The Supreme Court delivered its verdict in the matter pertaining to the repayment of adjusted gross revenue (AGR) dues by telecom companies on September 1. The bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah allowed a 10-year timeline for payment of AGR dues by telecom companies, will begin from April 1, 2021. The companies are required to make an upfront payment of 10 percent of the dues. The date fixed for annual instalment of AGR dues by telecom companies is February 7, the SC said. The SC clarified that there will be no revaluation of the dues.
The SC had in October 2019 upheld the expanded definition of AGR as given by the DoT, which placed a demand of over Rs 1 lakh crore on telecom companies.
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Experts say this is good for telecom companies even though the period of 10 years is lesser than the expected of 15-20 years.They say the verdict could work in favour of Reliance Jio and Bharti Airtel, but might be a matter of survival for Vodafone Idea.
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The news may not be good for Vodafone Idea, who along with Bharti Airtel had sought for 15 years to repay the amount. While Bharti Airtel may not be affected much by the judgement, Vodafone Idea with its stretched balance sheet mayfind it difficult to survive.
As per Bharti Airtel’s assessment, it owes Rs 13,004 crore to DoTwhich it has already paid along with Rs 5,000 crore in ad-hoc payment. DoT, however, has assessed Bharti’s dues at Rs 43,780 crore.
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SC has given 10 years against our demand of 15 years, 10 years is not bad. Too early to talk about a review petition. One needs to understand the judgment: Senior advocate Mukul Rohatgi, counsel for Vodafone Idea, to CNBC-TV18
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As per the DoT assessment, total amount was Rs 1.19 lakh crore — Vodafone Idea owed Rs 58,254 crore, Bharti Airtel Rs 43,989 crore and Tata Teleservices owed Rs 16,798 crore to the government.
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No doubt that there will be review andcurative. SpectrumUsage Charge (SUC) doesnot constitute AGR and this is ajurisdictional question: Senior advocate Abhishek Manu Singhvi, counsel For Bharti Airtel, to CNBC-TV18.
AGR Case LIVE Updates |
Bharti Airtelrallied 5.5 percent to Rs 542.40 andReliance Communicationsgained 3.32 percent at Rs 2.49, whereasVodafone Ideaplunged 14.92 percent to Rs 8.67on the BSE at 12:03 hours IST.
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Telecom stocks trade mixed after AGR verdict. Bharti Airtel, RCom rally, while Vodafone Idea tanks 15 percent
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The date fixed for annual installment of AGR dues by telecom companies is February 7, the SC said.Existing bank guarantee given to be kept alive and Managing Director to give the undertaking to comply with the schedule.
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Government was willing to give 20 years but SC said 10. Each company will decide if they want to file a review petition: Senior advocate Kapil Sibal, who had represented Bharti Airtel, to CNBC-TV18.
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SC clarifies again that no revaluation as regards AGR dues to be allowed, legal news website Bar & Bench reported.
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The bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah said the 10-year timeline for payment of AGR dues willbegin from April 1, 2021, and the payments can be made in instalments till March 31, 2031.
AGR Case LIVE Updates |
The SC has directed telcom companies to pay 10 percentof the AGR dues upfront. Telcom companies will be required to submit undertaking to pay AGR dues, and any default in payments would invite interest, penalty, along with contempt of court.
JUST IN |
SC allows 10 years for staggered payment of AGR dues
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Agree that whether spectrum sale can be allowed U/IBC is to be decided by NCLT: SC
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Judges and lawyers have assembled, CNBC-TV18 reported.
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SC verdict on telecom companies' plea expected shortly.
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Since the Supreme Court’s first judgment on payment of AGRdues of telecom companies on October 24, 2019, Vodafone Idea had made it clear it might have to shut shop without a bailout. Watch this video to find out more.
Delhi HC stays IBC proceedings against Anil Ambani in Rs 1,200 crore loan default case
The Delhi High Court, on August 27, stayed the IBC proceedings launched by the State Bank of India (SBI) seeking to enforce personal guarantees of Anil Ambani worth Rs 1,200 crore. The court restrained Ambani from selling and transferring personal assets.
Arguing against the stay order, Ministry of Corporate Affairs (MCA), Insolvency and Bankruptcy Board of India (IBBI) and SBI said that it would open the floodgates for similar cases where promoters try to escape personal guarantee.
AGR Case LIVE Updates |
The SC on August 24 reserved its judgment on the issue of recovery of AGR dues from insolvent telecom companies.On August 20, the top courtsaid it is worried that almost all of the AGR dues will be wiped out in the IBC process.
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Followour LIVE coverage of the markets to check howtelecom stocks are performing ahead of the verdict.
AGR Case LIVE Updates |
A Supreme Court bench led by Justice Arun Mishra will deliver the verdict at 11.30 am today. The judgement is expected on three key points:
> Time frame for the staggered repayment of AGR dues by telcom players. While the DoT had sought a 20-year time frame, companies like Bharti Airtel and Vodafone Ideahad sought 15 years.
> Whetheror not spectrumand the right to use it canbe transferred, assigned or sold under the Insolvency and Bankruptcy Code (IBC)
> Additional liabilities, if any, on Reliance Jio and Bharti Airtel for the past dues of RCom, Videocon and Aircel.
The Supreme Court (SC) had in October 2019 upheld the expanded definition of AGR as given by the DoT, which placed a demand of over Rs 1 lakh crore on telecom companies.
Vodafone Idea owes balance AGR-related dues of around Rs 50,399 crore, while Bharti Airtel's outstanding amount is Rs 25,976 crore, Solicitor General Tushar Mehta said on July 20.
Dues owed by companies facing insolvency proceedings, such as Reliance Communications (RCom) and Aircel are also being calculated.
Good morning! Welcome to Moneycontrol’s LIVE coverage of the Supreme Court hearing of the adjusted gross revenue (AGR) dues case. The apex court is expected to give a verdict at 11.20 am on the issue of staggered payments of AGR dues by telecom companies such as Bharti Airtel and Vodafone Idea.
