If telecom operators like Bharti Airtel and Vodafone Idea had pinned hope on some relief in terms of being allowed to offer staggered payment of their adjusted gross revenue (AGR) dues, the Supreme Court on Friday shattered it all by expressing its displeasure in severely strong words that why should contempt proceedings not be initiated against them for not making the payment by January 23.
It also came down heavily on the department of telecommunications officer who issued the order on January 23 to all its field offices for not initiating any coercive order against the telcos for non-payment as their modification pleas were pending before the apex court. It also issued contempt notices against the official. The managing directors and directors of the telcos were directed to be present in the court at the next hearing on March 17 to explain why contempt proceedings should not be initiated against them and why they did not make the payments on time. If the payments are made before that date, personal appearance of the executives will not be required but they still need to furnish the explanation.
The SC’s ire was over the fact that since it had rejected the review petition of the telcos there was no reason for them not to make the payment by the designated date and for DoT to issue orders to that effect.
“We have to draw contempt against these companies. How are they behaving? We had dismissed the review plea and not even a single penny has been deposited yet. These companies haven’t paid anything since 20 years by way of AGR dues. The desk officer (of DoT) is staying our order. We are concerned with the health of judiciary, of this country and of this system,” the bench headed by justice Arun Mishra said, while hearing modification applications filed by telcos seeking permission to approach the DoT for scheduling the payment of AGR dues and other reliefs.
With such sharp words from the SC, the DoT immediately recalled its January 23 order and subsequently one of its field office issued an order in the evening that the telcos need to clear all their dues by midnight. This means clearing dues to the effect of at least Rs 1.02 lakh crore – the total dues of the three telcos, Bharti Airtel, Vodafone Idea, and Tata Teleservices, within a span of some seven hours.
It was not only DoT which swung into action. Bharti Airtel which has total dues of Rs 35,586 crore, wrote to DoT that since the exercise required complex calculations and reassessment, it will deposit Rs 10,000 crore on February 20 and the remaining amount before March 17. Till the time of going to the press, however, there was no statement from Vodafone Idea and Tata Teleservices on when and how they intend to pay.
Though in total 15 telecom companies owe Rs 1.47 lakh crore in dues to the government, many have either shut shop or gone into insolvency. As such the total amount from the three companies functioning – Bharti Airtel, Vodafone Idea, and Tata Teleservices – is Rs 1.02 lakh crore.
Though Bharti has raised funds to pay up and Tata Teleservices is in a position to do the same, Vodafone Idea has stated in the past its inability to pay in one go. Friday’s order in a way pushes Vodafone Idea to shut shop as was indicated by its chairman Kumar Mangalam Birla earlier.
Apart from the telcos, a host of non-telecom PSUs who either have some form of telecom licence or use spectrum for some part of their operations, also needed to pay over Rs 3 lakh crore as dues. However, they got a reprieve of some sort as the court directed them to approach legal forums (TDSAT) to challenge the notices issued to them by the DoT. “We don’t know who is creating this nonsense. Who is generating all this? Justice Arun Mishra asked senior counsel Mukul Rohtagi, who immediately opted to withdraw the applications filed by four PSUs.
As is known, the SC in its October 24, 2019 order had upheld the government’s definition of AGR which includes all revenues of a licence holder including those from non-core telecom operations such as rent, dividend and interest income. It had directed the telcos to pay the dues within three months.