Some hope for telcos: SC to hear Airtel, Vodafone Idea and others on deferred payment

Telecom operators on Tuesday got a little more time to pay their adjusted gross revenue dues, which totals Rs 1.47 lakh crore, and some hope that they may not be required to pay the full amount upfront. This is because the Supreme Court agreed to list next week the fresh pleas of Bharti Airtel, Vodafone Idea and Tata Teleservices seeking a fresh schedule of payment of the dues – more time and easier terms and conditions.

A bench headed by Chief Justice SA Bobde took note of submissions by senior lawyers, including AM Singhvi and CA Sundaram, and said it will list the fresh pleas “sometime in next week” before the same bench which had heard the earlier petition in the matter. “We are not disputing the payment to be made by us rather we want working out of fresh schedule of payment,” Sundaram told the bench which also comprised justices SA Nazeer and Sanjiv Khanna.

The telcos said they wanted an open court hearing on their fresh pleas with regard to working out a fresh schedule of payment of their dues. “That (open court or in-chamber hearing) will be decided by the bench concerned,” the CJI said.

The development comes as a huge relief for Vodafone Idea, particularly, as it needs to pay the highest amount, Rs 53,039 crore.

Legal experts said that now since the court has agreed to listen to their plea, there is no compulsion for the companies to pay the dues by January 23 and such a stance will not be construed as contempt of court. “Since the apex court has agreed to listen to their plea and a judge who was part of the original order pronounced on October 24, 2019, was part of the bench, the companies can choose not to pay by January 23 and such a move will not be seen as contempt of court. However, companies are free to take their own view and either make full or part payment of the amount before the said date,” a lawyer told FE.

Singhvi termed the SC’s listing of the case next week as a positive move for the sector, but said that it is “premature to comment at this stage”. “Modification of the order is clearly needed because of humongous amounts and the need to seek proper instalments and to reconfigure the structure of payment so as to avoid job losses and telecom sector paralysis. But submissions are yet to be made before the SC and we should wait till the next week,” the lead counsel for telecom operators told FE.
“Since an application has been moved before the date of payment and the same has been posted for hearing next week, there is no question of facing the wrath of the apex court. There is no voluntary disobedience. We are not challenging the judgment, but are seeking payment scheduling. We are hopeful of the relief,” a lawyer for one of the telecom operators said.

Of the Rs 1.47 lakh crore dues, the share of the three companies – Bharti Airtel, Vodafone Idea, and Tata Teleservices — comes to Rs 1.02 lakh crore.

The basic prayer of these telcos is that the apex court should allow them to approach the DoT to negotiate the terms and conditions of payment – meaning some token payment is made upfront, followed by a period of moratorium and the rest is paid in deferred instalments, and the DoT be empowered to provide them some concessions, maybe at reduced interest rates or something similar, which the court “deems fit and proper”.

Seeking more time to pay, Vodafone Idea, for instance, had said in its petition that it does not have “resources” and “even banks and financial institutions do not have enough security to lend money for payment to the DoT to comply with the SC orders”.

Apart from AGR dues of Rs 53,039 crore, Vodafone Idea owes government by way of deferred spectrum instalment Rs 157,750 crore (it needs to pay this by 2031 in instalments), and Rs 5,712 crore as one time spectrum charge (under litigation). The company’s total exposure to banks is of Rs 49,466.43 crore.

Bharti Airtel, which needs to pay Rs 35,586 crore is better placed than Vodafone Idea as it has just completed a fund raise of $3 billion through qualified institutional placement and foreign currency convertible bonds.

Source: Financial Express