NCLT stops DoT from canceling Aircel spectrum, licence

The National Company Law Tribunal on Thursday directed the department of telecommunications (DoT) not to cancel the telecom license and spectrum issued to Aircel which had shut operations many years now.

The Mumbai NCLT bench said, "the relief sought by Aircel is that due to issuance of the demand notice by DoT, apprehension has been created that the same may be suspended. We hereby direct that the clauses of "moratorium" are squarely applicable to this bankruptcy process, hence need not be interrupted or hampered by any authority."

The apprehension is that the DoT demand notice seeking Rs 55.70 crore issued on April 13, 2018, may lead to cancellation of the license of the company.

"Cancellation of the licence shall adversely affect the business. Only on the basis of the license, the company is running its business. Therefore, the licence is an essential requirement for running the business," said a tribunal bench of MK Shrawat and Chandra Bhan Singh.

It also noted since spectrum and operating license are the most crucial components of Aircel's core business, its cancellation/taking back will lead to the stalling of the resolution process as "without such an asset, no party shall take interest in acquiring the company.

The tribunal bases its decision on the objectives cited in the 'preamble' of the IBC which states the resolution process should aim at maximizing the value of the assets under resolution and thus help the revival of the company.

Therefore, NCLT instructed "DoT not to make any attempt to cancel the license issued to Aircel," as the usage of license/spectrum is akin to "essential goods or services" because without these the company cannot run its business."

However, it said since "license/spectrum is an asset of the state over which Aircel has no ownership rights and therefore DoT can approach Trai or TDSAT for remedy.