New Delhi, August 19
The SBI led Committee of Creditors (CoC) for Reliance Communications (RCom) advised the Supreme Court on Wednesday that if spectrum sale is just not allowed, then the telecom firm will discover itself going into liquidation and it gained’t assist anybody.
The CoC advised the highest court docket that RCom is just not looking for to run away from Adjusted Gross Revenue (AGR) associated dues by hiding itself behind Insolvency and Bankruptcy Code (IBC) however the telecom firm owes over Rs 42,000 crore to the banks.
A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah was advised by senior advocate Harish Salve, representing the CoC for RCom and Reliance Jio mentioned each banks and the Department of Telecom are looking for compensation of the general public cash.
“If spectrum sale is not allowed, RCom will find itself going into liquidation and it won’t help anyone,” Salve mentioned.
The bench noticed that sale of spectrum is allowed beneath buying and selling pointers however how can or not it’s offered beneath the IBC.
It mentioned all decision transactions should be as per the IBC and buying and selling pointers present that dues should be taken care of earlier than the sale of spectrum.
The bench advised Salve that the IBC has relegated dues of the federal government behind the banks, after which in such a situation, how will prior dues be paid, as required by the buying and selling pointers.
Salve, throughout practically two-hour listening to, advised the bench that there isn’t any query of sale of spectrum with out the nod of DoT and even the decision applicant says the plan entails sale of proper to make use of spectrum, solely topic to DoT approval.
He mentioned the difficulty of sale of spectrum is to be determined by the DoT and within the current situation it’s even potential for the very best bidder UV Asset Reconstruction Company (UVARC) to again out of the bid with DoT now saying that spectrum sale can’t be allowed beneath the IBC.
The senior lawyer mentioned that DoT had refused to grant nod to the Jio-RCom spectrum sale settlement, regardless of TDSAT judgment in favour of RCom. He mentioned that it’s untimely for the highest court docket to resolve whether or not spectrum will be offered or not as if the decision plan succeeds, DoT will resolve on the sale of spectrum at that stage.
He contended that it was not looking for to promote the spectrum, however solely desires to switch the best to make use of as the connection between the telecom firm and the federal government is akin to the connection of landlord and lessor of property.
Spectrum is recorded as an asset, by advantage of getting been bought in an public sale, Salve mentioned, including that the telecom firm owns the best to make use of the spectrum, a particularly worthwhile proper.
The bench advised the senior lawyer that one can solely promote something that’s in his possession however how can a telecom firm which solely has the best to make use of spectrum, promote it?
Salve replied that it’s no one’s case that spectrum is owned by anybody else aside from the Government and the license merely transfers the best to make use of by the telecom firm.
Nobody can declare that spectrum belongs to him, the best to make use of the spectrum is with the corporate, he mentioned, including that the spectrum vests with the folks of India and it defies possession.
The listening to remained inconclusive and would proceed on Thursday. On Tuesday, Reliance Jio advised the highest court docket that it has already paid Rs 195 crore in AGR-related dues which included spectrum sharing cost of RCom.
It mentioned there isn’t any query of 1 operator paying the AGR associated dues of one other agency, as advised by the apex court docket earlier, and it has cleared all its dues.
The billionaire Mukesh Ambani-led Jio advised the apex court docket nevertheless that if nonetheless any quantity stays pending from sharing of spectrum of RCom, it’s prepared to pay that.
The prime court docket had mentioned it will resolve all of the authorized points concerned within the matter and would do it conclusively.
The CoC has contended that the insolvency proceedings towards RCom had been triggered by Ericsson, which couldn’t be withdrawn even after the Swedish telecom gear maker was paid its dues.
It had knowledgeable the court docket that UVARC is the highest bidder for RCom, which was earlier led by Anil Ambani, and it’s not fronting for anybody.
Earlier, the highest court docket had requested Centre to make clear its stand on why Jio, which is incomes income by sharing RCom’s 800 MHz spectrum, be not requested to pay the AGR associated dues to the federal government.
The Centre had advised the highest court docket there was a distinction of opinion between two of its ministers (DOT and Ministry of Corporate Affairs) on the difficulty of sale of spectrum throughout insolvency proceedings.
On August 14, the highest court docket had sought the small print of spectrum sharing pact between RCom and Jio and mentioned as to why the corporate utilizing the spectrum of the opposite agency can’t be requested to pay the AGR associated dues to the federal government.
Earlier, the highest court docket had made it clear it won’t hear “even for a second” the arguments on reassessment or re-calculation of the AGR associated dues of telecom corporations which run into about Rs 1.6 lakh crore.
The apex court docket had in October 2019 delivered the decision on the AGR challenge for calculating authorities dues of telecom corporations equivalent to licence charge and spectrum utilization prices.
After the highest court docket had rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices looking for overview of the judgement which widened the definition of AGR by together with non-telecom revenues, the DoT had in March moved a plea looking for staggered fee over 20 years. — PTI