SC seeks govt’s view on whether Jio should pay RCom’s AGR dues

The Supreme Court on Monday said the government must express its stand on Reliance Jio Infocomm Ltd using bankrupt Reliance Communications’ spectrum since 2016, and asked the Centre to share its view on recovering adjusted gross revenue (AGR) dues of RCom from Jio.

The apex court also asked if Reliance Jio can be held liable for AGR and other dues of RCom as it has been earning revenue by using the latter’s airwaves in the 800 megahertz band under an asset-sharing agreement. The court has adjourned the case to 19 August.

Reliance Jio, in a written submission on Monday, told the Supreme Court that there is no legal basis for transferring bankrupt RCom’s dues, AGR or otherwise, to Jio as two telecom operators in a spectrum-sharing agreement do not share liabilities.

Senior lawyer Harish Salve, representing Reliance Jio, submitted that the company is neither involved in the Insolvency and Bankruptcy Code (IBC) proceedings of RCom nor is acquiring the bankrupt telco’s spectrum.

Interestingly, the government informed the three-judge bench headed by Justice Arun Mishra that the DoT and the Ministry of Corporate Affairs (MCA) have divergent views on whether the spectrum with a telecom company can be sold under insolvency proceedings.

The DoT said spectrum is a national property, held by the government in trust, and thus, cannot be sold under insolvency proceedings. Telcos do not own spectrum, while any contract allows only its use, said Solicitor General Tushar Mehta.

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 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. Live mint