Verdict on staggered AGR payments awaited as SC to hear bankrupt telcos

The Supreme Court on Monday will examine whether the insolvency proceedings of bankrupt telcos Reliance Communications (RCom), Aircel and Videocon Telecom are bonafide, while an order on the timeline of staggered payments of adjusted gross revenue-(AGR) related dues is awaited.

In its last hearing on 20 July, the apex court had directed the Department of Telecommunications (DoT) to submit details of the insolvency proceedings of the bankrupt telcos before the next hearing.

The apex court had also reserved its order on the timeline of staggered payment of AGR-related dues by telecom operators including Vodafone Idea, Bharti Airtel and Tata Teleservices. Both Vodafone and Airtel have requested for a 15-year window to clear the dues, while Tata Teleservices has sought 7-10 years.

Though the top court did not give a date last time to pronounce the order on staggered payments, it is widely expected that the judgment should be made on 10 August.

“All arguments have taken place and the court last time had categorically said no new application can be moved in this matter. It is a reasonable expectation that the order should come out tomorrow,” a legal source said on condition of anonymity.

Even the two main telecom companies at the receiving end of this judgment – Vodafone and Airtel – are expecting that the order will be pronounced on Monday.

On 20 July, the apex court reiterated that there is “no room for self-assessment” and telcos have to treat the AGR dues calculated by the DoT as final. The government wants that the telcos be granted a timeline for payment of dues to avoid insolvency.

The court also expressed doubt over Vodafone Idea’s capacity to clear the dues, asking on how to “rely” on the company for payment over a period given its financial position. The telco has now sought 15 years to pay the dues versus 20 years earlier, accepting dues worth ₹ ₹58,254 crore estimated by the DoT.

The apex court on 24 October 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 that have shut operations, to pay ₹1.47 trillion in AGR dues within three months.

Vodafone Idea has so far paid ₹7,854 crore to the DoT. It still has to clear more than ₹50,000 crore in AGR dues.

According to Bharti Airtel’s self-assessment, it owes ₹13,004 crore to the DoT. The telco has already paid this amount along with an additional ₹5,000 crore in ad-hoc payment. Live Mint