Jio may spend Rs 13,000 crore towards past dues of Reliance Communications

Reliance Jio may have to spend around Rs 13,000 crore of past dues relating to licence fee and spectrum usage charge owed by Reliance Communications.
Reliance Jio Digital Life

The development comes in the wake of the recent Supreme Court ruling on the controversial definition of AGR.

Reliance Communications needs to pay around Rs 20,000 crore — Rs 16,456 crore licence fee and Rs 3,533 crore SUC — to the Department of Telecom (DoT). Since the company has filed for bankruptcy, DoT will have to claim the amount in the insolvency court as an operational creditor, Financial Express reported.

DoT may look at claiming around Rs 13,000 crore from Jio which bought around 47.50 MHz spectrum in the 800 MHz band from Reliance Communications through spectrum trading in January 2016. The spectrum was acquired across 13 circles and is currently being used by Jio to provide 4G services.

Documents show that while Reliance Communications paid dues up to the date for effecting the spectrum trading as per the guidelines, Reliance Jio would have to take the burden of any future liabilities arose.

A DoT letter dated May 20, 2016, written to both Reliance Communications and Jio, giving approval for the spectrum trading, stated, “The licensor reserves its right to recover the dues which were not known to the parties at the time of the effective date of trade, from the buyer or seller, jointly or severally at its discretion as per para 11 of the trading guidelines, dated 12, October, 2015.”

Sources close to the company said a February 2019 order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), in a separate case, had ruled that Jio would not be liable for any past dues of Reliance Communications. They said the SC had upheld the TDSAT order.

However, government officials said the TDSAT order was with regard to a subsequent Jio-Reliance Comm spectrum trading deal where Jio had refused to give any undertaking to pay for any past dues of Reliance Communications at any stage. DoT did not give assent to the trading pact and Reliance Communications had to eventually file for bankruptcy