The Supreme Court on Friday sought the details of spectrum sharing pact between Reliance Communications (RCom) and Reliance Jio and said as to why the company using the spectrum of the other firm cannot be asked to pay the Adjusted Gross Revenue (AGR) related dues to the government.
Spectrum is a government property, not private, and anyone using it is liable to pay the dues, the top court said. A bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah asked the counsels for Reliance Jio and RCom to place their spectrum sharing agreements on record.
The bench also asked the Department of Telecom (DoT) to file the requisite documents in this regard and posted the matter for further hearing on August 17. The top court asked the DoT to place on record the details regarding the use of spectrum of other telecom companies, including Aircel, which are facing proceedings under Insolvency and Bankruptcy Code (IBC).
During the hearing, senior advocate Shyam Divan, appearing for resolution professional for RCom, said that the government has been informed about the spectrum sharing agreement which was done in 2016 and the required fees have been paid.
He said that a part of the spectrum was lying idle with the company for a while and it has not traded, but has only shared it.
The bench then said as to why it cannot ask Reliance Jio to pay the AGR related dues on behalf of RCom as the outstanding amount arises from the spectrum use and Jio has been using it for three years.
When Divan stated that the lenders have approved UV Asset Reconstruction Company's resolution plan for RCom, the bench said it wanted to know who was backing UV ARC. Senior advocate KV Vishwanathan, appearing for Jio, said that the company has already paid its AGR related dues but on this question he needs to seek instruction.
He tried to explain to the bench the spectrum sharing and spectrum usage guidelines, and said that the company was following all the rules and paying the requisite fees. The bench said again as to how Reliance Jio can escape the liability when it is using the spectrum and sharing the revenue.
On August 10, the top court had asked the DoT to apprise it as to how it plans to recover AGR related dues from telecom companies facing insolvency proceedings and whether spectrum given to these companies can be sold.
The DoT had told the top court that their stand is that the spectrum cannot be sold by the telecom companies facing insolvency proceedings as it is not their property. The top court had said that it needs to ascertain the bona fides of the telecom companies who have gone under proceedings under Insolvency and Bankruptcy Code (IBC).
It had said that the court wants to go into cause of initiation of insolvency for these telecom companies and wants to know about their liabilities and what was the urgency for pushing for insolvency.
On July 20, the top court had made it clear it will not hear "even for a second" the arguments on reassessment or re-calculation of the AGR related dues of telecom companies which run into about Rs 1.6 lakh crore.
The top court had observed that it was not a reasonable proposal that a period of 15 to 20 years be given to the telecom companies to pay AGR dues. It had reserved the verdict on the issue of timeline for staggered payment of AGR-related dues by telecom companies.
The top court which on June 18 had asked the telecom companies including Bharti Airtel, Vodafone to file their books of accounts for the last ten year and give a reasonable time frame for paying the AGR dues. The top court had taken the submission of the Centre on record that there were “moratorium” in place with regard to some companies like RCom and Videocon as insolvency proceedings against them have started.
It had sought details within seven days from the Centre with regard to the pendency of proceedings against some firms under the IBC and said that it would like to ensure whether IBC was being misused to “escape liabilities”.
The Centre had earlier urged the top court that up to 20 years be given to telecom companies for the payment of dues in a staggered manner.
On June 18, the top court was informed by the Centre that the DoT has decided to withdraw 96 per cent of the Rs 4 lakh crore demand for AGR related dues raised against non-telecom PSUs like GAIL.
The top court had in October 2019 delivered the verdict on the AGR issue for calculating government dues of telecom companies such as licence fee and spectrum usage charges.
After the top court had rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices seeking review of the judgement which widened the definition of AGR by including non-telecom revenues, the DoT had in March moved a plea seeking staggered payment over 20 years.