AGR issue: No wilful default, says Airtel in its review petition

Our Bureau Mumbai | Updated on November 25, 2019

Operator warns that Supreme Court ruling will lead to massive job losses

Airtel has told the Supreme Court that there was no wilful default in the payment of licence fee in the form of Adjusted Gross Revenue.

In a review petition filed by the telecom operator, the operator has argued that since it had won five rounds of litigation previously, there was no justification for paying interest and penalty on the disputed amount. “The interpretation of AGR has been in dispute since 2003 before the expert bodies as well as the court. It is stated that since all those judgements were ruled in favour of the petitioner (Airtel), it has acted on the basis of the directions given in those judgements,” Airtel has said in its review petition before the Supreme Court.

“A party shall not be penalised for an act of court, especially, when such a party has always succeeded in all rounds of litigation that have prevailed,” it added.

Incumbent telecom operators, including Airtel and Vodafone Idea, will have to cough up nearly ₹1.3 lakh crore after the Supreme Court, in October, dismissed their plea seeking a review of what constituted adjusted gross revenue (AGR).

Also read: SC ruling on AGR: Telcos will have to pay ₹1.3-lakh crore

While the actual balance due from telcos is around ₹23,000 crore, DoT has slapped a penalty, with interest on the original amount. On the question of waiving the penalty and interest, the court had said, “No litigant can be permitted to reap fruits on such inconsistent and untenable stands and litigate for decades in several rounds, which is not so uncommon but is a disturbing scenario projected in very many cases.”

Contesting the apex court’s ruling, Airtel said the Telecom Dispute Settlement Appellate Tribunal, via an order in April 2015, had quashed the demand raised by the Department of Telecom. “Hence, the levy of interest from 2006 is ex facie unreasonable,” Airtel said, adding that it had made full payments to DoT, based on the previous orders of the various courts and hence there was no shortfall in payment, much less wilful default.

Catastrophic consequences

Airtel said the Supreme Court’s order, if implemented, will have catastrophic consequences for the industry and the public at large. It said the huge AGR payout would make operations unviable, leading to job losses, destruction of shareholder value, large-scale NPAs for banks, collateral impact on vendors and other allied sectors, and threaten the roll-out of 5G services in the future.

Airtel said the impact of the Supreme Court order would not be limited to just private operators, but also public sector companies, including BSNL, MTNL, GAIL, Railtel and Powergrid. “The impugned judgement fails to undertake an economic analysis of its impact. It is respectfully stated that in economic matters, the perspective must be based on economical and commercial realities and in context of the entire sector suffering extremely adverse economic conditions. Thus the review is warranted in the public interest,”Airtel said.

Also read: Airtel, Voda-Idea report combined loss of ₹73,000 cr

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Published on November 25, 2019

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