The Supreme Court on Monday agreed to consider a staggered schedule for the payment of telecom dues by 15 entities including Airtel and Vodafone Idea but refused to reconsider the sum of Rs 1.47 lakh crore that the department of telecom (Dot) has demanded in unpaid licence fees and spectrum usage charges dating back to 2007.

The telecom companies want to repay the amount over 20 years which they were prepared to shorten to 15. However, the apex court deemed their plea to be unreasonable even as it was prepared to consider a shorter payback period provided the companies were ready to furnish appropriate bank guarantees.

Several companies, including Reliance Communications, Videocon and Sistema Shyam Teleservices — which no longer provide mobile telephony services — have made claims of insolvency before the court which it agreed to vet.

The bench comprising Justices Arun Mishra, S. Abdul Nazeer and M. R. Shah reserved their verdict on the staggered payments but made it clear that under no circumstances would they allow any re-assessment of the dues.

The bench heard arguments from several senior lawyers appearing for various telecom firms and solicitor-general Tushar Mehta.

The court is expected to pronounce its verdict on August 10.

On the same day, the insolvency claims of R-Com and two other telecom firms would also come up for hearing.

“There is a need to ensure that the IBC (Insolvency and Bankruptcy Code) is not being misused by companies to escape liabilities,” the bench observed, while seeking details on R-Com and others.

Technically, since the IBC proceedings are pending against these three companies, they can escape paying the AGR dues. The court will examine whether their plea of insolvency is genuine or a ruse to avoid AGR liabilities.

When the issue of re-calculation of the dues was raised, the bench shot back: “We will not hear arguments for re-assessment (of AGR related dues) even for a second.”

In all, 15 telecom entities owe the government Rs 1.47 lakh crore – Rs 92,642 crore in unpaid licence fees and another Rs 55,054 crore in outstanding spectrum usage charges.

Telecom providers pay DoT nearly 3-5 per cent of their adjusted gross revenue (AGR) in usage charges for spectrum or airwaves and 8 per cent of AGR as licence fees.

Vodafone plea

Senior lawyer Mukul Rohatgi appeared for Vodafone Idea, while senior counsel Arvind Datar and Ramji Srinivasan represented Tata Teleservices. Hughes Communications was represented by senior lawyer Kapil Sibal.

Rohatgi pleaded that telcos be allowed to stagger the payments over 15 years as Vodafone’s “entire investments in India businesses have been wiped out”.

Asked how Vodafone would pay its dues, Rohatgi said all tangible assets of the company were secured with banks. No nationalised bank was willing to give any guarantee, he added.

This prompted the bench to ask: “If you’re running in loss for decades, how can we rely on you? How will you ensure paying AGR dues? ”

Rohatgi assured that the company would pay the dues if the payments schedule was staggered.

“The Supreme Court order should be honoured. If the verdict can’t be honoured in one stroke, it should be in parts,” he said.

Solicitor-general Tushar Mehta told the court that the Centre was in favour of the apex court judgment that there should be no fresh reassessment of the AGR dues but at the same time the telcos should be given some time to refund the amount.

“The government has taken the decision (to permit deferred payments) to save the cascading effect on the economy,” Mehta told the court.

On March 18, the bench had warned that it could send managing directors of telecom companies to jail if they persist with defiance of its October 24, 2019 judgment to refund the AGR dues over Rs 1.47 lakh h crore Adjusted Gross Revenue (AGR) to the exchequer; as it asserted there would be no question of any “self assessment” or “reassessment.”

The court was dealing with an application moved by the DoT seeking a 20 year window period for the telecom companies to pay the AGR ordered by the bench in the October 2019 judgment.

“Fact remains that companies have earned and you have to pay from 2002. Telecom companies are usurpers of public money. You don’t even want to pay a fraction of the revenue earned..Even the media is in grossest contempt of court. Media is misleading country…We are disturbed..” the court had observed at an earlier hearing.

“There is no question of reopening of judgment…it will be a fraud if we allow this,” Justice Mishra had said. Ends