New Delhi, October 27 (Monday): The Supreme Court of India is today hearing a pivotal writ petition filed by Vodafone Idea Limited, which challenges the Department of Telecommunications’ (DoT) additional demand of ₹9,450 crore towards Adjusted Gross Revenue (AGR) dues for the 2016–17 period.
The case, listed before a bench headed by Chief Justice BR Gavai, carries significant financial and policy implications — not only for the telecom operator but also for the government and over 20 crore subscribers of Vodafone Idea across India.
Centre’s 49% stake changes the equation
A major development that now shapes the court’s considerations is the government’s 49% equity stake in Vodafone Idea, following the conversion of ₹36,950 crore of outstanding spectrum dues into equity earlier this year. This transformation has shifted the issue from a purely corporate dispute to one involving public interest and market stability.
With the government emerging as the single largest shareholder, the outcome of the case will directly impact both the exchequer and consumers. As Solicitor General Tushar Mehta noted in earlier hearings, the Centre’s equity participation means that “the government’s and public’s interests are now intertwined with the company’s survival.”
Vodafone’s plea and argument
Vodafone Idea has argued that the additional AGR demand raised by the DoT is unsustainable, as all liabilities were already crystallised by the Supreme Court’s 2019 judgment. The company contends that any further demands would amount to a reopening of settled accounts, beyond the scope of the earlier verdict.
Of the total disputed ₹9,450 crore:
- Around ₹2,774 crore pertains to the post-merger Vodafone Idea entity, and
- About ₹5,675 crore relates to the pre-merger Vodafone Group liabilities.
Vodafone Idea has also sought a waiver of penalties and interest, stating that the additional charges have aggravated its financial stress amid heavy debt and funding constraints.
Why the case matters
The Supreme Court’s verdict is expected to have far-reaching consequences for India’s telecom sector. If the company is compelled to pay the additional AGR dues, it could face serious liquidity pressure, potentially disrupting market competition and affecting service continuity for millions of users.
Legal experts say the matter now extends beyond Vodafone Idea’s balance sheet:
“With the government holding nearly half the equity, any adverse outcome will not only hurt investors but also the public exchequer and competition in the telecom space.”
Timeline of recent proceedings
- September 19: Centre told the Supreme Court it does not oppose Vodafone Idea’s plea but stressed that resolution is essential as it now holds equity in the company.
- September 26 & October 6: The hearing was deferred after the Centre sought additional time.
- October 13: The matter was postponed again for post-Diwali hearing.
- October 27: The Supreme Court is now set to hear final arguments, with a potential verdict expected soon.
The outcome could determine not only Vodafone Idea’s financial future but also the government’s broader strategy in balancing regulatory enforcement with market stability.
