SC junks final AGR plea: With all legal options closed, govt relief now telcos’ only hope

Telecom

Telecom operators such as Vodafone Idea and Bharti Airtel have exhausted their legal recourse after the Supreme Court dismissed their pleas regarding Adjusted Gross Revenue (AGR) dues.

The Supreme Court dismissed a set of review petitions filed by telecom companies seeking to overturn its 2021 order, which refused to allow corrections of errors or unintended additions in the telecom department’s calculation of AGR dues.

Vodafone Idea, in a statement, said that the company and other telecom operators filed miscellaneous applications, review petitions, and a curative petition at the Supreme Court from time to time in the AGR matter, mostly dealing with the need to allow the correction of manifest errors in AGR demands.

“These petitions mainly had been disposed of, the last being the dismissal of the Curative Petition for which we had intimated the Stock Exchanges on 19 September 2024. However, there was one pending Review Petition dated 23 August 2021, which has now been dismissed, which closes all AGR-related matters at the Hon’ble Supreme Court,” the company said.

Bharti Airtel separately informed stock exchanges that the Supreme Court, vide its order dated January 28, 2025, has dismissed the review petitions filed by the telecom service providers in the AGR matter.

“The aforesaid order was received/uploaded on the website of Hon’ble Supreme Court on February 13, 2025,” Airtel stated.

Airtel had filed a review petition against the order/judgment dated July 23, 2021, in the AGR matter, whereby the clarification/modification applications filed by the telcos for correction of errors were dismissed by the Supreme Court.

Now, telcos have no other option but to rely on the government for another relief package. Moneycontrol reported on January 18 that the government is considering proposals to relax AGR dues, which could significantly reduce the financial burden on telcos.

The Department of Telecommunications (DoT), in a proposal shared with the finance ministry, suggests waiving 50% of interest and 100% of penalties and interest on penalties. If finalized, it could result in over Rs 1 lakh crore in financial relief for telecom operators, with over half benefiting Vodafone Idea, which is grappling with severe economic distress.

Sources said that after the DoT sent its proposal to the finance ministry, the Cabinet Secretary is expected to take a final call.

The proposal could reduce Vodafone Idea's outstanding AGR liability by approximately Rs 52,000 crore and Bharti Airtel's by about Rs 38,000 crore. This would provide substantial financial relief and improve operational viability if implemented.

“With the Supreme Court’s decision, the legal avenues for telecom companies on AGR dues have narrowed significantly. While a curative petition remains an option, its success is uncertain,” Ketan Mukhija, Senior Partner at Burgeon Law, told Moneycontrol.

Zubin Morris, Partner at Little & Co, told Moneycontrol that the court's ruling has effectively exhausted telecom operators’ avenues for legal recourse regarding the calculation of these dues. Now, telecom companies could argue to reduce or waive the interest and penalties imposed on AGR dues, as these form a significant portion of the liability.

“They might lobby for legislative changes that redefine AGR calculations or offer broader relief provisions, especially given their financial challenges,” Morris said.

Mukhija added that a more strategic approach for telecom operators like Vodafone Idea and Bharti Airtel would be to engage with the government for relief measures, such as extended payment timelines, policy interventions, or financial restructuring.

“Given the sector's critical role, a constructive dialogue with authorities could help create a balanced solution that ensures compliance and industry stability,” Mukhija said.