AGR case: SC fears dues will be wiped out under insolvency

New Delhi, August 20

Expressing concern over non-payment of the Adjusted Gross Revenue (AGR) related dues by the telecom companies which are under insolvency, the Supreme Court on Thursday said “without paying for the horse, telecos are taking a ride”.

The apex court said it is “extremely worried” that almost the entire AGR dues will be “wiped out” in the IBC process.

A Bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah said spectrum trading is altogether different from sale of spectrum under the IBC.

APEX COURT’S OBSERVATION

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• The SC wondered can a liability like AGR-related dues be wound up, under the guise of selling spectrum under the Insolvency and Bankruptcy Code
• The Bench said it wants details from DoT of spectrum allocated to Reliance Communication and Aircel since 1999

“Without paying for the horse, telecs are taking a ride. Unless dues are paid, nobody can start using the spectrum. Can a liability like AGR be wound up, under the guise of selling spectrum under the IBC,” the Bench said.

It further observed, “We are extremely worried that almost entire AGR dues will be wiped out in the IBC process”.

The Bench said after the sale of spectrum, the new user will extinguish any pending demand against the spectrum in question.

During the hearing, senior advocate Ravi Kadam, appearing for Aircel Monitoring Committee, told the Bench that from April 8, 2016, there have been eight instances of spectrum trading with Bharti Airtel.

He said the Department of Telecom (DoT) had approved the sale and had raised demand for the dues.

Kadam said there are no instances of spectrum sharing by Aircel with any operator.

The Bench asked Kadam what has Aircel going into resolution proceedings got to do with the AGR dues.

It questioned whether Airtel has paid AGR dues for spectrum bought from Aircel.

Senior advocate Kapil Sibal, appearing for Airtel, said the company has paid all relevant dues with respect to spectrum trading and have paid Rs 18,004 crore towards AGR dues.

The Bench said it wants details from DoT of spectrum allocated to Reliance Communication (RCom) and Aircel since 1999. — PTI