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Can AGR dues of RCom be recovered from Jio?

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The Supreme Court on Monday asked the Centre to clarify its stand on whether the adjusted gross revenue (AGR) and other dues of bankrupt Reliance Communications can be recovered from Reliance Jio. Notably, Reliance Jio is using RCom’s spectrum since 2016 under an agreement between the two companies.

The court asked the government to clarify whether Jio can be held responsible for the AGR dues of RCom. The apex court’s query came as Jio is using RCom’s airwaves in the 800 megahertz band under an asset sharing agreement.

The next hearing of the matter has been scheduled on August 19.

Reliance Jio clarifies stand

Senior advocate Harish Salve appearing for Jio submitted before the court that there was no legal basis for transferring RCom’s dues to Jio. The two telecom operators engaged in a spectrum sharing agreement do not share liabilities.

Jio has also contended that it is not part of the Insolvency and Bankruptcy Code (IBC) proceedings of RCom. It also said that the company has not acquired RCom’s spectrum.

Centre’s submissions

The Union government informed the apex court that the Department of Telecom (DoT) and the Ministry of Corporate Affairs (MCA) have different views on whether, or not, the spectrum of a telecom company can be sold under insolvency proceedings.

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As per DoT, spectrum is a national property and cannot be sold under insolvency proceedings. Telecom companies do not own spectrum, but are allowed to use it under contract.

RCom owes Rs 25,199 cr to govt

As per government estimates, RCom owes the DoT Rs 25,199 crore, including spectrum usage charges and licence fees. The amount is nearly half of Rs 49,054 crore dues calculated under RCom’s insolvency proceedings.

The court had earlier asked the Centre to devise a plan for recovering AGR and other dues from bankrupt telecom operators. The court has flagged doubts on the government making any recoveries from their insolvency proceedings.

 

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