InvestorQ : Do you see Reliance being held liable for the outstanding AGR dues of RCOM?
vidhya Laxmi made post

Do you see Reliance being held liable for the outstanding AGR dues of RCOM?

sarah Leo answered.
2 years ago

Supreme Court has asked the government to clarify its stand on whether RCOM’s AGR dues can be recovered from Reliance Jio since it has been using RCOM’s spectrum since 2016. Jio has also been getting revenues using RCOM’s airwaves in the 800 megahertz band.

However, Harish Salve, arguing on behalf of Reliance Jio has argued that there was no legal basis for transferring RCOM’s AGR dues to Jio. Salve pointed out that two telecom operators which are in a spectrum-sharing agreement do not share liabilities. This could be a technical point and the SC view is awaited.

Currently, the DOT and the Ministry of Corporate Affairs or MCA have divergent views on this subject. According to DOT, spectrum is national property held by the government in trust and cannot be sold under insolvency proceedings.

As per the order of the Supreme Court passed in September 2019, RCOM owes Rs.25,199 crore in the form of AGR charges, spectrum usage charges and licence fees to the DOT. SC also wants clarity on whether spectrum can be sold under the IBC proceedings.

The SC is right in asking for clarity on these technical issues as it can have a major bearing on the dues collection by the DOT. Airtel and Vodafone would also want to see solvent and insolvent companies paying up their share of AGR and SUC charges to the government.