Airtel Follows Vi to Supreme Court in Seeking Waiver of AGR Interest, Penalties

Following in the footsteps of Vodafone Idea (Vi), Bharti Airtel has filed a fresh petition in the Supreme Court seeking a waiver of interest, penalty, and interest on penalty incurred on Adjusted Gross Revenue (AGR) dues owed to the government. The petition was filed on May 17, just days after Vi submitted a similar plea, raising concerns about its ability to operate beyond FY26.

According to the Economic Times (ET), Airtel is not challenging the Supreme Court’s 2020 ruling, which ordered telecom operators to pay AGR dues totalling about Rs 1.43 lakh crore to the Department of Telecommunications.

Instead, it is seeking a waiver of the additional burden—interest, penalty, and interest on penalty—faced by Bharti Airtel and its unit, Bharti Hexacom. Both petitions, by Vi and the Bharti companies, are scheduled to be heard on Monday by a bench comprising Justices J.B. Pardiwala and R. Mahadevan.

How Much Bharti Airtel and Hexacom Owe

Bharti Airtel and Bharti Hexacom together owe a principal amount of Rs 9,235 crore in AGR dues. In addition, they are liable to pay Rs 21,850 crore in interest, Rs 3,995 crore as penalty, and Rs 8,900 crore as interest on the penalty.

According to the companies, the total amount has swelled to Rs 43,980 crore after including these additional charges. However, the Department of Telecommunications (DoT) has calculated the dues at Rs 38,397 crore as of March 31, according to the ET report. As per their petition, the Bharti Airtel Group says it is facing a significant one-time liability, to be paid over 10 years ending March 31, 2031.

Meanwhile, Vodafone Idea has also sought relief from paying interest, penalty, and interest on penalty under the Supreme Court judgment. The company stated that, in addition to principal AGR dues of Rs 12,797 crore, it owes Rs 28,294 crore in interest, Rs 6,012 crore as penalty, and Rs 11,151 crore as interest on the penalty.

What Airtel Said in Its Plea

The Sunil Mittal-led Bharti companies argue that the Supreme Court’s September 1, 2020, judgment had a crippling financial impact on the telecom sector.

The petition, as reported by ET, said equitable relief is essential for the survival of all telecom operators. It warned that without equal treatment of all licence holders and telecom service providers (TSPs), the government's approach could violate Article 14 of the Constitution and further erode the financial health of the industry.

The companies urged the court to ensure a level playing field by granting similar relief to all affected TSPs, including Vodafone Idea (Vi), on a non-discriminatory basis.

Following Vi’s equity conversion, Airtel also approached the DoT to ask whether it could convert its own AGR dues into equity. The government has not yet responded.

While acknowledging the government’s efforts to support the telecom sector after the AGR ruling—including relief packages and conversion of dues into equity for Vi—the petition urged the court to direct the Centre to act fairly and waive interest, penalty, and interest on penalty for all operators.

Vi’s plea also noted that the government had already converted a portion of its dues into equity. However, due to its large AGR liability and limited access to bank funding, Vodafone’s survival remains at risk. The company said any disruption in its services could affect nearly 200 million subscribers.

As per the DoT, Vodafone Idea’s AGR dues stood at Rs 83,400 crore as of March 31, with an annual instalment of Rs 18,000 crore due in March 2026, the report said. Despite the equity conversion, the government is still expected to recover Rs 1.19 lakh crore from Vi, including spectrum and AGR dues.

Legal Battle Over AGR Dues

The Supreme Court has consistently upheld the DoT’s definition and calculation of AGR dues. In February, it rejected petitions from telecom operators seeking rectification of what they claimed were arithmetical errors. In September 2023, the apex court also dismissed curative petitions challenging the imposition of penalties and interest on penalties.

Of the total Rs 1.47 lakh crore in AGR dues to be paid by 2031, roughly 75% comprises interest and penalties. The dues include Rs 92,642 crore in licence fees and Rs 55,054 crore as spectrum usage charges.

The Supreme Court has allowed telecom companies to pay their dues over 10 years, starting with an upfront payment of 10% by March 31, 2021. Annual payments will continue until 2031.

The court in its last judgment had made it clear that no revaluation of dues will be allowed, and any default will attract further penalties, interest, and possible contempt proceedings.