RCom seeks Supreme Court nod to use Rs 104 cr to be refunded by DoT

Reliance Communication (RCL) and Reliance Telecom (RTL) on Thursday moved the Supreme Court seeking permission to use Rs 104.34 crore, lying unutilised in a separate account, to meet their day-to-day expenses.

A Bench led by Justice UU Lalit sought a response from the department of telecommunications (DoT) on a fresh application by the bankrupt companies, which are in the final stages of insolvency proceedings. The application sought a direction to the department to file its application with the National Company Law Tribunal (NCLT) so that money can be released to them.

The Supreme Court earlier this year, while dismissing an appeal from the the Centre, had asked DoT to refund over Rs 104 crore to the two ailing companies, which was encashed towards their deferred spectrum dues. The government had encashed bank guarantees furnished by the companies of Rs 908.91 crore against the actual dues of Rs 774.25 crore for deferred spectrum instalments for 2018.

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Despite the SC asking the DoT to seek the NCLT’s decision for adjustment of Rs 104.34 crore, the department sought to set off the excess amount towards the adjusted gross revenue (AGR) dues, the companies said in their fresh plea.

Stating that DoT has deliberately chosen not to file any application before the NCLT, they also alleged that the government’s “inaction is hampering the CIRP and depriving” them of an opportunity to ease their financial burden.

The DoT cannot offset the amount towards AGR or any other dues on its own, and it needs to be settled only as per the provisions of the Insolvency and Bankruptcy Code, senior counsel Arvind Datar, appearing for the firms, said.

RCL and predecessor Sistema Shyam Tele Services had emerged successful in 2015 and 2013 spectrum auctions, respectively. After the merger of Sistema with RCL, its assets and liabilities, including the spectrum licence, had devolved on the latter. While the government approved the transfer in October 2017, RCL and RTL had bagged further spectrum in 2015 auctions. However, RCL failed to pay the third instalment of deferred spectrum charges of Rs 281.45 crore in terms of NIA 2013. This led to the encashment of bank guarantees to the extent of Rs 281.45 crore and another Rs 492.79 crore for deferred spectrum liability under the NIA 2015.

On both companies failing to pay their dues, the government encashed bank guarantees of Rs 908.91 crore against the actual dues of Rs 774.25 crore. While the two licensees later in August 2018 submitted fresh bank guarantees of Rs 774.25 crore towards the next instalments of deferred spectrum liability, the government did not refund the excess amount.

RCL and RTL then moved the TDSAT, which in December 2018 directed the central government to return around Rs 104.34 crore. DoT has already adjusted Rs 30.33 crore out of the encashed amount of Rs 908 crore.