S.B. SINHA
INTRODUCTION
Validity of an order/determination passed/issued by Telecom Regulatory Authority of India (TRAI) vis-Ã -vis the Regulations framed by it is in question in this petition.
BACKGROUND FACTS
2. The first petitioner is an Association of Cellular Operators. Other petitioners were granted licences by the first respondent herein in terms of the provisions of Section 4 of the Indian Telegraph Act, 1885 (the1885 Act).
3. Indisputably, during the period in question namely 2001-2003, direct connectivity amongst the cellular operators was not permitted and calls used to be routed through the exchanges set up by the 1st respondent, which were succeeded by the respondent No.2, BSNL on its creation. For those calls, the operators used to collect a sum of Rs.1.20 from each of the subscribers for each call and pay the same to DoT/BSNL.
4. However, the operators were to incur some expenditures therefor i.e. namely for preparation and service of the bill, collection charges etc. Sometimes even bills were not paid by the subscribers, as a result whereof the same was required to be treated as bad debts.
REGULATIONS
5. The TRAI made Regulations known as Telecommunication Interconnection Charges and Revenue Sharing Regulations of 1999 (hereinafter called and referred to for the sake of brevity as the ‘1999 Regulations’).
Section IV of the said Regulations contained revenue sharing arrangements, providing for :-
“I. Any revenue sharing among interconnection seeker and interconnection provider shall take place out of the proceeds of the amount payable by the subscriber for obtaining the service which involves the usage of the network of the interconnection provider.
II. Unless specifically provided in the Schedules to this Regulation, the Authority forbears with respect to revenue sharing arrangements.
III. Where the Authority has, for the time being, forborne from specifying revenue sharing arrangements for any telecommunication service or part thereof, service providers shall mutually decide on such arrangements.”
6. Clause 6 of the said Regulations provide for a power of review in the following terms :-
“6. Review
i. The Authority may, from time to time, review and modify an interconnection charge and/or revenue sharing arrangements.
ii. The Authority may also at any time, on reference from any affected party, and for good and sufficient reasons, review and modify any interconnection charge or revenue sharing arrangements.”
7. The said regulations contain two schedules. The first schedule provided for interconnection charges; revenue sharing having been fixed for 0.48 paise per unit of major call for traffic delivered from its network to the network of the transit/terminating service providers at the point of interconnection of its further carriage from the points of interconnection for destination STD pulse set.
8. The aforementioned sum of Rs.0.48 paise represented 40% for the charges, which were otherwise leviable, namely Rs.1.28. It was meant for basic operators.
Schedule II appended to 1999 Regulations provided for interconnection charges and revenue sharing for cellular service, Clauses 3 and 4 whereof read as under :-
“(3). Local calls from cellular mobile to basic service subscriber
Payment to basic service provider at the rate of Rs.1.20 per metered call, with number of metered calls measured at the pulse rate applicable to a basic service local call.
(4) Domestic Long distance calls from cellular mobile to basic service subscriber
Payment to basic service provider at a rate applicable to domestic long distance calls. The charge shall be Rs.1.20 per metered call, with the number of metered calls measured at the pulse rate applicable to basic service long distance calls, with the chargeable distance equal to the distance of the call carried by the basic service provider for an equivalent STD from point of interconnection to destination.”
PROCEEDING BEFORE THE TRAI
9. The cellular operators raised a contention before the TRAI that it has been incurring expenses towards collection of the said charges and thus it should be granted some percentage of the amount collected by way of revenue sharing.
10. The TRAI examined the issue between the parties, said to be by way of a mediation process. It, by a letter dated 08.01.2001, stated :-
“As indicated in para 4 of the above referred letter (copy enclosed for ready reference), the Authority was to deliberate on the six major issues and issue appropriate determination. Accordingly, Authority’s determination on these issues is enclosed. All 18 issues identified during mediation process have been sorted out. It is, therefore, expected that an Interconnection Agreement between CMSPs and DOT (now BSNL) will now be signed at the earliest. With the issue of this determination, the mediation process initiated by TRAI for signing of an Interconnection Agreement comes to an end.”
11. The TRAI, in the aforementioned order, noticed the conditions of licence vis-Ã -vis the provisions of interconnection, the relevant portion whereof reads as under :-
“5.7 For calls originating from the fixed network to mobile, the mobile subscriber will be charged for the air time and DOT will not have to pay any access fee to the Cellular Operator. The air time charges will be collected by the Cellular Operator.”
12. Pursuant thereto, a direction was issued by the TRAI on or about 19.8.1998 to DoT and cellular operators to finalize and sign the interconnection agreement in accordance with the direction contained therein. In the said mediation proceedings, the parties thereto were also heard on the various interconnection issues which arose for discussions. It was noticed that the issues relating to interconnection between the two sides and the attempt on their part to resolve the differences had failed and the TRAI undertook the task of mediation between the parties about two years prior thereto and since then it had been endeavouring to get interconnect agreement(s) signed based on principles of ‘non-discrimination’ and ‘level playing field’.
13. The issues between the parties narrowed down to six. It was divided into two parts. The first part containing number/level of interconnection containing four issues under the said category, which are as under :-
“(a) Interconnection of MSC with the switching nodes of BSNL (S. No.1 of Annexure B)
(b) Network Interconnectivity between PLMN and PSTN (S.No.2 of Annexure B)
(c) Routing of Mobile originated calls (S.No.3 of Annexure B)
(d) Routing of Mobile terminated calls (S.No.4 of Annexure B)”
14. The remaining two issues were noticed in Section B, namely :
“B. Access Charges – Following two items are covered under this category :-
(a) Access charges as per TRAI (S. No.5 of Annexure B);
(b) Access charge related issue raised during presentation by COAI (S.No.6 of Annexure B)”
15. So far as the revenue sharing issue was concerned, having regard to the rival contentions raised by the parties thereto, vis-a-vis the 1999 Regulations, a question arose as to whether the prevailing system should be altered.
16. Upon noticing paragraph 33 of the Explanatory Memorandum appended to the said Regulations, the TRAI opined :-
“17. This should not, however, be taken to mean that the Authority is of the opinion that the present regime should continue even in a multi-operator environment in which a call will be transported over the facilities of three or more network operators. With the entry of another network provider, or in a multi-operator network, the Authority will have to address the issue of demarcating usage charge for origination, transit and termination. The May 1999 Regulation has mentioned these concepts in the definitions for “originating/transit/terminating service provider” and “usage charge”. In particular “usage charge” is defined as the charge by a service provider for carriage/delivery/collection of telecommunication messages in its network. In fact, the May 1999 Regulation has taken note of the fact that the prevailing system would have to be changed. Accordingly, in paragraph 29 of the Explanatory Memorandum to the Regulation, it is stated that :
“To begin with, it must be re-iterated that the revenue sharing arrangements specified in this Regulation are interim, and are not based on detailed cost analysis. Application of an access/carriage charge regime will provide more logically tenable usage charges. That requires a detailed assessment of the underlying costs. It would, moreover, imply major changes to the existing revenue sharing arrangements, and hence an analysis is required also of the revenue implications for service providers. This is so also for suggestions made by ABTO regarding revenue sharing principles. Till any access/carriage charge regime is implemented, a system of revenue sharing must be in place to give effect to the commercial relationships arising through interconnection.”
