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SC gives telcos 10 years to pay back AGR dues; spectrum issue goes to NCLT [Read Judgment]

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New Delhi: The Supreme Court today has given 10 years time for staggered payment of adjusted gross revenue (AGR) related dues by telecom giants including Vodafone Idea, Bharti Airtel and Tata Teleservices.

A three-judge bench of Justices Arun Mishra, B.R. Gavai and Krishna Murari, in its verdict today, said that the telecom firms get 10 years to clear their AGR dues with instalments to be paid by March 31, of every succeeding year.

The Court has issued the directions given below:
(i) That for the demand raised by the Department of Telecom 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 that there shall not be any re­assessment.
(ii) That, at the first instance, the respective Telecom Operators shall make the payment of 10% of the total dues as demanded by DoT by 31.3.2021.
(iii) TSPs. have to make payment in yearly instalments commencing from 1.4.2021 up to 31.3.2031 payable by 31st March of every succeeding financial year.
(iv) Various companies through Managing Director/Chairman or other authorised officer, to furnish an undertaking within four weeks, to make payment of arrears as per the order.
(v) The existing bank guarantees that have been submitted regarding the spectrum shall be kept alive by TSPs. until the payment is made.
(vi) In the event of any default in making payment of annual instalments, interest would become payable as per the agreement along with penalty and interest on penalty automatically without reference to Court. Besides, it would be punishable for contempt of Court.
(vii) Let compliance of order be reported by all TSPs. and DoT every year by 7th April of each succeeding year.

The court has warned the telecom companies that any default in payment of their annual instalments will accrue interest and non-payment and will also invite contempt of court proceedings.

The court has shown agreement with Senior Advocate Harish Salve’s submission during the hearing that the question of whether spectrum can be a subject matter of IBC proceedings should be decided by NCLT first. The court has, therefore, directed NCLT to decide on the issue.

SC to hear plea in AGR case

The Supreme Court on August 24 had reserved its judgement in the matter regarding duration for staggered payment of adjusted gross revenue (AGR) related dues by telecom giants.

The court had been hearing the telecommunications companies undergoing IBC proceedings on the larger question of whether spectrum can be sold under IBC proceedings and liability of companies towards AGR dues of companies whose spectrum they are sharing.

The Supreme Court on July 20 had reserved its order on the timeline of staggered payment AGR related dues by telecom giants including Vodafone Idea, Bharti Airtel and Tata Teleservices. The court had heard parties on liability and time frame for making the payment and noted that while hearing the matter, attempts were made to wriggle out of the liability like asking for reassessment and recalculations.

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The court before today had not decided the reasonable period for staggered payment of AGR dues. While the government had proposed 20 years, Telecoms like Airtel and Vodafone had asked for at least 15 years. Airtel’s AGR demand was Rs 43,989 crores out of which it paid Rs 18,004 crores, and Voda Idea have paid Rs 7,854 crores out of its total AGR demand of Rs 58,254 crores.

Read the judgment here;

AGR-judgement

– India Legal Bureau

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