Guwahati, Jan. 24: Tripura High Court has set aside an over Rs 339-crore penalty imposed by the department of telecommunications (DoT) on Dishnet Wireless, which owns Aircel, for alleged lapses in subscriber verification in the Northeast.

The penalty was imposed on Aircel for alleged flouting of rules related to verification of the identity of their mobile subscribers in the Northeast, including Assam, from April 2007 to January 2012. The penalty was imposed under clause 10(2) (ii) of the licence agreement signed by Dishnet with the DoT.

Dishnet's counsel Amit Goyal said a single-judge bench of Justice S. Talapatra struck down the clause, thereby setting aside the penalty imposed by the DoT under it.

"The high court ruled that such a penalty can't be imposed by way of agreement," said Goyal, who assisted senior advocate Ashok Kumar Saraf in this case. Goyal said the clause of the licence agreement provided unbridled power to the licensor to impose "financial penalty" for violation of terms and conditions of licence agreement.

The high court order, which was passed a few days ago, could have significant ramifications for similar disputes between the DoT and other mobile service providers throughout the country.

The DoT had issued a circular dated November 22, 2006, stating that after March 31, 2007, if any subscriber's number is found to be working without proper verification, a minimum penalty of Rs 1,000 per violation (of subscriber number verification norms) shall be levied on the licensee apart from immediate disconnection of the number by the licensee under the clause mentioned above.

The circular directed each licensee to take re-verification of the existing subscribers on priority basis and ensure that such re-verification be completed by March 31, 2007.

The letter explained that re-verification means there shall be 100 per cent checking of documentary proof of identity and address, and it should also be ensured that the subscriber information available in the service provider's database matches with that in enclosed documents. The licencee company was also instructed to cross verify the information by calling the respective subscribers.

Financial penalty was imposed wherever the mobile service provider was found to not have properly followed the process of verification.

According to DoT, the circular has been issued in the interest of national security since non-verification of a customer may endanger the security of the nation.

An official source said the DoT had made it mandatory for telecom companies to verify subscribers after security agencies could not trace specific mobile users.