In a significant development, the Supreme Court on Monday permitted the Centre to reconsider and reconcile Vodafone Idea Ltd’s pending adjusted gross revenue dues amounting to Rs 5,606 crore for the financial year 2016–17, observing that the issue falls within the policy domain of the government.
Adjusted gross revenue (AGR) is the income figure used to calculate the licence fees and spectrum charges that telecom companies must pay to the government.
A bench comprising Chief Justice B R 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 Department of Telecommunications (DoT). The telco contended that these additional claims were unsustainable as the liabilities had already been crystallised by the apex court's 2019 judgment on AGR dues.
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 that consumer interests are safeguarded.
The bench noted that the petition has been filed seeking the quashing of additional AGR demands for 2016-17, and further directions to comprehensively reassess all dues.
“The solicitor general on instructions states that taking into consideration the change in circumstances, i.e., the Centre acquiring 49 per cent equity and 20 crore customers utilising the service of the petitioner, the Union government is willing to examine the issues raised by the petitioner company,” the bench said.
“Taking into 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 crore customers, we see no issue in the Union reconsidering the issue and taking appropriate steps,” the CJI said in the order.
Clarifying that the issue fell under the policy domain of the Union, the bench said, “There is no reason as to why the Union should be prevented from doing that, and 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 dispute over AGR, particularly its inclusion of non-telecom income, led to massive liabilities on the telecom operators, with Vodafone Idea and other telcos among the hardest hit. Vodafone Idea had filed a fresh plea against the DoT's demand of Rs 5,606 crore relating to 2016-17, which was disposed of on Monday by the bench, permitting the Centre to reconsider the issue. Earlier, the Centre said that efforts were underway to arrive at a resolution with the company.
Mehta said the government held 49 per cent equity in Vodafone Idea, making it a direct stakeholder in the operator's survival. "Some solution may have to be found out, subject to your lordship's approval. If it can be kept next week, we can think of some solution," Mehta had said.
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