The apex court had sided with the Department of Telecommunications (DoT) back on the issue of AGR (adjusted gross revenue) dues. The appeal made by DoT was that the telcos must pay AGR dues on the revenue they generate from the selling of assets and other non-telecom services in addition to the revenues they generate from telecom services. But this definition of AGR dues didn’t fall straight with the telecom companies. Hence the telcos made an appeal to not side with the definition of AGR dues which DoT suggested. But on October 2019, the Supreme Court of India ruled in favour of DoT and asked the telcos to clear the unpaid dues. The SC said that gains which come from the sale of capital assets and insurance claims won’t be included under the AGR dues but everything else will be. In a ruling today, SC also expressed its displeasure with the telcos on a certain issue.
Telcos Implying ‘Fraud on the Court’ by Asking for Continuous Reassessment of AGR Dues
SC has expressed that it is not happy with the telecom companies as they have been continuously asking for the reassessment of the October 2019 decision on AGR dues. The SC said that the continuous attempts by telcos for the reassessment of the decision made by the court amount to reflect ‘Fraud on the Court’.
The bench was headed by Justices S Abdul Nazeer, Arun Mishra, and Mr Shah. The SC has made it clear that it is not going to listen to telcos plea of recalculation of AGR dues. The only issue that the apex court is going to be focusing on is at what time frame do the telcos pay the remaining dues.
One of the other major topics discussed by the SC was can spectrum be sold by the companies which are undergoing IBC process. Mehta said that the submissions made by Aircel to the National Law Tribunal (NCLT) for the sale of spectrum, that can't happen. Spectrum can’t be sold by the telco because it is government property and not a private one.
Mehta further said that the objection on sale of spectrum is still under consideration by the SC. To this, the bench raised a question as to why did the government take so much time in raising an appeal in the court for spectrum being a government property and hence can’t be sold. One of the justices, Mr Shah asked Mehta, ‘what if the spectrum was sold in the meanwhile?’
The apex court has directed SG Mehta to come prepared on August 14 and make a clear statement on whether the spectrum can be sold or not for companies undergoing the IBC process. SC also asked Divan, the Resolution Professional of Reliance Communications as to how were the proceedings for Reliance Communications revived by the NCLT when the SC had directed for a settlement payment between Ericsson and Reliance on August 2019.
To this Divan replied that the Committee of Creditors (CoC) had approved of the resolution plan. The SC has asked Divan to submit a hardcopy regarding this matter and will further resume the argument on August 14, 2020.