Home Legal News [AGR Dues] First 10% AGR Dues To Be Paid By March 2021; Rest within 10 Years Period: Relief to Telecom Companies by SC

[AGR Dues] First 10% AGR Dues To Be Paid By March 2021; Rest within 10 Years Period: Relief to Telecom Companies by SC

by Preeti Dhoundiyal
Adjusted Gross Revenue DUES

The Supreme Court has held that the telecom companies shall make payment of 10% of AGR dues as liability Clearance by March 31, 2021.

Supreme Court Held

Justice Arun Mishra
Justice Arun Mishra

 Justice Arun Mishra heading the bench rejected the prayer seeking payments by telecom companies in a staggered fashion spanning over 20 years by the Department of Telecommunication and instead allowed the telcos to make payments in a period spanning 10 years.

Directions by the Court on clearing AGR Dues

Directions for payments are as follows:

– With respect to AGR dues, there shall not be any reassessment.

– Teleco’s have to make payments in yearly instalments commencing from 1.04.2021 upto 31.03.2031

– Adjusting Bank Guarantees to be kept alive by telcos until payments have been made

“In case of any default in making payment of annual instalments, interest would become payable as per agreement along with the penalty and interest on penalty and would be punishable by contempt of court.”

The Justice Mishra led bench stated that the NCLT’s approval to decide the issue of whether spectrum can be a subject matter of resolution process has been called for.

The court also held that in light of the officer of the department (DoT)’s unconditional apology, suo motu proceedings against him have been dropped.

ALSO READ- SC to SG Mehta : Whether spectrum can be sold by telecom companies that are undergoing proceedings under the Insolvency and Bankruptcy Code (IBC)?

Time Line of the AGR Dues Case

On June 18, while considering the instant plea by the Department of Telecommunications to allow them to settle the AGR-related dues in a staggered fashion over 20 years, the Supreme Court had directed telecom companies to submit their financial documents.

On June 11, the Department of Telecommunication was directed to reconsider the claims raised on Public Sector Undertakings on the basis of the October 2019 verdict in the case pertaining to AGR dues of telecom companies.

On the demands on PSUs, Justice Mishra observed, “This is an outright misuse of our verdict. You are making a demand of over 4 lac crores! This is wholly and totally impermissible!.”

Observations were made by the bench that raising demands on PSUs on the strength of AGR verdict was uncalled for and that the licenses for telecos and PSUs were of different nature, as the latter was not intended at commercial exploitation.

In March, for proposing staggered payment over 20 years for telecom firms to discharge their AGR dues, the Department of Telecom (DoT) before the commencement of the ongoing coronavirus-forced lockdown had moved the Supreme Court.

A plea in the Supreme Court had been filed by the Department of Telecommunications (DOT) for modification of the order dated October 24, 2019 vis-à-vis arriving at a formula for recovery of past dues from telecom service providers.

The union in the instant appeal stated that it is imperative that the proposal for mode for recovery is approved, even though the Court had widened the definition of adjusted gross revenue (AGR), leaving the three telcos, i.e. Vodafone Idea, Bharti Airtel and Tata Teleservices, collectively facing more than INR1.02 lakh crore in additional licence fees, spectrum usage charges (SUC), penalties and interest.

Supreme Court on March 18 had lashed out at the Centre and telecom companies for doing self-assessment or reassessment of the Adjusted Gross Revenue (AGR) dues fixed by the apex court in its verdict and had rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices seeking review of the October 24 verdict that widened the definition of adjusted gross revenue (AGR) in April.

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