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Supreme Court gives telecom firms 10 years to clear AGR dues, 10% to be paid by March

A three-judge bench led by Justice Arun Mishra said the time was extended due to Covid-19 pandemic and nonpayment of dues will lead to contempt proceedings.

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New Delhi: The Supreme Court gave telecom firms 10 years to clear their Adjusted Gross Revenue (AGR) dues, which are estimated to be around Rs 1.6 lakh crore, Tuesday.

A three-judge bench led by Justice Arun Mishra said the firms will have to pay 10 per cent of the dues by 31 March 2021. Thereafter, the companies will have to pay an instalment by 7 February, every successive year.

In October 2019, the top court had delivered the verdict on the AGR issue for calculating government dues of telecom companies such as licence fee and spectrum usage charges, and had given telecom firms 90 days to clear the dues.

The deadline for the payment lapsed on 24 January, after which the companies approached the court and got an extension till 17 March to make the payment.

However, in March, an application was filed by the Department of Telecom (DoT) asking the court to grant the firms 20 years’ time to pay.

On 24 August, the court had reserved its verdict on the application, after hearing all telecom firms.

Also read: Mukesh Ambani vs Sunil Mittal – the telecom war is back

Time extended due to Covid-19

The Justice Mishra-led bench, in its judgment, said that non-payment of instalments will not just accrue interest but also invite contempt of court proceedings. It added that it had extended the time frame of repayment due to the Covid-19 pandemic.

The firms’ managing directors and chairmen were also ordered to furnish personal affidavits to the court, undertaking compliance of today’s order.

The bench further agreed with the submissions of the companies that the National Company Law Tribunal (NCLT) and not the Supreme Court should decide whether spectrum can be a subject matter of dispute resolution under the Insolvency and Bankruptcy Code (IBC).

This question arose for consideration when the bench was considering the bona fides of some telecom companies that said they were facing proceedings under the IBC in NCLT as well.

While the telecom department had argued before the court that spectrum cannot be sold and belonged to the government, the companies said the right to use spectrum, purchased through an auction, is an asset and can be subject to IBC proceedings.

Also read: With Ambani by his side, Zuckerberg has finally made his Mark in India’s telecom space


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