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Videocon AGR dues: SC restrains Centre from encashing Airtel's bank guarantee for three weeks

A Department of Telecommunications notice, issued to Bharti Airtel on August 17, warned that failure to make payment will result in invocation of its bank guarantees.

August 24, 2021 / 05:10 PM IST
File image of the Supreme Court of India

File image of the Supreme Court of India

The Supreme  Court on August 24 restrained the Centre from encashing Bharti Airtel's bank guarantees for a period of at least three weeks to recover adjusted gross revenue (AGR) dues of Videocon Telecom.

Videocon Telecom, whose spectrum was taken over by Airtel in 2016 for Rs 4,428 crore, is assessed to owe an amount of Rs 1,376 crore to the government in form of AGR dues.

On August 17, the DoT had issued a demand notice asking Airtel to pay the pending AGR dues of Videocon within a week. If the Sunil Mittal-led telecom giant fails to pay the stated amount within the stipulated time, its bank guarantees would be invoked, the department said.

Airtel subsequently moved the apex court, appealing the bench to restrain the DoT from encashing its bank guarantees.

Spectrum trading guidelines dictate that Videocon should have cleared all dues prior to concluding any agreement for spectrum trading, the company's counsel told the bench, as per a CNBC TV 18 report.

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Videocon liability is now being foisted on Bharti Airtel by DoT, the counsel added, further pointing out that even if Videocon's liability is added to Airtel’s AGR, the latter's payment of Rs 18,004 crore "easily satisfies the 10 percent payment that had to be made by March 2021".

The court, apart from restraining the Centre from invoking Airtel's bank guarantees for three weeks, allowed the company to approach the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) to challenge DoT's order on Videocon's AGR dues.

Solicitor General Tushar Mehta, who opposed Airtel's bid to approach the TDSAT, told the court that the demand notice issued by DoT was as per the SC’s order on AGR dues issued in September 2020, Economic Times reported. Mehta further added that he would contest the jurisdiction of the TDSAT to decide on the issue, the report added.
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