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RCom files case in Supreme Court against DoT over Jio deal

Navadha Pandey
In the contempt of court plea, RCom claimed DoT failed to furnish an NOC clearing the RCom-Jio spectrum deal even after the Supreme Court had directed it to do so

New Delhi: Reliance Communications Ltd on Thursday filed a contempt of court plea against the department of telecommunications in the Supreme Court claiming that it failed to furnish a no-objection certificate clearing RCom's spectrum deal with Reliance Jio Infocomm Ltd even after the court had directed it to do so.

This means that the proposed asset sale, announced in December 2017 and initially expected to be cleared by March 2018, will be delayed again, affecting repayment to the lenders of RCom.

“The plea has been filed today (Thursday) and will be heard on 7 January,” a person aware of the development said requesting anonymity.

“The contempt plea has been filed since the government has not complied with Supreme Court's order to clear the RCom-Jio deal. This has been delayed by more than two weeks,” the person added.

The Supreme Court had on 30 November cleared the sale of spectrum by Anil Ambani-controlled RCom to elder brother Mukesh Ambani's Reliance Jio on the condition that the seller furnished ₹1,400 crore as corporate guarantee to the government within two days. This corporate guarantee, to be furnished by Reliance Realty, a unit of RCom, was in addition to the land parcel that had to be given as security. The Supreme Court had also asked the central government to grant a no-objection certificate within a week of receiving the corporate guarantee.

But DoT, on its part, refused to furnish the no-objection certificate after Reliance Jio did not agree to assume payment liabilities of RCom to complete the spectrum trading deal between the two companies.

Under the government's spectrum trading guidelines, DoT has the right to recover these dues.

Senior officials of RCom and Reliance Jio had last month also met telecom secretary Aruna Sundararajan to resolve issues flagged by the DoT around payment related to the spectrum deal between the two companies.

Meanwhile, Reliance Jio has also extended the term of the definitive agreement for the acquisition of specified assets of RCom and its affiliates to 28 June 2019, Jio's parent Reliance Industries Ltd said in an exchange filing on 31 December.

The RCom-Jio deal is crucial for the Anil Ambani firm as the beleaguered telecom operator, which had been struggling with a mountain of debt and a failed merger with Aircel, finally decided to wind up its wireless business in December 2017 and announced a deal with Reliance Jio under which RCom's assets, including 122.4MHz of 4G spectrum in the 800/900/1,800/2,100MHz bands, more than 43,000 towers, 178,000 route km of fibre with a pan-India footprint and 248 media convergence nodes covering 5 million sq. ft used for hosting telecom infrastructure, would be bought by Reliance Jio.

RCom wanted to seal the deal by March 2018, but all assets have not been sold yet.

An email query sent to RCom was unanswered till press time.

Reliance Group companies have sued HT Media Ltd, Mint's publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.