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AGR: Supreme Court seeks details from DoT on spectrum sharing, licence trading agreements of telecom companies

The Court has directed for these details to be furnished by DoT by August 22 and it will hear the case again next on Monday, August 24.

Shruti Mahajan

The Supreme Court on Friday sought details from the Department of Telecommunications (DoT) pertaining to Spectrum sharing agreements and licence trading agreements of telecom companies before the Court.

The three-Judge Special Bench has been hearing the case on the question of whether Spectrum can be sold under IBC proceedings. This question came from the Bench when it was hearing ailing telecom companies on the issue of their bona fide vis-a-vis discharging their dues towards AGR.

Justices Arun Mishra, S Abdul Nazeer and MR Shah
Justices Arun Mishra, S Abdul Nazeer and MR Shah

The fact pertaining to a Spectrum sharing arrangement between Reliance Jio and Reliance Communication, which is undergoing IBC proceedings, was put forth before the Court earlier this week, which steered the course of the hearing also in the direction to touch upon government's guidelines on Spectrum sharing and Spectrum trading.

The Court's order of August 21 mandated DOT to file an affidavit with the following details:

1) Pointing out on the basis of sharing arrangement, how much is the liability of the sharers from the date of sharing and how much they have paid and as per our Judgment, what are the arrears, which are required to be paid on the basis of sharing arrangement by respective sharers.

2) The date of transfer, how much are the previous dues with effect from the date of grant of licence till the date when transfer was made and the arrears worked out after transfer and before transfer (trading) and the outstanding on that count, with respect to the companies which are before us in these matters.

3) In a tabular form, from the date of grant of licence, who was using the licence and from which date the respective sharing has taken place with respect to each licence and the date

Hearing

In addition to the Spectrum sharing agreements, government's guidelines pertaining to Spectrum trading were also discussed during the hearings before the Court, with the Bench being apprised of a spectrum trading agreement between Aircel and Bharti Airtel. In light of the discussion on this issue, the Court has also sought details of licence trading between companies.

The Bench will take up the case for hearing next on Monday, August 24, at 3:50 PM.

Earlier, the Bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah had asked the Solicitor General to assist the Court on whether or not Spectrum can be sold under IBC proceedings.

The Bench was considering the issue of bona fides of telecom companies undergoing IBC proceedings.

AGR hearing since October

On July 20, the Court had reserved its order on the time period to be allowed to telecom companies to clear their AGR dues through staggered payment.

On that date, the Bench was told by the DoT that it would stick to allowing a period of 20 years for staggered payment of AGR dues by telecom companies. This was in a slight difference from the 15-year window proposed by Vodafone-Idea as well as Bharti Airtel. Tata Telecom had argued that a 7-10 year window would be required.

After the Supreme Court, in October 2019, delivered its judgment on the interpretation of the term "Adjusted Gross Revenue", it granted the telecom companies a period of 90 days to clear the dues that would accrue. Keeping in view the precarious financial and economic health of the country as well as the telecom industry, the DoT, in March sought a modification of the Court's order and proposed a time-frame of twenty years for staggered payment of these dues, in line with a formula evolved by the Union Cabinet.

While hearing this plea in March, the Court had pulled up the DoT for allowing telecom companies to self-assess the dues payable by them. The Court had made its displeasure with the telecom companies very clear, stating that the continued attempts made by these companies seeking re-assessment of the October 2019 order amounted to fraud on the Court. More recently, the Court asked the Centre to consider withdrawing its demand of AGR dues from PSUs saying that the October 2019 ruling did not bring PSUs under its purview. This demand later was withdrawn by the DoT and communicated to the Supreme Court.

Read Order:

IN RE MANDAR DESHPANDE - 21.08.2020.pdf
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