ET: SC stays appellate tribunal’s order in RCom OTSC Case

20 August 2019: The Supreme Court on Monday stayed an appellate tribunal’s order which had stalled the telecom department’s demand for Rs 2,000 crore from Reliance Communications (RCom) as one-time spectrum charges (OTSC), an order which may have wider ramifications for the broader industry.

“Currently, SC has granted an interim stay of the TDSAT judgement. It is subject to the outcome of the full and final hearing of all the operators,” said an RCom official.

This implies that RCom may have to provide bank guarantees worth Rs 2,000 crore, under the Department of Telecommunications (DoT) demands, said lawyers. But RCom said it can’t pay anything since it is in the midst of insolvency proceedings. “Aircel and RCom, both are in the NCLT / IBC, where DoT is an operational creditor, and both the companies are in the moratorium period,” explained the RCom official.

Sources in the DoT also admitted that despite the latest order, it will be difficult to recover the money from RCom, now that it is under insolvency proceedings. The one-time spectrum charges are dues towards payment of market-linked prices for excess spectrum held by a telco and have been a contentious issue between the operators and the government.

The DoT has raised demands against all telcos such as Vodafone Idea and Bharti Airtel, but all such demands have been stayed by the TDSAT. The DoT has also challenged all such orders in the SC, whose latest order on RCom may have a bearing on the OTSC demands against the other telcos, said an industry official.

“OTSC demands are an industry issue and these demands are pending for since 2013,” said the official.

RCom is the second telco to go under insolvency and all its payments are under moratorium till the resolution professional (RP) — Deloitte — completes its asset monetisation.

RCom has Rs 46,000 crore of debt. As many as 39 financial creditors have claimed about Rs 49,193 crore from the company. RCom and its units also have hundreds of operational creditors and DoT is one of them.

The Economic Times reported

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