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Legal & Patents
Wednesday, October 18, 2017
TechM files petitions against RCom, subsidiaries over dues

TechM files petitions against RCom, subsidiaries over duesReliance Communications today said IT services major Tech Mahindra has filed insolvency petitions against the company and its two subsidiaries for recovering dues. The quality of service and amounts billed are disputed, RCom said in a regulatory filing terming the petitions as “misconceived, premature and motivated by extraneous considerations“. “We wish to inform you that Tech Mahindra Ltd, a vendor for call centre services, has filed petitions, as an unsecured operational creditor under IBC (Insolvency and Bankruptcy Code against the company, Reliance Telecom and Reliance Big TV, subsidiaries of the company for certain bills submitted by them for services allegedly rendered,” the Anil Ambani company said.

Noting that the aggregate amount of Tech Mahindra’s claim against all the three companies worked out to Rs. 8.20 crore, RCom said “the claim amount is not considered material by respective companies concerned“.

“We submit that the petitions are misconceived, premature and motivated by extraneous considerations,” it added.Reliance Communications, which is reeling under a debt burden of about Rs. 46,000 crore, recently called off merger talks with Aircel, citing “legal and regulatory” delays.

RCom and Aircel had signed binding agreements in September 2016 for the merger of mobile business.RCom’s Rs. 11,000 crore tower deal with Brookfield is also being reworked following termination of wireless merger talks with Aircel. Aircel tenancy would have been a sweetener for Brookfield in the tower deal, but the recent collapse of merger talks (between RCom and Aircel) prompted a renegotiation on contours of the deal between the Anil Ambani company and the Canadian firm. (Source: The HinduBusiness Line)

Vodafone moves Supreme Court, seeks access to cost model used to calculate IUC

Vodafone moves Supreme Court, seeks access to cost model used to calculate IUC Vodafone India has approached the Supreme Court seeking access to the cost model used by the telecom regulator to calculate how much one operator must pay another to connect calls between their networks. Vodafone has filed a plea in the apex court contesting a Delhi High Court order that denied its request in the matter a few weeks ago, according to two people aware of the development.

“A petition has been filed in the Supreme Court against the division bench order of the high court,” one person said. The plea, filed on Saturday, is likely to be heard on October 4-5, after the apex court reopens, the second person said. Vodafone didn’t respond to an emailed query. The matter is related to the interconnection usage charge (IUC) paid by the network from where a call originates to the operator where it is received. The charge is decided by the telecom regulatory authority of India.

Vodafone’s appeal stated that Trai must ensure transparency in the process and that the division bench had ‘erred in holding that the telco does not have a vested legal right to the information sought,’ one of the people said. The UK-based carrier’s Indian arm appears to have taken a similar line of argument as it did when it approached the high court last month: that not sharing the cost model amounted to a violation of the principles of natural justice and that carriers were entitled to a transparent process in determining the charge.

IUC, currently 14 paise per minute, will be reduced to 6 paise a minute starting October 1 and scrapped from January 2020, Trai said on September 19. Bharti AirtelBSE -0.80 %, Vodafone India and Idea CellularBSE -1.02 %, which stand to lose about Rs 5,000 crore a year, criticised the regulator’s decision. (Source: Economic Times)

Cellular operators need permission for using generator: NGT

Cellular operators need permission for using generator: NGTThe tribunal granted four weeks to them to file applications for consent to operate and asked the pollution board to deal them expeditiously in accordance with the law. Cellular service providers need to take consent from the state pollution control boards for installing and operating generator sets, the National Green Tribunal has ruled. A bench headed by NGTChairperson Justice Swatanter Kumar declined to quash the order dated March 31, 2009 passed by the Madhya Pradesh Pollution Control Board (MPPCB).

"While we decline to quash the order dated March 31, 2009, passed by the MPPCB, we order and direct that the following conditions/directions shall be read in consonance with the order dated June 28, 2012. The parties to the lis shall abide by these directions. "We hold and declare that the applicants/appellant are obliged to take consent of the MPPCB for installing and operating Diesel Generator sets as an alternative source of power to the towers that they erect in the State under the provisions of the Air (Prevention and Control of Pollution) Act, 1981," the bench said.

The tribunal granted four weeks to them to file applications for consent to operate and asked the pollution board to deal them expeditiously in accordance with the law.

