CELLULAR OPERATORS ASSOCIATION OF INDIA AND OTHERS V. TELECOM REGULATORY AUTHORITY OF INDIA AND OTHERS (2016)
FACTS:
Various writ petitions were filled in the Delhi High Court challenging the validity of the Telecom Consumers Protection (Ninth Amendment)
The amendment was made in the exercise of powers conferred by sec.36 read with sec.11 of the TRAI Act, 1997. Every originating service provider is made liable to credit only the calling consumer with one rupee for each call drop, which takes place within its network, upto maximum of 3 call drops per day.
ISSUE:
Whether the Ninth Amendment to the Telecom Consumer Protection Regulation 2015 is ultra vires to sec.36 r/w sec. 11 of the TRAI Act, 1997?
Whether the Regulation is manifestly arbitrary and unreasonable violating Article 14 and 19(1) g?
Whether TRAI had power to interfere with their license conditions which is a contract between licensor and licensee?
Whether authorities were transparent in their dealings as provided under sec. 11(4)?
Whether the judgement given by High Court is justified?
REFERRED CASE LAW
The Lord Krishna Sugar Mills Ltd. and Anr. v. Union of India &Anr. -The Court in judging the reasonableness of a law, will necessarily see, not only the surrounding circumstances but all contemporaneous legislation passed as of a single scheme.
OBSERVATION:
Under Article 19(6) of the constitution, the state has to conform to two separate and independent tests if it is to pass constitutional muster – the restriction on the appellants’ fundamental right must first be a reasonable restriction, and secondly, it should also be in the interest of the general public.
DECISION:
The impugned Regulation is de hors sec.11 but cannot be said to be inconsistent with sec.11 of the Act. Also, in BSNL case this court held that the power under sec.36 is not trammeled by sec.11.The balance that is sought to be achieved by the Act for the orderly growth of the telecom sector has been violated. Therefore, Court holds that the Impugned Regulation does not carry out the purpose of the Act and must be held to be ultra vires the Act on this score.
The impugned Regulation must be arbitrary and an unreasonable restriction on the appellants’ fundamental rights to carry on business. The cause for call drops is twofold – one owing to the fault of the consumer, and the other owing to the fault of the service provider. The impugned Regulation’s very basis is destroyed: the Regulation is based on the fact that the service provider is 100% at fault. It is clear that the Impugned Regulation is a Regulation framed without intelligent care and deliberation.Thus a Mandatory is payable by the service provider for call drops which are not due to its fault, and may be due to fault of receipt, which is violative of Articles 14 and 19(1)g.
Licence condition, a contract between the service providers and consumers, have been amended to the former’s disadvantage by making the service provider pay a penalty for call drops despite there being no fault. As condition 28 of the Licence requires the licensee to ensure that the quality-of-service standards, as prescribed by TRAI, are, adhered to, and that the Impugned Regulation does not lay down quality of service standards. Thus, the laying down of penalty de hors condition 28, which, as, also requires establishing of fault of the service provider when it does not conform to a quality of service standard laid down by TRAI, would amount to interference with the licence conditions of the service providers without authority of law.
Court observed that service providers are alone to blame and are deficient in service when it comes to call drops is not a conclusion which a reasonable person can reasonably arrive at. The finding that a transparent process was followed by TRAI in making the Impugned Regulation is only partly correct. Indeed, in all aspects assuming a deficiency of service provider, is plainly incorrect.
The High Court is flawed for several reasons. The judgement has entirely missed the fact that the causes for call drops are many and are often beyond the control of service providers and attributable to the consumers themselves. The judgement is also incorrect when it says that 100% performance is not demanded from service providers when call drops are made. Judgement is at flawed when stating that the impugned Regulation has attempted to balance the interest of service providers by limiting call drops to be compensated to only three and by limiting compensation to only the calling and not the receiving consumer. Also, the High Court did not advert to a large number of other submissions made by the appellants before them and/or answer them correctly in law. As therefore the judgement of the High Court is ultra vires the TRAI Act and violative of appellant’s fundamental rights under Article 14 and 19(1)(g) of the constitution.