New Delhi: The Supreme Court on Friday allowed Anil Ambani-controlled Reliance Communications (RCom) to sell spectrum to older brother Mukesh Ambani’s Reliance Jio. The SC directed the Telecom Ministry to issue a no-objection certificate (NOC) for the proposed sale between the two companies by December 9, 2018. The SC also asked Reliance Realty to issue a corporate guarantee worth Rs 1,400 crore in favour of the government by December 2, 2018.
With this latest direction, RCom is now free to sell spectrum to Reliance Jio as a part of the Rs 18,000 crore transaction the two had signed. Department of Telecom (DOT) had moved the SC challenging TDSAT order of October 1, 2018 rejecting the DOT demand of a bank guarantee of Rs 2900 crore.
Before the SC, DOT remained firm on its demand of a bank guarantee citing unpaid spectrum dues of RCom. DOT also refused the proposal by RCom to offer land worth Rs 1400 crore in Navi Mumbai as a security for the spectrum dues claimed by it.
RCom argued in the SC that it was unable to furnish bank guarantee, given that the company was already facing IBC proceedings at the NCLT. RCom also cited earlier directions by the SC directing payment of Rs 550 crore to Ericsson by December 15, 2018. RCom counsels argued that they would be unable to meet SC directions for payment if the deal was not approved.
RCom counsels further argued that the deal was critical for lenders. Moreover, RCom counsels submitted that the DOT would also suffer as deferred spectrum dues of Rs 10,900 crore that would become payable by Jio would not materialise of the spectrum sale is not allowed.