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Sit down, resolve it yourselves: SC as Jio, RCom fight over spectrum dues

Both the companies are also learnt to have jointly approached the telecom ministry seeking clarification over their spectrum trading deal

Aashish Aryan  |  New Delhi 

Supreme Court

Mukesh Ambani-led Reliance Jio Infocomm (RJio) and Anil Ambani-led (RCom) locked horns in the (SC) on Monday over the payment of the latter's dues related to spectrum usage charges (SUC).

RJio, during the hearing, told the it could not take the risk of going ahead with the deal despite "knowing the problems with prior dues and physical guarantees". RCom, on the other hand, maintained it could not pay the dues owing to the company facing insolvency threats and general lack of capital.

The SC on Monday told both the parties to sort out the issue by Friday when it shall next hear them. It was hearing a fresh contempt petition moved by RCom against the Department of Telecommunications (DoT) for refusing it the NoC (no objection certificate) for spectrum sale to RJio.

Though RCom has offered the corporate guarantee of Rs 1,400 crore issued by Reliance Realty, along with an undertaking that it would not create any third party rights over the land belonging to Reliance Realty, RJio said it was not guarantee enough for them to go ahead with the deal.

ALSO READ: SC allows RCom to deposit Rs 118 crore against Ericsson dues for now

"Obviously, RJio has no faith in RCom's corporate guarantee. Sit down and resolve this between yourselves. It is not for us. If you can't resolve amongst yourselves, we can't do anything," said a two-judge Bench led by Justice Rohinton Fali Nariman.

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Once the issue of who would pay for the past dues was resolved, the would issue the required NoC, the top court said.

Both the are also learnt to have jointly approached the telecom ministry seeking clarification over their While they are yet to hear back from the ministry, RJio has once again told it is interested in going ahead with the spectrum trade with RCom but wants clarity on dues.

ALSO READ: SC asks RCom, RJio to resolve issue over settlement of past dues by Jan 11

On December 14, DoT had told the apex court that it would issue the NoC to RCom for the spectrum sale within two days, provided the company's arm Reliance Realty did not sell the "preference shares that are reflected in the financial statement of 2017-2018". RCom had then assured the SC that it would not do so without prior permission from the department.

The NoC was, however, put on hold after RJio wrote to the DoT seeking assurances from the government that it would not be held liable for RCom's dues related to airwaves once its deal with RCom was completed. Later, in a tripartite meeting with DoT and RCom on December 19, RJio had said it would like the deal to go ahead but it would not be able to take any undertaking for RCom's liabilities.

ALSO READ: Will clear dues, but oppose Ericsson's media trial and sensationalism: RCom

In December 2017, as part of debt-restructuring efforts, RCom had signed a Rs 25,000-crore deal with RJio. RCom expected to raise Rs 18,000 crore from the sales of its wireless assets to Jio and real estate assets to Canada's Brookfield, and pare some of its Rs 46,000-crore debt. Apart from the Rs 3,000-crore sale of its fibre and related infrastructure assets in August, nothing much has happened in the deal, and RCom continues to reel under debt pressure.

Notice to on Ericsson issue

Hearing a separate contempt plea moved by against RCom Chairman for failing to pay Rs 550 crore dues even by the deadline of December 15, the top court issued a notice to Ambani and sought a reply within four weeks. Though Ericsson demanded that RCom pay it the entire Rs 550 crore plus the interest it owed to them immediately, the top court allowed RCom to deposit in the registry Rs 118 crore by way of two demand drafts. RCom will pay Rs 131 crore to the registry. But the actual amount payable to Ericsson will be only Rs 118 crore after deducting tax.

ALSO READ: RCom, Reliance Jio extend validity of asset sale agreement to June 28

"This (the payment of Rs 118 crore) would not lead you (RCom) anywhere. You have to deposit the entire amount," the two-judge Bench said while allowing them to deposit the amount for now. RCom, on the other hand, said that this payment by them was just to establish its bonafide and that the company would pay the remaining outstanding amount in due course.

Besides seeking contempt proceedings against the RCom chairman and two others, Ericsson had sought that and others who had defied the rule of the court be "detained in civil prison" unless they made the payments. Ericsson had also sought directions from the Ministry of Home Affairs to prevent Ambani, Reliance Telecom Chairman Satish Seth and Reliance Infratel Chairperson Chhaya Virani from leaving the country. RCom has to pay Rs 550 crore to Ericsson as part of their agreement in the National Company Law Appellate Tribunal (NCLAT).

First Published: Mon, January 07 2019. 21:38 IST
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