SBI moves SC in AGR case, says interests of DoT will be protected

Representing RComm, SBI said that the amount payable under a resolution plan shall be paid on priority to operational creditors over financial creditors

State Bank of India (SBI) on Thursday filed a plea in the Supreme Court seeking permission to intervene in the adjusted gross revenue (AGR) matter on behalf of Reliance Communications’ (RCom’s) lenders.

The bank said that the interest of the DoT was adequately protected.

Representing RCom, SBI said the amount payable under a resolution plan would be paid prioritising operational creditors over financial creditors. Therefore, the interests of the DoT — which is an operational creditor — are adequately protected under the terms of the Insolvency and Bankruptcy Code (IBC) and the regulations made there under.

It has sought exemption from filing a notarised affidavit and submitting the court fee.

On August 10, the apex court had directed the Centre to prepare a plan for recovering AGR dues from bankrupt operators including RCom.

The application for intervention is being filed by SBI on behalf of the Committee of Creditors (CoC) of RCom, seeking protection of its rights and interests. The CoC includes Bank of Baroda, Axis Bank, UCO Bank, Punjab National Bank, HDFC, and LIC.

This appeal comes after the court said it would examine AGR dues of companies that had gone bankrupt. Since the dues are huge, the court had proposed to examine bona fides of the initiation of IBC proceedings, it had said in its order dated July 20.

Further, the Supreme Court had, on August 10, directed the existing parties to appeal for filing of the additional documents.

As regards spectrum, RCom said it was the security based on which banks grant loans to telecom operators.

The DoT has granted permission to telecom operators to create substitution rights on the same, in favour of their lenders.

“Therefore, spectrum is indeed an asset of the corporate debtor that could be subject to the resolution plan, as otherwise the continuance of telecom companies as going concerns and their transfer as a going concern as per the IBC, may stand frustrated.”