Bharti Airtel Might Pay DoT Rs 1,376 Crores

The National Company Law Appellate Tribunal (NCLAT) has decided that companies under insolvency proceedings can’t use or sell the spectrum they own. Spectrum is frequency airwaves that the government allots to the telcos for a limited period and is considered a sovereign property.

Looking at the decision announced by the NCLAT, Bharti Airtel might have to pay Videocon’s adjusted gross revenue dues (AGR). The appellate tribunal said that companies first need to clear the dues on the spectrum, and only then can they use or transfer the spectrum to some other company. Further, the appellate tribunal said that the government dues wouldn’t be wiped off the books under bankruptcy proceedings.

It is worth noting that NCLAT has accepted spectrum as an ‘intangible asset’ of the company, which DoT was arguing against. Even so, the companies can’t sell or use that asset if they are under the Insolvency and Bankruptcy Code (IBC).

Airtel Might Pay Videocon’s AGR Dues After NCLAT’s Recent Judgement

The DoT had asked Airtel to pay Rs 1,376 crores for AGR dues on the spectrum it purchased from Videocon. Airtel said that it isn’t liable to pay anything for another company’s dues.

However, looking at the NCLAT decision, Videocon couldn’t have transferred or used the spectrum it had. Do note that Airtel purchased spectrum from Videocon back in 2016; thus, it might just get relaxation on the front that the regulations were not in place at that time.

Airtel had purchased spectrum from Videocon in the 1800 MHz frequency band for Rs 4,428 crores. The telco is denying to pay anything on behalf of Videocon, and rightly so.

The DoT really has no grounds for asking Airtel to pay the dues since the telco acquired the spectrum from Videocon by fair means in 2016. The NCLAT not only denied DoT’s views on the spectrum’s definition as government property, but it also said that telcos couldn’t sell it or use it as a security to take money from lenders.

So at the end of the day, it was a win for neither of the parties. A few days back, DoT had filed an affidavit in the Supreme Court (SC) asking Airtel to pay the dues of Videocon on the spectrum it purchased from the latter. The SC is yet to hear on the matter.