The Central government has filed an affidavit in the Supreme Court on a petition filed by the Department of Telecommunications, challenging the Telecom Appeals Tribunal’s order of July 4, 2019 that quashed its demand for a one-time spectrum charge (OTSC) on spectrum allotted beyond start-up 4.4 MHz.

The affidavit was filed on Monday by K. Raja Raman, Secretary, Department of Telecommunications (DoT), Ministry of Telecommunications, New Delhi.

According to the affidavit, the Telecom sector has been experiencing financial stress since some time due to various circumstances. It is respectfully submitted that despite certain measures taken by the Government in public interest, most of the Telephony Service Providers (TSPs) providing for mobile phones and broadband have been making losses.

The Indian Bank Association has also conveyed to the Central Government in writing that adverse developments in the telecommunication sector may lead to failures, vanishing competition, duopoly, unsustainable operations and severe loss for the banking system, which has a huge exposure to this sector.

The Central government submitted that after taking into consideration several facts and keeping in mind public interest as the dominant guiding light, the Central Government vide its decision dated September 15, 2021 during a Central Cabinet meeting, took various decisions to promote public interest, protecting government revenue and more particularly, encouraging competition among the telecom service providers by preventing a situation where the viability of some of the TSPs becomes unsustainable, resulting in a monopolistic situation and other adverse impacts on economy. The said decision is taken after inter ministerial consultations and examining the issue from various perspectives.

The Central Government is desirous of reviewing and/or re-considering its decision to proceed with the present proceedings of appeal. It is submitted that considering the nature of the issues involved, this decision will have to be taken after scrutiny at various levels, which may consume some reasonable time, said the affidavit.

In view of the above referred circumstances, the Central government prayed  for three weeks’ time, so as to enable the government to take an informed decision, on whether to proceed with the present appeal or not.  

In light of the above, the Central Government prayed for adjourning the above referred group of appeals for the period of four weeks.

The Supreme Court had, in October 2019, mandated that telecom operators pay Rs 1,19,292 crore to the Department of Telecommunications as AGR dues. However, later in September 2020, the Supreme Court had granted 10 years to the operators to make staggered payments of AGR dues, including penalty, interest and interest on penalty through March 31, 2031.

Two contempt petitions have been filed in the Supreme Court, seeking punishment to contemnors for not obeying the apex court’s order of September 3, 2020, whereby the court had declared that “accounts, which were not NPA till August 31, 2020, shall not be declared NPA till further orders”.

The petitions have been filed by Advocates Vishal Tiwari and Abhigya, on behalf of Aslam Trading Company and Tarun Polymers.

The plea, filed by Aslam Trading Company, has impleaded as respondents, Reserve Bank of India Governor Shaktikanta Das, Chief Executive of Indian Banks’ Association Sunil Mehta and the Chief Manager of Canara Bank.

The plea by Tarun Polymers has impleaded as respondents Shaktikanta Das, Sunil Mehta and Shashi Ranjan Giri, the Authorised officer of Indian Bank, Allahabad.

The plea has cited the apex court’s direction, whereby the Court had noted, “At the request of Mr Tushar Mehta, Solicitor General, the matter is adjourned for September 10, 2020. Mr Harish Salve, Senior Advocate, submitted that no account shall become NPA at least for a period of two months. In view of the above, the accounts which were not declared NPA till August 31, 2020, shall not be declared NPA till further orders.”

Aslam Trading Company has stated that it was granted by the Bank from time to time, various credit facilities by way of financial assistance against various assets creating security interest in favour of the Bank. The installments of loan were being paid regularly and his account was not turned NPA till August 31, 2020.

However, on April 30, 2021, a Demand Notice under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to Aslam Trading Company demanding an amount of Rs 1,84,23,701.35 as on April 30, 2021, inclusive of interest up to April 30.

A similar notice was issued to Tarun Polymers by the Bank on April 9, 2021, demanding an amount of more than Rs five crore as on March 31, 2021 inclusive of interest up to March 31.

The pleas stated that both Aslam Trading Company and Tarun Polymers were unilaterally classified as NPA by the respondents on November 12, 2020 and September 28, 2020, respectively, under Section 13 (2) of the SARFAESI Act. However, no showcause notice was given to them.

Further, it was stated that the Demand Notice, along with such demand for the defaulted amount, provided with the threat of recovering the possession of the petitioners, if within 60 days of the Notice, the payment was not made by the petitioner.

According to the petitioners, the stay order was passed in the COVID-19 pandemic in the benefit of stressed borrowers, so that they shall not suffer in present financial crisis during the pandemic. Considering the slump in the petitioners’ work, the Stay order was operating as a life-saving drug to them, but the contemptuous act of the Respondents has brought a major setback to them, making their survival critical.

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They have submitted that the contemptuous act of the Respondents has not only disobeyed the courts order, but also caused severe irreparable damages and loss to the petitioners, as they have lost their image and have been defamed as the possession Notice was published in the newpapers of their locality, which has resulted in the degradation of dignity of petitioners.

The petitioners further alleged that the contemptuous act of the respondents has shaken the confidence of the public and degraded the trust of the borrowers in the bank.

Source:ILNS

The Supreme Court on Thursday reserved its verdict on pleas for the extension of the loan moratorium period. The bench comprising Justices Ashok Bhushan, R. Subhash Reddy and M.R. Shah reserved judgment on the batch of petitions seeking relief in the form of extension of the RBI’s loan moratorium period beyond six months or waiver of interest on interest in view of the Covid-19 pandemic.

During its previous hearing on December 16, the Reserve Bank of India (RBI) and the Indian Banks Association (IBA) had urged the apex court not to pass any further orders on petitions asking for financial aid.

The RBI had on March 27 announced a loan moratorium scheme, which allowed lending institutions to grant a temporary relief on payment of installments of term loans falling due between March 1, 2020, and May 31, 2020, due to the pandemic. Later, the moratorium was extended till August 31 this year. The move was intended to provide borrowers more time to pay EMIs amid the economic fallout due to Covid-19 pandemic-led nationwide lockdown, without being classified as a bad loan. The Supreme Court had instructed banks to not declare accounts as NPAs until further orders.

Senior Advocate Ravindra Srivastava made rejoinder submissions and said no authority seems to be looking into the grievances of the borrowers. On behalf of the Chhattisgarh industry bodies, he said the impact of Covid-19 is continuous and many people are still suffering financially.

He said this is a case where the NDMA should have made a comprehensive property instead of handing over the burden to the banks. He went on to say that NDMA has to collect empirical data and there can be a partial waiver also but for this there is a need for a calibration.

NDMA has to collect empirical data and make a comprehensive policy, not arguing that there needs to be a complete waiver. There can be a partial waiver also but for this, there is a need for a calibrated policy under the Disaster Management Act (DMA), Srivastava said.

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In October, the Centre had ordered that it would waive compound interest on repayment of loans up to Rs 2 crore in some categories that has provided marginal relief to individual and MSME borrowers.