AGR dues: Can spectrum be sold by telcos undergoing IBC proceedings? Supreme Court asks SG Tushar Mehta

The Supreme Court today asked Solicitor General Tushar Mehta, representing the Department of Telecommunications (DoT), whether spectrum can be sold by telecom companies that are undergoing proceedings under the Insolvency and Bankruptcy Code (IBC)..This question came up for consideration when the Supreme Court was hearing the matter pertaining to payment of Adjusted Gross Revenue (AGR) dues by telecom companies..The Bench of Justices Arun Mishra, S Abdul Nazeer, and MR Shah today considered the issue of bona fides of telecom companies undergoing IBC proceedings..The Court reiterated that it would not entertain any objections regarding the assessment of the AGR dues or attempts at reassessment or recalculation. The only aspect for consideration left before the Court was fixation of the time period within which these dues can be cleared by the telecom companies..Today, the Court said that it would delve into the issue of initiation of insolvency proceedings against various telecom companies vis-a-vis their outstanding liabilities. SG Mehta told the Court that the Centre is in the process of filing an affidavit. He informed the Court that all the IBC cases as regards various telecom companies were at different stages..Mehta gave the Court a summary of the amounts recoverable from companies like Reliance Communications and Aircel. He pointed out that as opposed to submissions made by Aircel before the National Company Law Tribunal (NCLT), spectrum cannot be included as company's assets, since it is national property and cannot be sold off by the company.As regards Reliance, Mehta told the Court that the objections as to spectrum sale are still under consideration before the Apex Court. In response to this, the Bench asked why there was a delay on the part of the government to file an appeal raising the point that spectrum could not be sold. Justice MR Shah asked,"What if spectrum is sold in the meanwhile?".Senior Counsel Shyam Divan, representing Relaince Communications (R Com) apprising the Court of the Corporate Insolvency Resolution Process (CIRP) process with respect to the company, said that the resolution plan is pending before the NCLT as of now. .The Court then asked how the proceedings under Section 7 of the IBC against Reliance Communications were revived by the NCLAT even after the Supreme Court's order of August 2019 had directed for a settlement payment between Reliance and Ericsson. ."Our order is binding for all courts and tribunals. How can NCLAT revive insolvency proceedings despite payment to Ericsson?"Supreme Court.The NCLAT, which had stayed the insolvency proceedings against RCom in 2018, had vacated this stay and allowed for the proceedings to continue before the NCLT after the Supreme Court passed the order directing RCom to pay Rs 550 Crores towards settlement with Ericsson..Divan informed the Court that the Committee of Creditors (CoC) has completely approved the resolution plan. The Court asked Divan to file a hard copy on the submissions. Arguments on behalf of Reliance will continue on August 14..As regards Aircel, the Court was told by Senior Advocate Ravi Kadam that the company had paid money upfront to buy spectrum. He said that the same was approved by the NCLT as it was a transferable asset..Before adjourning the matter, the Court said to SG Mehta,"Come prepared and tell us whether spectrum can be sold or not.".On July 20, the Court had reserved its order on the time period to be allowed to telecom companies to clear their AGR dues through staggered payment..On that date, the Bench was told by the DoT that it would stick to allowing a period of 20 years for staggered payment of AGR dues by telecom companies. This was in slight difference from the 15-year window proposed by Vodafone-Idea as well as Bharti Airtel. Tata Telecom had argued that a 7-10 year window would be required..AGR: "There can be no adjustment of dues", Supreme Court reserves verdict on timeframe for staggered payment of dues by telecom companies.After the Supreme Court, in October 2019, delivered its judgment on the interpretation of the term "Adjusted Gross Revenue", it granted the telecom companies a period of 90 days to clear the dues that would accrue..Breaking: Government interpretation on scope of “Adjusted Gross Revenue” to prevail, Supreme Court.Keeping in view the precarious financial and economic health of the country as well as the telecom industry, the DoT, in March sought a modification of the Court's order and proposed a time-frame of twenty years for staggered payment of these dues, in line with a formula evolved by the Union Cabinet..AGR: DoT seeks 20 years time for recovering dues from Telcos, moves Supreme Court for modification of its orders.While hearing this plea in March, the Court had pulled up the DoT for allowing telecom companies to self-assess the dues payable by them. The Court had made its displeasure with the telecom companies very clear, stating that the continued attempts made by these companies seeking re-assessment of the October 2019 order amounted to fraud on the Court..AGR: Do telcos feel they are more powerful? We will call all MDs and send them to jail: Supreme Court pulls up DoT, Telcos.More recently, the Court asked the Centre to consider withdrawing its demand of AGR dues from PSUs saying that the October 2019 ruling did not bring PSUs under its purview. This demand later was withdrawn by the DoT and communicated to the Supreme Court..AGR: "Don't misuse our October 2019 judgment", Supreme Court asks Centre to reconsider demanding dues from PSUs.Read Order: