The Supreme Court has held that the telecom companies who are liable to pay AGR dues shall make payment of 10% of the dues by March 31, 2021.
Apex Court has given the telecom companies till March 31, 2021 to pay 10% of the dues, in light of the COVID-19 pandemic. It was made clear that interest would accrue in case of default on the payment of annual instalments, and that the same may also invite contempt of court.
The Annual Instalments are required to be paid on February 7 every year.
The Bench clarified that no revaluation as regards AGR dues would be entertained.
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During the hearings in the Supreme Court, the telcos had proposed different timelines for clearing of dues. Bharti Airtel was in agreement with Vodafone’s proposal of 15 years. While Tata Telecom submitted that a window of at least 7-10 years would be required for payment of dues, Vodafone-Idea suggested payment over the course of 15 years. The Department of Telecommunications (DoT), however, stuck to the Union Cabinet’s proposal of payment within 20 years.
Another aspect of the matter that the Court considered was the question of whether spectrum can be sold by the companies through proceedings under the Insolvency and Bankruptcy Code.
On this aspect, the Supreme Court held that whether spectrum can be sold or not should be decided by the National Company Law Tribunal (NCLT) at the first instance.
These questions had arisen for consideration when the Bench was considering the bona fides of the ailing telecom companies as regards payment of their dues vis-a-vis their respective IBC proceedings. While the DoT had argued that the spectrum cannot be sold, the telecom companies had argued that the right to use spectrum, purchased through an auction, is an asset and this right or licence can be subject to IBC proceedings.