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“Is there no law left?”: Supreme Court anguished over telcos’ non-compliance with order to pay ₹1.47 lakh crore

The Supreme Court on Friday issued notice for contempt against companies, including telecom majors Bharti Airtel and Vodafone Idea, for not paying a single penny in Adjusted Gross Revenue (AGR) worth a whopping ₹1.47 lakh crore despite an October 2019 apex court judgment ordering them to pay within three months.

A Bench led by Justice Arun Mishra also issued show cause notice to the Department of Telecom (DoT) on why contempt proceedings should not be initiated against its officers for literally “staying a Supreme Court judgment” by issuing an internal letter on January 23, 2020, which barred authorities from taking any “coercive action” against the companies even if they fail to comply with the Supreme Court judgment.

The October 24, 2019, judgment had upheld the recovery of past dues amounting to ₹1.47 lakh crore from the companies. The recovery by the government was based on AGR of about ₹92,000 crore.

“Let us wind up the Supreme Court then… There is no law left in the country. We are anguished. I feel I should not work in this system. Who is behind all this nonsense? How can a mere desk officer in your department defy a Supreme Court judgment by ordering that they need not pay and no coercive action will be taken… Does he think he is the Supreme Court? How can he literally stay an Supreme Court judgment? What temerity is this? Have you (government) even questioned him once for this?” Justice Mishra lashed out at the DoT, represented by Solicitor General Tushar Mehta.

“This desk officer behind this nonsense (January 23 letter)… does he think he is the Supreme Court? This is pure contempt. A 100% contempt! If your desk officer does not withdraw this letter within the next one hour or 30 minutes, he will go to jail today itself. Withdraw this (letter) immediately… We want him here,” a visibly angry Justice Mishra addressed Mr. Mehta. “Mr. Mehta, have you asked him to withdraw as the SG of this country. What temerity is there, is this is the respect. Who is that desk officer. We want him here right now.”

When Mr. Mehta urged the Bench to defer the hearing and not make any insinuations that the DoT acted “hand-in-glove” with the defaulting companies, Justice Mishra shot back, saying “Do not saying anything more or you yourself will be in the frame. Do not take this lightly. There is no respect for the judicial system”.

Mr. Mehta tried to pacify the judge, saying “We all know about Your Lordship’s benevolence…”

“No, you don’t know me even an inch and we don’t want respect from anybody in this world… I am not bothered about it myself… In fact, it is better not to live in this country, better to leave this country. This desk officer is writing constitutional authorities… He grants a stay… The judicial system of this country has been taken away,” Justice Mishra responded sharply.

Justice Mishra turned to senior advocate Fali Nariman, appearing for Vodafone, saying “Companies have not deposited any money… have no respect for the direction of this court”. The court rejected Mr. Nariman’s offer to make an immediate part payment in dues, but the court declined.

The court ordered the managing directors of these companies to appear in person in court and explain why payment was not made.

“Ensure that they pay up by the next hearing,” Justice Mishra addressed Mr. Nariman. The court scheduled the next hearing for March 17.

The sharp observations came while hearing applications filed by the companies for a modification of the October 2019 judgment to pay dues to the government within three months.

The Bench, also comprising Justices Abdul Nazeer and M.R. Shah, on January 16 dismissed the review petitions filed by the companies against the October verdict for lack of merit.

The companies had sought the court’s intervention, saying the October direction would spell huge ramifications in the telecom industry and “severely hamper” programmes like Digital India, Make in India and Skill India.

Vodafone had urged the court to alter its order and permit it to submit an application before the DoT for drawing up a schedule for payment of the dues.

Bharti Airtel had said the exercise for calculating the amounts due, including past demands, were continuing and would require further interaction with the government as it covered licences across 22 circles and a period of over 15 years. Besides, it said all the parties would take time to “reconcile” with the calculations.

“Payment of thousands of crores in due amounts without proper assessment and financial calculations and time for payment will not only cause irreparable damage to the appellants (telcos) but also to the telecom industry at large, leading to possible disruption of a public utility service owing to the bad financial position of the telecom companies,” they had appealed.

If unmodified, the October 2019 schedule for payment may risk large-scale job losses, destruction of billions of dollars of capital investments due to bankruptcies and poor financial health and large-scale NPAs. Besides, the impact would have a ripple effect on vendors and retailers. The 5G and future technologies to support Digital India Mission may get “compromised”, the appeals had painted a bleak picture ahead.

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