Bpl Mobile Cellular Limited Vs. Bharat Sanchar Nigam Limited - Court Judgment

Excerpt:
1. the petitioner is a company engaged in providing mobile cellular telephone service in the states of tamil nadu, kerala and maharashtra (except in chennai and mumbai metros). the dispute which is the subject matter of this petition has arisen out of the refusal by the respondent (which is a public sector company having telecom operations through out the length and breadth of the country) to pay interest to the petitioner for the delays in making payments of amounts due from the respondent, whereas it charges heavy interest from the petitioner for delays in making similar payments which the petitioner is required to make to the respondent by way of interconnect usage charges.2. it is pointed out in the petition that the petitioner and the respondent entered into an interconnect agreement on 25/10/2002 for each of the circles mentioned above and it was provided therein that the petitioner would pay to the respondent the access charges for all calls originating in the petitioners network and terminating in the respondents network. these agreements are stated to be on the basis of the telecommunication interconnection (charges and revenue sharing) regulation 2001 notified by telecom regulatory authority of india (trai) on 14/12/2001. as per the requirements of the said regulation, the interconnect agreement provided for payment only by the petitioner to the respondent and did not provide for any payments to be made by the respondent to the petitioner for the calls of the respondent terminated in the petitioners network. in the said interconnect agreement, clause 7.5 has been included according to which the petitioner is required to pay penal interest at rates stipulated in that clause if the amount due is not paid within 15 days. it is also stipulated in the said agreement that the respondent could revoke the bank guarantee furnished by the petitioner in case the amount due is not paid to the respondent. it is further pointed out in the petition that on 24/01/2003, trai issued another notification on interconnection usage charges and under this notification it was enjoined that both service providers i.e. cellular mobile telephone service as well as basic operators would be required to pay interconnection charges for terminating calls in each others network. it was a clear departure from the earlier trai notification of 2001 wherein payment only from the petitioner to the respondent for termination of calls in the respondents network was envisaged and the respondent was not required to make payment for termination of calls to the petitioners network.according to the petitioner, after the trai notification of january 2003, an obligation automatically came into existence on both the parties to pay interest to other on a reciprocal basis for delays in making payments.2.1 the petitioner states that even after coming into force of the january 2003 notification the respondent started claiming interest on payments which had been delayed by the petitioner, at exorbitant penal interest ranging from 18 to 22 per cent per annum for the period of delay and in view of the fact that the respondent was also defaulting and delaying its counterpart payments to the petitioner, as were required to be made under the january 2003 notification, the petitioner also raised debit demand/notice against the respondent for interest at the same rates. the petitioner has given some details in regard to the amount of interest claimed by it from bsnl totaling rs.4,16,22,897/- and for the same circles the amount of interest claimed by bsnl against the petitioner totalling to rs.4,11,62,936/- indicating a requirement of a net sum of rs.4,59,961/- as payable by respondent to the petitioner. however, bsnl has not agreed to this arrangement and the petitioner was required to pay under protest rs.1,56,08,266/- to bsnl to avoid disconnection and encashment of bank guarantees due to the threat given to it in this regard by bsnl. according to the petitioner it is entitled to a payment of net sum of rs.4,59,961/- and refund of a sum of rs.1,56,08,266/- against this account which pertains to the kerala, tamil nadu and maharashtra circles.2.2 in the petition it is also mentioned that on 12/07/2002 trai had issued the telecommunication interconnection (reference interconnect offer) regulation 2002, wherein a certain format of the interconnect agreement called model interconnect agreement had been suggested by trai. in the said format of the model agreement between the service providers there was a provision of netting of each party's dues and both the parties were entitled to reciprocal charging of interest for delays in the making of the payments. although the respondent challenged certain clauses of the said model agreement before the tdsat in appeal no.11 of 2002 there was no challenge to the clause regarding netting of charges amongst the service providers nor there was any challenge to the stipulation that the payment of interest be made on reciprocal basis in case of delay in payments to each other. after the judgment of this tribunal in the above matter on 27/04/2005, it is pointed out, that the respondent posted a reference interconnection offer/agreement on its website on 25/07/2005 wherein the respondent again affirmed the clauses regarding netting of each parties dues as well as payment of interest on delay on reciprocal basis.2.3 it is pointed out that the cause of action in the present petition has arisen on 18/07/2005 when the respondent in response to a debit note issued by the petitioner against it for payment of interest wrote that the petitioner is not entitled to charge interest against it since there was no clause to this effect in the agreement dated 25/10/2002 between the two parties. it was also indicated in the said reply that the respondent would encash the bank guarantee submitted by the petitioner in case it did not make payments of the amounts due. a) to order the respondent to pay interest to the petitioner for all delayed payments of iuc bills issued by the petitioner as per iuc regulations from time to time at the same rate of interest as charged from the petitioner. (b) consequent to prayer (a) being granted, the respondent be directed to adjust the sum of rs.4,11,62,936/- from the sum to be paid by the respondent to the petitioner being rs.4,16,22897/- and the amounts thus remaining in excess (which is presently is rs.1,60,68,227/-) be directed to be refunded to the petitioner along with interest. (c) clause 7.5 of the interconnect agreement dated 25/10/2002 be set aside as null and void, inoperative and unenforceable. in terms of 2002 rio regulation and january 2003 iuc regulation. in the alternative this clause be made applicable reciprocatingly to the respondent also for making payment of interest to the petitioner at the same rate as charged from the petitioner. (e) to pass such other orders as this honble tribunal deems fit, proper and necessary in the circumstances of the case.4. in its reply bsnl has denied that it is arbitrarily charging interest from the petitioner for the delayed payments and has stated that the interest charged for the delay in payment is strictly as per the terms and conditions of the interconnect agreement. it has been further stated that bsnl in its reference interconnect offer published on 25/07/2005 has agreed on interest being payable to both the parties to the interconnect agreement on default in making payments in time. as per the judgment dated 27/4/2005 in appeal no.11 of 2002 it has been stated that the reference interconnect offer when published by the respondent would be applicable to future agreement only and the service providers would be given an option to migrate to the new rio regime by the bsnl. bsnl stated that the rio in accordance with the directions of this honble tribunal has been published on 25/7/2005. bsnl points out that it had offered to the service providers who had already signed interconnection agreements with bsnl the option to migrate to the rio regime with effect from 25/07/2005. however, the petitioner even though being aware of the publication of the rio on the bsnl website, during the period from 25/7/2005 until the filing of this petition on 24/10/2005 did not opt or came forward to migrate to the rio regime. in this view of the matter according to bsnl the petitioner is estopped from raising any grievance in regard to the terms and conditions being invoked of the earlier interconnection agreement between the parties.bsnl has further stated in its reply that the terms and conditions of the interconnection agreement already entered into are binding on the parties.it was further contended in its reply that under the unamended trai act 1997 and even with the amendment carried out in the year 2000 with effect from 24/1/2000, trai does not have any jurisdiction to pass any order, direction or regulation which has the effect of altering, modifying or superseding any term or condition of any licence or any term or condition of any existing arrangement/agreement between different service providers.in support of its contentions reliance has been placed upon the following judgments: 4.1 according to bsnl even after the coming into force of the 2003 iuc regulations, the parties continued to be governed by the terms and conditions of their interconnection agreements. none of the provisions of the 2003 regulations had provided that the respondent would be obliged to pay any interest. the petitioner would not be permitted, in law to pray to this honble tribunal to create liabilities for the respondent when no such liability actually exists as per the accepted and applicable terms and conditions of the interconnect agreement. the petitioner has not approached the respondent for any change in its existing interconnection agreement even after the respondent had