Home >News >India >SC says no AGR case against govt companies, asks DoT to scrap its demand
The DoT, in an overreach of the SC order, had asked these government-owned companies which owned some telecom infrastructure and used it to offer some B2B services, to also pay up even as they earned little from those fibers and towers.
The DoT, in an overreach of the SC order, had asked these government-owned companies which owned some telecom infrastructure and used it to offer some B2B services, to also pay up even as they earned little from those fibers and towers.

SC says no AGR case against govt companies, asks DoT to scrap its demand

  • The court order sent GAIL, Power Grid, Oil India shares up by at least 2% each
  • The court had on 24 October ordered private telecom companies to pay Rs1 trillion to pay DoT in AGR dues

NEW DELHI: The Supreme Court (SC) on Thursday asked department of telecommunications (DoT) to withdraw its demands of payments from public sector companies like Power Grid Corporation of India (PGCIL), GAIL India, GNFC and Oil India.

The SC said this was a misuse of its 24 October judgement that had ordered telecom companies to pay around Rs1 trillion in dues for under-reporting their revenues.

Last year's SC order had come in a 14-year-long case that held telecom companies guilty in their dispute against DoT. The DoT, in an overreach of the SC order, had asked these government-owned companies which owned some telecom infrastructure and used it to offer some B2B services, to also pay up even as they earned little from those fibers and towers. In some cases, the demand was more than the total annual revenues of the companies.

It turns out that the SC order was reserved only against private telecom services providers.

Today's order sent shares of Power Grid Corporation of India Ltd, GAIL India, GNFC and Oil India up by at least 2% each.

The bench headed by Justice Arun Mishra and comprising Justices MR Shah and S Abdul Nazeer said, “Let the authority explain how our judgment has been misused. A demand of 4 lakh crore is being raised against PSUs."

The biggest demand was raised on GAIL, of around 1.7 trillion. PGCIL was ordered to pay around Rs22,000 crore and Oil India upwards of Rs48,000 crore.

Levies and duties payable by companies to the government are based on adjusted gross revenues of the firms. DoT had argued that these firms had under-reported their revenues to pay lower charges.

As per DoT, income from activities like sale of handsets and renting out a property should also form part of revenues of telecom companies as at the heart of all those incomes is the telecom licence which enables them to create other revenue streams. It should thus form part of AGR, an argument that the DoT made and which was accepted by the SC.

On the matter of private telecom companies' pleas to allow them to pay the penalties over 20 years, the court asked the firms to file affidavits on the timeline and medium through which they will pay the dues. The government has been asked to give a time frame and a medium of security to ensure that the telecom companies pay the dues in time. The court listed 18 June as the next date of hearing the matter.

"Who has seen 20 years? Nobody knows what will happen in next 20 years..not even companies. Your plea of 20 years can't be reasonable, especially when this matter is already pending for 20 years. Litigation begins on 1999," SC remarked on DoT's application, which favours the service providers' request for a 20-year timeframe to make the payments.

After paying part of their dues in various tranches, Vodafone Idea’s outstanding is at over Rs50,000 crore currently, including penalty and interest, while that of Bharti Airtel is nearly Rs26,000 crore. Bharti Airtel’s estimated amount includes Telenor India’s dues as well, which Bharti Airtel had acquired in 2018.

With inputs from Japnam Kaur Bindra and Leroy Leo.

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