Telecom AGR dues: Supreme Court dismisses curative pleas on computation ‘errors’

A view of the Supreme Court of India. File
| Photo Credit: The Hindu

The Supreme Court has dismissed curative petitions filed by telecom service providers, including Bharti Airtel and Vodafone Idea, against the court’s October 2019 judgment upholding the Department of Telecom’s (DoT) move to recover adjusted gross revenue (AGR) of about ₹92,000 crore from them.

The curative petitions were dismissed in chambers by a Bench of Chief Justice D.Y. Chandrachud, Justices Sanjiv Khanna and B.R. Gavai on August 30. The order was available in the public domain on Thursday.

“We have gone through the curative petitions and the connected documents. In our opinion, no case is made out… The curative petitions are dismissed,” the Bench recorded in its order.

The October 2019 verdict had said the telecom sector had long reaped the fruits of the Centre’s liberalised mode of payment by revenue sharing regime with the government. Under this mechanism, the operators had to pay a certain licensing fee and spectrum usage fee to the DoT. The Department calculated the fee as a percentage of the AGR. The dispute between the private telecom sector and the government over the calculation of the AGR spanned nearly two decades.

‘Benefited immensely’

“The sector has benefited immensely under the scheme as apparent from the gross revenue trend from 2004 to 2015… The telecom service providers in spite of the financial benefits of the package started to ensure that they do not pay the licence fee to the public exchequer based on an agreed AGR,” the Supreme Court had observed in its 153-page judgment in 2019.

The court had dismissed the telecom service providers’ (TSP) objection to the government’s formulation of AGR.

The judgment had said the gross revenue would be inclusive of installation charges, late fees, sale proceeds of handsets (or any other terminal equipment etc.), revenue on account of interest, dividend, value-added services, supplementary services, access or interconnection charges, roaming charges, revenue from permissible sharing of infrastructure and any other miscellaneous revenue, without any set-off for related item of expense, etc.

Following the dismissal of a review plea, the TSPs had moved a curative petition alleging errors in the computation of the AGR dues.

This was despite a July 2020 order which had said that applications filed by the telecom majors to “correct” math mistakes, which at “first blush” look “innocuous”, was a roundabout way to recompute their AGR debts — a path expressly forbidden by the Supreme Court in an earlier order

The July 2020 order had made it clear that “no dispute could be raised in respect of AGR dues that had been arrived at on the basis of calculations made by the Union of India”.

“No telecom operator shall raise any dispute in respect of the demand raised by the Department of Telecommunications pertaining to AGR dues, based on the judgment of this court of October 24, 2019. It was also held that there cannot be any reassessment,” the Supreme Court had reiterated.

In September 2020, the apex court had ordered that the annual 10% instalments of the TSPs towards their AGR dues would commence from April 1, 2021 up to March 31, 2031.