The State Bank of India on Thursday appealed to the Supreme Court to allow it to intervene in the adjusted gross revenue (AGR) related matter on behalf of the committee of creditors (CoC) for Reliance Communications and said that the interests of the Department of Telecommunications were adequately protected.

Representing RComm, the State Bank of India said that the amount payable under a resolution plan shall be paid on priority to operational creditors over financial creditors. Therefore, the interests of the DoT, an operational creditor are adequately protected under the terms of the IBC and the regulations made therein.

It has also sought exemption from filing notarised affidavit and Court fees.

On August 10, the Supreme Court observed that the Union government should prepare a plan to recover AGR dues from bankrupt telecom operators, including Reliance Communications Ltd.

The application for intervention is being filed by the State Bank of India on behalf of the CoC of Reliance Communications seeking to protect its rights and interest.

The CoC of RCom include BOB, Axis Bank, UCO Bank, Punjab National Bank, HDFC and LIC.

The appeal comes after the Supreme Court said it would examine the AGR dues of the company that have gone into bankruptcy.

"Since the dues are huge, we propose to examine the bonafides of the initiation of the proceedings under the IBC," SC said in its order dated July 20, 2020.

On August 10, the SC directed the existing parties to present an appeal to file the additional documents.

On the issue of spectrum, RComm said that it is a security on the basis of which banks grant loans to telecom companies.

The DOT has allowed telecom companies to create substitution rights on the same in favour of their lenders.

"Therefore, spectrum indeed is an asset of the corporate debtor which can be subject to the resolution plan, as otherwise continuance of telecom companies as going concern and their transfer as going concern according to IBC, may stand frustrated."

The lenders have lent huge sums to the telecom companies based on security created over right to use the spectrum.

The right to use the spectrum by the corporate debtor during corporate insolvency resolution process (CIRP) is essential for the corporate debtor to function as a going concern until the resolution plan is approved, the appeal further said.