SC asks DoT not to invoke BGs of Airtel for 3 weeks to recover AGR dues of Videocon

The Supreme Court directed DoT not to invoke the bank guarantees (BGs) of Bharti Airtel for three weeks for recovering Rs 1,376 crore in AGR-related dues of Videocon Telecom Ltd (VTL) which had sold its spectrum to the Bharti group.

New Delhi: The Supreme Court Tuesday directed DoT not to invoke the bank guarantees (BGs) of Bharti Airtel for three weeks for recovering Rs 1,376 crore in AGR-related dues of Videocon Telecom Ltd (VTL) which had sold its spectrum to the Bharti group.

The top court, which refused to entertain Airtel's plea that VTL dues are not payable by it, permitted the telecom major to approach the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) with the grievances.

“The DoT shall not invoke the bank guarantee of Respondent...(Bharti Airtel) for the period of three weeks from today,” a bench comprising justices L Nageswara Rao, S Abdul Nazeer and M R Shah said in its order.

At the outset, the bench made clear to senior advocate Shyam Divan, appearing for Airtel, that it will not interfere with the earlier judgement. “We are making it very clear that we will not interfere with the judgement and we will give you the liberty to withdraw to approach the appropriate forum,” the bench said.

It also noted the submissions of Solicitor General Tushar Mehta, appearing for the Department of Telecom, that DoT will be permitted to raise all the grounds including the objection to the jurisdiction, if any, before the forum to be chosen Airtel. Airtel said a DoT communication of August 17 has directed it to pay AGR related dues of VTL within a week, failing which the BGs.

Divan referred to various documents including the spectrum trading guidelines and said that the dues -- arising from the Adjusted Gross Revenue or AGR of VTL, the seller of the spectrum -- were known at the time of the sale and hence the seller and not the buyer can be fastened with the liability to pay.

VTL had sold its spectrum to Bharti Airtel in pursuance of agreements entered into them in 2016. The Bharti group has already paid Rs 18,004 crore in AGR-related dues to DoT by March 31, 2021, which is much more than 10 per cent of its total AGR dues of over Rs 43,000 crore, he said.

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In its September last year order, the apex court had said that telecom operators shall make the payment of 10 per cent of the total dues as demanded by the DoT by March 31, 2021 and the rest be paid in yearly instalments from April 1, 2021 to March 31, 2031.

Divan argued that Airtel should not be proceeded against without being granted a reasonable opportunity to raise the grievances before an appropriate forum.

The bench then suggested the DoT saying: “We will permit him to withdraw and go before the TDSAT and hold your hand for two-three weeks.” The top court on July 23 had dismissed the applications filed by telecom majors, including Vodafone Idea and Bharti Airtel, seeking rectification of the alleged errors in the calculation of AGR related dues payable by them.

“All the miscellaneous applications are dismissed,” the bench headed by Justice L Nageswara Rao said while pronouncing the order. The telecom companies had submitted before the apex court that arithmetical errors in the calculation be rectified and there are cases of duplication of entries.

The top court in September last year had given a time period of 10 years to telecom service providers struggling to pay Rs 93,520 crore of AGR related dues to clear their outstanding amount to the government. The top court, which had held that demand raised by the DoT in respect of AGR dues will be final, had said there shall be no dispute raised by the telcos and there shall not be any re-assessment.

The apex court had in October 2019 delivered its verdict on the AGR issue. The DoT in March last year had moved a plea in the top court seeking permission for allowing staggered payment of the dues by telcos over a period of 20 years.

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PTI