DoT says stall RCom case till SC ruling

The matter has been adjourned for hearing on September 8. (File image)

The Department of Teleco-mmunications (DoT) on Friday submitted an affidavit in the Mumbai bench of the National Company Law Tribunal (NCLT) opposing the resolution plan for Reliance Communications (RCom) and its unit Reliance Telecom Ltd (RTL), as no dues are being paid to the government from the proceeds of the ongoing insolvency proceedings. This is despite spectrum, the main asset being put up for sale, which belongs to the government and not the company. DoT is understood to have filed a 19-page affidavit before NCLT, Mumbai and prayed that the resolution plan be set aside in the light of the matter of insolvency of RCom and RTL being sub-judice in the Supreme Court.

It has highlighted it has dues of over Rs 31,000 crore from the two firms and nothing has been allocated to it. It has said the current plan manifests a discrimination against it. The department said that it remains fundamentally opposed to any resolution plan that involves nu-llifying the DoT’s statutory dues payable under licence agreeme-nt u/s 4 of Indian Telegraph Act.

DoT has sought that resolution professional (RP) takes formal approval from it for the transfer of licence to resolution applicant. The department has also claimed that spectrum cannot be reallocated to any third party.

DoT has argued that proposed resolution plans are contrary to public interest, and resolution applicant have no intention of reviving RCom or RTL, while the current resolution plans are mere arrangement to dispose of the assets of Rcom and RTL. The matter has been adjourned for hearing on September 8.

The Supreme Court is currently hearing the adjusted gross revenue (AGR) dues case related to insolvent firms like RCom and Aircel. It is examining whether these companies can put up their spectrum for sale even though they do not own the spectrum and got it on lease from the government.

It means that while the companies have a right to use the spectrum they do not have ownership over it. The court is examining that if the spectrum belongs to the government and if it is sold under Insolvency and Bankruptcy Code (IBC) then do banks recover their dues first, and not the government which becomes an operational creditor.