‘The government should be filing a review petition’
Senior advocate KAPIL SIBAL, who represented Hughes Communications in the Adjusted Gross Revenue (AGR) dues case in the Supreme Court, tells Sudipto Dey and Aditi Phadnis that the government should feel aggrieved that its decision — to grant 20 years to telecom companies to make the payment — has been turned down. Edited excerpts:
Is there any clarity on whether the payments made so far by telecom companies towards AGR dues would be treated as the “upfront amount”, or do they have to pay over and above what they have so far?
The government had, through a cabinet decision, granted 20 years to telecom companies to make the payment. In the meantime, some payments towards AGR had already been made. I personally think there is no real clarity in the judgment on that issue. But I do hope that what it means is that whatever payments have been made thus far are adjusted towards the 10 per cent — and the instalments will run thereafter.
On the issue of review and curative petitions, experts see limited ground for relief on Spectrum Usage Charges (Suc)-related AGR liability and on payment timelines. Your comments?
Since this was a cabinet Do you think the apex court decision, I think the government asking the managing should be aggrieved directors of telecom that a decision taken by the companies to furnish Government of India has, in a Senior advocate personal guarantees and sense, been turned down by undertakings to abide by the court. Remember, the time frame the order is a concern over which during which payments should be you may seek relief ? made is something that the Yes, it is a concern. Normally MDS government decides as a matter of should not be asked to file personal policy, in the context of the grave guarantees because ultimately it is a financial situation that the telecom corporate liability. And unless that sector is facing. liability itself is supported by
Normally courts do not comment on guarantees — that’s a separate issue. the context of the terms of payments. But if it is not, then courts would That the court has done so is something normally not pass such an order. That that the government should be should be addressed by telecom aggrieved about — and if so, it should operators, who should take a call on be filing a review petition. Whether what should be done to seek some relief on that account.
You also appeared today, on behalf of the construction industry, on the issue of the moratorium. The Supreme Court has said that no account should be declared NPA (non-performing asset) for two months and the banks should not take coercive action against borrowers. Hearings will continue September 10 onwards. But what are the issues here?
In a sense, that is already built into the policy. You can falter. But you will be an NPA only after the 60-day period. So that’s already built in. But I think the intent is to ensure that whatever the status was on August 31, that status will continue till the court decides what is to be done.
Do you see the issue of whether spectrum can be traded under IBC (Insolvency and Bankruptcy Code) as something that will eventually end up in the Supreme Court?
That’s a matter of real concern for me. I think the whole purpose of the trading policy framework was the optimal use of spectrum. If somebody is not in a position to use spectrum, then that is not optimal use.
If spectrum at the time of trading cannot be given as security, then the whole telecom sector will be in deep trouble. For an operator, that is the most valuable asset he has. If the bank cannot use that as security, what else can he pledge?
It is also an indication that when courts take decisions, unaware of the economic consequences of those decisions, then it can have a very damaging effect, not only on the sector but also on the economy of the country. And, therefore, banks should be allowed to accept spectrum as security and spectrum should be allowed to be traded, subject to that security.