‘Misconceived’: SC junks pleas by Vodafone, Airtel, Tata Teleservices for AGR dues waiver

The Supreme Court on Monday dismissed the pleas of telecom majors Vodafone, Airtel and Tata Teleservices seeking the waiver of adjusted gross revenue (AGR) dues.

A bench comprising Justices J B Pardiwala and R Mahadevan called the pleas “misconceived”.

“We are really shocked by these petitions which have come before us. Really disturbed. It is not expected of a multinational company. We will dismiss it,” the bench told senior advocate Mukul Rohatgi, appearing for Vodafone.

The top court refused to “come in the way of the government” wanting to help the telecom companies.

Rohatgi at the start of Monday’s hearing sought an adjournment till July.

When the court asked for the reason, he said they were trying to see if something could be done without bothering the court and informed the bench that the government now held 50 per cent ownership in Vodafone.

“If the government wants to help you, let them. We are not coming in the way. But this is dismissed,” the bench went on to hold.

Rohatgi said the Centre expressed its inability to extend help owing to the Supreme Court judgment of July 2021.

The telecom companies had alleged arithmetical errors in the calculation of the AGR dues and sought it to be rectified contending duplication of entries but the top court on July 23, 2021 dismissed their pleas.

When Rohatgi sought permission to withdraw the petition on Monday, the bench said, “We will not permit you to withdraw as well.”

Vodafone sought a waiver of around Rs 30,000 crore towards interest, penalty, and interest on penalty components of its AGR dues.

“The present writ petition does not seek review of the judgment but only seeks the waiver of rigors of payment of interest, penalty and interest of penalty under the Judgment,” its plea said.

The plea also sought a direction to restrain the Centre from insisting on payment of interest for the period of payment of dues in instalments.

The company said it is one of the three major private telecom service providers in India with around 18 per cent of the total market share of mobility subscribers in the country.

“Significantly, the Union of India/Licensor, has since acquired substantial equity in the petitioner 1 company through conversion of dues owed by the company and currently holds 48.99% equity in the paid-up equity share capital of the petitioner 1 company, with conversions of dues done on the following dates,” it said.

The plea added, “Even post this conversion of dues, Government of India has dues in respect of spectrum of approx Rs 119,000 crore in addition to AGR dues, to be recovered from the petitioner company.”

The company has an active workforce of over 20,000 employees who are dependent on it for their livelihood, the plea said.

“The petitioner has made a total investment of approx Rs 135,000 crore in the last decade towards the country’s telecom industry. The petitioner has contributed to the public exchequer by way of license fees and SUC (spectrum usage charges) of approx Rs 61,000 crore in a decade along with significant additional contribution of GST, which was approx Rs 11,800 crore in FY 2024-25,” it said.

It is impossible for the promoters or any shareholder to invest any more monies in the company, the plea said.

“Since the petitioner is unable to raise debt in view of precarious financials, if it is compelled to pay amount of Rs 18,000 crore per year towards AGR dues for next six years, the petitioner will not be able to survive and will face extreme financial stress,” it said.

The top court had previously refused to review its 2021 order rejecting the pleas of telecom majors including Bharti Airtel and Vodafone Idea for rectification of alleged errors in calculation of AGR dues payable by them.

A bench comprising former Chief Justice Sanjiv Khanna and Justices Abhay S Oka and Sanjay Kumar dismissed the pleas seeking review of the 2021 order in-chambers on January 28.

The top court in September 2020 fixed a time frame of 10 years for telecom service providers struggling to pay Rs 93,520 crore of AGR related dues to clear their outstanding amount to the government.

In its September 2020 order, the apex court said that the telecom operators should make the payment of 10 per cent of the total dues as demanded by the Department of Telecommunications (DoT) by March 31, 2021 and the rest would be paid in yearly instalments commencing from April 1, 2021 to March 31, 2031.

The top court, which held the demand raised by the DoT with respect to AGR dues as final, said there should neither be a dispute raised by the telecom companies nor any re-assessment.

The apex court in October 2019 delivered its verdict on the AGR issue.

The DoT moved a plea in the top court asking for a staggered payment of the dues by telcos over 20 years.