The Supreme Court on Tuesday granted relief to Airtel by restraining the Department of Telecommunications (DoT) from enchasing Airtel’s Bank Guarantees in Airtel-Videocon Adjusted Gross Revenue (AGR) case. The apex court also directed the DoT to not invoke the Guarantees for three weeks. Further, Airtel was allowed to move the TDSAT to seek protection from payment of Videocon AGR dues.
The Supreme Court (SC) held a hearing on August 24, regarding a fresh plea by the telecom major Bharti Airtel against payment of defunct telecom company Videocon Telecommunications Ltd’s (VTL) adjusted gross revenue (AGR) dues. The bench was headed by Justice Rao TO SG Mehta and also comprised of Justices L Nageswara Rao, S Abdul Nazeer and MR Shah.
Senior Advocate Shyam Divan who was representing Bharati Airtel conveyed that on August 17 from the Department of Telecommunications (DoT) sought the payment of Videocon’s dues. The Letter warned the company that a failure to make the payment would result in the invocation of bank guarantees.
During the proceedings, the DoT cited the September 2020 AGR Judgment of the SC, which had raised demand on Bharti Airtel For Videocon’s dues of Rs 1,376 crore. On August 17, DOT slapped a demand notice on Airtel, seeking payment of Videocon’s AGR dues. However, it should be noted that this demand for the payment was only raised after the SC judgement, before that it was not raised once according to Bharati Airtel in a statement to the top court. The telco also stated that according to the spectrum trading guidelines, Videocon should have cleared all of its prior dues before concluding any agreement for spectrum trading.
Divan argued that on the grounds of the order passed by the SC in September of 2020, the AGR dues of Videocon could not be recovered from Airtel as it was present before the sale of its spectrum happened. The 2020 order stated that dues of a telecom service company existing before the sale of the spectrum are to be borne by the seller and not by the buyer.
Airtel argued that even if the Videocon liability was taken into account and added to Bharti Airtel’s AGR, Bharti’s payment of Rs 18,004 crore easily satisfies the payment of 10 per cent that was set to be paid by March of 2021.
During the hearing, Divan asked the apex court to see the Government’s letter to Videocon. He claimed that it was reiterated that dues were to be paid by them. “Consistent understanding till the 1st of September order was that they were liable,” stated Divan.
In response to this, Justice Rao said, “We have made it clear we will not review but will give liberty to approach TDSAT. Other issue is to hold your hand for another week or so till they approach TDSAT”
Airtel had previously entered into a Rs 4,428 crore deal to buy the Videocon Telecommunications owned spectrum in Bihar, Haryana, Madhya Pradesh, Uttar Pradesh (East), UP (West) and Gujarat. In the wake of this deal, Videocon had traded its entire spectrum of 30Mhz to Airtel. This deal took place in March of 2016. Following this, the Department of Telecommunications wanted Airtel to pay Videocon’s past dues or Adjusted Gross Revenue (AGR).
In April of 2021, the government had told the Supreme Court that it raised the demand for the AGR in compliance with an earlier order of the court but failed to get a positive response from Airtel.
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