The Supreme Court (SC) on July 20 heard the plea by telecom companies to allow staggered repayment of their adjusted gross revenue (AGR) dues. A three-judge bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah heard the case.
The court reserved the order on the time to be provided to telcos for the repayment of AGR dues. The next hearing in the matter has been scheduled for August 10.
The court observed that there can be no going back on AGR dues and said the calculation given by the telecom department is to be treated as final, adding that there is no scope for any re-assessment or re-calculation of said dues.
It also said that it wants to look into the bonafide of the decision to invoke insolvency on the part of several companies with AGR dues of over Rs 38,000 crore, that are currently in liquidation. Accordingly, it has asked RComm, Videocon and Aircel to submit all records and details of insolvency within seven days.
>>DidVodafone Ideaensure provisioning for AGR liabilities? Demands had been raised by the Department Of Telecommunications (DOT), why not provided for by Vodafone Idea?
>>”With so many losses, how are we to rely on you? You are making the decision more difficult for us. How should we secure AGR dues payable by Vodafone Idea?”
>> Vodafone Idea has conceded that no bank is prepared to lend it money.
>>You are showing such a black picture, how are we supposed to see any light? Vodafone Idea needs to secure AGR dues payable.
>>”Who is the kingpin? Who is managing Vodafone idea?”
>> We want to make clear again that there is no space for self assessment. Otherwise we will have to draw serious contempt against everyone. We made it clear that there is no room for self assessment. This would a violation of our orders.
>>”It seems the DOT is allowing room for re-assessment. Who in the Govt has the temerity to do this? No one has the authority to overturn our orders. You don’t know me, I will despatch people to jail from here.”
>>(ToBharti Airtel) “Don’t try to reopen the case, all dues are included in the AGR judgment”. There is no room available for adjustment of dues payable by Bharti Airtel
>>”Airtel is looking to reopen the issue. We can’t allow recalculation at this stage, we will not permit this. If we permit you to recalculate, it would be a violation of our orders.”
>>”We will not allow this self-assessment by Airtel. AGR definition has been clarified by SC, don’t try to review the issue.”
>> Will decide on the limited issue of time to be provided; this is a waste of our time, we will impose very heavy costs. Telcos are trying to seek recalculation, trying to dilute the judgment. They “are behaving dishonestly. Why should we allow relief to telcos when they are seeking to review the figures payable”.
>> Revenue of the country needs to be saved, telcos belong to this country, telcos should share the responsibility to secure the amount payable.
>>On the question of a 20-year period for repayment, the court asked, “How do you secure dues payable?”
>>We will go into the bonafides of these companies going into insolvency; Not sure if IBC is being misused by companies to escape liabilities.
>> Have heard all parties at length on time window to be allowed. An attempt was made to wriggle out of this order under the guise of re-calculation, reassessment. There can be no going back on AGR dues. No question of entertaining any objection to demand. The calculation that has been given by DoT is to be treated as final, there can be no scope of re-assessment.
SC orders: All records, insolvency details of RComm, Videocon, Aircel to be submitted within seven days; need to ensure IBC not being misused by companies to escape liabilities. Reserves order on time window to be provided. Next hearing in the matter scheduled for August 10. Issue of companies under liquidation to be considered on August 19.
Vodafone Idea counsel Mukul Rohatgi to the SC:
>> Have submitted financial documents like income tax returns. Over the last 15 years, entire networth of the company has been wiped out. Over 1 lakh crore of equity brought in by promoters has been eroded.
>> All the revenue has been spent on liabilities, tax, dues. Total revenue of over 10 years was Rs 6.27 lakh crore, of which Rs 4.95 lakh crore was Spent on expenses.
>> Will honour the judgment and the AGR dues sought from the company.
>> Not seeking re-calculation, not revisiting the demand. SC has made it clear, we will rely on the demands issued by DoT.
>> Have no assets left with company. The only asset that remains is spectrum. Goods and services tax (GST) refunds of Rs 8,000 crore accruing to us can be retained by the government.
>> Vodafone Idea accepts demand of Rs 58,000 crore; the only way to pay is to allow a 20-year payment period.
>>We are in deep waters. With folded hands prepared to accept a reasonable period of 15 years.
Solicitor General Tushar Mehta to SC:
>>No confusion about the SC Order, no room for re-assessment to be allowed. Have not submitted anything to suggest re-calculation. There is no confusion in the DoT.
>> As per DoT, Bharti Airtel owes a sum of Rs 43,780 crore, of which the company has paid Rs 18,004 crore, so the balance is Rs 25,976 crore.
>> Vodafone paid Rs 7,854 crore, balance is Rs 50,399 crore.
>> Tata Telecom paid about Rs 4,197 crore, balance due about Rs 12,601 crore.
>> Cabinet considered the issue, decided on 20 year period. Would still stand by DoT plea seeking a 20-year payout period. The government has provided for relief due to a cascading effect on the economy.
>>The government says in case of a default, we can cancel the spectrum and auction it to recover dues. The government is of the view that if an extension is not given, insolvencies that SC fears will happen tomorrow. The spectrum itself ac