By Raju Vernekar
New Delhi/Mumbai, Aug 25:
The Supreme Court on Monday said it may order cancellation of spectrum allocation if telecom companies are not ready to pay the dues related to Adjusted Gross Revenue (AGR) to the Government and opined that the Department of Telecom (DoT) should cancel the spectrum licence if the dues are at a risk of being wiped out.
A bench comprising Justices Arun Mishra, S Abdul Nazeer and M R Shah reserved the verdict on the point as to whether spectrum can be sold by the telecom companies facing proceedings under the Insolvency and Bankruptcy Code (IBC) and how the AGR dues are to be recovered from them. The bench will also give its finding on payment of dues, if any, on Jio and Airtel which have spectrum sharing pacts with RCom, Aircel and Videocon respectively.
It said that spectrum trading guidelines mandate clearing of pending dues by seller before entering any kind of sale agreement and if the sellers do not clear their liabilities then according to the guidelines the dues are transferred to the buyer. If spectrum license is cancelled, it needs to be surrendered to the DoT and later auctioned for higher realization.
Solicitor General Tushar Mehta, appearing for the DOT said all liabilities including AGR-related dues should be cleared by telecom firms prior to spectrum trading as per the guidelines. He told the apex court that the DOT can seek to recover dues from sellers and buyers of spectrum, jointly or individually.
The Government has collected Rs 32,000 crore in AGR and spectrum fees since SC’s rap . Total AGR dues and repayments so far: As per DoT estimates, telecom companies owe a total of Rs 1.19 lakh crore with payments received so far at Rs 26,896 crore. The balance, therefore, is currently at Rs 92,520 crore. AGR dues for Vodafone Idea: outstanding dues as per DoT at Rs 58,254 crore. Vodafone Idea has paid Rs 7,854 crores so far including Rs 1,000 crore paid on 17 July 2020 and Rs 6,854 crore paid in three tranches earlier. Balance due is Rs 50,400 crore (Vodafone’s self-assessment pegs dues at Rs 21,533 crore).
AGR dues for Bharti Airtel: outstanding dues as per DoT at Rs 43,980 crore. Bharti Airtel has paid Rs 18,004 crore so far- balance due is at Rs 25,976 crore (Airtel’s self-assessment pegs dues at Rs 13,004 crore). AGR dues for Tata Teleservices: outstanding dues as per DoT at Rs 16,798 crore. Tata Tele has paid Rs 4,197 crore so far- balance due is at Rs 12,601 crore ( Tata Tele’s self-assessment pegs dues at Rs 2,197 crore)
The SC is expected to deliver judgment in the first week of September, based on three aspects: First, Staggered Payment – DoT seeking 20 years, Bharti and Voda-Idea seeking 15 years. Second, can spectrum (or right to use spectrum) be transferred, assigned, sold under IBC. Third, additional liabilities, if any, on Jio, Airtel for past dues of R.Comm, Videocon, Aircel. Jio had spectrum sharing and trading pacts with R.Comm. Airtel had spectrum sharing and trading pacts with Videocon, Aircel.
