Vodafone Idea case deferred a fourth time—to be taken up after Diwali. Shares fall.
The Supreme Court on Monday once again adjourned Vodafone Idea Ltd’s plea to hear its plea for waiver of adjusted gross revenue (AGR) dues to the government. The matter will now be taken up by the court when it reopens after Diwali.
The court will remain closed from October 20 to 25 due to Diwali.
The matter relates to Vodafone Idea filing a petition last month objecting to the Department of Telecommunications (DoT)’s demand for surcharge. ₹9,450 crore towards AGR dues.
India’s third largest telecom operator also requested a waiver of interest and penalties on its dues, claiming that the disputed components of the dues have not been finalized yet.
The case was adjourned for hearing after Solicitor General Tushar Mehta, representing the Union government, sought additional time. In response, Chief Justice of India BR Gavai asked Mehta to take a specific stand and adjourned the hearing of the case for the fourth time.
Vodafone Idea shares lost 2.88 percent of their value at 12.50 p.m. ₹On NSE, each was at 8.78 while Nifty 50 lost 0.41%.
Based on DoT’s calculations, the Supreme Court in 2020 locked Vodafone Idea’s AGR dues till 2016-17 and added that no self-assessment or re-evaluation of dues would be allowed. However, Vodafone Idea, in its petition submitted on September 8, stated that the DoT has now sought additional payment up to 2018-19.
from the fresh ones ₹9,450 crore dues demanded, the additional demand brought by DoT from Idea Group and Vodafone Idea (post merger in August 2018) was: ₹The demand for Vodafone Group (pre-merger) was 2,774 million crore. ₹6,675 crore, according to the petition.
The Ministry informed the telecom operator that the license fee was calculated with interest and penalty interest until October 2019, and was updated with an annual interest rate of 8% until March 31, 2025.
‘No default, no penalty’
On September 19, the Supreme Court postponed the hearing to September 26, but the government sought more time. The case was later postponed to 6 October and 13 October.
During the hearing on September 19, Solicitor General Tushar Mehta said that a balanced solution that protects consumer interests was needed as the government now holds a significant equity stake in Vodafone Idea.
However, Vodafone Idea, in its amended petition submitted on September 18, argued that the Supreme Court had only “instructed the inclusion of disputed presidents in the AGR calculation in 2020. Therefore, it cannot be said that there has been any payment default to date that would require the imposition of a penalty.”
The company then filed an amended petition in the Supreme Court seeking waiver of penalties and interest on AGR dues, arguing that the disputed components of the dues were yet to be finalised.
According to the amended petition, both the DoT and the telecom operator agree that the amounts need to be reconciled, corrected and finalized. In Vodafone Idea’s petition, it was stated that “Unless the principal amount to be paid is clarified and finalized, it cannot be said that the plaintiff is in default requiring payment of the penalty.”
threat to survival
Vodafone Idea already has debt ₹83,400 crore in AGR dues to the government along with annual payments ₹18,000 crore from March. Their total liability to the government, including penalties and interest, is estimated to be approx. ₹2 trillion.
Vodafone Idea had previously said that its cash flow was not enough to pay the dues accumulated over the years. Akshaya Moondra, former managing director of Vodafone Idea, said in August that an early resolution of the AGR dispute was critical for the telecom operator to secure bank financing.
The telecom operator requested the Supreme Court to quash DoT’s additional claims for FY 2017 and earlier periods and order a comprehensive re-evaluation and reconciliation of all AGR dues for that period.
He warned that severe liability threatened the company’s survival and “the livelihoods of thousands of employees working directly or indirectly” at the company. Vodafone Idea serves approximately 198 million subscribers and employs more than 18,000 people.
