Reliance Jio told Supreme Court that there is no legal basis to transfer the dues of bankrupt Reliance Communication on Monday. It further stated that RCom’s depts, AGR or otherwise, cannot be transferred to Jio since the two telecom operators share agreement for spectrum and do not share liabilities.
Reliance Jio, New Delhi: On Monday, the Supreme Court of India said that the government must state its view on the Reliance Jio Infocomm Ltd using the bankrupt RCom’s spectrum since 2016. Furthermore, the Supreme court has also asked the center to share its opinion on recovering AGR (adjusted gross revenue) dues of RCom from Jio.
Apex Court to Held Reliance Jio for AGR and other Dues of RCom?
The Apex has sought the government to hold the Reliance Jio liable for AGR and other dues of RCom. The court states that the company is earning revenue via the latter’s airwaves in the 800 MHz bands under an agreement to share assets. The case is currently adjourned till 19 August by the court (1).
As per the written submission of Reliance Jio on Monday, there is no legal basis to transfer the dues of bankrupt Reliance Communication on Monday. It further stated that RCom’s depts, AGR or otherwise, cannot be transferred to Jio since the two telecom operators share agreement for spectrum and do not share liabilities.
Harish Salve, a senior lawyer representing Reliance Jio, stated that the company is not involved in the Insolvency and Bankruptcy Code proceedings of Rcom. He added that the company is also not acquiring the spectrum of the bankrupt Rcom.
Interestingly, the DoT and Ministry of Corporate Affairs have different opinions on the matter. As per DoT, the spectrum is the property of the nation. Tushar Mehta, Solicitor General, added that a telecom company does not own the spectrum, and a contract only allows its use.
As per the government’s estimation, RCom owes 25,199 Crore INR to Dot. It includes spectrum usage charges and license fees.
As per the court, the government must draw a plant to recover the dues from bankrupt teleoperators. It has also asked DoT to explain whether the spectrum can be sold via IBC code. As per legal experts, the spectrum cannot be transferred to a new buyer until past dues are apparent along with amendments to telecom laws and policies. DoT can, however, retain the spectrum with bankrupt tele, disallow the same and auction the airwaves commercially again.