SC Dismisses Telecoms’ Pleas For Recalculation Of AGR Dues

The Supreme Court has dismissed the curative pleas of telecom companies seeking correction of alleged errors in the computation of Adjusted Gross Revenue (AGR) dues payable by them.
“Application for listing the Curative petitions in open court is rejected. We have gone through the curative petitions and the connected documents. In our opinion, no case is made out within the parameters indicated in the decision of this court in… The curative petitions are dismissed,” stated the Supreme Court on its August 30 order.

The order passed by a bench of Chief Justice of India DY Chandrachud and Justice Sanjiv Khanna and BR Gavai also rejected the pleas of telecom companies seeking a hearing in open court.
Curative petitions are decided in chamber by the judges.

Vodafone Idea (VI), Bharti Airtel and other telecom companies had filed pleas seeking review of the AGR dues payable by them as per the apex court’s October 2019 judgement.
The review petitions filed by them against the October 2019 judgement were dismissed by the apex court in January 2020.
In September 2020, the Supreme Court had granted telecom companies a period of 10 years to clear their pending AGR dues to the Central government, with a 10 per cent payment to be made every year.

The deadline given to the telcos for the first installment was March 31, 2021.
In July 2021, the Supreme Court had dismissed the plea of telecom majors, including Bharti Airtel and Vodafone Idea, seeking correction of errors in calculation of AGR dues payable by them as per the top court’s 2019 judgement.

The companies had then submitted that the Department of Telecom (DoT) had made arithmetical errors in calculation of AGR dues and wanted the court to allow rectification of errors.
The total liability on Vodafone-Idea was Rs. 58,254 crore, while Bharti Airtel was to pay Rs. 43,980 crore.

In its curative plea, Vodafone India had said that it seeks to challenge only the two directions of the top court and it is not challenging or questioning the imposition of license fee on them as defined by the the court.

The first challenge, the company said was to the direction of the top court where it had said that “demands made by the DoT would be final and that even the manifest/clerical/arithmetical errors in the computation of dues could not to be rectified and the licensees would be compelled to make payment of the tentative/provisional show-cause cum demands raised by the DoT.”
The plea had said that the second direction challenged by the telecom company was the apex court court’s order that the “licensees would be liable to pay penalty of 50 per cent of the entire amount of short-payment and interest on the said penalty at a rate which will be 2 per per cent above the prime lending rate of State Bank of India and that too compounded monthly (In addition to interest for delayed payment which itself being very high is penal in nature).”

The curative plea had stated that since the petitioner is already bearing an excessively high rate of interest on delayed payment, which is akin to a penalty, it should not be further burdened with penalty and interest on penalty.

“It may be considered that the telecom industry is currently going through a critical phase and it is essential that it is not burdened with such exorbitant penalties in addition to penal interest,” the petition had stated.

It had added, “The petitioner is already on the verge of a financial crisis, which threatens its very existence and the judgement passed by this Court prohibiting even the corrections of clerical and arithmetical errors in the demands, foreclosing any reduction of the amount payable by thousands of crores of rupees and further imposing a penalty and interest on penalty, is highly unjust.”
At the time of filing this report, the stocks of Vodafone Idea dipped 14 per cent while Bharti Airtel was trading with a gain of 1.8 per cent. However, the stocks of the telecom companies are down after the judgement.