"For a period of eight weeks from the date of pronouncement of this judgement, the Board will not take any coercive steps against the applicants/appellant. However, after expiry of the above-said period, the Board shall be at liberty to proceed in accordance with law," it said. MPPCB, in its March 31, 2009 order, had said registration and renewal of registration under Hazardous Waste (Management, handling and transboundary movement) Rules, 2008 of medium scale industry and mines above an area of 5 hectare, has been given to Director and regarding up to 5 hectare and less given to local officers.

The state pollution control board had also said that the director would be authorised to include or omit any condition in the Rules of 2008. The order was challenged before Jabalpur High Court by Bharti Infratel Ltd, IDEA Cellular Ltd and ATC Telecom Infrastructure Pvt Ltd. The High Court disposed of the petitions while directing the MPPCB to consider the objections of the petitioners raised before it against the applicability of the Act and rules before taking action.

The Board held that the petitioners were required to make an application in a prescribed form, obtain its consent and also pay fee. The order was again challenged in the High Court which transferred the matter to the NGT in September 2012. The petitioners had contended that diesel generator sets attached to a tower as an alternative source of energy cannot be termed as 'industrial' plant as that is not "legislative intent" of the provision of the Air (Prevention and Control of Pollution) Act, 1981. (Source:ETTelecom)

Centre gets maximum complaints against e-commerce giants over consumer issues

Centre gets maximum complaints against e-commerce giants over consumer issuesThe Centre received the maximum complaints against e-commerce giants last year, prompting the Quality Council of India (QCI) to suggest that the government should “name and shame” such companies with total number of pending customer grievances.
This has been revealed in a study by QCI for the government on the nature of grievances received by the Centre — a report on which has been released by MoS for PMO Jitendra Singh. According to the report, if illegal cow slaughter was the top complaint at the environment ministry, grievances against digital set-top boxes were the main issue at the I&B ministry.

The civil aviation ministry received the maximum complaints against Air India’s services, says the report. A ban on all porn sites were also raised by citizens. The Centre got nearly 12 lakh grievances at its 88 ministries and departments last year, up from 8.7 lakh in 2015. The study is aimed at analysing these grievances, identifying the root causes and suggesting systematic changes to the government to reduce complaints.

Complaints related to e-commerce companies pertained to “unclear guidelines for quality check of the products, lack of standardisation of refund, delivery and exchange policy, no regulation on pricing and discount and poor customer service”.

QCI said the root cause of such complaints was lack of a policy on ecommerce transactions and quality check of products and unclear policies of some e-commerce companies on return, exchange and delivery. QCI suggested a drastic approach — “name and shame e-commerce companies on the basis of total number of pending customer grievances” and integrate a real-time grievance forwarding mechanism between ecommerce companies and the government for an efficient redressal.

On cow slaughter, the report said essential measures to address grievances were taken by the government.

On the issue of porn websites, QCI suggested that the government should institutionalise a process to ban such websites by using advanced technology and firewalls, though it admitted to a cumbersome legal process involved in such an exercise.

On Air India-related complaint, QCI said the ‘Air Sewa’ mobile application should be positioned as a “one stop information dissipation channel” for flight status, airport information, baggage rules and FAQs regarding flight cancellations and refunds.

QCI has also recommended adopting techniques at Singapore, Dubai and London Heathrow airports to lessen the congestion at security, check-in and immigration counters. This included employing automatic body scanners, automatic tray-return systems, baggage-screening machines that allow passage of electronic gadgets in the carry-on baggage without having to place it in a separate tray and finger-print based immigration gates in which passport and finger print are scanned and registered before obtaining the boarding pass.

Consumers also complained against digital TV companies for charging money but not providing relevant services, and frequent loss of connection. Some people have said private channels need to be checked. (Source: Economic Times)

Reliance Communications and Aircel creditors may challenge NCLT order

Reliance Communications and Aircel creditors may challenge NCLT order Three creditors of Reliance CommunicationsBSE 4.31 % and Aircel could challenge the dismissal of their right to call for a lenders’ meeting by the National Company Law Tribunal (NCLT) in the National Company Law Appellate Tribunal (NCLAT), people familiar with the matter said. The key operational creditors — those who have dues because they provide a service, not because they lent money — are Ericsson, GTL InfrastructureBSE -0.73 %, and Bharti Infratel.

The NCLT last Monday admitted the RCom-Aircel merger proposal, dismissing the operational creditors’ contention that a lenders’ meeting be called to clarify how the outstandings will be settled before the merger petition is heard by the tribunal. The NCLT order suggested that any creditor accounting for less than 5 per cent of the companies’ total debt cannot oppose the merger even in the final hearing.