19. The Authority, however, recognizes that a change in the present arrangement may be required on account of the fact that cellular mobile service providers incur billing and correction costs and bad debt costs on the amount of revenues they collect from their subscribers and pass on to the basic service providers for carriage of calls on the fixed network of Basic Service Providers. Based on the experience of such costs normally incurred, the Authority determines that 5% of such pass through revenue, paid to the basic service providers maybe retained by the cellular service providers for such calls made by their subscribers.”
17. It now transpires that the Full Telecom Commission considered the said matter, which has been noticed by this Tribunal in its order dated 29.3.2004, to which we shall advert to a little later.
18. The TRAI, however, on or about 08.01.2001 made recommendations on the issue relating to limited mobility in the network provided by basic service providers, which also arose for its determination. On or about 25.01.2008, guidelines for issuance of licence for basic service had been issued.
The 2nd respondent started the process of implementation of the determination of the TRAI, as would appear from its general circular dated 12.02.2001. Whereas the respondent No.2 proceeded to implement the said determination in respect of the five issues, but the 6th one, namely the 5% retention by the cellular operators, was not implemented.
In this connection, we may notice the contention of BSNL, which is in the following terms :-
“It is further submitted that the amendment dated 25.9.2001 with respect to 5% revenue retention was as emphasized by the appellant was to be implemented in accordance with the TRAI determination dated 08.01.2001.”
STAND OF THE PARTIES
19. We may furthermore notice the reply filed by the DoT also, which is relevant in this behalf :-
“12 and 13. That these Paras basically relate to BSNL. Moreover, the Licensees are bound by TRAI Determination/Regulation and the terms and conditions of the Licence Agreement signed with them.
15 and 16. The contents of this Para are denied. There is no question of draft Amendment. The fact is that the amendments to the License Agreement was signed with various CMTS operators. The said amendment was in accordance with the determination of TRAI. The date of applicability of 5% pass through charge to be retained by CMTS operators was fixed as 25.1.1001 as this was the date of issue, announcement of guidelines for issuance of Licence for Basic services. This was however subject to the decision of TRAI. This fact regarding Basic Service Licence has also been admitted by the Petitioner himself in their letter dated 11.4.02.).”
20. The petitioner, in its rejoinder, annexed a directive issued by the TRAI, purported to be under Section 13 of the Act.
21. The respondent No.2 also in its reply stated :-
“20. That, the Authority’s determination on these six issues was issued on 8thJanuary, 2001 which inter-alia covered following substantive matters related to interconnection :-
i) Interconnection of MSC with the switching nodes of BSNL
ii) Network interconnectivity between PLMN and PSTN.
iii) Routing of Mobile originated calls.
iv) Routing of Mobile terminated calls.
v) Access charges
a) Access charges as per TRAI
b) Access charges related issues raised during presentation by COAI.
In the determination dated 08.01.2001, the item (v) above has been covered under two heads i.e. Revenue Sharing and Notional TAX.
21. That it is also respectfully submitted that one of the issues addressed by the TRAI in the determination dated 08.01.2001 was the sharing of revenue between the cellular and basic operators. Prior to the 08.01.2001 determination by TRAI the revenue generated/collected by Cellular Operators (Cellular Mobile Service Providers/CMSPs) on account of carriage of their calls on the fixed network of basic service providers was passed-on a 100% basis by the CMSPs to the concerned basic operator. In other words, the position prior to the TRAI determination dt. 08.01.2001 was that access charges for calls from mobile phones to fixed phones were to be collected by the CMSPs and the same to be passed on 100% (without any deduction) to the basic operators (Fixed Service Providers-FSPs).
22. However, one of the concessions granted to the CMSPs as per the Determination dated 08.01.2001 of TRAI was that they were authorized to retain 5% of this revenue generated from carriage of calls on the fixed network of basic service providers.
23. That pursuant to the issuance of the aforesaid determination dated 08.01.2001 by the TRAI, BSNL (on 12.02.2001) issued instructions to it’s field units to provide connectivity to the cellular service operators in accordance with TRAI’s determination on interconnect issues. The other required changes necessitated by the said determination were also initiated by BSNL.”
22. It was furthermore contended :-
“It is further submitted that the amendment dated 25.9.2001 with respect to 5% revenue retention was as emphasized by the appellant was to be implemented in accordance with the TRAI determination dated 08.01.2001.”
23. It is not in dispute that in fact, the DoT also caused amendment in the licence in the year 2002, but it was given a retrospective effect and retroactive operation with effect from 25.01.2001.
24. While purporting to implement the aforementioned determination of the TRAI dated 08.01.2001, the BSNL disconnected certain ‘Points of Interconnection which, however, was resented to by the TRAI directing it to restore the same, pursuant whereto, an appropriate order directing restoration of POIs was issued by BSNL on or about 02.03.2001.
25. It is not in dispute that COAI preferred an appeal before this Tribunal against the aforementioned determination, which was marked as Appeal No.2 of 2001. We may notice that an interim order was passed therein on or about 15.03.2001.
26. No stay, so far as grant of 5% retention of the charges by the cellular operators is concerned, was, however, granted in favour of the COAI. Admittedly said appeal being Appeal No. 2 of 2001 was eventually withdrawn on 13.8.2001.
It was contended that the Respondent No.2 still did not implement the determination of TRAI.
27. It is also not in controversy that the Union of India constituted a committee known as Group of Telecom and IT Convergence (GoT-IT), which in its report dated 27.4.2001 recommended while accepting the right of the cellular operators to retain 5% of the pass through revenue. The respondent No.2 issued a letter on or about 21.8.2001 addressed to all the Chief General Managers of Telecom Circles, stating :-
“This is further to our letters of even number dated 12th February, 2001 and 26th March, 2001. (Since the appeal challenging the correctness of the determination of TRAI dated 8th January, 2001 stands unconditionally withdrawn by COAI, the said determination has become final. Necessary steps are now required to be taken for enforcement of the said determination in toto as already communicated vide our earlier letter of even number dated 12th February, 2001.”
28. The first respondent by a letter dated 22.8.2001 addressed to the Secretary, DoT and Chairman of Telecom Commission, requested that determination made by the TRAI be made effective from 08.01.2001. We may, however, notice the clause amending the licence :
“(d) In respect of the calls generated from Cellular network to fixed service network, 5% will be retained by the cellular operator, in accordance with the decision by TRAI, out of the total charges collected by the cellular operators for the fixed leg of the call.”
