A bench comprising of Justices Arun Mishra, S Abdul Nazeer and M R Shah is hearing the caseSC AGR Hearing HIGHLIGHTS: The Supreme Court continued hearing the case on non-payment of the adjusted gross revenue (AGR) dues by telcos under insolvency, and reserved the judgement on spectrum liability. A bench comprising of Justices Arum Mishra, MR Shah and S Abdul Nazeer heard the case. Earlier in July 20 hearing, the top court reserved its order on a 20-year timeline for staggered payment of AGR dues by telecom companies such as Bharti Airtel, Vodafone Idea and Tata Teleservices. During the hearing today, the SC said if telcos are unwilling to pay, we will direct cancellation of spectrum allocation. Senior advocate Harish Salve, appearing for Reliance Jio, said if it is cancelled, the government will not get anything and even banks would get nothing. The top court said if the spectrum is subject to the resolution process, government dues will be wiped out. Solicitor General Tushar Mehta said that under trading guidelines all past dues should be cleared prior to spectrum trading. DoT can seek to recover dues from seller and buyers, jointly or severally. When SC asked Solicitor General Mehta that why no demand was raised on Videocon, SG replied that it is in the process. The Department of Telecommunications (DoT) said that telcos are supposed to make two payments. When a telco participates in an auction, some amount is to be paid at the threshold while the remaining amount is to be paid in instalments over 15 years.
Highlights
The Supreme Court reserves judgment on the recovery of adjusted gross revenue (AGR) dues from insolvent telcos.
"Telecom secretary should answer and place before us in black and white. Correct facts should go in the judgment, file just a half-page," said Justice Arun Mishra.
Senior advocate Harish Salve said, "I am being told that there is single consolidated demand on AGR".
Solicitor General said it won't be able to quantify in two days. "We are expecting some documents from the telcos," said SG
"Whatever the Supreme Court judgment says we will honour that," said senior advocate Kapil Sibal.
"Everything will be paid. Not a paise will be held. We have paid as per assessment. Let them raise it," said Kapil Sibal, appearing for Bharti Airtel.
Senior advocate Harish Salve appearing for the Reliance Jio, said they have paid on self-assessment basis.
"Why you have not raised this demand on traded quantity?" the Supreme Court asked.
The Supreme Court asked: "Whether you quantified the dues from 2016 till date". SG said the assessment is in process.
Supreme Court asked the secretary to clarify if the demand was raised wrt purchase by airtel and Rjio.
"Everyone knew what dues were," said Kapil Sibal, appearing for Bharti Airtel.
Kapil Sibal, appearing for Bharti Airtel, saif if DoT raise the demand, the law will take its course.
Senior advocate Harish Salve, appearing for Reliance Jio, asked: "How can past dues be put on something already sold?".
The Supreme Court asked If the seller didn't pay pending dues, trading guidelines transfer liability on the buyer. Trading guidelines mandate clearing of pending dues by the seller before the sale.
Senior advocate Harish Salve said AGR demands by DoT already in the public domain.
Bharti Airtel share price ended at Rs 527.20 apiece, up 1.38 per cent on BSE in Monday's session. The stock quoted day's high of Rs 532.30 and low of Rs 508.50 per share.
DoT said telcos supposed to make two payments. When a telco participates in an auction, some amount is to be paid at the threshold. The remaining amount is to be paid in instalments over 15 years.
"Guidelines protect us, these dues were known," said senior advocate Kapil Sibal, appearing for Bharti Airtel.
The Supreme Court said as per senior advocate Kapil Sibal no demand has been raised. DoT should have raised the demand.
Supreme Court asked SG why no demand was raised on Videocon. SG replied that it is in the process.
Solicitor General Tushar Mehta gave details of what all comprise of AGR
SG says under trading guidelines all past dues should be cleared prior to spectrum trading. DoT can seek to recover dues from seller and buyers, jointly or severally.
Solicitor General Tushar Mehta takes the court through trading guidelines
The Supreme Court asked Solicitor General Tushar Mehta about sharing guidelines and payments.
Solicitor General Tushar Mehta started his argument.
Senior advocate Kapil Sibal, appearing for Bharti Airtel said "there is no issue. It has nothing to do with me".
Justice MR Shah asked "What will be the past liability? From 2016-2019, there can be no demand on Videocon. Did you pay the arrears as per our Oct 23 AGR judgment?.
"At no stage, dues were owed by me," senior advocate Kapil Sibal said.
"Bharti Airtel paid the entire price upfront, purchased it in the auction. No claim against Airtel, no demand raised by DoT. It was raised in Videocon," senior advocate Kapil Sibal said.
Senior advocate Kapil Sibal, appearing for Bharti Airtel started his argument.
Ranjit Kumar said, "It's fait accompli that IBC already on for 3 years. Value of spectrum will diminish, banks won't lend if spectrum not allowed as security".
The Supreme Court said if the spectrum is subject to resolution process, govt dues gets wiped out. Other people will use it free of all encumbrances. Then there is no liability to pay the govt dues. In the auction, some money will come.
Ranjit Kumar said Supreme Court should not decide on the commercial decision of DoT what it ought to do or not.
Salve said no additional demand has been raised by the DoT against Reliance Jio, Reliance Communications. No AGR dues are attributable to the small fraction of total RCom spectrum sold.
"Prior to 2016, there was no trading. Spectrum trading between RCom and RJio in 800 Mhz is a small part of the total spectrum owned by RCom. According to us, for this fractional trading, it was a surplus spectrum," Harish Salve said.
Harish Salve read paragraphs from the Department of Telecommunications' (DoT) affidavit filed on August 22.
"Security can be contractual. The law recognises security interests," said Harish Salve, appearing for Reliance Jio.
The Supreme Court said, "We are not on who will get it or not? These are contractual rights. We are not on your contract with the government", Justice Arun Mishra told Salve. Harish Salve said that these can be assigned.
Harish Salve, appearing for Reliance Jio, said if it is cancelled, the government will not get anything and even banks would get nothing.
"Where is right to use when there are arrears?" asked Justice Arun Mishra.