NEW DELHI: Counsel for bankrupt telecom service provider Reliance Communications (RCom) told the Supreme Court on Wednesday that if the court were to rule against any sale of RCom’s spectrum licenses, then the company would head into liquidation.
A bench of Justices Arun Mishra, M R Shah and S Abdul Nazeer are currently hearing arguments in the AGR liabilities case, where bankrupt telecom license-holders such as Aircel, RCom and Videocon Telecommunications owe the government over Rs 58,000 crore in unpaid spectrum and license fees.
The SC has been examining whether RCom, which is currently going through the bankruptcy process and owes Rs 31,000 crore in dues, should be allowed to sell its spectrum license as part of the resolution plan. The Centre’s Department of Telecom (DoT) has argued that no ownership of spectrum is transferred under the agreement and the government remains the owner.
On Wednesday however, RCom counsel Harish Salve told the bench, “If spectrum sale is not allowed, RCom will find itself going into liquidation and it won’t help anyone’. However, the bench also observed during the proceedings that if the sale of spectrum is allowed under trading guidelines, how could it be sold under the Insolvency and Bankruptcy Code (IBC).
The bench noted that all resolution transactions must be as per the IBC and trading guidelines mandate that dues need to be taken care of before the sale of spectrum. RCom, according to official sources, has not been paying any dues on its spectrum rights since it went into insolvency, which had led the DoT to send it a notice in 2019 asking why it shouldn’t revoke its license in the absence of payments. The matter was adjourned for the next hearing, which is to be held on Thursday.