Pages

Tuesday, June 29, 2021

DoT may appeal against NCLAT’s Aircel ruling DoT's appeal is likely to state that spectrum cannot be subjected to IBC at all. Devina SenguptaETTelecomJune 29, 2021, 08:17 IST

 

Mumbai: The telecom department may file an appeal against an appellate order in the Aircel case, objecting to certain portions which stated that spectrum can be subject to insolvency proceedings and that dues of the central government fall under the category of operational creditors.

"Portions of the appellate order go against Department of Telecommunications' (DoT) claims that spectrum cannot be subject to the Insolvency and Bankruptcy Code (IBC)," said a senior lawyer aware of the development.

In an April order, the National Company Law Appellate Tribunal (NCLAT) had said that the spectrum “cannot be utilised without payment of requisite dues, which cannot be wiped off by triggering CIRP (corporate insolvency resolution procedure) under the I&B Code (Insolvency and Bankruptcy Code)… Defaulting licensees/telcos cannot be permitted to wriggle out of their liabilities".
Aircel’s asset buyer UVARCL and lenders were taken aback by this order, and moved the Supreme Court against the NCLAT order, which made it mandatory to clear statutory dues before right to use spectrum could be transferred.

The Supreme Court in its hearing on Monday directed notices be sent to relevant parties in the case.

However, certain sections mentioned in the April order could impact the DoT too.

For example, the NCLAT order said, "Spectrum, being intangible asset of the licensee/ TSPs/TelCos/corporate debtor, can be subjected to insolvency/liquidation proceedings".

DoT's appeal is likely to state that spectrum cannot be subjected to IBC at all.

The other two points in that order: "Dues of central government/DoT under the licence fall within the ambit of operational dues under I&B Code" and "Deferred/default payment instalments of spectrum acquisition cost also fall within the ambit of operational dues under I&B Code,” are likely to be contested by the department as well.

Both UVARCL and lenders are worried that delays due to legal hurdles are hurting recovery amounts as asset values, especially that of airwaves, deteriorate with time.
According to the Aircel resolution plan approved by the National Company Law Tribunal (NCLT) in June 2020, operational creditors, including the telecom department, were provided Rs 28.50 crore—0.16% of the Rs 17,462 crore they had claimed.

DoT has claimed Rs 12,389 crore as statutory dues and an additional Rs 14,000 crore from Aircel, including unpaid instalments for the right to use spectrum.

UVARCL is supposed to take over Aircel’sassets, including spectrum, for Rs 6,630 crore, with lenders taking a haircut of 89% on total dues of Rs 58,670 crore. UVARCL was expecting to generate the biggest chunk of funds—Rs 800-1,300 crore—through the sale of Aircel’s spectrum in the 1800 MHz and 2100 MHz

used here for Educational purposes only

No comments:

Post a Comment