The Delhi High Court has directed the Department of Telecommunications (DoT) not to revoke (RCom) telecom licenses for another 10 days and has asked the defunct telco to approach the dedicated bankruptcy court for relief.

DoT on Tuesday told the court that RCom is a “dead horse that is getting beaten to revive it unlike other telcos which still have their licenses valid.”

“I am of the view that the only remedy for the petitioner is to approach the NCLT…Accordingly, while permitting the withdrawal of the petition, the interim arrangement as directed on 19th July 2021 will continue for a period of 10 days,” said Justice Rekha Palli.

The court’s directions on Monday will be of slight relief to Rcom’s resolution professional Deloitte, since the company’s 20 licenses were due to expire on July 19 and DoT had refused to renew it. RCom was seeking an interim order from the court to prevent DoT from cancelling its licenses which would have meant that it would have to surrender its most valued asset – spectrum – to the government, virtually killing its resolution process under IBC.

“Their horse has died by flux of time and they are seeking to revive it,” said a counsel representing DoT.

Now, RCom’s RP may head for National Company Law Tribunal (NCLT) but that is exactly where the case was for the last two weeks, till they appealed to Delhi HC.

RCom’s fate is close to the wire since if its license is not renewed , its entire asset monetisation plan falls flat , leading to big loss for lenders.

“My license was expiring. I have got a mandatory right under the government guidelines to get a migration,” said senior advocate Mukul Rohatgi, representing RCom. He pointed out to the court that the DoT was seeking operational dues which do not take priority over financial dues. “Operational dues are paid at time of resolution,” he added. The telecom department has pegged dues of at least Rs 26,000 crore against RCom.

Under the IBC proceedings, RCom’s CoC in March 2020 had cleared a resolution plan that would see asset reconstruction firm UVARCL pick up the company’s spectrum for Rs 12,760 crore, staggered over 12 years, with Rs 5 crore of upfront cash payment.

That is a big chunk of the Rs 20,000-23,000 crore expected from the sale of assets in RCom and its two units – Reliance Telecom and Reliance Infratel. Besides spectrum, the assets on sale include towers, fibre, enterprise business, data centres, and land.

Lenders’ claims under IBC had totalled over Rs 57,000 crore. But DoT, as an operational creditor, stands to recover only a fraction of its dues if and when the asset monetisation takes place under IBC.

The resolution plans for RCom and Reliance Telecom are yet to be cleared by NCLT. The tribunal though has cleared the sale of towers under Reliance Infratel to a Reliance Jio unit for nearly Rs5,000 crore, which though hasn’t been implemented yet.