The Supreme Court on Friday asked the department of telecommunications (DoT) to grant a no objection certificate (NoC) to Reliance Communications to trade its spectrum with Reliance Jio Infocomm by Monday on the condition that its subsidiary, Reliance Realty, does not redeem the preferential shares without DoT’s nod.
Reliance Realty, a unit of RCom, has furnished redeemable preferential shares worth Rs 1,000 crore as corporate guarantee towards outstanding spectrum usage charges of Rs 2,940 crore, as sought by DoT. This is in addition to the land parcel that has been given as security, as directed by the Telecom Disputes and Settlement Appellate Tribunal (TDSAT) in its October 1 order. The tribunal while favouring RCom had directed it against alienating its Navi Mumbai property so as to secure the government at least for Rs 1,400 crore for the time being.
The DoT on November 30 reiterated its demand for a bank guarantee of Rs 2,940 crore in lieu of spectrum dues for giving nod to RCom’s spectrum sale to Reliance Jio. Additional Solicitor General PS Narsimhan on Friday informed the bench led by Justice RF Nariman that the government “is not giving any NoC” to RCom as it has nil assets for the last two years.
Senior counsel Kapil Sibal and counsel Mahesh Agarwal, appearing for RCom, soon undertook that the firm will not redeem the preferential shares without the DoT’s consent. Justice Nariman then asked the DoT to give NoC within two days on the condition that “the preference shares reflected in the balance sheet and the financial statements of Reliance Realty for 2017-18 will not be redeemed without permission of DoT. The ASG assures on this statement that NoC will be given in two days”.