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Modi Govt butress Spectrum to Jio , Airtel using solvency route : Supreme Court reserves verdict

After several rounds of hearings and a year later, the Supreme Court has reserved its judgment on the adjusted gross revenue (AGR) case.
 
On the last day of hearing on Monday, the court warned that if telecom companies are unwilling to pay their dues, it would direct the Union government to cancel their spectrum allocation and licence.
 
While the court’s verdict on the tenure of paying AGR dues is expected to decide the future of Vodafone Idea, its ruling on spectrum held by telcos under insolvency will be critical for the telecom industry, analysts said.
 
The judgement on the aspect of additional liabilities, if any, will determine the payout for Reliance Jio and Bharti Airtel for past dues of Reliance Communications, Videocon and Aircel. Reliance Jio had spectrum sharing and trading pacts with RCom and Airtel with Videocon as well as Aircel.
 
The Department of Telecommunications (DoT), in its submission, said the assessment of demand for payment of dues by Airtel, on behalf of Videocon, can be done once SC finalises its view on spectrum sharing and trading.
 
According to the spectrum trading guidelines, the seller of airwaves must satisfy all pending dues before the transaction.
 
On non-payment of dues by the seller, the burden of dues is on the buyer, the court had observed.
 
Appearing on behalf of Bharti Airtel, senior advocate Kapil Sibal said if the liability of past dues of Videocon was to be cast on Airtel, the DoT should have clarified long back.
 
DoT told the court that so far no demand had been raised against Reliance Jio and Bharti Airtel for past dues of RCom and Videocon.
 
With out putting exact measures BJP led modi Government said the assessment of their liability for past dues of RCom and Videocon was under process, DoT said.
 
Earlier in the month, SC had sought the details of spectrum sharing pact between RComm and Reliance Jio and asked why the company using the spectrum of the bankrupt firm cannot be asked to pay the AGR dues to the government.
 
The Centre instead of covering the spectrum loss then apprised Supreme Court with a novel logic and had told the court there was a difference of opinion between two of its ministries DoT and Ministry of Corporate Affairs on the issue of sale of spectrum during the insolvency proceedings.
 
Earlier, the apex court had made it clear it would not hear “even for a second” the arguments on reassessment or re-calculation of the AGR related dues of telecom companies.
SC in October 2019 had upheld the DoT definition of AGR and ordered telcos to pay the pending dues of Rs 1.6 trillion in licence fee and spectrum usage charges.
 
After the top court had rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices for a review of the judgment which widened the definition of AGR by including non-telecom revenues, the DoT had in March moved a petition seeking staggered payment spread over 20 years.
Splco Reporter
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