"What Is The Guarantee That You Will Not Escape? SC Reserves Order On Plea Seeking Time For Staggered Payment Of AGR Dues By Telecom Companies

The Supreme Court on Monday reserved orders in the plea by Department of Telecommunications (DoT) seeking to allow telecom companies to make payments of the AGR dues in a staggered fashion over 20 years.

A bench of Justices Arun Mishra, MR Shah & S. Abdul Nazeer also made it clear that it shall not entertain any objections for re-assessment/ re-calculation of AGR in light of the decision passed by Top Court in October 2019 and directed Reliance Communications, Sistema, Shyam Teleservices & Videocon to submit their insolvency details within 7 days. 

Court noted that, in doing so it needed to ensure that the IBC was not being misused by companies in order to escape liabilities.

While warning all parties to dispense with payments pertaining to public revenue as had already been directed by the Court, the Justice Arun Mishra led bench expressed reservations regarding keeping the payment of dues pending.

"What is the guarantee that you will not escape? Some of you are foreign companies and may even go into liquidation. What is the security that you can give us?" Justice Mishra asked.

Senior Advocate Mukul Rohatgi appearing for Vodafone Idea stated that his client had suffered losses during its operations in India since 2006. 

Rohatgi: Several columns indicate profit and loss. My lords take note that 2010-11 revenue is 43000 crore while expenditure is 36000 crore. There are also other expenses mentioned in the table of affidavit. Net loss of 2857 crore in the first year and so on.

Justice Mishra also pulled up all telecom companies that due to make the AGR payments since October 2019, remarking that none of the Telcos shall be allowed to "wriggle" out of their liabilities. He also said that the Solicitor General must not bat for re-assessment of dues as this would then mean going against orders of the Court which mandated the payment of AGR dues in terms of the requisite heads.

Justice Mishra: Don't try to wriggle out of this. This can never be permitted in the Country. This country is suffering due to you people.

In light of this, the bench asked the Counsel for all telecom companies as to what would be the ideal and reasonable timeline for them to make the requisite payments. On those lines, the bench reserved its verdict and stated that it would now take up the matter for further consideration on August 10, 2020.

On June 18, the Supreme Court had directed telecom companies to submit their financial documents while considering the instant plea by the Department of Telecommunications to allow them to settle the AGR-related dues in a staggered fashion over 20 years.

On June 11, it had directed the Department of Telecommunication to reconsider the claims raised on Public Sector Undertakings on the basis of the October 2019 verdict in the case pertaining to AGR dues of telecom companies.

The bench  had also observed that raising demands on PSUs on the strength of AGR verdict was uncalled for. The bench pointed out that the licenses for telecos and PSUs were of different nature, as the latter was not intended at commercial exploitation.

"This is an outright misuse of our verdict. You are making a demand of over 4 lac crores ! This is wholly and totally impermissible!", Justice Mishra observed on the demands on PSUs.

In March, before the commencement of the ongoing coronavirus-forced lockdown, the Department of Telecom (DoT) had moved the Supreme Court proposing staggered payment over 20 years for telecom firms to discharge their AGR dues.

The Department of Telecommunications (DOT) has filed a plea in the Supreme Court for modification of the order dated October 24, 2019 vis-à-vis arriving at a formula for recovery of past dues from telecom service providers.

In the instant appeal, the union had stated that even though the Court had widened the definition of adjusted gross revenue (AGR), leaving the three telcos, i.e. Vodafone Idea, Bharti Airtel and Tata Teleservices, collectively facing more than INR1.02 lakh crore in additional licence fees, spectrum usage charges (SUC), penalties and interest, it is imperative that the proposal for mode for recovery is approved.

However, on March 18, Supreme Court lashed out at the Centre and telecom companies for doing self-assessment or reassessment of the Adjusted Gross Revenue (AGR) dues fixed by the apex court in its verdict.

In April, the Supreme Court had rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices seeking review of the October 24 verdict that widened the definition of adjusted gross revenue (AGR).