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Top Court Gives Telecom Firms 10 Years To Pay Dues, Contempt If Default
01 Sep 2020, 12:24 PM IST 
The telecom companies will have to clear their dues by February 7 each year.
- The top court said the 10-year timeline for payment of AGR dues will begin from April 1, 2021, and the payments will have to be made in instalments till March 31, 2031.
- The telecom companies will have to clear their dues by February 7 each year and non-payment of dues will incur penalty, interest and contempt of court, the bench added.
- The dispute centres around the definition of adjusted gross revenue (AGR). Telecoms pay a percentage of their revenues as license fee to government. They argue that non-core business like rent or income from sale of handsets or roaming charges should not be included in the revenue of which they pay a percentage - they want to pay only on revenue earned from their core business. The court did not agree.
- The Supreme Court asked the managing directors or chief executive officers of the concerned telecom companies to give personal guarantees on the payments within four weeks.
- During the earlier hearings, Tata Telecom had asked for a window of at least 7-10 years for payment of dues, whereas Vodafone-Idea and Bharti Airtel had each suggested payment over 15 years. The Department of Telecommunications (DoT) had, however, stuck to the Cabinet's proposal of payment within 20 years.
- The court said the demand made by the DoT and verdict on the matter is final. On July 20, the three-judge bench had reserved its order on the timeline for staggered payment of dues and took up the issue of spectrum licences held by the companies.
- The Supreme Court also said the issue of sale of spectrum by telecom companies facing insolvency proceedings will be decided by the National Company Law Tribunal (NCLT).
- The ruling should come as a relief for Bharti Airtel and Vodafone Idea, which have been struggling with mounting losses.
- Vodafone Idea chairman Kumar Mangalam Birla had warned in December that the company was headed towards insolvency.
- Telecom stocks traded mixed after the verdict. Bharti Airtel and RCom shares gained up to 5 per cent each on the BSE, while Vodafone Idea plunged 15 per cent.
