Vodafone Idea (Vi) recently experienced a substantial win in the Supreme Court after the government agreed to revisit its request for additional adjusted gross revenue (AGR) dues from the corporation. The government’s decision is expected to be in accordance with the law.
Government’s Interest in Vi
Tushar Mehta, the Solicitor General representing the Union government, presented the case before a bench chaired by Chief Justice of India B.R. Gavai. Mehta noted an extensive shift in circumstances since the most recent AGR litigation involving Vi in the Supreme Court.
He informed the Court of the government’s significant 49% equity investment in the company, suggesting that the government’s interests were now tightly intertwined with those of the company and, in turn, the public. He added that the company’s decisions directly affect its 200 million consumers, and the government intended to thoroughly examine any issues, such as over-invoicing, to ensure they are adequately addressed.
Entering the “Policy Domain”
According to the Court, the matter has transitioned into the “policy domain” due to the government’s substantial equity investment and the involvement of 200 million customers. The Court had no objections to the government’s decision to revisit its demand for additional AGR dues for the fiscal year 2016-2017 and to make an appropriate decision that would serve the larger public interest.
Vi’s Appeal to the Supreme Court
Vi had approached the Supreme Court to contest the additional AGR demand issued by the Department of Telecommunications (DoT) for the 2016-2017 period. The corporation argued that the liabilities had already been calculated and shouldn’t be altered or increased. It sought the Court’s dismissal of the additional DoT demand and requested a comprehensive reassessment and reconciliation of AGR dues up until FY 2016-17.
Previous Rejections
This most recent litigation follows only months after the Supreme Court denied earlier appeals by Bharti Airtel, Vi, and Tata Teleservices. These companies were seeking relief from paying interest on dues, penalties, and interest on penalties related to their AGR liabilities, citing significant financial constraints.
In its May verdict, the Supreme Court labelled their pleas as “misconceived.” The Chief Justice had previously stressed the necessity for a conclusion in the AGR litigation. About a year ago, the Supreme Court rejected a curative petition filed by telecom companies, including Bharti Airtel and Vi, against the court’s October 2019 ruling that upheld the DoT’s move to recover approximately INR 92,000 crore in AGR from them.
Questions & Answers
What is the government’s stake in Vi?
The government holds a significant 49% equity investment in Vi.
What significant shift in circumstances was noted by the Solicitor General Tushar Mehta?
Tushar Mehta observed a major change in circumstances since the last AGR litigation involving Vi in the Supreme Court, particularly the government’s large equity investment in the company.
What was Vi’s argument to the Supreme Court against the additional AGR demand?
Vi argued that the liabilities had already been calculated and should not be altered or increased. The company sought a comprehensive reassessment and reconciliation of AGR dues up until FY 2016-17.
