On Tuesday, 24th August 2021, the Supreme Court allowed Bharti Airtel to move to an alternate forum against the directions issued to it by DOT(department of telecommunications) to pay the AGR (adjusted gross revenue)dues of Videocon Telecommunications ltd.
Videocon had sold its spectrum to Airtel in 2016. The issue arises from the interpretation given by the Supreme Court in its October 2019 judgment to the term "Adjusted Gross Revenue" in the spectrum licensing agreements between telecom companies and the DoT. The license fee is computed based on AGR.
The Supreme Court held that 'AGR' includes revenue from non-telecom operations of the companies like rent, profit on sale of fixed assets, dividend and treasury income. This resulted in an additional liability to the tune of Rs 92,000 crores on the telecom companies collectively.
A bench comprising of justices L NAGESWARA RAO,ABDUL NAZEER,MR SHAH has been set up to hear the plea filed by Bharti Airtel to restrain the Department of Telecommunications from demanding AGR (adjusted gross revenues)dues of Videocon ltd from it.
Senior advocate Shyam Divan,appearing for Airtel submitted that according to the spectrum trading guidelines the liabilities of a telecom company before the sale of its spectrum are to be borne by it only and not by the subsequent purchaser. Therefore, the AGR dues of Videocon before it sold its spectrum to Airtel cannot be recovered from Airtel.
Divan pointed that the order passed by the Supreme Court in September 2020 had also stated that the dues of a telecom service company existing before the sale of spectrum are to be borne by the seller and not the buyer.
Another point raised by Divan was that by adding the dues of Videocon to the demand made from Airtel, the DoT has violated the Supreme Court's order that AGR dues cannot be recalculated or reassessed.
Therefore the bench said that it will grant liberty to Airtel to move any other alternate forum to redress its grievances. Responding to a query from the bench, Divan said that the alternate forum will be the Telecom Disputes Settlement and Appellate Tribunal(TDSAT).
But the solicitor general Tussar Mehta submitted that it is the case of the DoT that the TDSAT has no jurisdiction to deal with the matter. He requested the bench to keep all contentions open.
Divan also sought for an order restraining the DoT from invoking the bank guarantees. In this regard, he submitted that Airtel has paid so far over Rs 18,000 crores, which is more than 10% of its total AGR dues to the tune of Rs 45,000, which it had to pay by March, 2021 as per the Supreme court order.
CONCLUSION
Ultimately, the bench allowed Airtel to withdraw the application with liberty to approach the alternate forum, and restrained the DoT from invoking its bank guarantee for 3 weeks starting from Tuesday 24th august 2021.
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