IT Correspondent
New Delhi, Sept. 1:
A bench comprising Justices Arun Mishra, S Abdul Nazeer and M R Shah of the Supreme Court allowed telecom companies to pay Adjusted Gross Revenue (AGR) charges within a period of ten years, on Tuesday.
The SC directed the telecom companies to clear their AGR dues in line with the Court’s October 2019 judgment and also allowed them to pay 10% of the dues, till March 31, 2021, in light of the COVID-19 pandemic. The SC made it clear that interest would accrue in case of default on payment of annual instalments, and that the same may also invite contempt of court. These annual instalments are required to be paid on February 7 every year. The Bench once again clarified that no revaluation as regards AGR dues would be entertained.
During the hearings, the telecom companies had proposed different timelines for clearing of dues. While Tata Telecom submitted a window of at least 7-10 years to pay the dues, Vodafone-Idea suggested payment over the course of 15 years. Bharti Airtel was also in agreement with Vodafone’s proposal of 15 years.
The Department of Telecommunications (DoT), had stuck to the Union Cabinet’s proposal of payment within 20 years, when the judgment on this aspect of the matter was reserved on July 20, and the court, had said in an unequivocal terms, that it would not entertain objections regarding the assessment of dues.
Another aspect of the matter that the Court considered was the question whether spectrum can be sold by the companies through proceedings under the Insolvency and Bankruptcy Code. On this aspect, the Court held that whether spectrum can be sold or not should be decided by the National Company Law Tribunal (NCLT) at the first instance.
The bench was considering the bona fides of the ailing telecom companies as regards payment of their dues vis-a-vis their respective proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC). While the DoT had argued that the spectrum cannot be sold, the telecom companies had argued that the right to use spectrum, purchased through an auction, is an asset and this right or licence can be subject to IBC proceedings. The verdict on this aspect of the matter was reserved on August 24.
After the SC had delivered its judgement on the interpretation of the term “AGR”, it had granted the telecom companies a period of 90 days to clear the dues. Keeping in view the precarious financial and economic health of the country as well as the telecom industry, the DoT in March had sought a modification of the Court’s order and proposed a time-frame of twenty years for staggered payment of these dues, in line with a formula evolved by the Union Cabinet.
As per DoT estimates, the AGR dues are worth Rs 1.19 lakh crore of which Rs 26,896 crore have been received so far and the balance is estimated at Rs 92,520 crore at present. It includes- AGR dues for Vodafone Idea: Rs 58,254 crore (amount paid- Rs 7,854 crore, including Rs 1,000 crore paid on 17 July 2020 and Rs 6,854 crore paid in three tranches earlier). Balance- Rs 50,400 crore. Bharti Airtel: outstanding dues- Rs 43,980 crore(amount paid-Rs 18,004 crore), balance due – Rs 25,976 crore and Tata Teleservices- outstanding- Rs 16,798 crore(amount paid-Rs 4,197 crore), balance due- Rs 12,601 crore.