The DoT order followed immediately after the Delhi high court rejected the petition of the four operators seeking an interim injunction against DoT from encashing their bank guarantees.

Dismissing the petition, Justice MK Sharma said, "The petitioners fail to make a prima facie case for granting interim injunction."

Top DoT sources confirmed that orders for encashment of Rs 313.80 crore bank guarantee of Birla AT&T, Rs 50 crore each for Tata Teleservices and Hughes Ispat and Rs 25 crore in the case of Essar Commvision had been issued.

The total amount recoverable from the four companies is nearly Rs 439 crore, as per the terms of the licence agreement. Birla AT&T has pledged the highest amount of Rs 313.80 crore, securitised in the form of post dated cheques to cover the principal, which in turn has beencovered with post dated cheques for the interest.

The four petitioners, however, are likely to file an appeal against the judgement in a division bench of the high court on Tuesday. A Birla AT&T spokesperson said that despite the ruling, the company was on good grounds to seek an interim injunction, pending arbitration, on the issue of losses arising from contractual violations by the DoT. The senior management of Birla AT&T plan to meet soon to finalise their strategy.

Though the reaction to the High Court ruling in Sanchar Bhawan remained muted, top department officials said that the ruling had vindicated their stand. "We are not the villains of the telecom scene, as some have sought to portray us", said a senior official.

Laying the blame at the private operators doors, DoT officials repeatedly referred to the licence fee agreements as legally binding and unquestionable.

In the main petition, the high court issued notices to DoT which was accepted by counsel Rakesh Tiku. The court has given threeweeks time to DoT for replying to the notices.

The four petitioners had failed to pay 20 per cent of the licence fee by February 28, the last date set by the ministry of telecommunications, and approached the court for interim injunction.

Earlier, the court had admitted a petition filed by three private basic and one cellular operator. The petitioners had sought to restrain the department of telecommunication (DoT) from encashing bank guarantees and proceeding against them on other counts, following their refusal to pay up 20 per cent of outstanding licence fees.

The petitioners alleged before Justice MK Sharma that it was because of the delay on part of DoT and other government agencies that the companies were unable to pay up the 20 per cent licence fee.

Basic telephone operators alleged that by allowing Internet Service Providers (ISPs) last mile linkages, the DoT had violated the duopoly clause in the licence agreement.

The three said that "voice over internet protocol" (VOIP) service that ISPscould provide, was so cheap that any person could make international calls at the rate of local calls, making basic telephone services by private operators totally unviable.

Counsel for the government had added a new twist to the case, when they offered to extend the deadline for licence fee payment to March 31 if the operators promised to pay up 20 per cent outstanding licence fee by the date.

"If telecom operators undertake to make payment by March 31 without raising any further issue, the government can consider their viewpoint," DoT counsel and additional solicitor general R N Trivedi had submitted before the Delhi High court, during the second round of hearing on the case. Trivedi's offer had been rejected on the spot by counsel of the four petitioner companies Birla AT&T, Essar Commvision, Tata Teleservices and Hughes Ispat.

DoT is required to give six months notice for termination of licence to basic operators and that of 60 days to cellular companies, Trivedi and government counsel Rakesh Tikusaid.