Supreme Court Dismisses Telecom Giants' Plea For AGR Dues Waiver

Supreme Court Dismisses Telecom Giants' Plea For AGR Dues Waiver

Supreme Court upholds government's decision on adjusted gross revenue dues for telecom companies

The Supreme Court dismisses petitions from Vodafone Idea and Bharti Airtel seeking a waiver on paying interest, penalty, and interest on penalty components of their adjusted gross revenue (AGR) dues. The court's decision affects Tata Teleservices as well, which had filed a similar plea. The bench, led by Justices JB Pardiwala and R Mahadevan, termed the petitions "misconceived" and criticized the telecom companies for approaching the court with such requests.

The court added that, "Heard (Senior Advocates) Mukul Rohatgi and Arvind Datar, Shyam Divan. appearing for the respective petitioners. Three multinational companies have come before this court by way of writ petition. We believe these are misconceived writ petitions. Dismissed."

In October 2019, the Supreme Court upheld the Department of Telecommunications' interpretation of AGR, resulting in significant financial liabilities for telecom operators, including Vodafone Idea's ₹58,254 crore and Bharti Airtel's ₹43,989 crore. Despite the companies' claims of financial turmoil the court refused to provide relief.

The dismissal of the petitions has substantial implications for the telecom industry, putting Vodafone Idea's survival at danger due to the high AGR installments. The company generates about ₹9,200 crore in operating cash each year, which is significantly less than the ₹18,000 crore AGR instalment. Although the government's position on AGR dues was maintained by the Supreme Court's decision, the government's 2021 Telecom relief Package had provided some relaxation.

In this case Vodafone was represented by Mr. Mukul Rohatgi, Senior Advocate. Meanwhile, Airtel was represented by Mr. Shyam Divan, Senior Advocate and Tata Telecom was represented by Mr. Arvind Datar, Senior Advocate.