published on the website its rio on 25/7/2005. the petitioner would therefore be prohibited to claim any benefit of interest for any period prior to 25/7/2005 and even for the period after 25/7/2005 in the absence of its seeking amendment of the existing interconnect agreement in the light of the rio published on 25/7/2005.4.2 in regard to the demands raised by bsnl and referred to in the petition, it is stated in the reply of bsnl that the demands raised by respondent are as per the contractual entitlement of the respondent under the interconnect agreement between the parties and accordingly the petitioner is liable to pay to bsnl the interest amount of rs.4,11,62,936/-. there is no corresponding liability on this account on the respondent as admittedly, there is no clause in the existing interconnect agreement between the parties which entitles the petitioner to claim any such interest from the respondent.4.3 according to the respondent the petition is thus devoid of any merit and deserves to be dismissed.5. during the arguments an important objection was raised by shri maninder singh, learned counsel for bsnl regarding maintainability of the petition. it was stated that the petitioner herein i.e. m/s bpl cellular ltd. was petitioner no.5 in petition no.48 of 2004 filed before the tdsat and which was decided on 11/11/2005. in the said petition the petitioners, including m/s bpl, had inter-alia raised the same issue of grievance regarding payment of interest. according to shri maninder singh the issue of interest had been specifically set out in prayers (g), (i) and (k) of the said petition. the tribunal after hearing the parties declined any refund to the petitioners. the issue of reciprocity in interest was raised in prayer (k) and on this the tribunal directed the petitioners and the respondent bsnl to enter into agreements for interest on delayed payments on reciprocal basis.according to bsnl this was to be done for the future. subsequently a review application namely no.3 of 2005 was filed by the petitioners in petition no.48 of 2004 which was rejected by the tribunal on 03/5/2006.also, bpl is an applicant in ma 26 of 2006 in petition no.48 of 2004 praying for the implementation of the judgment of 11/11/2005 which is pending before the tribunal. in prayer (d) of the said application it is prayed for execution of the agreements in terms of para 52 (c) of the said judgment for bringing about reciprocity in regard to payment of interest.according to shri maninder singh the principle of resjudicata gets attracted and he placed reliance on the following judgments of the honble supreme court:commissioner of endowment v. vittal rao (ii) aanaimuthu thevar (dead) by lrs. v. alagamai and ors. 6. dr. abhishek singhvi, learned counsel for the petitioner in reply stated that the present petition has been filed on the basis of a fresh cause of action which arose on 18/7/2005 when the respondent for the first time refused to pay interest to the petitioner for the delayed payment from the respondent to the petitioner by stating that there was no agreement between the two sides regarding payment of interest while on the other hand the interconnect agreement dated 25/10/2002 was having a clause which provided for payment of interest only by the petitioner to the respondent. the iuc bills issued by the petitioner to the respondent since may 2003, the date of implementation of the first iuc regulation dated 23/1/2003, provided for payment of interest for any delay in payment by the respondent beyond the due date. thus the present case was based on a specific distinct and a fresh cause of action which is in no way raised or covered in petition no.48 of 2004.6.1 he stated that petition no.48 of 2004 was filed by the petitioner along with the other cellular operators for claiming refunds from the respondent of amounts wrongly charged on account of mcu based billing system of respondent, higher carriage charges for calls terminating in the same ldca, adc wrongly charged for calls from cellular to wll(m) subscribers etc. along with this prayer for refund, the petitioner had claimed that the respondent ought to pay interest to the petitioner on amounts due at the same rate at which the respondent charges interest from the petitioner. thus, there is a difference in the basis, the issues, and the cause of action between the two proceedings.6.2 according to dr. singhvi, the basis of the prayer in the present petition is that the respondent while relying upon the interconnect agreement dated 25/10/2002 is charging interest against the petitioners but is not paying interest to the petitioner although under the changed circumstances both the parties are liable to make payment of interconnection charges to each other. the principles of equity and level playing field demand that for any delay in payment of the bills by one party due to any reason not attributable to the other party, the interest should be paid to the other party at the same rate at which it charges interest from the other party. on the other hand the prayer (k) in petition no.48 has an entirely different basis, namely, that the respondent is committing delays in making payments to the petitioner on the basis of its own circular regarding verification as mentioned in prayer (j) of the said petition. the prayer (k) on this basis prays that the respondent ought to pay the amounts withheld disregarding it own circulars referred to in prayer (j) along with the interest at the rate at which the respondent charges from the petitioner. in the present petition the claim is only regarding reciprocal payment of interest by the respondent to the petitioner on the amount due and is not seeking payment of any principal amount. thus, the petition being on a totally different cause of action as well as on different basis, cannot be said to be hit by res-judicata.6.3 also it was argued by dr singhvi that the judgment in petition no.48 of 2004 was passed only on 11/11/2005 which is much later than the filling of the present petition by the petitioner in october 2005.therefore, the principal of res-judicata is not at all applicable because the present petition is not subsequent to the decision in petition no.48 of 2004 section 11 of the code of civil procedure mandates that res-judicata is applicable only if the subsequent suit is between the same parties on the same issue and that a judgment has already been rendered by the court. in the present circumstances, this principle will not apply because the present petition is much before the passing of the judgment of this honble tribunal in petition no.48 of 2004. in the latter petition, apart from the petitioner, there were other parties also involved and no specific facts of any of the parties were discussed whereas in the present petition after the cause of action for filing the present petition has arisen in july 2005, the specific facts of the petitioner which resulted in a dispute between the petitioner and the respondent, have been presented and the matter therefore deserves to be adjudicated upon by this honble tribunal under section 14 of the trai act.6.4 further, dr singhvi argued that paragraph no. 52(c) regarding reciprocity in interest in the judgment dated 11/11/2005 in petition no. 48 of 2004 clearly holds that interest ought to be on reciprocal basis. nowhere does it hold that for the prior period the respondent need not pay interest to the petitioner. since the refunds have been disallowed in para 51 of the said judgment, the claim for interest on the said refunds has also been consequentially disallowed. in the present petition the petitioner is not claiming any refunds of either the principal amounts or the interest paid by the petitioner. it is only demanding interest on reciprocal basis for the delay in making payments by the respondent at the same rate at which the respondent has charged the petitioner for a similar default. as such, it was stated, that the argument of the respondent that paragraph no.52 (c) disallows interest to be paid for the prior period deserves to be rejected.7. for the sake of clarity we need to examine the points raised in the arguments more closely with reference to the judgment of 11/11/2005 in petition no.48 of 2004.7.1 it is factually true that m/s bpl mobile cellular ltd is petitioner no.5 in petition no.48 of 2004 decided by this tribunal on 11/11/2005.in the said petition the petitioners including m/s bpl mobile cellular had challenged certain acts/actions of bsnl and mtnl which are alleged to be violative of relevant regulations/directions/letters of trai and are stated to be discriminatory, arbitrary, unfair, unreasonable and against the established principles of equity, justice and good conscience and were also alleged to be in breach of the principle of reciprocity. these actions of the respondents no. 1 and 2 (bsnl and mtnl) were summarized in the said judgment as under: billing on per mcu basis in violation of trais iuc regulation dated 24/01/2003 and 29/10/2003 and also applying non-reciprocity in the billing methodology i.e. bsnl and mtnl are billing member operators on call-by-call basis while they pay to them on aggregate total seconds expressed in terms of minute basis. imposition of distance based carriage charge (re. 0.65 for 50 200 kms. re.0.90 for 200 500kms. and re.1.10 for over 500 kms instead of a uniform re.0.20) with effect from 01.02.2004 for intra circle intra ldca calls from cellular network to pstn handed over to bsnl at level ii tax. not refunding the excess amount of adc collected by bsnl on wll(m) calls. charging interest on delayed payments of iuc bills by member operators and non-payment of any interest on reciprocal basis for long delays in payment of bills by bsnl/mtnl to member operators. seeking irrelevant and unnecessary information and in absence thereof delaying payments by withholding the bills of the petitioners. the point at (e) above