NEW DELHI: The Supreme Court on Monday reserved its judgement on the plea by telecom firms seeking a staggered payment schedule for their massive AGR dues, most of which remains unpaid. The day’s proceedings also saw the bench make a crucial observation: If spectrum trading guidelines mandate the clearing of dues before such transactions, then the government should cancel spectrum licenses where statutory dues have not been paid; these could then be auctioned off—possibly for a higher value.
In its submission to the bench of Justices Arun Mishra, S Abdul Nazeer, and M R Shah, the Department of Telecom (DoT) had said that spectrum trading guidelines require the seller to satisfy all pending dues before the sale of spectrum. They also allow the DoT to seek dues on any revenues from such spectrum from both the seller and buyer, “jointly or severally”.
“If telcos are unwilling to pay, we will direct cancellation of spectrum allocation. How else is DoT supposed to deal with such an issue?” the bench asked. If the bench decides in this direction in its final order, Bharti Airtel is set to get stuck with additional AGR liability due to its takeover of bankrupt Aircel’s and Videocon Communications’ spectrum licenses.
Videocon owes Rs 1,376 crore, while Aircel owes a whopping Rs 12,289 crore. If Airtel does not pay up, it will lose a large portion of its spectrum resources and may have to bid for the same through a DoT auction.
As for Reliance Jio, which shares over 30 per cent of bankrupt Reliance Communications’ (RCom) spectrum, it had told the court earlier that it was willing to pay any dues arising from its use of the same, but that it would not pay any of RCom’s dues.
Even in this case, Jio may still end up losing these assets, though. The court has expressed strong reservations about the sale of spectrum through the IBC process, noting that the new holder will end up with no encumbrances and AGR dues would be wiped out. The bench said it will clarify whether there will be any additional liability for Jio and Airtel in its final order. This is likely to come before September 2, which is the day Justice Arun Mishra will retire.
Final order likely to come before September 2
The Supreme Court has reserved the judgement on the telecom adjusted gross revenue (AGR) case for a new date. While the bench has not mentioned any date, the judgement is expected to come before September 2, when Justice Arun Mishra will retire.