Clarify stand on Jio’s liabilities: Supreme Court

The Supreme Court on Monday stated that the federal government should state its place on whether or not adjusted gross revenue-related dues of bankrupt Reliance Communications Ltd (RCom) needs to be recovered from Reliance Jio Infocomm Ltd because it has been utilizing RCom’s spectrum since 2016.

The three-judge bench, headed by Justice Arun Mishra, requested the federal government if Reliance Jio could be held answerable for AGR and different dues because it has been producing income through the use of RCom’s airwaves by means of an asset-sharing settlement. The court docket has adjourned the case to 19 August.

“We want the government’s position on Jio sharing RCom’s spectrum and on Jio discharging RCom’s spectrum dues,” stated Justice Mishra. In response, solicitor common Tushar Mehta stated the federal government will assist any choice the court docket takes to get better the dues.

However, Reliance Jio, in a written submission on Monday, instructed the Supreme Court that there is no such thing as a authorized foundation for transferring bankrupt RCom’s dues, AGR or in any other case, to Jio as the 2 telecom operators are in a spectrum-sharing settlement and don’t share liabilities. Senior lawyer Harish Salve, representing Reliance Jio, stated the corporate is neither concerned within the Insolvency and Bankruptcy Code (IBC) proceedings of RCom neither is it buying the telco’s spectrum.

Interestingly, the federal government instructed the court docket that the division of telecommunications (DoT) and the ministry of company affairs (MCA) have completely different views on whether or not the spectrum with a bankrupt telecom agency could be offered below insolvency proceedings. “People of the country are owners of spectrum held by the government in trust… This cannot be sold under IBC,” stated Mehta. The DoT additionally stated radio airwaves can’t be part of the IBC proceedings as “telcos do not own spectrum, contract allows only its use,” stated Mehta.

Mehta additionally knowledgeable the bench that DoT has had a constant place on spectrum by way of the IBC. “The ministry of corporate affairs had sought to allow spectrum sale for maximization of value,” added Mehta.

RCom owes DoT ₹25,199 crore, together with spectrum utilization costs (SUC) and licence charges, as per authorities estimates. This is sort of half of ₹49,054 crore in dues calculated below the corporate’s insolvency proceedings. Jio cleared its comparatively minuscule AGR dues of ₹195.18 crore in January, complying with the court docket’s October 2019 order.

According to authorized consultants, switch of spectrum to a brand new purchaser isn’t allowed until previous dues are cleared.