The top court also asked the telecom companies to file affidavits explaining how they will pay their AGR dues.

New Delhi, June 11:

The Supreme Court on Friday came down heavily on telecom companies for not having cleared their dues related to adjusted gross revenue (AGR) and slammed the Department of Telecommunications (DoT) for demanding Rs 4 lakh crore from state-run firms. The top court said DoT officials are misusing its earlier judgement, and ordered the telecom department to reconsider its ask from the state-run companies. “This is wholly and totally impermissible,” the bench said, while referring to the demand raised against the PSUs. Warning of initiating contempt proceedings against the concerned officers, the Supreme Court asked the government how it used its judgement on the AGR matter to devise the formula to raise demand from the public sector companies.

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“This is an outright misuse of our verdict. You are making a demand of over (Rs) 4 lakh crores,” said the bench, headed by Justice Arun Mishra and also comprising Justice MR Shah and Justice S Abdul.

The court asked the telecom companies to file affidavits on how they will pay their AGR dues, and any timeframe that can be set for the payment.

Solicitor General Tushar Mehta, appearing for the telecom department, said the government has extensively examined the issue and has come out with a bailout package. “It would be difficult for the companies to pay the amount in one go. If the court objects, it will adversely impact the telecom sector, affect network, and the consumers will ultimately suffer,” he said.

Mr Mehta said the government will file an affidavit on why dues were raised against public sector enterprises, to which the court responded by directing the government to reconsider their demands from the companies.

On whether telecom companies should be allowed these to pay the AGR dues in a staggered fashion over 20 years, the bench asked who has seen 20 years in the future? The top court will hear the matter next on June 18.

The dispute centers around the definition of adjusted gross revenue. Telecom service providers operating in the country pay the telecom department 3-5 per cent of their AGR in spectrum usage charges and 8 per cent as licence fees. Companies have long argued that AGR should comprise just revenue accrued from core services, while the government says it should include all revenue.

In October last year, the Supreme Court had allowed the telecom department to recover adjusted gross revenue-related dues worth Rs 92,000 crore from telecom companies, backing the government’s definition of AGR. Following the court’s order, the telecom department had sought a cumulative Rs 2.7 lakh crore from GAIL India and other non-telecom PSUs.

State-owned firms – including GAIL and Oil India – challenged the demand, arguing that they did not owe any dues as the AGR judgement was not applicable to them.

The government had earlier told the court that telecom companies including private sector firms Bharti Airtel and Vodafone Idea as well as state-run MTNL and BSNL had licence fee-related dues of more than Rs 92,000 crore.

The DoT had sought Rs 1.83 lakh crore from GAIL India and Rs 48,489 crore from Oil India by including their revenues from oil and gas business in calculating dues for leasing out surplus bandwidth capacity to third parties. It had also demanded Rs 21,953.65 crore from Power Grid Corporation and Rs 15,019.97 crore from Gujarat Narmada Valley Fertilizers. Other state-run companies that were also slapped with demands included Ral Tel Corporation and Delhi Metro Rail Corporation.