SC rejects telecom companies’ curative petition on AGR dues
The curative petition challenged the October 24, 2019 judgment in favour of the government, permitting DoT to include all non-telecom revenue in calculations of AGR
NEW DELHI: The Supreme Court has dismissed curative petitions by telecom companies such as Bharti Airtel and Vodafone Idea against an October 2019 verdict that requires them to pay over ₹1 lakh crore towards adjusted gross revenue dues (AGR) to the department of telecommunications (DoT).
In an order dated August 30 and uploaded to the top court’s website on Thursday, a three-judge bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud said, “We have gone through the Curative Petitions and the connected documents. In our opinion, no case is made out within the parameters indicated in the decision of this Court in Rupa Ashok Hurra v Ashok Hurra (2002).” The 2002 decision lays down the parameters for entertaining a review or curative petition against the top court’s order if the decision carries any apparent error or causes manifest injustice.
The bench, also comprising justices Sanjiv Khanna and BR Gavai, decided the matter in chambers and rejected the applications of the telecom companies for an open court hearing.
The curative petition challenged the court’s October 24, 2019 judgment that ruled in favour of the government, permitting DoT to include all non-telecom revenue in calculations of AGR.
As per the figures originally placed before the court, companies such as Bharti Airtel and Vodafone Idea were required to pay ₹43,980 crore and ₹58,254 crore, respectively. Other firms included Reliance Telecom ( ₹25,199 crore), Tata group ( ₹16,798 crore) and Aircel ( ₹12,389 crore). Review petitions filed by the companies against the verdict were dismissed in January 2020.
Saddled with a huge liability that threatened their business and with insolvency proceedings pending against some of the companies – Aircel, Reliance Telecom, Sistema Shyam and Videocon Telecommunications – the Centre proposed to the court in March 2020 to permit the AGR dues to be paid by way of 20 equal instalments.
The Centre’s application was partly allowed on September 1, 2020. The court allowed the telcos to pay annual instalments for 10 years, from April 2021 to March 31, 2031. Companies were directed to pay a penalty and penal interest in case of default besides being liable for contempt of court proceedings.
Since this order effectively modified the October 2019 judgment, the effective challenge in the curative petition was against this decision.
During proceedings in the top court in 2020, the Centre said some of the AGR dues stood paid and revised the total outstanding dues to roughly over ₹1.43 lakh crore. The Bharti Airtel group deposited ₹18,000 crore bringing its outstanding balance to ₹25,976 crore while Vodafone Idea deposited ₹3,500 crore swelling its unpaid corpus to ₹54,754 crore. Even Tata had dues worth over ₹12,600 crore. Even government telecom providers BSNL and MTNL had accumulated dues to the tune of ₹5835 crore and ₹4352 crore respectively.
The consolidated dues as of date are not known.
To be sure, the concept of AGR is a revenue-sharing agreement which arose in the light of the policy framed by the government under provisions of the Indian Telegraph Act which gives the Centre exclusive privilege of establishing, maintaining and working telegraphs. The October 2019 judgment upheld the Government’s interpretation that revenues from various heads will be included in calculating AGR.
Most telecom companies in the past self-assessed the AGR dues and submitted figures to the court that were less than half the amount calculated by DoT. The September 2020 judgment ended any future possibility of re-assessment as it held, “For the demand raised by the DoT in respect of the AGR dues based on the judgment of this court, there shall not be any dispute raised by any of the telecom operators and there shall not be any re-assessment.”