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AGR case: Telcos ‘profited’ from lockdown, says SC, raps Govt over demanding dues from PSUs

While a conclusion was not arrived at, the SC also struck down the government’s demand of seeking Rs 4 lakh crore from PSUs for telecom licences.

SNS | New Delhi |

The Supreme Court on Thursday directed the telcos to file affidavits on how they plan to pay the rest of the Adjusted Gross Revenue (AGR) dues and adjourned the matter for further hearing on June 18.

Earlier today, the Department of Telecommunications (DoT) had informed the apex court that the Central government has extensively examined the AGR matter, and then it has come out with a bail-out package, while adding that it would be difficult for the telcos to pay in one go.

A bench headed by Justice Arun Mishra and comprising Justices S Abdul Nazeer and MR Shah was hearing the issue of allowing telecom firms to pay the mammoth AGR dues worth Rs 1.43 lakh crore in a staggered fashion spread over 20 years.

“What is the guarantee telecom companies will pay in that time frame (decided by the Centre)?” the bench questioned Solicitor General Tushar Mehta, who was appearing for the DoT.

The court also remarked that telcos had “profited” during the lockdown.

While a conclusion was not arrived at, the SC also struck down the government’s demand of seeking Rs 4 lakh crore from PSUs for telecom licences. Fuming at the demand, the court said officials of the telecom department are misusing an earlier judgement for raising demands from public sector companies, and warned of initiating contempt proceedings against the concerned officers.

At the Government’s demand, Justice Arun Mishra commented: “Everyday, I think about how our judgement (AGR matter) has been used and misused.”

Mehta replied that the government has examined the impact on the economy if telecom companies were to pay the entire amount in one go. “Seeking all telecom dues in one go might create distrust among telecom service providers, if some operators shut down operation,” Mehta argued.

He also contended that if the court objected to the time-frame developed by the Centre, then it will adversely impact the telecom sector, affect the network and ultimately the consumers will suffer. The bench sought time frame from the Centre on the payment of the AGR dues. “What if one of the companies goes into liquidation, who will pay then?” queried the bench to Mehta.

The bench asked the telcos to give an undertaking to deposit money in the time-frame decided by the Centre. Mehta, however, insisted that telecom companies should give the undertaking on the payment of dues.

Earlier in March, the Supreme Court had come down heavily on the Centre for seeking a 20-year window for telecom service providers to pay the Adjusted Gross Revenue (AGR) dues saying the self-assessment done by telcos was a “sheer violation” of the court order – a “sheer contempt”.

Questioning the Centre on who permitted self-assessment of dues, the top court thundered: “If reassessment is permitted, it is fraud on this court. We won’t spare officials who allowed reassessment of telecom dues.”

Calling it a question of “this court’s prestige”, the judges said, “self-assessment of AGR payments is a sheer violation, sheer contempt.”

The court further warned that “it will send the top executives of all telecom companies to jail”.

The DoT had moved the Supreme Court seeking approval of a formula to allow telecom service providers, including Vodafone and Airtel, to make annual installments of around Rs 1.47 lakh crore AGR dues in the next 20 years or more.

The apex court had in February rapped telecom companies for not paying dues to the tune of Rs 1.47 lakh crore to the Government and summoned their top executives to court to explain why its order on clearing dues was not followed.

The top court had also pulled up the Department of Telecommunications for not complying with the court’s October 2019 judgement related to the payment of AGR dues .

The court had expressed anguish over the Central government’s order staying the payment of AGR dues despite the SC order.

This January, Justice Mishra-led bench had already rejected the telecom service providers’ plea seeking a review of its earlier order that allowed the government to collect dues worth Rs 92,000 crore from them. It further asked them to pay Rs 1.47 lakh crore in statutory dues by January 23, saying it did not find any “justifiable reason” to entertain them.