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Monday, February 24, 2020

Govt relief to telecom firms angers SC: all dues must be paid, no one will be spared

The apex court’s observations came during the hearing of a plea moved by telecom companies in which they sought the court’s permission to negotiate with the DoT on the payment schedule for AGR.

Written by Aashish Aryan | New Delhi | Updated: February 15, 2020 5:59:59 am
Govt relief to telecom firms angers SC: all dues must be paid, no one will be spared The Supreme Court Friday came down heavily on the Department of (DoT) Telecommunications as well as telecom companies. (File)

The Supreme Court Friday came down heavily on the Department of Telecommunications (DoT) as well as telecom companies such as Bharti Airtel and Vodafone Idea for failing to comply with its October 24, 2019 judgment on payment of dues under the adjusted gross revenue (AGR) head and said that the way everyone was behaving suggested there was “no law left in the country”.

“What is happening in this country? What is the law? What is the respect for Supreme Court’s order? We had dismissed the review. But not even a penny has been deposited so far. And there is a stay passed by the desk officer of your government,” a three-judge bench headed by Justice Arun Mishra observed.

The bench also included Justice S Abdul Nazeer and Justice M R Shah.

Explained

Could hit quality of services

The payment of Rs 1.47 lakh crore by telcos could lead them to cut investment in operational infrastructure which could hit quality of services for consumers. It could result in further consolidation of a sector that has already been reduced from 10 telecom operators to just three — with Vodafone Idea the most hit.

The apex court’s observations came during the hearing of a plea moved by telecom companies in which they sought the court’s permission to negotiate with the DoT on the payment schedule for AGR, and whether they could deposit the amount in a staggered manner.

Read | DoT scrambles for cover, Bharti says will pay Rs 10,000 crore by Feb 20

The bench, however, refused to hear any submissions made by the counsel for the parties, and, instead, expressed anguish on how its order asking the companies to pay AGR dues was, in effect, stayed by a “desk officer” of the DoT, who had, vide a notification, said that until further orders there should be no coercive action against telecom companies.

“Your desk officer has the temerity to stay our order. This is not how your desk officers can behave. They can’t annul Supreme Court orders. If this is not the outcome of money power, what else is this?,” Justice Mishra observed, adding that the said order must be withdrawn within the next “thirty minutes” or he would make sure that the officer was behind bars.

Also Read | Why SC hard line on AGR could lead to a windfall for govt, but bigger phone bills for you

Apart from DoT, the companies covered by the AGR judgment also faced a lot of heat for not having paid their respective dues by the January 23 deadline.

During the hearing which lasted close to 40 minutes, Justice Mishra was insistent on initiating contempt against the companies for not paying. Later, he issued show-cause notice to the telcos and asked them as to why action should not be taken against them.

In its written order, the three-judge bench later said that all companies should, by March 17, comply with earlier directions to make the AGR payments, failing which the Managing Directors (MD) and directors of these companies covered by the AGR judgment also have to be personally present in the court on that date.

In its order, the SC also said that the case projected a “very disturbing scenario”, where “companies have violated the order passed by this Court in pith and substance”.

“In spite of the dismissal of the review application, they have not deposited any amount so far. It appears the way in which things are happening that they have scant respect to the directions issued by this court,” said the court.

Earlier in the day, during the hearing, Solicitor General (SG) Tushar Mehta, appearing for the Centre, tried to defuse the situation saying that the courts should ask for an explanation from the officer of the DoT who had passed the order directing that there should be no coercive action against the telcos. Justice Mishra, however, rejected this suggestion and stated that the said officer had done what he had to and that there could no explanation for the same.

“He has done already his job. Let us draw contempt against these fellows and these companies for acting like this. I will not spare anybody in this. It is being taken lightly,” he observed.

During the hearing, Justice Mishra also observed that it seemed as if the DoT was doing all this to “oblige the companies” and warned that he would also include the same in the written order.

Though it drew sharp protests from SG Mehta, there was little effect on Justice Mishra, who appeared to calm down only after Justice Shah intervened. Justice Mishra, however, also remarked that he would not spare anybody, and said “Kisi ko nahi chorenge hum…kisi ko nahi chorenge isme” (we will not spare anybody… nobody will be spared in this).

This mood was reflected in the written order as well. The bench said that the DoT notification should not have been passed by the officer at all.

“A desk officer of the department of telecommunications has the temerity to pass the order to the effect of issuing a direction to the Accountant General, another constitutional authority, ‘not to insist for any payment pursuant to the order passed by this court and not to take any coercive steps till ‘further orders.’ This is nothing but a device to scuttle order of this court,” the order said.

The notification released on January 23, signed by a director of the licence finance policy wing of the DoT, said that there should be no coercive action against the telecom companies until further orders. Following the SC’s directive, the order was withdrawn by the DoT on Friday, with directions that “immediate necessary action in compliance with the judgment” of the SC on October 24, 2019 should be taken.

On October 24, 2019, the SC had upheld the DoT’s definition of AGR and said since the licencees had agreed to the migration packages, they were liable to pay the dues, the penalty on dues, and the interest on penalty due to delay in payments. The top court had then given the telcos three months to clear their AGR dues.

That three-month deadline ended on January 23, before which the telcos had unsuccessfully tried to persuade the DoT to give them more time to pay the dues. Having failed there, the telcos again approached the apex court seeking a review of the October 24 judgment, which was also turned down.

Two days before the stipulated deadline was to end, the telcos moved the top court again, seeking to “work out feasible terms mutually with DoT” to ensure that they remain a “going concern”.

The total payout by all telecom companies could be as high as Rs 1.47 lakh crore after dues for spectrum usage charges (SUC) linked to the AGR payout are also taken into account. Industry sources said that 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. And Tata Teleservices, which sold its business to Bharti Airtel, will have to pay as much as Rs 14,000 crore in AGR dues.

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