“Telecom Companies Taking A Ride Without Paying For The Horse”: Supreme Court On AGR Dues

“Telecom Companies Taking A Ride Without Paying For The Horse”: Supreme Court On AGR Dues


The SC was commenting on telecom dues of firms underneath insolvency

Expressing concern over non-payment of the Adjusted Gross Income (AGR) associated dues by the telecom firms that are underneath insolvency, the Supreme Courtroom on Thursday stated “with out paying for the horse, telcos are taking a journey”. The highest court docket stated it’s “extraordinarily anxious” that just about your complete AGR dues might be “worn out” within the IBC course of. The highest court docket puzzled can a legal responsibility like AGR associated dues be wound up, underneath the guise of promoting spectrum underneath the Insolvency and Chapter Code (IBC).

A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah stated spectrum buying and selling is altogether completely different from sale of spectrum underneath the IBC.

“With out paying for the horse, telecos are taking a journey. Until dues are paid, no one can begin utilizing the spectrum. Can a legal responsibility like AGR be wound up, underneath the guise of promoting spectrum underneath the IBC,” the bench stated. It additional noticed, “We’re extraordinarily anxious that just about total AGR dues might be worn out within the IBC course of”.

The bench stated after the sale of spectrum, the brand new consumer will extinguish any pending demand in opposition to the spectrum in query. In the course of the listening to, senior advocate Ravi Kadam, showing for Aircel Monitoring Committee, advised the bench that from April 8, 2016, there have been eight situations of spectrum buying and selling with Bharti Airtel.

He stated that the Division of Telecom (DOT) had permitted the sale and had raised demand for the dues.

Kadam stated there are not any occasion of spectrum sharing by Aircel with any operator.

The bench requested Kadam what has Aircel going into decision proceedings bought to do with the AGR dues. It questioned whether or not Airtel has paid AGR dues for spectrum purchased from Aircel.

Senior advocate Kapil Sibal, showing for Airtel, stated the corporate has paid all related dues with respect to spectrum buying and selling and have paid Rs 18,004 crore in direction of AGR dues.

The bench stated it needs particulars from DOT of spectrum allotted to Reliance Communication (RCom) and Aircel since 1999. It stated the court docket need related particulars of all situations of spectrum sharing and requested whether or not Aircel is seeking to promote spectrum underneath the IBC.

Kadam stated that proper to make use of spectrum is an asset and to maintain the corporate working, this proper might be offered on approval of the decision plan. He stated the decision course of has been concluded, UV Asset Reconstruction Firm (UVARC’s) plan has been permitted and dues of the DOT has been acknowledged by the Committee Of Collectors (CoC) .

Kadam stated that proper to make use of spectrum is an intangible good underneath IBC that may be offered and license settlement recognises proper to make use of it as an asset. He stated the corporate has the ability to switch the appropriate to make use of the spectrum.

The listening to remained inconclusive and would proceed on Friday.

On August 14, the highest court docket had sought the main points of spectrum sharing pact between RComm and Reliance Jio and stated as to why the corporate utilizing the spectrum of the opposite agency can’t be requested to pay the AGR associated dues to the federal government. The Centre had earlier advised the highest court docket there was a distinction of opinion between two of its ministers (DOT and the Ministry of Company Affairs) on the difficulty of sale of spectrum throughout insolvency proceedings.

Earlier, the highest court docket had made it clear it won’t hear “even for a second” the arguments on reassessment or re-calculation of the AGR associated dues of telecom firms which run into about Rs 1.6 lakh crore.

The apex court docket had in October 2019 delivered the decision on the AGR concern for calculating authorities dues of telecom firms comparable to licence charge and spectrum utilization fees.

After the highest court docket had rejected pleas by Vodafone Concept, Bharti Airtel and Tata Teleservices searching for evaluation of the judgement which widened the definition of AGR by together with non-telecom revenues, the DoT had in March moved a plea searching for staggered cost over 20 years. 

(Aside from the headline, this story has not been edited by workers and is revealed from a syndicated feed.)


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