The three companies which filed for bankruptcy together owe around Rs 40,000 crore of the total Rs 1.67 lakh crore owed by various telcos as AGR dues.
The Supreme Court on Friday clarified that the issue of whether the spectrum of insolvent telecom operator Aircel and its entities can be sold as part of its assets under the Insolvency and Bankruptcy Code (IBC) will be decided by the NCLAT and not the NCLT as ruled by it on September 1.
A bench headed by Justice S Abdul Nazeer agreed to suggestions by both the government and the Aircel monitoring committee to let the National Company Law Appellate Tribunal (NCLAT) decide the issue on the ground that the appellate tribunal is already hearing the Aircel insolvency case. However, the issue of spectrum of Reliance Communications (RCom) is pending before the National Company Law Tribunal (NCLT), Mumbai, and will continue there.
Appearing for the monitoring committee of Aircel, Aircel Cellular and Dishnet Wireless, senior counsel Ranjit Kumar, argued that the resolution plan has been approved by the CoC and the NCLT, and is already pending for approval before the NCLAT.
The application seeking clarification stated that “the NCLT had examined various aspects including payment to operational creditors (including DoT)…in respect of the transfer of right to use of spectrum. It submitted that an appeal has already been filed by the DoT before the NCLAT against the approval order. Therefore, the proceedings in case of Aircel entities are at large before the NCLAT and not the NCLT”.
The SC had on September 1 left the decision on issue of the applicability of IBC with regard to natural resources like spectrum on the NCLT. While lenders want spectrum of telecom companies transferred to the successful resolution applicant, the Department of Telecom’s (DoT) stand is that spectrum should return to the government.
The three companies which filed for bankruptcy together owe around Rs 40,000 crore of the total Rs 1.67 lakh crore owed by various telcos as AGR dues. While RCom has AGR dues worth Rs 25,000 crore, Aircel’s is around Rs 12,389 crore.
Aircel has sold its 3G and 4G spectrum to Bharti Airtel while RCom has traded a large portion of its spectrum to Reliance Jio. Videocon Telecommunications has also sold its spectrum to Bharti Airtel.
The NCLT had already approved the resolution plan of asset reconstruction firm UVARCL for Aircel, which included its assets and spectrum, and is in final stages of taking a call on the assets and spectrum of RCom. On November 27, 2019, the NCLT had ruled that Aircel can go ahead and sell spectrum as part of its resolution plan. Though the tribunal accepted DoT’s contention that Aircel does not have ownership over spectrum, it said under IBC, continuity of service needs to be maintained and for that spectrum and licences of the company cannot be terminated by DoT.