Telephone off-hook indicator

With the 'phone on-hook, central battery voltage is high enough for sufficient current through the 4M7 to bias the associated transistor on.  The current through the l.e.d. will be so small that it will either not glow or glow so dimly that it is difficult to see.  The conducting transistor will hold the other npn one off.

When the 'phone is off-hook the line voltage drops to a low value, perhaps 6 or so volts.  There will be insufficient current through the 4M7 for the associated transistor to stay on.  The pnp transistor now conducts and its collector current switches on the npn transistor in series with the l.e.d., which will light.  Current will depend upon the actual line voltage, less the l.e.d. forward drop, divided by 1k8.