NEWS: Supreme Court Listen to the Case Regarding Adjusted Gross Revenue (AGR) to be paid by Telecom Companies

Previously, the SC had ordered all the companies to submit their financial documents & also the plan to make the payment of the dues to the DoT.

The SC reserves order on timeline of AGR outflows by Telecom companies.

The same is to be heard on 10^th August, 2020. Responses of the companies are to be submitted before 7^th August.

ORDER: The companies, Aircel, Reliance communication, Videocon provide all insolvency records to court.

ORDER: Though while hearing the matter an effort was made to wriggle out of our order in the garb of reassessment or re-calculation. However, there can be no adjustment regarding the dues apart from what was stated in the Supreme Court verdict. No objection will be entertained.

What is AGR?^[1]

 Adjusted Gross Revenue is mainly collected from two main charges namely usage and licensing fee. Apart from these fees, it also includes other revenues like profits, revenue from assets, etc. The spectrum usage charges are pegged between 3% and 5%. The licensing fee is 8%. However, since 2005, the Telecom companies have been registering cases in the apex court for proper definition of AGR. In 2015, the SC ruled that AGR included dividend, capital receipts, miscellaneous income, profit from sale of fixed assets, etc.

The crux of this tustle is that the consumers might have to pay more on mobile data in forthcoming days.

Senior Advocate Shyam Divan appears for Reliance Communication.

