AGR Verdict Relief! Supreme Court gives telecom operators 10 years to pay dues

AGR verdict: The Supreme Court on Tuesday allowed telecom operators 10 years to pay dues related to adjusted gross revenue (AGR). The verdict comes as a relief for telecos fighting for survival. Among others, Vodafone-Idea, which owes over Rs 58,000 cr in AGR dues, was closely watching the apex court verdict.  

A three-judge apex court bench, headed by Justice Arun Mishra, directed telecom operators to make 10% upfront payment of their AGR dues, with the rest of the payments to begin from 1 April, 2021. 

The bench asked the Managing Director (MDs) or Chief Executive Officer (CEOs) of telecos concerned to furnish undertaking or personal guarantee within four weeks for payment of dues. It cautioned the telecom firms and said that failure to pay installments of AGR-related dues would incur penalty, interest and contempt of court. 

AGR मामले पर फैसला आने से पहले ना करें हड़बड़ी...

अनिल सिंघवी- कोर्ट के फैसले को आराम से समझें, सावधानी के साथ करें ट्रेड…किसी भी खबर पर न दें ओवर रिएक्शन#EditorsTake #AGR #SupremeCourt @AnilSinghvi_ pic.twitter.com/cknru9hI3c

— Zee Business (@ZeeBusiness) September 1, 2020

The top court said that issue of sale of spectrum by telecos facing insolvency proceedings shall be decided by the National Company Law Tribunal (NCLT). The bench delivered its verdict on the issues, including the timeline for staggered payment of AGR-related dues amounting to about Rs 1.6 lakh crore. 

The department of telecommunications (DoT), in March, had appealed to the apex court seeking 20 years for paying AGR dues, which include spectrum usage charges, license fees, interest, penalties, and interest on penalties. 

The Supreme Court had expressed reservations about granting 20 years' time, voicing doubt about recovery of dues, especially from Vodafone Idea which has been battling liquidity crunch. 

Vodafone Idea and rival Bharti Airtel had sought 15 years for payment of AGR dues, while Tata Teleservices Ltd had wanted 7-10 years. Reliance Jio Infocomm Ltd, which launched in September 2016, had paid its relatively minuscule dues of Rs 195.18 crore in January, complying with the Supreme Court’s October 2019 judgement.