ECONOMY

AGR Case: Bharti Airtel Gets A Three-Week Reprieve

The Supreme Court has asked the Department of Telecommunications to not invoke any bank guarantees of Bharti Airtel Ltd. for the next three weeks.

The direction comes after the DoT sent a letter to Bharti Airtel on Aug. 17, asking it to clear Videocon Telecommunications Ltd.’s dues from the adjusted gross revenue case as per the court’s directions within a week. The letter also added that a failure will result in the DoT invoking the bank guarantees submitted by Bharti Airtel.

The issue is a fallout of the Supreme Court’s October 2019 ruling that non-core revenue must be included while calculating statutory levies. In September last year, the apex court had given telecom operators 10 years to pay their AGR dues.

Bharti Airtel had struck a spectrum-trading agreement with Videocon in March 2016. And it bought the entire spectrum of Videocon Telecommunications.

And so, the DoT moved to recover Videocon’s dues from Bharti Airtel. In it’s letter, the DoT stated that as per the apex court’s verdict, only where the part of the spectrum was sold, AGR liability will fall on the seller. But not where the entire spectrum was sold.

Bharti Airtel filed an application before the top court questioning the government’s demand. The bank guarantees, the company said, were submitted for securing license fees and the other statutory dues.

It argued on Monday that as per the Supreme Court’s judgment of September 2020, it’s the seller’s responsibility to clear the liabilities which were known on the date of the agreement. In this case, AGR dues were known liabilities and therefore should be cleared by Videocon, Senior Advocate Shyam Divan argued for Bharti Airtel.

The application was heard by the top court bench of Justices L Nageswara Rao and S Abdul Nazeer and MR Shah. The bench observed that it was not going into the merits of the case.

It allowed Divan to withdraw the application and approach the appropriate forum for relief. In this case, the forum is likely to be the Telecom Disputes Settlement and Appellate Tribunal.

The top court, however, asked the government to not invoke any of the bank guarantees for three weeks.

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