Telecom tribunal TDSAT has slammed state-run MTNL for deducting the disputed amount from Tata Communications during the pendency of the matter before it.

The tribunal observed that "it was expected of a public sector undertaking which is a 'State' within the meaning of Article 12 of the Constitution of India to seek leave of this Tribunal before any such deduction was made".

The Telecom Disputes Settlement and Appellate Tribunal also did not agreed with PSU submissions that the money owed by Tata was a public money and recovery should not be stayed.

"...there should not be a stay of recovery of public money by way of adjustments of the bills, in our opinion, cannot prima facie be accepted. If the MTNL was so much concerned about the public money it ought to have taken steps to recover the same at an early date," TDSAT said.

TDSAT also agreed with Tata group's firm submission that Rs 80 lakh adjusted by MTNL was barred by limitation and deduction was made on the pretext of old demands ranging from May, 2005 to August 2008.

"Prima facie" bills which are sought to be enforced "are apparently barred under the law of limitation," said TDSAT bench headed by its Chairman Justice S B Sinha. However the tribunal did not passed any interim order at this stage.

MTNL and Tata Communications (formerly VSNL) had entered into an agreement for its ILD services for Mumbai and Delhi circles.

However, some dispute arose and the Tata group firm approached Telecom Disputes Settlement and Appellate Tribunal seeking recovery of Rs 88 lakh from MTNL.

While Tata's petition remained pending, MTNL deducted Rs 88 claiming dues from it based on the demand notices issued in June 2012.

Feeling aggrieved Tata group firm filed another petition before the TDSAT contending that deduction was made on the pretext of old demands ranging from May, 2005 to August 2008, which are also time barred under the laws of limitation.

MTNL opposed it saying that Tata group firm had assured it ISD calls would be charged at the lowest rate offered by BSNL and had offered its entire international traffic.

Adjustment was done on the basis of that assurance only and it was done in past also.