The Department of Telecommunications (DoT) Monday approached the Supreme Court with a plea that the telcos impacted by the court’s judgment on adjusted gross revenue (AGR) be given up to 20 years to complete the payment of pending dues as calculated by the Telecom ministry. These dues, the DoT suggested, could be paid by the telcos in annual instalments.
In its plea before the SC, the DoT has also suggested that the interest on the past unpaid amount, penalty and the interest on penalty with respect to past dues, may be frozen as of October 24, 2019.
“However, the TSPs (telecom service providers) shall continue to be liable for interest, penalty, and interest on penalty for unpaid dues of LF (license fee) and SUC (spectrum usage charges) which arise prospectively after the date of judgment,” the DoT said in its plea.
The DoT has also cited concerns voiced by banks which met ministry officials last month. With the telecom sector under the stress that it is, the DoT has said that if forced to pay AGR immediately, the companies could face insolvency which would have a severe ripple effect on the overall economy, as well as the overall service quality of all telcos.
Though the court was scheduled to hear the AGR matter Tuesday, it is unclear when the matter will be taken up as lesser number of judges have been sitting as a preventive measure to contain the COVID-19 outbreak. The matter, Justice Arun Mishra said Monday, would be listed before the same three-judge bench which initially heard the matter.
The plea by DoT seeks SC’s permission to modify its October 24, 2019 order to the extent that it relaxes the payment schedule. On October 24, 2019, the apex court had upheld DoT’s definition of AGR, and said that all telcos must pay their dues within three months, that is by January 23, 2020.
None of the telcos, however, paid the said dues by the stipulated deadline, in hopes of a bailout package by the DoT. Earlier between October 24 and January 23, the telcos had tried to unsuccessfully persuade the DoT as well as the SC to get more time for payment. No such relief was, however, given by the court, while the DoT repeatedly maintained that any change in timeline could be done only by the SC.
On January 23, however, the DoT issued a notification saying that there would be no coercive action against the telcos for non-payment of AGR, until further notice. The DoT’s evening notice was preceded by early morning correspondence from both Bharti Airtel and Vodafone Idea to the Telecom ministry, in which they said that they would not be paying any AGR dues as of now as the matter was “sub-judice”.
The non-compliance of its orders by companies as well as the DoT notice asking no coercive action against telcos enraged the apex court. 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, the top court had on February 14 come down heavily on all parties, and suggested that there was “no law left in the country”.
It had then also asked all the companies to pay the full AGR dues by March 17, the next date of hearing, failing which it would summon the managing directors and other directors of these companies.
After the SC rap, both Bharti Airtel and Vodafone Idea, facing payout of more than Rs 36,000 crore and Rs 53,000 crore, respectively, scrambled to pay their dues. Over the past month, Bharti Airtel has deposited Rs 13,004 crore as AGR dues, based on its internal assessment, and claimed full compliance with the SC’s orders.
Vodafone Idea on the other hand paid Rs 3354 crore on Monday, in addition to the Rs 3500 crore it had paid in two separate instalments over the last month, and claimed to have paid the principal part of pending AGR.
Earlier this month, the company had in a notification to the exchanges said that total AGR dues payable by the company between financial year 2006-07 and 2018-19, according to its internal self-assessment, stood at Rs 21,553 crore. This amount includes a principal AGR amount of Rs 6,854 crore, and the interest on AGR up to February 2020, Vodafone Idea had told the exchanges.
In a separate affidavit filed Monday, the DoT official who had issued the January 23 notification asking no coercive action against telcos, has tendered unconditional apology to the court. In his affidavit, the staffer has said that he did not intend to go against the orders of the court, and that it was a bonafide mistake on his part.
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