Supreme Court Asks Telecom Department About Spectrum Sharing In AGR Case
The Supreme Court on Friday directed the Department of Telecom to apprise it by Saturday the basis of spectrum sharing done by telecom companies and how much is the liability of the sharers.
The top court asked the secretary of DoT to file a specific affidavit apprising it about who was using the spectrum from the date of grant of license and from which date the respective sharing of spectrum has taken place.
A bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah posted the matter for further hearing on Aug. 24 and asked the DoT what was the amount paid by Reliance Jio for using 23% of Reliance Communications spectrum.
The DoT is required to file an affidavit, specifically by Aug. 22, 2020, pointing out on the basis of sharing arrangement, how much is the liability of the sharers from the date of sharing and how much they have paid and as per our Judgment, what are the arrears, which are required to be paid on the basis of sharing arrangement by respective sharers, the bench said.
It said, Secondly, we also require the Secretary, DoT, to file an affidavit with respect to the date of transfer, how much are the previous dues with effect from the date of grant of licence till the date when transfer was made and the arrears worked out after transfer and before transfer (trading) and the outstanding on that count, with respect to the companies which are before us in these matters.
The bench said the Secretary of DoT is also required to file a specific affidavit in a tabular form from the date of grant of licence.
It said the affidavit will state who was using the licence and from which date the respective sharing has taken place with respect to each licence and the date of transfer/trading.
During the hearing, senior advocate Harish Salve, appearing for Jio, said that the company has not received any notice from the government on any additional dues claimed by the DoT.
He said that with the top court holding that the spectrum cannot be sold will not help in recovery of Adjusted Gross Revenue related dues.
He said, if spectrum sale is not allowed, it will be returned to DoT, auctioned for future use and would not help in recovery of AGR related dues.
Senior advocate Kapil Sibal, appearing for Bharti Airtel, said that his client had also not received any notice from the government over any additional dues.
He said spectrum is recognized as an asset and it is the most valuable asset with telecom companies.
Sibal added that spectrum is taken as security by the lenders and if the top court refuses to recognise the sale of spectrum, banks will stop lending funds to the telecom companies, grievously hurting the telecom sector.
The hearing remained inconclusive and would resume on Aug. 24.
On Thursday, the top court had expressed concern over non-payment of the AGR related dues by the telecom companies which are under insolvency saying "without paying for the horse, telcos are taking a ride".
It has observed that it is extremely worried that almost the entire AGR dues will be wiped out in the IBC process.
The top court wondered can a liability like AGR related dues be wound up, under the guise of selling spectrum under the Insolvency and Bankruptcy Code.
On Aug. 14, the top court had sought the details of spectrum sharing pact between RComm and Reliance Jio and said as to why the company using the spectrum of the other firm cannot be asked to pay the AGR related dues to the government.
The Centre had earlier told the top court there was a difference of opinion between two of its ministers (DoT and the Ministry of Corporate Affairs) on the issue of sale of spectrum during insolvency proceedings.
Earlier, 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 apex 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.