SC bench slams telcos for seeking recalculation of AGR dues, says it can 'impose more costs than any other court before'

'The calculation that has been given by DoT is to be treated as final; there can be no scope of re-assessment,' the Supreme Court held.

FP Staff July 20, 2020 20:08:19 IST
SC bench slams telcos for seeking recalculation of AGR dues, says it can 'impose more costs than any other court before'

The Supreme Court on Monday asserted that there can be no going back on adjusted gross revenue (AGR) dues by telcom companies. The court also lashed out at companies for trying to seek recalculation of the dues, saying that it can 'impose more costs than any other court before' if they do so.

The companies have been asked to pay the pending dues due to a Supreme Court ruling on 24 October last year when it upheld the government's broader definition of AGR, on which it calculates various levies like spectrum usage charges and license fees.

During the hearing, some companies, including Airtel and Tata Group argued that the dues payable should be limited to only license fee dues and SUC (spectrum usage charges) should not be included in the telecom department's demand.

To this, a Supreme Court bench comprising Justices Arun Mishra, S Abdul Nazeer and MR Shah said, "We will decide on the limited issue of time to be provided. This is a waste of our time, we will impose very heavy costs. We will impose more costs on telcos than any other court before. Telcom companies are trying to seek recalculation and to dilute the judgment."

The court said, "Have heard all parties at length on time window to be allowed. An attempt was made to wriggle out of this order under the guise of the recalculation, reassessment. There can be no going back on AGR dues. No question of entertaining any objection to the demand. The calculation that has been given by DOT (Department of Telecom) is to be treated as final; there can be no scope of re-assessment."

Come up with 'appropriate' time frame: SC tells telcos

Some companies like Vodafone Idea and Bharti Airtel had earlier asked the court to grant a 20-year time frame to pay the dues. However, on Monday, they sought a 15-year timeline instead.

Nevertheless, Solicitor General Tushar Mehta, appearing for the Central government, said that the government wants to allow a time period of twenty years, saying that it was reasonable, as reported by Financial Express.

During the hearing, the bench observed that 15 or 20 years is not a reasonable time period and the companies should come forward with appropriate time frame.

The court also noted that some companies with AGR dues of over Rs 38,000 crore are presently in the process of liquidation, CNBC-TV18 reported. The judges remarked, "We are not sure if IBC ((Insolvency and Bankruptcy Code) is being misused by the companies to escape liabilities. We will go into bonafides of these companies going into insolvency. AGR Dues of Rs 35-40,000 crore are recoverable from the companies under IBC."

The bench reserved its verdict on the issue of timeline for staggered payment of AGR-related dues by telcom companies.

The judges further stated in their order, "All records, insolvency details of RComm, Videocon, Aircel to be submitted within seven days."

The next hearing in the matter has been scheduled for 10 August. The issue of companies under liquidation to be considered on 19 August.

On 18 June, the top court was informed by the Centre that the Department of Telecommunications (DoT) has decided to withdraw 96 percent of the Rs 4 lakh crore demand for AGR related dues raised against non-telcom PSUs like GAIL.

The court had asked the private telcom companies including Bharti Airtel, Vodafone Idea to come out with a “reasonable payment plan”, make some payment to “show their bona fide” and file their books of accounts for the last 10 years.

Background of the case

The court, on 24 October last year, had ordered that non-telcom revenues should be included in the AGR for calculating statutory dues such as license fee and spectrum charges.

The DoT calculated that Bharti Airtel, Vodafone Idea and others owe as much as Rs 1.47 lakh crore in past dues, including penalties and interest, while non-telcom firms, who had taken some licence from it, owed another Rs 2.65 lakh crore.

On 16 January this year, a bench headed by Justice Arun Mishra dismissed petitions of telcom firms seeking review of that order saying it did not find any "justifiable reason" to entertain them.

With inputs from PTI

Updated Date:

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