1. This is an Appeal filed by BPL Mobile Cellular Ltd. under Section 14A(2) and other applicable sections of the Telecom Regulatory Authority of India Act, 1997 against the order dated 23^rd December, 2002 passed by Telecom Regulatory Authority of India (TRAI) in case No.314-3/2002-TRAI (Eco.) pursuant to the directions of the Bombay High Court, Aurangabad Bench in Writ Petition No. 656 of 2002.
2. The facts of the case are as under. The Appellant Company, BPL Mobile Cellular Limited is licensed under the India Telegraph Act, 1885 to provide Cellular mobile services in the telecom circles of Maharashtra and Goa (excluding Mumbai), Tamil Nadu and Pondicherry (excluding Chennai) and Kerala. A Writ Petition was filed against the Appellant Company in the Aurangabad Bench of the Bombay High court by one Shri Sudhanshu who alleged that BPL Mobile Cellular Limited had advertised a particular tariff plan, inclusive of free incoming calls for a period of 1 year in widely circulated Maharashtra-based newspapers on 25^th July, 2001 and that after enlisting the subscribers, the Company suddenly withdrew the scheme 5 months later in November 2001. The Petitioner, Shri Sudhanshu, prayed that BPL Mobile Cellular Limited be directed to provide free incoming calls for the period originally advertised. The High Court called for a status report from Telecom Regulatory Authority of India in this respect which was submitted by Telecom Regulatory Authority of India on 30^th May 2002.
Subsequently, by orders dated 22^nd Sept. 2002 and 11^th October, 2002, the High Court directed Telecom Regulatory Authority of India to take appropriate proceedings in the matter after hearing parties concerned for the redressal of the grievance of the Petitioner, Shri Sudhanshu.
Acting in compliance to the said order the Telecom Regulatory Authority of India heard the concerned parties in December 2002 and passed the order dated 23^rd December, 2002 which has now been challenged before this Tribunal.
3. In its order dated 23^rd December, 2002 Telecom Regulatory Authority of India dealt with the following three issues: a) whether the premature withdrawal by the service provider was legally valid and in order; b) whether the premature withdrawal has adversely affected the interest of the subscribers and whether they are entitled to any compensation; and c) whether the reporting requirements as envisaged in Clause 7 under Section (iii) of the Telecommunication Tariff Order 1999 as amended from time to time was complied with.
The findings of Telecom Regulatory Authority of India on the above issues were as under: a) The premature withdrawal of the advertised tariff plan was without sufficient reason and not in accordance with the terms and conditions as contained in the subscription form of the service provider.
b) Since Telecom Regulatory Authority of India was not vested with any power to award compensation to consumers, the Petitioner and other subscribers should seek appropriate remedies as per law.
c) There was a definite violation of the provisions of the reporting requirements of Telecommunication Tariff Order, 1999 on the part of BPL Mobile Cellular Limited which does not make any distinction between regular tariff plans and promotional tariff plans.
4. Telecom Regulatory Authority of India accordingly filed a complaint before the Chief Metropolitan Magistrate at Bangalore under Section 29 and Section 34 of the Telecom Regulatory Authority of India Act, 1997 on 4^th February, 2003. This Tribunal, vide its Order dated 18^th February 2003 has stayed the impugned order till the Appeal is heard and disposed of finally.
