Thread by @barandbench

AGR DUES:

Supreme Court begins hearing the case concerning payment of Adjusted Gross Revenue (AGR) dues by telecom companies.

The Court is currently considering the question of whether Spectrum can be sold under IBC proceedings.

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#agrcase #AGRhearing

Senior Advocate Ravi Kadam appearing for Aircel's monitoring committee is the first to address Court today.

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Kadam apprises the Court of the IBC proceedings Aircel is undergoing.

Kadam submits that an affidavit has been filed on behalf of Aircel before the Supreme Court.

#SupremeCourt #AGR #AGRhearing @Aircel @airtelindia

Kadam is taking the Court through the affidavit filed for Aircel, tells the Court that since 2016, there have been 8 spectrum trading agreements between Aircel and Airtel and had DOT nod.

#SupremeCourt #AGRhearing #AGR @Aircel @airtelindia @DoT_India

Kadam says that Board resolutions of Aircel are placed on record.

Justice Mishra says Bench will limit itself to the question of Aircel's IBC proceedings and AGR dues

#SupremeCourt #AGRhearing #AGR @Aircel @airtelindia

Kadam gives the details of spectrum licences that were surrendered by Aircel.

Justice Mishra: Who was using the spectrum before it was surrendered.

Kadam: Was not being used by anyone

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Kadam: No instance of spectrum sharing with any operator by Aircel. Aircel is going through insolvency. Licences surrendered were accepted by DOT.

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Justice Mishra: How much are the dues to be paid up by Aircel and what are the arrears traded with Airtel?

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Justice Mishra inquires if Airtel has paid all dues with respect to spectrum purchased from Aircel.

Senior Advocate Kapil Sibal for Airtel: We have paid all relevant dues in relation to trades spectrum

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Justice Mishra: We want to know from DOT all details of spectrum allocated since 1999 to RCom and Aircel and details of all spectrum sharing

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Justice Mishra: Will Aircel sell Spectrum under its IBC proceedings?

Kadam: Spectrum usage right is an asset. Right to use will be sold after the approval of the resolution plan

SC: Who is the resolution applicant

Kadam: UVARC

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Justice Mishra: How much AGR dues will be paid?

Kadam: Resolution plan of UVARC has been approved. DOT had applied for operational creditors. DOT was part of the COC meetings.

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Kadam: When rights to spectrum use are sold, the liability is as on that date of sale itself. It is not a liability that arose subsequently.

#SupremeCourt #AGR #AGRhearing @Aircel

Kadam: Right to use (Spectrum) is an intangible asset and since this is an asset of a company and it should remain with the company and go with the company.

#SupremeCourt #AGR #AGRhearing @Aircel

Kadam: Spectrum belongs to everyone but right to use is an asset.

SC: But explanation to Section 18 (of IBC) excludes contractual part

Kadam: But contract stipulates the right to transfer

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Justice Mishra: What bothers us is if remain unpaid. In case dues are not paid then the spectrum must be surrendered.

#AGR #AGRdues #AGRhearing #SupremeCourt @aircel

Justice Mishra: We are worried that almost entire AGR dues will be extinguished in the IBC proceedings. After sale (of spectrum), new user will extinguish pending demand of dues

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Justice Mishra: Spectrum trading is different from sale of spectrum under IBC. Without paying for the horse, telcos taking a ride.

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Justice Mishra: Nobody can start using the spectrum till dues are paid. Can a liability like AGR be closed under the guise of spectrum sale under IBC

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A lighter exchange takes place ~

Justice Mishra: 7 more days... I want to then be at peace

Senior Advocate Harish Salve: My Lord is mistaken that we will allow him to be at peace.

Justice Mishra: No no... I want my own tranquility now.

#courtroomexchange
#SupremeCourt

Kadam concludes his arguments.

Senior Advocate Ranjit Kumar for Aircel's COC begins his submissions now.

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#AGRdues

Kumar: We are lenders, we are in the business of lending money. If government is doing business and companies are doing business, the IBC gives the prescribed procedure for liquidation.

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Kumar: For a telecom company, Spectrum is the raw material

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Kumar: If the regime requires for this raw material to be utilised in a certain way, and for keeping the company as a going concern, then Resolution Plan should give preference to keep telcos going.

#AGRDues #AGR #SupremeCourt

Kumar: The only reason the Bank exposed itself by lending money is because the spectrum was being kept as security interest. If the government allowed keeping spectrum as security and then now can it be that the government will get all the money and Bank won't get anything

Kumar: If it is all contractual then one contractor cannot get more than what the other contractor

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Kumar: If all licences are cancelled, then nobody gets anything, everything goes to the government and then the government will also have to auction the whole thing again.

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Kumar: Both (banks and govt) have to coexist. It has to be a case of coexistence of people who are owed money. Government would use it for social and public purposes, banks would use it for economic purposes and advance loans. Economy is also in crisis.

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#AGR

Kumar is taking the Court through the clauses and provisions under the tripartite agreements entered into by Aircel.

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Kumar is now referring to the provisions of IBC

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SC asks Kumar if he will argue till late.

Kumar: No I will not argue till late but we are here to assist My Lords till whenever required... But we are tiring My Lords like this.

Justice Mishra: No not tiring... You are refreshing us.

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Kumar continues with his arguments taking the Court through IBC provisions

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Kumar summarises:

"IBC is a complete code and it will be inequitable if the raw material is taken away."

Kumar: If only government's dues are considered, the Banks will be at an inequitable loss and it would be against the resolution process provided for under IBC

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Kumar: It is my humble submission that Your Lordships may not decide this question at this stage.

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Ranjit Kumar concludes his arguments

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Senior Counsel Neeraj Kishan Kaul appearing for Videocon Telecom's resolution professional tells the Court that it's AGR dues are valued at Rs.1,512 cr by the DOT. As of now, the business is nil and the resolution process on.

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Bench adjourns the hearing for 2PM tomorrow.

Senior Advocate Kapil Sibal seeks brief time to assist the Court on the larger issue without making arguments jn favour of any side

Hearing to resume tomorrow at 2PM

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