SC hauls up telcos for not paying AGR dues

Apex court also issues notice to DoT for letter ‘staying’ judgment

February 14, 2020 11:45 am | Updated February 15, 2020 12:04 am IST - New Delhi

In January, the Supreme Cuort dismissed petitions filed by telecom companies for a review of its October 2019 judgment upholding the recovery of past dues amounting to ₹1.47 lakh crore from them

In January, the Supreme Cuort dismissed petitions filed by telecom companies for a review of its October 2019 judgment upholding the recovery of past dues amounting to ₹1.47 lakh crore from them

The Supreme Court on Friday ordered the managing directors and directors of companies, including telecom majors Bharti Airtel and Vodafone Idea, to show cause why contempt proceedings should not be initiated against them for failing to pay even a “single penny” to the government in Adjusted Gross Revenue (AGR) dues, worth ₹1.47 lakh crore, despite an October 2019 judgment .

A three-judge Bench, led by Justice Arun Mishra, called the non-compliance with the judgment a “very disturbing scenario”. It also drew contempt proceedings against a Department of Telecom (DoT) officer responsible for issuing an order to the Accountant General, a constitutional authority, on January 23, 2020, to desist from taking any coercive action against the defaulting companies.

Following the strictures, the DoT began issuing notices to the telcos to pay the AGR dues as early as midnight of February 14 (Friday). 

Failure to comply with the orders would entail company heads appearing in person in court at the next hearing on March 17, the court said.

 The court recorded in the order that the DoT’s January 23 order was “nothing but a device to scuttle the order of this court”. The October 2019 judgment had given the companies three months to pay their dues in AGR. The DoT officer concerned has been asked to file a reply to the contempt notice.

“Let us wind up the Supreme Court then... There is no law left in the country. We are anguished. I feel I should not work in this system. Who is behind all this nonsense? How can a mere desk officer in your department defy a Supreme Court judgment by ordering that they need not pay and no coercive action will be taken... Does he think he is the Supreme Court? How can he literally stay an Supreme Court judgment? What temerity is this? Have you [government] even questioned him once for this?” Justice Mishra lashed out at the DoT, represented by Solicitor General Tushar Mehta.


“This desk officer behind this nonsense [January 23 letter]... does he think he is the Supreme Court? This is pure contempt. A 100% contempt! If your desk officer does not withdraw this letter within the next one hour or 30 minutes, he will go to jail today itself. Withdraw this [letter] immediately... We want him here,” a visibly angry Justice Mishra orally addressed Mr. Mehta initially in the hearing.

When Mr. Mehta urged the Bench to defer the hearing and not make any insinuations that the DoT acted “hand in glove” with the defaulting companies, Justice Mishra shot back, saying: “Do not saying anything more or you yourself will be in the frame. Do not take this lightly. There is no respect for the judicial system”.

Mr. Mehta tried to pacify the judge, saying “We all know about Your Lordship’s benevolence...”

Justice Mishra responded sharply, “No, you don’t know me even an inch and we don’t want respect from anybody in this world... I am not bothered about it myself... In fact, it is better not to live in this country, better to leave this country. This desk officer is writing constitutional authorities... He grants a stay... The judicial system of this country has been taken away”.

Justice Mishra turned to senior advocate Fali Nariman, appearing for Vodafone, saying “Companies have not deposited any money... have no respect for the direction of this court”. The court rejected Mr. Nariman’s offer to make an immediate part payment in dues.

“Ensure that they pay up by the next hearing,” Justice Mishra orally addressed Mr. Nariman.


Modification plea

The sharp observations came while hearing applications filed by the companies for a modification of the October 2019 judgment to pay dues to the government within three months.

Public sector units Oil India, GAIL, Rail Tel and Power Grid Corporation chose to withdraw their applications against the judgment. 

The Bench, also comprising Justices Abdul Nazeer and M.R. Shah, on January 16 dismissed the review petitions filed by the companies against the October verdict for lack of merit.

The companies had sought the court’s intervention, saying the October direction would spell huge ramifications in the telecom industry and “severely hamper” programmes like Digital India, Make in India and Skill India.

Vodafone had urged the court to alter its order and permit it to submit an application before the DoT for drawing up a schedule for payment of the dues.

Bharti had said the exercise for calculating the amounts due, including past demands, were continuing and would require further interaction with the government as it covered licences across 22 circles and a period of over 15 years. Besides, it said all the parties would take time to “reconcile” with the calculations.

They had argued that the October last judgment's schedule for AGR payment may risk large-scale job losses, destruction of billions of USD of capital investments due to bankruptcies and poor financial health, large scale NPAs (Non-Performing Assets).

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