is the one relating to payment of interest which could be relatable to the subject matter of the present petition.7.2 the prayers made in petition no.48 of 2004 seek refunds/payments of the following types of amount together with interest at the rate at which bsnl charges interest from member operators as per their respective interconnect agreements calculated from the date of payment till the date of refund i.e. w.e.f. 1/5/2003. (i) all overcharged/levied amounts in excess on account of bsnl implementing and charging interconnection user charges on call by call mcu basis.such amounts as have been overcharged/levied in excess by bsnl on account of levy of the distance based carriage charges in case of intra-circle call from cellular network handed over to bsnl at the terminating ldca tax. the amount of the access deficit charge wrongly levied and collected by bsnl on cellular to wll(m) local, intra circle and inter circle calls for the period between 01/05/2002 to 31/01/2004. (iv) the amount of the access deficit charge levied and collected by bsnl on cellular to wll(m) local and intra circle calls for the period between 01/02/2004 till the date of refund. (v) the payment of all bills to member operators withheld on account of absence of the information mentioned in prayer (j). (prayer (j) is regarding supply of data/information with reference to collection of adc).7.3 it is true that in para 24 of the said judgment the argument put across in regard to interest was recorded as under: the next point of petitioners was on the issue of interest on delayed payments. mr vaidyanathan stated that on delayed payments bsnl is charging 24% interest from them whereas they pay no interest on dues to the petitioners and stated that this has to be on a reciprocal basis and on all outstanding amount bsnl should pay the same interest rate which they are charging from them 52(c) reciprocity in interest - the petitioners have pointed out that large amounts of bills are not paid in time by the respondent and when paid after considerable delay there is no payment of interest whereas an interest of 24% per annum compounded quarterly is charged from them on their dues. we direct that this should be on reciprocal basis. both parties are directed to enter into agreement regarding the rate of interest which will be applicable for both the parties on reciprocal basis 7.5 in regard to refunds the tribunal did not agree to the prayer for refunds except for the excess amounts collected by way of access deficit charges (adc).8. on going through the issues raised in petition no.48 of 2004, we find that the specific issue raised in the present petition of reciprocity in regard to payment of interest on delayed payments does seem to have been addressed in that petition. there is no doubt that the action of bsnl namely of charging interest on delayed payments of iuc bills by member operators and non-payment of any interest on reciprocal basis for long delays in payment of bills by bsnl/mtnl to member operators had been highlighted as an issue and there is also a a prayer seeking reciprocity in regard to interest on delayed payments.9. we find considerable merit in the argument of shri maninder singh, learned counsel for bsnl that under these circumstances the decision in petition no.48 of 2004 laying down that payment of interest should be on a reciprocal basis and the direction given to the petitioners and bsnl to enter into agreement regarding the rate of interest which will be applicable to both the parties on reciprocal basis should be made applicable to this case.we have taken into account the ruling of honble supreme court (1995) 6 supreme court cases 733 cited by dr. abhishek singhvi in which it was held that if a subsequent suit is based on a different cause of action, the rule of resjudicata will not operate as a bar. while it is true that the present petition has been filed at a point of time which is earlier to the date of the tdsat order of 11/11/2005 in petition no.48 of 2004, the petitioner having been party to the proceedings, the said petition would be bound by the said judgment and cannot expect a fresh deliberation of the same issue although presented before us in the context of certain factual details which tends to give it a colour of being a different cause of action. however in its essence the cause of action is the same and since the parties here had an opportunity to contest the issue in an earlier proceeding before this tribunal now cannot seek fresh deliberation on the same.9.1 we are also inclined to agree with the arguments advanced on behalf of bsnl that this reciprocity of interest is to be achieved with prospective effect. in the context of the judgment given by us in appeal no.11 of 2002 (bsnl v. trai), now known as the rio matter, bsnl has tried to conclude this from our observations in the said judgment that bsnl will provide opportunity to the service providers with whom interconnect agreements have already been entered into to migrate to the new regime which provides inter alia reciprocity in payment of interest. we however in the light of our order dated 11/11/2005 in petition no.48 of 2004 see no reason why the formality of migrating to a new rio based interconnect agreement should hold up implementation of reciprocity in regard to interest on delayed payments to either side.we do see merit in the argument of the petitioner that while bsnl wants to enjoy various advantages of the january 2003 iuc regime, many of which do not find mention in the interconnect agreement of 2002 between bsnl and the petitioner, it wants to rely on the agreement of 2002 for stating that the same does not stipulate payment of interest by bsnl on delayed payments of terminating charges. we accordingly hold on consideration of level play field and equity that it would be unfair if the principle of reciprocity is not adhered to from the date of our order dated 11/11/2005 in petition no.48 of 2003 and we hold that bsnl is liable to pay the same interest with effect from 11/11/2005 on delayed iuc charges as it seeks to impose on other operators for delayed payments to itself.10. we have while arriving at our conclusions taken into account the citations namely, (i) 1900 3 all e.r. ref p 20 23 wherein it is stressed that one needs to go into the substance of the contract and then to ask the question whether the substantial contract needs for its foundation the assumption of the existence of a particular state of things. this is in support of the argument that the contract of 2002 did not provide for payment of interest on delayed payments to the cellular operators by bsnl as termination charges were not payable by bsnl at that point of time. (ii) (1966) 1 scc 516 where inter alia it is stated that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation. (iii) (2006) 2 scc 540 in which jwala prasad sahani and ors. v. commisioner of income tax and ors. 175 itr 535 has been quoted to the effct: a citizen is entitled to payment of interest due to delay even if there is no statutory provision in this regard. (iv) 1966 supp scr 164 where the observations of lrd chemsford lc observed in blogg v. jhonson at page 228 have been quoted: where money is thus improperly retained it appears to me immaterial how the sum has arisen whether from a legacy, or a distributive share, or a residue or the arrears of income. in the latter case, the claim of interest is not made on account of the arrears, but for the improper keeping back of a sum of money, from whatever source derived, which the executor or trustee ought to have paid over.10.1 learned counsel for bsnl has in turn cited cases in support of his contention to the effect that courts could not modify or otherwise charge terms contained in a contract (union territory of pondicherry v.pv suresh ; that mere fact of a contractual term may be perceived to be not fully reasonable, would not render it void or unconscionable.(bihar state electricity board v. green rubber industries and ferro alloys corporation ltd. v. ap electricity board air 1993 sc 2995 wherein it is held that merely because english acts provide for interest it is not necessary that the same should be adopted in india as well.10.2 we have carefully gone through these citations. however in our view there is no need for us to cover this territory all over again as in petition no. 48 of 2004 we have covered this ground and have concluded that there should be reciprocity in payment of interest.10.3 in the light of the above, we give the following directions with reference to the prayers made in the petition: (i) we direct the respondent to pay with effect from 11/11/2005, interest to the petitioner for all delayed payments of iuc bills as per the iuc regulations at the same rate of interest as charged by the respondent from the petitioner for termination of calls in the respondents network. prayer (b) of the petition is disallowed as it would result in plethora of demands and litigations seeking reopening of old cases as many service providers have paid their dues including the interest amount for the delayed payments. we have by our order of 11/11/2005 in petition no.48 of 2004 accepted the argument of reciprocity of interest, and in line with our general approach in all such matters, we would not like old cases to be reopened as the benefit of refund/payments on this account will not be passed on to the consumers, nor can the tariffs which have taken into account all these payments be altered retrospectively. (iii) clause 7.5 of the interconnect agreement dated 25/10/2002 which stipulates the interest rates for delayed payments made to bsnl by the cellular operators for termination charges, should be read to allow for making payments of interest with effect from 11/11/2005 on a reciprocal basis at the same rate to the petitioner for delayed payments made by bsnl for the termination charges due to the petitioner.

