Case BriefsSupreme Court

Supreme Court: In a major turnaround in the AGR case, with respect to Public Sector Undertakings, the Department of Telecommunication has decided to withdraw the demands which constitute 96% of the of the ?4 lakh crore demand. However, with respect to 4% other Public Sector Undertakings, Solicitor General Tushar Mehta told the bench of Arun Mishra, SA Nazeer and MR Shah, JJ that “the final decision shall be taken before the next date of hearing and placed on record.

The decision came after the Court pulled up the Government for misusing it’s 2019 verdict and had said that the said verdict only applied to AGR dues owed by the telecom companies and not to PSUs.

In today’s order, the Court directed the telecom operators to file audited Balance Sheets, for the last 10 years including for the Calendar year ending 31.3.2020 as well as the Income Tax Returns and the particulars of AGR deposited during the last 10 years. It also requested to make payments of reasonable amount also to show their bonafides, before the next date of hearing.

The matter is scheduled to be taken up in the 3rd week of July.

Last year, in Union of India v. Association of Unified Telecom Service Providers of India, 2019 SCC OnLine SC 1393, where it had  refused  to change the definition of gross revenue as defined in clause 19.1 of the licence agreement granted by the Government of India to the Telecom Service Providers and had said,

“The definition of revenue has been taken in a broad, comprehensive, and inclusive manner to pose fewer problems of interpretation, and exclusion of certain items was avoided.”

[In re Mandar Deshpande, 2020 SCC OnLine SC 518 , order dated 18.06.2020]


Also read:

In a big blow to the Telecom Sector, SC refuses to change AGR definition

 

 

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of Arun Mishra, SA Nazeer and MR Shah, JJ has given 5 days to Telecom Service Providers to file a joint affidavit with respect to their proposal to secure the amount, which is to be paid against AGR dues. The matter will now be taken up on June 18, 2020.

The issues that are to be considered are:

  • reasonable time-frame
  • 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

It was also brought into Court’s notice that how the demand was raised on the basis of it’s judgment with respect to Public Sector Undertakings when the licences were different and the judgment never dealt with the issue of Public Sector Undertakings and their agreements are quite different. Noticing that the licences are different, the Court asked the Department of Telecom reconsider the demand that has been sprung, within three days, and on the next date of hearing report the compliance of the action taken on the basis of this order.

Last year, in Union of India v. Association of Unified Telecom Service Providers of India, 2019 SCC OnLine SC 1393, the Court had refused  to change the definition of gross revenue as defined in clause 19.1 of the licence agreement granted by the Government of India to the Telecom Service Providers and had said,

“The definition of revenue has been taken in a broad, comprehensive, and inclusive manner to pose fewer problems of interpretation, and exclusion of certain items was avoided.”

[In re Mandar Deshpande, 2020 SCC OnLine SC 501, order dated 11.06.2020]


Also read:

In a big blow to the Telecom Sector, SC refuses to change AGR definition

Hot Off The PressNews

Supreme Court:  The bench of Arun Mishra and MR Shah, JJ has dismissed a petition filed by Vodafone against the levy of one-time spectrum charges (OTSC).

When Senior advocate Abhishek Manu Singhvi, appearing for Vodafone, told a bench that the charges are related to the adjusted gross revenue (AGR), a rather furious Justice Mishra said,

“Don’t pay anything… not this, not AGR. You will still not be touched,”

The Department of Telecommunications (DoT) had sought to levy a one-time spectrum charge on telecom service providers. This comes after the telecom companies paid their AGR dues to the Central government after the Supreme Court pulled them up for violating its earlier order and not paying the money on time.

Last year, in Union of India v. Association of Unified Telecom Service Providers of India, 2019 SCC OnLine SC 1393the bench of Arun Mishra, SA Nazeer and MR Shah, JJ had refused to change the definition of gross revenue as defined in clause 19.1 of the licence agreement granted by the Government of India to the Telecom Service Providers. It had held,

“The definition in agreement is unambiguous, clear, and beyond the pale of doubt, and there is no confusion in the definition of gross revenue, which is the basis for realisation of the licence fee. Licensees have made a futile attempt to wriggle out of the definition in an indirect method, which was rejected directly in the decision of 2011 between the parties and it was held that these very heads form part of gross revenue.”

Vodafone Idea’s total AGR dues, as estimated by the DoT stand at Rs 53,038 crore, which includes Rs 24,729 crore of spectrum dues and Rs 28,309 crore as the license fee. On the other hand, Bharti Airtel’s total AGR dues reportedly amount to Rs 35,586 crore.

(Source: ANI)

Case BriefsSupreme Court

Supreme Court: Taking a strong note of non-compliance of its order asking telecom companies to pay adjusted gross revenue of Rs 1.47 lakh crore to DoT, a bench headed by Justice Arun Mishra, JJ has issued contempt notice to the telecom companies. The managing directors of Bharti Airtel , Vodafone, MTNL, BSNL, Reliance Communications, Tata Telecommunication and others have been summoned to the court on March 17.

