In a significant reprieve for Vodafone Idea (Vi), the Supreme Court on Monday permitted the department of telecommunications (DoT) to take a fresh look at the company’s adjusted gross revenue (AGR) dues, citing the “peculiar facts and circumstances” of the case. The move opens a window for the debt-laden, third-largest telecom service provider to seek a recalibration of its long-standing dues, which has weighed heavily on its financial health for years.
A bench led by Chief Justice B R Gavai said there was no reason why the Union government should be barred from reassessing the amount claimed from Vodafone Idea, especially since the issue now lies within the policy framework of the Centre. “In the peculiar facts of this case, we see no reason to prevent the government from reconsidering the issue,” Chief Justice Gavai said while pronouncing the order.
The verdict saw Vodafone Idea’s shares surge 3.85% to close at Rs 9.99 on the BSE, after touching an intra-day high of Rs 10.27. The relief comes at a crucial time for the company, which has been struggling under the weight of spectrum and AGR-related dues amounting to nearly Rs 1.91 lakh crore.
During the hearing, Solicitor General Tushar Mehta, appearing for the government, told the court that the situation had evolved significantly since the original litigation. The Centre now holds a 49% stake in Vodafone Idea, he pointed out, adding that any disruption to the company’s operations could have far-reaching consequences, not only for competition in the telecom sector but also for nearly 200 million subscribers who rely on its services.
The Supreme Court’s direction effectively allows the government to exercise policy discretion in reassessing Vi’s dues, a move many legal experts described as a pragmatic step. “The order gives adequate elbow room to the government to rework Vodafone Idea’s AGR dues. Now that it is part-owner, the figures can be recalculated without being constrained by earlier judgments,” Mukund P Unny, advocate-on-record at the Supreme Court, told Fe. “To put it simply, the earlier AGR ruling no longer binds Vodafone Idea in the same way,” he added.
However, the court made it clear that the relaxation was being extended strictly on account of Vodafone Idea’s unique circumstances, particularly the government’s equity holding and the scale of public interest involved. Legal observers said this distinction means other operators, such as Bharti Airtel, are unlikely to benefit from the ruling or seek similar reassessments of their dues, which were also determined under the 2020 Supreme Court judgment.
That 2020 verdict had fixed Vodafone Idea’s AGR liability at Rs 58,254 crore and was meant to bring finality to a two-decade-long dispute over the definition of adjusted gross revenue. But in August this year, the DoT raised a fresh Rs 9,500-crore demand on the company, prompting Vi to challenge it in court on the grounds that the department was unlawfully reopening settled issues.
For the government, which became the largest shareholder in Vi after the conversion of dues into equity, Monday’s order effectively validates a policy-led reassessment. For the company, it provides breathing space at a time when large repayments are due in FY26. Analysts said the ruling could help ease immediate financial pressures and improve liquidity, giving the company room to focus on growth and network investments.
“This will significantly reduce uncertainty and support Vodafone Idea’s ongoing capital expenditure plans,” said an analyst with a leading brokerage. The company has committed around Rs 50,000 crore over the next three years to upgrade its network and narrow the gap with rivals Reliance Jio and Bharti Airtel.
Vodafone Idea, in a statement to the exchanges, said it welcomed the decision and looked forward to working closely with the DoT “to resolve the matter in the interests of our nearly 200 million subscribers”.