The telecom tribunal TDSAT has dismissed Idea Cellular''s plea challenging a show cause notice issued by the Department of Telecom (DoT) 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 said since the matter was still at the stage of show cause notice, there was no need to intervene in this issue at this stage.

The TDSAT Chairman Justice S B Sinha said the issue was at a premature stage and the DoT could take a decision on the matter.

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

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 had contended before the TDSAT that DoT can't issue SCN for cancellation of UASL while it asks the company to pay LD for failure to roll out its services.

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

As per the terms, 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 Idea Cellular has been holding 41.09 per cent stake in Spice Telecommunication since October 17, 2008.

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

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