AGR case: SC seeks details of spectrum users of bankrupt telcos2 min read . Updated: 14 Aug 2020, 04:41 PM IST
- SC on 10 August had observed that the government must draw a plan to recover AGR-related dues from bankrupt telecom operators after flagging doubts over the government recovering any amount from their insolvency proceedings
NEW DELHI: The Supreme Court on Friday asked bankrupt telecom companies, including Reliance Communications Ltd (RCom), Aircel Group and Videocon Telecommunications Ltd, to furnish details of those using spectrum with insolvent firms. This came after RCom told the apex court that Reliance Jio Infocomm Ltd has been using its spectrum.
A bench headed by Justice Arun Mishra asked Shyam Divan, counsel representing the resolution professional of RCom, that if Reliance Jio has been using the spectrum with RCom and whether Jio can pay the adjusted gross revenue (AGR)-related dues of RCom. While Reliance Jio is owned by Mukesh Ambani, RCom is led by his younger brother Anil Ambani.
Divan told the apex court that RCom is in asset-sharing agreement with Reliance Jio since 2016, the launch year of the latter, and the DoT has been informed about the pact along with payment of required fee to use the spectrum. The bench, however, said spectrum is government property and no debtor can come in the way of public interest.
The next hearing in the case is on 17 August.
The apex court on 10 August had observed that the government must draw a plan to recover AGR-related dues from bankrupt telecom operators after flagging doubts over the government recovering any amount from their insolvency proceedings.
It had also asked the department of telecommunications (DoT) to explain whether spectrum can be sold under the Insolvency and Bankruptcy Code (IBC). According to legal experts, transfer of spectrum to a new buyer is not allowed unless past dues are cleared and will require amendments in telecom law and policies.
The DoT, however, can retain the spectrum with bankrupt telcos, disallowing the sale and commercially auctioning the airwaves again. Lenders differ on this, with State Bank of India telling the Supreme Court that spectrum is an integral asset of telecom companies.
RCom owes DoT ₹25,199 crore, including spectrum usage charges (SUC) and licence fees, according to government estimates. This is nearly half of ₹49,054 crore in dues calculated under the company’s insolvency proceedings. Aircel owes ₹12,389 crore to the DoT.
The apex court on 24 October upheld the DoT’s broader definition of AGR and ordered telcos to pay levies based on that definition, along with interest on the principal amount and penalty. The DoT calculates levies such as SUC and license fees based on AGR.
The court directed 15 telecom operators, including the ones that have shut operations, to pay ₹1.47 trillion in AGR dues within three months.
Vodafone Idea has so far paid ₹7,854 crore to the DoT but still needs to clear more than ₹50,000 crore in AGR dues. The telco’s self-assessment of the dues stands at ₹43,066 crore.
According to Airtel’s self-assessment, it owes ₹13,004 crore to the DoT. The telco has already paid this amount along with an additional ₹5,000 crore in ad-hoc payment subject to refund/adjustment to cover differences arising out of reconciliation with the DoT.