SC gives telcos 10 yrs to clear AGR dues, NCLT to decide on spectrum sale

The Supreme Court finished hearing the AGR case on August 24, almost a year after its verdict on the definition of the AGR

The Supreme Court in its judgment in the matter of adjusted gross revenue allowed telcos to pay their outstanding dues in 10 years. Telcos can pay 10 per cent of their dues by March 31, 2021, and the remaning instalments by 7 February every year.

Any default will accrue interest and non-payment will also invite contempt of court proceedings, said the SC in its verdict. The companies have been ordered to keep adjusting bank guarantees alive till the time the payment is made.

On the question of whether telcos could sell spectrum, the SC has left the question to the wisdom of the National Company Law Tribunal (NCLT). There is no clarity so far on the SC's decision on whether Reliance Jio would have to pay the dues of Reliance Communications, whose spectrum it is using — and whether Bharti Airtel would have to clear the dues of Aircel and Videocon for the same reason.  

Earlier, after the top court had rejected pleas by Vodafone Idea, Bharti Airtel, and Tata Teleservices seeking review of the judgment which widened the definition of AGR by including non-telecom revenues, the DoT had in March moved a plea seeking staggered payment over 20 years.

The Supreme Court finished hearing the AGR case on August 24, almost a year after its verdict on the definition of AGR.

The SC had to deliver judgment on three matters related to telecom sector. The first one being on the tenure for staggered payment of AGR dues. 

The second was related to the clarification on whether or not Reliance Jio had to pay the AGR dues bill of RCom, and Bharti Airtel of Aircel and Videocon. 

And three, it will direct banks on whether they can, as creditors, transfer spectrum, which is a national asset, to a new buyer under IBC, without first taking cognizance of the dues of the government. The apex court has left this question for the NCLT to decide,

SC in October 2019 delivered the verdict on the AGR issue for calculating government dues of telecom companies such as licence fee and spectrum usage charges.