This deals a huge setback to telcos like Vodafone Idea and Bharti Airtel who were hoping that a substantial portion of their statutory dues would get knocked off and now have no legal recourse left except filing curative petitions against dismissal of their review petitions on January 29.
Shares of loss-making Vodafone Idea slumped 5.1% to close at Rs8.21 on the BSE Friday, underpforming broader markets which fell 0.3%. Shares of financially stronger Airtel though closed 0.2% higher at Rs1717.15.
Upholding the DoT’s calculations on quantum of AGR demand, a bench comprising chief Justice Sanjiv Khanna and Justices Abhay S. Oka and Justice Sanjay Kumar, “We have carefully perused the review petitions as also the grounds in support thereof. In our opinion, no case for review of the order dated July 23, 2021 passed in Miscellaneous Applications is made out. The review petitions are, accordingly, dismissed.”
Though the order was passed on January 28, it was uploaded on the SC website on late Thursday.Voda Idea in its press statement said that “there were Miscellaneous applications, Review Petitions and a Curative Petition filed in the AGR matter at the SC from time to time by the company and other telecom operators, mostly dealing with the need for allowing correction of manifest errors in AGR demands. These petitions had mostly been disposed of, the last being the dismissal of the curative Ppetition for which we had intimated the Stock Exchanges on September 19, 2024. However, there was one pending Review Petition dated August 23, 2021, which has now been dismissed, which closes all AGR related matters at the SC.”Seeking rectification of what they called arithmetical errors, the telecom service providers had said that there were some “glaring errors” in the demand raised by the DoT, wherein the amounts that have already been paid by the companies were not taken into account for computing outstanding AGR dues.
According to the review petitions, there was double counting of some revenue items in the AGR revenue demands. This even covered a situation where a figure of revenue had been added twice to the revenue of the companies, leading to the same amount being subjected twice to demand of licence fee/spectrum usage charges. While they were eligible for deduction of public switched telephone network related call charges from its gross revenue, certain deductions were not granted by the department, they added.
Further, the carriers including Vodafone Idea had sought a direction to the DoT to “carry out a time bound exercise to reconcile the demand and make correction of manifest/clerical/arithematical errors.”
Of the total Rs 1.47 lakh crore of AGR dues which the telecom operators were required to pay by January 2020 as a result of the apex court’s order, nearly 75% comprised interest, penalty and interest on penalty, the companies stated. The licence fee dues totalled Rs 92,642 crore while the spectrum usage charge was Rs 55,054 crore.
DoT had back then estimated cash-strapped Vodafone Idea’s dues at Rs 58,300 crore, but the telco had self-assessed the dues at Rs 21,500 crore and has so far paid Rs 7,900 crore. Airtel’s dues, as per the DoT, stood at Rs 44,000 crore, compared with the operator’s own assessment of around Rs13,000 crore. Airtel has so far paid Rs 18,000 crore, which includes a Rs 5,000-crore ad hoc payment.
The top court had on September 1, 2020 asked the companies needed to pay their arrears over a 10-year period, after paying 10% of the AGR dues upfront by March 31, 2021.
Thereafter, the deferred payment cycle would start from 2026 and run till 2031 with the 10% amount to be paid by March 31 every year. The SC had then said no revaluation of AGR dues would be allowed and any default would invite interest and penalty, along with contempt of court charges.
