NS Supreme court relieved on Tuesday Airtel rein in Department of Telecommunications (DoT) by encashment of Airtel’s bank guarantee in the Airtel-Videocon Adjusted Gross Revenue (AGR) case. The top court also directed the DoT not to invoke the guarantee for three weeks. In addition, Airtel was allowed to transfer to TDSAT to seek protection from payment of Videocon AGR dues.
The Supreme Court (SC) on August 24 heard a fresh plea by telecom major Bharti Airtel against payment of adjusted gross revenue (AGR) dues of telecom company Videocon Telecommunications Ltd (VTL). The bench was presided over by Justice Rao TO SG Mehta and also included Justices L Nageswara Rao, S Abdul Nazeer and MR Shah.
Senior advocate Shyam Divan, representing Bharti Airtel, said that on August 17, the Department of Telecommunications (DoT) had sought payment of Videocon’s dues. The letter warned the company that failure to pay would result in invoking a bank guarantee.
During the proceedings, the DoT referred to the SC’s September 2020 AGR decision, which sought Videocon’s dues of Rs 1,376 crore on Bharti Airtel. On August 17, DoT issued a demand notice on Airtel demanding payment of Videocon’s AGR dues. However, it should be noted that this demand for payment was raised only after the SC verdict, not once in a statement from the top court according to Bharti Airtel. The telco also said that as per the spectrum trading guidelines, Videocon should have cleared all its past dues before entering into any agreement for spectrum trading.
Dewan argued that on the basis of the order passed by the SC in September of 2020, Videocon’s AGR dues could not be recovered from Airtel as it existed before the sale of its spectrum. The 2020 order states that the outstanding dues of a telecom service company prior to the sale of spectrum will be borne by the seller and not the buyer.
Airtel argued that even if the Videocon liability was taken into account and added to Bharti Airtel’s AGR, Bharti’s payment of Rs 18,004 crore could easily satisfy the 10 per cent payment that was to be paid by March 2021.
During the hearing, Dewan asked the apex court to see the government’s letter to Videocon. He claimed that it was reiterated that dues were to be paid by him. “The consistent understanding until the September 1 order was that they were liable,” Diwan said.
In response, Justice Rao said, “We have made it clear that we will not review but give liberty to approach TDSAT. The second problem is that until they approach TDSAT, it may take a week or two to hold your hand for me.”
Airtel had earlier inked a deal worth Rs 4,428 crore to buy Videocon Telecom-owned spectrum in Bihar, Haryana, Madhya Pradesh, Uttar Pradesh (East), UP (West) and Gujarat. In the wake of this deal, Videocon traded its entire spectrum of 30 MHz to Airtel. The deal was done in March 2016. Subsequently, the DoT wanted Airtel to pay Videocon’s past dues or Adjusted Gross Revenue (AGR).
In April of 2021, the government told the Supreme Court that it had raised the demand for AGR in compliance with the court’s earlier order, but failed to elicit a positive response from Airtel.
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