India’s Supreme Court on May 19 dismissed pleas from telecom giants including Vodafone Idea, Bharti Airtel and Tata Teleservices, all seeking a waiver of adjusted gross revenue (AGR) dues.
A bench led by Justices J B Pardiwala and R Mahadevan said it found the petitions “misconceived” and unfit for hearing, according to reports from PTI.
The bench expressed strong disapproval of the petitions. “We are really shocked by these petitions which have come before us. It is not expected of a multinational company. We will dismiss it,” the judges told senior advocate Mukul Rohatgi, who appeared for Vodafone Idea.
The telcos had approached the apex court hoping for some relief — not from the principal AGR amount — but from the heavy interest, penalties and the interest on penalties that ballooned the total dues.
Vodafone Idea, which has been struggling financially, had filed the plea on 15 May. It sought a waiver amounting to nearly ₹30,000 crore, citing that the Department of Telecommunications (DoT) was “handicapped” in granting relief due to the binding nature of an earlier Supreme Court verdict.
The company clarified in its petition that it wasn’t looking for a review of the 2020 AGR judgment but only for a waiver of certain financial burdens stemming from it — specifically, the interest components.
Rohatgi argued that Vodafone Idea’s survival was important to keep the Indian telecom sector competitive. The company is one of three dominant players in the space, along with Reliance Jio and Bharti Airtel. State-owned players BSNL and MTNL, while present, have a much smaller slice of the market.
The central government now owns a 49% stake in Vodafone Idea, a result of converting some of its AGR-related dues into equity — a move meant to keep the debt-laden telco afloat.
The market didn’t take kindly to the court’s dismissal. Vodafone Idea’s shares dropped 8.82% by the afternoon session on 19 May, slipping to ₹6.72 from the previous close of ₹7.37 on 16 May. Investors appeared spooked by the court’s firm refusal to offer any leeway on the payment terms.
AGR — or adjusted gross revenue — is the revenue calculated by including all income earned by a telecom company. The long-standing dispute began when telcos and the DoT disagreed on what exactly counted as part of this revenue.
In a landmark 2020 judgment, the Supreme Court ruled in favour of the government’s interpretation, directing telcos to pay up dues including interest, penalty and interest on penalty — a decision that landed companies like Vodafone Idea in deep trouble, with dues running into tens of thousands of crores.
The dismissal leaves Vodafone Idea with limited legal options. Unless the government steps in with policy-level relief, the telco is still on the hook for its AGR liabilities.
While the plea framed the demand as a matter of public interest, arguing that forcing a struggling company to pay hefty penalties would hurt competition and consumer choice, the court did not seem convinced.