9911796707
TMI Blog2020 (3) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... er action against the Petitioner Company in relation to the Telecom Licenses and Spectrum allocation; C. Pending hearing and final disposal of this Application, direct the Respondent from taking any action/steps against the Petitioner Company in relation to any unpaid dues; 2. FACTS IN BRIEF :- Facts of the case are that an Application/Petition was moved by Aircel Limited, Corporate Debtor/Petitioner U/s 10 of I&B Code, 2016 to declare itself insolvent. The said Petition under section 10 of I&B Code, 2016 was 'Admitted' vide an Order dated 12.03.2018 by declaring Moratorium and appointing Interim Resolution Professional. This is a case where the Corporate Debtor is under heavy debt i.e. operational debt of about Rs. 19,889 Crores and financial debt of about Rs. 7,378 Crores. On appointment, the Resolution Professional has taken charge over the debtor company so as to commence the Corporate Insolvency Resolution Process proceedings (CIRP). 3. The present application is revolving around the fundamental question of Telecom License granted by Department of Telecommunication/ DoT (Licensor) to the Petitioner/Aircel (Licensee) under the provisions of Section 4 of Indian Teleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this juncture Learned Counsel of the Resolution Professional has informed that up till the commencement of the Corporate Insolvency Resolution Process the Company had paid the license fees. 5. It is vehemently pleaded that during "Moratorium" in operation the Telecom License and Spectrum cannot be terminated as prescribed U/s 14 of I&B Code. So the prayer is that the DoT be directed not to take any action against the Company such as termination of Telecom License and Spectrum Allocation. Learned Counsel has raised a serious concern that in case of termination the value of the Petitioner should get severely eroded. A great prejudice shall be caused if any action is taken by the said department. 5.1 Further it is informed that the Company had made a huge investment of Rs. 6249.27 Crores for procuring the license. It is further pleaded that the terms and conditions of "License Agreement for Provision of Unified Access Services" do not permit for revocation of license when the period has not expired. In support placed reliance on the following Clauses of the Agreement:- "NOW THIS AGREEMENT WITNESSETH AS FOLLOWS :- 1. In consideration of the payment of Licence fee, and due per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted only Transfer of "Right to use" and in case of breach of condition the revocation has also been specified as per the terms, only relevant portion reproduced below :- "2.1 Spectrum to be auctioned. Rights to use spectrum at specified frequencies in the following bands (subject to fulfilment of eligibility conditions, relevant license conditions and any particular conditions related to specific frequency blocks) for a period of 20 years (from the date of award of right to commercially use the allocated spectrum block) are being offered for award." The relevant provisions in case of breach of those conditions, as per the NIA 2010 are :- 3.7 Breach, revocation and surrender The spectrum assignment may be revoked, withdrawn, varied or surrendered in accordance with applicable license conditions or any other applicable laws, rules, regulations or other statutory provisions. The spectrum assignment may also be revoked if the Government determines the user of the spectrum to be in serious breach of any of the conditions of the award of the spectrum (including adherence to the Auction Rules) and the consequent obligations." 6.3 One of the legal argument is that as per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tic right of renewal or extension on expiry of original tenure of license. Renewal is at sole discretion of Licensor/ DoT. It is the exclusive privilege of the Government of India which could be permitted to be exercised by others only by way of grant from the Government of India. Therefore, the argument is that the license/Spectrum is a National Asset, therefore, no individual or a corporate body can demand a claim over this property. Almost on identical lines a legal proposition has been laid down by the Hon'ble Supreme Court in the case of (2012) 3 Supreme Court Cases 1 (Writ Petition No. 423 of 2010) in Centre for Public Interest Limitation (supra) Subramanian Swamy (supra) Others dated 02.02.2012 that :- "Natural resources belong to the people but the State legally owns them on behalf of its people and from that point o view natural resources are considered as national assets, more so because the State benefits immensely from their value. The State is empowered to distribute natural resources. However, as they constitute public property/national asset, while distributing natural resources, the State is bound to act in consonance with the principles of equality and public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ** (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium." 7.3 As a fundamental principle, if a property is in possession of the Corporate Debtor the same cannot be demanded back by the Owner/Lessor/DoT of the property as long as the same is in use and in possession of the Corporate Debtor/ Licensee. To this extent there should not be any controversy that since the intangible asset is used for business purpose by the Corporate Debtor, the provisions of Moratorium must apply. The Licensor/DoT can be prohibited from taking any step which may be prejudicial to the interest of the Licensee/Aircel. 7.4 An exception to this general rule is that if an asset is in possession of the Corporate Debtor under contractual arrangement the same can be demanded back by the owner of the asset, refer Section 18(1)(f) of the Code. In this regard a decision of NCLT Chandigarh has also been relied upon by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, it has also been demonstrated that the Debtor Company has enough valuable assets to satisfy the major portion of the outstanding Debt. A provisional Assets and Liabilities drawn as on 20th February, 2018 of Dishnet Wireless Limited and annexed in Volume-VIII, Page 1583 which reflects under the Head "Current Assets", Loans and Advances are to the tune of Rs. 22,50,27,638/- and Other Financial Assets Rs. 195,25,78,756/- and other Non-Current Assets Rs. 256,07,69,485/-. As against that, the major Liability shown as Financial Borrowings to the tune of Rs. 25,21,60,00,511/-. There are other Financial Liabilities of Rs. 22,87,13,45,246/-. Attention has also been drawn on the Trade Receivables totaling Rs. 432,30,02,623/-. As against that, Trade Payables are Rs. 35,58,40,94,097/-. Therefore, since inception of the Insolvency Proceedings the advantage of having license to run telecom business has been acknowledged by this Bench. Without such an asset, no party shall take interest in acquiring this Debtor company, hence approved the commencement of CIRP. 7.6 As far as the apprehension of cancellation of license by DoT is concerned, on examination we have noticed that there is a clau ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
