2 July 2019: The Supreme Court Tuesday dismissed the telecom department’s petition against a tribunal order that had stated that liabilities of past dues related to spectrum usage charges (SUC) rested only with Reliance Communications (RCom) and not the buyer, which in that case was Reliance Jio.
The SC’s verdict comes on the back of a bitter war fought between RCom, Department of Telecommunications (DoT) and Jio on the spectrum deal which never materialised because of lack of consent from the government. The DoT had wanted the buyer -Jio – to agree that it would be responsible for past liabilities of RCom as well when it buys spectrum from the Anil Ambani-led telco. Jio refused to accept DoT’s terms and the deal fell through, forcing RCom to move into insolvency.
The matter was contested in Telecom Dispute Settlement Appellate Tribunal (TDSAT) and the tribunal in February had said that the liability of past dues related to SUC rested only RCom and asked the government to reconsider its refusal to give a no objection certificate (NOC) to the spectrum sale.
DoT moved SC but its plea was dismissed Tuesday.
However, SC’s judgement today may have little impact on RCom’s spectrum sale since the bankrupt telco under a debt of Rs 46,000 crore is in the insolvency court. The reins of the operator are now in the hands of resolution professional (RP), Deloitte.
“Now we may consider to file another application or see what comes out of the resolution since RCom is in insolvency. All creditors will now have to take a haircut,” said a DoT official, who did not want to be named.
RCom’s spectrum – once valued at Rs 7,300 crore – may find few takers during the insolvency process since bidders may prefer to go for a fresh set from the upcoming spectrum auctions to be held later this year than get embroiled in any legal battles with the DoT.