5. During the hearings before the Tribunal the Appellant Company made the following submissions: a) What it had offered in July 2001 was basically a promotional offer limited to a particular period which itself was due to the fact that its competitor in the market had introduced an identical promotional offer of free incoming calls. It was clearly stipulated that after a period of 12 months, the customers would have to revert back to the standard tariff plan; b) The Appellant Company was compelled to reduce the period of free incoming calls due to circumstances beyond its control. The high usage of the incoming calls, coupled with extensive misuse by some of the subscribers resulted in heavy network congestion which led to frequent complaints from the customers. The Appellant also failed to obtain additional lines from Bharat Sanchar Nigam Limited (BSNL) to augment the network in spite of its best efforts. As a result the promotional offer had to be modified; c) The Subscribers Agreement, including the promotional offer, did have a specific clause which allowed the Appellant to make changes in its charges by giving a notice to the subscribers. In the instant case also the Appellant had issued such a notice to its subscribers informing them about the change and the optional plans; d) Telecom Regulatory Authority of India committed a jurisdictional error in entertaining the individual complaint of a customer as the subject matter of the complaint was in effect a contractual dispute between the Appellant and one individual customer which could be contested in a Consumer Forum; e) Actually some consumers had filed identical complaints in some Consumer Forums which in fact were the appropriate and competent authority to deal with such disputes. The Customer Forums at Lalgaon and Ahmednagar in Maharashtra dealt with two such complaints and dismissed them on the ground that the Appellant was within its rights under the terms and conditions of the contract to modify its schemes and that the Appellant had furnished sufficient reasons for modification of the scheme under the terms and conditions of the contract. No appeals came to be filed against these orders which have attained finality; f) Telecom Regulatory Authority of India was in error in coming to the conclusion that the Appellant had violated the provisions of the Reporting Requirements under Telecommunication Tariff Order, 1999.
The base tariff plan of the Appellant was duly reported to, and approved by, the Telecom Regulatory Authority of India. The promotional offer for a limited period was based on this approved base tariff plan and all the customers were to revert to the approved plan once the limited period was over. Telecom Regulatory Authority of India also failed to recognize that there was no mala fide in the action of the Appellant in reducing the period of the promotional offer which was due to circumstances beyond the control of the Appellant and that, in any event, the modifications were made after giving due notice and in terms of the subscription agreement.
g) Telecom Regulatory Authority of India was also in error in concluding that the alleged violation of the Reporting Requirement had to be dealt with under Section 29 read with Section 34 of the TRAI Act, 1997. Section 29 specifically lays down the penalty for contravention of directions of authority which can be taken cognizance of under Section 34. No direction under any provision of the Act was issued to the Appellant. Hence there was no question of any contravention of directions of Telecom Regulatory Authority of India, calling for action under Section 29 read with Section 34 of the Telecom Regulatory Authority of India Act.
6. In its response, Telecom Regulatory Authority of India, the Respondent has mostly laid emphasis on the fact that the Telecommunication Tariff Order (TTO), 1999 had laid down specifically in Clause 7 of the Order that all service providers would report all tariffs specified in the order and all subsequent changes. No distinction was made between standard tariffs approved and promotional offers and no exemption was made for promotional offers from Reporting Requirements. No service provider was to alter any tariff of any telecommunication service without complying with the reporting requirement. Therefore the Appellant had very definitely violated the reporting requirement laid down under TTO, 1999 while making the promotional offer and also while withdrawing the same prematurely.
It was further argued by the Respondent that the action initiated by it was in compliance with the order of High Court to take appropriate proceedings in the matter. Respondent gave hearing to all the parties before passing its order. It was further urged that even though no specific directions under Section 13 of the Telecom Regulatory Authority of India Act were issued to the Appellant, violation of which was punishable under Section 29 of the Act, the Respondent did issue a general direction under Section 13 read with Section 11(1)(b) of the Telecom Regulatory Authority of India Act, 1997 which dealt with the procedure to be followed in cases of non-compliance with provisions of the Orders, Regulations, Determinations and Directions of Telecom Regulatory Authority of India. It was pointed out that the Appellant had admitted that its promotional tariff plan was not reported to Telecom Regulatory Authority of India in terms of Telecommunication Tariff Order, 1999. hence there was sufficient cause for action under Section 29 read with Section 34 of the Act.
