TELECOM
DISPUTES SETTLEMENT & APPELLATE TRIBUNAL
DATED 13th
May, 2009
Appeal No.
1 of 2008
(M.A. No.
30 of 2008)
Tata
Teleservices Limited
10th
Floor, Tower1, Jeevan Bharti,
124,
And
Tata
Teleservices (
A,E &
F Blocks,
T.B. Kadam
Marg, Chinchpokli
Mumbai –
400 033 ……….. Petitioner
Versus
Telecom Regulatory Authority of
Mahanagar Door Sanchar Bhawan,
Jawahar Lal Nehru Marg,
(
BEFORE :
HON’BLE MR. JUSTICE ARUN KUMAR,
CHAIRPERSON
HON’BLE MR. G.D. GAIHA, MEMBER
|
For Petitioner |
: |
Mr. Ramji Srinivasan, Senior Advocate with Mr. Mohit Jolly,Advocate Ms. Vartika Sahay |
|
For Respondent |
: |
Mr. Saket Singh, Advocate. |
O R D E R
|
1. |
The present appeal has been filed
by the Appellant impugning the direction of Telecom Regulatory Authority of
India (hereinafter referred to as TRAI/Authority), purported to have been issued
on 18.1.2008 under Section 13 of TRAI Act, 1997 thereby directing
unconditional refund of Rs.1,73,37,535/- to the subscribers within 15 days
from the date of issue of such direction alleging that the said amount has
been recovered in excess. Appellants are
Telecom Operators licensed to operate telecom services, having specified jurisdiction
in the country and are inter-related. |
|
2. |
The respondent has alleged that
the appellants had in Feb, 2006 unilaterally and without just cause increased
the tariff payable by subscribers before the expiry of six months from the
date of enrolment of such subscribers in violation of the 31st
Amendment to the Telecommunication Tariff Order 2004 (hereinafter referred to
as TTO 2004) which prohibits any such alteration or change within the said
initial period of six months. |
|
3. |
The appellants’ case is that no
such change, as alleged was effected, but in fact it was following the
judgment of this Tribunal on 9th Sept, 2005 in Petition No. 45 of
2005 as well as the decision of the Department of Telecommunication dated 26th
Aug, 2005, reclassifying Fixed Wireless Telephones(FWT) as Limited Mobile Telephones and, therefore, the
appellants were forced to apply the correct and relevant applicable IUC
(Interconnection Usage Charges) inclusive of ADC (Access Deficit Charges hereinafter referred to as
ADC). As soon as the classification of
FWT as mobile phone came into force, it was incumbent upon the appellant to
ensure the correct classification from the said date to reflect not only the
payments made to other interconnecting operators but also in the tariffs
recovered from the subscribers, that included the elements of IUC and ADC. In fact by this action, the appellant has
pleaded that, it remained compliant with the applicable rules and
regulations. The appellant has further
pleaded that the impugned directions of 18th Jan, 2008 would
result in the appellant not following the then applicable tariff regulations
and IUC regulations as well as the judgment dated 9th Sept, 2005. The appellant also brought to our notice
that it had challenged the order and judgment dated 9th Sept, 2005
in the Hon’ble Supreme Court of India vide Civil Appeal No. 5850 of 2005
wherein an order dated 3.10.2005 has been passed restraining Bharat Sanchar
Nigam Limited (BSNL) from recovering any amounts pursuant to the said
judgment, upon deposit of a sum of Rs. 10 crore by the appellant. The appellant has also intimated to the
respondent, the changes as required by the applicable regulations after reclassification
of service as limited mobile, following which the respondent has taken
exception to these changes and called for explanation of the appellant. The appellant has explained to the
respondent that these changes with little implication on the subscriber, were
necessitated because of implementing the Regulation in accordance with the interpretation
placed there upon by the competent authority i.e. the Department of
Telecommunications vide its communication dated 26th Aug, 2005 as
also the judgment of this Tribunal dated 9th September 2005. As per this communication the Department of
Telecommunication has conclusively placed such services being provided by the
appellant to be treated, as limited mobile service, within the scope of the license. |
|
4. |
The appellant contended that the
respondent had issued the following directions to the first appellant on 2.2.2007: (a)
To furnish the details of the number of
subscribers affected by the increase in tariff. (b)
To furnish the total excess amount
charged from the subscribers; (c)
deposit the said amount in a separate
bank account; and (d)
Not to utilize the said amount. In spite of the fact that the matter
was already pending in appeal in Hon’ble Supreme Court and the judgment of
this Tribunal dated 9th September 2005 was not considered to be final and
binding on the appellant, the appellant decided to accept the decisions of
the competent authority i.e. the Department of Telecommunications without
prejudice to its rights and contentions and implemented the applicable IUC regulation (interconnect
usage charge regulation) and introduced appropriate changes to the tariff to
reflect the same. The appellant has also stated that with effect from 10th
March 2006 the interconnect usage charge regime changed altogether and the
methodology of collection of ADC changed from per minute basis to a simple
1.5% of the Adjusted Gross Revenue (AGR).
