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SC gives telcos 10 yrs to clear AGR dues, bars any reassessment

New Delhi,  The Supreme Court on Tuesday granted 10 years to telecom operators to clear their AGR dues, while barring them from raising any dispute or seeking reassessment of the demand raised by the Department of Telecom in respect of the dues, based on its judgment.

A bench comprising Justices Arun Mishra, S. Abdul Nazeer and M.R. Shah, laying down seven directions in the matter, said: “That for the demand raised by the Department of Telecom in respect of the AGR dues based on the judgment of this court, there shall not be any dispute raised by any of the Telecom Operators and that there shall not be any reassessment.

“That, at the first instance, the respective Telecom Operators shall make the payment of 10 per cent of the total dues as demanded by DoT by March 31, 2021. TSPs have to make payment in yearly instalments commencing from April 1, 2021 to March 31, 2031 payable by March 31 of every succeeding financial year.”

The bench said various companies, through their Managing Director/Chairman or other authorised officer, will furnish an undertaking within four weeks, to make payment of arrears as per the order. “The existing bank guarantees that have been submitted regarding the spectrum shall be kept alive by TSPs until the payment is made,” added the bench.

The Union Cabinet had favoured a 20-year period for repayment of AGR dues, but, the top court said that this period is excessive. The bench, however, did not interfere with the Cabinet decision concerning the discounted rate of 8 percent, which is based on one marginal MCLR rate of the SBI which is currently at 7.75 percent, and modified the time schedule for making payment of arrears.

“Considering the various factors taken into account and the letters written by the Indian Banks Association, we are of the opinion that the decision of the Cabinet is based on the various factors, and in the interest of the economy and the consumers,” observed the top court.

But, at the same time, the bench said, it is to be ensured that the dues are paid in toto.

“The concession is granted only on the condition that the dues shall be paid punctually within the time stipulated by this court. Even a single default will attract the dues along with interest, penalty and interest on penalty at the rate specified in the agreement,” added the bench.

The top court also said that in the event of any defaults, interest along with penalty and interest on penalty would automatically become payable without reference to the court.

“Besides, it would be punishable for contempt of court. Let compliance of order be reported by all TSPs and DoT every year by April 7 of each succeeding year,” added the top court.

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