Supreme Court Clarifies AGR Dues: No Recalculation Allowed, Union of India vs. Association of Unified Telecom Service Providers of India (23 July 2021)

Date of the Judgment: 23rd July 2021

Citation: M. A. No.83 of 2021 in M. A. (Diary) No.9887 of 2020 in Civil Appeal Nos. 6328-6399 of 2015

Judges: L. Nageswara Rao J., S. Abdul Nazeer J., M. R. Shah J.

Can the Supreme Court’s order prohibiting reassessment of Adjusted Gross Revenue (AGR) dues for telecom companies be interpreted to also prevent the correction of simple calculation errors? This question was at the heart of a recent case where the Union of India sought clarification on a previous judgment. The Supreme Court, in this judgment, addressed the issue of whether errors in the calculation of AGR dues could be rectified, despite its earlier order prohibiting any reassessment. The bench comprised Justices L. Nageswara Rao, S. Abdul Nazeer, and M. R. Shah.

Case Background

The dispute originated from a disagreement over the definition of ‘gross revenue’ in the license agreements between the Government of India and Telecom Service Providers (TSPs). The Supreme Court, in a judgment dated 24th October 2019, had interpreted this definition. Following this, the TSPs attempted to seek reassessment and recalculation of their AGR dues, which the Supreme Court rejected on 20th July 2020, firmly stating that there was no scope for any further dispute regarding AGR dues. The court also specified that the calculations made and the amounts to be recovered, as stated in the said order, were final and not subject to recalculation or self-assessment. The Union of India then filed an application seeking approval of the mode and timeline of recovery of AGR dues. The court, on 1st September 2020, directed that there should be no dispute raised by any of the Telecom Operators regarding the demand raised by the Department of Telecom (DoT) based on the court’s judgment. It also prohibited any reassessment of the dues.

Timeline

Legal Framework

The core of the dispute revolves around the definition of ‘gross revenue’ as outlined in Clause 19.1 of the license agreements between the Government of India and the Telecom Service Providers (TSPs). The Supreme Court’s judgment dated 24th October 2019, in Civil Appeal Nos.6328-6399 of 2015, interpreted this definition. The subsequent order dated 20th July 2020, clarified that there was no scope for raising any further dispute with respect to AGR dues, and prohibited any recalculation or self-assessment. The final order of 1st September 2020, reiterated that no telecom operator shall raise any dispute in respect of the demand raised by the Department of Telecommunications pertaining to AGR dues, and prohibited any reassessment.

Arguments

The Applicants (telecom operators) argued that while scrutinizing accounts for several years to determine AGR dues, certain arithmetical errors were discovered due to inadvertence by the Department of Telecommunications. They clarified that they were not seeking to reopen the issues already decided by the Supreme Court. They contended that these errors included double counting of some revenue items, payments made but not accounted for, and accrued deductions not being given effect to. They emphasized that they should not suffer due to calculation errors made by the Union of India. The applicants sought permission for the Union of India to verify their accounts and rectify these errors, but were not seeking any positive direction.

The Union of India, on the other hand, had initially sought approval for the mode and timeline of recovery of AGR dues. The Supreme Court had made it clear that the amounts payable by the TSPs were final and not subject to recalculation. The Union of India argued that allowing any rectification of errors would essentially amount to recalculation, which was expressly prohibited by the court’s previous orders.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was whether the judgment dated 01.09.2020, which prohibited any reassessment of AGR dues, also barred the Union of India from rectifying clerical or arithmetical errors in the computation of these dues.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered its previous judgments in Civil Appeal Nos. 6328-6399 of 2015 dated 24.10.2019, and the orders in M.A. (D) No. 9887 of 2020 in C.A. Nos. 6328-6399 of 2015 dated 20.07.2020 and 01.09.2020. The court emphasized that the order dated 20.07.2020 made it clear that there was no scope for any recalculation/re-computation of AGR dues. The court also reiterated that the order dated 01.09.2020, prohibited any dispute regarding the demand raised by the Department of Telecommunications pertaining to AGR dues and also prohibited any reassessment.

Judgment

What weighed in the mind of the Court?

The Supreme Court was primarily concerned with the finality of its previous orders and the need to prevent further litigation regarding AGR dues. The court emphasized that the dispute relating to AGR dues had been pending for a very long time, and it was at pains to ensure that the dues payable by TSPs would not be the subject of any future litigation. The court also noted that an attempt was made to seek recalculation and reassessment even at the time of passing the order dated 20.07.2020, which was rejected outright.

The Court reasoned that while the applications appeared innocuous, the end result of the relief sought would be a recalculation of AGR dues, which was expressly prohibited by the previous orders. The Court stated, “There is no room for any doubt, from the perusal of para 38 (i) of the judgment dated 01.09.2020, with respect to this Court entertaining any application for altering the AGR dues of the TSPs.” The Court further noted, “The dispute relating to AGR dues had remained pending in courts for a very long period of time and bearing this in mind, this Court was at pains to emphasize, at the cost of repetition, that the AGR dues payable by TSPs cannot be the subject matter of any future litigation.” The Court also emphasized, “Even at the time of passing of the order dated 20.07.2020, an attempt was made to seek recalculation and reassessment, as recorded in the order, which was rejected by this Court outright.”

Key Takeaways

• ✓ The Supreme Court has made it clear that there is no scope for any recalculation or reassessment of AGR dues, even if there are clerical or arithmetical errors.
• ✓ Telecom operators cannot raise any further disputes regarding the demand raised by the Department of Telecommunications.
• ✓ The judgment reinforces the finality of the Supreme Court’s orders and aims to prevent further litigation on the issue of AGR dues.

Directions

The Supreme Court did not issue any new directions but dismissed the Miscellaneous Applications seeking clarification/modification of the judgment dated 01.09.2020.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that the Supreme Court’s orders regarding AGR dues are final, and no recalculation or reassessment is permitted, even for the rectification of clerical or arithmetical errors. This judgment reinforces the principle of finality in judicial pronouncements and aims to prevent endless litigation. There is no change in the previous position of law, but rather a reaffirmation of the previous orders of the Supreme Court.

Conclusion

The Supreme Court dismissed the applications seeking clarification/modification of its earlier judgment, holding that no recalculation or reassessment of AGR dues is permissible, even to rectify clerical or arithmetical errors. This decision underscores the court’s intent to put an end to the long-standing dispute over AGR dues, emphasizing the finality of its orders.