Judgment:
1. The Petitioner is a company engaged in providing mobile cellular telephone service in the states of Tamil Nadu, Kerala and Maharashtra (except in Chennai and Mumbai Metros). The dispute which is the subject matter of this petition has arisen out of the refusal by the Respondent (which is a public sector company having telecom operations through out the length and breadth of the country) to pay interest to the Petitioner for the delays in making payments of amounts due from the Respondent, whereas it charges heavy interest from the Petitioner for delays in making similar payments which the Petitioner is required to make to the Respondent by way of Interconnect Usage Charges.

2. It is pointed out in the petition that the Petitioner and the Respondent entered into an Interconnect Agreement on 25/10/2002 for each of the circles mentioned above and it was provided therein that the Petitioner would pay to the Respondent the access charges for all calls originating in the petitioners network and terminating in the Respondents network. These agreements are stated to be on the basis of the Telecommunication Interconnection (Charges and Revenue Sharing) Regulation 2001 notified by Telecom Regulatory Authority of India (TRAI) on 14/12/2001. As per the requirements of the said regulation, the interconnect agreement provided for payment only by the Petitioner to the Respondent and did not provide for any payments to be made by the Respondent to the Petitioner for the calls of the Respondent terminated in the Petitioners network. In the said Interconnect Agreement, Clause 7.5 has been included according to which the Petitioner is required to pay penal interest at rates stipulated in that clause if the amount due is not paid within 15 days. It is also stipulated in the said agreement that the Respondent could revoke the Bank Guarantee furnished by the Petitioner in case the amount due is not paid to the Respondent. It is further pointed out in the petition that on 24/01/2003, TRAI issued another notification on Interconnection Usage Charges and under this notification it was enjoined that both service providers i.e. Cellular Mobile Telephone Service as well as Basic Operators would be required to pay interconnection charges for terminating calls in each others network. It was a clear departure from the earlier TRAI notification of 2001 wherein payment only from the Petitioner to the Respondent for termination of calls in the respondents network was envisaged and the Respondent was not required to make payment for termination of calls to the Petitioners network.

