NCLAT to decide within 3 months if bankrupt telcos' spectrum can be sold

The parties in the case involving the Department of Telecom, Aircel and its committee of creditors have been asked by an appellate tribunal to jointly seek an extension of three months to conclude hearings from the Supreme Court (SC).

The decision of if the right of use of spectrum allotted to bankrupt telcos can be sold has to be taken by The National Company Law Appellate Tribunal (NCLAT). The SC mandated three-month deadline to decide on the matter ends on December 13.

“Since the time is going to expire on 13th December, 2020, we request learned counsel for the parties to make a joint request before the Hon’ble Apex Court for extension of time at least by three months, keeping in view the uncertainties that have caused delay in concluding the hearing,” the NCLAT said in its order on Friday.

The SC, in an order dated September 25, had directed the appellate tribunal to hear the matter expeditiously and gave it two months to make its decision.

The parties are likely to seek the extension from the apex court in the coming week, which is most likely to be granted, said a person aware of the developments.

The three month period is to account for the delays that had already occurred as well as the tribunal’s winter break till January, apart from the likelihood of prolonged hearings given the complex nature of the case.

Proceedings were interrupted on account of Amit Mahajan, counsel for the telecom ministry and a member of the bench contracting Covid-19 in the intervening period, resulting in a delay of about two weeks.

While the case was likely to exceed the mandated timeline, the three-member NCLAT bench, headed by acting chairperson, Justice Bansi Lal Bhat, sought the extension as it did not want to be at odds with the SC’s decision, another person directly involved in the matter said.

The main issue among the batch of cases that have been tagged together is that of the Union of India, through the DoT, against Vijaykumar Iyer, resolution professional for Aircel and Dishnet Wireless.

The DoT has contested a National Company Law Tribunal’s approval of a resolution plan from UV Asset Reconstruction Company that involves the transfer of the bankrupt telcos right of use of spectrum, stating that it is a public asset which cannot be sold. The opposing parties have averred that it should be possible under the Insolvency and Bankruptcy Code, given that the debt resolution is also in public interest.