Supreme Court dismisses telcos’ pleas on ‘errors’, no change in dues

While Bharti Airtel had estimated its AGR dues at Rs 18,000 crore and Vi (Vodafone Idea) at Rs 25,000 crore, the DoT told the Supreme Court the two companies owed it Rs 43,000 crore and Rs 58,000 crore, respectively.

“All applications are dismissed,” a bench of Justices L Nageswara Rao and S Abdul Nazeer and M R Shah said. (File Photo)

THE SUPREME Court Friday dismissed applications by telecom companies seeking correction of what they claimed were “arithmetic errors” in the calculation of Adjusted Gross Revenue (AGR) payable to the Department of Telecommunications (DoT).

“All applications are dismissed,” a bench of Justices L Nageswara Rao and S Abdul Nazeer and M R Shah said.

While Bharti Airtel had estimated its AGR dues at Rs 18,000 crore and Vi (Vodafone Idea) at Rs 25,000 crore, the DoT told the Supreme Court the two companies owed it Rs 43,000 crore and Rs 58,000 crore, respectively.

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Uncertainty ends

The question of Adjusted Gross Revenue (AGR) dues payable by telecom companies to the government had been a point of dispute since 2003. In 2011, the SC first ruled that TRAI and TDSAT did not have the jurisdiction to exclude certain items of revenue included in AGR. On Friday, it dismissed all pleas by companies over arithmetic errors in the calculation of AGR.

The SC order will particularly intensify the financial troubles for debt-laden Vi, market analysts said. It has to pay nearly Rs 6,000 crore in AGR dues every year between 2021 and 2031. The company also owed Rs 96,270 crore in deferred spectrum obligations, and another Rs 23,000 crore to banks and financial institutions as of March 31 this year.

Appearing for Vodafone Idea, Senior Advocate Mukul Rohatgi said it was not cast in stone and the top court could rectify the “arithmetic error”. Senior Advocate A M Singhvi, representing Bharti Airtel pointed to cases of duplication and of payments made but not accounted for while calculating the dues. Tata Teleservices counsel Senior Advocate Arvind Datar contended that the SC ruling only barred reassessment but not rectification of errors.

Upholding the DoT stand on what constitutes AGR, the Supreme Court had, on October 24, 2019, paved the way for recovery of AGR dues amounting to about Rs 1.6 lakh crores from telcos. Meanwhile, the Centre urged the court to allow telecom companies which pleaded financial difficulties to pay the dues over a 20 year period. By an order on September 1, 2020, the court allowed the companies to pay the same over a 10-year period, starting April 1, 2021.

It, however, warned of contempt of court proceedings against companies that failed to pay the stipulated AGR dues. The ruling said the interest on the AGR amount due for the year will also continue to accrue until the payment is made.

Ananthakrishnan G

Ananthakrishnan G. is a Senior Assistant Editor with The Indian Express. He has been in the field for over 23 years, kicking off his journalism career as a freelancer in the late nineties with bylines in The Hindu. A graduate in law, he practised in the District judiciary in Kerala for about two years before switching to journalism. His first permanent assignment was with The Press Trust of India in Delhi where he was assigned to cover the lower courts and various commissions of inquiry. He reported from the Delhi High Court and the Supreme Court of India during his first stint with The Indian Express in 2005-2006. Currently, in his second stint with The Indian Express, he reports from the Supreme Court and writes on topics related to law and the administration of justice. Legal reporting is his forte though he has extensive experience in political and community reporting too, having spent a decade as Kerala state correspondent, The Times of India and The Telegraph. He is a stickler for facts and has several impactful stories to his credit. ... Read More

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