According to the Petitioner, after the TRAI Notification of January 2003, an obligation automatically came into existence on both the parties to pay interest to other on a reciprocal basis for delays in making payments.

2.1 The Petitioner states that even after coming into force of the January 2003 notification the Respondent started claiming interest on payments which had been delayed by the Petitioner, at exorbitant penal interest ranging from 18 to 22 per cent per annum for the period of delay and in view of the fact that the Respondent was also defaulting and delaying its counterpart payments to the Petitioner, as were required to be made under the January 2003 notification, the Petitioner also raised debit demand/notice against the respondent for interest at the same rates. The Petitioner has given some details in regard to the amount of interest claimed by it from BSNL totaling Rs.4,16,22,897/- and for the same circles the amount of interest claimed by BSNL against the Petitioner totalling to Rs.4,11,62,936/- indicating a requirement of a net sum of Rs.4,59,961/- as payable by Respondent to the Petitioner. However, BSNL has not agreed to this arrangement and the petitioner was required to pay under protest Rs.1,56,08,266/- to BSNL to avoid disconnection and encashment of Bank Guarantees due to the threat given to it in this regard by BSNL. According to the Petitioner it is entitled to a payment of net sum of Rs.4,59,961/- and refund of a sum of Rs.1,56,08,266/- against this account which pertains to the Kerala, Tamil Nadu and Maharashtra Circles.

2.2 In the petition it is also mentioned that on 12/07/2002 TRAI had issued the Telecommunication Interconnection (Reference Interconnect Offer) Regulation 2002, wherein a certain format of the Interconnect Agreement called Model Interconnect Agreement had been suggested by TRAI. In the said format of the model agreement between the service providers there was a provision of netting of each party's dues and both the parties were entitled to reciprocal charging of interest for delays in the making of the payments. Although the Respondent challenged certain clauses of the said Model Agreement before the TDSAT in Appeal No.11 of 2002 there was no challenge to the clause regarding netting of charges amongst the service providers nor there was any challenge to the stipulation that the payment of interest be made on reciprocal basis in case of delay in payments to each other. After the judgment of this Tribunal in the above matter on 27/04/2005, it is pointed out, that the Respondent posted a Reference Interconnection Offer/agreement on its website on 25/07/2005 wherein the Respondent again affirmed the clauses regarding netting of each parties dues as well as payment of interest on delay on reciprocal basis.

2.3 It is pointed out that the cause of action in the present petition has arisen on 18/07/2005 when the Respondent in response to a debit note issued by the Petitioner against it for payment of interest wrote that the Petitioner is not entitled to charge interest against it since there was no clause to this effect in the agreement dated 25/10/2002 between the two parties. It was also indicated in the said reply that the Respondent would encash the Bank Guarantee submitted by the petitioner in case it did not make payments of the amounts due.

a) To order the Respondent to pay interest to the Petitioner for all delayed payments of IUC Bills issued by the Petitioner as per IUC Regulations from time to time at the same rate of interest as charged from the Petitioner.

(b) Consequent to prayer (a) being granted, the Respondent be directed to adjust the sum of Rs.4,11,62,936/- from the sum to be paid by the Respondent to the Petitioner being Rs.4,16,22897/- and the amounts thus remaining in excess (which is presently is Rs.1,60,68,227/-) be directed to be refunded to the Petitioner along with interest.

(c) Clause 7.5 of the Interconnect Agreement dated 25/10/2002 be set aside as null and void, inoperative and unenforceable. In terms of 2002 RIO Regulation and January 2003 IUC Regulation. In the alternative this clause be made applicable reciprocatingly to the respondent also for making payment of interest to the Petitioner at the same rate as charged from the Petitioner.

(e) to pass such other orders as this Honble Tribunal deems fit, proper and necessary in the circumstances of the case.

4. In its reply BSNL has denied that it is arbitrarily charging interest from the petitioner for the delayed payments and has stated that the interest charged for the delay in payment is strictly as per the terms and conditions of the Interconnect agreement. It has been further stated that BSNL in its Reference Interconnect Offer published on 25/07/2005 has agreed on interest being payable to both the parties to the Interconnect agreement on default in making payments in time. As per the judgment dated 27/4/2005 in Appeal No.11 of 2002 it has been stated that the Reference Interconnect Offer when published by the Respondent would be applicable to future agreement only and the service providers would be given an option to migrate to the new RIO regime by the BSNL. BSNL stated that the RIO in accordance with the directions of this Honble Tribunal has been published on 25/7/2005. BSNL points out that it had offered to the service providers who had already signed interconnection agreements with BSNL the option to migrate to the RIO regime with effect from 25/07/2005. However, the petitioner even though being aware of the publication of the RIO on the BSNL website, during the period from 25/7/2005 until the filing of this petition on 24/10/2005 did not opt or came forward to migrate to the RIO regime. In this view of the matter according to BSNL the petitioner is estopped from raising any grievance in regard to the terms and conditions being invoked of the earlier interconnection agreement between the parties.

