Synopsis
The three-judge bench also asked RCom to explain the fall in the value of its assets, even as the government stressed that airwaves of all telcos, including that of bankrupt companies like RCom, belong to the government.
The Supreme Court asked the government to clarify its stand if Reliance Jio should bear the adjusted gross revenue (AGR) liabilities of Reliance Communications (RCom) for using its spectrum.
The three-judge bench also asked RCom to explain the fall in the value of its assets, even as the government stressed that airwaves of all telcos, including that of bankrupt companies like RCom, belong to the government.
RCom's drop in valuation was one of the moot points on Monday's adjusted gross revenue (AGR) hearing as the apex court wanted to know details of the resolution plan for the bankrupt telco and its units.
Senior advocate Shyam Divan told the court that Rcom and its units -Reliance Telecom and Reliance Infratel's value eroded from Rs 35,000 crore in 2019 to Rs 5,304 crore as on date of liquidation with a fair value approx. Rs 10000 crore.
RCom which went bust under a debt Rs 46,000 crore , is awaiting approval from the National company Law Tribunal (NCLT) so that its towers can be sold to Reliance Jio and spectrum, fibre and data centre to asset reconstruction firm UVARCL.
For RCom, its 800 Mhz spectrum in 13 circles is its most valuable asset and it is the dues over spectrum that is now the new battlefront in the AGR crisis. SC's directions on whether spectrum can be traded to resolution applicants will pave way for other insolvent telcos like Aircel, whose assets incidentally are also bought by UVARCL.
"Can spectrum be bought and sold under IBC?', the bench led by Justice Arun Mishra, who was sitting with Justices S. Abdul Nazeer and M.R. Shah.
Solicitor General Tushar Mehta told SC that the Department of Telecommunications’ (DoT) view differs from views of Ministry of Corporate Affairs (MCA) on sale of spectrum under IBC, thereby opening up another line of arguments which will impact in insolvency of both Rcom and Aircel.
However , people aware of the insolvency details of the two bankrupt telcos have said that if spectrum is taken away, then they will head towards liquidation as all resolution plans will fall flat. The court will take up the case on Tuesday.
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