Wants the Tribunal to pass a reasoned order on the questions within two months
The Supreme Court has left it to the National Company Law Tribunal (NCLT) to examine all the contentious questions on insolvency matters impinging on the Adjusted Gross Revenue (AGR) dues case, including as to whether “spectrum” can be subjected to proceedings under the Insolvency and Bankruptcy Code (IBC).
There is also the big question as to whether IBC overrides the provisions contained in Indian Telegraph Act 1885, Indian Wireless Telegraphy Act 1933 and Telecom Regulatory Authority Act 1997.
Many legal experts see this move as one where the apex court has allowed the key insolvency related questions around AGR case to be resolved under the Insolvency law rather than look at it under the prism of the Telegraph law. This may have been done possibly on account of the fact that neither Corporate Affairs Ministry nor the insolvency regulator, Insolvency and Bankruptcy Board of India, were party to the AGR dues case and it may not have been appropriate for the apex court to examine insolvency law without giving a hearing to the administrative ministry dealing with IBC, they said.
Souvik Ganguly, Founder and Managing Partner, Acuity Law, said the response to the queries raised by the Supreme Court will decide much bigger legal issues relating to ownership of assets under insolvency law especially if such assets are in the form of licenses/concessions. Surely, such significant matters will ultimately be decided by the Supreme Court, he said.
Vidisha Krishan, Partner, MV Kini & Co, said the questions before NCLT will be of major significance in deciding jurisdictional issues and characterization of the resource. Determining whether license fee is in the nature of an operational debt and further if the right to use the spectrum is an asset of the telecom companies under liquidation will be the two major questions before NCLT, she added.
One thing is for sure— the NCLT’s answers to the questions raised by the apex court is expected to significantly impact the Insolvency proceedings of telecom companies in the coming days. .“We make it clear that it being a jurisdictional question, it requires to be gone into at this stage itself. Let the question be decided (by NCLT) within outer limits of two months,” said the SC order passed by the Bench comprising Justices Arun Mishra, S Abdul Naseer and MR Shah.