India

Supreme Court AGR case latest updates: No going back on DoT dues, says SC bench; Reserves order on staggered payment timeline; next hearing on Aug 10

Updated : July 20, 2020 05:42 PM IST

Here are the latest updates from the Supreme Court hearing on the AGR payments dues case today

Justice Arun Mishra-led Supreme Court bench on Monday reserved its order on the government's petition to allow telecom companies such as Bharti Airtel, Vodafone Idea and others to make staggered payments of the adjusted gross revenue (AGR) over a period of the 20-year period. The apex court also said that there is "no going back" on the DoT demand on the AGR issues and it will only consider the timeline. The AGR dues relate to an apex court ruling on October 24 last year when it upheld the government's broader definition of AGR, on which it calculates various levies like spectrum usage charges and license fees.

Here are the latest updates from the Supreme Court hearing on the AGR payments dues case today:

Hearing concludes. The Supreme Court has reserved its order on the timeline of AGR payments in staggered fashion by telcos. The matter to be next heard on August 10.
Justice Mishra: "All companies—RCom, Sistema Shyam Teleservices, Videocon to submit their Insolvency details within 7 days. Need to ensure IBC not being misused by companies to escape liabilities."

#AGRCase | Supreme Court Order: SC reserves orders on time to be allowed for staggered payment of AGR dues; Next hearing on Aug 10

SC to consider issue of cos under liquidation on Aug 10 pic.twitter.com/eng2ixhl7a
— CNBC-TV18 (@CNBCTV18Live) July 20, 2020

SC orders: Let all records of RComm, Videocon, Aircel be submitted within 7 days. The apex court reserves order on a staggered payment timeline issue. The next hearing is scheduled for August 10 and the court will consider the issue of companies under liquidation on August 19.
SC: Have heard all parties at length on time window to be allowed. An attempt was made to wriggle out of this order under the guise of the recalculation, reassessment. There can be no going back on AGR dues.No question of entertaining any objection to the demand. The calculation that has been given by DOT is to be treated as final, there can be no scope of re-assessment. Several telcos with AGR dues of over Rs 38,000 crore are currently in liquidation. We want to go into bonafide of the decision to invoke insolvency.
SC observes: "Not sure if IBC is being misused by the companies to escape liabilities. We will go into bonafide of these companies going into insolvency. AGR Dues of Rs 35-40,000 crore are recoverable from the companies under IBC."

Solicitor General: The government view is that if the extension is not given, insolvencies that the Supreme Court fears will happen tomorrow. The spectrum itself acts as a security for ensuring payment of AGR dues.
SC to SG: How do you secure dues payable? Govt says, in case if default we can cancel spectrum and auction it to recover dues.

Alert: Telcos had proposed spectrum to act as security for securing a staggered payout.

SG to SC: "Cabinet considered the issue, decided on a 20-year period. Would still stand by DoT plea seeking a 20-year payout period. The government has provided for relief due to the cascading effect on the economy."
Abhishek Manu Singhvi for Airtel: Airtel seeks a 15-year window from SC for repaying AGR dues.
SC observes: “We don’t like this tone from Vodafone. Vodafone is threatening us that the SC order will not be followed if 20 years are not allowed.”
Mukul Rohatgi for Vodafone: “With folded hands prepares to accept a reasonable period of 15 years. Voda revises demand from 20 years to 15 years to repay AGR dues.”
Mukul Rohtagi for Voda: “Voda accepts the demand of Rs 58, 000 crore. The only way to pay is to allow Voda a 20-year payment period.”
SC observes: Telcos should be reasonable in seeking time. Telcos are dragging us to a corner where we have no options. Telcos are making much more than the dues sought.
Tata Tele submits to SC that a 7-10 year period would be reasonable for repaying AGR dues.
SC observes: "Revenue of the country needs to be saved. Telcos belong to this country, telcos should share the responsibility to secure the amount payable."
SC observes: "Telcos should seek a reasonable period for payout. 20 years is too long a period, doesn't seem reasonable." The DOT had sought a 20-year payout for AGR dues.
SC observes: "Telcos are behaving dishonestly. Why should we allow relief to telcos when telcos are seeking to review the figures payable. Four companies are in insolvency, almost Rs 40,000 crore of dues is sought from them. If telcos don't secure the dues payable, how can we allow installment wise payments."

