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Sunday, September 20, 2020
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SC asks Jio, RComm to submit spectrum sharing deal

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The Supreme Court today directed Jio and R.Comm to submit details of spectrum sharing agreement, since the R.Comm Spectrum is being used by Jio. The Court has also asked the insolvent telcos under bankruptcy process to furnish details on use of their spectrum.

A three judge Bench of Justices Arun Mishra, Abdul Nazeer and M.R. Shah heard the matter regarding staggered payment of adjusted gross revenue (AGR) related dues by telecom giants including Vodafone Idea, Bharti Airtel and Tata Teleservices.

The Court has yet not decided the reasonable period for staggered payment of AGR dues. While the government had proposed 20 years, Telecoms like Airtel and Vodafone had asked for atleast 15 years. Airtel’s AGR demand was Rs 43989 crores out of which it paid Rs 18004 crores, and Voda Idea have paid 7854 crores out of its total AGR demand of 58254 crores.

During the hearing today, Senior Counsel Harish Salve appearing for SBI informed the Court that SBI is batting for spectrum as an asset of the telco. SBI also clarified that COC has complete autonomy to decide who gets how much and operational creditors (like the DOT) can’t be paid at par with financial creditors.

Justice Mishra questioned if Reliance Jio is using R.Comm’s spectrum, to which R.Comm’s Resolution professional responded by informing the Court that the company is in asset sharing pact with R.Jio since 2016, the Department of Telecommunications was was informed and the required fee was paid.

Justice Mishra stated that revenue will be wiped out if spectrum is sold and person using the spectrum should be liable to pay.

Why should RJio not pay? They have been using it for past 4 years. We will catch hold of you and recover entire amount”: Justice Mishra remarked.

The Court observed that dues arising out of use of natural, public resources cannot be merely operational dues, as it’s a matter of public money.

“When sovereign right is transferred for using spectrum, can dues arising be subservient to dues claimed by secured creditors?,” The Court asked.

Counsel for RJio submitted before that the Court that Jio is following the guidelines, which require only Spectrum Usage Charge to be paid. Jio has paid its Spectrum Usage Charge and its share of AGR as sought by DoT. 

“There was no trading of spectrum. Only sharing of spectrum.“ Jio informed SC

The Court has asked for regarding of who is using spectrum of all the three telcos under bankruptcy process. The case has been adjourned to next Monday Monday, 3PM.

The Supreme Court on on July 20th had reserved its order on the timeline of staggered payment AGR related dues by telecom giants including Vodafone Idea, Bharti Airtel and Tata Teleservices. The Court had heard parties on liability and time frame for making the payment and noted that while hearing the matter, attempts were made to wriggle out of the liability like asking for reassessment and recalculations. The bench had also said that as a huge amount of AGR dues is remaining, they will examine the bonafide of R.Com going into insolvency. The bench had asked for the details of R.Com, Sistema Shyam Teleservices, Videocon to be submitted within 7 days.

Read the order here;

7388_2020_32_302_23408_Order_14-Aug-2020

-India Legal Bureau

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