Vodafone Idea gets major relief as SC allows Centre to examine DoT's AGR demands

In a major relief to telecom major Vodafone Idea, the Supreme Court on Monday (October 27) allowed the Centre to consider the company’s plea seeking quashing of the Department of Telecommunication's (DoT) additional adjusted gross revenue (AGR) of Rs 5,606 crore for FY 2016-17, observing the issue falls within the policy domain of the government.

A Bench comprising Chief Justice BR Gavai and Justice K Vinod Chandran passed the order while hearing a writ petition filed by Vodafone Idea challenging fresh AGR-related demands raised by the DoT.

Centre willing to examine issues

The company contended that these additional claims were unsustainable as the liabilities had already been crystallised by the apex court’s 2019 judgment on AGR dues.

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During the hearing, Solicitor General Tushar Mehta, appearing for the Centre, informed the court that the government now holds 49 per cent equity in Vodafone Idea and that around 20 crore consumers depend on its services.

He submitted that, given these circumstances, the Centre was willing to examine the issues raised by the company to ensure consumer interests are safeguarded.

The Bench noted the petition has been filed seeking the quashing of additional AGR demands for 2016-17 and further directions to comprehensively reassess all dues.

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“The solicitor general on instructions states that taking into consideration, the change in circumstances that is the Centre acquiring 49 per cent equity and 20 crore customers utilising the service of the petitioner, the Union is willing to examine the issues raised by the petitioner (company),” the Bench said.

“Taking into the consideration the status of the case now, the government has infused substantial equity into the company and that it will have direct bearing on 20 crores customers, we see no issue in the Union reconsidering the issue and taking appropriate steps,” the CJI said in the order.

Massive liabilities on telecom operators

The Bench clarified that the issue fell under the policy domain of the Union and said, “There is no reason as to why that Union should be prevented from doing, with that view of the matter, we dispose of the writ petition.”

Senior advocate Mukul Rohatgi, appearing for Vodafone Idea, argued that the DoT’s additional demand of Rs 5,606 crore for FY 2016-17 was unsustainable since the dues had already been determined following the Supreme Court’s 2019 verdict.

The AGR represents the income figure used to calculate the licence fees and spectrum usage charges payable by telecom operators to the government.

The dispute over AGR, particularly its inclusion of non-telecom income, led to massive liabilities on telecom operators, with Vodafone Idea and Bharti Airtel being among the hardest hit.