#AGRCase | SC Observes: Will decide on limited issue of time to be provided; this is a waste of our time, we will impose very heavy costs pic.twitter.com/wLjIEGyh50
— CNBC-TV18 (@CNBCTV18Live) July 20, 2020

SC observes: "Will decide on the limited issue of time to be provided. This is a waste of our time, we will impose very heavy costs. We will impose more costs on telcos than any other court before. Telcos are trying to seek recalculation, trying to dilute the judgment."
Airtel, Tata argue that dues payable should be limited to only license fee dues. Airtel, Tata argue that SUC dues should not be included in the DOT demand.
SC observes: "We will not allow this self-assessment by Airtel. AGR definition has been clarified by SC, don't try to review the issue."
SC observes: "Airtel is looking to reopen the issue. We can't allow recalculation at this stage, we will not permit this. If we permit you to recalculate, it would be a violation of our orders."
Abhishek Manu Singhvi for Airtel: "Today dues payable by us should be Rs 21,000 crore, not Rs 43,989 crore claimed by DoT. The DoT has clubbed SUC dues to amounts claimed. The DoT demand of Rs 43,980 crore also includes SUC dues. AGR judgment of SC was only with respect to license fee dues, not SUC." "If we are found to be wrong, we will pay the amount demanded by DoT, SC," Singhvi adds.
SG to SC: As per us DoT, Airtel owes a sum of Rs 43, 780 crore. He further added, "Airtel paid Rs 18,004 crore, balance is Rs 25,976 crore. Vodafone paid Rs 7,854 crore, balance is Rs 50,399 crore. Tata paid Rs 4,197 crore, balance is Rs 12,601 crore.
SC to Abhishek Manu Singhvi for Airtel): Don’t try to reopen the case, all dues are included in the AGR judgment. No room available for adjustment of dues payable by Airtel.
Abhishek Manu Singhvi for Airtel: “Have paid Rs 18,000 crore after SC order, 60 percent of the total dues paid by all telcos combined, so far. Have Rs 21,000 crore of dues still payable towards license fee dues as per AGR judgment. The govt has wrongly sought Rs 43, 000 crore of dues, it includes SUC (spectrum usage charge) as well.” “SUC dues are not a part of the AGR dues, only license fee dues are a part,” Singhvi adds.
Kapil Sibal for Hughes: Have paid Rs 28 crore, Rs 126 crore of balance demand is outstanding. The govt has bank guarantees worth Rs 69 crore available with them; the govt can encash it if required. We can discharge the balance dues with time allowed. We are ready to discharge, just need some time.
Mukul Rohatgi for Vodafone: "Not seeking re-calculation, not revisiting the demand. SC has made it clear, we will rely on the demands issued by DoT."

"Have no assets left with us, the only asset that remains is Spectrum. GST refunds of 8000cr accruing to us can be retained by Govt," Rohatgi adds.

#AGRCase | SC says made it clear that there is no room for self-assessment; otherwise we will have to draw serious contempt against everyone pic.twitter.com/82sFUx4joJ
— CNBC-TV18 (@CNBCTV18Live) July 20, 2020

SG says No confusion about the SC Order. No room for re-assessment will be allowed. Have not submitted anything to suggest re-calculation. There is no confusion in the DoT.
SC observes: There seems to be communication between govt to allow room for re-calculation. How is Vodafone claiming payable dues to be lower by Rs 20,000 crore from the dues cited in our judgment?
Solicitor General (Trying to interject angry judges): It is not happening, the court has misunderstood the facts. No such move to dilute the SC judgment is being allowed.
Supreme Court: It seems the DoT is allowing room for self-assessment. Who in the government has the temerity to do this? No one has the authority to overturn our orders. You don’t know me, I will despatch people to jail from here.
SC observes: We want to make clear again that there is no space for self-assessment. Otherwise, we will have to draw serious contempt against everyone. We made it clear that there is no room for self-assessment. This would a violation of our orders, we will be compelled to take action.
Mukul Rohatgi for Vodafone: Will honour the judgement and the AGR dues sought from us.
SC observes: You are showing such a black picture, how are we supposed to see any light? Voda needs to secure AGR dues payable.

16/n
SC Observes -
Of the 8000cr you paid 1000cr just this last weekend.
Very difficult to rely on Voda.
Who is the kingpin? Who is managing Voda?
— Ashmit Kumar (@AshmitTejKumar) July 20, 2020

Mukul Rohatgi for Voda: No dispute that Voda is owed GST refund of about Rs 8,000 crore. That refund may be retained by the government with respect to the AGR dues. Have now paid Rs 8, 000 crore towards the AGR dues.
SC Observes (For Voda): With so many losses, how are we to rely on you? You are making the decision more difficult for us. How should we secure AGR dues payable by Voda? Voda has conceded that no bank is prepared to lend it money.
Mukul Rohatgi for Voda: Had not provided earlier because we had won earlier in TDSAT. Made provisions in the previous fiscal for about Rs 38,000 crore.

