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Informist, Monday, May 19, 2025

 

--SC rejects Bharti Airtel, Vodafone Idea pleas seeking waiver of AGR dues

 

NEW DELHI – The Supreme Court on Monday rejected petitions by Bharti Airtel Ltd., its subsidiary Bharti Hexacom Ltd., and Vodafone Idea Ltd. seeking a waiver of adjusted gross revenue dues towards interest, penalty and penalty on interest. The top court said the writ petitions filed by these multinational companies were "misconceived".

 

However, the bench of Justices J.B. Pardiwala and R. Mahadevan clarified that "if the government wants to help you (the petitioners), we are not coming in your way".

 

According to their petitions, Bharti Airtel and Bharti Hexacom sought waiver of INR 347.45 billion in adjusted gross revenue-related dues, while Vodafone Idea wanted a waiver of INR 454.57 billion in dues. 

 

At 1345 IST, shares of Vodafone Idea were down 8.9% at INR 6.72 on the National Stock Exchange. Shares of Bharti Airtel were up 0.1% at INR 1,814.90, while those of Bharti Hexacom were up 1.0% at INR 1,685.10.

 

Bharti Airtel and Bharti Hexacom said that by way of the Supreme Court's adjusted gross revenue judgment, a substantial one-time liability of approximately INR 439.80 billion was imposed on the Bharti Airtel Group, including both the petitioners, and the same was to be paid to the government within a period of 10 years ending on Mar. 31, 2031. Bharti Airtel and Bharti Hexacom said that the principal amount of INR 92.35 billion ballooned to INR 439.80 billion by addition of interest, penalty and interest on penalty. 

 

On these adjusted gross revenue dues, despite substantial payments, the acute burden of additional interest is steadily mounting with each passing day and as of Mar. 31, the companies' liability, as per the government's calculation, was a whopping INR 383.97 billion, said Bharti Airtel and Bharti Hexacom.

 

The adjusted gross revenue dues arising from the apex court order had a crippling financial impact across the telecom sector, questioning the "very survival" of the established telecom companies including the petitioner companies, said Bharti Airtel and Bharti Hexacom. The adjusted gross revenue dues, gravely impacted the ability of the petitioner companies to meet the much-needed aggressive network roll-out requirements for remaining competitive in the telecom sector and for sustaining their operations and serving public interest, the two Bharti group companies said in their petition. "Therefore, in the absence of grant of waiver, as prayed hereunder, on a nondiscriminatory basis to all license holders/TSPs (telecommunications service providers) impacted by the AGR judgment, would undoubtedly jeopardize the survivability of the petitioner companies and the entire telecom sector at large," they added.

 

Vodafone Idea, in its petition, said that by the adjusted gross revenue verdict, a huge liability of approximately INR 582.54 billion was imposed on them and the same was to be paid to the government within a period of 10 years ending on Mar. 31, 2031. As of March, Vodafone Idea's liability, as per the government's calculation, was approximately INR 834.00 billion, it said.

 

The petitioner, post payment of INR 78.54 billion against the adjusted gross revenue dues in 2020, even opted for the part conversion of spectrum and adjusted gross revenue dues into equity against option offered by the government, which currently holds 48.99% stake in the company, said Vodafone Idea. Despite this, the petitioner still has a substantial amount of adjusted gross revenue dues to be repaid, said Vodafone Idea.

 

Due to the enormous adjusted gross revenue liability and no bank funding, the petitioner's very survival is at risk, said Vodafone Idea. Any disruption in services of the company will have a direct and far reaching bearing on approximately 200 million subscribers, said Vodafone Idea. "Moreover, any threat to the operations of the petitioner company would lead to a duopoly in the telecom sector in India with only two major private TSPs serving the Indian population of 1.4 billion, which may lead to anti-competitive practices and significant price hikes for the consumers," Vodafone Idea added.

 

In 2019, the apex court had backed the government's view and levied adjusted gross revenue dues on telecom companies of INR 1.47 trillion. Thereafter in 2020, the court had granted 10 years to telecom companies to clear their adjusted gross revenue dues to the Department of Telecommunications. It had asked telecom companies to pay 10% of the adjusted gross revenue dues upfront. The top court had then said that no revaluation of adjusted gross revenue dues would be allowed, and any default would invite interest, penalty, and contempt of court.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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