SC pulls up DoT for non-collection of AGR dues

Airtel to pay ₹10,000 crore by February 20

The Supreme Court on Friday came down hard on the Department of Telecommunications (DoT) for not taking any action or collecting a single rupee from operators such as Bharti Airtel and Vodafone Idea India (VIL) on their adjusted gross revenue (AGR) dues.

Shortly after, Airtel said it would pay ₹10,000 crore by February 20 to the DoT.

“...in compliance with the judgment of the Hon’ble Supreme Court and their direction today, we shall deposit a sum of ₹10,000 crore (on account) by February 20, on behalf of the Bharti Group companies (Bharti Airtel, Bharti Hexacom and Telenor India),” Airtel said in a letter to the Member (Finance), DoT, Ministry of Communication, which was seen by BusinessLine.

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The apex court has also asked top officials of the telecom firms to explain why contempt action should not be taken against them for “non-compliance of its order” to pay AGR of ₹1.47 lakh crore to the DoT.

Disturbing scenario: Court

“This case projects a very disturbing scenario. The companies have violated the order passed by this Court in pith and substance. In spite of the dismissal of the Review application, they have not deposited any amount so far. It appears the way in which things are happening that they have scant respect to the directions issued by this court,” the three-member bench said.

The company said it was confident of completing the self-assessment exercise ‘shortly’ and making the balance payment well before the Supreme Court’s next hearing on March 17.

While Airtel has dues of over ₹35,500 crore, VIL needs to pay more than ₹53,000 crore.

Tata Teleservices, which sold its consumer mobility business to Airtel, faces dues of ₹13,823 crore. Tata Sons has indicated that it may rely on Tata Consultancy Services to pay the dues.

DoT withdraws letter

The Court also questioned how a DoT officer wrote a letter to Attorney-General KK Venugopal and other constitutional authorities, saying they should not insist on payment of money by telecom firms and others, and to ensure that no coercive action is taken against them (dated January 23).

Following this, the DoT on Friday came out with another letter saying the letter dated January 23 ‘stands withdrawn with immediate effect’.

“A Desk Officer of the DoT has the temerity to pass the order to the effect of issuing a direction to the Accountant General, another Constitutional Authority... This is nothing but a device to scuttle order of this Court. This kind of order should not have been passed by the Desk Officer at all,” said the Bench comprising Justices Arun Mishra, S Abdul Nazeer and MR Shah.

Reacting to the directive on Friday, analysts tracking the telecom industry said that such an eventuality will be a blow for the sector.

‘Setback for sector’

“The Supreme Court rebuke is a major setback for incumbent players as well as for the government (which is) seeking to ease the blow of the AGR judgement for telecom companies. Vodafone Idea will be especially disappointed; as it is on record that it would have to shut shop if government relief is not forthcoming,” said Mahesh Uppal, Director at consulting firm Com First India. He said that fewer players in the market will hurt consumers.

“The exit of a high-profile company is bound to hurt investor sentiment — even beyond the telecom sector — at a time when India needs substantive investments in its infrastructure,” he added.

VIL had not responded to queries on how it planned to respond to the Supreme Court order, till the time of going to press.