29. A similar request was also made by the first petitioner in its letter dated 15.12.2001.
30. The TRAI, however, made a regulation after the WWL(M) operators were allowed to operate on full mobility known as Telecommunication Interconnection (Charges and Revenue Sharing) Regulations, 2001.
The said Regulations were made effective on and from 31.01.2002.
We may notice some provisions thereof :-
“4.(ii) Unless specifically provided in the Schedules to this Regulation, the Authority forbears with respect to revenue sharing arrangements.
(v)(a) The existing arrangements, if any, between the Interconnection seekers and Interconnection providers shall hold good until changed with the concurrence of the Authority, or by a regulatory determination.”
31. At that stage, the DoT informed the petitioner by a letter dated 13.6.2002 that 5% retention of the tariff shall be enforced only with effect from 31.01.2002. By a letter dated 02.9.2002 the first petitioner, however, wrote to the TRAI reiterating the pendency of the issue relating to the cellular operators’ eligibility to retain 5% of pass through revenue to cover debts and collection cost also with effect from 11.11.2002, stating as under :-
“d) CMSPs retention of 5% of pass through revenues to cover debts and collection costs with effect from January 08, 2001
The matter has been taken up with BSNL and we would advise you further shortly.”
32. BSNL also by its letter dated 09.10.2002 reiterated the said position, stating :-
“4.0 TRAI, therefore, issued Regulation and revised the revenue sharing arrangement vide the Telecommunication Interconnection (Charges and Revenue Sharing) Regulation, 2001 (5 of 2001) dated 14th December, 2001 to be made effective with effect from 31.01.2002. The Regulation covers arrangements among service providers for interconnection charges and revenue sharing, for Telecommunications Services, including wireless in local loop with limited mobility {WLL(M)}. This regulation specifies revenue sharing arrangements @ Rs.1.14 per MCU as access charges for calls originating in a Cellular Mobile Service Provider’s network and transmitted through or terminated in another service provider’s network. However, (v) (a) of section IV of this regulation dated 14.12.2001 provides that “the existing arrangements, if any, between the Interconnection seekers and Interconnection providers shall hold good until changed with the concurrence of the Authority, or by a regulatory determination”. Therefore, the existing arrangement of revenue sharing between BSNL and Cellular Operators, which was payment of access charges by cellular operator to BSNL @ Rs.1.20 per metered call, has now been changed to Rs.1.14 per metered call with effect from 01.02.2002 as per the provision of this regulation.
5.0 Without prejudice to the right and contention of BSNL with respect to the validity and correctness of the said regulation, instructions have been issued to the field units of BSNL on 26th February 2002 to charge @ Rs.1.14 per MCU with effect from 1st February, 2002 for all mobile calls registered at the POI provided by the BSNL as prescribed by the above said regulation of TRAI dated 14.12.2001.”
33. The first petitioner, however, by a letter dated 30.12.2002 contended as under :-
“We wish to respectfully submit that this matter of anomaly in local call access charge should not suffer any further delay for rectification. In fact, it needs to be corrected with retrospective effect from January 25, 2001 i.e. the date of the introduction of FSP guidelines featuring WLL (M).
The Authority is doubtless aware that the cellular industry is continuing to reel under heavy losses, accumulated losses over Rs.7700 crores as of March 31st, 2002 with there having been an addition of over Rs.800 crores during the 12 month ended 31.3.2002. This is the result of the imposed high cost structure of the industry and its inability to recover even the cost through the tariffs realized in the market place due to the extreme severity of competition featuring four cellular players and at least 3 WLL(M) players who are offering a competitive mobile service.
We would also respectfully submit that it is the regulatory regime regarding extent of competition, interconnection costs etc. which has prevented the cellular operators from recovering cost of service, let alone the wiping off of earlier accumulated losses.
It may be noted that the chief objective of the WLL(M) operators is clearly to churn cellular subscribers over to their service and, to this end, even exchange of GSM handset for CDMA is being offered. The existing anomaly in local call access charge is preventing a cellular operator from offering free incoming calls and, thus, we have the situation of regulatory favour to one class of operators to help them wean away customers of another class of operators, through the unfair advantages enjoyed by the former.
We ask the Authority to ensure justice and fair play by applying identical origination access charge and identical termination charge for cellular as well as WLL (M) calls.
Every day of delay in collecting the local call access regime is directly adding to the irretrievable damage to the industry and is inflicting tremendous losses on the cellular subscribers.
In conclusion, we reiterate that a glaring anomaly of this nature does not need to await any further deliberation as cellular consumers are being seriously disadvantaged since the last two years and continue to be disadvantaged on an ongoing basis as extensive WLL (M) rollouts are taking place. The damage to the industry is devastating – the Authority must take immediate measures to ensure parity between these two services.”
PROCEEDINGS BEFORE THE TRIBUNAL
34. At that stage, this petition was filed on or about 10.7.2003 praying inter-alia, for the following reliefs :
“(a) Direct the Respondents to implement the TRAI Determination dated 08.01.2001 allowing CMSPs to retain 5% of their pass through revenue paid to the Fixed Operators for calls made by Cellular Subscribers with effect from 08.01.2001;
(b) Direct the Fixed Service Operators to refund/adjust all the excess amounts received by them from the Cellular Operators towards the said 5% of CMSPs pass through revenues with effect from 08.01.2001 upto 31.1.2002 together with interest thereon computed at prime lending rate of State Bank of India from the date of over payment in each bill by the CMSPs to the FSPs until the actual date of refund/adjustment.”
35. D.P. Wadhwa, J., Chairperson of this Tribunal passed an order allowing this petition on 29.3.2004 upon taking into consideration the defence raised by the respondent herein. The learned Chairperson furthermore took into consideration the earlier decision passed by this Tribunal in Petition No.1 of 2001.