The appellant has further contended that the impugned demand raised by
BSNL from 14-11-2003 to 26-8-2005 shall also depend on the outcome of the
judgment of the Hon’ble Supreme Court to decide about the classification of
the service being provided by the
appellant as Fixed Wireless Telephones (FWT) or Wireless in Local Loop
(Limited Mobile Telephone). |
|
5. |
Appellant has stated that in
response to the alleged notice, it intimated to the respondent a total number
of 10,17,029 subscribers affected by increase in tariff and the corresponding
total alleged excess amount worked out to Rs. 1,73,37,535/-. Following
the directions dated 2nd Feb, 2007 of the respondent, the entire
excess amount realized from the subscriber was kept in a separate bank
account and the same was intimated to the respondent by appellant. The appellant stated that, since the
direction dated 2nd Feb, 2007, nothing was heard from the
respondent for about a year, and suddenly the respondent has issued another
direction namely the impugned direction dated 18.1.2008 calling upon the
appellant to now take urgent steps within 15 days, to unconditionally refund
the said amount of Rs. 1.73 crores to over 1 million subscribers. |
|
6. |
The issues which arise for
determination are as follows : (i)
Whether the classification of the
services as per the directions of the licensor resulting into the change of
the tariff is in contravention of the TTO? (ii)
Whether there is a provision in the TTO
to accommodate such changes which are to be implemented in classifying the
service according to its characteristics, which results into a change of
tariff? (iii)
Whether the implications of the
Interconnect Usage Charges Regulation dated 29th October, 2003
which envisages the payment of ADC after classification of the service in
WLL(M) category is possible to be met with without realizing the same by
changing the tariff as per the classification of the service? (iv)
Whether the directions issued by the
respondent are legitimate in the facts
and circumstances of this particular case. |
|
7. |
The learned counsel for appellant
has pleaded that no change, as alleged to have been done, is without a just
cause. He further argued that the
appellant was following a judgment of this Tribunal on 9.9.2005 in Petition
No. 45 of 2005 as well as decisions of the competent authority i.e. Deptt. Of
Telecommunication vide letter dated 26th Aug, 2005 reclassifying
FWT as Limited Mobile Phones, which in turn has forced them to apply correct
and relevant applicable IUC (Interconnect Usage Charges) inclusive of ADC as
stipulated by respondent itself. The
learned counsel pleaded that by taking this action the appellant remained
compliant with the applicable rules and regulations. The counsel argued that if the appellant
gives effect to impugned directions dated 18.1.2008, it would be found guilty
of not following the applicable Tariff Regulations and IUC Regulations as
well as the judgment dated 9.9.2005 of this Tribunal. It has also been pleaded by the learned
counsel of appellant that these changes in tariff were intimated to the
respondent, following which the respondent took exception to these changes
and, called for explanation of the appellant. |
|
8. |
The counsel for appellant has
pleaded that respondent should make
out a case of deliberate violation and should attribute intention to breach
the provisions of the Regulation in order to inflict penalty in any form
including, by way of extracting refunds to customers. The counsel further argued that
implementation of regulatory provisions and decisions of Licensor and/or
judgment of any court cannot amount to any voluntary breach of any
Regulations. The appellant has contended that neither can it amount to
attributing intent on the part of the appellant nor the breach of the
Regulations and, therefore, impugned Direction is totally unjustified and
cannot be sustained. |
|
9. |
The learned counsel for respondent has
argued that the appellant had reportedly and admittedly increased the charges
payable by its subscribers suddenly and without notice to its
subscribers. No protection has been
given for a period of six months from the date of enrolment to a tariff plan
as mandated by the 31st amendment to TTO, 2004. The subscribers of the appellant had been,
