New Delhi: The Supreme Court has left it on the bankruptcy court to decide whether sale, or transfer of right to use, of spectrum can be allowed under insolvency law.
The court’s order on adjusted gross revenue (AGR) dues of telcos, pronounced Tuesday, comes as a breather to telecom companies under insolvency, Reliance Communications and Videocon, besides Aircel whose spectrum has been picked up by asset reconstruction company UVARCL.
The SC had earlier raised questions on trading of spectrum when the Department of Telecommunications (DoT) highlighted that bankrupt telcos have not paid AGR dues of Rs 40,000 crore.
The bench had earlier wondered why they had not made contingency provisions for paying their AGR dues when the companies themselves had initiated a case contesting the dues to be paid. SC had also remarked that the AGR dues will get “wiped out”.
The resolution professionals and the lenders of these ailing telcos have argued that spectrum was a precious natural resource which cannot be kept idle and that they were well within their right to reassign these rights to recover the dues of the corporate debtors.
DoT has contested this position. It has claimed that the government can suspend or terminate these rights if they were put up for sale as an asset. Spectrum is a sovereign possession and the ailing companies cannot claim to own it.
SC had earlier said that spectrum trading guidelines, all past dues need to be paid before any transfer.
RCom owes almost Rs 26,000 crore, Aircel about Rs 14,000 crore and Videocon Rs 1,400 crore.
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