The Supreme Court’s dismissal of the pleas by Vodafone Idea, Bharti Airtel, and Tata Teleservices marks the end of the judicial road towards waiver of interest, penalties, and interest on penalties related to adjusted gross revenue (AGR) dues. This is not the first time the apex court has rejected such petitions. Since its 2021 judgment defining AGR and quantifying the dues, it has consistently stood firm against any dilution of its verdict through review, curative, or fresh writ petitions, with new reasoning but seeking the same relief. This continued return to the courtroom on part of the telecom companies reflects a misplaced hope that persistence can override legal closure. It is clear now that the companies cannot escape the compounded burden of their AGR liabilities. The court, in its firm rebuke, said that such attempts are not expected of multinational companies and termed the latest round of petitions “misconceived”.
The companies are not contesting the principal amounts, which highlights that the dispute is no longer legal but financial and political. The issue, therefore, is no longer for the judiciary to resolve. As the SC itself noted, it would not stand in the way of any executive decision to assist the sector. The ball, therefore, is now in the court of the government, which has displayed ambivalence on the matter. While it initiated a proposal with regard to waivers of penalties and partial relief on interest components, it ultimately backed off, wary of, perhaps, perceptions of favouritism, executive overreach, or objections from institutions like the Comptroller and Auditor General. But this hesitation is increasingly untenable. The collapse of a player like Vodafone Idea would not only distort competition by creating a de facto duopoly but also saddle the government, now the largest shareholder in the company, with direct political and fiscal fallout.
Further, this is not a matter where the government should feel constrained by arguments about ensuring a level playing field. There is no parity between a financially strong firm and a debt-laden entity struggling to survive. Policy decisions need to be rooted in pragmatic recognition of economic realities, not a notional fairness that treats unequals equally. Relief, if it is to come, should be differentiated and rooted in broader public interest. This is also an opportunity for the government to undertake deeper structural reform. The telecom sector’s experience has exposed glaring inadequacies in insolvency laws. In both Reliance Communications and Aircel, the resolution processes have stagnated for years due to disputes over the treatment of spectrum, which is a leased but indispensable asset. This has led to public resources being locked away.
It is imperative that the government moves swiftly to overhaul the insolvency framework as it applies to telecom, clarifying the treatment of spectrum and prioritisation of government dues in a manner that facilitates resolution. As the moratorium on AGR and spectrum payments ends in September 2025, Vodafone Idea will face annual outflows that threaten its viability. Without policy clarity, this could trigger a fresh crisis. The government cannot afford to wait for that moment. It must act now. And the companies, for their part, must now accept that their appeals have reached a dead end in court. Their focus should shift to working constructively with the government to chart a financially viable future, rather than revisiting a legal past that has already been conclusively settled.