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Supreme Court's order in Telcos' AGR Case

Courtesy/By: Eisha Singh | 2020-07-21 00:27     Views : 225

The Supreme Court has been seen to be having certain issues with the ability of telecommunication companies to clear their Adjusted Gross Revenues (AGR) dues. In a virtual hearing, on 20th July 2020, the Court held that telecom companies must ask for a reasonable time to make staggered payments.  The decision was delivered by a bench headed by Justice Arun Mishra. Although the order didn't reserve on the specific period of time that may be reasonable for telcos for staggered payments, it repeatedly emphasised that 20 years sis too long a period to make such payments.

Before this, the Department of Telecommunication (DoT) had sought the apex court's approval to ask telcos to pay their Rs. 1.69 lakh crore dues over a period of 20 years. This would've helped leading telcos like Airtel, Vodafone Ide and Tata Teleservices to spread their huge ADR burden over the period of 20 years. However, if this wouldn't be done, paying such huge amounts at one go would render all these companies insolvent. The government has been arguing over this point in the Supreme Court for months.

In a response to the Court's order to come up with a reasonable time period, both Airtel and Vodafone Idea have suggested that they pay their dues in 15 years, and Tata Teleservices has requested to be granted a period of 7-10 years.

The whole matter came to fore after the October judgment, wherein telcos lost their 16-year-old AGR case to the DoT. The telcos were supposed to pay their dues in 3 months by Januray, but have only paid a partial amount so far. Airtel has paid Rs. 18,004 crore to DoT, and is yet to pay Rs. 25,976 crore, whereas Vodafone has only paid an amount of Rs. 7,854 crore, out of the overall dues of Rs. 58,254 crore.

The bench, in the present case as well as previous cases, has raised serious questions on the financial strength of the telcos to pay their dues. The bench had even asked the companies to submit their bank details and financial documents for the past 10 years.

Courtesy/By: Eisha Singh | 2020-07-21 00:27