Category
🗞
NewsTranscript
00:00We're tracking today now the Supreme Court has rejected the plea of telecom operators seeking a recalculation of the AGR dues
00:06AGR refers to the revenue earned by these companies from spectrum and other non telecom revenues
00:12Now the Chief Justice of India rejected the curative plea filed by Vodafone Idea, Parthi Airtel and various other
00:19Telecos and Varun Gakhar is reporting on this and joins us now
00:24Varun a huge blow coming in for these pharma
00:28For these are telecom companies take us through what happened in court
00:35That's right
00:35So a big setback for the telcos such as Vodafone Idea, Parthi Airtel as the top court has rejected their curative pleas that were filed
00:42against top court judgment which came out in
00:452019 that held that
00:47While calculating these AGR dues all these telcos will have to include their non core revenues as well
00:53Now telecom operators had filed their curative petitions based on the premise that the Department of Telecommunications had heard had
01:00made a grave error in the
01:02Calculation of the AGR dues and on top of that the top court had imposed an arbitrary penalty on these telcos
01:08Now the curative plea was taken up by a three-judge bench led by the Chief Justice of India D Y Chandrachud on August 30
01:15This year and the order was made privy to us only in the morning
01:19Now, let's understand what AGR is. AGR is basically
01:24Revenue sharing mechanism between the telecom operators and between the Department of Telecommunications
01:29Now under this mechanism the operators have to pay a certain spectrum usage fee and a licensing fee to the Department of
01:36Telecommunications. Now how the DOT calculates this fee is by calculating it as a percentage of the AGR
01:42However, what constituted AGR was under dispute since 2005
01:47Now in October 2019 the top court ended this 14 year long battle and held that
01:52While calculating these AGR dues the telcos will have to include the non core revenues as well. Now the
01:592019 judgment was a big blow to all these telcos and
02:03Specifically Vodafone ID and Bharatiya Airtel were staring at dues worth more than 1 lakh crore
02:07Now since the curatives have been rejected
02:10This seems like a final nail in the coffin and as much as any reconsideration in the AGR dues case is concerned
02:16and joining us for more on this is
02:19our
02:20Satyan N Gupta is the ex-principal advisor at Tri and HP Ranina. He's a lawyer at the Supreme Court
02:26Good evening, both of you. Thank you very much for joining in. Mr. Gupta to you first
02:31Mr. Gupta, this is a huge blow to both Vodafone and Airtel but more so for Vodafone
02:38It is already besieged by a lot of financial trouble. Now, this essentially could sound the death knell for them
02:47Not exactly Nupur, yes, it is a big blow for them who are already under big stress
02:54but this actually if if it is wrong or if it is
02:59Injustice it can be undone also though the Supreme Court have rejected
03:04the plea itself
03:06But actually in India, we have two pillar of what we call democracy the judiciary
03:12Which is supreme and then the government actually government can also help if they are convinced that there is something
03:21Unjustice is being done. If you remember Justice Bhagwati the old chief justice in one judgment
03:27He told to a lawyer that gentlemen. This is a
03:32Court of law not court of justice
03:35So Supreme Court have done whatever they could do as per the law
03:40But there is a concept called natural justice the natural justice can be actually
03:47you can say
03:49Implemented or can be used by the government through different means if government believes
03:56That there is a error. There is a arithmetic
04:00Calculation error, which is genuine, you know, actually there is a saying called e o e
04:06Error and omission
04:08Accepted and that is a famous actually cloth
04:12Which is used in most of the invoices even the government invoices also normally have that so if that is the case the government
04:19Suomoto
04:21Actually can have a real look on the calculations. They can make use of some experts
04:27They can make use of some independent accountant independent auditors and they can have a look on the calculations
04:34And if it is found, there was a genuine mistake
04:38Okay, the EOE they can actually Suomoto return the overpayment made by these telcos
04:48Mr. Gupta, you still believe that there could be a way out for these companies particularly Vodafone because you know in case
04:56This hit is too hard for them to digest
04:59It we could be creating a duopoly sort of a situation. I'm going to go across to mr
05:03Anina on this one now, obviously legally, you know, this marks an end of the road as far as the AGR dues bit is concerned
05:11But as mr. Gupta was pointing out, do you think that the government may now, you know, look at perhaps an intervention from their side?
05:18Yeah, no poor. I think mr. Gupta is right
05:21But if they make a recalculation that recalculation will have to be made for all the telecom companies not only for Vodafone
05:29So it is entirely the choice of the government to give some relief if they so wish but that it will benefit everybody else
05:37but they have a 10-year period to pay the amount and
05:41ultimately Vodafone was aware of this and
05:44As I was interviewed last year
05:47I mentioned that there is no point in going for a curative petition because
05:52There's nothing wrong or illegal which a Supreme Court has done and therefore the petition was bound to be rejected
05:59Therefore they were aware of the consequences merely going on a curative petition doesn't help them
06:04But they will now have to get the money if they don't have the money as has been pointed out
06:09earlier and
06:11Vodafone UK or
06:14Netherlands will have to bring in the money as a promoter and pay the dues. There is no other solution
06:20They will have to pay there may be some relief in terms of recalculation, but that's a separate issue
06:26Whatever is the amount finally decided will have to be paid
06:29Right, Mr. Ranina. So as you're pointing out, you know, even if there's some relief in terms of recalculation
06:34It won't be a very huge amount. So as far as the dues remain right now, and they're about
06:39About seventy thousand three hundred crore rupees for Vodafone in particular. Those will have to be paid. Is that correct?
06:51So the promoters will have to bring in funds if they don't have enough money that's the only solution
06:56All right, mr. Gupta coming back to you now, how do you see this impacting Vodafone's debt raising plans since you know
07:04That debt fundraise was going to be very crucial for the company's survival itself
07:10No, Nupur actually it will not it is not new at our
07:15Lawyer friend have told it was known it was known to the institution
07:19It was known to the banks also and everything has been disclosed by Vodafone
07:24So it is not anything surprised to the lender or to the investors. That is for sure
07:30But I will still say there is a way out that there is something called a law of arbitration
07:36actually sometime the bilateral like here the government and the operators or one operator any operator who have
07:43really a strong case so they can go for arbitration also actually which can run parallel to the
07:51Judicial process and I've seen a lot of arbitration cases
07:56decided actually as for the fact as for the natural justice as I mentioned and there is a way out and
08:03the volume as far as we
08:06Order is concerned actually is quite high when they have made the plea actually, it's quite high
08:11It will be a big relief because the total
08:1470,000
08:16Crore need not to be paid
08:18Our friend lawyer also mentioned the in one go it is in 10 annual installments
08:25So if they can get relief
08:28Equivalent to one installment or two installment so that can also delay their struggle and their stress
08:36Perhaps could be looking to buy more time and will be hopeful that the government
08:40Will be kind enough to allow for that of both of you. Thank you very much for joining us on the broadcast
08:46You