SC junks curative pleas by telecom firms on AGR dues

No telecom operator shall raise any dispute in respect of the demand raised by the DoT pertaining to AGR dues, based on the judgment of this court of October 24, 2019,” the apex court had reiterated

Highlights:

• The Supreme Court of India has dismissed curative petitions filed by telecom service providers (TSPs), including Bharti Airtel and Vodafone Idea, seeking relief from its October 2019 judgment.
• The judgment upheld the Department of Telecommunications' (DoT) demand to recover approximately ₹92,000 crore in Adjusted Gross Revenue (AGR) dues from the telecom companies.

Dismissal of Petitions:

• The curative petitions were dismissed by a bench consisting of Chief Justice D.Y. Chandrachud, Justices Sanjiv Khanna, and B.R. Gavai on August 30, 2023. The court concluded that there was no merit in the petitions, stating, "no case is made out."

2019 AGR Judgment:

• In October 2019, the Supreme Court ruled in favor of the DoT’s calculation of AGR, which includes various components such as installation charges, late fees, and revenues from supplementary services, among others.
• The telecom operators had long disputed the government’s formula for AGR computation, arguing that it incorrectly inflated their dues. However, the court had dismissed their objections and upheld the government's broader interpretation.

Telecom Sector's Revenue-Sharing Regime:

• The dispute dates back nearly two decades and revolves around the revenue-sharing model introduced by the government, which required TSPs to pay a percentage of their AGR as license and spectrum fees to the DoT.
• According to the court’s 2019 ruling, the telecom sector had benefited significantly from this scheme but had failed to pay its full dues to the public exchequer.

Curative Petitions and Previous Orders:

• After the Supreme Court dismissed their review plea, the telecom companies filed curative petitions, citing errors in the computation of AGR dues.
• However, the court rejected these petitions, maintaining that no reassessment of the dues could be carried out, as clarified in previous orders. In July 2020, the court had already emphasized that no further disputes could be raised regarding AGR dues based on its earlier rulings.

Payment Timeline:

• In September 2020, the Supreme Court ordered telecom operators to begin annual 10% installments of their AGR dues starting from April 1, 2021, to be completed by March 31, 2031. Despite various legal challenges, the court has reaffirmed that the AGR dues must be paid as per its directives.

Prelims Takeaways:

• Department of Telecom’s (DoT)