The National Company Law Appellate Tribunal (NCLAT) has asked private telecom operator Bharti Airtel and Bharti Hexacom to pay Rs 112 crore to Aircel. A three-member NCLAT bench on Monday set aside the order of the Mumbai bench of the National Company Law Tribunal (NCLT), which on May 1, 2019, granted a set-off of Rs 112 crore to Bharti Airtel and Bharti Hexacom in their Rs 453 crore Spectrum Trade Agreement with Aircel and Dishnet Wireless.
Bharti Airtel and Bharti Hexacom had paid Rs 341 crore to Aircel and Dishnet Wireless but had retained Rs 112 crore to set off the dues owed by Aircel entities to Airtel entities. However, the appellate tribunal said both the companies are going through corporate insolvency resolution process (CIRP) and are under moratorium under the Insolvency & Bankruptcy Code and any accounting conventions cannot supersede it.
“We allow the present appeal and set aside the order dated May 1, 2019 passed by NCLT, Mumbai Bench and direct the Respondent No 1 & 2 (Bharti Airtel and Bharti Hexacom) to pay the amount whatever has been set off by them to the Aircel entities,” the NCLAT said.
The NCLAT order came over a plea moved by the resolution professional of Aircel and Dishnet Wireless. Bharti group’s move to set off Rs 112 crore was also objected to State Bank of India, which said that since it was a financial creditor, it had first charge over spectrum assets and any beneficial interest from spectrum sale.
Agreeing to it, the NCLAT said the order of moratorium would be applicable during the CIRP till the Resolution Plan is approved or liquidation order is passed. “The I&B Code has a provision to override other laws as enunciated above. Hence, even if there are some such provisions in any other law, the I&B Code 2016 will prevail over that,” said NCLAT said in its judgement.
In 2016, Aircel and Dishnet Wireless Limited had entered into a spectrum trade agreement with Bharti Airtel and Bharti Hexacom for a total consideration of Rs 453 crore.