• Justice Mishra: Please submit records showing the liquidation process.
• SG: The government has taken this verdict to save the economy from its tumbling influence on the economy.
• SC: What if someone goes into liquidation?
• SG: We can cancel their spectrum and auction the same.
• SG: Tushar Mehta: We will stick to the cabinet decision. 20 years is a reasonable period for us.
• Senior Advocate AM Singhvi: COVID-19 is a reason for the losses incurred to the companies.
• Justice MR Shah: COVID-19 has no effect on this industry. You have only profited.
• Senior Advocate AM Singhvi: We need 15 years to pay off the dues. We also have a 9,000 crore credit with the government which may be accustomed too.
• Justice Mishra: We are dealing with revenue of this country. As a senior officer of this court, please tell us the time limit?
• Justice Mishra: Come out of the shell of your client & answer like the former Attorney General.
• Senior Advocate Rohatgi: For me, 15 years is a reasonable time. I am not implicating this as a bargain. The government has also found that we are in deep waters.
• Senior Advocate Rohatgi: The only way the judgment of the top court can be complied with is if a 20-year time period is given.
• Justice Mishra: Are you suggesting to us or threatening us? Your tone and tenor is not good.
• Senior Adv. Mukul Rohatgi: We accept the dues of 58,000 crores
• Justice Mishra: We are obliged to you
• Senior Advocate Kapil Sibal: For Hughes, we have never questioned AGR. We only have one notice of 155 crores out of which 40 crores has been paid.
• Senior Advocate Ramji Srinivasan: I appear for TATA Maharashtra. We are yet to receive 780 crores from the Union towards GST dues
• SG Mehta: That will be settled.
• Senior Advocate Parasaran suggests a term of 7 to 10 years to pay off the dues.
• Justice Mishra: As an officer of the Court, how do we secure the telecom payments?
• Senior Adv. Parasaran: We will explain in our affidavit
• Justice Mishra: No more affidavits in the case!
• Justice Mishra (to Senior Adv. Mohan Parasaran): How much time do you need to pay off the dues
• Parasaran: 15 years…
• Justice MR Shah: This is not reasonable
• Justice Mishra: This is the most unreasonable time period. If any country goes into liquidation, then you will not forgive yourself
• Datar: But my client has paid 40% of total payable in the last three months
• SC: You all are disputing the basic liabilities
• Datar: No, we are not disputing. We are sticking to the figure as cited by the Centre on July 23.
• Senior Advocate Mohan Parasaran argues for TATA
• Justice Mishra: Just tell us how you will pay and what security are you giving for the payment? Enough is enough. We will not consider any plea for financial difficulty
• Datar: if a party does not pay, then I understand
• Justice Mishra: Mr. Datar, you don’t know what we can do. This country is suffering due to all of you. We will impose costs if you don’t adhere to our orders. You don’t know what we are thinking.
• Justice Mishra to Senior Advocate Arvind Datar: Your clients have earned too much money and now you all don’t want to pay. We know how jugglery of accounts take place so don’t teach us. This is not something you should do with this country
• Datar: We are not seeking review
• Solicitor General Tushar Mehta informs the top court that Videocon, Aircel under IBC, and Reliance Jio has paid full dues.
• Senior Advocate Arvind Datar for TATA: There is no reassessment or recalculation from our end. Just clarifying this.
• Justice Mishra: Please submit on merits
• Datar: Now as per DoT we have Rs. 9,987 crores to pay. We have paid over 4,000 crores
• Justice Mishra: We will not allow you (Bharti Airtel) to go in for recalculation or reassessment
• AM Singhvi: We will stick to the order. Remaining liability is only 30 billion rupees
• SC: You are disputing liability of over 200 billion rupees
• SG Mehta gives an estimate of dues owed by various telecoms:
• Airtel has paid about ₹18004cr, balance due is about ₹25976cr
• Vodafone Idea paid about ₹7854cr, balance due is about ₹50399cr
• Tata Telecom paid about ₹4197cr, balance due about ₹12601cr.
• Senior Adv. Dr. Abhishek Manu Singhvi for Bharti Airtel: We have paid 180 billion rupees after court order on telecom dues.
• SG Mehta: Their liabilities are around 43,000 crores
• Senior Adv. Kapil Sibal for Hughes Telecom: We have 155 crores to pay. We are yet to pay anything post the Supreme Court verdict… Government already has 59 crores from us as a bank guarantee which can be cashed.
• Senior Adv. Rohatgi: We are not seeking any reassessment or recalculation. We will stick to the verdict. The government owes us 8,200 crores. They can retain it.
• Justice Mishra: Do not think you have very big hands. We will cut it short
• SG Mehta: I didn’t open my mouth today. I did not say re-calculate.
• Justice Mishra: Tell us your liabilities and then we will consider this nonsense
• SG Tushar Mehta: Please allow me 60 seconds to speak. Allow me to remove the wrong impression
• Justice MR Shah: Where is the question of self-assessment now?
• Justice Arun Mishra: First you said self-assessment and now call it re-calculation. You are the solicitor general and you cannot do this. You cannot commit contempt on this court? What is this nonsense?
• Senior Adv. Rohatgi: We paid 8,000 crores after your verdict. We paid another 1,000 crores after June 18.
• Justice Mishra: Who is the kingpin in Vodafone?
• Rohatgi: No one owns Vodafone. All directors are salaried and don’t own us.
• Senior Adv. Rohatgi: Whatever we have earned as revenues in the last 14 years has become wiped away.
• Justice Mishra: Then how do we get hold of you?
• Justice MR Shah: What kind of security is there? No one is ready to lend you too
• Justice Mishra to Vodafone Idea: Why didn’t you have a provision for AGR dues despite DoT demand?
• Senior Adv. Rohatgi: 14,000 crores was in addition to AGR dues as per DoT calculation, with penalties and interest amount crossed 50,000 crores
• Justice Mishra: Did you make any arrangement for contingent liabilities on yearly accounts?
• Rohatgi: We succeeded in TDSAT so we had no provision
• Senior Adv. Rohatgi: We (Vodafone) have a net loss of 2,800 crores in first year, 1800 crores loss in next and thereafter a loss of 523 crores. Total revenue over 10 years is 6 lakh crores, out of which expenses was 495 crores.
• Senior Adv. Mukul Rohatgi urges Senior Advocate Abhishek Manu Singhvi to switch off his mic
• “Dr. Singhvi, the Rajasthan High Court hearing (in Sachin Pilot’s case) can be heard. Please mute your mic.”
• Senior Adv. Rohatgi: The affidavit filed by Vodafone is in compliance with Supreme Court orders dated June 18.
• Rohatgi: Substance of affidavit will tell you that over the last 10-15 years of working in India since 2006, unfortunately, for extraneous reasons, net worth of the company has been wiped. We had a loss of 1 lakh crore.
• Justice Mishra: What have you filed Mr. Rohatgi?
• Senior Adv. Rohatgi: We have filed a detailed affidavit with Income tax returns etc.
• Advocate Binu Tamta appears for Centre.  Senior lawyer AM Singhvi for Bharti Airtel.  Senior lawyer Mukul Rohatgi for Vodafone Idea.  Senior lawyers Arvind Datar, Ramji Srinivasan for Tata Teleservices.  Senior lawyer Kapil Sibal for Hughes Communications.

After the Supreme Court had questioned the DoT on its move to claim AGR dues from PSUs calling the act a “misuse” of the Supreme Court’s judgment, the Centre had informed the Court earlier that the demand for AGR dues from PSUs stands withdrawn.

Justice Arun Mishra led bench of the Supreme Court is hearing the case concerning Adjusted Gross Revenue (AGR) payable by telecom companies.

Earlier the Court had asked all companies to submit their financial documents and plan to make the payment of the dues to the DoT.

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