Supreme Court on Tuesday, has given 10 years time frame to the Telcos in connection to the payment of Adjusted Gross Revenues (AGR). The court has denied interfering in the insolvency process as it is a jurisdictional matter and has directed the NCLT to decide on the spectrum sale to clear dues.
Three judge bench comprising Justice Arun Mishra, Justice S Abdul Nazeer, and Justice MR Shah has directed the Telcos to clear 10 percent of the AGR dues till March 31, 2021, under Supreme Court’s October 2019 order. While the rest of the amount should be paid in the installments on February 7 every year.
Any default in the payments will accrue interest and non-payment of the AGR dues will invite contempt proceedings.
The court has directed National Company Law Tribunal (NCLT) to decide on whether the spectrum can be monetized without payment of dues payable to the government in cases where telecom companies are filed for bankruptcy. This crucial verdict salvages the Insolvency and Bankruptcy Code (IBC).
Still, there is ambiguity related to the SC ruling that whether Reliance Jio who is using the spectrum of Reliance Communications and Bharti Airtel using the spectrum of Aircel and Videocon, would have to clear the AGR dues or not.
Earlier the Telcos had approached the apex court seeking a suitable timeframe for the payment of AGR dues. Tata Telcom sought a time frame of 7-10 years, Vodafone-Idea of 15 years, and Bharti Airtel for 15 years. However, the Department of Telecommunications (DoT) was in agreement with Union Cabinet’s proposal for payment within 20 years.