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SC reserves order on Airtel, Voda Idea's pleas in AGR case

SC reserves order on Airtel, Voda Idea's pleas in AGR case

While principal case has already been settled and telcos are paying those pending AGR dues, today's hearing was about petitions filed regarding "errors" cited by companies

Today's hearing was scheduled regarding "errors" cited in calculation of AGR dues by telcos Today's hearing was scheduled regarding "errors" cited in calculation of AGR dues by telcos

The Supreme Court on Monday reserved its order on Bharti Airtel and Vodafone Idea's pleas. These telecom companies had sought the correction in the adjusted gross revenue (AGR) demand, citing errors in the DoT (department of telecom)'s calculation of dues.

The principal case has already been settled and telcos are paying those pending AGR dues, but today's hearing was scheduled regarding "errors" cited by the companies.

Senior advocate Mukul Rohatgi, appearing for Vodafone, told the SC bench that there are certain entries, which are "arithmetic entries", and there are "some cases where Re 1 paid but 50 paise reflected. There are cases where the third cheque isn't reflected". He said these "entries" should be corrected as the "small entries become a lot over 20 years".
Citing an example, Rohatgi referred to one of the entries. "The actual payment made is Rs 155 crore, what's considered by DoT in final total is around 153.2 crore."

The SC bench asked Rohatgi to read the order that said that "reassessment and reevaluation can't be done". Rohatgi said several tribunals don't have the power of review but they do have the power to correct an arithmetical error. "I'm saying let the DoT consider this. Allow me to place it before them and they can consider it uninfluenced," Rohtagi told the SC bench.

Senior advocate Dr AM Singhvi, appearing for Airtel, said the company is making a limited point as it has paid a large amount. "Three-four clear examples of categories: duplication in revenue addition, payment already made or accounted for while raising demands, deduction verification report."

Senior advocate Arvind Datar, while appearing for Tata Teleservices, said the dispute was regarding the meaning of AGR. "We said the non-telecom operations won't come under AGR, which was rejected and now it involves telecom and non-telecom". The counsel said the SC had not barred "rectification" of "calculative errors".

The SC reserved its order on the demand raised by telecom companies. "You (telcos) all are saying the same thing. You say there are arithmetic errors and you be permitted to go to the government to get that corrected," the bench said.

The DoT has raised total demand of around Rs 1.47 lakh crore from telecom companies. Some of the companies like Reliance Communications Ltd (total dues Rs 21,139 crore), Aircel (Rs 10,229.77 crore), S Tel (Rs 55.67 crore), Etisalat DB (Rs 31.81 crore) are either going through liquidation process or have shut down their operations.

The Supreme Court in September 2020 had granted 10 years to telecom firms for paying the Adjusted Gross Revenue (AGR)-related dues to the DoT with certain conditions. The apex court asked telcos to pay 10 per cent of the AGR-related dues by March 31, 2021.

However, this month, cash-strapped Vodafone Idea Ltd (VIL) had approached the government to seek a one-year moratorium on payment of spectrum instalment of over Rs 8,200 crore, due in April 2022.

VIL, in a letter to the Telecom Secretary on June 25, 2021, said it would be "unable to pay the instalment of Rs 8,292 crore due on April 9, 2022" due to "cash being used for payment of AGR dues and the inability of the operations to generate the required cash in a predatory pricing situation".

Also read: AGR case make-or-break point for Airtel, Reliance Jio and Vodafone Idea, here's why

Also read: AGR case: New ray of hope for Airtel, Vodafone Idea before Mar 31 deadline