SC directs Centre to refund Rs 104 crore to RCom

New Delhi: Facing insolvency proceedings, embattled Reliance Communications (RCom) on Tuesday got some relief from the Supreme Court which directed the Centre to refund Rs 104 crore to the telecom firm. The top court upheld TDSAT's December 21, 2018 order which directed the Department of Telecom (DoT) to refund Rs 104.34 crore.

It rejected the Centre's contention that RCom cannot be granted refund as it is under liquidation and continuously defaulting on spectrum deferred payments. A bench of Justices R F Nariman and S Ravindra Bhat said, "On a recapitulation of all circumstances, and the various terms of NIA (Notice Inviting Application) 2013 and NIA 2015, this court is of the opinion that the order of the TDSAT does not call for any interference".

It said the Union government has nowhere disputed the RCom/Reliance Telecom Ltd (RTL) liability on deferred spectrum charges in May, 2018 was Rs 774.25 crores, and the total amount realised upon encashment of the bank guarantees by the company was Rs 908.91 crore.

"There is consequently logic and merit in the contention of RCL/RTL (RCom) that the Union unreasonably refused to refund the excess amounts. 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 bench said.

In these circumstances, there is "no rationale" for the Union government to resist the demand for refund of excess amounts, it added.

"The TDSAT, in the opinion of this court, exercised its discretion, with respect, circumspectly, because the entire amount of 134.66 crores claimed in the application was not allowed; rather the direction issued was in respect of Rs 104.34 crore," it said, adding that TDSAT had noted that the existing charges of Rs 30.33 crore against the company has already been adjusted out of the encashed amount of over Rs 908 crore.

It said, "In view of the foregoing discussion, it is held that there is no merit in the present appeal, which is dismissed without costs".

The government had contended that TDSAT's impugned order is contrary to clauses of NIA 2013 and NIA 2015 and others conditions of the license agreement. It had also cited the default of Rs 21.53 crore with overdue interest amount working out to be Rs 27.63 crore as on March 3, 2019.

The government has further contended that the question of refund of excess amounts retained could not arise.

The telecom firm has on other hand contended that the government's refusal to refund the money amounts to its unjust enrichment at its cost and it has no right over the excess money directed to be refunded by the Tribunal.

Reliance Communications had submitted that despite the directions of the TDSAT, the government has refused to refund the money.