While hearing the AGR case on Friday, Supreme Court said that that the telco will have to pay the dues of bankrupt Videocon Telecommunication. This remark has increased worries for Bharti Airtel NSE -1.01 %.
In 2016, Videocon had sold rights to use 2×5 MHz spectrum in the 1,800 MHz band in six circles to Airtel for a consideration of Rs 4,428 crore, which itself owes ₹43,980 crore in AGR due. Those circles were Bihar, Gujarat, Haryana, Madhya Pradesh, UP (East) and UP (West). Also, Airtel had bought the airwaves held by another bankrupt telco Aircel Group.
The court observed that Airtel, which under a trading pact with the bankrupt company, is using the spectrum given to it, will have to the pay the AGR dues of the telco undergoing insolvency proceedings. The solicitor for Bharti Airtel, however, pointed out that the company has not received any demand from the government in this regard.
The three-judge bench, headed by Justice Arun Mishra, observed that the past dues need to be paid before transfer of spectrum as per spectrum trading guidelines under the Insolvency and Bankruptcy Code (IBC).. If Videocon doesn’t pay, Bharti Airtel, which acquired Videocon spectrum will have to pay, the bench said as per media reports.
The Supreme Court directed the DoT secretary to file an affidavit detailing dues that are to be paid by users under spectrum sharing agreement. The court also asked the government to submit details on past dues, dates of grant and transfer of spectrum licenses. The court will hear the matter next on Monday.