Government Tells Telecom Companies That AGR Is Sacrosanct

The government has strongly supported the payment of annual gross revenues (AGR) by the telecom companies following the Supreme Court order asking the telcos to cough up Rs 92,000 crore under the provision.

Telecom Minister Ravi Shankar Prasad conveyed this message to Sunil Bharti Mittal and Rajan Bharti Mittal of Airtel, who had gone to meet him to apprise him of the “pain and stress” being faced by telecom companies.

Tata Group Chairman N. Chandrasekaran, Kumar Mangalam Birla and a Vodafone representative were also scheduled to attend the meeting, but they did not turn up.

Prasad is learnt to have conveyed to the Mittals that the “severity, directness and unambiguity” of the Supreme Court order emphasises the fact that “AGR is sacrosanct” and the telecom companies have to pay up.

“Licensees have made a futile attempt to wriggle out of the definition in an indirect method, which was rejected directly in the decision of 2011 between the parties and it was held that these very heads form part of gross revenue”, the court had said.

In its judgement on October 24, the Supreme Court had made scathing observations over-ruling the telecom operators” argument contesting the definition of AGR and its implementation.

The court observed that while computing the licence fee, the gross revenue has to be taken into consideration. “The argument had been raised on a hypothetical basis without foundational facts to raise the same is thus, liable to be and is rejected at the threshold,” said the court dismissing the telecom operators” argument on gross revenue calculation.

The court also emphasized on incorporating gross revenue in the books. “What is gain over and above the book value in the year in question, has to be taken into consideration towards gross revenue received. Submission to the contrary raised on behalf of the licensees cannot be accepted,” it observed.

The court upheld the findings of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). “TDSAT has not accepted the submission of the licensees. We find the finding to be appropriate. No case for interference in the findings recorded by the TDSAT is made out,” it said.

Dismissing telecom operators” claims, the apex court noted that no litigant can be permitted to reap fruits on such inconsistent and untenable stands and litigate for decades in several rounds, which is not so uncommon but is disturbing scenario projected in very many cases. “We have examined the matter upon merits and then aforesaid conclusion indicates frivolous nature of objections,” the Supreme Court said.―Outlook India