Rejecting charges of favouring Reliance Communications, telecom minister Kapil Sibal today insisted that the penalty of Rs5 crore imposed on it for interrupting services briefly was as per the agreement between USO Fund and the private operator.

He dismissed as "malicious, motivated and defamatory" the charges levelled against him by an NGO in a PIL filed in the Supreme Court that the company was imposed the penalty of Rs5 crore against the Rs 650 crore as a favour.

Addressing a press conference here a day after the petition was filed, Sibal questioned the basis for computing the penalty as Rs 650 crore whereas the USO Fund itself had recommended a penalty of up to Rs50 crore only.

"I am deeply grieved by what is happening by the PIL filed by an NGO in the Supreme Court stating that telecom minister has abused his power to reduce penalty on Reliance Telecom to Rs 5 crore," an agitated minister said, adding that PILs should not be "used to settle personal score".

Giving details of the issue, he said Reliance Telecom services were switched off for "whatever reasons" in November 2010 and on December 21, a show cause notice was issued to the company threatening imposition of "lumpsum" amount of Rs50 crore as penalty for the same.

"The notice for Rs50 crore was to pressurise the Reliance Telecom.... They got worried," Sibal said, adding finally the services were restored on February 16, this year and the company paid a penalty of Rs5.5 crore.
He maintained that the penalty was calculated on the basis of duration of disruption of services (7-45 days) as provided in the agreement between USO Fund and RCom.

Sibal also termed as "unfortunate" the allegations that he had over-ruled officials of his ministry, saying the government could not function this way that a minister cannot take a decision because he would be labelled as "dishonest and wanting to favour private parties".

Sibal suggested that the PILs were being misused as they were meant only for serving public interest and "not to settle personal score". He, however, did not elaborate even when asked whether he felt he was deliberately being targeted.

An application was filed in the Supreme Court by Centre for Public Interest Litigation (CPIL) alleging that Sibal reduced the penalty from Rs650 crore to Rs5 crore against Anil Ambani-headed RCom for violations in the UASL agreement.

The NGO alleged that a penalty of Rs50 crore per circle should have been imposed for "violation of the terms and conditions of Universal Service Obligation Fund (USOF) agreement and UASL agreement by voluntary, unilateral and unauthorized switching-off/closure of services to subscribers from USOF sites without any notice."

"The Rs5 crore penalty on the ADAG firm was as per the agreement between the USOF and Reliance Telecom. The DoT was nothing to do with the penalty as the company had not violated the rules of license conditions," Sibal said.

He said when the file reached him on February 18, this year, RCom had already restored the services two days prior to that. He said he gave instructions to impose penalty as per the provisions of the agreement and did not himself decide the amount of Rs5 crore as penalty.

He, however, was evasive when asked on what basis Rs50 crore was decided as penalty.