"Misconceived": Supreme Court junks plea by Vodafone, Airtel for waiver of interest, penalty in AGR dues

The Supreme Court on Monday dismissed petitions by telecom giants Vodafone Idea and Airtel plea seeking a waiver on paying interest, penalty, and interest on penalty components as part of their long-standing adjusted gross revenue (AGR) dues..Tata Telecom, which used to operate telecom services under the brand Docomo, had also filed a similar plea. Although this plea was not listed, it too was taken on board and dismissed by the Court today. A Bench of Justices JB Pardiwala and R Mahadevan, said that it was disturbed by the requests made by the telcos for relief in this matter. The Court added that multinationals of such repute cannot knock its door with such misconceived petitions."Heard (Senior Advocates) Mukul Rohatgi and Arvind Datar, Shyam Divan. appearing for the respective petitioners. Three multinational companies have come before this court by way of writ petition. We believe these are misconceived writ petitions. Dismissed," the Court ordered. .Vodafone had cited severe cashflow issues while seeking relief from the top court. During the course of the hearing, Senior Advocate Mukul Rohatgi, who appeared for Vodafone-Idea sought for an adjournment of the case noting that the parties were trying to approach the government for relief. He urged the Court to adjourn the case to July to wait for the outcome of the government's representation. The Court, however, refused to adjourn it and proceeded to dismiss the case. .Vodafone-Idea has contended that with nearly 200 million subscribers, over 18% market share, and a workforce of more than 20,000 employees, its survival is at serious risk if compelled to continue paying AGR instalments of approximately ₹18,000 crore annually for the next six years.Vodafone Idea contended that the relief sought would protect its viability, preserve market competition, and safeguard consumer interests. Notably, the Union of India now holds 48.99% stake in the company following the conversion of spectrum and AGR dues into equity shares in two phases - 14.89% was acquired in February 2023 and 34.10% in April 2025..The dispute has its origins in the National Telecom Policy (NTP) of 1999, which allowed telecom companies to migrate to a revenue-sharing regime— an arrangement that involved paying licence and spectrum fees as a percentage of the company's annual gross revenue. However, telecom operators challenged the Department of Telecommunications' (DoT) interpretation of “gross revenue,” arguing that only revenue from core telecom operations should be included in the calculation of Adjusted Gross Revenue (AGR).DoT, on the other hand, insisted that 8% of the entire revenue, including income from non-telecom activities such as asset sales, rent, interest, and other gains, should be paid as licence and spectrum fees..The matter led to prolonged litigation before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and the Supreme Court, with the TDSAT initially ruling in favour of the telecom companies in 2006 and 2015. However, the Supreme Court’s judgment on October 24, 2019, reversed those rulings, upholding the DoT’s interpretation and imposing substantial financial liabilities on telecom operators..Following the judgment, the DoT’s total demand rose to ₹1.19 lakh crore, with the liability break-up as follows:- Vodafone Idea: ₹58,254 crore- Bharti Airtel: ₹43,989 crore- Tata Teleservices: ₹16,798 crore.The dues ballooned over two decades of litigation since 2002, driven largely by interest and penalties..In September 2020, the Supreme Court allowed a 10-year staggered payment schedule. However, in July 2021, the Court rejected pleas for re-computation of dues, holding that there could be no reassessment or self-correction. Vodafone Idea’s curative petition—a final remedy alleging miscarriage of justice—was dismissed.In the present writ petition, Vodafone Idea did not challenge the AGR judgment itself but sought a waiver of the interest, penalty, and interest on penalty components of the payable dues, which form a significant portion of the ₹83,400 crore demand as of March 2025. The company noted that its annual operational cash generation (around ₹9,200 crore) is well below the annual AGR instalment of ₹18,000 crore, making compliance unsustainable.Vodafone Idea contended that the government’s 2021 Telecom Relief Package, which offered moratoriums, AGR definition changes, and reduction in penalties, implicitly acknowledged the sector's distress. The company has also submitted that it has raised ₹56,000 crore in equity since a 2018 merger, but has not received fresh debt for over five years and continues to operate under severe financial stress..In a representation dated April 17, 2025, the company proposed settling the dues by treating ₹17,213 crore as the final principal, waiving all interest and penalties, and repaying the balance ₹7,852 crore over 20 years. However, the DoT rejected the proposal on April 29, 2025, citing the binding effect of the Supreme Court’s 2020 judgment.Vodafone Idea then sought directions from the Supreme Court to either waive these burdensome components or ask the government to reconsider the proposal in light of sectoral realities and the government’s own equity stake in the company..Vodafone was represented by Senior Advocate Mukul Rohatgi..Airtel was represented by Senior Advocate Shyam Divan..Tata Telecom was represented by Senior Advocate Arvind Datar.