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The Supreme Court on Monday, during the hearing on the adjusted gross revenue (AGR) matter of telecom companies, questioned the Centre as to how is it possible to sell the spectrum and whether it is transferable. A bench, headed by Justice Arun Mishra, told Solicitor General Tushar Mehta, representing the Department of Telecommunications (DoT), to come prepared on the next hearing, and explain how can spectrum be sold or whether is transferable. The bench also asked Mehta to get the NCLT orders connected with the query, as it scheduled the next hearing on the matter on August 14. Mehta contended before the bench that the government has filed an appeal saying spectrum is a national property and it should not be part of bankruptcy assets. At this, the bench questioned: "Why there was a delay in filing the appeal? What if the spectrum is sold in the meanwhile?" Mehta contended before the bench that the Centre has told the National Company Law Tribunal that spectrum is a national property, cannot be an asset of the company, and it cannot be sold. The bench also questioned how Aircel's spectrum and license were sold and who gave the permission for it. Aircel's monitoring committee's lawyer contended before the bench that no dues to government are be paid under the bankruptcy resolution plan, and insisted that he will place the details in court. The lawyer contended that the company paid the money to buy spectrum, and it is a transferable asset. The Centre, however, said Aircel's dues were Rs 12,000 crore. As the bench questioned the DoT as to how it proposes to recover the <keyword id="8275485" type="UNKNOWN" weightage="20" keywordseo="agr-dues">AGR dues</keyword> from a company which has gone into insolvency, Mehta replied that DoT's stand is that spectrum cannot be part of bankruptcy assets.

Supreme Court adjourns AGR case hearing to August 14

The Supreme Court on Monday reserved its judgment on the issue of recovery of adjusted gross revenue (AGR) dues from insolvent telecom companies. A bench headed by Justice Arun Mishra is likely to pronounce the judgment on three counts: Staggered payment schedule, where the Centre said it is fine with 20-year arrangement to recover AGR dues; Can spectrum be transferred or sold by companies under IBC; and, additional liabilities, if any, on Jio, Airtel for the past dues of RCom, Videocon, and Aircel. Airtel had spectrum sharing and trading pacts with Videocon and Aircel, whereas Jio had it with RCom. The court had asked the Department of Telecommunications (DoT) to share the details of 'demand under process' for raising the liabilities against Airtel and Jio in the backdrop of spectrum-sharing. The bench also comprising Justices S Abdul Nazeer and MR Shah observed that if DoT does not provide the correct position on the AGR demands, then the due figures quoted in the ruling could go wrong. "It has been nearly 10 months to the AGR ruling -- why has the DoT not yet raised the demand?" The DoT informed the bench that no demand has been raised against Jio and Airtel for part dues of RCom and Videocon, and that the assessment of Jio and Airtel liability for the past dues is "under process". Senior Advocate Harish Salve, appearing for Committee of Creditors for RCom, contended before the bench that the right to use spectrum is an "asset which can be sold", if the company wants to. Salve added that the resolution plan proposes the sale of the right to use spectrum is in line with the licence trading guidelines. Senior Advocate Kapil Sibal, appearing for Airtel, contended that if the liability of the past dues of Videocon were to be imposed on Airtel, why wait for so long. Instead, the DoT should have clarified it long back, he argued. The court observed that according to trading guidelines, the seller of the spectrum shall satisfy all pending dues, before the sale. The bench said that it understood that upon the non-payment of dues by the seller, the trading guidelines would transfer the burden on the buyer. The DoT counsel contended that under trading guidelines, the past dues have to be cleared prior to the spectrum-trading, and under these guidelines, the DoT could recover the dues from seller and buyers. The bench questioned why no demand was raised against Airtel for the past dues of the Videocon spectrum. Sibal said Airtel had been paying all pending dues since the acquisition of the Videocon spectrum in May 2016. The apex court remarked that what is being proposed seems like renting out a house to a tenant and the latter selling the house under Insolvency and Bankruptcy Code.

Supreme Court reserves order on recovery of AGR dues from insolvent telecom companies

