The Supreme Court on Monday asked Department of Telecom (DoT) to explain how it plans to recover Adjusted Gross Revenue (AGR) related dues from telecom companies facing insolvency proceedings.
The apex court also wanted to know whether spectrum given to these companies can be sold. The DoT told the SC that its stand is that the spectrum cannot be sold by the telecom companies facing insolvency proceedings as it is not their property. While the question was posed by a bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah, the DoT was represented by Solicitor General Tushar Mehta
“Please tell us what will happen to the DoT’s AGR related dues, if the companies like RCOM, Aircel and Videocon go into insolvency then what would happen to the said amount. Tell us how you will recover Rs 31,000 from RCOM and Rs 12,000 crore from Aircel. You have to do something. This is public money”, the bench said and added that the court needs to ascertain the bonafides of the telecom companies who have gone under proceedings under Insolvency and Bankruptcy Code (IBC).
The Solicitor General said that he will be filing an affidavit in this regard. He said telecom companies are at varying stages of insolvency proceedings. Mehta said that their appeal against the National Company Law Appellate Tribunal (NCLAT) order has been pending before the Supreme Court on the question whether the spectrum given to the companies can be sold or not.
The Supreme Court asked Mehta as to why did NCLAT dismiss their petition against sale of spectrum to which he replied that due to delay in filing of appeal against the order. Why was the delay in filing the appeal? What would happen if the spectrum is sold out by then? the bench said. It said that the court wants to go into cause of initiation of insolvency for these telecom companies and wants to know about their liabilities and what was the urgency for pushing for insolvency.
The bench said it wanted to know as how insolvency proceedings were initiated against Reliance Communication (RCOM) even after the operational creditor the Swedish telecom equipment maker Ericsson was paid its dues. How were the proceedings under IBC, revived when the Supreme Court had in its 2019 order directed for settlement of dues of Ericsson?, the bench said.
As mentioned by the apex court, it was not a reasonable proposal that a period of 15 to 20 years be given to the telecom companies to pay AGR dues.