BSNL has further stated in its reply that the terms and conditions of the interconnection agreement already entered into are binding on the parties.

It was further contended in its reply that under the unamended TRAI Act 1997 and even with the amendment carried out in the year 2000 with effect from 24/1/2000, TRAI does not have any jurisdiction to pass any order, direction or regulation which has the effect of altering, modifying or superseding any term or condition of any licence or any term or condition of any existing arrangement/agreement between different service providers.

In support of its contentions reliance has been placed upon the following judgments: 4.1 According to BSNL even after the coming into force of the 2003 IUC Regulations, the parties continued to be governed by the terms and conditions of their interconnection agreements. None of the provisions of the 2003 Regulations had provided that the Respondent would be obliged to pay any interest. The petitioner would not be permitted, in law to pray to this Honble Tribunal to create liabilities for the Respondent when no such liability actually exists as per the accepted and applicable terms and conditions of the Interconnect Agreement. The Petitioner has not approached the Respondent for any change in its existing interconnection agreement even after the Respondent had published on the website its RIO on 25/7/2005. The Petitioner would therefore be prohibited to claim any benefit of interest for any period prior to 25/7/2005 and even for the period after 25/7/2005 in the absence of its seeking amendment of the existing interconnect agreement in the light of the RIO published on 25/7/2005.

4.2 In regard to the demands raised by BSNL and referred to in the petition, it is stated in the reply of BSNL that the demands raised by Respondent are as per the contractual entitlement of the Respondent under the Interconnect Agreement between the parties and accordingly the Petitioner is liable to pay to BSNL the interest amount of Rs.4,11,62,936/-. There is no corresponding liability on this account on the Respondent as admittedly, there is no clause in the existing Interconnect Agreement between the parties which entitles the petitioner to claim any such interest from the Respondent.

4.3 According to the Respondent the petition is thus devoid of any merit and deserves to be dismissed.

5. During the arguments an important objection was raised by Shri Maninder Singh, learned Counsel for BSNL regarding maintainability of the petition. It was stated that the Petitioner herein i.e. M/s BPL Cellular Ltd. was Petitioner No.5 in petition No.48 of 2004 filed before the TDSAT and which was decided on 11/11/2005. In the said petition the Petitioners, including M/s BPL, had inter-alia raised the same issue of grievance regarding payment of interest. According to Shri Maninder Singh the issue of interest had been specifically set out in prayers (g), (i) and (k) of the said petition. The Tribunal after hearing the parties declined any refund to the petitioners. The issue of reciprocity in interest was raised in prayer (k) and on this the Tribunal directed the petitioners and the respondent BSNL to enter into agreements for interest on delayed payments on reciprocal basis.

According to BSNL this was to be done for the future. Subsequently a review application namely No.3 of 2005 was filed by the Petitioners in Petition No.48 of 2004 which was rejected by the Tribunal on 03/5/2006.

Also, BPL is an applicant in MA 26 of 2006 in Petition No.48 of 2004 praying for the implementation of the judgment of 11/11/2005 which is pending before the Tribunal. In prayer (d) of the said application it is prayed for execution of the agreements in terms of para 52 (c) of the said judgment for bringing about reciprocity in regard to payment of interest.

According to Shri Maninder Singh the principle of resjudicata gets attracted and he placed reliance on the following judgments of the Honble Supreme Court:Commissioner of Endowment v. Vittal Rao (ii) Aanaimuthu Thevar (dead) by Lrs. v. Alagamai and Ors.

6. Dr. Abhishek Singhvi, learned Counsel for the petitioner in reply stated that the present petition has been filed on the basis of a fresh cause of action which arose on 18/7/2005 when the Respondent for the first time refused to pay interest to the Petitioner for the delayed payment from the Respondent to the Petitioner by stating that there was no agreement between the two sides regarding payment of interest while on the other hand the interconnect Agreement dated 25/10/2002 was having a clause which provided for payment of interest only by the Petitioner to the Respondent. The IUC Bills issued by the Petitioner to the Respondent since May 2003, the date of implementation of the first IUC Regulation dated 23/1/2003, provided for payment of interest for any delay in payment by the Respondent beyond the due date. Thus the present case was based on a specific distinct and a fresh cause of action which is in no way raised or covered in Petition No.48 of 2004.

6.1 He stated that Petition No.48 of 2004 was filed by the Petitioner along with the other Cellular Operators for claiming refunds from the Respondent of amounts wrongly charged on account of MCU based billing system of Respondent, higher carriage charges for calls terminating in the same LDCA, ADC wrongly charged for calls from Cellular to WLL(M) subscribers etc. Along with this prayer for refund, the Petitioner had claimed that the Respondent ought to pay interest to the Petitioner on amounts due at the same rate at which the Respondent charges interest from the Petitioner. Thus, there is a difference in the basis, the issues, and the cause of action between the two proceedings.

6.2 According to Dr. Singhvi, the basis of the prayer in the present petition is that the Respondent while relying upon the Interconnect Agreement dated 25/10/2002 is charging interest against the petitioners but is not paying interest to the petitioner although under the changed circumstances both the parties are liable to make payment of Interconnection charges to each other. The principles of equity and level playing field demand that for any delay in payment of the bills by one party due to any reason not attributable to the other party, the interest should be paid to the other party at the same rate at which it charges interest from the other party. On the other hand the prayer (k) in Petition No.48 has an entirely different basis, namely, that the Respondent is committing delays in making payments to the Petitioner on the basis of its own circular regarding verification as mentioned in prayer (j) of the said petition. The prayer (k) on this basis prays that the Respondent ought to pay the amounts withheld disregarding it own circulars referred to in prayer (j) along with the interest at the rate at which the Respondent charges from the Petitioner. In the present petition the claim is only regarding reciprocal payment of interest by the Respondent to the Petitioner on the amount due and is not seeking payment of any principal amount. Thus, the Petition being on a totally different cause of action as well as on different basis, cannot be said to be hit by res-judicata.

