The Union government on Thursday informed the Supreme Court that it had withdrawn 96% of its ₹4 lakh-crore demand in adjusted gross revenue (AGR) from non-telecom public sector undertakings (PSUs).
The turnaround comes days after the court pulled up the government for “misusing” its October 2019 judgment to get money from PSUs such as DMRC, Oil India and GAIL and Gujarat Narmada Valley Corporation.
A Bench, led by Justice Arun Mishra, had made it clear its verdict last year was only limited to AGR dues owed by telecom companies and not PSUs that had nothing to do with the sector.
On May 11, the court said the Department of Telecom’s move to employ the judgment to demand money from PSUs was “totally impermissible.” The court had threatened to haul up officials for contempt.
“Since these PSUs are not in the business of providing telecom services, we are withdrawing 96% of the ₹4 lakh-crore demand...,” Solicitor General Tushar Mehta informed the courtat the very outset of the virtual court hearing on Thursday.
Meanwhile, telecom major Vodafone said it was in no position to give a fresh bank guarantee for repayment of its AGR dues. The court is considering the viability of the government’s proposed ‘formula’ to stagger the repayment of the dues over a period of 20 years.
The October 2019 judgment originally wanted the telcos to make the repayment
In the previous hearing, the court asked the telcos to respond to whether they could provide any bank guarantee for ensuring the repayment of AGR dues without fail for the next 20 years.
Senior advocate Mukul Rohatgi, for Vodafone, said no bank would give a guarantee. Individual directors cannot afford guarantees for over ₹50000 crore the company owed the government in AGR dues. “This is not one crore or five crore to give guarantee”, he stated. He said his client intended to “work and pay” its AGR dues. Besides, he pointed out, Vodafone had ₹15,000 crore worth bank guarantee with the government for licence fee and spectrum. The company had not enjoyed any profits for several years. The situation was “extremely precarious”. Senior advocate A.M. Singhvi, for Bharti Airtel, also referred to the guarantee given on spectrum and licences.
Justice M.R. Shah asked, “This is guarantee given on licence and spectrum... What will happen to AGR?” He said telecom was the only sector making money during the pandemic. The government needs funds to fight the pandemic.
The court said the firms would have make a “down payment.”
It sought their financial documents by the next hearing which was scheduled for July third week.
