MTNL may disconnect Infocomm

State-owned Mahanagar Telephone Nigam (MTNL) today invoked bank guarantees worth approximately Rs 5 crore given by Reliance Industries (RIL) on behalf of Reliance Infocomm.

It has also decided to disconnect the point of interconnections of Reliance Infocomm by end of this week because of non-payment of its dues.

MTNL's action comes close on the heels of a Supreme Court directive asking Reliance Infocomm to pay Rs 84.7 crore to Bharat Sanchar Nigam (BSNL).

The Supreme Court on January 3 rejected Reliance Infocomm's plea to furnish a bank guarantee for Rs 84.7 crore and asking it to pay the amount to BSNL within a week. In case of any delay, the court allowed BSNL to withdraw its services to Reliance Infocomm.

With this decision, MTNL has decided to go ahead with its plans of disconnecting its services if its dues are not paid. It has already asked the banks, including United Bank of India and Union Bank of India, to invoke the bank guarantee. It has requested the banks to send the amount through a pay order in MTNL's favour immediately.

"We have decided to encash the company's bank guarantees. Also we intend to disconnect points of interconnection by end of this week," a senior MTNL official said. A Reliance Infocomm spokesman said the company would take some time to comment on all this.

"We wanted to avoid this situation. But we have been pushed to the wall and there can be no further negotiations. We are also planning to invoke other bank guarantees as well and soon steps will be taken," the MTNL official added.

MTNL had asked Reliance Infocomm to pay Rs 158.92 crore for Mumbai and Rs 182.36 crore for Delhi. The payments were in respect of the alleged tampering of caller line identification (CLI) and routing international long distance calls on MTNL's network as domestic calls, thereby saving on the access deficit charge.

This decision to invoke the bank guarantee and disconnect points of interconnection was a fallout of an internal MTNL committee's decision. The committee was set up at the request of Reliance Infocomm, which had urged it to consider the case before further recovery.

As a part of the security, Reliance Infocomm had submitted a "conditional bank guarantee" of Rs 33.24 crore.

However, the committee was of the view that further recovery of dues was to be done without any delays and hence the bank guarantee drawn on Andhra Bank was returned.

MTNL officials claimed that "even if Reliance Infocomm pays its dues, we will still demand additional bank guarantees to recover additional dues. These additional dues are towards international roaming facilities enjoyed by users of Reliance Infocomm prior to the latter receiving a universal access license".