Supreme Court Rejects Vodafone Idea and Bharti Airtel’s Pleas on AGR Dues

The Supreme Court of India has dismissed the curative pleas of telecom companies seeking corrections in the computation of Adjusted Gross Revenue (AGR) dues payable by them. The court stated, “Application for listing the Curative petitions in open court is rejected. We have gone through the curative petitions and the connected documents. In our opinion, no case is made out within the parameters indicated in the decision of this court.”

The order was passed by a bench of Chief Justice of India DY Chandrachud, Justice Sanjiv Khanna, and Justice BR Gavai. The pleas for a hearing in open court were also rejected. Curative petitions are decided in chambers by the judges.

Vodafone Idea (VI), Bharti Airtel, and other telecom companies had filed pleas seeking a review of the AGR dues payable by them as per the apex court’s October 2019 judgement. These review petitions were dismissed in January 2020. In September 2020, the Supreme Court granted telecom companies a period of 10 years to clear their pending AGR dues to the Central government, with a 10 per cent payment to be made every year. The deadline for the first installment was March 31, 2021.

In July 2021, the Supreme Court dismissed the plea of telecom majors, including Bharti Airtel and Vodafone Idea, seeking correction of errors in the calculation of AGR dues. The companies argued that the Department of Telecom (DoT) had made arithmetical errors in the calculation of AGR dues and wanted the court to allow rectification of these errors.

The total liability on Vodafone Idea was Rs. 58,254 crore, while Bharti Airtel was to pay Rs. 43,980 crore. Vodafone India, in its curative plea, stated that it was not challenging the imposition of the license fee but was contesting two specific directions of the top court. The first challenge was against the court’s direction that demands made by the DoT would be final and that even manifest/clerical/arithmetical errors in the computation of dues could not be rectified. The second challenge was against the court’s order that licensees would be liable to pay a penalty of 50 per cent of the entire amount of short-payment and interest on the said penalty at a rate 2 per cent above the prime lending rate of the State Bank of India, compounded monthly.

The curative plea argued that since the petitioner is already bearing a high rate of interest on delayed payment, it should not be further burdened with additional penalties and interest on penalties. The plea highlighted that the telecom industry is going through a critical phase and should not be burdened with exorbitant penalties.

At the time of filing this report, the stocks of Vodafone Idea dipped 14 per cent, while Bharti Airtel was trading with a gain of 1.8 per cent. However, the stocks of the telecom companies are down after the judgement.