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Last Updated : Mar 18, 2020 08:18 PM IST | Source: Moneycontrol.com

AGR order: Supreme Court lashes out at telecom operators, says all dues must be paid

In an unprecedented criticism of telecom operators, the Supreme Court said their action of self-assessment was contempt of court and warned that the bosses of these companies will be jailed.



The Supreme Court on March 18 launched an unprecedented tongue-lashing at mobile phone operators for self-assessing their outstanding telecom dues, saying the action was a clear violation of its rulings on the matter.

Hearing the Department of Telecommunications (DoT) plea on the adjusted gross revenue (AGR) case, a bench of the Supreme Court of India held that no further objections to its orders would be allowed against payable dues.

In its order, the three-judge bench led by Justice Mishra, and comprising Justices S Abdul Nazeer and MR Shah held that no self-assessment can be done and no further objection would be entertained. “All dues as per our judgement will have to be paid, including interest and penalty. The Solicitor General had filed a plea seeking reasonable time, we will consider this plea on the next date,” the order stated.

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Before passing the order, the judges unleashed a barrage of stinging criticism at the operators for violating its order. The Supreme Court late last year upheld a demand by the DoT that these companies pay Rs 1.47 lakh crore in overdue levies and interest.

"Do the companies think they are more powerful than the court?

Who authorised it?" the court said, warning that it will send top executives of the telecom companies to jail.

The SC order directed that no exercise of self-assessment be carried out and no further objection would be entertained.

Vodafone Idea and Bharti Airtel, two of India's top three carriers, owed the bulk of the dues.

Bharti Airtel said it has paid Rs 13,000 crore as AGR dues. Though Bharti said that amount covers all outstanding dues,  it is less than half of the company's liability as estimated by the DoT.

Vodafone Idea has so far paid Rs 3,500 crore out of the "self-assessed" liability of Rs 21,533 crore it estimates it owes, but much lower than the government demand.

These actions did not cut ice with the court. The order stated that the court does “not appreciate telcos' actions and will hold MDs personally accountable.”

Also Read: Telecom stocks plunge up to 40% as SC denies relief; Bharti Airtel buck the trend

Justice Mishra finally observed, “We will summon the DoT secretary who allowed this self-assessment. You can’t understand our pain. We can’t keep quiet anymore.”

The SC also grilled the officer who passed the order regarding "no coercive" action, adding: “You have committed a sin, we will get you fired.”

The Supreme Court will hear the next AGR case after two weeks.

The proceedings

“Our order is clear, no further objections to be allowed against payable dues,” said Justice Arun Mishra. The same bench - comprising Mishra, Nazeer and Shah had upheld the DoT definition of AGR in the court ruling on October 24, 2019.

Mishra also questioned the telecom companies’ self-assessment. “Where did the concept of self-assessment come in? Who permitted self-assessment without permission of the court? This is sheer contempt of court,” Justice Mishra observed.

The bench further added that the DoT demand was confirmed by the court and self-assessment cannot be allowed when “our order clearly spells out the dues”.

“DOT demand has been confirmed by this court, how can there be self-assessment? This cannot be allowed when our order clearly spells out the dues. This is impermissible,” Justice Mishra said.

He added that some players (telcos) have suggested that they would require 8-10 months’ time to corroborate numbers of self-assessment, but “this can’t be allowed.”

“Dues have been finalised by the court, no backtracking can be allowed for that. Are we fools?! Can’t we understand what's happening?” he stated.

The Vodafone Idea counsel tells court: “We are not seeking recomputation. DoT had made some errors in calculation and licence fee was charged twice in some places.”

Mishra, however, observed that “every company is violating orders”.

“Won’t tolerate this. Companies want to hoodwink us. If required we will summon the MDs of all the telcos. Telcos are the usurpers of public money and don’t even want to pay a fraction of revenue earned,” Justice Mishra stated.

He further observed that companies were “trying to influence the court through the media”. “This is tantamount to seeking a review of our judgement. Please summon the dot officials responsible for self-assessment. Withdraw the DoT move to allow self-assessment. There can be no further exercise regarding the dues payable. If a reassessment is permitted it will be a fraud on this court,” he added.

Mishra further observed that actions of telcos are tantamount to seeking to “bypass our judgement” and that no further objection can be entertained.

Case background

On March 16, Solicitor General Tushar Mehta appearing for the DoT had sought staggered payment over 20 years of AGR dues by telecom companies. The plea also asked that telcos not be charged a penalty and interests on penalty and principal beyond the date of the judgement.

Telcos will instead be charged an 8 percent interest on the staggered payments, CNBC-TV18 reported. Seeking the apex court’s approval, the DoT said the proposal was made based on a formula arrived at after detailed deliberations by the government and the Cabinet.

Citing adverse impact on the telecom and banking sectors, DoT also requested the SC to SC to modify its October 2019 AGR judgement and subsequent orders. In October 2019, the top court upheld the DoT's new definition of AGR and has ordered telcos to clear total dues of Rs 1.47 lakh crore.

Vodafone Idea, Bharti Airtel, and Tata Teleservices owe the highest amounts to the DoT.
First Published on Mar 18, 2020 10:50 am
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