"No Reason Centre Can't Reconsider": Supreme Court Relief For Vodafone Over AGR

In a major relief for telecom company Vodafone Idea, the Supreme Court today allowed the Centre to reconsider relaxing Adjusted Gross Revenue (AGR) dues worth Rs 9,450 crore. The court reasoned that this matter falls in the policy domain of the Union.

AGR refers to a fee-sharing mechanism under which telecom operators must share a part of their revenue with the Centre as licensing fees and spectrum usage charges. There was a longstanding dispute between telecom companies and the Centre over the definition of AGR. While the telecom giants stressed that AGR should be based just on core services, the Centre argued it should also factor in non-telecom services provided by the telecom giants.

In a landmark 2019 verdict, the Supreme Court endorsed the Centre's definition of AGR and allowed the Centre to collect dues worth Rs 92,000 crore. This was a massive blow to telecom giants such as Vodafone and Bharti Airtel.

Vodafone's latest petition flagged a fresh AGR demand of Rs 9,450 crore raised by the Department of Telecommunications. The petition contended that a substantial portion of the demand pertained to the pre-2017 period, which had already been settled by the Supreme Court.

Solicitor General of India Tushar Mehta told the court that "there is a huge change in circumstances" of the case because the government has infused equity in Vodafone. The government now has 49 per cent stake in the company. "The government's interest is public interest. There are 20 crore consumers. If this company is to suffer, it would lead to issues for consumers," he said.

The court noted in its order that the Centre is willing to examine the issue. "The government is also willing to reconsider and take an appropriate decision if the court permits. In the peculiar facts, we see no impediment in the government reconsidering the issue. We clarify that this is a matter of policy; there is no reason as to why the Union should be prevented from doing so," the court said.