It was held :
“I am unable to appreciate any of the objections raised by BSNL to the case set up by the petitioners. When it is stated by BSNL that there were certain requirements to be met before 5% of pass through revenue could be allowed to CMSPs but BSNL did not specify what were those requirements which were required to be fulfilled by CMSPs and when those requirements at all were eliminated and how. As noted above, there were no interim order granted by this Tribunal in Appeal No.2/2001 filed by the petitioners which could prohibit the BSNL from complying with the Determination dated 8.1.2001/25.1.2001 from giving credit to the CMSPs of 5% pass through revenue through the network of BSNL. Telecommunication Interconnection (Charges and Revenue Sharing) Regulation, 2001 did not have the effect of superceding the Determination dated 8.1.2001. That Determination was a decision and was made by the TRAI in discharge of its function under the TRAI Act. There is nothing in the Interconnection Regulation to suggest that Determination dated 8.1.2001 of TRAI stood superceded. We have to give a commonsense and pragmatic interpretation to the Interconnection Regulations when Schedule-II talks of date of implementation by “31st January, 2002”. That could at best mean where the passed through revenue of which credit has so far not been given should be done by this date i.e. 31st January, 2002. Any other interpretation would question the very legality of the Determination dated 8.1.2001. It is unfortunate that TRAI failed to implement its own decision dated 8.1.2001 as if it was a non-est and this inaction on the part of the TRAI has caused undue inconvenience and expense to the petitioners. It is all the more unfortunate that DOT just toed the line of TRAI and failed to exercise its own independent judgment. Both TRAI and DOT were aware of the recommendations dated 8.1.2001 of the TRAI allowing limited mobility in WLL to Fix Service Providers from 8.1.2001 and that question was taken due note in the judgment of this Tribunal in Petition No.1/2001. The decision of the TRAI in WLL case while accepting the recommendations of allowing 5% of passed through revenue to CMSPs did not in term mention the date from which it was payable. But nobody was in doubt and particularly and certainly not the TRAI and DOT that it was 8.1.2001. Principle of sub silentio has no application and the decision cited are not of any relevance to the facts and circumstances of the present case. In the present petition Petitioners have sought implementation of the Determination/Decision of TRAI dated 8.1.2001/25.1.2001 and it was not necessary for them to separately challenge the letters of rejection of TRAI or DOT though the validity of which was questioned in the petition.
For all these reasons, these petitions are allowed with cost against BSNL. BSNL and MTNL are directed to implement the TRAI recommendations dated 8.1.2001 allowing the petitioners to retain the 5% of their passed through revenue paid to them for calls made by the petitioners w.e.f. 25.1.2001 and both BSNL and MTNL shall refund/adjust all the excess amounts received by them from the petitioners towards the 5% of their passed through revenues w.e.f. 25.1.2001 upto 31.1.2002. This amount shall carry interest @ 12% per annum from 1.2.2002 as BSNL and MTNL were allowed to make the payments due from 25.1.2001 by 31.1.2002. Counsel fee Rs.20,000/-.”
APPEAL BEFORE SUPREME COURT
36. The respondent No.2 preferred an appeal thereagainst before the Supreme Court of India.
37. By reason of an order dated 26.10.2010 passed in Civil Appeal No. 5546 of 2004 and Civil Appeal No. 6969 of 2004, the Apex Court directed :-
“Heard learned counsel appearing for the parties.
This Appeal has been filed against the order dated 29.03.2004 passed by the Telecom Disputes Settlement and Appellate Tribunal (for short ‘TDSAT’), New Delhi.
The facts of the case have been set out in the impugned order of the TDSAT and hence we are not repeating the same here.
On the facts of the case, it appears that the Regulation of 1999 was not brought to the notice of the TDSAT and we are of the opinion that it should have been brought to the notice of the TDSAT and should have been considered by TDSAT. Hence, we remand the matter to the TDSAT for a fresh consideration of the case in accordance with law;, preferably within a period of four months from the date of production of a copy of this Order.
We make it clear that we are not expressing any opinion on the merits of the case. The interim arrangement dated 06.12.2004 ordered by this Court shall continue to operate till the disposal of the case by the TDSAT.
The impugned order of the TDSAT is set aside without going into the merits of the case. The Appeal is allowed accordingly. No costs.
Civil Appeal No. 6969 of 2004
This case is also remanded to the TDSAT with the same observations and directions as made by us in CIVIL APPEAL No(s).5546 of 2004 above.
The Appeal is allowed accordingly. No costs.”
SUBMISSIONS
38. In the aforementioned factual backdrop of the matter, we have heard the learned counsel for the parties once again in great details.
39. Mr. Ramji Srinivasan, the learned Senior Counsel appearing on behalf of the petitioners, submitted :-
1. A determination made by the Regulator upon holding negotiation between the parties for effective implementation for interconnection, must be held to be binding on the parties thereto, particularly when the respondents themselves have implemented five out of six issues referred to it.
2. The 1999 Regulations referred to by the Supreme Court of India having been noticed by the TRAI in its determination dated 08.01.2001 and in any event, the said regulations having nothing to do with the revenue sharing arrangement for interconnection, the same was not relevant.
3. No order of stay having been passed by this Tribunal in Appeal No.2 of 2001, there was no bar for the respondent herein to implement the said order in toto.
4. The respondents herein being a ‘State’ and/or instrumentality of the ‘State’ could not have withheld from this Tribunal the information that the determination made by TRAI was accepted by the Full Telecom Commission of the Government of India and subsequently by the GoT-IT.
5. The DoT itself having in its reply accepted the fact that the order passed by the Regulator is binding on all concerned, it is now idle to contend that the effective date for implementation of the said order should be 31.01.2002 and not 08.01.2001 or 25.01.2001.
6. The respondent No.2 having itself implemented five out of six issues considered by TRAI in its determination dated 08.01.2001 must be held to be estopped and precluded from contending otherwise, particularly when the said order of determination has never been questioned by them.
40. Mr. Maninder Singh, the learned senior counsel appearing on behalf of the Respondent No.2 (BSNL), on the other hand urged:
1. The 1999 regulations have a significant role to play for determination of the issue inasmuch as interconnection rates having been fixed thereby, the same could not have been modified and/or altered by reason of any settlement between the parties arrived at by mediation or otherwise.
2. Fixation of interconnection charges including ADC, being a statutory function of the regulator, only because an issue had been raised by the private operators in relation thereto, the same could not have formed the subject matter of any dispute leading to a determination by the TRAI.
3. The petitioners themselves having preferred an appeal against the 2001 Regulations and obtained an order of stay, cannot now be heard to stay that the second respondent or for that matter the first respondent also should have fully implemented the said purported determination.
4. Representations having been made by the petitioner to the TRAI to give effect to its purported determination from the date of issuance thereof and the said representations having remained pending and having ultimately been rejected both by the TRAI as also by DoT, this petition must be held to be not maintainable.
5. The regulator must be held to be conscious of the limitations of its jurisdiction in as much as had it been intending to implement its own determination, not only nothing prevented it from doing so, it was not necessary for it to consider the matter afresh in exercise of it’s statutory function as contained in Clause ‘b’ of Subsection 1 of Section 11 of the TRAI Act.
41. Mr. Ruchir Mishra, the learned counsel appearing on behalf of the Respondent No.1 submitted:-
1. That DoT was bound to implement the statutory order made by TRAI in terms whereof, the petitioners became entitled to retain the 5% of the revenue collected by it only from the date of coming in force of the 2001 order and not from any earlier date.
2. The Full Telecom Commission had merely made recommendations, which having not been accepted by the DoT, the same cannot be given effect to.
42. Mr. Drupad Das, the learned counsel appearing on behalf of MTNL adopted the submissions of Mr. Maninder Singh.
Mediation Issue
43. Indisputably, the TRAI is a regulatory body. It, before the amendment in the Act of 1997 in the year 2000, had three functions, one of them being adjudicatory one.
