Telecom tribunal TDSAT has dismissed Aditya Birla group firm Idea Cellular's plea against Department of Telecom's (DoT) show cause notice, asking why its licence in Punjab circle should not be cancelled for violating merger and acquisition (M&A) norms.

The Telecom Disputes Settlement and Appellate Tribunal has said that the Idea's plea against was "premature one" and "has failed to make out a prima facie case" as the DoT was yet to take any decision on the issue.

"When the respondent (DoT) has not examined the case fully, and have not come out with any conclusion, it will not be proper on the part of this Tribunal to pre-empt enquiry to be conducted by the respondent," said the TDSAT bench headed by Justice S B Sinha.

Moreover, the tribunal observed that as per the procedure, the government has already alloted 60 days time to Idea Cellular to respond to the show cause notice.

"The Show Cause Notice issued by the DoT for termination of the UASL issued to Idea for Punjab Service Area on February 24, 2011 is for violation of guidelines for Intra Service Area Merger of CMTS/UASL and the petitioner was given 60 days? time to reply to the said notice from the date of issue.

"The petitioner has the opportunity to satisfy the Government that it has not violated the terms and conditions of the agreement or otherwise," observe the tribunal.

It further said, "we are of the view that Idea has failed to make out a prima facie case. It is, therefore, not necessary for us to consider the other factors necessary for passing of an order of injunction".

However, the order said that once DoT takes a decision in this regard, the Aditya Birla Group firm can approach the tribunal.

"If Idea is aggrieved by the final orders of the DoT, it will be at liberty to approach this Tribunal," said TDSAT in its order.

The tribunal's order came over a petition filed by the Idea Cellular, challenging the DoT's show cause notice on April 21 to cancel its licence in Punjab for violating merger and acquisition (M&A) norms.

The company has also been slapped with Liquidated Damages (LD) for not rolling out its services as per the norms for the same circle.

Idea has contended before the TDSAT that DoT can't issue show cause notice for cancellation of UASL, while it has asked the company to pay LD for failure to roll out its services.

However, DoT has countered this argument, saying that demanding LD for failure to roll out services from an existing licensee is a separate matter and can not be linked to SCN for violating the terms of UASL (Unified Access Service Licence). .

Idea Cellular owns 48.9 per cent stake in Spice Telecom since October 17, 2008. This was objected to by DoT as the above firms had separately bought spectrum in January that year under the then Telecom Minister A Raja.

As per the norms, a licensee is not allowed to merge or amalgamate with any other company for the first three years.

It also provides that a person can't hold 10 per cent or more stake in more than one licence in the same telecom circle or service area

The DoT had on February 24, 2011 slapped a penalty of Rs 50 crore on Idea Cellular for not providing requisite information about its merger with Spice Telecom despite several requests.

The Delhi High Court had last month stayed the merger of Spice with Idea, which has been challenged by the company.

On January 31, 2011, Idea moved Telecom disputes Settlement and Appellate Tribunal (TDSAT) seeking directions to DoT to issue 3G spectrum to the company in Punjab and Haryana circles where the allocation had been pending because of Idea's merger with Spice Telecom.

It also sought directions to the DoT for making necessary amendments in the licence terms so as to make Idea Cellular 3G spectrum licensee in Punjab.