Supreme Court AGR case update Highlights: Vodafone Idea, Bharti Airtel counsels tell court the companies licences can be cancelled if they do not pay up within the agreed time.
The Supreme Court today directed telecom companies to provide details with respect to three key points: the roadmap for payments in terms of the period required to repay AGR dues; timeline of payment, and security they can provide to guarantee payment. The Supreme Court was giving its verdict on a plea from the telecom department to allow companies to make staggered payment for their adjusted gross revenue (AGR) dues.
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He noted that undertakings will have to be there and that the court cannot allow staggered payout without securing government dues.
Justice Arun Mishra said, nobody has seen the next 20 years, can't allow extension based on a "gentleman's promise". How can 20 years be said to be reasonable? he asked referring to the government demand that staggered payment be allowed over a period of 20 years. The Solicitor General had earlier said the cabinet has proposed a period of 20 years for the payment of dues keeping in mind various considerations.
Telco counsels: On Justice Mishra's doubts about the guarantee that telecom companies will make the payment, Vodafone Idea counsel Abhishek Manu Singhvi and Bharti Airtel counsel Mukul Rohatgi said the court can go ahead and cancel their licences if the companies do not pay up within the stipulated period.
Rohatgi also pointed out that Bharti Airtel has already paid Rs 18,000 crore, 70 percent of the Rs 25,600 crore received by DOT from all companies.
PSU AGR dues highlights:
Questions were raised on how the department made demands from oil PSUs when the judgement never dealt with PSUs.
Demands to the tune of Rs 4 lakh crore are being raised with ulterior motives, Justice Mishra said, ordering that the demand against PSUs be withdrawn.
Justice Mishra asked:What nonsense is being done in the name of our judgement?
How could demands have been issued when our judgment does not touch them?
The government must explain how our ruling is used for that purpose, adding, this is a misuse of judgement.
He noted that there are vast differences in the licenses of PSUs and licenses of telcos. The government must clarify if demand order has been revoked, he said. "Is the govt trying to overwhelm us by raising surcharge demands," he asked.
Court order on PSU dues: DOT is directed to clarify raising of demands within 3 days of the orders.
The Solicitor General told SC that 'PSUs were license holders is our justification'. He said they will file necessary affidavits to explain their position.
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The court also noted that none of the telecom companies have done anything
The next hearing in the telecom AGR dues case is scheduled for June 18.
This hearing comes after the one held on March 18, where the apex court pulled up the Department of Telecommunications (DoT) for allowing telcos to self-assess payable dues.
The case will be heard by a bench headed by Justice Arun Mishra and including Justices MR Shah and S Abdul Nazeer. The same bench, on March 18, held that “no further objections would be allowed against payable dues.”
On March 16, Solicitor General Tushar Mehta appearing for the DoT had sought staggered payment over 20 years of AGR dues by telecom companies. The plea also asked that telcos not be charged a penalty and interests on penalty and principal beyond the date of the judgement.
The hearing is likely to address the solicitor general’s plea seeking reasonable time to resolve payments.
Company reports and Lok Sabha submissions give an idea of how much is at stake.
For Bharti Airtel, the AGR dues as per DoT is Rs 35,500 crore whereas it is Rs 13,000 crore as per the company's self assessment. So far, it has paid Rs 18,800 crore. As per DoT, it still has to pay Rs 17,500 crore.
For Vodafone Idea, DoT claims that the remaining payable is Rs 53,000 crore while the company claims it is Rs 21,500 crore. So far, the company has paid Rs 6,900 crore. As per DoT, it still has to pay Rs 46,100 crore.
Here is a timeline of the case so far:
> The DoT in October 2019 issued bills to major telecom operators seeking payment of licensing and spectrum dues as per the AGR.
> The companies included telcos such Vodafone Idea, Bharti Airtel, BSNL and non-telcos which had revenues from telecommunication services such as ONGC and SAIL, etc.
> Telcos disputed the adjusted amount demanded by the Centre, post which the DoT approached the Supreme Court for redressal of the matter.
> The apex court had on October 24, 2019, ruled that the statutory dues need to be calculated by including non-telecom revenues in the AGR of telecom companies. It had upheld the DoT's definition of AGR and termed "frivolous" the nature of objections raised by the telecom service providers.
> The court had ordered telcos to clear total dues of Rs 1.47 lakh crore in line with the telecom department's estimate.
> After this, many telcos let the date slip by citing economic slowdown and poor finances, due to which the SC in February 2020 rapped DoT and telcos for ignoring court orders
> The SC on March 18 held that no further arguments against the dues owed would be heard
> Vodafone Idea, Tata Teleservices and Bharti Airtel owe the bulk of the dues.
> Airtel has already paid Rs 13,000 crore, but this is less than half of the company’s estimated liabilities
> Meanwhile, Vodafone has so far paid Rs 3,500 crore out of the "self-assessed" liability of Rs 21,533 crore it estimates it owes, but much lower than the government demand.