The Supreme Court on Tuesday asked Department of Telecommunication (DoT) not to invoke bank guarantee given by Bharti <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword> for a period of three weeks for not clearing Videocon Telecommunications Ltd's adjusted gross revenue (AGR) dues of over Rs 1,300 crore. A bench headed by Justices L. Nageswara Rao and comprising Justices S. Abdul Nazeer and M. R. Shah declined to entertain Airtel's plea challenging the DoT demand, but it allowed the telecom firm to approach the appropriate forum against the government decision. Senior advocate Shyam Divan, representing Bharti Airtel, argued that his client received a communication on August 17, saying the firm must make payment and if it fails to do so, then there is a possibility of invoking various bank guarantees. He contended that Rs 18,000 crore dues have already been paid by the telecom company, according to the top court's order and there is another figure, which is attributed to Videocon Telecommunications. He added that there is a particular spectrum traded by Videocon to Airtel and citing the spectrum trading guidelines, he added the seller shall clear all dues prior to concluding any agreement for spectrum trading. "The liability is of Videocon... full liability of the seller," submitted Divan. Divan argued that by adding the dues of Videocon to the demand made from Airtel, the DoT has violated the apex court's order that AGR dues cannot be recalculated or reassessed. The top court said it will not interfere with its order, rather it will grant liberty to Airtel to move any other alternate forum to redress its grievances. Divan said that the alternate forum will be the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Earlier this year, in an affidavit filed before the Supreme Court on the status of statutory dues paid by telecom operators, the DoT said it is planning to slap Videocon Telecommunications Ltd's AGR dues over Rs 1,300 crore on Bharti Airtel. Videocon Telecommunications had sold spectrum of 30 MHz to Bharti Airtel in 2016. Concluding the hearing, the top court allowed Airtel to withdraw the application and also restrained the DoT from invoking its bank guarantees for 3 weeks. According to the Centre's calculations, the total AGR liability of Bharti Airtel is Rs 43,980 crore, Vodafone Idea's is Rs 58,254 crore, Tata group's is Rs 16,798 crore, BSNL owes Rs 5,835.85 crore, and MTNL Rs 4,352.09 crore. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/airtel-added-5-million-new-4g-users-tariff-hike-hopes-and-record-broadband-customer-addition-surge-share-price/articleshow/85039298.cms">Five million new 4G users, tariff hike hopes and record broadband customer addition send Airtel's stock to a 6-month high</a> <a href="https://www.businessinsider.in/business/telecom/news/the-enormous-gap-between-vodafone-idea-on-one-hand-airtel-and-jio-on-the-other/articleshow/85035781.cms">The enormous gap between Vodafone Idea on one hand, Airtel and Jio on the other</a> <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-loses-over-4-million-subscribers-airtel-and-jio-add-over-9-million-in-june/articleshow/85589113.cms">Vodafone Idea loses over 4 million subscribers, Airtel and Jio add over 9 million in June</a>

AGR case: Supreme Court directs DoT not to enchash Airtel's bank guarantees for three weeks

New Delhi, Jan 19 () The telecom department is examining the legal applicability of January 23 deadline for payment of over Rs 2.4 lakh crore statutory dues in the case of non-telecom PSUs which were not originally party to AGR matter in the Supreme Court, according to sources.
Sources in the Department of Telecom (DoT) told that while the PSUs too have been asked to make payments related to statutory liabilities (after the SC in October upheld government's position on calculation of non-core revenue for AGR dues), the larger question is whether the January 23 deadline is legally enforceable on state-owned companies that were not direct party to the dispute.
The current view that is emerging in the DoT appears to be that the court-imposed timeline may not apply to PSUs, but the matter is being legally examined for clarity.
"Of course, the court has decided the issue of principle of what is AGR, so they (PSUs) have to pay but if they do not pay by January 23 it will not be contempt as it will be in case of the parties to the case. So PSUs have to pay and we have raised demands, but if they do not pay by January 23 it will not amount to contempt of court on their part because they were not party to the case, but they have to pay," a source added.
Another official also said that the issue of deadline for PSUs is being examined legally. Telecom companies Bharti Airtel and Vodafone Idea, on the other hand, are legally bound to comply with the payment timelines stipulated by the apex court.
Following the Supreme Court order of October last year, the DoT estimated that the total liability of 15 telecom companies, including penalties and interest, would be Rs 1.47 lakh crore. 
These AGR liabilities arose after the Supreme Court in October last year upheld the government's position on including revenue from non-telecommunication businesses for calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer.
It has estimated another over Rs 2.4 lakh crore in liability for non-telecom companies, including state-owned gas utility GAIL India Ltd and power transmission firm PowerGrid, which had taken licences to trade broadband on optic fibre running along their pipelines and transmission lines.
The DoT has sought Rs 1.72 lakh crore in past statutory dues from state-owned gas utility GAIL India Ltd following the Supreme Court's AGR ruling. The DoT sent a letter to GAIL last month seeking these dues on IP-1 and IP-2 licences as well as Internet Service Provider (ISP) licence, in response to which, GAIL has told DoT that it owes nothing more than what it has already paid to the government.
The assessment puts PowerGrid liability at Rs 21,000 crore, and another Rs 40,000 crore liability was assessed of Oil India Ltd. However, a demand notice was served in case of Gujarat Narmada Valley Fertilizers &amp; Chemicals Ltd for Rs 15,019 crore. MBI ANZ MKJ

