So far in the AGR dues case, Reliance Jio has made it clear that it has paid all the AGR dues which includes the spectrum usage charges as well. It is interesting to see that the court’s hearing has shifted from the primary concern of AGR dues to whether or not spectrum can be sold by a company under IBC. In yesterday’s hearing, SC had posed a question that when telco’s don’t own the spectrum, then how can they sell the right to use it? Keep reading ahead to find out all the major updates from today’s hearing.
SC Asks has Airtel Paid AGR Dues for Using Aircel’s Spectrum?
Ravi Kadam representing Aircel Monitoring Committee notified the SC about the 8 instances since April 8, 2016, where spectrum trades with Bharti took place. He told the court that DoT had approved of the sale and the demand for all the dues was raised. SC then asked whether Airtel has paid all the AGR dues. Further, SC asked to present how much spectrum was used by Airtel and whether or not they have cleared the payments based on the 1999 guidelines. After that, SC demanded to be notified about the date RCom started sharing the spectrum with Rjio. Everything the court wants, it wants on the basis of license these companies had. To the question raised by SC on Airtel’s AGR dues, Kapil Sibal representing Airtel said that the telco has paid all the dues in respect to spectrum trading worth Rs 18,004 crore. SC then asked whether Aircel is looking to sell the spectrum under IBC? Kadam responded by saying that spectrum is an asset and to keep the company on a going concern basis, the right to use the spectrum will be monetised when the resolution plan is approved. The resolution applicant is UVARC. To this, SC then asked what happens with AGR dues? How much has the telco paid already? Kadam said that the resolution process has finished and since DoT is an operational creditor which is recognised by COC as well, not even 1% of the AGR dues will be paid. He notified SC about the COC meeting of which DoT was also a part. From this reply, SC said that it is worried about AGR dues being wiped out under the IBC process. If the spectrum is sold, there will be no questions left to entertain against the spectrum in concern. SC said that sale of the spectrum under IBC is a totally different thing than the sale of spectrum normally. Telcos can’t use the spectrum until and unless all the dues relating to the spectrum are clear. After this, Ravi Kadam concluded from the side of the Monitoring Committee of Aircel. Ranjit Kumar representing COC for Aircel started by stating that the requirement to pay AGR is purely contractual. There is a tripartite agreement which says that spectrum is security before banks. He further said that Spectrum is a raw material for the company and by restricting them to sell the right to use it, SC is directly pushing the companies in the direction of liquidation. Kumar made a point that banks’ dues are of the same nature as of AGR dues in this case. If the telco uses all the proceeds to satisfy the AGR dues, then none of the banks which also keep the money of the public will get anything. In addition to that, Kumar said that payment of AGR dues before the payment of money owed to the banks would be a violation of IBC. Kumar further made a point that government can’t pull back now from its original decision of allowing spectrum as security. Kumar has put forth the SC about the right of the telcos to transfer the right of use of spectrum which is stated under the tripartite agreement. SC adjourned the hearing of AGR dues case to Friday, 2 PM.
