RCom moves SC against TDSAT order rejecting time for clearing spectrum liabilities
24 April 2018
Reliance Communications on Monday moved the Supreme Court, challenging the TDSAT’s 19 April judgment that rejected its request for the grant of more time for payment of Rs774.19 crore in deferred spectrum liabilities.
The company owed the Department of Telecom (DoT) Rs774.19 crore in deferred spectrum liabilities, including Rs281.4 crore for its acquisition of spectrum in 2013 and Rs492.8 crore for spectrum acquired in 2015.
Reliance Communications had sought more time for the payment of the Rs774.19 crore deferred spectrum liabilities.
The last date for payment of Rs281.4 crore was 5 April and that of Rs492.8 crore was 19 April.
RCom had participated in the 2015 auctions and was successful in the 800MHz band, 900 MHz band and the 1800 MHz bands in certain service areas for which it made an upfront payment of Rs1,104.09 crore.
RCom and its subsidiary Reliance Telecom told the Supreme Court that the tribunal had failed to appreciate that they were willing to pay penal interest at 2 per cent above the prime lending rate of SBI for the delay in making the payment and requested the apex court to stay the TDSAT order and restrain DoT from taking any coercive steps against the two companies.
The companies also said that DoT was fully securitised on account of the bank guarantees that are valid up to July 2018 and April 2019, as far as the third installment is concerned.
The companies in their appeal stated that the non-extension of time would hinder RCom’s debt restructuring being undertaken by them at the behest of the lenders and secured creditors. Rcom also cited “unforeseen and uncalled for circumstances beyond their control” for the delay in spectrum payment.
RCom said the tribunal lost sight of the fact that it had suffered the setback due to the arbitral tribunal’s order in the Ericsson India and Indus Towers cases and the NCLT’s stay order in the HSBC Daisy Investments’ case that stalled the sale transaction with Reliance Jio.
RCom had, in December 2017, struck a Rs25,000-crore deal with Reliance Jio for the sale of its mortgaged assets in order to avoid insolvency proceedings as part of its debt resolution plan. These included spectrum, media convergence nodes (MCN), real estate, towers and fibre assets.
A bench led by Justice AK Goel will hear the case on Tuesday.
While the apex court earlier this month allowed for RCom to proceed with the sale of spectrum, media convergence nodes (MCN) and real estate, the NCLAT last week stayed the sale of its tower and fibre assets owned by tower firm Reliance Infratel.