SC junks PIL challenging Centre’s decision to relax payment of AGR dues

Satya Prakash

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New Delhi, September 11

Telecom companies can heave a sigh of relief as the Supreme Court has dismissed a PIL challenging the Centre’s decision to relax payment terms of Adjusted Gross Revenue (AGR) dues from them, saying it was a policy matter.

“Any interference by this Court at this stage would not only create uncertainty in the implementation of the policy but also jeopardise the policy itself,” a Bench led by Justice NV Nagarathna said.

As per the top court’s order, the AGR payment had to be made in yearly instalments commencing from April 1, 2021 up to March 31, 2031 payable by 31st March of every succeeding financial year. The top court had in September 2020 given a time of 10 years to telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amount to the government.

In order to provide relief for telecom service providers, the Union Cabinet in September 2021 introduced certain structural and procedural reforms, including exclusion of non-telecom revenue from the definition of AGR on a prospective basis; reduction in requirements for bank guarantees; reduction/waiving off interest rates/penalties for delayed payments; increasing the spectrum tenure from 20 years to 30 years for future auctions; and permitting 100% FDI under automatic route in the Telecom Sector.

Petitioner Anshul Gupta had challenged these changes.

“In our view, these are all matters of policy and decision-making which is on the basis of experts’ opinion and on emerging situations and exigencies, to be made in the interest of the welfare of the people of India having serious technical and financial implications and, therefore, have to be in public interest,” the Bench said, dismissing his PIL.

“Hence, we do not think such Cabinet decisions could be lightly interfered with by a Court of law in the absence of there being any particulars or materials brought to the notice of the Court assailing the Cabinet decisions, as being unconstitutional or arbitrary in nature or contrary to law,” the Bench said in an order earlier this month.

“Moreover, the other stakeholders, namely, the Telecom Service Providers are not arraigned as parties to this Writ Petition. Therefore, at this stage, we do not think it proper to entertain this petition,” the top court said.

As per the New Telecom Policy, telecom licensees are required to share a percentage of their AGR with the government as annual license fee. But TDSAT had held that AGR will include only revenue arising from licence activities and that capital assets and receipt from the sale of scrap cannot be included in gross revenue for computation of licence fee. The TDSAT had exempted a large number of streams from the definition of AGR, like capital receipts, bad debt, distribution margins to dealers, forex fluctuations, sale of scrap and waiver of late fee.

However, the top court on October 24, 2019 reversed the TDSAT’s findings leading to huge financial burden on telecom service providers. On July 23, 2021, it dismissed pleas telecom companies, including Vodafone Idea and Bharti Airtel, seeking re-computation of AGR-related dues payable by them as they alleged errors in calculation in their dues.