SC dismisses Vodafone Idea's plea for waiver of AGR dues; telco's shares tumble 9%

SC dismisses Vodafone Idea's plea for waiver of AGR dues; telco's shares tumble 8%

The Supreme Court on May 19 dismissed the pleas of telecom majors Vodafone Idea, Airtel and Tata Teleservices seeking the waiver of adjusted gross revenue (AGR) dues.

A bench comprising Justices J B Pardiwala and R Mahadevan called the pleas "misconceived".

"We are really shocked by these petitions which have come before us. It is not expected of a multinational company. We will dismiss it," the bench told senior advocate Mukul Rohatgi, appearing for Vodafone Idea.

At close on May 19, Vodafone Idea shares on BSE ended 8.68% lower at Rs 6.73 apiece. Meanwhile, shares of Indus Towers closed 2.87% lower at Rs 388.6 apiece.

The top court refused to come in the way of the government wanting to help the telecom companies.

According to their petitions, Bharti Airtel and Bharti Hexacom sought waiver of Rs 34,745 crore in adjusted gross revenue-related dues, while Vodafone Idea wanted a waiver of Rs 45,457 crore in dues.

Rohatgi previously said the survival of the petitioner firm was crucial for maintaining competition in the telecom sector.

Now the Centre holds a 49% stake in the company following a recent equity conversion of interest dues, he had added.

"The present writ petition does not seek review of the judgment but only seeks waiver of rigors of payment of interest, penalty and interest of penalty under the Judgment," the company's plea said.

The petitioner, therefore, sought appropriate directions to the Centre to "act fairly and in public interest" and not insist on the "payment of interest, penalty and interest on penalty on AGR dues".

The company said it is one of the three major private telecom service providers in India and has around 18% of the total market share of mobility subscribers in the country.

"Even post this conversion of dues, Government of India has dues in respect of spectrum of approx Rs 1,19,000 crore in addition to AGR dues, to be recovered from the Petitioner Company," it said.

The company has an active workforce of over 20,000 employees which are dependent upon it for their livelihood, the plea had stated.

Bharti Airtel asked for relief in AGR dues on an “equitable basis”.

In its petition, Bharti Airtel and its subsidiary Bharti Hexacom requested a waiver of Rs 34,745 crore in dues related to interest and penalties.

The top court had previously refused to review its 2021 order rejecting the pleas of telecom majors including Bharti Airtel and Vodafone Idea for rectification of alleged errors in calculation of AGR dues payable by them.

The top court in September 2020 fixed a time frame of 10 years for telecom service providers struggling to pay Rs 93,520 crore of AGR related dues to clear their outstanding amount to the government.