Supreme Court rejects Vodafone Idea's petition for a staggered payment plan of AGR dues, here's what it means according to experts

But, the telecom ministry will seek a legal view on encashing the guarantee before next Supreme Court hearing on March 17.

3. Airtel has made a payment of Rs 10,000 crore and promised to pay the balance after a "self-assessment exercise." Airtel owes about Rs 39,000 crore.

4. Vodafone-Idea has made a payment of Rs 2,500 crore and the government claims the company owes more than Rs 56,700 crore.

Vodafone-Idea is also apparently asking the tax department to adjust the Rs 7,000 crore it is owed. Sources say the company believes it can pay Rs 9,500 crore after that tax adjustment.

5. Tata Tele Services has made a payment of just under Rs 2,200 crore. The company says according to its self-assessment this is the entire due. But, according to a government reply to the Rajya Sabha the dues are over Rs 14,700 crore.

Finance minister Nirmala Sitharaman on Monday said that the telecom ministry is actively engaging with the telecom companies on the AGR issue and the ministry will wait to hear from the telecom department before finalising its future course of action.

To discuss these developments CNBC-TV18 spoke to Mukul Rohatgi Counsel for Vodafone-Idea and Senior Supreme Court Lawyer; SS Sirohi, former member of Telecom Commission; Sanjay Kapoor, former CEO of Bharti Airtel and telecom consultant; and R Chandrashekhar, former secretary at DoT.

Rohatgi said: "On self-assessment Vodafone-Idea owes about Rs 7,000 crore to the government. Apart from that it will be interest, penalty and interest on penalty, the total of which may be around Rs 23,000-24,000 crore. This may be disputed by the government but the government's figure is also disputed by Vodafone and subject to accounting with both sides a final figure can be reached."

He said over the last few years Vodafone-Idea have consistently lost money. By the end of 2019, about Rs 2 lakh crore have been lost by this joint venture.

"So there is hardly any money left in the kitty. So whatever they have is some Rs 3500 crore odd which they will pay and some amount of money they will retain to carry on with their business because there are 30 crore subscribers who have to be serviced by Vodafone."

If Vodafone is to sell its towers and other assets and pay a few thousand more is possible then obviously they have to shut shop as soon as possible, Rohatgi added.

"If you shut shop, you kind of go the liquidation way, go in insolvency and then you don't have the money to pay. So the idea today is that we pay whatever we can, show our bonafides and engage with the government and ask them not to rock the boat by encashing bank guarantees because the moment you do that then obviously you have to shut shop the next day and which does not help anybody."

"The only way out is a structured approach. People should engage because there are many pluses and minuses to be done in the accounting over the last 17 years, then come out with a figure, then come out with a plan so that people do survive, the Supreme Court judgement is also honoured, the subscribers survive and in some measured period of time the instalments are paid, that is the only way out, otherwise it is a no-no situation", Rohatgi added.

According to Chandrashekhar: "If you are trying to define what is a solution then you are looking for solution by which the government takes certain decisions which allow Vodafone-Idea to survive but which does not interfere with any of the provisions or conditions which lie within the four corners of the Supreme Court judgement and that seems an extremely tall order, I don't see actually any solution which meets all of these criteria's."

He added: "Technically as of 11:59 pm on Friday they are in violation of DoTs instruction which admittedly was a little extreme."

However, the only leeway that is available is if you look at when does it become violative of the Supreme Court order then that time is only one month from now, by March 17.

"Given the kind of observations that the Supreme Court has made the other day, the government would certainly have to worry about the court on March 17 if they are confronted with a situation where payment has not been made and having issued the notice the government has just sat back and waited, would get another wrap on the knuckles from the court saying, you are supposed to take coercive action once your orders are violated, so what have you done? So it would be extremely difficult for the government not to proceed to the next logical step before March 17."

Sirohi said, "As per the today's judgement of the Supreme Court I do not think there is any room for any kind of leeway for not paying up immediately. The Supreme Court today also has asked the telcos to pay because it wants it order of October 24 to be implemented immediately."

"So the order of October 24 is valid and it is there. So the last date was January 23 and whoever is beyond it is violating as of now. So the telcos should make the full payment or the DoT has no other option but to encash the guarantee and if they don't do it action will be taken against DoT itself. So the DoT has to encash the bank guarantee and issue a show cause notice for why their licence should not be revoked, so both things have got to be done."

"This self-assessment exercise is all a farce. As per the licence conditions all operators have to declare their revenue and pay the licence fee according to the calculated revenue which is audited by their auditors and their board through a resolution certifies it on affidavit that this is meeting the requirement of the licence conditions."

The DoT is accepting that and since it is in variance with their calculation which is there and that is why they have put the penalty.

So, is  it already calculated, so where is the question of self-assessment again? Sirohi said.

Kapoor said: "I don't think any of the telecom companies at this stage will be able to debate around the definition of AGR, I think that is well settled with what Supreme Court has done. However they are well within their rights to calculate the mathematics behind how these numbers have been arrived at and present."

"If there is something fallacious about what they present then it will be negated. However to say that they will not do a self-assessment exercise and present without challenging the whole process of how an AGR is defined, I think is well within their means."