Videocon’s AGR dues: SC stops DoT from encashing Bharti Airtel’s bank guarantees

By: |
August 25, 2021 4:15 AM

The apex court provided this relief to Bharti for a period of three weeks during which the telecom operator can appeal in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against the demand notice issued by the DoT.

As per the SC's July 20, 2020, order, Bharti Airtel said that it had so far paid Rs 18,400 crore, which is more than 10% of its total AGR dues of Rs 45,356 crore.As per the SC's July 20, 2020, order, Bharti Airtel said that it had so far paid Rs 18,400 crore, which is more than 10% of its total AGR dues of Rs 45,356 crore.

The Supreme Court on Monday directed the department of telecommunications (DoT) not to invoke Bharti Airtel’s bank guarantees worth Rs 1,376 crore to recover adjusted gross revenue (AGR) dues of Videocon Telecommunications, which had earlier sold its entire spectrum to the former.

The apex court provided this relief to Bharti for a period of three weeks during which the telecom operator can appeal in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against the demand notice issued by the DoT.

On August 17, DoT had sent a demand notice asking Bharti Airtel to pay Videocon’s AGR dues of Rs 1,376 crore within a week, failing which the company’s financial bank guarantees would be enchashed.

The dispute between the two parties is thus: Based on the SC’s order on payment of AGR dues which said that in case of trading of entire spectrum of a telecom operator, the dues need to be paid by the buyer, the DoT had issued the demand notice to Bharti. However, Bharti’s contention is that under the spectrum trading guidelines only unknown dues at the time of trading, which comes to light later can be recovered by the DoT by either of the parties or jointly. In the matter of AGR, Bharti’s stand is that since the dues were known prior to the trading of the spectrum so the liability is of the seller, Videocon Telecommunications in this case.

Tuesday’s SC order states that Bharti would first need to go to TDSAT to resolve its dispute with the DoT in the matter.

In 2016, Videocon, which is at present is undergoing insolvency proceedings, had traded its entire spectrum of 30 MHz to Bharti Airtel.

As per the SC’s July 20, 2020, order, Bharti Airtel said that it had so far paid Rs 18,400 crore, which is more than 10% of its total AGR dues of Rs 45,356 crore.

Review petitions filed by Bharti Airtel and Vodafone Idea are yet to be considered by the top court, where the companies have sought rectification of arithmetical errors in AGR demands raised by the DoT.

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