The Court said that the telecom companies have violated the order passed by this Court in pith and substance as in spite of the dismissal of the Review application, they have not deposited any amount so far.

“Shocked” over the non-compliance of it’s 2019 order, the bench said,

“It appears the way in which things are happening that they have scant respect to the directions issued by this court.”

The Court also issued notice to a DoT Desk Officer who asked the Attorney General to not insist on payment of dues as directed by the Supreme Court.  On this, a furious Justice Mishra said,

“A Desk Officer of the Department of Telecommunications has the temerity to pass the order to the effect of issuing a direction to the Accountant General, another Constitutional Authority”

The Desk Officer had asked the Attorney General

“not to insist for any payment pursuant to the order passed by this Court and not to take any coercive steps till further orders.”

The Court said that this kind of order was nothing but a device to scuttle order of the Supreme Court.

Last year, in Union of India v. Association of Unified Telecom Service Providers of India, 2019 SCC OnLine SC 1393the bench of Arun Mishra, SA Nazeer and MR Shah, JJ had refused to change the definition of gross revenue as defined in clause 19.1 of the licence agreement granted by the Government of India to the Telecom Service Providers. It had held,

“The definition in agreement is unambiguous, clear, and beyond the pale of doubt, and there is no confusion in the definition of gross revenue, which is the basis for realisation of the licence fee. Licensees have made a futile attempt to wriggle out of the definition in an indirect method, which was rejected directly in the decision of 2011 between the parties and it was held that these very heads form part of gross revenue.”

According to DoT, Bharti Airtel owes around Rs 23,000 crore, Vodafone Idea Rs 19,823 crore and Reliance Communications Rs 16,456 crore.

[Union of India v. Association of Unified Telecom Service Providers of India, 2020 SCC OnLine SC 182, order dated 14.02.2020]

Case BriefsSupreme Court

Supreme Court: Refusing to change the definition of gross revenue as defined in clause 19.1 of the licence agreement granted by the Government of India to the Telecom Service Providers, the 3-judge bench of Arun Mishra, SA Nazeer and MR Shah, JJ has said,

“The definition of revenue has been taken in a broad, comprehensive, and inclusive manner to pose fewer problems of interpretation, and exclusion of certain items was avoided.”

The Court agreed that to a certain extent, it cannot be disputed that to have clarity, uniformity, and definitiveness; the accounting standards lay down guidelines with respect to financial terms. It, however, said that when the financial terms in the agreement are clear in the form of definition of gross revenue governed by Clause 19.1 of the agreement, the definition of Accounting Standard­9 cannot supersede it which is a general one.

“The definition in agreement is unambiguous, clear, and beyond the pale of doubt, and there is no confusion in the definition of gross revenue, which is the basis for realisation of the licence fee. Licensees have made a futile attempt to wriggle out of the definition in an indirect method, which was rejected directly in the decision of 2011 between the parties and it was held that these very heads form part of gross revenue.”

The Court further noticed that the parties had agreed to various inclusions in the agreement and have willingly switched over to revenue­ sharing regime under the National Telecom Policy, 1999. TSPs agreed to interpretation and accepted it as held by this Court in 2011 judgment.

“The deliberations were held with the licensees, experts, and then finally migration package, revenue sharing regime is being consented to, was worked out in which the definition of adjusted gross revenue as a part of the financial condition of the licence is mentioned.”

Going through the chequered history on the case, the Court noticed:

  • The demand was raised for the first time in the year 2003 despite the fact that the definition of gross revenue was clear. Licensees were aware that these items concerning which they have raised the dispute were included in the definition of gross revenue, as such, they had initially questioned inclusion on the basis of the validity of the definition of gross revenue. The challenge was found to be sans any basis by this Court.
  • The objections raised concerning the validity of the gross revenue, were wholly unsustainable and on the face of it, were liable to be rejected, and came to be rejected finally and conclusively by this Court in the year 2011.
  • After that, again the objections have been repeated to exclude those very revenue items which were held to be included once over an effort has been made to get rid of the definition of gross revenue. The objections which have been raised pertained to the definition of gross revenue for which the court held they are part of revenue.

“Now, relying upon AS­9 standards, an attempt has been made by an indirect method for excluding items, which are expressly included in the definition of gross revenue. Objections are too tenuous, and, as a matter of fact, there was no scope to raise such objections in 2003 itself.”

In the over 150 pages long verdict, the Court has discussed at length the various revenue heads not being revenue and has held that they all fall within the purview of gross revenue.

[Union of India v. Association of Unified Telecom Service Providers of India, 2019 SCC OnLine SC 1393, decided on 24.10.2019]