6.3 Also it was argued by Dr Singhvi that the judgment in Petition No.48 of 2004 was passed only on 11/11/2005 which is much later than the filling of the present Petition by the Petitioner in October 2005.

Therefore, the principal of res-judicata is not at all applicable because the present petition is not subsequent to the decision in Petition No.48 of 2004 Section 11 of the Code of Civil Procedure mandates that res-judicata is applicable only if the subsequent suit is between the same parties on the same issue and that a judgment has already been rendered by the Court. In the present circumstances, this principle will not apply because the present Petition is much before the passing of the Judgment of this Honble Tribunal in Petition No.48 of 2004. In the latter Petition, apart from the petitioner, there were other parties also involved and no specific facts of any of the parties were discussed whereas in the present Petition after the cause of action for filing the present petition has arisen in July 2005, the specific facts of the Petitioner which resulted in a dispute between the Petitioner and the Respondent, have been presented and the matter therefore deserves to be adjudicated upon by this Honble Tribunal under Section 14 of the TRAI Act.

6.4 Further, Dr Singhvi argued that paragraph No. 52(c) regarding reciprocity in interest in the judgment dated 11/11/2005 in Petition No. 48 of 2004 clearly holds that interest ought to be on reciprocal basis. Nowhere does it hold that for the prior period the Respondent need not pay interest to the Petitioner. Since the refunds have been disallowed in Para 51 of the said judgment, the claim for interest on the said refunds has also been consequentially disallowed. In the present Petition the Petitioner is not claiming any refunds of either the principal amounts or the interest paid by the Petitioner. It is only demanding interest on reciprocal basis for the delay in making payments by the Respondent at the same rate at which the Respondent has charged the Petitioner for a similar default. As such, it was stated, that the argument of the Respondent that paragraph No.52 (c) disallows interest to be paid for the prior period deserves to be rejected.

7. For the sake of clarity we need to examine the points raised in the arguments more closely with reference to the judgment of 11/11/2005 in Petition No.48 of 2004.

7.1 It is factually true that M/s BPL Mobile Cellular Ltd is Petitioner No.5 in Petition No.48 of 2004 decided by this Tribunal on 11/11/2005.

In the said petition the petitioners including M/s BPL Mobile Cellular had challenged certain acts/actions of BSNL and MTNL which are alleged to be violative of relevant Regulations/Directions/Letters of TRAI and are stated to be discriminatory, arbitrary, unfair, unreasonable and against the established principles of equity, justice and good conscience and were also alleged to be in breach of the principle of reciprocity. These actions of the Respondents No. 1 and 2 (BSNL and MTNL) were summarized in the said judgment as under: Billing on per MCU basis in violation of TRAIs IUC Regulation dated 24/01/2003 and 29/10/2003 and also applying Non-Reciprocity in the billing methodology i.e. BSNL and MTNL are billing Member Operators on call-by-call basis while they pay to them on aggregate total seconds expressed in terms of minute basis.

Imposition of distance based carriage charge (Re. 0.65 for 50 200 kms. Re.0.90 for 200 500kms. and Re.1.10 for over 500 kms instead of a uniform Re.0.20) with effect from 01.02.2004 for Intra Circle Intra LDCA Calls from Cellular Network to PSTN handed over to BSNL at Level II TAX. Not refunding the excess amount of ADC collected by BSNL on WLL(M) calls.

Charging interest on delayed payments of IUC bills by Member Operators and non-payment of any interest on reciprocal basis for long delays in payment of bills by BSNL/MTNL to Member Operators.

Seeking irrelevant and unnecessary information and in absence thereof delaying payments by withholding the bills of the Petitioners.

The point at (e) above is the one relating to payment of interest which could be relatable to the subject matter of the present petition.

7.2 The prayers made in Petition No.48 of 2004 seek refunds/payments of the following types of amount together with interest at the rate at which BSNL charges interest from Member Operators as per their respective Interconnect Agreements calculated from the date of payment till the date of refund i.e. w.e.f. 1/5/2003.

(i) all overcharged/levied amounts in excess on account of BSNL implementing and charging Interconnection User Charges on call by call MCU basis.such amounts as have been overcharged/levied in excess by BSNL on account of levy of the distance based carriage charges in case of Intra-circle call from Cellular Network handed over to BSNL at the terminating LDCA TAX. the amount of the Access Deficit Charge wrongly levied and collected by BSNL on Cellular to WLL(M) local, intra circle and inter circle calls for the period between 01/05/2002 to 31/01/2004.

(iv) the amount of the Access Deficit Charge levied and collected by BSNL on Cellular to WLL(M) local and intra circle calls for the period between 01/02/2004 till the date of refund.

(v) the payment of all bills to Member Operators withheld on account of absence of the information mentioned in prayer (j).

(Prayer (j) is regarding supply of data/information with reference to collection of ADC).

7.3 It is true that in para 24 of the said judgment the argument put across in regard to interest was recorded as under: The next point of Petitioners was on the issue of interest on delayed payments. Mr Vaidyanathan stated that on delayed payments BSNL is charging 24% interest from them whereas they pay no interest on dues to the petitioners and stated that this has to be on a reciprocal basis and on all outstanding amount BSNL should pay the same interest rate which they are charging from them 52(c) Reciprocity in Interest - The petitioners have pointed out that large amounts of bills are not paid in time by the respondent and when paid after considerable delay there is no payment of interest whereas an interest of 24% per annum compounded quarterly is charged from them on their dues. We direct that this should be on reciprocal basis. Both parties are directed to enter into agreement regarding the rate of interest which will be applicable for both the parties on reciprocal basis 7.5 In regard to refunds the Tribunal did not agree to the prayer for refunds except for the excess amounts collected by way of Access Deficit Charges (ADC).

