SC turns down Airtel plea for clarification in order asking it to pay Rs 112 crore to Aircel

Airtel withdraws plea from SC

The Supreme Court on January 25 refused to entertain a plea by telecom giant Airtel seeking clarification in its order asking the company to pay Rs 112 crore to the now defunct Aircel.

As a consequence of the apex court decision not to entertain the plea, Airtel chose to call off its application.

In its application, reviewed by Moneycontrol, Airtel has contended that the resolution plan to revive Aircel did not receive the approval from the Reserve Bank of India (RBI). "UV Assets Reconstruction Company, the successful resolution applicant, despite admittedly leaving 'no stone unturned' has failed to secure the mandatory approval of the Reserve
Bank of India required for acquiring shares of the Aircel entities in order to implement the resolution plan, resulting in the implementation of the resolution plan becoming practically impossible," it said.

According to Airtel, since the resolution plan is unworkable, it sought the SC approval to deposit Rs 112 crore in an escrow account with the registry. Airtel requested for this as it contended that its interests must be protected in case Aircel goes into liquidation. The SC, however, refused to entertain the plea.

On January 3, the Supreme Court directed Airtel to pay Rs 112 crore to the now defunct Aircel towards its Spectrum Trade Agreements (STA) and other dues.

In 2016, Airtel entered into eight spectrum trading agreements with Aircel Limited and its subsidiary Dishnet wireless for the purchase of the right to use spectrum allocated to it in the 2,300 MHz band. However, in 2018, Aircel was admitted to the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016.

As Aircel went into insolvency proceedings, Airtel owed it Rs 453 crore towards STA and other dues. The Resolution Professional (RP) of Aircel called upon Airtel to make the payment in 2019. However, Airtel paid only Rs 341 crore and retained Rs 112 crore as Aircel owed it on account of other transactions.

The case ultimately reached the Supreme Court after NCLT and NCLAT passed contradicting judgments. The SC held that once a company is admitted to the insolvency resolution process, it could not be permitted as it would amount to one creditor receiving preferential treatment over the others.