SC to deliver AGR dues verdict today

The Supreme Court today is expected to pronounce its judgment in relation to the payment of Adjusted Gross Revenue (AGR) dues of over Rs 1.6 lakh crore by telecom companies.

The Bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah will lay down timeframe within which the telecom companies are required to clear their AGR dues in line with the Court’s October 2019 judgment.  The Bench had reserved its judgment on this issue on July 20.

During the hearings, the Court was told by Tata Telecom that a window of 7-10 years at least would be required for payment of dues, while Vodafone-Idea (balance dues over  Rs 50,400 crore) suggested payment over the course of 15 years. Bharti Airtel (balance dues Rs 26,000 crore ) was in agreement with Vodafone’s proposal of 15 years. The Department of Telecommunications (DoT), however, stuck to the Union Cabinet’s proposal of payment within 20 years.

While reserving its order, the Court, in unequivocal terms, said it would not entertain objections regarding the assessment of dues. It recorded in its order,

“While hearing the matter an attempt was made to wriggle out of our order in the garb of reassessment or recalculation. However, there can be no adjustment regarding the dues apart from what was stated in the Supreme Court verdict. No objection will be entertained.”

Besides the primary issue of staggered payment of dues, the Court is also expected to rule on the question of whether spectrum can be sold as part of Insolvency and Bankruptcy Code proceedings and the effect of spectrum sharing and licence trading agreements between telecom companies. On whether past AGR dues of bankrupt telcos such as Reliance Communications (nearly Rs 26,000 crore), Aircel (nearly Rs 14,000 crore) and Videocon (Rs 1400 crore) should be paid by companies such as Reliance Jio and Airtel, who have been using the spectrum of the ailing telcos through either spectrum sharing or trading contracts.

These questions had arisen for consideration when the Bench was considering the bona fides of the ailing telecom companies as regards payment of their dues vis-a-vis their respective IBC proceedings. 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. Justice Mishra demits office on September 3.
CT Bureau