the DoT official said.

Though passive infrastructure sharing is allowed by government but as per licence agreement, a operator has to make its own arrangements for all infrastructure involved in providing the service and shall be solely responsible for installation and manging of equipment.

According to DoT, EDB was required to inform it 60 calendar days in advance before surrendering its licence but the company informed DoT on February 28 that it does not have any intention to invest any further in continuing with its operations.

EDB only complied with the obligation of informing its customers 30 days in advance. DoT official said that Etisalat DB informed about closure of its operations from March 31, 2012 on February 22.

Telecom regulator TRAI has also asked EDB to comply with its licence condition in February and asked to continue its operations till the time its licences were valid.

However, EDB had earlier said that "Nothing is in that license that requires us to give 60-day notice. The only thing that was mandatory was to inform our subscribers 30 days in advance of shutting down operations and we did that."