Supreme Court to pronounce verdict on Tuesday on AGR-related issue

Last Updated 31 August 2020, 17:23 IST

The Supreme Court is scheduled to pronounce its verdict on Tuesday on issues including the timeline for staggered payment of Adjusted Gross Revenue-related dues which run into about Rs 1.6 lakh crore by telecom companies.

A bench headed by Justice Arun Mishra is also all set to deliver the verdict on the point as to whether spectrum can be sold by the telecom companies facing proceedings under the Insolvency and Bankruptcy Code (IBC) and how the AGR related dues can be recovered from them.

The top court had in October 2019 delivered the verdict on the AGR issue for calculating government dues of telecom companies, such as Vodafone Idea, Bharti Airtel and Tata Teleservices, as licence fee and spectrum usage charges.

Later, the Department of Telecom had in March this year moved a plea seeking permission for staggered payment in a time period of nearly 20 years for the telecom companies.

The bench, which also comprised justices B R Gavai and Krishna Murari, had reserved the verdict on July 20 on the aspect of granting timeline to telcos for staggered payment of AGR- related dues by saying that it will not hear "even for a second" the arguments on reassessment or re-calculation of the AGR.

Prior to this, it had asked the telecom companies to file their books of accounts for last ten year and give a reasonable time frame for paying the AGR dues and later got miffed when some senior lawyers started disputing the dues being calculated by the DoT.

It had said that the period of 15-20 years sought by some of the telecom companies was not reasonable and had asked the Centre as to how it would secure the payment of dues by them.

Later, the top court on August 24 was informed by the DoT that all liabilities including AGR-related dues should be cleared by telecom firms prior to spectrum trading as per the guidelines.

After hearing arguments, it had then reserved the verdict on the point as to whether spectrum can be sold by the telecom companies facing proceedings under the IBC and other related issues.

The DoT had further told the top court that it can seek to recover dues from sellers and buyers of spectrum, jointly or individually.

The DoT had said that assessment of dues is under process and once the Supreme Court clarifies the legal position on spectrum sharing, it will move to recover the outstanding amounts from the telecom firms.

The DoT had said that no demand has been raised against Reliance Jio and Airtel for part dues of Reliance Communications (RCom) and Videocon respectively.

The top court will also give its finding on payment of dues, if any, on Jio and Airtel which have spectrum sharing pacts with RCom, Aircel and Videocon respectively.

On August 21, the top court had directed the DoT to apprise it the basis of spectrum sharing done by telecom companies and how much is the liability of the sharers.

The top court asked the DoT secretary to file a specific affidavit apprising it about who was using the spectrum from the date of grant of license and from which date the respective sharing of the spectrum has taken place.

It had asked the DoT what was the amount paid by Reliance Jio for using 23 per cent of Reliance Communication (RCom's) spectrum.

On August 20, the top court had expressed concern over non-payment of the AGR related dues by the telecom companies which are under insolvency saying "without paying for the horse, telcos are taking a ride".

On August 14, the top court had sought the details of spectrum sharing pact between RCom and Reliance Jio and said as to why the company using the spectrum of the other firm cannot be asked to pay the AGR related dues to the government.

The Centre had earlier told the top court there was a difference of opinion between two of its ministers (DOT and the Ministry of Corporate Affairs) on the issue of sale of the spectrum during insolvency proceedings.

(Published 31 August 2020, 17:23 IST)

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