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Supreme Court To Pronounce Judgment On The Payment Of AGR Dues By Telecom Companies Tomorrow

Radhika Roy
31 Aug 2020 3:55 PM GMT
Supreme Court To Pronounce Judgment On The Payment Of AGR Dues By Telecom Companies Tomorrow
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Supreme Court will be delivering the judgement tomorrow on the issue pertaining to the payment of Adjusted Gross Revenue (AGR) dues by telecom companies.

A Bench comprising of Justices Arun Mishra, S. Abdul Nazeer and MR Shah will elaborate the period within which the companies will have to pay the AGR dues and, further, they are expected to decide the question of whether spectrum can be sold under the insolvency proceedings as per the Insolvency and Bankruptcy Code (IBC).

On July 20, the Bench had reserved orders in the plea by the Department of Telecommunications (DoT) against the October 2019, which sought to allow the telecom companies to make payments of the AGR dues in a staggered manner over a period of 20 years.

During the proceedings, the Bench had made it clear that they would not entertain any objections for re-assessment/re-calculation of AGR in light of the decision passed by the Apex Court in October 2019, and had directed Reliance Communications, Sistema, Shyam Teleservices and Videocon to submit their insolvency details within a period of 7 days.

The Court had noted that it needed to ensure that the IBC was not being misused by companies in order to escape liabilities. A warning was also communicated to all parties to dispense with the payments pertaining to public revenue in line with what had been directed by the Bench.

Justice Mishra, during the proceedings, also expressed reservations regarding keeping the dues pending.

"What is the guarantee that you will not escape? Some of you are foreign companies and may even go into liquidation. What is the security you can give us?",
asked Justice Mishra.

Justice Mishra had also pulled up all the telecom companies and had stated that none of them would be allowed to "wriggle" out of their liabilities and that the Solicitor-General must not bat for re-assessment of dues as this would then mean going against the orders of the Court which mandated the payment of AGR dues in terms of the requisite heads.

The DoT, in its plea, sought for a window of 20 years for payment of dues, in line with the proposal of the Central Government. On the other hand, Tata Telecom informed the Court that they would require a window of 7-10 years, and Vodafone-Idea, as well as Bharti Airtel sought for payment over the course of 15 years.

Apart from the aspect of period during which the dues need to be paid by the telcos, the Supreme Court had reserved its decision on August 24 on the aspect regarding whether spectrum could be sold as a part of proceedings under IBC, and the effect of spectrum sharing and licence trading agreements between telecom companies.

The DoT had argued that spectrum could not be sold and the telecom companies submitted to the Court that as spectrum was purchased through auctions, it became an asset and therefore, they had the right to use and sell it under the IBC.

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