The Supreme Court has allowed Aircel employees to file a contempt case against Bharti Airtel, its unit Bharti Hexacom and the telecom department for not returning Rs 453 crore to the company as ordered by the apex court.
“Permission to file contempt petition is granted,” the court said on Wednesday. It said Bharti Airtel and Bharti Hexacom could be added as party respondents in the case.
The order is a big win for the employees of debt-laden Aircel, 300 of whom approached the top court after Sunil Mittal-owned Airtel and the Department of Telecommunications failed to release Rs 453 crore, as ordered by the SC, after the amount was pledged through bank guarantees in a spectrum sale deal.
The Supreme Court also upheld an earlier verdict that cancelled the bank guarantees. This effectively means Airtel may now have to pay cash to Aircel. “All parties (including Axis Bank and Bharti Airtel) to proceed on the basis that the three bank guarantees referred to… stand cancelled and shall no longer be used for any purpose whatsoever,” the court said.
Airtel and Axis Bank, which provided the bank guarantees, did not respond to ET’s queries on the matter.
The 300 employees had filed a plea on January 2 asking the SC to “initiate contempt proceedings” against DoT, Airtel and its units for committing a “contumacious act” by not returning the bank guarantees as directed in November. The employees said that without the payments, they were unable to meet their basic financial needs.
Aircel, which is undergoing a corporate insolvency resolution process, and its unit Dishnet Wireless had earlier appealed to the SC to look into the delays in getting the payments from the government and Airtel.
“This is a win-win for the employees who can now be hopeful to get their past and present dues. We were racing against time because the corporate insolvency resolution process is about to get completed and employees need their dues before the process closes. Their dues are about Rs 300 crore,” said advocates Mohit Paul and Shikha Sarin, who represented the Aircel employees.
The battle between Airtel, Aircel and the government has been on for more than a year. Airtel, the country’s secondlargest telecom operator, had paid Rs 298 crore in cash and submitted bank guarantees worth.`453 crore to telecom department on behalf of cash-stricken Aircel, adjusting the amount against its Rs 3,500-crore deal to buy Aircel’s spectrum.
The lapse of the bank guarantees effectively means Airtel has to pay Rs 453 crore to Aircel. DoT has until January 25 to return Rs 298 crore to Aircel.
Aircel, being run by resolution professional Deloitte under the Insolvency and Bankruptcy Code, is trying to raise funds to restart operations, generate revenue and sell assets or businesses to repay at least part of the Rs 19,000 crore it owes to banks.
It needs cash to pay salaries and for daily operational expenses. The National Company Law Tribunal has granted time till later this month to find buyers for Aircel’s assets.
