The Supreme Court on Tuesday allowed the telecom companies 10 years to pay up their dues related to adjusted gross revenue (AGR); this is a big relief to all, especially to Vodafone Idea Ltd which would have folded up if asked to cough up over Rs 58,000 crore dues in one go.
A 3-judge Bench headed by Justice Arun Mishra, for whom this is one of the last verdicts before he retires on Wednesday, asked the telcos to make 10% upfront payment of their AGR dues; the timeline for the staggered payments starts from April 1, 2021. The two other judges on the Bench were Justices S Abdul Nazeer and M R Shah.
The Bench sought an undertaking from the MDs and CEOs of the telecom companies for the payment, warning that failure to pay instalments will incur penalty, interest and contempt of court.
Vodafone Idea and rival Bharti Airtel had sought 15 years to pay AGR dues, while Tata Teleservices Ltd wanted 7-10 years. Reliance Jio, which was launched in September 2016, had paid its relatively minuscule dues of Rs 195.18 crore in January.
The department of telecommunications (DoT) had in March appealed to the apex court seeking 20 years timeline for payment of AGR dues, including spectrum usage charge, interest, penalty and interest on penalty. However, the Supreme Court had reservations about granting 20 years' time to telcos, expressing doubt over recovery of dues, especially from Vodafone Idea which has severe liquidity problems.
On October 24 last year, the apex court upheld the DoT’s broader definition of AGR and ordered telcos to pay levies based on that definition, along with interest on the principal amount and penalty. The DoT calculates levies such as SUC and licence fees based on AGR.
The court directed 15 telcos, including the ones which have shut operations, to pay ₹1.47 trillion in AGR dues within three months. In subsequent hearings, the court had rejected dues based on self-assessment by telcos, saying that the calculations of the DoT were final. For Bharti Airtel, the DoT estimate stands at Rs 43,780 crore, but according to the company's self-assessment, it owes Rs 13,004 crore to the DoT. The telco has already paid this amount along with an additional Rs 5,000 crore in ad hoc payment.
The court also left it to NCLAT (National Company Law Appellate Tribunal) to decide whether the spectrum of the insolvent telecom companies like Reliance Communication (RCom), Aircel and Videocon can be part of the insolvency proceedings. It had reserved its ruling on August 24 in this aspect while the question of the staggered dues was reserved on July 20 for the verdict.