AGR Case: Supreme Court Asks Insolvent Telecom Firms To Submit Spectrum Sharing Contracts
The adjusted gross revenue hearings at the apex court saw a fresh twist on Friday.
A new twist emerged during the adjusted gross revenue case hearing at the Supreme Court on Friday, with the court inquiring if companies that are using the spectrum of insolvent telecom companies can be asked to pay AGR dues.
The question was raised by a bench headed by Justice Arun Mishra citing the case of Reliance Communications Ltd., which is currently undergoing insolvency proceedings. The bench asked whether Reliance Jio Infocomm Ltd.—which has a spectrum sharing contract with the insolvent company since 2016—can be asked to pay RComm’s AGR dues.
Jio informed the top court that it has paid the spectrum usage charge according to the spectrum sharing guidelines. It also said the company has cleared its share of AGR dues which was asked by the Department of Telecommunications.
The court then asked all the telecom operators undergoing insolvency proceedings to submit their spectrum sharing contracts by Monday, the next date of hearing. The government has also been asked to submit details of spectrum usage by the telecom companies under these contracts.
The Department of Telecommunications (has) to make it clear in whose name and from which date the spectrum is being used and how much fees/dues of AGR year-wise and amount deposited with it for using of the same by the respective companies under some inter se arrangements of the companies and the dates thereof.Supreme Court Order On Aug. 14
In the last hearing, the Supreme Court had questioned the government’s ability to recover pending AGR dues from carriers such as Aircel Ltd. and Reliance Communications that are facing insolvency proceedings.
On July 20, the court had expressed its intention to look into the insolvency proceedings initiated against the telecom operators who were party to its October verdict that said AGR should include non-core revenue. It will examine the bona fides of the decision to go for insolvency proceedings to ensure that it wasn't done to escape AGR dues, the court had said. Aircel had filed for voluntary insolvency proceedings while RCom was dragged to insolvency by its operational creditors.
On Friday, the bench asked for details on bids received for RComm. Shyam Divan, appearing for the resolution professional, informed the court that an asset reconstruction company has submitted a bid which has been has been placed before the National Company Law Tribunal. The court sought to look into the details of the bidder.
The court has again directed the companies to submit more details of the insolvency process on an affidavit, including details of proposal regarding sale of assets and potential purchaser.
Every detail of proceeding should be made clear by the committee of creditors and the resolution professional as well as by the counsel appearing for the respective companies.Supreme Court Order
The apex court, during the previous hearing, had come down heavily on what it saw as attempts to recalculate the dues of the telecom operators.
“Such big hands, that are going against our orders. We will cut them short,” the legal news portal Live Law quoted Justice Arun Mishra as saying. “First you said self-assessment and now call it recalculation. You’re the solicitor general and you cannot do this,” he had said. “You cannot commit contempt on this court? What is this nonsense?”
The solicitor general, however, said there were no attempts to recalculate the dues. Subsequently, he expressed unconditional apology on behalf of the officials of the Department of Telecommunications, but the court asked him to submit the apology in an affidavit. The issue did not see any discussion during Friday’s hearing.
Similarly, there is no word yet on the issue of extending the payment timeline for the telecom firms. The Supreme Court, on July 21, had reserved its order on granting more time to the carriers. While the government had proposed allowing the payment to be staggered over 20 years, the apex court didn’t favour it.
Vodafone Idea Ltd. had sought a 20-year window, which was declined by the court. The operator said it was willing to provide security through licence and spectrum for the pending dues. It then modified its request to 15 years. Companies such as Bharti Airtel Ltd. and Tata Teleservices Ltd. also requested for more time.
The Supreme Court in October had ruled that telecom operators will have to include non-core revenue to calculate levies and asked the carriers to pay pending dues, ending a 14-year-old legal battle between mobile operators and the government. The court subsequently dismissed the review petitions filed by the carriers and had made it clear that it won’t allow self assessment of dues by the companies. The top court had even threatened to hold India’s beleaguered telecom operators in contempt for not complying with its order to pay thousands of crores worth of dues within the deadline.
