The Supreme Court on Tuesday, 1 September, allowed a period of 10 years for telecom companies to clear adjusted gross revenue (AGR)-related dues.
Ten percent of the dues will have to be paid by 31 March 2021, with the extension granted in view of the COVID-19 situation.
"Instalments to be paid by 7 February of every succeeding year. Any default will accrue interest and non-payment will also invite contempt of court proceedings,” the apex court was quoted as saying in its order in the case.
The development comes as a relief for Vodafone Idea Ltd, for which survival would have been a concern had the court not agreed to a staggered payment schedule.
The Bench of Justices Arun Mishra, S Abdul Nazeer and MR Shah pronounced the order.
The court clarified that in the case of default on payment, a penalty will be issued and will be considered as contempt of court. The annual instalments are required to be paid on 7 February every year.
Telecom Companies Proposed Different Timelines Which Weren’t Accepted
The telecom companies had proposed different timelines for clearing of dues.
While Vodafone Idea and Bharti Airtel had sought 15 years for payment of AGR dues, Tata Telecom submitted that a window of at least 7-10 years would be required for payment of dues.
The department of telecommunications (DoT), in March, had appealed to the apex court seeking 20 years for payment of dues, which included spectrum usage charges, licence fees, penalties, and interest on penalties.
No revaluation regarding the AGR dues will be entertained, the bench said.
On the matter of whether spectrum can be sold by the companies through proceedings under the Insolvency and Bankruptcy Code, the court held that this can be decided by the National Company Law Tribunal (NCLT), reported Bar and Bench.
Impact of AGR Dues
The shares of Bharti Airtel jumped nearly 5 percent to Rs 537.70 and RCom shares went up by 5 percent to Rs 2.53 on the BSE today at 12:50 pm.
But Vodafone Idea fell nearly 9 percent to Rs 9.33 and On Mobile was down by 5 percent to Rs 35.40 on the BSE.
Stocks of Vodafone Idea, OnMobile, GTL Infra, Vindhya Telelink and ITI fell sharply.