The Supreme Court on Monday cleared the air over the scope of its earlier order in the adjusted gross revenue (AGR) case, affirming that the government is free to comprehensively reassess and reconcile all AGR dues of Vodafone Idea up to the financial year 2016–17. The clarification effectively ends days of confusion over whether the relief extended to the entire dues or only the additional Rs 9,449-crore demand raised by the department of telecommunications (DoT).
In its clarification order, the apex court said that the prayer in Vodafone Idea’s petition sought relief not only on the additional demand but also for a comprehensive reassessment of all dues up to FY17. The bench said there was no impediment to the government reviewing both aspects, given the peculiar circumstances of the case, including its own equity holding in the company and the wider public interest involved. This clarification now allows the government to revisit the computation of all dues arising from the AGR dispute, not just the incremental amount that had triggered the current litigation.
The need for clarity arose after the court’s October 27 order was widely interpreted as permitting the government to reassess Vodafone Idea’s entire AGR liability. However, when the detailed text of that order was uploaded two days later, on October 29, it appeared to confine the relief only to the additional Rs 9,449-crore demand raised by the DoT. That interpretation narrowed the scope of review and prompted Vodafone Idea to seek a clarification from the court, supported by the Centre. Monday’s clarification removes that ambiguity.
With the confusion resolved, the government can now comprehensively rework the company’s dues up to FY17. The move offers the heavily indebted telecom operator a major breather. Vodafone Idea has long maintained that several of the deductions disallowed in earlier assessments were legitimate and that a fresh reconciliation could substantially reduce its liability.
However, the order applies solely to Vodafone Idea, taking into account the Union government’s 49% equity in the company and the fact that nearly 200 million subscribers depend on its services.
Vodafone Idea’s total AGR dues had been fixed at Rs 58,254 crore by the Supreme Court’s 2020 judgment, which had sought to bring finality to the two-decade-old dispute over the definition of adjusted gross revenue. Including interest, penalties, and interest on penalties, the figure currently stands at around Rs 83,400 crore. With spectrum-related and other government dues, the company’s total liabilities are estimated at nearly Rs 2 lakh crore. It faces annual payments of around Rs 18,000 crore from March 2026 onward.
The DoT’s fresh demand of Rs 9,450 crore in August this year, covering both Vodafone’s pre-merger and post-merger periods with Idea Cellular, had reignited the legal battle. The company challenged the demand, arguing that it violated the finality of the 2020 verdict and amounted to a reopening of settled issues. The government, however, took a more pragmatic view, acknowledging that its 49% stake in Vodafone Idea made it a stakeholder in the company’s financial recovery.
At the October 27 hearing, Solicitor General Tushar Mehta had told the court that the Centre saw no reason to be constrained by past rulings in reassessing the dues, given the evolution of circumstances since 2020. Chief Justice B R Gavai’s bench had agreed, saying there was no reason to restrain the government from reconsidering the issue in the peculiar facts and circumstances of the case.
Legal experts said the clarification was both necessary and inevitable. “The court’s order now makes it explicit that the government can reassess all AGR dues up to FY17. This resolves the interpretative inconsistency between the October 27 and 29 orders,” said a senior advocate familiar with the matter.
On Monday, Vodafone Idea shares closed up 9.28% at Rs 9.54 on the BSE.
