Economy

Apex court ‘extremely worried’ AGR dues will be wiped out by IBC process

Our Bureau New Delhi | Updated on August 20, 2020 Published on August 20, 2020

The Supreme Court (SC) on Thursday said that it is “extremely worried” that almost the entire adjusted gross revenue (AGR) dues (owed to the government by telecom operators) will be wiped out by the Insolvency and Bankruptcy Code (IBC) process.

A three-member Bench comprising Justices Arun Mishra, S Abdul Nazeer and MR Shah, which continued to hear the AGR matter on Thursday, sought to know whether a liability like AGR could be wound up in this fashion, under the guise of selling spectrum under IBC.

It observed that under IBC, spectrum trading is different from sale of spectrum. Without paying for the horse, the telecom companies are taking a ride, the Bench noted, adding that unless dues are paid, nobody can start using the spectrum.

The SC Bench further observed that after the sale of spectrum, the new user will have extinguished any pending demand against the spectrum in question.

The SC is in a difficult situation as it has to find a balance or choose between the different positions taken by the telcos, lending banks and the government as regards realisation of AGR dues and whether the IBC process should be adopted. What has complicated the matter is the differing hierarchy or priority of payments prescribed for various categories of stakeholders including the government under the IBC and Department of Telecommunications (DoT) guidelines.

Spectrum sharing details

The SC on Thursday also asked the representatives of the telcos and government to give details of all spectrum sharing arrangements. The DoT was also asked to submit all details of spectrum allocated since 1999 to RCom and Aircel.

Hearing adjourned

The hearing has been adjourned to Friday.

Justice Mishra also mentioned his impending retirement. “Seven more days, I want to now be at peace...I want my own tranquillity now,” he said.

On July 20, the SC had reserved its order on the timeline of payment of AGR dues by the telcos. That day the DoT stuck to allowing a period of 20 years for staggered payment of AGR dues by the telcos, against the 15-year window requested by the telcos.

As per DoT estimates, while Airtel has AGR dues of ₹43,980 crore, Vodafone Idea has ₹51,400 crore and Tata has ₹16,788 crore. Till now, Voda Idea has paid ₹7,854 crore, Airtel ₹18,004 crore and Tata ₹4,197 crore.

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Published on August 20, 2020
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