In a major relief for Vodafone Idea, the Supreme Court on Monday allowed the Centre to reconsider and reconcile the telecom company’s pending adjusted gross revenue dues amounting to ₹5,606 crore for 2016-17, observing that the issue falls within the policy domain of the government.

Adjusted gross revenue (AGR) is the income figure used to calculate the licence fees and spectrum charges that telecom companies must pay to the government.

A bench comprising Chief Justice B R Gavai and Justice K Vinod Chandran passed the order while hearing a writ petition filed by Vodafone Idea challenging fresh AGR-related demands raised by the department of telecommunications (DoT).

Vodafone Idea welcomed the order as a “positive development” and said it looks forward to working closely with the telecom department to resolve the matter in the interests of its nearly 20 crore subscribers.

Shares of Vodafone Idea ended nearly 4 per cent higher after the order. The stock climbed 3.85 per cent to settle at ₹9.99 on the BSE. During the day, it surged 9.87 per cent to ₹10.57.

On the NSE, the stock jumped 3.63 per cent to ₹9.97.

During the hearing, Solicitor-General Tushar Mehta, appearing for the Centre, informed the court that the government now holds 49 per cent equity in Vodafone Idea, and that around 200 million consumers depend on its services.

He submitted that, given these circumstances, the Centre was willing to examine the issues raised by the company to ensure that consumer interests are safeguarded.

The CJI-led bench noted that the petition by Vodafone Idea has been filed seeking the quashing of additional AGR demands for 2016-17, and further directions to comprehensively reassess all dues.

“Taking into consideration the status of the case now — the government has infused substantial equity into the company and that it will have a direct bearing on 20 crore customers — we see no issue in the Union reconsidering the matter and taking appropriate steps,” the CJI said in the order.

Clarifying that the issue fell under the policy domain of the Union, the bench said, “There is no reason as to why the Union should be prevented from doing that, and with that view of the matter, we dispose of the writ petition.”

Senior advocate Mukul Rohatgi, appearing for Vodafone Idea, argued that the DoT’s additional demand of ₹5,606 crore for FY 2016-17 was unsustainable since the dues had already been determined following the Supreme Court’s 2019 verdict.

The dispute over AGR, particularly its inclusion of non-telecom income, led to massive liabilities on the telecom operators, with Vodafone Idea and other telcos among the hardest hit. Vodafone Idea had filed a fresh plea against the DoT’s demand of ₹5,606 crore relating to 2016-17. Earlier, the Centre said that efforts were underway to arrive at a resolution with the company.

“Some solution may have to be found out, subject to your lordship’s approval. If it can be kept next week, we can think of some solution,” Mehta had said.

Vodafone Idea had sought a direction to the DoT to “comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016-17 following the ‘Deduction Verification Guidelines’ dated February 3, 2020.

Earlier this year, in a setback to telecom majors, including Bharti Airtel and Vodafone Idea, the apex court refused to review its 2021 order rejecting their pleas for rectification of alleged errors in the calculation of AGR dues payable by them. The telcos argued that arithmetical errors in the calculation should be rectified and that there were cases of duplication of entries.