Supreme Court Verdict on AGR Dues

Supreme Court directed telecom operators to make a 10% upfront payment of their AGR dues, and the timeline for staggered payments will start on 1 April 2021. Further, telecom companies (Telco’s) should pay 10 percent of the AGR-related dues by March 31, 2021.

Highlights of AGR Verdict:

1. Staggered Payments:
10 years timeline for staggered payments will start on 1 April 2021 with some directions.

2. No Revaluation:
On demands raised for AGR – no dispute to be raised on revaluation and 10 percent payment to be made upfront.

3. Personal Guarantees:
The Managing Director (MDs) or Chief Executive Officer (CEOs) of the telco’s concerned to furnish an undertaking or personal guarantee within 4 weeks for payment of dues. It cautioned the telecom firms and said that failure to pay installments of AGR-related dues would incur penalty, interest, and contempt of court.

4. Spectrum Sale:
The question of the spectrum to be given as security will be decided by NCLT.
General Points
Each company has its own decision whether they want to file the review petition.

Telecom companies that have now gone bankrupt had dues of about Rs 40,000 crore. As per the assessment, Aircel dues stand at Rs 12,289 crore, Videocon at Rs 1,376, and Reliance Communications at Rs 25,199 crore. In order to deal with this AGR dues, the telecom companies may hike the tariff rates and also there are chances that telcos may raise funds.


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