Telecom stocks are in focus as the adjusted gross revenues (AGR) hearing is scheduled today, July 19, in the Supreme Court (SC). Last September, the apex court had reaffirmed dues payable by the telecom companies, particularly, Bharti Airtel and Vodafone Idea (VI). Bharti Airtel’s AGR dues at the time were Rs 43,000 crore, while for Vodafone Idea it was over Rs 58,000 crore.
Meet Malhotra, Senior Advocate, on being asked if going to the SC with such applications that have been moved before is a good idea, he said, I think the applications have a lot of a merit and they deserve to be considered. However, court is within its right to say that we have had several rounds now, on October 24, September 1 and then September 20, and it is time to put a quietus to all this, therefore let us not have this application now.
The earlier applications where about the length of the repayment period and whether interest should be levied at all and so to that extent, these applications are different, said Malhotra, adding that the sense is that they are not seeking to have the verdict re-examined and are actually seeking the verdict to be applied in all its rigour.
“DoT had come out with some figures, which are recorded in the Court’s order of September 1, 2020. These were not figures which were not reconciled and settled, these were figures according to DoT. The operators have been saying from day 1 that these figures are full of errors on the face of the record - certain incomes have been counted twice over, certain deductions made by the judgement of the SC have not been allowed. Therefore, these rectifications call out loud for a correction. I think if the court were to consider this then it would be a justified cause,” said Malhotra.
To make matters worse for telecom operators, they have not only to pay the excess amount, on the face of it double charging etc., they have to pay a steep interest on it, a penalty on it and interest on the penalty, he said, adding that theoretically speaking if the computational errors are say Rs 100 crore, then the telecom operator ends up having to pay about Rs 400 crore, so the mistake is then magnified many times over, said Malhotra. Therefore, in my view these applications are worth considering but I do not know whether the court would consider them, he added.For the entire discussion, watch the accompanying video.