NEW DELHI: The Supreme Court on Thursday expressed concern on the possibility of over Rs 57,000 crore in AGR dues owed by bankrupt telecom operators being wiped out in the IBC process. During the day’s proceedings, the SC bench comprising Justices Arun Mishra, S Abdul Nazeer and M R Shah continued examining the status of the companies under insolvency, such as Anil Ambani’s Reliance Communications (RCom), Aircel, and Videocon Telecommunications.
These, and other smaller license-holders, owe a cumulative Rs 57,000 crore as AGR dues. Observing that trading in spectrum is different from selling it under the Insolvency and Bankruptcy Code (IBC), the apex court questioned whether a liability like AGR dues could be wound up, under the guise of selling spectrum. It also noted that telecom firms could not use their licenses if they do not first pay the dues.
“Without paying for the horse, telecos are taking a ride. Unless dues are paid, nobody can start using the spectrum,” bench said. It had earlier noted that it was “extremely worried that almost entire AGR dues will be wiped out in the IBC process”. The bench pointed out that after the spectrum is sold under a resolution plan under the IBC, the new user of the license will extinguish any pending demand against the spectrum assets in question.
Meanwhile, the hearing also saw the court direct the Department of Telecom (DoT) to all details of spectrum allocated to Reliance Communication (RCom) and Aircel since 1999, including all instances of spectrum sharing.
Senior advocate Ravi Kadam, appearing for Aircel Monitoring Committee, also told the court that the right to use spectrum is an asset, and in order to keep the company running, this right will be sold up the on approval of the resolution plan. He also argued that Aircel’s resolution process has been concluded, since UV Asset Reconstruction Company (UVARC’s) plan has been approved. The dues of the DoT has been recognised by the Committee Of Creditors (CoC). He also submitted that the company has the power to transfer the right to use.
Divided opinion
The Centre had earlier told the top court that there was a difference of opinion between the telecom department and the Ministry of Corporate Affairs on the sale of spectrum during NCLT hearings