Jio warns AGR relief to Airtel, Vodafone Idea will be contempt of SC

Continuing its fight for a level-playing field, Reliance Jio has written to Telecom Minister Ravi Shankar Pras saying a "financial windfall" for Bharti Airtel and Vodafone-Idea by waiving penal action on unpaid statutory dues of past 14 years will be violative of Supreme Court's recent ruling and will set a b precedent for errant companies.

Jio, whose offer of free calls and dirt cheap data on mobile phones since its launch in 2016 helped make India nation with lowest telecom tariffs in world, said Supreme Court in its October 24 order has clearly settled base on which statutory levies such as telecom licence fee and spectrum us charge has to be paid and waiving of interest and penalty on due amounts of past 14 years will be violative of judgement.

" judgment records submission on behalf of Department of Telecommunications (DoT) to effect that interest and penalty were being levied strictly as per contract between parties and that any reduction, modification or alteration of interest and penalty provisions contained in License Agreement would amount to impermissibly rewriting agreement. This contention was accepted by Hon'ble Court," it wrote on vember 1.

Supreme Court h on October 24 upheld DoT's contention that n-telecom revenues should be part of annual justed Gross Revenue (AGR) -- a percent of which is paid to government as statutory dues.

With total liabilities estimated at Rs 1.4 lakh crore, Airtel and Vodafone-Idea, through telecom sector association COAI, are seeking waiver of at least penalty and interest on delayed payments, which constitute about half of total dues, if a complete waiver of past liabilities is t possible.

Reiterating its position that telcos have sufficient resources to meet liability, Jio said incumbents such as Bharti Airtel and Vodafone-Idea h reaped rich bonanza when y h accepted and moved to a revenue share method of paying statutory dues almost two deces back and relief on unprovisioned and unpaid past liability should w be entertained.

"While considering issue relating to imposition of interest and penalty, judgement deals with elaborate reasoning that covers pendency of multiple proceedings raised at instance of Telecom Service Providers (TSPs) in various forums from time to time for some reasons and concludes that se disputes h t been raised in a bonafide manner, but rar, were solely with aim to somehow or or eve from making payment, even on hes/items on which y h lost in earlier proceedings," it said.

Jio ded that "claimed inability to meet payment obligations is t on account of any reasons or an event or an effect that parties could t have anticipated or controlled."

"Rar, position that emerges from a plain reing of judgment is that licensees have indulged in abuse of process of Court and deliberately delayed payment of dues on frivolous and legally untenable grounds," it said.

Stating that Supreme Court has repeatedly held that spectrum is a finite and precious natural resources, Jio said "any action on part of Government of India to modify or waive contractual provisions pertaining to interest and penalty on unpaid dues would t be legally tenable specially when same has been dealt in judgement of Supreme Court specifically."

"Any reduction in financial liability of licensees arising from judgment of Court would in effect be rewarding m for ir conduct in initiating frivolous and vexatious proceedings to delay payment of ir just dues," it said. "Any proposal for waiver will be considered as loss to public exchequer and contrary to Hon'ble Supreme Court judgement."

Also, "such largesse, if granted, will become an iniquitous precedent emboldening and encouraging ors in similar situations including or sectors and spreing across industry to commit similar breaches and get away with it," it ded.

It "deplored" Cellular Operators Association of India (COAI) for continuing to t take its comments on record and only propagate nda of two select members -- Bharti Airtel and Vodafone-Idea.

"In order to help its two select members get a financial windfall from Government, COAI is in fact canvassing for going against decision of Supreme Court judgement," it said. " Supreme Court has very fairly and categorically rejected all frivolous grounds taken by operators and it has also given sufficient time to operators to make good ir obligations within three months."

"Given background of matter, we are of view that Government does t have option of going against Supreme Court judgement and provide any of reliefs sought by COAI from plain reing of legal facts," it said.

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