In a temporary relief for Bharti Airtel, the Supreme Court today told the government the telecom giant’s bank guarantees will not be encashed for three weeks over not paying Videocon’s dues.
The telecom giant had sought protection from the Supreme Court over the payment of AGR (adjusted gross revenue) dues that Videocon owes the government.
In 2016, Bharti Airtel, India’s biggest mobile carrier, had sealed a Rs 4,428 crore deal to purchase spectrum owned by Videocon Telecommunications in six circles — Bihar, Haryana, Madhya Pradesh, Uttar Pradesh (East), UP (West) and Gujarat.
But Videocon had to pay Rs 1,376 crore to the Department of Telecommunications. After a top court verdict last year, the Department of Telecommunications sought the payment of Videocon’s AGR dues from Bharti Airtel.
Today, the telecom giant told the top court that the AGR dues were “the liability of Videocon and not Airtel’s”. “The demand raised by the Department of Telecom is not valid as it pertains to Videocon’s liability,” Senior Advocate Shyam Diwan told the court.
The Supreme Court replied, “We are not going to review our earlier verdict”. Last year, the top court had said that according to spectrum trading guidelines, AGR dues need to be met before trading of licenses and if the seller could not pay, the buyer will have to step up.
This afternoon, a three-judge bench of Justices L Nageswara Rao, S Abdul Nazeer and MR Shah told the Telecom Department, “Hold your hands for two weeks, and you (DoT) will not invoke bank guarantees.” While Bharti Airtel asked for a month’s time, an agreement was finally reached for three weeks.
As the top court refused to offer permanent relief, Bharti Airtel today withdrew its plea. The firm will now appeal to the Department of Telecom for a review.
In April this year, the government told the Supreme Court that it had raised the demand in compliance with an earlier order of the court, but received a negative response from Airtel.
Currently, if a telecom firm fails to pay its quarterly licence or spectrum-related dues, then the bank guarantees are with the telecom department are encashed. The bank guarantees are also periodically replenished.