Payment of AGR by Telcom companies: LIVE UPDATES from the Supreme Court

The Court is hearing telecommunications companies undergoing IBC proceedings on the larger question of whether Spectrum can be sold under IBC proceedings.

Bar & Bench

Aug 18, 2020, 4:29 PM IST

The hearing in the case concerning payment of AGR dues by telecom companies is currently underway at the Supreme Court of India.

Read what happened in yesterday's hearing here:

Payment of AGR dues by Telcos: LIVE UPDATES from Supreme Court

The Court is hearing telecommunications companies undergoing IBC proceedings on the larger question of whether Spectrum can be sold under IBC proceedings.

Live updates from today's hearing are featured on this page.

The matter is being heard by a Bench of Justices Arun Mishra, Abdul Nazeer and MR Shah.

Hearing commences

Senior Counsel Harish Salve first to make submissions. There is a potential area of difference between DOT and lenders

Justice Mishra: We are conscious of the scope of the conflict. It is essentially two sides of the government saying different things.

Justice Mishra: We want to settle the dispute and we will not exceed our jurisdiction. We never exceed our jurisdiction

Justice Mishra: There are huge dues payable. How can we let it go?

Justice Mishra: We had directed for dues to be paid in a certain period but now the government is seeking 20 years. What if companies go into insolvency then? We cannot allow this like this

Justice Mishra: You (Salve) may put any technical arguments and call them legal arguments but no technical argument will come in the way of us enforcing recovery of AGR dues

Justice Mishra: We are shocked that the appeal against NCLT order was passed belatedly. It happened under our nose, we cannot allow like this.

Justice Mishra: Who has given NCLT this power.

Salve: The Parliament

Justice Mishra: No, we have to decide on this

Salve begins his submissions, says that the position is very clear that Rcom and Aircel are liable to pay the dues.

RComs insolvency was triggered by Ericsson

Salve tells the Court that RCom's resolution plan is accepted by the COC and it envisions auction of the spectrum, but subject to permission from the DOT

Salve: Spectrum is diminishing in value... demand for spectrum has gone down. The bankruptcy proceedings were used as a rouse to get out of the AGR demand.

Salve: They have placed a draft appeal before the Court saying Spectrum cannot be subject to bankruptcy proceedings. First of all, that is an issue which is not even crystallised.

Salve delves into the issue of Spectrum sharing, says sharing started the moment sharing guidelines were issued.

Salve: There is no question of one operator paying AGR dues of another. As far as Jio is concerned, it has cleared its dues pertaining to spectrum usage.

Salve: After the October 2019 judgment, Jio has paid some Rs. 194 Crores as part of their dues.

Justice MR Shah: Does this include the spectrum usage of Rcoms spectrum.

Salve: Entire thing that was payable by Jio

SC: The central question before us is if spectrum can be sold.

Salve: Now on the central issues (of) can spectrum be sold at all? The government has allowed it; they call it trading. They are governed by the spectrum sharing guidelines.

Salve: Then - can this trading be part of a resolution plan - the guidelines are relied upon bring this under Section 18 IBC

The Bench and Salve are now indulging in an informal conversation about Court proceedings held through telecom hearings and video conferencing in places like the UK and the USA.

Salve: DOT came up with a format under which licences were given as surety. To say that this is not an asset capable of being considered under resolution process is wrong.

Salve: As a public sector bank, you're lending thousands of crores to a telecom company and it goes bankrupt, then all of its infrastructure is junk without spectrum.

Salve: The question of sale of spectrum will arise only when the resolution applicant approaches DOT for its nod. This question should be decided at the relevant stage, that stage has not come yet.

SC again raises the question pertaining to drastic reduction in the value of RCom's assets.

Salve: The promoter of RCom is not going to get anything out of this. The promoter's shareholding is going to be extinguished.

Justice Mishra: Who is the promoter of RCom?

Salve: Anil Dhirubhai Ambani

Salve: The right to use a spectrum under a licence is an asset. You acquire the right to use the spectrum in an auction on payment of the fee, and that right is an asset.

Salve: Once the government has entered into a contract with a licencee for national resources, the licencee does not become a trustee. These are matters governed by contracts and these contracts have to be rigorously implemented.

Senior Counsel Ranjit Kumar requests for the day's hearing to be ended at 4PM.

Justice Mishra: No. Request declined. This is not the way. This is not right that someone is arguing and someone else is making a request for ending the day's proceedings

After continuing to make submissions for 10 minutes, Salve informs the Court that he requires about half an hour to finish his arguments.

Supreme Court of India Adjusted Gross Revenue AGR