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Aircel spectrum sale to be decided by NCLAT: Supreme Court

The original Supreme Court order had ruled that the question of saleability of spectrum rights would be examined by the NCLT.

Published: 26th September 2020 10:40 AM  |   Last Updated: 26th September 2020 10:40 AM   |  A+A-

Supreme Court

Supreme Court (File Photo| Shekhar Yadav, EPS)

By Express News Service

NEW DELHI: Friday saw the first of what is likely to be several requests for clarification on the Supreme Court’s recent judgement on the AGR dues of telecom companies. On the day, the apex court clarified to bankrupt telecom company Aircel that the National Company Law Appellate Tribunal (NCLAT) will decide on the question of whether its creditors may sell its spectrum assets. 

The two-judge bench headed by Justice S Abdul Nazeer, however, added that the decision was only for Aircel, since the NCLT has already approved the acquisition of these assets by UV Asset Reconstruction Company under its resolution plan. There are other companies in a similar situation, including Anil Ambani’s Reliance Communications  (RCom) and Videocon Telecom. 

The original Supreme Court order had ruled that the question of saleability of spectrum rights would be examined by the NCLT. However, Aircel had appealed to the court that since its case was already cleared by the NCLT there was nothing pending in its case. The SC had also ordered that the questions surrounding bankrupt telcos should be taken decided within two months by the bankruptcy tribunal. 

The question the NCLT has to answer is whether spectrum  can be sold under insolvency process. While creditors are arguing that spectrum is an asset and can be part of the insolvency process, the Department of Telecom (DoT) is holding that these rights would revert to the nation and cannot be sold off. 

The above factor is not the only  aspect that may need clarification from the SC, say industry sources. As reported earlier, the DoT and operating telcos Bharti Airtel and Vi (erstwhile Vodafone Idea) differ in their interpretations of when the first AGR instalments are due. While the former says the first instalment will be due in March 2021, the companies hold that the partial payments they have made so far should be factored while setting up the instalment process. 

Question before NCLAT

  • The court has to decide if spectrum  can be sold under insolvency process
  • Creditors are arguing that spectrum is an asset and can be part of the insolvency process
  • The DoT holds that these rights would revert to the nation and cannot be sold off
  • Companies whose fates are on the line include Reliance Comm and Videocon Telecom


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