Supreme Court order on Vodafone Idea limited to additional AGR dues up to FY2016-17

The apex court noted that the Centre now holds 49% equity in Vodafone Idea and that around 20 crore customers use its telecom services, making the issue one of significant public interest

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The Supreme Court’s order permitting the government to revisit the adjusted gross revenue (AGR) demands applies only to Vodafone Idea Ltd and is restricted to the additional AGR dues raised for the period up to FY2016-17, as per the order copy.

As per the order copy, the order applies only to Vodafone Idea and covers only the additional AGR dues up to FY2016-17, taking into account the “peculiar facts and circumstances” of the case, including the Union government’s 49% equity stake in the telecom operator.

“It is further to be noted that the prayer in the petition itself restricts its claim only to the additional AGR demand raised by the respondent for the period up to the Financial Year 2016-17,” the Bench led by Chief Justice B. R. Gavai said in its order dated October 27.

A copy of the order was reviewed by Moneycontrol. “We further clarify that this order is passed only with regard to the petitioner-Vodafone Idea Ltd., taking into consideration the peculiar facts and circumstances of the case as put up by the Union of India,” it said.

Telecom minister Jyotiraditya Scindia on October 29 said the government will assess its implications before making any policy decision. We will need to study the order to understand its implications and will wait for Vodafone Idea to apply for seeking relief,” Scindia said.

Officials told Moneycontrol that the Centre will decide on possible relief measures for Vodafone Idea only after examining the detailed order. “The finer details of the judgment will guide us on the course of action for any possible relief,” a senior government official said, adding that the written order is still awaited.

Another official said the telecom operator will have to formally communicate the kind of relief it is seeking once the court issues its directive. “The extent of any relief will depend on internal deliberations and the court’s final wording,” the official added.

The apex court noted that the Centre now holds 49% equity in Vodafone Idea and that around 20 crore customers use its telecom services, making the issue one of significant public interest.

Taking these factors into account, the Court said there was no impediment to the Union government reconsidering the AGR issue and taking a fresh decision in accordance with law, if it so desires. It emphasised that the matter falls “within the policy domain of the Union of India,” and there was “no reason to restrain or prevent it” from doing so.

The order came in response to Vodafone Idea’s petition seeking to quash additional AGR demands raised by the Department of Telecommunications (DoT) and to reconcile dues as per the Deduction Verification Guidelines of February 2020.

Solicitor General Tushar Mehta, appearing for the government, informed the Court that given the change in circumstances — including the government’s ownership stake and public interest considerations — the Centre was willing to re-examine and reconsider the matter.

While the Court has not granted any direct relief on the AGR dues, the order effectively opens the door for a potential government review of Vodafone Idea’s liabilities, a move that could have broader implications for the financially strained telecom operator.