44. Upon amendment in the 1997 Act in the year 2000, the power of adjudication between the licensor and the licensee, between two service providers and between a service provider and a group of consumers vested in this Tribunal in terms of Sections 14 and 14-A of the Act.
45. The TRAI, therefore, invoked its powers to make recommendations to the Central Government in terms of Clause (a) Sub-section 1 of Section 11.
46. The TRAI in terms of Section 11 of the Act has the power :-
(i) to make recommendations to the Government of India in relation to the matters enumerated in Sub-Clause (a) of Sub-Section 1 of Section 11; and
(ii) to discharge the functions as enumerated in Clause (b) thereof, besides tariff making power in terms of Sub-section 2 of Section 11 and Regulation making power in terms of Section 36 thereof.
47. It, however, is now well settled in view of several decisions of the Supreme Court of India as also this Tribunal and in particular Bharat Sanchar Nigam Ltd. Vs. Telecom Regulatory Authority of India and Ors. (Appeal No.6 of 2006 and connected matters) that it has also not only a power but also a duty to monitor implementation of its regulations.
48. Indisputably, the TRAI has no statutory power of mediation. It can, for the purpose of making regulatory provision in regard to sharing of the revenue by the service providers for providing interconnection in telecommunication service as contained in sub clause (iv) of clause (b) of Sub Section 1 of Section 11 of the Act issue orders, but there cannot be any doubt or dispute that it is meant not to be through the process of mediation.
49. The fact that in absence of any amendment in relation to inter-connection agreement, as noticed heretobefore, a large number of issues were framed.
50. TRAI thought to mediate between the parties for facilitating the process of negotiation. The TRAI in its letter dated 8.7.2001 categorically stated that all the issues identified during mediation process have been sorted out. It did not issue any direction but expressed a hope and expectation that interconnection agreement would now be signed at the highest level.
Mr. Maninder Singh, therefore, may be correct in his submission that the so-called determination by the TRAI by taking recourse to mediation process for the purpose of facilitating the service providers to enter into an interconnection agreement, stricto sensu, was not and cannot be termed as exercise of power/jurisdiction under Section 11 of the Act.
We have, however, some doubt as to whether the Regulator understood the nature of its functions, which it had undertaken.
A mediator cannot determine an issue. It has no power to decide. It has to act as a facilitator. A mediator would be neutral person. It does not take side of any of the disputants. Mediator can also be assisted negotiation.
51. The TRAI did not say that the parties had agreed for a hybrid alternative disputes redressal mechanism known as MED-ARB or MEDOLA.
52. The TRAI also does not say that it has undertaken recourse to the process of conciliation within the meaning of the provisions of Part III of the Arbitration and Conciliation Act, 1996.
We have not been informed as to on what basis the parties had referred their disputes for mediation and/or what were the terms of their reference.
We, therefore, are of the opinion that by reason of its purported determination, the TRAI cannot be said to be exercising its jurisdiction under Section 11 (1) (b) of the Act. If that is not so, it was a matter of the parties to accept the same or not to do so.
Effect/consequence of the determination dated 08.01.2009
53. Immediately after the said determination was communicated, BSNL had sought to implement that part of the determination, which was favourable to it. It even took recourse to disconnection of some POIs of the cellular operators pursuant to and or furtherance of the said purported determination. In its circular letter dated 12.02.2001, the Respondent No.2 sought to supercede its earlier letter dated 19.01.1997 and issued the same purported to be in accordance with the TRAI’s determination on interconnection issue. Prior to issuance of the said determination dated 08.01.200 admittedly, it had made a Regulation in the year 1999 providing for interconnection charges to be 1.20 paise.
54. Mr. Maninder Singh is correct in his submission that when an authority exercises the statutory power, in terms whereof a law within the meaning of Article 13 of the Constitution of India is made, amendment thereto and/or modification thereto can be carried out only in exercise of the power in the said manner.
This has been so held by the Supreme Court of India in A. Manoharan and Others Versus Union of India and Others (2008 Vol. 3 SCC page 641). It is, therefore, not correct to contend that although in the 1999 regulations, the Regulator reserved unto itself a power to review the charges, it could have done so by taking recourse to a mediation process or determination as such.
55. Mr. Ramji Srinivasan has relied upon a large number of decisions of Supreme Court of India i.e. Union of India V. Tulsiram Patel (1985 3 SCC page 398), and (ii) P.K. Palanisamy V. N. Arumugham (2009 Vol. 9 SCC page 173), Baljinder Singh Vs. Rattan Singh (2008 16 SCC page 785), to contend that mentioning of a wrong provision would not invalidate the other, if otherwise the statutory authority had jurisdiction to do so.
But, if the statutory authority has exercised its jurisdiction not vested in it by statute, indisputably the said decisions must be held to have no application, the order having been passed without jurisdiction. In such a matter, even it may not be necessary for a party to question the correctness and/or legality thereof by way of judicial review or otherwise. An order passed without jurisdiction is a nullity. Such an order being void ab-initio must be held to be non-est in the eye of law. An order, which in law has never come into existence, can be subject matter of challenge in a collateral proceeding.
56. Our attention has been drawn to a decision of the Supreme Court of India in M.P. State Electricity Board Vs. Union of India and Others (2006 (10) SCC page 736), wherein the law has been laid down in the following terms :-
“36. It may or may not be legal but indisputably it was a provisional one. Although there does not exist any provision in sub-section (4) of Section 58 therefor, the Central Government in exercise of its statutory power was not denuded to pass a provisional order. Even under Section 14 of the General Clauses Act, a statutory authority may exercise his statutory power from time to time. Furthermore, on a plain reading of the provision of sub-section (4) of Section 58 vis-Ã -vis sub-section(3) thereof, it appears that any order passed by the Central Government directing a new Board or Corporation to take over from an existing Board or Corporation evidently would be a provisional power in the sense that the same would be subject to a final decision which may be taken by the Central Government in terms of sub-section (3) of Section 58 of the 2000 Act.”
57. The proposition of law laid down in the aforementioned judgment of the Supreme Court of India is unquestionable. But, the power to amend from time to time vested in the statutory authority, as indicated by the Supreme Court of India in Madras Port Trust (Supra) (2008 3 SCC page 641) must be exercised in the same manner. It is trite that a statutory authority must exercise its jurisdiction in the manner provided for under the statute or not at all.
58. We may notice that this Tribunal recently in Appeal Nos. 1 and 2 of 2010 and Petition No. 176 (C) and 179 (C) of 2010 ESPN Software India Pvt. Ltd. Vs. Telecom Regulatory Authority of India and Anr. decided on 16.12.2010 has clearly held that taking recourse to facilitation between the parties is not the statutory function of TRAI.
