Tue. Mar 28th, 2023
AGR hearing }} Photo: Reuters

In October 2019, the Supreme Court ruled that non-core revenue will also be needed to get included by the telecom operators to calculate levies. This ended a 14 year-long battle between the telecom operators and the government on AGR. The industry has been already neck-high in dues and penalties and this adds a few thousand crores more to that. Following the decision, the liabilities of companies like Bharti Airtel and Vodafone Idea limited increased to ₹ 90,000 crores.

Based on that verdict of the Supreme Court, on Tuesday, granted ten years’ time to the telecom operators to pay the dues. The decision was made by a three-judge bench, headed by Justice Arun Mishra. Their time will start from 1st April 2021. Therefore, the will need to clear their dues by 31st March 2031.

However, a portion of the payment will need to be made by March 31st, 2021. The court has decided that the network carriers will need to pay 10 percent of the total dues by the end of March next year.

The companies, like Bharti Airtel and Vodafone Idea Limited, that had already paid the required amount will again have to make their next payment by March 31st, 2022. The companies failing to pay their dues before the given time will add in interest on the pending dues. The three-judge bench had set the interest rate of 8 percent to be added to the pending dues.

The court also added that the chairmen of the companies will have to give undertakings for the payments. The order also added that failing to pay the default payment by the ending date of installment will not only add interest to the dues but also add a penalty and contempt of court.

The companies will also need to report compliance of the order of the Supreme Court by April 7th of each year during the ten year time period of payment of their dues. Also, the court said that the existing bank guarantees that have been submitted regarding the spectrum shall be kept alive by the telecom companies until their AGR dues are paid in full.

On March 6th, Bharti Airtel had to pay added ₹ 25, 976 crores in terms of AGR dues. Vodafone Idea had to pay ₹ 54,754 crores during the same time. The Tata group has a pending due of ₹ 12,601 crores. Reliance communications also had pending dues of ₹ 25,194 crores, but, the Anil Ambani company has since filed for insolvency which is now under the proceedings.

On the August 14th hearing, the court looked into the matter that whether the companies that are using the spectrum of insolvency filed companies can be asked to pay the dues on their behalf. Some companies in the telecom industry that are under insolvency proceedings are Aircel, Videocon Telecommunications Ltd., and Reliance Communications Ltd. The judge bench of the apex court also asked if the spectrum of those telecom operators who are under insolvency proceedings can be sold. The court did not answer this. Although, they said The National Company Law Tribunal will take the decision whether the spectrum can be sold during insolvency proceedings. The National Company Law Tribunal must take a decision on this matter within two months by way of reasoned order.

The court judgment also added, “Shared operator TSPs [telecom service providers] cannot be saddled with the liability to pay the past dues of AGR of the licensee, that have shared the spectrum with the original licensees.”

Therefore, the dues of a telecom operator who are sharing other’s spectrum will be to the extent they had used the said spectrum.

If a spectrum trading has taken place, the court said that the in the buyer had bought the entire spectrum of a company then they will be liable to the past dues which they had the knowledge of during the transaction.

During the AGR hearing, the telecom operators asked the court to grant them more time for the payment of the dues. Solicitor General Tushar Mehta put in a request to the bench to extend the time period of clearing their dues to 20 years.

However, the court said that the decision of the amount of time was taken after extensive deliberations and consultation. Also, the decision had taken into account the government’s concerns. Also, according to the opinion of the Supreme Court, 20 years for the payment of the dues is excessive in nature.


By Swastik Bhattacharjee

A student from Kolkata. Currently content creator at The Indian Wire.

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