8. On going through the issues raised in Petition No.48 of 2004, we find that the specific issue raised in the present petition of reciprocity in regard to payment of interest on delayed payments does seem to have been addressed in that Petition. There is no doubt that the action of BSNL namely of charging interest on delayed payments of IUC bills by Member Operators and non-payment of any interest on reciprocal basis for long delays in payment of bills by BSNL/MTNL to Member Operators had been highlighted as an issue and there is also a a prayer seeking reciprocity in regard to interest on delayed payments.

9. We find considerable merit in the argument of Shri Maninder Singh, learned Counsel for BSNL that under these circumstances the decision in Petition No.48 of 2004 laying down that payment of interest should be on a reciprocal basis and the direction given to the petitioners and BSNL to enter into agreement regarding the rate of interest which will be applicable to both the parties on reciprocal basis should be made applicable to this case.

We have taken into account the ruling of Honble Supreme Court (1995) 6 Supreme Court cases 733 cited by Dr. Abhishek Singhvi in which it was held that If a subsequent suit is based on a different cause of action, the rule of resjudicata will not operate as a bar. While it is true that the present petition has been filed at a point of time which is earlier to the date of the TDSAT Order of 11/11/2005 in Petition No.48 of 2004, the Petitioner having been party to the proceedings, the said petition would be bound by the said judgment and cannot expect a fresh deliberation of the same issue although presented before us in the context of certain factual details which tends to give it a colour of being a different cause of action. However in its essence the cause of action is the same and since the parties here had an opportunity to contest the issue in an earlier proceeding before this Tribunal now cannot seek fresh deliberation on the same.

9.1 We are also inclined to agree with the arguments advanced on behalf of BSNL that this reciprocity of interest is to be achieved with prospective effect. In the context of the judgment given by us in Appeal No.11 of 2002 (BSNL v. TRAI), now known as the RIO matter, BSNL has tried to conclude this from our observations in the said judgment that BSNL will provide opportunity to the service providers with whom interconnect agreements have already been entered into to migrate to the new regime which provides inter alia reciprocity in payment of interest. We however in the light of our order dated 11/11/2005 in Petition No.48 of 2004 see no reason why the formality of migrating to a new RIO based interconnect agreement should hold up implementation of reciprocity in regard to interest on delayed payments to either side.

We do see merit in the argument of the petitioner that while BSNL wants to enjoy various advantages of the January 2003 IUC regime, many of which do not find mention in the interconnect agreement of 2002 between BSNL and the petitioner, it wants to rely on the agreement of 2002 for stating that the same does not stipulate payment of interest by BSNL on delayed payments of terminating charges. We accordingly hold on consideration of level play field and equity that it would be unfair if the principle of reciprocity is not adhered to from the date of our order dated 11/11/2005 in Petition No.48 of 2003 and we hold that BSNL is liable to pay the same interest with effect from 11/11/2005 on delayed IUC charges as it seeks to impose on other operators for delayed payments to itself.

10. We have while arriving at our conclusions taken into account the citations namely, (i) 1900 3 ALL E.R. Ref p 20 23 wherein it is stressed that one needs to go into the substance of the contract and then to ask the question whether the substantial contract needs for its foundation the assumption of the existence of a particular state of things.

This is in support of the argument that the Contract of 2002 did not provide for payment of interest on delayed payments to the Cellular Operators by BSNL as termination charges were not payable by BSNL at that point of time.

(ii) (1966) 1 SCC 516 where inter alia it is stated that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation.

(iii) (2006) 2 SCC 540 in which Jwala Prasad Sahani and Ors. v. Commisioner of Income Tax and Ors. 175 ITR 535 has been quoted to the effct: A citizen is entitled to payment of interest due to delay even if there is no statutory provision in this regard.

(iv) 1966 Supp SCR 164 where the observations of Lrd Chemsford LC observed in Blogg v. Jhonson at page 228 have been quoted: Where money is thus improperly retained it appears to me immaterial how the sum has arisen whether from a legacy, or a distributive share, or a residue or the arrears of income. In the latter case, the claim of interest is not made on account of the arrears, but for the improper keeping back of a sum of money, from whatever source derived, which the executor or trustee ought to have paid over.

10.1 Learned Counsel for BSNL has in turn cited cases in support of his contention to the effect that Courts could not modify or otherwise charge terms contained in a contract (Union Territory of Pondicherry v.PV Suresh ; that mere fact of a contractual term may be perceived to be not fully reasonable, would not render it void or unconscionable.(Bihar State Electricity Board v. Green Rubber Industries and Ferro Alloys Corporation Ltd. v. AP Electricity Board AIR 1993 SC 2995 wherein it is held that merely because English acts provide for interest it is not necessary that the same should be adopted in India as well.

10.2 We have carefully gone through these citations. However in our view there is no need for us to cover this territory all over again as in Petition No. 48 of 2004 we have covered this ground and have concluded that there should be reciprocity in payment of interest.

10.3 In the light of the above, we give the following directions with reference to the prayers made in the petition: (i) we direct the respondent to pay with effect from 11/11/2005, interest to the petitioner for all delayed payments of IUC bills as per the IUC Regulations at the same rate of interest as charged by the respondent from the petitioner for termination of calls in the respondents network. Prayer (b) of the petition is disallowed as it would result in plethora of demands and litigations seeking reopening of old cases as many service providers have paid their dues including the interest amount for the delayed payments. We have by our Order of 11/11/2005 in Petition No.48 of 2004 accepted the argument of reciprocity of interest, and in line with our general approach in all such matters, we would not like old cases to be reopened as the benefit of refund/payments on this account will not be passed on to the consumers, nor can the tariffs which have taken into account all these payments be altered retrospectively.

(iii) Clause 7.5 of the Interconnect Agreement dated 25/10/2002 which stipulates the interest rates for delayed payments made to BSNL by the Cellular Operators for termination charges, should be read to allow for making payments of interest with effect from 11/11/2005 on a reciprocal basis at the same rate to the petitioner for delayed payments made by BSNL for the termination charges due to the petitioner.