NCLAT rejects telecom dept's plea in Rolta insolvency, upholds ₹900-crore resolution plan

The National Company Law Appellate Tribunal (NCLAT) on Thursday rejected the Centre's plea seeking to recover admitted claims of ₹179.19 crore from bankrupt technology company Rolta India, delivering a setback to the Department of Telecommunications (DoT).

A Delhi bench of the NCLAT upheld the National Company Law Tribunal's (Mumbai bench) approval of the ₹900-crore resolution plan submitted by Ashdan Properties, the successful bidder acquiring Rolta India. Under the approved plan, the DoT is treated as an operational creditor and allocated just ₹10 lakh. "The appeal is dismissed," the NCLAT bench said while pronouncing the order. The detailed written judgement is awaited.

The DoT had originally claimed about ₹469 crore towards unpaid licence fees. However, the resolution professional admitted claims worth ₹179.19 crore. Despite this, the approved resolution plan allocated only ₹10 lakh to government and statutory authorities.

According to the NCLT-approved plan, government authorities will recover just 0.06% of their admitted claims. In comparison, secured financial creditors will recover 11.41% of their admitted claims ( ₹808.55 crore), while unsecured financial creditors will recover 0.96% ( ₹64.20 crore) from the ₹900-crore resolution amount.

The dispute centred on how the government's claims were treated under the Insolvency and Bankruptcy Code (IBC). The DoT argued that the resolution plan unfairly allocated only ₹10 lakh against its admitted claims of ₹179.19 crore arising from unpaid licence fees under Rolta's internet service provider (ISP) licence. It asked the appellate tribunal to modify the plan.

However, under the approved plan, the DoT's dues were treated as operational debt, which ranks below financial creditors in the payment waterfall prescribed under the IBC.

Rolta entered insolvency with admitted liabilities of over ₹14,074 crore, while total claims filed by creditors exceeded ₹22,546 crore. Ashdan Properties' ₹900-crore resolution plan translates to an overall recovery of about 6.39% of admitted claims.

Queries emailed to Dr. Mamta Binani, resolution professional for Rolta India, and the DoT remaining unanswered at the time of publishing.

Rolta India was once among India's leading providers of IT, geospatial and engineering solutions, serving government agencies, defence organisations and enterprise clients across sectors.

The dispute between the DoT and Rolta dates back more than two decades. In November 1998, the telecom department granted the Mumbai-headquartered company an ISP licence to establish and operate internet services in the Mumbai telecom circle for five years.

The parties entered into a fresh ISP licence agreement on 30 April 2002, under which Rolta was required to pay licence fees based on its adjusted gross revenue (AGR).

According to the DoT, the company later defaulted on these payments, prompting the department to raise demand notices. Rolta challenged the demands before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which stayed the recovery proceedings while the matter remained pending.

The Mumbai bench of the NCLT admitted Rolta into corporate insolvency in January 2023. The insolvency proceedings shifted the long-running dispute over the DoT's licence fee dues to the insolvency forum, ultimately culminating in Thursday's NCLAT ruling upholding the approved resolution plan.

Krishna Yadav is a Senior Correspondent at Mint, based in New Delhi, and part of the corporate bureau. He joined the newsroom as a trainee in 2023 and quickly grew into his current role. He writes on legal and regulatory developments in corporate India, with a focus on insolvency, taxation, company law, and policy. His reporting includes tracking and breaking key legal stories from the Supreme Court, Delhi High Court, NCLT, and NCLAT.

With a background in law, Krishna is known for simplifying complex legal developments into clear, accessible stories for readers. His work focuses on trends in corporate law and policy that affect businesses. This ranges from explaining tax disputes—like whether coconut hair oil is edible—to writing on why celebrities are seeking personal rights protection. He closely tracks India’s insolvency system, covering issues such as creditor losses, gaps in the process, and challenges in how the framework works in practice.

Krishna also tracks developments within law firms—covering hiring trends, how firms help companies navigate global challenges, and how the legal industry is adapting to artificial intelligence. Beyond legal reporting, he has written long-form pieces, including on-ground coverage of the 2024 general elections, capturing the scale and logistics of polling across India.

Outside work, he enjoys travelling, exploring new places, and reading about geopolitics and history.

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