According to the government, Vodafone Idea now owes Rs 50,399 cr, Airtel owes Rs 25,976 cr and Tata Telecom owes Rs 12,601 cr.

Telecom tower
Money Telecom Monday, July 20, 2020 - 19:52

The Supreme Court on Monday reserved its order on the Adjusted Gross Revenue matter where telecom companies asked the court to allow staggered payment, and said that the total amount payable by telecom companies will not be revised.

As things stand currently according to the government, Vodafone Idea owes Rs 50,399 cr after paying Rs 7,854 cr, Airtel owes Rs 25,976 cr after paying Rs 18,004 cr, and Tata Telecom owes Rs 12,601 cr after paying Rs 4,197 cr. Airtel and Vodafone Idea have pleaded for 15 years time to pay off their dues in a staggered manner.

The SC said it would not hear arguments for reassessment of AGR related dues "even for a second," and said that it would not entertain any objections.

Advocate Mukul Rohatgi, representing Vodafone Idea, told the court that the entire net worth of the company had been wiped out in 15 years, with revenue being spent on liabilities, taxes and dues. Rohatgi also said that the government can retain the Rs 8,200 cr it owes to Vodafone Idea as GST refund.

“Over Rs 1 lakh cr of equity brought in by promoters has been eroded,” he told the court. Rohatgi told the court that the telco had not provided for AGR earlier because they had won in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

Slamming the telco, the bench said that out of the Rs 8,000 crore they have paid so far, Rs 1,000 crore was just paid the previous weekend. Justice Arun Mishra reportedly questioned who the “kingpin” of Vodafone Idea was. 

The telcos had paid their dues based on their assessment of their pending dues, which widely differed from that of the Department of Telecommunications.

Bharti Airtel, represented by advocate Abhishek Manu Singhvi told the court that the Centre wrongly sought dues of Rs 43,000 cr which included spectrum usage charges as well which are not a part of AGR dues, and only licence fee dues were. To this, the bench told Airtel not to try and reopen the case, and that there was “no room for adjustment of dues”.

Solicitor General Tushar Mehta told the top court that Videocon, Aircel (under IBC), and Reliance Jio have paid their dues in full to the government.

The Tata group informed the court that a period of 7 to 10 years will be ideal to pay off its dues.

Rohatgi for Vodafone said that they accept the AGR dues of Rs 58,000 cr, but only said that “the only way the judgment of the top court can be complied with” is if a 20-year time period is given.

To this, Justice Arun Mishra questioned if the telecom company was suggesting or threatening the court. “Your tone and tenor is not good,” he reportedly said.

Following this, both Airtel and Vodafone Idea have asked for 15 years to pay off their respective AGR dues.

Solicitor General Tushar Mehta said the government is fine with a 20-year payment formula to clear AGR dues. Mehta contended before the apex court that the Centre is of the view that if extension is not given, insolvencies that the top court fears might begin to happen tomorrow.

"Spectrum itself acts as a security for ensuring payment of AGR dues", Mehta contended before the bench.

Mehta submitted before the bench that the Cabinet considered the issue and decided on a 20 year period. The government has provided this relief due to the cascading effect on the economy, Mehta added.

The court reserved order on a timeline of AGR payments. The matter will be heard again on August 10.

The Supreme Court also said that several telecom companies, AGR dues of nearly Rs 39,000 crore, are currently under liquidation and it is essential for the court to go into bonafides of the decision to invoke insolvency.

The bench asked insolvency records of Reliance Communications, Videocon, Aircel to be submitted within 7 days.

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