Wednesday, September 29, 2021
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SC restricts DoT to invoke Airtel bank guarantees over non-payment of AGR dues

A three-judge bench led by Justice L Nageswara Rao allowed Bharti Airtel to go to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for relief over the issue

In a major relief to the top telecom operator, Airtel, the Supreme Court of India has directed the telecom department not to invoke bank guarantees of Bharti Airtel for three weeks over non-payment of adjusted gross revenue (AGR) dues of defunct telco Videocon Telecommunications (VTL).

A three-judge bench led by Justice L Nageswara Rao allowed Bharti Airtel to go to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for relief over the issue.

“We’ve made it clear we will not review the (main AGR) judgement. He (Airtel) wants to file an application. We will allow. He (Airtel) says after dues are added now, so you hold your hands for some time till he goes before TDSAT,” the bench also comprising Justice SA Nazeer and Justice MR Shah told Solicitor General Tushar Mehta.

Mehta was arguing that the recovery notice served by the Department of Telecommunications (DoT) on Airtel was as per the court’s AGR dues order. He said that he would contest the jurisdiction of the TDSAT to decide the issue.

Earlier the DoT issued a demand notice on August 17, 2020, asking Bharti Airtel to pay AGR dues assessed at Rs 1,376 crore within a week or have the bank guarantees invoked. The dues were of Videocon Telecommunications, whose spectrum was acquired by the Sunil Mittal-led in 2016. Videocon had sold rights to use spectrum in the 1,800 MHz band in six circles to Airtel in 2016 for Rs 4,428 crore.

The Sunil Mittal-led telco said that it had so far paid the government Rs 18,004 crore by way of AGR dues, which was more than 10% of dues to have been paid by March 31, 2021, as per the top court’s order. DoT has demanded Rs 43,980 crore from Airtel towards AGR dues.

Senior advocate Shyam Divan, representing Airtel, said that Airtel was not responsible for Videocon’s dues on account of the spectrum trading deal as the law states that the ‘seller shall clear all dues prior to concluding any agreement for spectrum trading’.

“Our agreement date is 16th March 2016. I am the buyer and the effective date is 18th May 2016. If there was a liability not known to parties at the time, the government has the discretion to recover jointly or severely. In our case, it’s common ground between us that it was known liability, so we are not in the realm of unknown liability,” Diwan argued. “The liability is of Videocon, full liability is of the seller.”

The bench later said, “We know where you are heading, but we are not going to review this judgement.” To this, Diwan responded: “We don’t want to review the judgement.”

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