Consequence of the determination by TRAI dated 08.01.2001
59. The said order of determination ordinarily, therefore, should be accepted by the parties. It, however, appears to us to be clear, so far as the legal position is concerned, that a party cannot approbate and reprobate at the same time. It cannot seek to implement a part of an order passed by an authority, which is without jurisdiction, which is in its favour and refuse to implement the other part, which it does not like.
In its letter dated 12.02.2001, the Respondent No.2 while superceding its earlier circular letter dated 29.01.1997, evidently sought to implement the determination of TRAI as it used the words “in accordance with the TRAI’s determination on interconnection issues.”
60. We may notice that TRAI in its recommendations as regards limited mobility services through hand held sets in the access network by basic service providers, observed :
“20. To ensure fairer competition and at the same time to ensure services at affordable rates, the Group is of the view that the present revenue sharing arrangement between FSPs and long distance carriers on the one hand and CMSPs and long distance carriers on the other hand, should not be continued with those aspects of FSP services which have the advantage of limited mobility. Since WLL limited mobile subscriber can be said to have the benefit for some (but not all of the benefits and accrue to regular cellular subscribers, the sharing ratio for these two should be equalized. This means that the present ratio of 60:40 for WLL subscribers should be reduced to 5:95 in respect of, but only in respect of, those subscribers who use the facility of WLL with limited mobility through hand-held sets. It was clarified by DOT that it would not be difficult to identify such subscribers separately through the numbering system so as to ensure that accounts in respect of these subscribers are distinguished from other subscribers.
21. The Group recommends that if on this basis an arrangement could be arrived to the mutual satisfaction of both contending parties or otherwise be regulated or determined by TRAI, this would be seen to be fair, particularly since the cellular operators have been given similar revenue sharing with long distance carriers by the Regulator (TRAI) itself.”
61. Indisputably, whereas the ratio of 60:40 revenue sharing was between two service providers and regular cellular operator, basic service providers and WLL subscribers, which have limited mobility so far as the basic service providers and cellular operators are concerned, the same has been reduced to 5:95, which for all intent and purport is 5% of the amount collected by way of pass through charges. The Group made a recommendation on the said basis having regard to the fact that the cellular operators have been given similar revenue sharing with greater distance carriers by the Regulator.
62. It has been brought to our notice that in fact, the said matter was considered by the Full Telecom Commission (FTC).
63. This Tribunal in its order dated 29.3.2004 went through the records maintained by the DoT to observe that the recommendations of the TRAI was approved by the Full Telecom Commission. The said draft amendment in the licence was published on 25th September, 2001 by the Department of Telecommunication, Clause (d) whereof reads as under :-
“(d) In respect of the calls generated from Cellular network to fixed service network, 5% will be retained by the cellular operator, in accordance with the decision by TRAI, out of the total charges collected by the cellular operators for the fixed leg of the call.”
64. The petitioners in the rejoinder have annexed a copy of the agreement entered into by and between a service provider and the DoT wherein it was categorically stated that the Government of India in its order dated 11.4.2002 in the case of Vodafone, Essar Telecom Ltd. had executed an amended agreement on 25.9.2009, which reconfirmed that in respect of cost generated from cellular network to fixed service network, 5% will be retained by the cellular operators from the revenue collected by them.
If the DoT had not accepted the said determination by TRAI, there was absolutely no reason as to why it was felt necessary to make amendments in the conditions of licence. Certain amendments, as would appear from the Addendum, became applicable from 25.01.2001 i.e. from the date the draft was issued.
For the said purpose, we may notice clause (iii) of the letter dated 11.4.2002. It reads as under :-
“(iii) The terms contained in the following sub-paras (a) to (d) shall be applicable from 25.01.2001 which is the date of issue/ announcement of guidelines for issuance of license for Basic services, exclusive of any period during which existing or future Basic service operators may be prohibited to provide the use of hand held set with wireless access system in local area i.e. Short Distance Charging Area (SDCA), commonly known as ‘Limited Mobility’. For the period, thus excluded, during which existing or future Basic Service operators are prohibited Limited Mobility, other terms mentioned, hereinabove, shall be binding.”
65. The Respondent No.2, moreover, raised a contention that the said Regulation made by TRAI could not be given effect to as the petitioners had preferred an appeal and it has obtained an order of stay.
66. We have noticed that this Tribunal on 15.03.2001 did not pass any interim order. Moreover, for one reason or the other, with which we are not concerned, the petitioners withdrew the Appeal No.2 of 2001.
It would, therefore, be relevant to notice a circular letter issued by the Respondent No.2 itself on 21.8.2001, the subject matter whereof is as under :-
“Connectivity at the Point of Interconnection between cellular networks and BSNL/MTNL fixed network.”
67. It was stated :-
“This is further to our letters of even number dated 12th February, 2001 and 26th March, 2001. (Since the appeal challenging the correctness of the determination of TRAI dated 8th January, 2001 stands unconditionally withdrawn by COAI, the said determination has become final. Necessary steps are now required to be taken for enforcement of the said determination in toto as already communicated vide our earlier letter of even number dated 12th February, 2001.”
68. Mr. Maninder Singh would submit that the words “in toto” referred to in the said letter related to the subject matter and had nothing to do with the revenue sharing. We, having regard to the pleadings of the parties, with which we will deal with a little later, cannot agree therewith.
The said circular letter was issued by the Respondent No.2 in furtherance of its letters dated 12.02.2001, 16.3.2001 and 26.3.2001.
It has been noticed that the appeal preferred by the petitioners have been withdrawn unconditionally and, thus, the determination became final. What was sought to be enforced, was the determination in toto. There is absolutely no reason as to why a restricted meaning thereto should be given; particularly when, according to the respondent No.2, there was no bar in implementing the other parts of the order.
PLEADINGS
69. It is only in the aforementioned backdrop, we may notice the pleadings of the parties. DoT in para 5 of its reply categorically stated that the amendment to the last agreements had been carried out in accordance with the determination of TRAI. The amended Regulation of 2009 was considered by DoT to be a revised determination. The statements made in the other paragraphs of the said reply, contending that the said determination should be given effect to on and from 31.01.2002 were evidently based on the contentions raised by the TRAI and not on any other order. It could not have treated to be an independent opinion of the DoT.
70. BSNL also in its reply, for all intent and purport, stated that the TRAI decided to determine the five issues while dealing with substantial issues separately.
So far as the sixth issue is concerned, BSNL has to say as under :-
“Prior to the 08.01.2001 determination by TRAI the revenue generated/collected by Cellular Operators (Cellular Mobile Service Providers/CMSPs) on account of carriage of their calls on the fixed network of basic service providers was passed-on a 100% basis by the CMSPs to the concerned basic operator. In other words, the position prior to the TRAI determination dt. 08.01.2001 was that access charge for calls from mobile phones to fixed phones were to be collected by the CMSPs and the same to be passed on 100% (without any deduction) to the basic operators (Fixed Service Providers-FSPs).
