Only a legal forum can say whether they qualify as operational debt: experts
With Aircel filing for bankruptcy, it is uncertain whether customers will get back the security deposit on postpaid connections and the amount paid for prepaid recharge. According to legal experts, there is ambiguity on this aspect as it needs to be tested in a legal forum.
In February, Aircel services were disrupted due to its payment issues with other telecom operators and tower firms. Tamil Nadu was a crucial market for Aircel with a customer base of nearly 1.5 crore.
Aircel ultimately decided to file for bankruptcy. Aircel has an outstanding debt of 50,000 crore, of which 15,000 crore is due to financial creditors, while 35,000 crore is to be paid to operational creditors including tower companies, system integrators, IT firms and telecom equipment makers. The firm also owes dues to vendors such as the security agency, housekeeping staff and distributors.
Aircel customers have started to port to other telecom service providers such as Airtel, Vodafone and BSNL. However, according to industry sources, the security deposit and the remaining prepaid balance do not get transferred while porting.
Tharcius S. Fernando from Virugambakkam, an Aircel customer since 1997, has ported to another service provider. However, he is not sure whether he will get back the security deposit. “I was also using roaming facilities due to my frequent travels within and outside the country. Aircel had collected an amount as security deposit from me. When I have settled all my dues and want to get back my deposit amount, I get no response from Aircel and I am in a fix as to how to get back the deposit amount. I am sure there must be many like me facing a similar situation,” he said.
According to legal experts, one of the key questions in the issue is whether the advances paid by customers for future services qualify as an operational debt under the provisions of the insolvency code. In other words, the key issue would be whether advances paid by customers are treated similar to that of debt owed by the firm to banks and other vendors in normal course of business.
“Some benches of the National Company Law Tribunal (NCLT) have ruled advances paid by customers as operational debt, while some others have ruled it is not operational debt,” said a corporate lawyer who did not wished to be named.
He said it has to be seen whether the customers in the Aircel case be allowed to make their claims on security deposit and other pending amounts before the Insolvency Professional, who handles the bankruptcy process and admits claims made by various debtors against the company.
The customer angle came under spotlight, when the Allahabad Bench of the NCLT initiated insolvency proceedings against the real estate firm Jaypee Infratech, in a case filed by banks. However, a few flat buyers moved the Supreme Court against the order and sought protection for the money they invested for buying the flat. The Supreme Court directed home buyers also to file claims before the insolvency professional.
“It has to be seen whether telecom customers are allowed to make similar claims. All these will be clarified when tested before the NCLT or another appropriate judicial forum,” said Anant Merathia, a Chennai-based corporate lawyer. – The Hindu