New Delhi: The Supreme Court on Monday allowed the Central government to reconsider the reassessment of Vodafone Idea’s adjusted gross revenue (AGR) dues, observing that the issue lies within the Union government’s policy jurisdiction.
A bench headed by Chief Justice of India BR Gavai passed the order after hearing Solicitor General Tushar Mehta, who explained that the Centre holds a 49% equity stake in Vodafone Idea and acted primarily to safeguard the interests of over 20 crore consumers.
“The government has infused equity to the extent of 49%. There are 20 crore consumers. That was one of the reasons for which the government took this decision. The consumers would suffer… they have concerns—issues like duplicate billing and over-invoicing,” Mehta told the court.
Emphasising that the matter squarely falls within the Union’s policy framework, the bench stated: “We clarify that this is in the policy domain of the Union. There is no reason why the Union should be prevented from doing so. With that view, we dispose of the writ petition.”
The court, however, stressed that its order was being issued in light of the specific circumstances of the case—particularly because the government has a significant stake in the company and its move was aimed at protecting Vodafone Idea’s large customer base.
Relief for the Debt-Laden Operator
The verdict offers a crucial policy reprieve for the financially stressed telecom operator, which has been battling mounting AGR liabilities and struggling to attract fresh investment. Following the ruling, Vodafone Idea’s stock surged sharply, rebounding from an early 2% dip to rise as much as 11.4% to a new 52-week high of ₹10.52 on the NSE by 11:35 a.m.
Earlier this month, on October 13, the apex court had adjourned Vodafone Idea’s plea seeking waiver of interest, penalty, and interest on penalty related to its AGR dues. The company had filed a fresh petition contesting the Department of Telecommunications’ (DoT) demand for ₹5,606 crore for the financial year 2016–17.
The Centre had informed the court that discussions were ongoing to resolve the matter, highlighting that its near 50% equity in Vodafone Idea made it a direct stakeholder in the company’s survival.
Vodafone Idea had also urged the court to direct the DoT to “comprehensively re-assess and reconcile all AGR dues up to FY 2016–17” in line with the Deduction Verification Guidelines issued on February 3, 2020.
Long Legal Battle Over AGR Dues
The AGR dispute traces back to October 2019, when the Supreme Court upheld the DoT’s interpretation of “adjusted gross revenue” to include both telecom and non-telecom income—such as interest, dividends, and asset sales—for calculating licence and spectrum usage fees.
In September 2020, the court granted operators a 10-year window to clear their dues amounting to ₹93,520 crore, directing that 10% of the amount be paid by March 31, 2021, and the rest in annual instalments up to March 2031. The bench had also clarified that no further reassessment or dispute over the dues would be entertained.
Although the DoT initially sought a 20-year repayment period, the government in 2021 amended the definition of AGR to exclude non-telecom income—providing much-needed relief to the sector. However, the amendment did not apply retrospectively, leaving earlier dues unaffected.
In 2021, the Supreme Court had also dismissed review petitions filed by telecom majors, including Vodafone Idea and Bharti Airtel, seeking rectification of alleged errors and duplication in DoT’s AGR calculations, reaffirming that the assessed dues were final.
A Potential Turning Point
Monday’s order, while narrow in scope, marks a significant policy opening for Vodafone Idea. By acknowledging the Centre’s right to reassess dues within its policy framework, the court has effectively given the government leeway to explore relief measures for the debt-ridden telecom operator — and by extension, the broader sector.
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