“The order is clear that any of our objections can be made at anytime during the process. But it also dismisses all claimants, saying none of us account for 5 per cent of debt exposure,” said a lawyer involved on behalf of the creditors of Reliance and Aircel.

Telecom tower company GTL Infra had earlier argued that it alone accounted for over 5 per cent of the exposure between current receivables and future commitments.

The argument has been dismissed by the NCLT and the company is likely to challenge it, said a person close to developments. Two lawyers said all three were readying applications to challenge the order in the Appellate court . Sources close to Bharti Infratel said they were “keeping options open” while another source close to Ericsson said it was reviewing the order.

The NCLT order said since none of these companies were owed more than 5 per cent of total outstandings of the companies in the last disclosed balance sheet, they would not be considered eligible to call for a lenders’ meeting. But “the order doesn’t say these companies can’t challenge again,” said another senior lawyer, not involved in the case.

The order also says that since the net worth of the Reliance Communications and Aircel combine is positive, their debt holders remain unaffected by a company rejig. “That isn’t true, we don’t know who will underwrite our liability,” said one of the companies objecting to the merger.

Late last week, RCom filed a caveat in the NCLAT that it should be heard if any one appeals against the NCLT order or asks for an ex-parte order. Ericsson, GTL Infra and Bharti Infratel didn’t respond to emailed queries.

The three companies, besides lenders such as China Development Bank (CDB), Standard Chartered Bank and HSBC had previously objected to the merger plea being admitted by the NCLT. The three lenders withdrew their objections, but retained their right to object at a later stage. (Source: Economic Times)

JioPhone: Operators may seek clarity on GST for bundled 4G handsets

JioPhone: Operators may seek clarity on GST for bundled 4G handsets India's top telecom operators are likely to seek clarification from the finance ministry on whether bundled 4G handsets offered effectively for free would attract the 12% goods and services tax applicable on mobile phones. "Ideally, the government must determine the GST implications of selling a handset at zero price and provide guidance to telcos about the pros and cons of structuring similar handset bundling deals," Rajan Mathews, director general of the Cellular Operators' Association of India, told ET.

Reliance IndustriesBSE 2.03 % unveiled a 4G feature phone last week that may further disrupt an already stressed telecom market. The JioPhone comes with free voice service for life and can be obtained for Rs 1,500, which is refundable after three years if the handset is returned. Apart from the tax treatment, telcos may seek clarity on whether such financing schemes will enable operators to skip payment of licence fees and spectrum usage charges.

Although telcos Bharti AirtelBSE 0.81 %, Vodafone India and Idea CellularBSE -1.09 % have not subsidised handsets so far, they could offer 'a scheme similar to what is being offered by Jio,' HSBC Global Research said in a note to clients. These telcos would have, at best, 4-5 months to come up with matching bundling offers. Mobile operators, Mathews said, would definitely "look for clarity" from the finance ministry as any "potential imposition of GST on a technically free phone would increase the cost of similarly structured handset bundling offers in future."

The COAI represents the country's biggest phone companies, including Bharti AirtelBSE 0.81 %, Vodafone India, Idea Cellular and Reliance Jio Infocomm. "Someone can choose to offer anything for free, be it a handset or even a plot of land. But that doesn't mean the asset being offered is devoid of an imputed value, in that, the government can always go back to the company, determine a fair value of the asset and levy a tax," said a top mobile industry executive.

A senior executive at a Big 4 consulting firm said whether the JioPhone, given to a consumer against a refundable deposit, amounts to a deemed sale is open to interpretation. "Even if it is not a sale, it can be construed to be a handset lease, in which case, it would attract GST. The government must clear the air on the issue… as other telcos could also be contemplating similarly structured handset bundling offers," the executive said. While refundable deposits don't attract GST, a potential grey area could be the tax treatment on the amount if the phone is not returned after three years. To be sure, an importer of the phone would pay basic customs duty and iGST.

Bharti Airtel, Vodafone India, Idea and Jio did not immediately respond to ET's queries on the matter. The other issue is whether such deposits are included while calculating the licence fee and spectrum usage charges that operators pay to the government. "It's for the government to determine what JioPhone offer at an effective sale price of zero means. The key issue is whether or not a one-time fully refundable deposit over a three-year span can be construed as revenue and included in a telco's adjusted gross revenue," said Mathews. (Source: Economic Times)

Reliance Jio investigating claims of alleged data breach

Reliance Jio investigating claims of alleged data breachIndia's newest telecoms entrant, Reliance Jio, said it was investigating claims of customer personal data being leaked onto a website called "Magicapk." "We have informed law enforcement agencies about the claims of the website and will follow through to ensure strict action is taken," a Jio spokeswoman said early on Monday, adding the data on the website appeared to be "unauthentic."
She added the company's subscriber data was safe and maintained with the highest security.Users have been registered on the Reliance Jio network using a 12-digit Unique Identification Authority of India (UIDAI) provided number, commonly known as the 'Adhaar' number.

