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SC dismissed the appeal of centre against TDSAT order to refund ₹104.34 crores lying unadjusted to R

UNION OF INDIA v. RELIANCE COMMUNICATION LIMITED & ANR. CIVIL APPEAL No. 32 OF 2020 on 07th January.

The appeal made in the Supreme Court was dismissed as there was no merit present this was dictated by Justice R. F. NARIMAN and Justice S. RAVINDRA BHAT

Sistema Shyam Teleservices Ltd. was a successful applicant in respect of NIA 2013, in 1956 RCL merged with Sistema Shyam Teleservices Ltd. Union also accepted this. Further, in 2015 the Union invited bids for auction .This was also successfully auctioned by the respondents RCL and RTL. In terms of NIA 2013, Rs  281.45 crores were due from RCL which couldn’t be paid. Occurring at the same time the due payable for NIA 2015 was Rs 492.79  by the respondents. They couldn’t make these charges.

The respondents approached TDSAT complaining of acute financial crunch as well as interim orders made in the course of litigation with lenders, to seek relief by way of extension of time towards payment of deferred spectrum charges. The reliefs claimed were declined by TDSAT. Consequently, Civil Appeal was preferred to the Supreme Court which was disposed of by granting time to the respondent licensees till 12.05.2018 for making payments towards deferred spectrum installment charges. However, they couldn’t make payments within the specified time. On 13.08.2018, the respondent licensees submitted fresh bank guarantees for the sum of Rs 774.25 crores towards the next instalments of deferred ₹ spectrum liability. They also urged to release the excess of Rs 134.66 crores encashment. The amount urged to pay is the diference between the amount the union urged for late payment. The Union had accepted fresh bank guarantees towards the subsequent spectrum liability Rs 774.25 crores. The Union however, did not refund the excess sums. As a consequence, the respondents approached the TDSAT in execution proceedings and sought a direction for the return of Rs 134.66 crores, i.e. the excess amounts and also the release of the bank guarantee amounting to Rs 108.95 crores. TDSAT directed the union to return the excess of Rs.104.34 crores to the respondents.

In this appeal, the union made the following contentions that the TDSAT’s order is against the provisions in the NIA 2013 and NIA 2015. The respondents were defaulting in the payment of the spectrum, therefore the question of refund of excess amounts retained could not arise was contended.

The Court held that: “These issues could not have been gone in execution proceedings but were properly the subject matter of substantive proceedings.”

The respondents submit that the union cannot refuse to pay the amount directed by the TDSAT. They say that the union can get back the dues in the deferred payment through the Insolvency and Bankruptcy Code. So the union has to return the excess amount withheld by the appellants.

The SC held that there are logic and merit in the respondent’s contention and so the Union cannot just reject the order of the TDSAT. “The Union’s argument that there were subsequent defaults or short payments in respect of liability towards later periods, or its objection that the impugned directions could not have been issued in execution proceedings, are insubstantial.”

The order of the TDSAT does not call for any interference was held by the SC because the entire claim of refund by the respondents was not allowed only the part was allowed. Therefore the appeal was dismissed by the Supreme Court.

–  Manusri Ramakrishna

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