[AGR Case] SC Seeks Centre's Response On Whether Reliance Jio Should Pay R-Com's Dues

The Supreme Court on Monday asked the Department of Telecommunications (DoT), to file a detailed response on the issue of recovering Reliance Communications' Adjusted Gross Revenue (AGR) dues from Reliance Jio.A bench of Justices Arun Mishra, BR Gavai & Krishna Murari told the Centre that there exists a difference of opinion between two of its ministers (Department of Telecommunication and Ministry of Corporate Affairs) on the issue of sale of spectrum during insolvency proceedings. The Bench will continue hearing the case tomorrow, i.e. August 18. Bench also asked the Centre to give a year-wise chart of dues owed by RCom by Tuesday.Solicitor General Tushar Mehta, appearing for Centre and DoT submitted that "the government would support any view taken by the top court resulting in recovery of the AGR related dues".Mehta also submitted that the Centre had always maintained its stand spectrum cannot be sold during insolvency proceeding. "The spectrum is allowed to be used by the telecom companies under a contract but the ownership of it does not get transferred" said Mehta.The bench said it wants to know, since when RCom has not paid its dues and DoT should also give the year-wise details of demand raised against the company.The bench also referred to the earlier proposed deal of RJio and RCom and said RCom claimed its assets valued at Rs 35,000 crore."How has the value depleted? Where have the assets disappeared?," the bench asked.Senior Advocate Shyam Divan said that this was done to evade the insolvency proceedings but the deal did not materialise and the IBC became the preferred route.At the end of the hearing, Senior Advocate Harish Salve told the bench that he will address the court on legal issues of whether the spectrum can be sold under the bankruptcy process.SG: We (DoT) issued a notice on March 14, 2019 to @RCommCare as to why we should not revoke your spectrum as they are not making the payments for it?Mishra, J.: What were the dues and what was the judgment of this court, before & after. Yearly. Tell this to us by tomorrow.— Live Law (@LiveLawIndia) August 17, 2020On August 14, the bench had directed the Centre, Reliance Jio and Reliance Communication's to produce necessary documents in order to bring to light who would be liable for AGR dues of Reliance Communications. The bench also sought details of who was using the spectrum of Aircel and Videocon.Similar direction is issued to other companies which are under insolvency, including Aircel Limited, Aircel Cellular Limited and Dishnet Wireless Limited and Videocon Telecommunications Ltd. to specify who is using the spectrum an arrangement along with documents be placed on record.On August 10, Court had sought the Centre's response on whether Telecom Spectrum can be sold/auctioned in the insolvency proceedings faced by the telecom companies.The Court posed this query while examining the bona fides of bankruptcy claims of Reliance Communications, Aircel and Videocon.In 2016, Airtel had bought Aircel's 4G airwaves in the 2,300 MHz band and Videcon's spectrum. Earlier this year, the National Company Law Tribunal (NCLT) approved the sale of Aircel's assets to UV Asset Reconstruction Company (UVARCL).On August 7, the Top Court had reserved orders in the plea by Department of Telecommunications (DoT) seeking to allow telecom companies to make payments of the AGR dues in a staggered fashion over 20 years.The bench had also made it clear that it shall not entertain any objections for re-assessment/ re-calculation of AGR in light of the decision passed by Top Court in October 2019 and directed Reliance Communications, Sistema, Shyam Teleservices & Videocon to submit their insolvency details within 7 days.Court noted that, in doing so it needed to ensure that the IBC was not being misused by companies in order to escape liabilities.While warning all parties to dispense with payments pertaining to public revenue as had already been directed by the Court, the Justice Arun Mishra led bench expressed reservations regarding keeping the payment of dues pending."What is the guarantee that you will not escape? Some of you are foreign companies and may even go into liquidation. What is the security that you can give us?" Justice Mishra had asked.On June 18, the Supreme Court had directed telecom companies to submit their financial documents while considering the instant plea by the Department of Telecommunications to allow them to settle the AGR-related dues in a staggered fashion over 20 years.On June 11, it had directed the Department of Telecommunication to reconsider the claims raised on Public Sector Undertakings on the basis of the October 2019 verdict in the case pertaining to AGR dues of telecom companies.The bench had also observed that raising demands on PSUs on the strength of AGR verdict was uncalled for. The bench pointed out that the licenses for telecos and PSUs were of different nature, as the latter was not intended at commercial exploitation."This ...

[AGR Case] SC Seeks Centre's Response On Whether Reliance Jio Should Pay R-Com's Dues

Sanya Talwar

Tags