SC Blasts Tel­cos, DoT Over Non-pay­ment of AGR Dues

Court is­sues show­cause no­tices to MDs and direc­tors of tel­cos ask­ing why con­tempt pro­ceed­ings should not be ini­ti­ated, raps DoT of­fi­cial for is­su­ing over­rid­ing order Prasad Meets PM Modi Over Is­sue

The Economic Times - - Front Page - Our Bureau Quan­tum of Dues

New Delhi: The Supreme Court on Fri­day came down heav­ily on both tele­com com­pa­nies and the tele­com de­part­ment (DoT) over non-pay­ment of ad­justed gross rev­enue (AGR) dues of `1.47 lakh crore. A three-judge bench headed by Jus­tice Arun Mishra is­sued show­cause no­tices to the manag­ing direc­tors and direc­tors of the er­rant com­pa­nies ask­ing why con­tempt pro­ceed­ings should not be ini­ti­ated against them. It also drew con­tempt pro­ceed­ings against a tele­com de­part­ment of­fi­cial who had ‘passed an order’ stat­ing no co­er­cive ac­tion should be taken against the tel­cos for not stick­ing to the Supreme Court’s stip­u­lated Jan­uary 23 pay­ment dead­line.

The apex court fur­ther said the manag­ing direc­tors of the tele­com com­pa­nies would need to ap­pear in per­son be­fore the bench at the next hear­ing on March 17 if the dues were not paid. The court passed this order while hear­ing the pleas of tel­cos to mod­ify its Oc­to­ber 24, 2019, order, which had widened the def­i­ni­tion of AGR to in­clude non-core items, leav­ing tel­cos sad­dled with thou­sands of crores in out­stand­ing dues.

A few hours af­ter the order, Bharti Air­tel wrote to DoT, say­ing it would pay up `10,000 crore by February 20, and the bal­ance amount — as per their self-as­sess­ment

“This case projects a very dis­turb­ing sce­­pa­nies have vi­o­lated the order passed by this court in pith and sub­stance...”

DoT’s desk of­fi­cer has “temer­ity” to pass order “...not to in­sist for any pay­ment pur­suant to the order passed by this court...This is noth­ing but a de­vice to scut­tle order of this court.”

— by March 17. Ac­cord­ing to DoT, the telco owes over `35,500 crore in li­cence fees, spec­trum us­age charge (SUC), in­ter­est and penal­ties, but Air­tel may come up with a lower fig­ure af­ter self­assess­ment.

A big ques­tion mark hangs over the fu­ture of cash-strapped Voda­fone Idea, which owes about `53,000 crore, ac­cord­ing to of­fi­cial es­ti­mates. So far the two pro­mot­ers of the com­pany — Voda­fone UK and the Aditya Birla Group — have said they will not in­fuse ad­di­tional fund­ing.

A se­nior gov­ern­ment of­fi­cial, how­ever, ex­pects Voda­fone Idea to pay up. If the pro­mot­ers stick

to their pre­vi­ous po­si­tion, the com­pany will have to ex­plore the op­tion of fil­ing for bank­ruptcy. But it is un­clear if mov­ing the bank­ruptcy tri­bunal will give it pro­tec­tion from the Supreme Court order. Voda­fone Idea chair­man KM Birla met tele­com min­is­ter Ravi Shankar Prasad in the even­ing. The com­pany did not comment on the order.

Voda­fone Idea’s stock plunged 23.2% to `3.44 dur­ing the day. Air­tel’s shares, how­ever, jumped 4.7% to close at `565.10 af­ter touch­ing an all-time high in­tra­day on hopes that it will gain mar­ket share if Voda­fone Idea shuts shop.

Tata Te­le­ser­vices, which had sold its con­sumer mo­bil­ity business to`Air­tel, faces pay­ment of nearly 14,000 crore dues, which Tata Sons is ex­pected to fund.



Tele­com min­is­ter

RS Prasad meets PM Modi to dis­cuss order

Tele­com de­part­ment or­ders with­drawal of ear­lier no­tice

Some cir­cle of­fices tell tel­cos to pay AGR dues by 11.59 pm of Feb 14, oth­ers give dif­fer­ent dead­lines

Air­tel says will pay `10kcr by Feb 20, bal­ance amount by next date of hear­ing

Ques­tion mark over Voda Idea sur­vival A se­nior govt of­fi­cial ex­pects Voda Idea to pay up

Tata Sons likely to fund Tata Tele’s dues

Tele­com min­is­ter Ravi Shankar Prasad met Prime Min­is­ter Naren­dra Modi on Fri­day to dis­cuss the con­se­quences of the Supreme Court’s Fri­day rul­ing in the AGR case.