7. It was also urged by the learned Counsel of the Appellant before us that even if there was a technical violation of the Reporting Requirement under Telecommunication Tariff Order, 1999, issued under Section 11(2) of the Telecom Regulatory Authority of India Act, it was inadvertent and unintentional and could at best be dealt with under Section 20A of Indian Telegraph Act, 1885, and not under Section 29 of the Telecom Regulatory Authority of India Act. To this, response of the learned Counsel of the Respondent was that while the Indian Telegraph Act, 1885 deals with grant of licence to establish, maintain or work a telegraph and conditions attendant thereto, the power to regulate the telecommunication services is governed by the Telecom Regulatory Authority of India, Act, 1997 as may be seen in the recommendatory [Section 11(1)(a)], mandatory [Section 11(1)(b)] and the tariff fixation [Section 11(2)] functions of Telecom Regulatory Authority of India under the Telecom Regulatory Authority of India Act. It was therefore contended by the learned Counsel of the Respondent that a violation of the mandate of Telecom Regulatory Authority of India, could be taken cognizance of only under the Telecom Regulatory Authority of India Act and not under the Indian Telegraph Act, 1885. It was also pointed out by the learned Counsel of the Appellant that no action was taken against an y service provider, other than the Appellant, for violating the Reporting Requirement under Telecommunication Tariff Order, 1999 even though many of them had made identical promotional offers without reporting.
8. We have looked into the question as to whether there was a violation of the reporting requirement as laid down under telecommunication Tariff Order, 1999. There is no doubt that there was no forbearance clause in Telecommunication Tariff Order, 1999 under which promotional offers were not to be reported to Telecom Regulatory Authority of India. Therefore, there was a violation. However, the relevant points to be considered are : (a) whether this violation was actionable under Section 29 read with Section 34 of the Act; and (b) whether the general direction issued by Telecom Regulatory Authority of India on 7^th October, 2002 under Section 13 read with Section 11(1)(b) of the telecom Regulatory Authority of India Act, 1997 was applicable in the instant case, the violation of which was actionable under Section 29 read with Section 34 of the Act. It is relevant to note here the exact statutory provision in this respect.
Section 29 which lays down the penalty for contravention of directions of authority i.e. Telecom Regulatory Authority of India reads as under: If a person violates directions of the Authority, such person shall be punishable with fine which may extend to Rs. 1 lakh and in case of second or subsequent offence with fine which may extend to Rs. 2 lakh and in the case of continuing contravention with additional fine which may extend to Rs. 2 lakh for every day during which the default continues." Section 13 of the Act which deals with the Power of Telecom Regulatory Authority of India to issue directions reads as under: The Authority, may for the discharge of its functions under Sub-section (1) of Section 11, issue such directions from time to time to the service providers, as it may consider necessary.
[PROVIDED that no directions under Sub-section (4) of Section 12 or under this section shall be issued except on the matters specified in Clause (b) of Sub-section (1) of Section 11]".
"Section 12(4): The Authority shall have the power to issue such directions to service providers as it may consider necessary for proper functioning by service providers." It may be noted that the power to issue directions is not absolute; it is circumscribed to the extent indicated under Section 13 of the Act. Thus directions are to be restricted to matters specified only in Section 12(4) and Section 11(1)(b) of the Act. It is significant to note that the Telecommunication Tariff Order, 1999 was issued in exercise of powers under Section 11(2) of the Act and not under Section 11(1)(b) or Section 12(4) of the Act.
On the face of it therefore violation of the reporting requirement prescribed under Telecommunication Tariff Order, 1999 was not actionable under Section 29 read with Section 34 of the Act.
9. As regards the general direction issued by Telecom Regulatory Authority of India on 7^th October 2002 it is relevant to quote it in extenso. This reads as under: Sub: Direction under Section 13 Read with Section 11(1)(b) of the Telecom Regulatory Authority of India Act, 1997 as amended by TRAI (Amendment) Act, 2000.
WHEREAS there have been cases of non-compliance with the provisions of the license as well as with Authority's order/Regulations/Determinations/Directions and it has been found that even after such lapses having been pointed out, some service provides have not been prompt enough to take corrective actions.
2. AND WHERE it is considered necessary that in the interest of a healthy growth of telecom service sector, service providers be made duly accountable for their failure to conform to licensing and regulatory regimes in force, specially if such failures are repeated.
3. the Authority, therefore, in exercise of the power conferred upon it under Section 13 read with Section 11(1)(b) of the Telecom Regulatory Authority of India Act, 1997 as amended by TRAI (Amendment) Act, 2000, hereinafter called "TRAI Act", hereby directs that:- (i) comply with all Orders/Regulations/Directions/Determinations issued by the Authority from time to time.
