The Supreme Court on Tuesday allowed the telecom companies to clear their adjusted gross revenue (AGR) dues in a staggered manner in a span of 10 years.
The outstanding sum amounts to Rs 1.6 lakh crore. The court also said that the National Company Law Tribunal (NCLT) should decide whether or not spectrum can be sold under the Insolvency and Bankruptcy Code.
However, the court rejected the central government’s proposal to grant the 20-year timeline to pay the dues.
Citing the coronavirus crisis, the apex court said that the telecos should pay 10 per cent of the total dues by March 31, 2021.
The companies can make payments in annual installments between 2021 and 2031.
Following the order, the managing directors of the telcos will deposit a personal guarantee within four weeks from today.
The telecom companies will have to clear their dues by February 7 each year and non-payment of dues will incur penalty, interest and contempt of court, the bench said.
During the hearing, the Tata Telecom had asked the court for a window of at least 7-10 years for the payment of the dues.
On the other hand, the Vodafone-Idea and Bharti Airtel had asked for 15 years time for the payment.
While the Department of Telecommunication (DoT) has asked the court to grant them 20 years time period for the payment.
In its plea, the DoT had also suggested that the interest on the past unpaid amount, penalty and the interest on penalty with respect to past dues, be frozen as of October 24, 2019.
The apex court’s ruling is somehow a relief for the Bharti Airtel and Vodafone-Idea as the duo were struggling with mounting losses.
The centre of crisis revolves around the definition of the AGR. As per the rules, the telecom companies have to pay a percentage of their revenues to the government as license fee.
They argue that the non-core business like rent or income from sale of handsets is also included in the AGR and it should be restricted to the revenue generated from core business only.