The Supreme Court today sought response from the Centre on a plea questioning issuance of show cause notice to Loop Telecom Ltd for discontinuing its operation in 21 circles and threatening to impose Rs1100 crore penalty for allegedly violating 2G spectrum licence norms.

Loop Telecom was one of the company whose licences for 2G spectrum was quashed by the apex court's February 2, 2012 judgement.

A bench of justices G S Singhvi and K S Radhakrishnan issued notice to Department of Telecommunication (DoT) and also sought its response for allegedly threatening in the show cause notice to impose liquidated damages of Rs seven crores per circle on Loop Telecom for its failure to fulfil its second year 'roll out obligation'.

Senior advocate P P Rao accepted the notice for the DoT, which was asked to file its reply in two weeks.

Following the quashing of its licences, the telecom company had discontinued its services by proceeding to shut down its operations after duly porting out all its subscribers and had preferred not to go for the fresh auction.

Senior advocate Harish Salve, appearing for the company, sought quashing of the DoT's November 22, 2012 show cause notice saying that it was entitled to discontinue its operation under the quashed UASLs (Unified Access Services Licences).

He said after the February 2012 judgement, the court on DoT's plea had said the existing licencees shall be entitled to continue until January 18, 2013.

Salve said it was not mandated on telecom operators that they should necessarily continue till such date but DoT misinterpreted the February 2 judgement and subsequent orders of April 24 and August 27, 2012 giving further extension to operate till the conclusion of fresh auction.

Loop Telecom submitted that by its letters of March 30 and April 6, 2012, DoT was informed that the company was shutting down its operations and removing its network/infrastructure in the wake of quashing of its licences.

However, DoT has already encashed the bank guarantee of Rs five crore for the Bihar circle.