The 'Adhaar' number, which works on similar lines as Social Security numbers in the U.S., is unique to every Indian citizen and stores biometric and demographic data of the user at a centralised database. If the claims of the data breach are true, it would be a large setback for the Indian telecom entrant's aggressive push led by Reliance Chairman Mukesh Ambani, which added 3.9 million subscribers to its network in April.

Many users complained on Twitter about personal information of millions of Jio users being publicly available on, in what appears to be the first of its kind large-scale data breach of an Indian telecom operator. The website, when accessed by Reuters, flashed a message saying: "This Account has been suspended." (Source: Reuters)

Centre plans to reinforce IT law to curb cyber crimes, says Ravi Shankar Prasad

Centre plans to reinforce IT law to curb cyber crimes, says Ravi Shankar PrasadUnion minister Ravi Shankar Prasad today said the Centre was mulling "further reinforcement" in the IT law to prevent cyber crimes including, posting and sharing of videos containing sexually abusive material.
Union minister Ravi Shankar Prasad today said the Centre was mulling “further reinforcement” in the IT law to prevent cyber crimes including, posting and sharing of videos containing sexually abusive material. The law and IT minister said he has given directions to top officials in the IT ministry to work on the matter to check such cyber crimes. “I have directed the IT secretary in particular to revisit the IT law if there is a need of further reinforcement on this issue…

I have already given the instruction,” the minister told reporters here when asked about the increasing incidents of such crimes in the country’s cyber space. In response to a query on social networking giant Facebook’s controversy-ridden Free Basics programme in India, Prasad said he was opposed to programme in the present form. “My serious problem of Free Basics is you get free only when you enter through my gate… To get free service you have to enter through Facebook gate… That is plainly not acceptable,” he said.

“India is too big a country… India is too open a country and our digital ecosystem today is the top of the world. We have talked of digital access without hindrance. In Parliament, I have spoken when I was the communications minister. I said no and we don’t propose to permit Free Basics in the present form at all,” Prasad said. (Source: Financial Express)

PMO to take a call on imposing customs duty on mobile phones

PMO to take a call on imposing customs duty on mobile phonesThe Prime Minister’s Office will take a final call on imposition of import duties on mobile phones after weighing the pros and cons of taking such a decision, a government official has said. While, on one hand, levying of basic customs duties on mobile phones could ensure a competitive edge for domestic manufacturing as imports will remain more expensive in the goods & services tax (GST) regime, it could also spell trouble at the World Trade Organisation, where several countries are already accusing India of trying to breach the global Information Technology Agreement (ITA-1).

Domestic push
“The PMO has been presented with all possible scenarios and its call will be final on the matter,” a Commerce Ministry official told BusinessLine. The Department of Telecommunication made a case for imposition of basic customs duty on imported mobile phones to maintain the duty differential being enjoyed by domestic manufacturers (a 12.5 per cent countervailing duty is applicable on imported mobile phones compared with a 1 per cent excise duty for those made in India), which will disappear once the GST regime is implemented in July.

India’s justification
What is creating trouble is the fact that India has committed at the WTO under the ITA-1 pact not to impose customs duty on mobile phones. The DoT’s argument, backed by that of the Attorney General, is that mobile phones have evolved into smart gadgets carrying out multiple functions since the ITA was signed in 1996 and the new instruments are not covered under the pact.
“But there are two sides to the argument.

“Mobile phone exporting countries such as Japan, South Korea, the US and the EU have trashed India’s justification and said that no matter however evolved, mobile phones remain mobile phones, and hence, imposition of customs duty on them would be in breach of the ITA,” the official said.

Verdict soon
The PMO is aware of the situation and the implications of taking a decision either way, the official said, adding that it will come up with its verdict soon. There wouldn’t be a problem in imposing basic customs duty if the PMO decides it is in national interest even if it is challenged at the WTO. “It takes at least three years for a case to be fought, a verdict given and then implemented. The domestic industry would have moved a long away ahead in that time period,” the official said.

Smart or not
DoT argues that mobiles have evolved into smart gadgets that are not covered under WTO’s IT Agreement of 1996.
Mobiles remain mobiles, insist exporting countries. (Source: The Hindu Businessline)

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