Airtel and Vodafone Idea request that the Supreme Court examine their curative petitions regarding AGR dues

10 Oct 2023 , 09:03 AM

Bharti Airtel Ltd. and Vodafone Idea, two telecom service providers, asked the Supreme Court to hear their curative petitions against the top court’s earlier ruling rejecting their limited review petitions for the correction of arithmetical errors in the department of telecommunications’ (DoT) calculation of their adjusted gross revenue (AGR) dues in ‘open court’ on Monday.

Vodafone Idea’s senior attorney, Harish Salve, urged the bench presided over by Chief Justice DY Chandrachud to quickly hear his client’s curative plea that highlights mathematical problems in the calculation of AGRs. Senior attorney K.K. Venugopal, who represented Airtel, joined Salve in asking for an open court hearing on curative petitions, claiming that the ‘prejudice is so huge that there is need for open court hearing.’

The CJI did state that it would make a decision regarding the open court hearing issue after speaking with the other justices who will sit on the bench. Unless a particular request for an open court hearing is granted, judges typically decide curative petitions in the chamber.

The two operators have once more made a point of emphasizing to the court in their individual curative arguments that they are not contesting the imposition of a license fee on the heads as determined by the supreme court, but rather that these directives were ‘vitiated by a patent error of law’ and have ‘resulted in a gross miscarriage of justice.’

They ask that the October 2019 ruling be set aside with the exception of ‘imposing penalty and interest on penalty’ and ‘allowing correction of manifest/clerical and arithmetical errors in the provisional demands raised by DoT.’

According to the apex court’s order from October 24, 2019, approximately 75% of the total Rs 1.47 lakh crore in AGR dues that telecom operators were obliged to pay by January 2020 were made up of interest, penalties, and interest on penalties. The outstanding license cost was Rs 92,642 crore, and the outstanding spectrum usage fee was Rs 55,054 crore.

Bharti Airtel’s debt was estimated to be around Rs 13,004 crore by Airtel, compared to the DoT’s estimate of Rs 43,980 crore. 

For Tata Teleservices, DoT estimations put the amount at Rs 16,798 crore compared to Rs 2,197 crore, while for Vodafone, Idea, the figures were Rs 58,254 crore versus its self-assessment of Rs 21,533 crore.

In their curative argument, Vodafone stated that the licensees would also be required to pay a penalty equal to 50% of the total amount of the short payment as well as interest on the penalty at a rate that was 2% higher than State Bank of India’s prime lending rate, compounded monthly. This is in addition to the interest that accrues for late payments, which Vodafone Idea claims is ‘high and penal in nature.’

The top court’s September 1, 2020, judgment requiring the corporations to pay their fines over a ten-year period after paying 10% of the fines upfront by March 31, 2021, is the source of these corrective petitions. After that, the 10% amount must be paid by March 31 of each year for the remainder of the deferred payment cycle, which runs through 2031. The SC had previously stated that no revaluation of AGR obligations would be permitted and that any default would result in interest, a penalty, and orders for contempt of court.

With the SC denying their limited review petition in January 2020, telecom operators suffered a severe setback. They had asked for the waiver of interest, penalty, and interest on penalty on their AGR payment. Additionally, they had asked for the SC’s September 1 ruling to be modified so that the DoT may take into account their arguments regarding mathematical flaws in the computations of its AGR dues.

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