71. It furthermore stated :
“22. However, one of the concessions granted to the CMSPs as per the Determination dated 08.01.2001 of TRAI was that they were authorized to retain 5% of this revenue generated from carriage of calls on the fixed network of basic service providers.”
72. In para 26 of its reply, BSNL stated that only because representation was made by the first petitioner herein, the determination of the TRAI could not be immediately implemented. It furthermore stated that one of the reasons for non-implementation of the said determination was an appeal preferred by the petitioners. The stand that the petitioner had filed a representation and, thus, the determination could not be implemented, has been reiterated in para 30 of the reply.
73. We may also notice paragraphs 33 and 34 of the reply, which are of some significance.
“33. That it is respectfully submitted that it is only after the withdrawal of the aforementioned appeals on 13.08.2001 that it became possible to initiate steps for the implementation of the determination dated 08.01.2001 of TRAI. After the said dismissal/ withdrawal, steps were initiated by BSNL or the implementation of said determination.
34. It is most respectfully submitted that BSNL has throughout agreed to abide by the TRAI determination dated 08.01.2001. After the dismissal of the appeal of the cellular operators which was challenging the TRAI determination dated 08.01.2001, the CMSPs were to enter into Interconnection Agreements with respondent No.2/BSNL.”
74. In para 40 of its reply, BSNL stated :
“40. That this position that its determination dated 08.01.2001 was implemented in all parts of the country only towards the closing months of the year 2001 was well within the knowledge of the TRAI. Therefore, when the TRAI issued the Telecommunication Interconnection (Charges and Revenue Sharing) Regulation, 2001 on 14.12.2001, it clearly prescribed in the said Regulation that the effective date for the implementation of the said Regulation, including 5% retention by CMSPs shall be 31.01.2002.“
75. It, in para 24 of its reply on merit, stated :-
“It is further submitted that the amendment dated 25.9.2001 with respect to 5% revenue retention was as emphasized by the appellant was to be implemented in accordance with the TRAI determination dated 08.01.2001.”
76. Further, in its reply as also in its circular letter referred to hereinbefore, the Respondent No.2 did not raise any contention that it was not agreeable to implement the said determination of TRAI. It may be true that TRAI in its subsequent letter being dated 10.4.2002 rejected the representation of the petitioners. The DoT also followed the decision of TRAI. It is also true that the petitioners have not specifically questioned the validity of the said orders. In our opinion, however, in the facts and circumstances of this case, it was not necessary to be done.
77. In this connection, it is necessary to be considered that BSNL submitted itself to the mediation process adopted by the TRAI. The TRAI had intervened only because the parties could not themselves agree with terms of the interconnection agreement for one reason or the other. The TRAI in its order dated 8.01.2001 as also the Regulations of December, 2001 rejected the contentions of the petitioner that the revenue share should be on 60:40 basis.
It, however, not only in its determination dated 08.01.2001 but also in its Regulations of 2001 accepted that keeping in view the fact that the cellular operators were required to incur administrative expenditure towards raising bills, collection of charges and writing down some of the amount etc., it was entitled to some reliefs.
78. If the said concession was granted keeping in view the hardship faced by the cellular operators and which was not only accepted by BSNL, but also by DoT in clear and express terms, there is absolutely no reason as to why the principle of Estoppel and/or Waiver shall not be held to be applicable in this case.
79. Ordinarily, a statutory order passed by a statutory authority without jurisdiction being a nullity need not be complied with, but there are certain exceptions to the said rule.
In this case, even according to the Respondent No.2, the process adopted by the TRAI was an alternative dispute resolution process. It was not an adjudicatory one. It was presumably on a voluntary basis. Both the parties must presumably requested the TRAI to mediate in regard to their disputes and differences.
By reason of the same, the Parliament’s intent, as reflected in the Amendment of 1997 Act in the year 2000 has not been sought to be nullified. When such an alternative disputes redressal mechanism is resorted to and a party not only submits itself to its jurisdiction without any demur whatsoever, but also seeks to implement a part of the determination immediately, which is in its favour and does not complain thereabout, in our opinion, should not be permitted to question the jurisdiction of this Tribunal at a later stage.
80. In D. Ranganayakulu Vs. Superintendent Engineer Nsrc OandM reported in (2010) 13 SCC 113, the Supreme Court observed :-
“In view of the notice issued by this Court limited to the question as to whether the parties participated before the arbitrator without any demur would have effect of waiver of the parties to raise an objection about the jurisdiction of the arbitrator is the sole question to be determined in these appeals. In this connection, Mr. L. Nageswara Rao has referred to a decision of this Court rendered in Sathyanarayana Brothers (P) Ltd. Vs. T.N. Water Supply and Drainage Board, (2004) 5 SCC 314. This Court in the said decision considered a similar question and pointed out in paragraph 9 as under:- "We find that the stage to have raised such an objection as to whether the dispute was liable to be decided by two arbitrators or a Board of three arbitrators had passed long before. The two arbitrators were appointed in accordance with the provisions of the arbitration clause as well as the third arbitrator called umpire. The mode of hearing was adopted in the manner that the dispute was heard by two arbitrators appointed by the respective parties. The matter was referred to the umpire since there was no agreement between the two arbitrators. There is no justification now at this stage to raise such an objection that the Board of three arbitrators should have decided the matter. Such a plea contradicts its own action, and it seems to be taken now to wriggle out of the award ultimately given by the umpire, but it would not be permissible at this stage. Shri Nageswara Rao, learned senior counsel, has placed reliance upon Russell on Arbitration -- "Loss of right to object". It states as under: "A party who objects to the award on the ground that the Tribunal lacks substantive jurisdiction, should not only act promptly, but should also take care not to lose his right to object. A party who takes part or continues to take part in the proceedings is in a different position from someone who takes no part in the proceedings. The latter cannot lose his right to object as long as he acts promptly to challenge the award once it is published. The former must, however, state his objection to the Tribunal's jurisdiction 'either forthwith or within such time as is allowed by the arbitration agreement or the Tribunal'. That statement, which should be recorded in writing and sent to the Tribunal and the other parties, should not only mention the jurisdiction objection but also make clear that any further participation in the arbitration will be without prejudice to the objection. If that is not done, the party concerned may not be able to raise that objection before the court 'unless he shows that, at the time he took part or continued to take part in the proceedings, he did not know or could not with reasonable diligence have discovered the grounds for the objection'. A person alleged to be a party to arbitral proceedings but who takes no part in those proceedings may at any time apply to the court for a declaration, an injunction or other relief concerning the validity of the arbitration agreement, the proper constitution of the Arbitral Tribunal and any matter submitted to arbitration in accordance with the arbitration agreement".
