[Breaking] AGR Dues: Supreme Court to deliver tomorrow its verdict on period to be allowed for staggered payment of AGR dues by telcos
Litigation News

[Breaking] AGR Dues: Supreme Court to deliver tomorrow its verdict on period to be allowed for staggered payment of AGR dues by telcos

Besides the primary issue of staggered payment of dues, the Court is also expected to rule on the question of whether spectrum can be sold as part of IBC proceedings.

Shruti Mahajan

The Supreme Court will tomorrow pronounce its judgment in relation to the payment of Adjusted Gross Revenue (AGR) dues by telecom companies.

The Bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah will lay down timeframe within which the telecom companies are required to clear their AGR dues in line with the Court's October 2019 judgment.

The Bench had reserved its judgment on this issue on July 20.

During the hearings, the Court wad told by Tata Telecom that a window of 7-10 years at least would be required for payment of dues, while Vodafone-Idea suggested payment over the course of 15 years. Bharti Airtel was in agreement with Vodafone's proposal of 15 years. The Department of Telecommunications (DoT), however, stuck to the Union Cabinet's proposal of payment within 20 years.

While reserving its order, the Court, in unequivocal terms, said it would not entertain objections regarding the assessment of dues. It recorded in its order,

"While hearing the matter an attempt was made to wriggle out of our order in the garb of reassessment or recalculation. However, there can be no adjustment regarding the dues apart from what was stated in the Supreme Court verdict. No objection will be entertained."

Besides the primary issue of staggered payment of dues, the Court is also expected to rule on the question of whether spectrum can be sold as part of Insolvency and Bankruptcy Code proceedings and the effect of spectrum sharing and licence trading agreements between telecom companies.

These questions had arisen for consideration when the Bench was considering the bona fides of the ailing telecom companies as regards payment of their dues vis-a-vis their respective IBC proceedings. While the DoT had argued that the spectrum cannot be sold, the telecom companies had argued that the right to use spectrum, purchased through an auction, is an asset and this right or licence can be subject to IBC proceedings.

The verdict on this aspect of the matter was reserved on August 24.

After the Supreme Court, in October 2019, delivered its judgment on the interpretation of the term "Adjusted Gross Revenue", it granted the telecom companies a period of 90 days to clear the dues that would accrue.

Keeping in view the precarious financial and economic health of the country as well as the telecom industry, the DoT in March sought a modification of the Court's order and proposed a time-frame of twenty years for staggered payment of these dues, in line with a formula evolved by the Union Cabinet.

While hearing this plea in March, the Court had pulled up the DoT for allowing telecom companies to self-assess the dues payable by them. The Court had made its displeasure with the telecom companies very clear, stating that the continued attempts made by these companies seeking re-assessment of the October 2019 order amounted to fraud on the Court.

More recently, the Court asked the Centre to consider withdrawing its demand of AGR dues from PSUs saying that the October 2019 ruling did not bring PSUs under its purview. This demand later was withdrawn by the DoT and communicated to the Supreme Court.

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