(ii) Fulfill requirements regarding publications of tariffs, notifications and provisions of information as directed by the Authority through its orders/regulations/directions/determinations issued from time to time as per the provisions of TRAI Act (iii) Strictly adhere to and comply with the terms and conditions of their license(s).
B. The procedure as mentioned below shall be followed in case of a violation of any of the (i) In the first instance the delinquent service provider shall be asked to furnish as explanation.
(ii) If the explanation furnished by the service provider is not satisfactory, the Chief Executive Officer will be called upon to appear in person before the Authority and to explain his point of view.
(iii) In the event of non-appearance by the Chief Executive Officer an ex parte decision shall be taken by the Authority and strictures, if circumstance so warrant, shall be passed against the service provider.
(iv) If after hearing the Chief Executive Officer, the explanation furnished to the Authority is found unsatisfactory, strictures may be passed against the service provider.
(v) If a service provider persists in its acts of non-compliance with the Authority's orders/regulations/directions determinations and terms of his license, and three successive and separate strictures are passed against the service provider, the Authority may:- (a) initiate necessary actions for imposition of penalty in terms of Section 29 of the TRAI Act by filing a complaint before the Chief Metropolitan Magistrate or a Chief Judicial Magistrate of First Class, as the case may be, to take cognizance of the offence, and/or (b) send suitable recommendations to the Licensor for taking action under the terms of the License including cancellation of the License.
C. The Authority reserves his right, in cases of serious violations, to pursue one of the two options, or both, as specified in Clause B(v)(a)(b) above even in the event of a single violation.
We had an occasion to examine the legal validity of this directive in Appeal No. 13 of 2002 (BSNL v. TRAI) and Appeal No. 14 of 2002 (MTNL v. TRAI) respectively. Our decision was to quash this directive vide our Order dated 3rd March, 2003. Even if one assumes for the sake of argument that this directive was valid till it was quashed, one cannot get away from the fact that the cause for action in the instant case had arisen much before the directive issued on 10^th November, 2002. The Learned Counsel of the Respondent was also honest enough to concede that the Order impugned in the Appeal does not specifically indicate as to which direction of the Telecom Regulatory Authority of India has been violated, nor does this fact find any mention in the complaint filed in the Court of Chief Metropolitan Magistrate, Bangalore.
10. We have not gone into the question as to whether the alleged violation of the reporting requirement was an infringement of the licence agreement, actionable under the Indian Telegraph Act 1885 under which the licence was granted or under the Telecom Regulatory Authority of India, 1997 under which Telecom Regulatory Authority of India is mandated to notify the rates at which Telecommunication services are to be provided, as prima facie we are not convinced that there was any statutory direction which was violated by the Appellant. However, had the Telecommunication Tariff Order, 1999 been issued under Section 11(2) read with Section 12(4) of Telecom Regulatory Authority of India, 1997 the situation would have been different.
11. In the light of what we have discussed above, we find that even though there has been a violation of the reporting requirement under Telecommunication Tariff Order, 1999 the action taken by the Telecom Regulatory Authority of India in filing a compliant filed before the Chief Metropolitan Magistrate, Bangalore is not as per law. Telecom Regulatory Authority of India was also in obvious error in trying to adjudicate an issue which was already adjudicated by two separate consumer Forums and which had already reached a stage of finality. We also do not appreciate the urgency shown by Telecom Regulatory Authority of India in filing the criminal complaint when appeal against the impugned order had been filed before us within 30 days of that order. We accordingly quash and set aside the impugned order dated 23rd December, 2002 in case No. 314-3/2002-TRAI (Eco.) passed by Telecom Regulatory Authority of India. The Telecom Regulatory Authority of India would withdraw the complaint filed before the Chief Metropolitan Magistrate, Bangalore in pursuance of the impugned order as per the procedure prescribed. In fact the very basis of the maintainability of the complaint before the Chief Metropolitan Magistrate has been challenged before us; however when a Criminal Court is seized of the matter, it is not for us to say anything on that.