India Markets closed

SC rarely accepts curative petitions

New Delhi: Curative petitions like that being contemplated by the telecom companies have rarely been accepted by the SC, brokerage firm Motilal Oswal said.

"Both Bharti and VIL (Vodafone Idea Ltd) indicated that they are exploring filing a curative petition in the SC, wherein it has to be proved that the decision would have a humanitarian impact and also severe repercussions on GDP, given the importance of the sectorhave been rarely accepted by the SC," it said.

Besides, other non-telecom public sector undertakings (PSUs) have liabilities of over Rs 3 trillion "the payment for which is still questionable - and they may have to file a review petition."

The brokerage said that it won't be surprising if the government comes to the rescue of the telecom sector. This is particularly because it has to recover Rs 900 billion as deferred spectrum debt from VIL, which has said it will be forced to shut operations if asked to pay the entire adjusted gross revenue (AGR) liability.

Also, VIL owes Rs 300 billion to banks. Against this, the Aditya Birla Group and Vodafone Plc's stake in VIL stands at a mere Rs 70 billion and Rs 80 billion, respectively.

"Moreover, the implication on end-customer in the advent of VIL shutdown could be terrible. In such a scenario, we believe that the government may look to exercise other options, including -- it may provide an AGR liability extension or moratorium on the same lines as spectrum payment liability to resolve near-term cash flow issues," the note said.