Vodafone Idea gets relief as Supreme Court allows the Government to re-examine AGR-related issues

In a major relief to Vodafone Idea Limited, the Supreme Court on Monday allowed the Department of Telecommunications (DoT) to reconsider the additional Adjusted Gross Revenue (AGR) demands raised against the company after noting that the government’s 49% equity stake in the company and the interests of over 20 crore consumers warranted a fresh look at the issue [Vodafone Idea Limited v. Union of India].

A Bench of Chief Justice of India BR Gavai and Justice Vinod Chandran passed the order after the Central government agreed to reexamine the additional demands in view of changed circumstances.

"Taking into consideration the change in circumstances that now the government itself has induced substantial equity in the petitioner company, and further that the issue involved is likely to have direct bearing on the interest of 20 crore consumers, in the particular facts, we see no impediment in the Union of India reconsidering the issue and taking appropriate decision in law," the Court said.

It clarified that the issue is one which falls within the policy domain of the government and the Court will not prevent the same, if the government considers such reexamination necessary in public interest.

"We clarify that this is a matter within the policy domain of the Union. If the Union, in the particular facts of the circumstances, addressing a larger public interest, desires to reconsider the issue, there should be no reason as to why the Union should be prevented from doing so," the Bench said.

The order was passed on a plea by Vodafone Idea against additional AGR demands.

Appearing for the Central Government, Solicitor General Tushar Mehta told the Court that in view of the change in circumstances over the large 5 years, it was willing to reconsider the fresh AGR demands.

He was referring to the government infusing capital and taking 49% stake in the company as well as the interests of 20 crore consumers of the company's services.

The SG therefore sought the permission of the Court to re-examine the AGR demands.

The writ petition filed by Vodafone Idea arose from the DoT issuing fresh additional demands towards AGR dues for the period up to FY 2016–17. These demands were contested on the ground that they were contrary to the Supreme Court’s earlier orders of July 2020 and September 2020, which had crystallised all AGR liabilities for that period.

The company pointed out that by the Court’s directions, its total liability had been finalised at ₹58,254 crore up to FY 2016–17 and the Court had barred any recalculation, self-assessment or reassessment of dues.

Despite this, DoT has continued to raise further demands for the same period, describing them as “above and beyond” the crystallised AGR dues and subject to further revisions through departmental assessments, CAG audits or court cases.

According to Vodafone, DoT’s subsequent claims exceeded ₹5,960 crore. For instance, an August 2023 show-cause-cum-demand sought around ₹292 crore for FY 2015–16.

More recently, an August 2025 letter from DoT computed dues of approximately ₹9,450 crore up to FY 2018–19, of which nearly ₹5,606 crore (as of March 31, 2025) pertained to the already settled period up to FY 2016–17.

Vodafone Idea submitted that if spectrum usage charges for the same cut-off are also included, the disputed component rises to nearly ₹6,800 crore.

The company argued that while the DoT continues to assert the right to raise additional demands, operators themselves have not been permitted to correct what they describe as clerical and arithmetical errors in the original assessments. Earlier applications by Vodafone Idea for reconciliation of such errors were rejected by the Supreme Court in July 2021 and again at the review stage in January 2025.

The latest petition sought quashing of the additional demands and enforcement of the earlier Supreme Court orders, contending that either the dues for the period up to FY 2016–17 must be treated as completely crystallised, or else a fair reconciliation exercise should be directed in line with the Deduction Verification Guidelines of February 2020.

The Central government today agreed to reexamine the additional demands.

The Court said that the government is at liberty to do the same and proceeded to dispose of the petition.

Senior Advocate Mukul Rohatgi and advocate Mahesh Agarwal appeared for Vodafone Idea.