The same view was taken by this Court in the case of State Bank of India Vs. Ram Das and Anr., (2003) 12 SCC 474. There it was pointed out in paragraph 27 as under:-
"It was only after the High Court adversely commented upon the conduct of the arbitrator in the manner as noticed hereinbefore, that the appellant became wiser and for the first time this objection has been taken before us. It is an established view of law that where a party despite knowledge of the defect in the jurisdiction or bias or malice of an arbitrator participated in the proceedings without any kind of objection, by his conduct it disentitles itself from raising such a question in the subsequent proceedings. What we find is that the appellant despite numerous opportunities made available to it, although it was aware of the defect in the award of the umpire, at no stage made out any case of bias against the umpire. We, therefore, find that the appellant cannot be permitted to raise the question of bias for the first time before this Court."
Mr. Anoop Choudhary, learned senior counsel appearing for the respondents, however, referred to a decision of three-Judge Bench of this Court rendered in State of A.P. and Anr. Vs. Obulu Reddy, (2001) 10 SCC 30. We are of the view that the facts of that case is not applicable in the present case. In the case referred to by Mr. Anoop Choudhary, learned senior counsel, it clearly appears that the appointment of arbitrator was challenged in the High Court contending, inter alia, the jurisdiction of the arbitrator. As already pointed out, in the present case, the respondent did not challenge the order of the Court dated 30/04/1993 appointing Mr. Justice Punniah, retired Judge of the High Court as sole arbitrator. They participated in the entire proceedings before the arbitrator without any demur till the award was passed on 02/03/1995.
In the facts and circumstances as recited above, the respondents waived their rights to file an objection at the time when the award was made Rule of the Court. For the reasons afore-stated, these appeals are allowed and the order of the High Court is set aside. No order as to costs.
The said notice was reiterated by the Apex Court in J. Kodanda Rami Reddy v. State of A.P. and Ors. reported in (2011)1 SCC 197.
“4. We do not propose to examine the arguments advanced as we find on examination of the record that the appellant has come to this Court with unclean hands. As the facts mentioned above show that by the impugned award the arbitrators have worked out an adjustment of assets and liabilities of the firm and settlement of various disputes between the parties (including those relating to residential house) and in the process the arbitrators ordered Jagdish Prasad to hand over a portion of the house in his occupation to Laxmi Narain which was objected to by Om Prakash and Jagdish Prasad vide objection dated 21-6-1972 filed before the District Judge. Moreover, all throughout, the appellant has contended that the award of the arbitrators was valid except to the extent of clause 7 by which Jagdish Prasad was ordered to hand over possession of the portion of the house to Laxmi Narain. On 17-8-1972, pending decision on these objections by the civil court, Om Prakash, Jagdish Prasad and their mother sold the portion of the house covered by clause 7 to a third party for consideration. Therefore, the appellant before us seeks to eat the cake and have it too. He wants all the benefits but not the liability. The appellant has contended right up to this Court that the arbitrators had erred in directing Jagdish Prasad to hand over a portion of his house to Laxmi Narain. The award is based on distribution of assets, liabilities and properties of the parties. If we are to uphold the award it would lead to an iniquitous position because the portion of the house under the award which is to go to the heirs of Laxmi Narain, respondent herein has been disposed of by Jagdish Prasad and Om Prakash for consideration in which event the appellant herein would have the best of both worlds. Hence, we have refrained from going into the merits of the case as we are satisfied that the appellant has come to this Court with unclean hands.”
In Construction India v. Secy., Works Deptt., Govt. of Orissa, reported in (1998) 2 SCC 89, it was held that:
“12. The jurisdiction which is conferred on an arbitrator is on account of the consent of the parties to the arbitration agreement. Before the arbitrator, the objection as to jurisdiction of the arbitrator was withdrawn by the respondents. It shows acquiescence on the part of the respondents in the continued jurisdiction of the arbitrator to decide the dispute. The minutes recorded show that after raising the objection, the respondents have withdrawn the same. This would indicate a conscious acquiescence on the part of the respondents in the continued jurisdiction of the arbitrator. In the case of N. Chellappan v. Secy., Kerala SEB this Court on similar grounds held that the State Electricity Board was precluded from challenging the jurisdiction of the umpire. A passage from Russell on Arbitration, 17th Edn. at p. 215 was relied upon. It is to the following effect:
“If the parties to the reference either agree beforehand to the method of appointment, or afterwards acquiesce in the appointment made, with full knowledge of all the circumstances, they will be precluded from objecting to such appointment as invalidating subsequent proceedings. Attending and taking part in the proceedings with full knowledge of the relevant fact will amount to such acquiescence.”
It has also relied upon a decision of Privy Council in the case of Murtaza Hossein v. Bibi Bechunnissa.”
81. It is, moreover, trite that so far as the matter relating to submission of jurisdiction to an arbitrator is concerned, a person who does so, cannot avoid an award passed in an arbitration proceeding on the ground of lack of jurisdiction.
In Pooran Chand Nangia v. National Fertilizers Ltd., reported in (2003) 8 SCC 245 it was held that:
“3. So far as the first question is concerned, it is not disputed that the appellant had received the money which was due to him under the award and once the appellant had submitted to the award unequivocally and without reservation, it is not open to him to challenge the award. We have looked into the record and find that the appellant had submitted unequivocally to the jurisdiction of the arbitrator. He also accepted the awarded amount without any reservation. Had the appellant desired to challenge the award, he could have reserved his right to do so, but no such reservation was made in the letters sent by him. In this view of the matter, there remains no manner of doubt about the fact that the appellant had submitted to the award and it does not lie in the mouth of the appellant to challenge the award.”
82. Moreover, if BSNL is bound by the conditions of licence issued by the DoT in exercise of its statutory power conferred upon it under Section 4 of the 1865 Act, or otherwise bound by necessary implication it must be held to have accepted the determination of TRAI.
The principle of ‘Waiver’ and/or ‘acquiescence’ shall apply in the present case. Moreover, the respondent No.2 could not have objected to implementation of the determination of the TRAI in view of the stand taken by it and that too after withdrawal of the appeal by the petitioner.
83. In any event, the determination of TRAI, moreover, was not only approved by GoI-IT but also by the Full Telecom Commission.
84. We thought that the first respondent as a ‘State’ and the 2nd respondent as an instrumentality of the ‘State’, would bring the same to the notice of this Tribunal. Even otherwise a party to a lis, cannot suppress a document, which has a vital bearing on the subject matter thereof.
85. We, therefore, are of the opinion that keeping in view the conduct of the respondents, they are estopped and precluded from raising a contention that they have not implemented the order of the TRAI, although the same was implementable in law. But what should be the date from which it is required to be given effect to?
DoT says that the same should be 25.01.2001 and not 08.01.2001. As agreed to by Mr. Ramji Srinivasan, this may be so, but then we do not find any reason as to why such a contention raised in favour of the cellular operators should be made operative only from 31.01.2002.
86. For the reasons aforementioned, the petition is allowed in part and to the extent that the determination of TRAI shall take effect from 25.01.2001.
87. In the facts and circumstances of this case, there shall be no order as to costs.