The Supreme Court to Vodafone: Did Vodafone ensure provisioning for AGR liabilities? Demands had been raised by the DOT, why not provided for by Voda?
Mukul Rohatgi for Vodafone Idea: The bulk of revenues have been committed to expenses such as tax, levies, costs. Total revenues over 10 years were Rs 6.27 lakh crores, out of which Rs 4.95 lakh crore was spent on expenses. Accounting for other expenses, losses come to over Rs 1 lakh crore.

Mukul Rohtagi complains, in a lighter vein, that Abishek Manu Singhvi's audio was on and that he could hear Raj HC proceedings in which Abhishek Manu Singhvi was appearing in the Sachin Pilot case.
Making Vodafone Idea's case for staggered payments, Mukul Rohatgi said, " Several columns indicate profit and loss. My lords take note that 2010-11 revenue is Rs 43000 crore while expenditure is Rs 36000 crore. There are also other expenses mentioned in the table of the affidavit. Net loss of Rs 2,857 crore in the first year and so on."
Justice Arun Mishra-led 3 judge bench assembles and logs in for the AGR case virtual hearing. Mukul Rohatgi will be appearing for Vodafone Idea. The counsel tells the court that "we have submitted financial documents like income tax returns."

"Over the last 15 years, the entire net worth of the company has been wiped out. All revenue has been spent on liabilities, tax, dues. Over 1 lakh crore of equity brought in by promoters has been eroded," Rohatgi adds.

Three-Judge Bench headed by Justice Arun Mishra yet to log in for AGR hearing.

7/n

Three Judge Bench headed by Justice Arun Mishra yet to join.
Solicitor General Tushar Mehta yet to log in for Centre.
As per SC website, AGR hearing was scheduled for 02.00pm.
Technical Glitches?
Wait continues...
— Ashmit Kumar (@AshmitTejKumar) July 20, 2020

Some technical issues delaying the virtual hearing for AGR dues. Judges are yet to join the virtual proceedings. Lawyers for telcos have logged in for virtual hearing.
Arvind Datar, Kapil Sibal, Ramji Srinivasan also join virtual hearing. Wait for 3 judge bench headed by Justice Arun Mishra continues.
The Systems Team of the Supreme Court routing in lawyers for telecom companies, the government for virtual hearing. Mukul Rohatgi for Vodafone Idea has logged in. Waiting for Judges to join. The 3-Judge bench headed by Justice Mishra to begin hearing shortly.
The Supreme Court will shortly hear a plea by the Department of Telecommunications for staggered payment of AGR Dues by Telecom companies. On June 11, the bench had directed the telecom companies to file affidavits explaining the time needed by them to clear the dues on account of the AGR verdict and also pulled up the Centre for ‘misusing’ its October 2019 verdict by levying dues on PSU’s. On June 18, a bench of Justices Arun Mishra, S. Abdul Nazeer & MR Shah had directed the telecom Companies to file their audited balance sheets of 10 years before Court.
You can also follow all the latest updates on CNBC-TV18's live thread on twitter.

Stand By - AGR hearing in SC to begin shortly.

SC to decide on allowing telcos staggered payment over 20 years.
Watch this space for live updates. @CNBCTV18Live pic.twitter.com/NNGHHXSetR
— Ashmit Kumar (@AshmitTejKumar) July 20, 2020

Telecom stocks surge ahead of the SC hearing; Vodafone Idea's shares rally 9%: Telecom stocks gained ahead of the Supreme Court's hearing on the adjusted gross revenue (AGR) case, at 2 PM. Vodafone Idea's shares gained as much as 9 percent to Rs 9.70 per share on the NSE. Meanwhile, Bharti Airtel and Bharti Infratel rose 1.54 percent and 5 percent respectively, intraday. Reliance Communications' stock price hit a 52- week high by surging over 4 percent to Rs 2.50. On July 18, Vodafone Idea paid an additional Rs 1,000 crore to the government towards the statutory dues, taking its total payment to an aggregate Rs 7,854 crore. The company had earlier deposited Rs 6,854 crore in three tranches, said the company's regulatory filing. The apex court on June 18 had adjourned the case, asking Vodafone Idea, Bharti Airtel and Tata Teleservice to submit financial statements and books of accounts of the last 10 years. Bharti Airtel owes a sum of about Rs 44,000 crore whereas Vodafone Idea owes a sum of about Rs 58,000 crore. For the latest stock market updates, follow CNBC-TV18.com’s live blog
Here are the main highlights from the Supreme Court's last hearing on June 11 on the AGR dues case.
CNBC-TV18's Ashmit Kumar is tracking all the developments related to the AGR dues case and gives a quick heads-up on what is expected and what has transpired so far. The hearing is scheduled for 2 pm today and the big question on everyone's mind is: Will the SC allow them a staggered payment over a 10-year schedule. Click here for more

Supreme Court AGR case latest updates: No going back on DoT dues, says SC bench; Reserves order on staggered payment timeline; next hearing on Aug 10

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