In a remark that could increase worries for Bharti Airtel NSE -1.01 %, Supreme Court on Friday while hearing the AGR case said that the telco will have to pay the dues of bankrupt Videocon NSE 2.44 % Telecommunication.
The three-judge bench, headed by Justice Arun Mishra, observed that the past dues need to be paid before transfer of spectrum. If Videocon doesn’t pay, Bharti Airtel, which acquired Videocon spectrum will have to pay, the bench said as per media reports.
Videocon had sold rights to use 2×5 MHz spectrum in the 1,800 MHz band in six circles to Airtel in 2016 for a consideration of Rs 4,428 crore. Those circles were Bihar, Gujarat, Haryana, Madhya Pradesh, UP (East) and UP (West).
The solicitor for Bharti Airtel, however, pointed out that the company has not received any demand from the government in this regard. He added that spectrum is recognised as assets of telcos and even used as collateral. And, if that is derecognised, even banks will refuse to give a loan.
A couple of days back, the Supreme Court had said that Reliance Jio, which was using Reliance Communication’s spectrum, would pay the AGR-related dues of the insolvent company. Jio had denied any such liability.
The court on Friday asked the Department of Telecom to file details of spectrum shared by insolvent companies. DoT will also file details of dues that arose on account of shared spectrum, and if relevant dues have been paid.