Reliance Jio informs Supreme Court it is not liable for Rcom's AGR dues

According to legal sources, the affidavit filed in the top court ahead of Monday's AGR hearing , clarifies that the telecom government did not demand any AGR dues from the Mukesh Ambani-led telco, for its spectrum sharing and trading agreements wi...

Reliance Jio Infocomm (Jio) has informed the Supreme Court that it is not liable for Reliance Communications' (Rcom) adjusted gross revenue (AGR) dues. The largest telco has said that AGR dues arise out of revenue from customers and sharing spectrum does not make the telco liable for the contested statutory dues.

According to legal sources, the affidavit filed in the top court ahead of Monday's AGR hearing , clarifies that the telecom government did not demand any AGR dues from the Mukesh Ambani-led telco, for its spectrum sharing and trading agreements with Rcom.

Jio's affidavit comes on the back of SC's observations of last week that Jio must pay a part of RCom’ AGR dues since it was using the latter’s spectrum since 2016.


The apex court asked all bankrupt telcos who have expressed their inability to pay dues worth Rs 57,000 crore, to explain who used their airwaves while the insolvency resolution process was on.

RCom and unit Reliance Telecom (RTL), once owned by Anil Ambani, Mukesh’s younger brother, had entered into an agreement with Jio in 2016 for trading spectrum in eight circles and sharing airwaves in 17 circles.

Jio shares around 38% of total spectrum currently held by RCom, on which spectrum usage charges are being paid as required under rules.
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SC's previous observations must have come as a surprise to Jio, which is not a party in this AGR case.

Jio in its affidavit said that spectrum sharing guidelines do not make any provision for sharing of liabilities.

The telco has cleared its own AGR dues of Rs 195 crore while RCom owes the government Rs 31,000 crore in statutory dues, including those of Sistema Shyam Teleservices, which was merged with it, as per the government’s submissions at the last hearing.

Brokerage firm Axis Capital in its report says that it is unlikely that Jio will be held liable since the ownership and rights of spectrum were not transferred and Jio has been paying spectrum usage charges.
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"As per law, any outcome of unresolved litigations would always be borne by the owner of the asset and the agreements for sharing or trading of these assets (spectrum) would have clauses pertaining to such litigations. Hence, RJio (Reliance) is unlikely to be liable for RCom’s AGR dues as the agreement between the both would have these clauses in their spectrum sharing agreement," said Axis Capital.
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