On January 25, the Supreme Court declined to entertain Airtel’s request for clarification regarding its order instructing the telecom giant to pay Rs 112 crore to the now defunct Aircel. Following the apex court’s decision not to entertain the plea, Airtel decided to withdraw its application.
Airtel argued in its application, that the resolution plan to revive Aircel did not receive approval from the Reserve Bank of India (RBI). The application stated, “UV Assets Reconstruction Company, the successful resolution applicant, despite admittedly leaving ‘no stone unturned,’ has failed to secure the mandatory approval of the Reserve Bank of India required for acquiring shares of the Aircel entities in order to implement the resolution plan, resulting in the implementation of the resolution plan becoming practically impossible.”
Given the unfeasibility of the resolution plan, Airtel sought Supreme Court approval to deposit Rs 112 crore in an escrow account with the registry, aiming to protect its interests in case Aircel undergoes liquidation. However, the Supreme Court refused to entertain this plea.
On January 3, the Supreme Court mandated Airtel to remit Rs 112 crore to the now defunct Aircel, settling its Spectrum Trade Agreements (STA) and other outstanding dues.
In 2016, Airtel engaged in eight spectrum trading agreements with Aircel Limited and its subsidiary Dishnet Wireless, obtaining the right to use spectrum in the 2,300 MHz band. However, in 2018, Aircel entered the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016.
During the insolvency proceedings, Airtel had a liability of Rs 453 crore to Aircel for STA and other dues. The Resolution Professional (RP) of Aircel requested Airtel to fulfill this payment in 2019. Airtel, however, only paid Rs 341 crore, retaining Rs 112 crore as Aircel owed it for other transactions.
The case escalated to the Supreme Court after conflicting judgments were issued by NCLT and NCLAT. The Supreme Court ruled that once a company is admitted to the insolvency resolution process, preferential treatment to one creditor over others is impermissible.
