Supreme Court seeks details on RCom, RJio spectrum deal

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Supreme Court proceedings in the crucial AGR case took a turn on Friday that may well lead to Mukesh Ambani’s Reliance Jio getting stuck with part of the AGR liabilities of brother Anil Ambani’s insolvent Reliance Communications (RCom).

At the hearing, the bench comprising Justices Arun Mishra, S Abdul Nazeer and MR Shah sought details on which companies are currently using the spectrum assets of insolvent telecom license holders such as RCom, Aircel and Videocon Telecommunications. The bench observed that since spectrum was a public asset, whichever company is using it could be liable to pay statutory dues on the same. 

“We have directed them (parties) to place on record the information relating to Agreement entered into with respect to using of spectrum by the respective parties. In the case of RCOM, its spectrum of 800 MAZ is being used by Reliance Jio from 2016. Let the agreement entered into between the parties be placed on record,” the bench said in its Friday order.

Industry sources say that if the court decides on such a course, it  may well lead to a significant portion of the over Rs 40,000 crore in pending taxes, interest and penalties owed by these bankrupt firms having to be paid by whichever company was using the spectrum.

For instance, Reliance Jio has been using RCom’s spectrum assets through a spectrum sharing agreement since 2016, a point that was raised by the bench. “Why should Jio not pay dues when it is using the spectrum for the last three years,” Justice Mishra asked Jio’s legal counsel K V Viswanathan. 

The bench also queried the government’s counsel on whether secured creditors can take precedence when sovereign rights for a natural resource—spectrum in this case—are transferred. While Jio’s counsel submitted that it has paid all its statutory liabilities, it sought time to file a response. The Department of Telecom has also been asked to file an affidavit before the next hearing on August 17. 

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