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AGR case: 'Should Reliance Jio pay RCom's dues,' Supreme Court asks govt

Solicitor General Tushar Mehta told the court that the government's official position is that it will support any decision that SC takes to help recovery of AGR dues

twitter-logoBusinessToday.In | August 18, 2020 | Updated 12:58 IST
AGR case: Will support any decision to help dues recovery, govt tells SC
AGR case

The Supreme Court on Monday reportedly asked the government to share its view on how it plans to recover adjusted gross revenue (AGR) dues of RCom from Jio and also explain its stand on Jio using spectrum of RCom since 2016.  The court asked Jio to tell if it could be held liable for AGR dues of bankrupt RCom as it has been using its spectrum under asset sharing arrangement.

The Supreme Court had earlier indicated that entities using the spectrum must discharge the AGR dues.  The case has been adjourned to August 18 at 2 PM. Earlier, Jio had told the top court in writing that RCom's dues can not be transferred to it legally as the two companies don't share any liabilities.

Solicitor General Tushar Mehta told the court that the government's official position is that it will support any decision that SC takes to help recovery of AGR dues.

In its hearing last Friday, Supreme Court had sought the details of spectrum sharing pact between Reliance Communications (RCom) and Reliance Jio and said as to why the company using the spectrum of the other firm cannot be asked to pay the Adjusted Gross Revenue (AGR) related dues to the government. A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah asked the counsels for Reliance Jio and RCom to place their spectrum sharing agreements on record. The bench also asked the Department of Telecom (DoT) to file the requisite documents in this regard and posted the matter for further hearing on August 17.

On August 10, the Supreme Court had asked the DoT to apprise (on August 14) it about how it plans to recover AGR related dues from telecom companies facing insolvency proceedings and whether spectrum given to these companies can be sold.

On July 20, the top court had reserved its order on permitting telecom firms to make staggered payments of AGR dues over 15 years. The three-judge bench had in June said that there would be no reassessment of the AGR dues calculated by the DoT. The Supreme Court had then said there is "no going

 back" on the Department of Telecommunications (DoT) demand on the AGR issues and it will only consider the timeline. While Vodafone Idea has to make a payment of balance Rs 50,399 crore, Bharti Airtel's outstanding amount is Rs 25,976 crore.

On June 18, the top court was informed by the government that the DoT has decided to withdraw 96 per cent of the Rs 4 lakh crore demand for AGR related dues raised against non-telecom PSUs like GAIL.

In October 2019, the apex court had delivered the verdict on the AGR issue for calculating government dues of telecom companies such as licence fee and spectrum usage charges. The apex court had upheld the government's broader definition of AGR. After the top court had rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices seeking review of the judgement 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.

Also read: Will Reliance Jio have to pay RCom's AGR dues?

Also read: RCom insolvency to fall apart if spectrum not part of its assets: SBI tells SC

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