Have Rs 1 lakh cr losses, can’t furnish bank guarantees: Vodafone to Supreme Court
Vodafone Idea on Thursday told the Supreme Court that it has incurred Rs 1 lakh crore losses as it insisted it is not in a position to furnish bank guarantees
Vodafone Idea on Thursday told the Supreme Court that it has incurred Rs 1 lakh crore losses as it insisted it is not in a position to furnish bank guarantees.
A bench comprising Justices Arun Mishra, S. Abdul Nazeer, and M.R. Shah, taking up the adjusted gross revenue (AGR) matter through video conferencing, directed the telecom companies to submit their financial documents and books for the last 10 years.
Asking Vodafone if it was a foreign company, the bench said that how can the company say it would not furnish any bank guarantee.
"What if you fly away overnight in future without paying anything?" it asked.
Senior advocate Mukul Rohatgi, representing Vodafone Idea, denied his client is a completely foreign firm and cited before the bench its tie-ups and investments.
Vodafone owes over Rs 58,000 crore as AGR dues and so far, has paid close to Rs 7,000 crore.
Rohatgi contended before the court that the telecom company is in a tough situation, and cannot furnish any fresh bank guarantee, as profits have eluded the company in past many quarters. He submitted before the bench that Rs 15,000 crore bank guarantees are lying with the government, and his client's losses are over Rs 1 lakh crore.
"I cannot offer any more surety," he informed the bench.
Justice Mishra noted that this is public money and these dues should be recovered. "Do not tell us that you will pay if you were to make profits... the money must come," he noted.
Justice Shah observed that the telecom industry is the only industry which earned during the Covid-19 pandemic. "After all, this money will be used for public welfare", he said.
Rohatgi argued that his client would have to fold up if orders were issued to clear dues tomorrow. "11,000 employees will have to go without notice, as we cannot pay them," he added.
Senior advocate Abhishek Manu Singhvi, appearing for Bharti Airtel, contended before the court that out of Rs 21,000 crore AGR dues, the company has already deposited a sum of Rs 18,000 crore.
He argued that his client has given a bank guarantee, in excess of demand, to DoT, and supported the proposal for phased repayment of remaining AGR dues. He insisted that the company needs to sit down with the government and calculate the dues. Airtel owes Rs 25,976 crore after paying Rs 18,000 crore, as per the government.
Senior advocate Arvind Datar, representing Tata Telecom, informed the bench that his client has paid Rs 6,504 crore in AGR dues so far, and furnishing a bank guarantee may adversely impact investments in the sector.
The total AGR dues are close to Rs 1.5 lakh crore.
The top court will now take up the matter in the third week of July.