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AGR Hearing Highlights | Supreme Court adjourns case to August 17

No verdict was passed on the time frame for a staggered repayment of telecom companies' AGR dues.

August 14, 2020 / 09:37 PM IST

The Supreme Court (SC), in its hearing on August 14 in the AGR dues case, directed telcos under insolvency to submit details of spectrum sharing agreements that they have entered into. The court has also asked for the spectrum sharing agreement between RComm and Reliance Jio to be placed on record, CNBC-TV18 has reported.

No verdict was passed on the time frame for a staggered repayment of telecom companies' AGR dues. The next hearing in the matter has been scheduled for 3 pm on August 17.

Vodafone Idea has to pay a balance of Rs 50,399 crore, while Bharti Airtel's outstanding amount is Rs 25,976 crore, Solicitor General Tushar Mehta said on July 20.

The top court had in October 2019 upheld the expanded definition of AGR set by Department of Telecommunications (DoT).

Also read: AGR case | SBI files intervention plea on behalf of Reliance Communications

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Supreme Court observations: 

>> When sovereign right is transferred for using spectrum, can dues arising be subservient to dues claimed by secured creditors Dues arising out of use of natural, public resources cannot be merely operational dues, matter of public money.

>> We want details of spectrum sharing agreements entered into by all insolvent companies. We want to know who is using spectrum of insolvent companies.

>> The court adjourns the hearing to August 17, and directs the government, Jio and RComm Resolution Professional to produce necessary documents to bring to light who would be liable for AGR dues of RComm. Similar directions for similar companies, like Aircel and Videocon, that are also in liquidation.

Senior Advocate Shyam  Divan, RCom's resolution professional, to SC:

>> Reliance Communications (RCom) owes about 25,000 crore in AGR dues.

>> Ericsson filed application under Section 9 for insolvency. Ericsson agreed to settle for Rs 550 crore instead of pending Rs 1500 crore.

>> Divan reads out all applications, orders and dates in the RCom insolvency case.

Senior Advocate Harish Salve for SBI, lenders to RCom, Aircel

>> SBI has clarified that Committee of Creditors (CoC) has complete autonomy to decide who gets how much

>> SBI bats for spectrum as an asset of the telecom company.

>> SBI said operational creditors (like the DoT) cannot be paid at par with financial creditors.

Here are some highlights from the previous hearings:

>> The Supreme Court has prohibited any recalculations or self-assessment, and said the DoT's estimates of AGR dues will be final.

>> The apex court also said staggered payments of over 20 years cannot be allowed without any security.

>> The government said in case of a default, the telecom companies' spectrum license can be cancelled and auctioned to recover dues.

>>  Both Vodafone Idea and Bharti Airtel, which owe the maximum amounts, had on July 20 revised their demand from 20 years to 15 years for the staggered payments after SC's stringent stance on payment period.

>> The Supreme Court on August 10 said it wants a plan for recovery of the dues from the companies going through insolvency, such as RCom, Videocon and Aircel.

>> The amount recoverable from RComm is Rs 31,000 crore, Solicitor General Tushar Mehta said on August 10.

>> At the previous hearing, Justice Arun Mishra said "We want to go into cause of initiation of insolvency for telcos under IBC. We want an understanding of their outstanding liabilities, urgency in pushing for insolvency."

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Moneycontrol News
first published: Aug 14, 2020 02:21 pm
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