Relief to Airtel as Supreme Court restrains govt from invoking bank guarantee

The Supreme Court has directed Centre to not invoke the bank guarantee furnished by Bharti Airtel for payment of Rs 1,300 crore in AGR dues for three weeks. Airtel has been allowed to move Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in the meantime for interim relief. The apex court said that AGR judgment will not be reviewed by the court.

A bench comprising Justices L Nageswara Rao, S Abdul Nazeer and MR Shah heard an application filed by Bharti Airtel restraining Department of Telecommunications from demanding the AGR dues of Videocon that had sold its spectrum to Airtel in 2016.

Senior Advocate Shyam Divan who appeared for Airtel, said that the DoT issued a communication to Airtel asking them to pay the AGR dues of Videocon nearing Rs 1,500 crore within a week. If it fails, then bank guarantees will be invoked, it said. Divan pointed out that the liabilities of a telecom company before the sale of its spectrum are to be borne by it, and not the subsequent purchaser. It said that AGR dues of Videocon should, therefore, cannot be recovered from Airtel.

Divan also cited the order passed by the Supreme Court in September 2020 had also stated that dues of a telecom service company before a spectrum sale are to be borne by it and not the buyer. He further stated that adding Videocon’s dues to demand from Airtel violates Supreme Court’s order that AGR dues cannot be reassessed.

"This application is dismissed as withdrawn, with liberty to the applicant to approach the appropriate forum for redressal of its grievances. The Department of Telecommunications is at liberty to raise all contentions. The Department of Telecommunications shall not invoke the financial bank guarantees of respondent No. 53 for three weeks from today," the court judgement stated.

The bench, however, said it would not interfere with the order and instead grant liberty to move any other alternate forum to address its grievance.

Divan also sought an order restraining DoT from invoking bank guarantees. He said Airtel has so far paid Rs 18,000 crore which is more than 10 per cent of its total AGR dues of Rs 45,000 crore.

Also read: AGR case: Bharti Airtel approaches SC with review petition