Will direct Union Govt to cancel spectrum allocation if telcos unwilling to pay AGR dues: SC
On 24th August, 2020, the Supreme Court observed that if telecom companies are unwilling to pay their dues, it would direct the Union government to cancel their spectrum allocation and licence.The Department of Telecommunications (DoT), submitted that the assessment of demand for payment of dues by Airtel, on behalf of Videocon, can be done once the Supreme Court finalises its view on...
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On 24th August, 2020, the Supreme Court observed that if telecom companies are unwilling to pay their dues, it would direct the Union government to cancel their spectrum allocation and licence.
The Department of Telecommunications (DoT), submitted that the assessment of demand for payment of dues by Airtel, on behalf of Videocon, can be done once the Supreme Court finalises its view on spectrum sharing and trading.
The spectrum trading guidelines state that the seller of airwaves must satisfy all pending dues before the transaction. The Court observed that on non-payment of dues by the seller, the buyer would be burdened with the dues.
The judgement on the aspect of additional liabilities, if any, will determine the payout for Reliance Jio and Bharti Airtel for past dues of Reliance Communications, Videocon and Aircel. Reliance Jio had spectrum sharing and trading pacts with RCom and Airtel with Videocon as well as Aircel.
The DoT informed the Court that so far no demand had been raised against Reliance Jio and Bharti Airtel for past dues of RCom and Videocon and that the assessment of their liability for past dues of RCom and Videocon was under process.
The Centre had told the Court there was a difference of opinion between two of its ministries – DoT and the Ministry of Corporate Affairs – on the issue of sale of spectrum during the insolvency proceedings. Earlier, the Supreme Court clearly said that it would refrain from hearing, the arguments on reassessment or re-calculation of the AGR related dues of telecom companies.
After the Top Court in October 2019 had upheld the DoT definition of AGR and ordered telcos to pay the pending dues of Rs 1.6 trillion in licence fee and spectrum usage charges, and rejected pleas by the telcos for a review of the judgment which widened the definition of AGR by including non-telecom revenues, the DoT had in March moved a petition seeking staggered payment spread over 20 years.
