Supreme Court Says PSUs Can’t Be Asked To Pay Pending AGR Dues

The Supreme Court said the government can’t use its verdict ordering wireless carriers to pay pending statutory dues to raise similar demands from public sector companies “who are not in the business of providing mobile services to the general public”.

The court on Thursday sought an explanation from the government and asked it to consider withdrawal of these demands. The Department of Telecommunications will have to submit its response within three days.

“It is apparent that the licences are different and our judgment in this case could not have been made the basis for raising the demand against public sector undertakings,” the top court said in its order. “Even otherwise, the Public Sector Undertakings are not in the actual business of providing mobile services to the general public.”

The court in October ruled that adjusted gross revenue should include non-core revenue and asked telecom operators to pay pending dues. The Department of Telecommunications, however, later asked non-telecom companies including Gail (India) Ltd., Oil India Ltd. and Power Grid Corporation Ltd. to pay Rs 4 lakh crore of outstanding dues stemming from revenue they earned from internal networks. In March, the top court “detached” the PSUs from its judgment.

The Supreme Court will now take up the AGR dues case on June 18.

Meanwhile, the Supreme Court asked private telecom operators to explain how they plan to pay the pending dues.

Bharti Airtel Ltd. informed the court that it has paid all the dues according to its calculations. Still, the operator said, it will discuss with the government clear if anything remains outstanding.

The court had in March ruled that it won’t allow self assessment or reassessment of AGR dues by telecom companies and the carriers would have to pay interest and penalty in accordance with its October judgment.

Vodafone Idea Ltd., the telecom firm most affected by the verdict, told the court that it is willing to provide security through licence and spectrum for the pending dues.

The government, however, proposed allowing payment of dues in a staggered manner over 20 years.

On the request of telecom operators, the court gave them five days to file a joint affidavit on their proposal to “secure the amount which is to be paid under the orders passed by this court”.

On the next hearing, the top court is likely to consider:

• The reasonable time frame to be allowed for payment.
• How to ensure the payment of the amount even within that time frame.
• What kind of securities, undertakings and guarantees should be furnished to ensure that the amount is paid by the telecom service providers.
• The case will now come up for hearing on June 18.