SC seeks govt view on Reliance Jio's liability for RCom's AGR dues

According to the apex court, spectrum cannot be sold under the Insolvency and Bankruptcy Code (IBC)
The Supreme Court on Monday asked the Union government whether Reliance Jio could be held liable to pay the adjusted gross revenue (AGR) dues of Reliance Communications (RCom), a bankrupt firm, because the former was sharing spectrum with the latter and earning revenue from it. It sought the annual financial details of RCom because it would be crucial for the judgment on AGR dues.

Solicitor General Tushar Mehta told the court the Union government would support any decision it took to help recover the dues. He said the views of the Department of Telecommunications (DoT) and those of the Ministry of Corporate Affairs (MCA) on spectrum sale differed. The MCA had sought to allow spectrum sale whereas the resolution plan for RCom has not yet been approved.

According to the apex court, spectrum cannot be sold under the Insolvency and Bankruptcy Code (IBC).

Reliance Jio told the court there was no legal basis to transferring RCom’s dues to it. The two companies have a spectrum-sharing agreement and do not share liabilities. Advocate Harish Salve, who appeared for Jio, said the company was not involved in any proceedings under the IBC and was not acquiring RCom’s spectrum.

Mehta said spectrum sharing was different from trading and the user must pay AGR-related dues.

At the end of the hearing, Salve told the Bench he would address the court on the legal issue as to whether spectrum could be sold under the bankruptcy process. Jio informed the court that in accordance with spectrum-sharing guidelines, the users were required to pay only usage charges. The next hearing in the matter has been adjourned till August 19.     


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