About The Adjusted Gross Revenue (AGR): UPSC Current Affairs

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ADJUSTED GROSS REVENUE (AGR)

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Picture Courtesy: https://www.hindustantimes.com/india-news/sc-rejects-telecom-companies-curative-petition-on-agr-dues-101726744819537.html#:~:text=NEW%20DELHI%3A%20The%20Supreme%20Court,department%20of%20telecommunications%20(DoT).

Context:

The Supreme Court dismissed telecom companies' curative appeals against a 2019 ruling that required them to pay over ₹1 lakh crore in Adjusted Gross Revenue (AGR) dues to the Department of Telecommunications.

Curative Petitions

A curative petition is a legal procedure that permits a petitioner to ask the Supreme Court to review its final judgement or ruling. The Supreme Court introduced the concept in the landmark decision of Rupa Ashok Hurra v/s Ashok Hurra and Others (2002).

Features of a Curative Petition:

It is the last option for an aggrieved party to seek justice after all other legal remedies, including a review petition, have been exhausted. The Supreme Court can examine its judgements under Article 137 of the Indian Constitution.
The petitioner must show a genuine violation of natural justice norms, such as bias or a lack of fairness in the hearing. The grounds mentioned in the curative petition must have been raised in the dismissed review petition.
A senior advocate must certify the petition and confirm that the grounds mentioned are valid and part of the review petition.
The curative petition is circulated to the three most senior Supreme Court judges and, if possible, to the judges who delivered the original judgement. If most of these judges agree that the matter needs further examination, it is sent to the same bench for a hearing.
There is no set time restriction for filing a curative petition.

About Adjusted Gross Revenue (AGR)

Adjusted Gross Revenue (AGR) is a term used in the telecoms sector to describe the usage and licence fees that telecom providers must pay to the Department of Telecoms.

These fees are divided into two major components:

Spectrum Usage Charges (SUC) are costs for using the radio frequency spectrum, which is required for mobile communication. It ranges between 3-5% of the AGR,

License fees are costs paid for the right to operate telecom services. It is about 8% of the AGR.

AGR Dispute

The AGR issue is a legal conflict between the Department of Transportation and telecom companies over the meaning and calculation of AGR. The core issue of the dispute is whether non-telecom earnings (such as interest income, dividends, and asset sales) should be included in the AGR calculation.

Timeline of Events

The Indian government switched from a fixed licence fee model to a revenue-sharing model in 1999, requiring telecom operators to pay a percentage of their AGR in licensing fees and SUC.

In 2003, the Department of Telecommunications (DoT) expanded its demand for AGR payments, including non-telecom profits in the calculation.

From 2005 until 2019, the dispute was litigated in several courts, including the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), the High Courts, and the Supreme Court.

In 2019, the Supreme Court ruled in favour of the DoT, upholding its definition of AGR and requiring telecom companies to pay all dues, including interest and penalties.

In 2020, the court allowed the telecom companies to pay their dues in annual instalments over ten years, from April 2021 to March 2031.

Impact on the Telecom Sector

The Supreme Court's verdict has far-reaching financial consequences for the telecommunications industry. The total dues are approximately INR 1.5 lakh crore, which caused substantial financial difficulties for several telecom operators.

Government Relief Measures

In response to the financial crisis experienced by the telecom sector, the Union government proposed several relief measures, such as:

A four-year moratorium on AGR-related dues and spectrum payments.
AGR has been redefined to exclude non-telecom revenues from the future.
100% Foreign Direct Investment (FDI) allowed via the automated route to encourage more investment into the sector.

These initiatives aim to increase funding, protect jobs, promote competition, and minimise the regulatory burden on telecommunications companies.

Conclusion

The AGR issue shows the complexity and challenges associated with the telecom regulatory environment. It highlights the requirement for precise and consistent policies to ensure the telecommunication sector's stability and growth.

Must Read Articles:

CURATIVE PETITION

CURATIVE PLEA

TELECOM SECTOR

ENFORCEMENT OF TELECOMMUNICATIONS ACT 2023

Source:

The Hindu

Livemint

Wikipedia

PRACTICE QUESTION

Q.Consider the following statements in the context of a Curative Petition:

1. The Rupa Ashok Hurra v/s Ashok Hurra case established this principle.

2. Any aggrieved party can file a curative petition.

3. No specific time limit is prescribed for filing a curative petition.

How many of the above statements are correct?

A) Only one

B) Only two

C) All three

D) None

Answer: C

Explanation:

Statement 1 is correct:

The concept of the curative petition emerged in the case of Rupa Ashok Hurra v/s Ashok Hurra and others (2002). The Supreme Court of India introduced the curative petition to handle cases where there had been a severe miscarriage of justice.

Statement 2 is correct:

Any aggrieved party can file a curative petition if they consider there was a grave miscarriage of justice and that the principles of natural justice were violated in the Supreme Court's final judgment or order.

Statement 3 is correct:

There is no set time limit for filing a curative petition. However, it is usually expected to be filed within a reasonable time after the review petition has been dismissed.