THE SUPREME Court Thursday dismissed a petition moved by telecom companies, including Bharti Airtel, Vodafone Idea, and Tata Teleservices, seeking a review of its judgment last October that upheld the Department of Telecommunication’s definition of adjusted gross revenue (AGR) and ordered operators to settle liabilities accrued over 14 years within three months.
Thursday’s ruling did not give any extension on the deadline for the operators to submit the AGR dues with the DoT.
While the operators said they are evaluating the option of a curative petition, it is likely that they may have to clear the dues amounting to Rs 1.47 lakh crore by January 23, as per the Supreme Court’s order on October 24, 2019.
Companies with larger liabilities, such as Bharti Airtel and Vodafone Idea, have already raised funds from the market to clear the pending dues. Additionally, the government’s move in November to provide the telecom companies with a two-year moratorium on spectrum payments has resulted in partial freeing-up of cash flow for payment of AGR dues.
“Having perused the review petition and the connected papers with meticulous care, we do not find any justifiable reason to entertain the review petitions. The review petitions are, accordingly, dismissed,” a three-judge bench led by Justice Arun Mishra said in its order.
As of July last year, Bharti Airtel had to pay nearly Rs 21,682 crore in AGR dues, while the combined entity of Vodafone Idea has to shell out as much as Rs 28,308 crore. Debt-laden Reliance Communications, which is currently undergoing insolvency proceedings, owed the government as much as Rs 16,456 crore as of July last year, according to an affidavit filed by the DoT in the apex court.
The total payout by all telecom companies combined could be as high as Rs 1.43 lakh crore after the dues for spectrum usage charges (SUC) linked to AGR is also taken into account.
According to industry sources, while Vodafone Idea may have to shell out as much as Rs 53,000 crore, Bharti Airtel will have to pay nearly Rs 35,590 crore. Tata Teleservices, which sold its business to Bharti Airtel, will have to pay as much as Rs 14,000 crore in AGR dues, sources said.
Bharti Airtel and Vodafone Idea had already provisioned a total amount of Rs 34,767 crore and Rs 44,700 crore, respectively, with respect to the AGR liabilities. Notwithstanding the financial provisions already made, sector experts anticipate significant liquidity constraints for the highly leveraged sector on account of the liability payments.
The Supreme Court judgment on AGR had also impacted non-telecom public sector units, such as GAIL, Power Grid, Delhi Metro Rail Corporation and RailTel.
Following the judgment, the DoT had written to GAIL and Power Grid, asking them to pay AGR fees of Rs 1.72 lakh crore and Rs 1.25 lakh crore, respectively. GAIL, Power Grid and other companies have denied that they owe any money to the DoT, and said they have paid all dues.
The petition moved by RailTel, which seeks a modification and clarification that non-telecom PSUs were not covered in the ambit of the judgment, was mentioned in the Supreme Court by Solicitor General Tushar Mehta Thursday. The court, however, refused to hear the case for now.
In its statement after the judgment, Bharti Airtel said they were evaluating filing a curative petition.
“The money now required to pay punitive interest, penalty and interest on penalty which forms nearly 75% of AGR dues would have better served the digital mission of the country,” Bharti Airtel said in a statement. Vodafone Idea said it would not issue any statement on the issue for now.
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