No Open-Court Hearing On AGR: Supreme Court

The Supreme Court has rejected the request of Bharti AirtelNSE 3.09 %, Vodafone Idea, Tata Teleservices, Hughes Communications India and some state-run firms for an open-court hearing of their petitions to review the verdict on adjusted gross revenue (AGR), which has left companies facing combined dues of more than Rs 4.45 lakh crore.

But the review petitions will be heard in chamber by the same three-judge bench, led by Justice Arun Mishra, which delivered the October 24 order that backed the Department of Telecommunications (DoT) and widened the definition of AGR to include non-core revenue, leaving telcos and even non-telcos facing hefty statutory dues. The other two members on the bench are Justices AA Nazeer and MR Shah.

The telcos and state-run companies on Wednesday mentioned the case before Mishra and sought an urgent hearing, a lawyer who was present in court said. It’s not clear when the review petitions will be heard. In India, less than 2% of review petitions have been successful.

The urgency of operators as well as non-telecom companies that hold telecom licences stems from the fact that they have just two weeks to pay AGR arrears — the deadline is January 23. While companies say payment of such huge dues would erode their finances and could bring operations to a halt, the government has refused to provide any relief unless directed by the court.

Advocates Kapil Sibal, Abhishek Manu Singhvi, Arvind Datar, Shyam Divan and Mahesh Agarwal represented the private companies, while solicitor general Tushar Mehta represented the state-run enterprises. Airtel’s shares closed 3% higher at .`458.95 on Wednesday, while Vodafone Idea rose more than 9% to end at Rs 651 on the BSE, where the Sensex remained nearly flat.

Telecom and non-telecom companies holding telecom licences were left facing huge dues around licence fees, interest and penalties after the top court ruled that revenue accruing to telecom operators, including those from handset sales, rent, dividends, interest income, profit from sale of scrap, termination fees and roaming charges, would also be included in AGR. However, gains from the sale of capital assets and insurance claims would not be a part of it. Till then, telcos had argued that only revenue derived from licensed services should be part of AGR.

The order, which said all revenue, including from non-core sources, would count as gross revenue for calculating AGR, implied that all companies with even minor telecom businesses will have to pay dues based on entire revenue with retrospective effect.―Business Telegraph