Call Waiting: Reliance Jio, RCom get three weeks more to resolve DoT liability issue

The Supreme Court on Friday gave further three weeks time to Reliance Communications (RCom) and Reliance Jio Infocomm (RJio) to resolve among themselves as to who will be liable for the past dues of the former once the spectrum trading deal between the two is cleared by the government.

At its last hearing on January 7, the court gave time to the two sides till Friday to resolve the matter after RJio refused to give an undertaking that it would pay the dues of RCom, if any came to light, once the trading deal was through.

Appearing before a bench led by justice RF Nariman, senior counsel Kapil Sibal sought three-week adjournment on behalf of RCom as the company wanted to move the telecom tribunal. The court granted the request.

The apex court had maintained that the department of telecommunications (DoT) would give the required no objection certificate to the deal only after RCom and RJio resolved the issue between themselves over the past dues. “Sit down and resolve this between yourselves, it is not for us. Till you don’t resolve between yourself, we can’t do anything,” the judge said at the last hearing on January 7.

The bench in its last hearing had also sought response from RCom chairman Anil Ambani on a plea by Swedish telecom equipment manufacturer Ericsson India seeking initiation of contempt proceedings against him and two others for failing to clear its dues of Rs 550 crore. Ericsson has sought that Ambani be “detained in civil prison” and restrained from travelling abroad unless the payment is made.

While allowing RCom to deposit Rs 118 crore towards its dues to Ericsson with the Supreme Court registry, the apex court had refused to exempt Ambani and others from personal appearance before it on the next date of hearing after five weeks.

Ericsson had also sought from the court directions to the ministry of home affairs to prevent Ambani, Reliance Telecom, chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani from leaving the country.

Ericsson had signed a seven year deal in 2014 to operate and manage RCom’s nationwide telecom network. After RCom failed to pay for its supplies procured from Ericsson, the latter initiated insolvency proceedings against it before NCLT to recover Rs 1,150 crore. Subsequently, the two parties made an out of court settlement by which Rcom was required to pay Rs 550 crore.

Rjio, which was not party to the case so far, refused to undertake to clear the past liabilities of RCom that may arise, following the company’s Rs25,000 crore spectrum trading acquisition deal with the former.

The Supreme Court had on November 30 cleared the sale of spectrum by RCom to RJio on condition that the former furnished Rs 1,400 crore as corporate guarantee to the government within two days. This corporate guarantee, to be furnished by Reliance Realty, a unit of RCom, was in addition to the land parcel that had to be provided as security as per the TDSAT’s order. DoT had asked Rcom to provide bank guarantee of Rs 2,950 crore towards outstanding spectrum charges to approve its spectrum sale to Reliance Jio.