Govt Needs AGR Money During Pandemic: SC Tells Voda Idea After Telco Says Won’t be Able to Pay 11,000 Staff

The Supreme Court on Thursday asked Vodafone Idea to deposit some amount of its adjusted gross revenue (AGR) dues to the government immediately, saying that this money needs to be used for the public, especially during the coronavirus pandemic.

“You deposit some amount mister… the government needs this money for the public, especially during the pandemic. The government of India will use that money. You must deposit the money,” Justice MR Shah told senior counsel Mukul Rohatgi, who was appearing for Vodafone Idea, Live Law reported.

The observation came after the telecom major told the three-judge bench, also comprising Justices Arun Mishra and S. Abdul Nazeer, that it has paid Rs 7,000 crore of the Rs 58,254 crore in AGR dues to the government, and said the rest should be allowed to be paid in instalments.

“If I pay more, I will have nothing left. I have 11,000 employees. Will not be able to pay them,” Rohatgi said on behalf of Vodafone Idea, adding that the company’s position is extremely precarious and it is not in a position to give any fresh bank guarantee.

The telecom companies have been asking the court to grant a 20-year grant to pay the dues. Vodafone Idea said a Rs 15,000 crore bank guarantee is already available with the government, and the standing instruction is of Rs 5,000 crore payment annually.

Vodafone Idea admitted no bank will give the company loan today and said it will have to fold up if asked to pay the dues upfront. "Payment in installment only way to remain a going concern," it said.

The bench then asked the telecom firm to place its books of account on record, and asked the Department of Telecom to consider all proposals filed by the companies for staggered payment stretching up to 20 years. The court listed the matter for next hearing in third week of July.

The DoT has said while telecom operators have filed affidavits, they still need time to reply on the roadmaps and timelines for the payment of their AGR dues to the government and the security they seek to provide against it.

Several industry experts and analysts have noted that for Vodafone Idea to avoid a shutdown, a 15-20 year payment period and equity infusion is a must. But Airtel Bharti is in a relatively better position.

Senior lawyer Abhishek Manu Singhvi, appearing for the company, told the court that it has paid dues of Rs 18,004 crore, which means it still owes Rs 25,976 crore.