RCom and DoT Go Hard on Legal Battle, Telco Files Contempt of Court Plea Against Department

Anil Ambani led telecom operator, Reliance Communications (RCom) has filed a contempt of court plea against the Department of Telecommunications (DoT) for not clearing its spectrum sale deal to Reliance Jio in the stipulated period. To recall, DoT had agreed to grant clearance to RCom for selling its assets to the Mukesh Ambani led telco to obtain cash for paring its debt. However, this recent plea in the Supreme Court by RCom has intensified the war between the cash-strained telco and the government.

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Legal Battle Between RCom and DoT Grows Harsh

According to an ET Telecom report, the telecom operator had to file the plea after the DoT, “did not follow the apex court’s direction and grant them the approval for spectrum sale within seven days of receiving corporate guarantees.”

When fired with questions from ET, Reliance Communications remained silent. Notably, the telco had been locked in a legal battle with the department over spectrum related dues worth Rs 2,947.68 crore, which it owes to the DoT for many months. When the matter of clearing the deal reached Supreme Court, the bench directed the DoT to grant clearance to the sale of spectrum to Reliance Jio on the condition that Reliance Communication furnishes corporate guarantees of Rs 1,400 crore to DoT. After the decision, Reliance Communications had stated that it furnished the Rs 1,400 crore corporate guarantees to DoT, whereas the department did not grant clearance to Reliance Communications for the sale of spectrum assets to Reliance Jio.

This deal to Reliance Jio is part of a bigger Rs 18,000 crore transaction which involves the sale of switching nodes, fibre, telecom towers and spectrum to Jio, and real estate to Canada’s Brookfield. The nodes and spectrum as of right now have been sold for Rs 5,000 crore.