In Big Blow to Telecom Majors, SC Rejects Review Plea on Rs 1.47 Lakh Crore Dues

New Delhi: In a huge setback to telecom service providers, such as Airtel, Vodafone Idea, the Supreme Court on Thursday dismissed their plea for relief on payment of adjusted gross revenue (AGR) on recovery of past dues amounting to Rs 1.47 lakh crore, the deadline for paying which is January 23.

The plea was dismissed by a bench comprising Justices Arun Mishra, S A Nazeer and M R Shah, who did not find merit in the review plea.  The recovery of past dues by the government was based on adjusted gross revenue of about Rs 92,000 crore, according to a PTI report.

According to a report in Bar & Bench, the apex court in a judgement in October 2019, had ruled that the Department of Telecom's (DoT) interpretation of AGR would prevail.

“This came as a massive blow to telecom service providers given that the DoT's interpretation brought under its scope most of the revenues "except one or two" causing severe financial implications to the telecom players such as Bharti Airtel and Vodafone, among others.”

The telecom companies had moved the court seeking a review of this judgment, saying that it would have “severe financial implications” and also have an adverse impact on the economy.

The telecom majors had expressed their inability to pay the pending AGR dues, running into lakhs of crores, with Vodafone Idea Chairman Kumar Mangalam Birla also declaring that his company may have to shut shop without government help. Bharti Airtel Chairman Sunil Mittal had also pleaded the government to be “sympathetic” towards telcos, citing “heavy losses” incurred by them since the entry of Reliance Ji0.

According to Vodafone, in its plea, the industry-wide impact of the judgment would be around Rs. 1,80,000 crores, as per the Bar & Bench report.

“Vodafone Idea is struggling with losses for the past three years that ballooned to Rs 50,922 crore in the September quarter of FY20 - the highest quarterly loss in India's corporate history - as it had to make significant provisions for the AGR dues. Airtel reported record losses to the tune of Rs 22,830 crore in the same quarter,” says a report in Business Today.

In fact, on January 8, the counsels for the telcos, Kapil Sibal and Abhishek Manu Singhvi, had sought an urgent hearing of the review petition, as the 

“On the request made for an open court hearing of the matter, Justice Mishra had directed the lawyers to return on Thursday saying that a call would be taken on the same after discussion with Chief Justice of India,  SA Bobde, the master of the roster, says the Bar & Bench report.

In November, Telecom Minister Ravi Shankar Prasad had told Parliament that Bharti Airtel, Vodafone Idea and other telecom companies owe the government as much as Rs 1.47 lakh crore in past statutory dues, and that  there was no proposal at present to waive interest and penalties on such dues, according to PTI.

In replies to separate questions in the Lok Sabha, Prasad had said telecom companies owe the government Rs 92,642 crore in unpaid licence fee, and another Rs 55,054 crore in outstanding spectrum usage charges.

In an affidavit filed earlier in the top court, the DoT said Airtel owed Rs 21,682.13 crore as licence fee to the government and dues from Vodafone totalled Rs 19,823.71 crore, while Reliance Communications owed Rs 16,456.47 crore. BSNL owed Rs 2,098.72 crore, and MTNL Rs 2,537.48 crore.

Holding that interest and penalty have rightly been levied on the telecom companies, the apex court had made it clear that there would be no further litigation on the issue and it would fix a time-frame for calculation and payment of dues by the telecom companies, adds the PTI report.

(With inputs from PTI)