DoT examining if Jan 23 legal deadline for AGR payment applies to non-telecom PSUs

New Delhi, Nov 17 () The Indian mobile industry will consolidate further if the government does not offer a material relief on AGR liabilities, regulatory levies and potentially a floor on pricing, according to Kotak Institutional Equities.
 A 'no material relief' scenario would be an industry-structure-altering one, it added.
 "We believe that the Indian wireless industry would consolidate further in case the government does not offer a material relief on...the AGR (adjusted gross revenue) case liabilities...other aspects like recurring regulatory levies, deferred spectrum payments and ...potentially a floor on pricing," Kotak said in a recent report.
 Even as the massive AGR-case-related payout is a meaty gross negative for Bharti Airtel, the potential gross positive from industry consolidation will likely result in a net positive outcome, it said adding that Bharti could be a net beneficiary.
 Credit Suisse noted that Vodafone Idea faced "another operationally weak quarter" and that the government relief measures are "key to sustain".
 The telecom industry has been hemorrhaging, with combined losses of listed mobile firms surpassing Rs 1 lakh crore in the just-ended quarter.
 Last week, India's two leading telecom operators Vodafone Idea and Bharti Airtel reported a combined loss of Rs 74,000 crore for the second quarter ended September 2019, mainly on account of statutory dues arising from the recent Supreme Court order on AGR.
 The apex court has upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which has to be paid as licence and spectrum fee to the exchequer. The ruling over statutory liabilities has triggered a rush for provisioning by telecom companies.
 While Vodafone Idea posted a loss of Rs 50,921 crore -- the highest-ever quarterly loss by any corporate in India -- Airtel reported a loss of Rs 23,045 crore.
 On Friday, Reliance Communication posted a consolidated loss of Rs 30,142 crore for July-September 2019 due to provisioning for liabilities after the Supreme Court ruling on statutory dues -- marking the second-highest loss posted by any Indian corporate to date.
 Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the Supreme Court order that has sent shock waves through an industry already grappling with past losses and billions of dollars in debt.
 According to the latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL, MTNL and some of the shut/bankrupt telecom companies.
 Stung by colossal losses, Vodafone Idea has said its ability to continue as a going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy.
 The company is also in the process of filing a review petition against the Supreme Court order.
 The Department of Telecommunications had shot off notices to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given option to telecom operators to clear all the dues on self-assessment basis.
 Last month, the government also constituted a committee of secretaries to explore a financial bailout package for the telecom sector. MBI HRS

Telecom industry to consolidate further in 'no relief' scenario: Kotak Institutional Equities

New Delhi, Feb 16 () Telecom operators Bharti Airtel, Vodafone Idea and Tata Teleservices are likely to make payment for adjusted gross revenue (AGR) dues on Monday to avoid stringent punitive action from the Telecom Department, according to official sources. The three companies are jointly liable to pay dues of over Rs 1 lakh crore, but they have informed the Department of Telecom (DoT) of making only partial payment, as per their representatives. "Airtel, Vodafone Idea and Tata Teleservices have said that they will make payments on Monday. DoT will take action after evaluating the amount paid by them," an official source told . Earlier on Friday, Bharti Airtel offered the DoT to pay Rs 10,000 crore by February 20, but a DoT official said that the department can't grant any extension. Vodafone Idea on Saturday said that it is assessing the amount that can be paid towards AGR dues, even as it flagged concerns over the continuation of its business. Telecom operators are collectively liable to pay Rs 1.47 lakh crore in AGR dues as per the Supreme Court order dated October 24, 2019. The deadline to pay the amount ended on January 23, but none of the telecom operators, except Reliance Jio, paid the amount. Even state-owned BSNL and MTNL did not pay the dues. As per the last available estimates, Airtel owes nearly Rs 35,586 crore, including licence fee and spectrum usage charges, to the government. Vodafone Idea is staring at dues worth Rs 53,000 crore, which includes up to Rs 24,729 crore of spectrum dues and another Rs 28,309 crore in licence fee. Tata Teleservices owes around Rs 13,800 crore, BSNL Rs 4,989 crore and MTNL Rs 3,122 crore. Out of Rs 1.47 lakh crore, around Rs 1.13 lakh crore is likely to be recovered, as other companies, which are liable to pay AGR dues, have folded up their businesses. Reliance Communications and Aircel are going through insolvency proceedings. The apex court on Friday came down heavily on the Telecom Department for not taking steps to recover statutory dues, estimated to be around Rs 1.47 lakh crore from operators. The DoT issued fifth and final notice to telecom operators on February 14 for making payment on the same day, but none of the companies paid the dues. When asked about telecom operators having sought time to assess the amount they have to pay, the DoT official said that the court gave them three months to do so and even after missing January 23 deadline telecom operators had sufficient time to calculate their dues. "Before the due date, DoT has sent telecom operators 4 notices and reminders to pay to avoid punitive action under license condition. After court order on modification plea, telecom players are not left with any excuse to delay the payment and the DoT can take action against them without serving any further notice," the source said. The apex court pulled up telecom operators and the government on non-payment of AGR dues despite its order. It has asked managing directors and directors of the company to be present in person before court on the next hearing, scheduled for March 17, in case there is violation of its order in the AGR case. Public sector companies, that do not sell telecom services, owe DoT around Rs 2.65 lakh crore, with GAIL India alone owing around 65 per cent of the total amount. However, these PSUs have the option to approach court for a legal recourse. PRS RVK

