AGR Dues: DoT and MCA Differ in Views of Spectrum as an Asset

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Supreme Court Directs Telcos Submit Affidavit AGR Dues

The Supreme Court on Friday had postponed the hearing of the AGR dues case of telcos to today. One thing that has become clear from all the past hearings is that there is no way that Bharti Airtel and Vodafone Idea Limited’s (VIL) request of reassessment of AGR dues is going to be entertained by the apex court. SC will only decide on the period at which the dues needs to be cleared by the telcos. In the earlier hearing, the SC posed a question that why shouldn’t Jio be paying the AGR dues as well if it has been using the spectrum of RCom? To this, the representative of Jio had replied that they have a contract with RCom for the sharing of spectrum and thus are only liable to pay the spectrum usage charges which they have. One of the remaining matters which was still at the SC’s hand was to determine whether the spectrum of a company under IBC can be sold or not? Read ahead to find out the updates from the hearing today.

Jio Says there is No Legal Basis for Transferring Bankrupt RCom’s Dues

SC said if Jio is earning revenues from the 800 MHz shared spectrum of insolvent RCom, then why should it be left out when the time of paying AGR dues is concerned? Jio in a written submission to SC today said that there is no legal basis for transferring the bankrupt RCom’s dues or AGR to Jio since both the companies shared was a spectrum sharing agreement. The spectrum sharing agreement does not say that the companies will have to share their liabilities. Harish Salve, the lawyer representing Jio said that the company is not in any way involved in the IBC or insolvency proceedings of the bankrupt RCom.

MCA Believes the Spectrum is a Company Asset Which Can be Sold

Ministry of Corporate Affairs (MCA) said that it believes that spectrum is a company asset. Not only MCA but also the State Bank of India (SBI) believes that spectrum is an asset of the company. But the Department of Telecommunications (DoT) doesn’t believe that. DoT says that the spectrum is government property, it is of the people of the nation and hence it can’t be sold. The SC sided with the definition of DoT only.

SC had asked if the companies can sell spectrum during the IBC proceedings or not, to which the legal experts believe that until and unless the past dues associated with the spectrum aren’t cleared, the transfer of spectrum is not allowed. DoT, however, can do as it pleases with the spectrum. Even when the dues are not clear, DoT can put the spectrum airwaves for auction anytime it wants.

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