In a relief for Bharti Airtel, the Supreme Court has stopped DoT (Department of Telecommunications) from invoking its bank guarantees worth Rs. 1,376 crores for 3 weeks for non-payment of AGR (Adjusted Gross Revenue) dues owed by bankrupt Videocon. However, the court refused to hear Bharti Airtel’s plea, allowing the telecom company to move TDSAT against an order by the DoT which had asked it to pay Videocon’s AGR dues.

Making it clear that they won’t review the verdict in the AGR case, the 3-judge bench of Justice LN Rao, Justice S Abdul Nazeer and Justice MR Shah asked Bharti Airtel that why did the DoT raise a demand for bankrupt Videocon’s AGR dues if the “seller-pays-dues” principle is common understanding. On August 17, DoT had sent a demand notice asking Bharti Airtel to pay bankrupt Videocon’s AGR dues of Rs. 1,376 crores by August 24, warning that non-payment will lead to encashment of Airtel’s bank guarantees.

Appearing for Bharti Airtel, senior lawyer Shyam Divan argued that the government can’t fasten Videocon’s AGR liability on the company since the original AGR demand was approved by the top court in its verdict. Submitting that a seller has to clear all dues prior to concluding any agreement for spectrum trade, Bharti Airtel contended that all liabilities incurred prior to the spectrum trading agreement have to be borne by the seller.

Bharti Airtel submitted that spectrum trade is governed by government norms, opposing payment of Videocon’s AGR dues just by virtue of using the spectrum earlier alloted to the now-bankrupt telecom company. Appearing for the DoT, Solicitor General Tushar Mehta agreed with the court’s approval to Bharti Airtel to pursue the case in TDSAT, though he argued that the government will oppose the jurisdiction of the telecom tribunal to hear the case.

Review petitions filed by Bharti Airtel and Vodafone Idea are yet to be considered by the top court, where the companies have sought rectification of arithmetic errors in AGR demands raised by the DoT.