Airtel, Voda Idea, Tata Tele likely to pay AGR dues on Monday: DoT sources

New Delhi, Feb 16 () Telecom operators <keyword id="6354287" type="COMPANY" weightage="20" keywordseo="bharti-airtel">Bharti Airtel</keyword>, Vodafone Idea and <keyword id="6359475" type="DOMAIN" weightage="20" keywordseo="tata-teleservices">Tata Teleservices</keyword> are likely to make payment for adjusted gross revenue (AGR) dues on Monday to avoid stringent punitive action from the Telecom Department, according to an official source. The three companies are jointly liable to pay dues of over Rs 1 lakh crore, but they have informed the Department of Telecom (<keyword id="16054" type="ORGANIZATION" weightage="20" keywordseo="DoT">DoT</keyword>) of making only partial payment, as per their representatives. "Airtel, Vodafone Idea and Tata Teleservices have said that they will make payments on Monday. DoT will take action after evaluating the amount paid by them," an official source told . Earlier on Friday, Bharti Airtel offered the DoT to pay Rs 10,000 crore by February 20, but a DoT official said that the department can't grant any extension. Vodafone Idea on Saturday said that it is assessing the amount that can be paid towards AGR dues, even as it flagged concerns over the continuation of its business. Telecom operators are collectively liable to pay Rs 1.47 lakh crore in AGR dues as per the Supreme Court order dated October 24, 2019. The deadline to pay the amount ended on January 23, but none of the telecom operators, except Reliance Jio, paid the amount. Even state-owned BSNL and MTNL did not pay the dues. As per the last available estimates, Airtel owes nearly Rs 35,586 crore, including licence fee and spectrum usage charges, to the government. Vodafone Idea is staring at dues worth Rs 53,000 crore, which includes up to Rs 24,729 crore of spectrum dues and another Rs 28,309 crore in licence fee. Tata Teleservices owes around Rs 13,800 crore, BSNL Rs 4,989 crore and MTNL Rs 3,122 crore. Out of Rs 1.47 lakh crore, around Rs 1.13 lakh crore is likely to be recovered, as other companies, which are liable to pay AGR dues, have folded up their businesses. <keyword id="46907" type="COMPANY" weightage="20" keywordseo="Reliance-communications">Reliance Communications</keyword> and Aircel are going through insolvency proceedings. The apex court on Friday came down heavily on the Telecom Department for not taking steps to recover statutory dues, estimated to be around Rs 1.47 lakh crore from operators. The DoT issued fifth and final notice to telecom operators on February 14 for making payment on the same day, but none of the companies paid the dues. When asked about telecom operators having sought time to assess the amount they have to pay, the DoT official said that the court gave them three months to do so and even after missing January 23 deadline telecom operators had sufficient time to calculate their dues. "Before the due date, DoT has sent telecom operators 4 notices and reminders to pay to avoid punitive action under license condition. After court order on modification plea, telecom players are not left with any excuse to delay the payment and the DoT can take action against them without serving any further notice," the source said. The apex court pulled up telecom operators and the government on non-payment of AGR dues despite its order. It has asked managing directors and directors of the company to be present in person before court on the next hearing, scheduled for March 17, in case there is violation of its order in the AGR case. Public sector companies, that do not sell telecom services, owe DoT around Rs 2.65 lakh crore, with GAIL India alone owing around 65 per cent of the total amount. However, these PSUs have the option to approach court for a legal recourse.

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Supreme Court adjourns AGR case hearing to August 14

IANS

Supreme Court reserves order on recovery of AGR dues from insolvent telecom companies

IANS

AGR case: Supreme Court directs DoT not to enchash Airtel's bank guarantees for three weeks

IANS

DoT examining if Jan 23 legal deadline for AGR payment applies to non-telecom PSUs

PTI

Telecom industry to consolidate further in 'no relief' scenario: Kotak Institutional Equities

PTI

Airtel, Voda Idea, Tata Tele likely to pay AGR dues on Monday: DoT sources

PTI

Airtel, Vodafone and Tatas are expected to cough up spectrum dues on Monday

PTI

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