SC Asks Airtel to Move Alternate Forum Against DoT’s Demand to Pay AGR Dues

Airtel, in 2016, had entered into a spectrum agreement with Videocon, which owes the government Rs 1,376 crore.

(Image: Altered by The Quint)

The Supreme Court on Tuesday, 24 August, refused to entertain Bharti Airtel Limited’s plea, challenging the demand notice issued to them by the Department of Telecommunications (DoT) 'directing the payment of adjusted gross revenue (AGR) dues of Videocon within a week, failing which bank guarantees will be invoked’, LiveLaw reported.

While dismissing the application, the Bench directed the DoT to not invoke bank guarantees for a period of 3 weeks from Tuesday.

Moreover, the Supreme Court granted Airtel liberty to move the appropriate forum against the directions issued by the DoT.

Airtel, in 2016, had entered into a spectrum agreement with Videocon, which owes the government Rs 1,376 crore.

What the Supreme Court Said:

Senior Advocate Shyam Divan, appearing for Airtel, submitted that the DoT issued a communication to his client on 17 August asking it to pay the AGR dues of Videocon of around Rs 1,500 crores within a week, failing which its bank guarantees will be invoked.

Referring to the spectrum trading guidelines, Divan submitted that the liabilities or telecom company before the sale of its spectrum are to be borne by the seller and not by the subsequent purchaser.

He also pointed out that the order passed by the Supreme Court in September 2020 had stated that the dues of a telecom service company existed before the sale of spectrum are to be borne by the seller and not by the buyer, LiveLaw reported.

Although the SC Bench did not interfere with DoT's order, it granted liberty to Airtel to move any other alternate forum to redress its grievances.

Divan said that the alternate form will be the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

Background

In September 2020, the apex court had ruled that AGR dues need to be paid before the trading of licenses as per the spectrum trading guidelines. In the case that the seller is unable to clear the dues, the responsibility for the same falls upon the buyer.

The Department of Telecommunications had then approached the Supreme Court in April 2021, informing the court that Airtel had refused to comply with the previously-issued ruling regarding the payment of AGR dues.

Airtel, on its part, has opposed the Centre's demand, arguing that it cannot be held responsible for the payment of Videocon's AGR dues, NDTV reported.

Presently, if a telecom company fails to pay its spectrum-related dues to the Department of Telecommunications, the bank guarantees of the telco submitted to the government are encashed.

Airtel's Deal With Videocon

Airtel, in March 2016, had announced its deal with Videocon to acquire the latter's spectrum in six circles in the 1800 MHz Band.

The six circles included in the Rs 4,428 crore deal are Bihar, Haryana, Madhya Pradesh, UP (East), UP (West) and Gujarat. The spectrum will be valid up to 18 December 2032.

(With inputs from NDTV)