SC Asks DoT To Reconsider Claims Made On PSUs Based On AGR Judgment; Says 'It's A Misuse Of Our Verdict [Read Order]

The Supreme Court on Thursday 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.

"Our judgement could not have the basis for demands on PSUs", the bench observed.

The bench also directed the telecom companies to file affidavits explaining the time needed by them to clear the dues on account of the AGR verdict.

The matter will be next considered on June 18.

A bench of Justices Arun Mishra, S. Abdul Nazeer & MR Shah passed the order while considering an application filed by DoT to allow telecom firms to pay the mammoth AGR dues worth Rs 1.43 lakh crore in a staggered fashion spread over 20 years.

Solicitor General Tushar Mehta, appearing for DoT, submitted that one-shot payment of dues could be detrimental to the telecom sector, which is already reeling under economic duress.

"There could be adverse impact on telecom service and consumers will suffer. Services might get costlier and this could be disadvantageous to the consumer", the SG submitted.

The bench asked about the rationale behind seeking 20 years time period.

The bench also asked what is the guarantee that the telecos will clear the dues within the time frame.

The bench 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.

"They don't provide services like other telcos for commercial exploitation. Imposing AGR dues on PSUs may not be in public interest", he added.

"We would request you to withdraw this (demand on PSUs) otherwise we will take strict action against them(DoT officers)", Justice Mishra asked.

He continued  "We want them to file an affidavit on how this could be done by them? [DoT officer]? We will punish them! We will punish them!"

At this juncture, the Solicitor General requested the Court to clarify whether the telecom verdict doesn't apply to PSUs.

Turning down this request, Justice Mishra said  "Why should we clarify ?"

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.

The top court, which was also anguished by frequently published newspaper articles on the AGR issue, said all Managing Directors of telecom companies will be personally responsible and will be held for contempt of court for any such future newspaper articles.

A bench of Justices Arun Mishra, S A Nazeer and M R Shah refused to take up the Centre's plea for allowing telecom companies to pay AGR dues in 20 years, saying the application will be taken up after two weeks.

The Union had also contended in its averments that this modification is extremely important and thereby the approval of the proposal for mode of recovery as envisaged by the Government in the administrative hierarchy, keeping in mind the larger economic consequences on the nation.

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).

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