Government orders telcos to clear dues immediately after top court threatens contempt

After Supreme Court threathened the telecom companies with contempt proceedings for failing to implement an earlier ruling, the Indian government ordered mobile carriers to pay the due immediately.  

The court ordered companies including Vodafone Idea and Bharti Airtel to pay 920 billion Indian rupees ($13 billion) in overdue levies and interest by Jan. 23. Last month, the court rejected petitions seeking a review of the order it issued back in October.

“This is pure contempt, 100% contempt,” Justice Arun Mishra told lawyers for the companies and the government on Friday.

Later in the day, the Department of Telecommunications called for “immediate payments” from the telcos. A second order instructed relevant offices to stay open on Saturday to “facilitate the Telecom Licensees to make payments or contact them with respect to any matter related to that.”

The companies had contested the government’s definition of revenues subject to tax and Vodafone Idea and Bharti Airtel both flagged risks to their ability to continue as ongoing concerns following the October order. They did not immediately respond to calls seeking comment on the new ruling.

The companies, along with Reliance Jio, control more than 90% of India’s mobile market. Jio, a relatively new entrant which has disrupted the market has paid its dues.

Justice Mishra rebuked the government for having failed to implement the court order on collecting the dues. “A desk officer in the government stays a Supreme Court order ... Is there any law left in the country?,” he said.

“We will draw up contempt against everyone,” he added, implying that both company and government officials could be fined or jailed if the dues are not paid by March 17.

Analysts said the court’s move could harm the government more broadly, as well as the companies.