AGR dues: SC verdict on staggered payment by telcos on Tuesday

New Delhi, Aug 31 (IANS) The Supreme Court will on Tuesday pronounce its judgement in connection with the staggered payment schedule of Adjusted Gross Revenue (AGR) dues by telecom companies.

A bench comprising Justices Arun Mishra, S. Abdul Nazeer and M.R. Shah is likely to deliver the judgement on three counts: the staggered payment schedule where the Centre said it is fine with the 20 years arrangement to recover AGR dues; could spectrum be transferred or sold by companies under the IBC; and additional liabilities, if any, on Jio, and Airtel for past dues of RCom, Videocon, and Aircel.

Airtel had spectrum sharing and trading pacts with Videocon and Aircel, whereas Jio had with RCom. The verdict may clarify the additional liability, if any, for Jio and Airtel on account of past dues of RCom and Videocon, respectively.

The top court had asked the Department of Telecommunication (DoT) to share details of demand under process for raising liabilities against Airtel and Jio against the backdrop of spectrum sharing. The bench had also observed that if DoT does not provide correct position on AGR demands, then the ruling may be wrong. The bench said it has been nearly 10 months to the AGR ruling, why has DoT not yet raised the demand?

DoT informed the bench that no demand has been raised against Jio, and Airtel for part dues of RCom, Videocon, and the assessment of Jio and Airtel’s liability for past dues is under process.

Senior advocate Harish Salve, appearing for the committee of creditors for RCom, contended before the bench that the right to use spectrum is an asset which can be sold, if the company wants to. He added that the resolution plan proposes the sale of right to use spectrum is in line with the licence trading guidelines.

Senior advocate Kapil Sibal, appearing for Airtel, contended before the bench that if the liability of past dues of Videocon were to be imposed on Airtel, why did DoT wait so long, and it should have clarified it long back.

The bench observed that according to trading guidelines, the seller of spectrum shall satisfy all pending dues, before the sale. It said it understood that upon non-payment of dues by the seller, the trading guidelines would transfer the burden on the buyer.

DoT counsel contended before the bench that under trading guidelines, past dues have to be cleared prior to spectrum trading, and under trading guidelines, DoT could recover dues from both seller and buyers.

As the bench asked why there was no demand raised against Airtel for past dues of Videocon’s spectrum, Sibal said Airtel has been paying all dues pending since acquiring this in May 2016.

At this, the apex court said “what is being proposed seems like renting out your house to a tenant and the tenant selling your house under IBC”.

–IANS

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