Jus­tice MR Shah said at least a ‘size­able’ amount must be paid by tel­cos to prove their ‘bona fides’ be­fore they can seek any more re­lief

Con­fu­sion still per­sists over the quan­tum of dues that the tel­cos have to pay up as there are dif­fer­ences be­tween the gov­ern­ment es­ti­mates and the self-as­sess­ments of tel­cos.

Dur­ing the court hear­ing, Jus­tice Mishra said for 20 years, no com­pany had de­posited money. “En­sure that the amount is de­posited,” he said dur­ing the pro­ceed­ings. His fel­low judge on the bench, Jus­tice MR Shah, in­ter­vened to say that at least a “size­able” amount must be paid by the com­pa­nies to prove their “bona fides” be­fore they can seek any more re­lief from the court.

Later in the day, tele­com min­is­ter Ravi Shankar Prasad met Prime Min­is­ter Naren­dra Modi to brief him about the order and pos­si­bly dis­cuss the con­se­quences. A rat­tled tele­com de­part­ment too swung into ac­tion and quickly re­scinded the ‘order’ that had in­vited the ire of the apex court. Of­fi­cial sources were quick to claim that this was a ‘let­ter’, telling all sides to await a court de­ci­sion on the mod­i­fi­ca­tion applicatio­ns filed by the tele­com com­pa­nies.

A DoT of­fi­cer in the UP (West) cir­cle sent a no­tice, or­der­ing tel­cos to pay up their AGR dues by 11.59 pm on February 14. Other cir­cles too sent no­tices, with dif­fer­ing dead­lines, for mak­ing the pay­ment.

State-run com­pa­nies such as GAIL, Power Grid and Oil In­dia, who hold some tele­com li­cences and have been served over Rs 2.65 lakh crore of li­cence fee de­mand no­tices by the DoT, had sought clar­i­fi­ca­tion if they came un­der the wider def­i­ni­tion of the top court’s Oc­to­ber 24 order. But these com­pa­nies with­drew their peafter the SC bench told them to ap­proach the ‘ap­pro­pri­ate fo­rum’.


The bench was scathing in its crit­i­cism of the tele­com com­pa­nies as well as the tele­com de­part­ment.

“The com­pa­nies have vi­o­lated the order passed by this court in pith and sub­stance. In spite of the dis­missal of the review ap­pli­ca­tion, they have not de­posited any amount so far,” the bench said in its order.

“It ap­pears the way in which things are hap­pen­ing that they have scant re­spect to the di­rec­tions is­sued by this court,” it added.

Though no dead­line was set for the pay­ment, any such amount would have to be paid be­fore the next hear­ing by the com­pa­nies to purge them­selves of con­tempt. “How much harsher must we be? A mes­sage must go,” Jus­tice Mishra said. “Are they run­ning this coun­try?”

The bench was up­set at the “temer­ity” of the “desk of­fi­cer” to override its order.

“This is noth­ing but a de­vice to scut­tle order of this court,” it said.

“This kind of order should not have been passed by the desk of­fi­cer at all. In the cir­cum­stances, we draw con­tempt pro­ceed­ings against the desk of­fi­cer for pass­ing the order and vi­o­lat­ing the order passed by this court,” the bench ruled.

The com­pa­nies, in­clud­ing the likes of Bharti Air­tel, Voda­fone, Tata Te­le­ser­vices and Hughes, had sought a mod­i­fi­ca­tion of the Oc­to­ber 24 court order and had asked for per­mis­sion to ne­go­ti­ate with the DoT for more time to pay their dues.

The court took up the mod­i­fi­ca­tion plea Fri­day only to ob­serve that “not a penny had been paid yet”.

“What is hap­pen­ing? What has hap­pened? A review was dis­missed. There’s no stay. De­spite this, there is an order of no-re­cov­ery?” Jus­tice Mishra said in court.

“There is no fi­nal­ity to Supreme Court judge­ments,” Jus­tice Shah, the third se­nior-most judge, ob­served. “There is no re­spect for the Supreme Court,” Jus­tice Mishra said.

Jus­tice Mishra shook off joint pleas by So­lic­i­tor Gen­eral Tushar Mehta and se­nior ad­vo­cate Fali S Na­ri­man to de­fer the hear­ing to an­other day. He then con­sid­ered ini­ti­at­ing con­tempt no­tices against the MDs and direc­tors of the tele­com com­pa­nies but at the urg­ing of Jus­tice Shah is­sued show­cause no­tices.

The max­i­mum jail for con­tempt is six months or fine or both should the court not ac­cept an ex­pla­na­tion. But the court can take any ac­tion against an er­rant party un­der its ex­tra­or­di­nary pow­ers to do jus­tice in any case.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.