therefore, reportedly and admittedly made to pay higher charges in the form
of increase in tariff within the protection period of six months. |
|
10. |
The learned counsel for the
respondent further argued that the 31st amendment to TTO, 2004 seeks to protect the interests
of consumers from erratic and frequent changes by the service providers in
the tariff plans chosen by the consumer. The consumers are virtually taken
unaware of these changes and it creates uncertainty and avoidable
confusion. Being an individual, the
consumer may not be in a position to pursue his case or lodge a complaint
with service provider and would perforce succumb to the increased tariff plan
structure. The learned counsel for
respondent extended his argument by saying that the respondent is duty bound
under the Act to devise methods to protect the interest of the consumers
against profit making, commercial attitude of the service provider and the 31st
amendment to the TTO, 2004 is one such step in the desired direction. The protection to the consumer as per the
31st amendment to TTO, 2004 is absolute and unexceptionable. The learned counsel for respondent also
argued that the said amendment is clear, unambiguous and does not have any
bearing on the liability of the appellant to refund the excess amount charged
by the appellant from its subscribers.
Finally, the learned counsel for the respondent argued that the
Directions are lawful, in the interest of the consumers and need to be
implemented without further delay by making refunds to the consumers,
otherwise many of the consumers may become untraceable due to various
reasons. |
|
11. |
The main submission made by the counsel for respondent is that this Tribunal and the
Hon’ble Supreme Court of India have decided that walky phones are WLL(M) and
the clarifications issued by the respondent and the Department of
Telecommunication (Licensor) were clarificatory of the license and regulatory
provisions. It was further pleaded that the judgments held the clarifications
to be clarificatory in nature and the services to be WLL(M). It was also pleaded by the counsel for
respondent that there was no issue of change in tariff with respect to the
decision on the classification, however, if there is any increase, then in
what manner the same should be applied is the main issue. The counsel for respondent argued that
increase in tariff cannot be made ignoring the regulatory principles,
governing the increase in tariff, especially the 31st Amendment to
the TTO, notwithstanding the fact that such increase is a consequence of a
judgment. The following case law were
cited by the learned counsel for respondent in support of its contention: (a) Bombay Dyeing & Mfg. Co. Ltd. (3) v.
Bombay Environmental Action Group,(2006) 3 SCC 434, at page 536 para 312. A judgment, it is well settled, cannot be
read as statute. Construction of a
judgment, it is well settled, should be made in the light of the factual matrix
involved therein. Any observation made
in a judgment, it is trite, should not be read in isolation and out of
context. (b) Mehboob Dawood Shaikh v. State of
Maharashtra,(2004) 2 SCC 362, at page 369 para 12. A decision is available as a
precedent only if it decides a question of law. (c) Union of India v. Major Bahadur
Singh,(2006) 1 SCC 368, at page 373 para 9-11. The observations of the Court are neither
to be read as |
|
12. |
The learned counsel for respondent
argued that the content of the clarification issued by the respondent on 26th
Aug, 2005 only stipulates that Walky shall be treated as a limited mobile
service; it does not, by itself, authorize the service provider, including
the appellant, to raise tariff
ignoring the provisions of the
TTO. The respondent’s counsel also
stated that increase in tariff may be valid but has to be effected well
within the confines of the regulatory principles governing increase in tariff
and the judgment or clarification automatically do not override the TTO. The learned counsel for respondent has
extended the argument by saying that if the contention of the appellant is
accepted, it would make the 31st Amendment to the TTO redundant,
ineffective and otiose. It would
amount to reading an exception against the object and purpose of the
provision. It was pleaded by the
learned counsel for respondent that this is a situation where the Tariff
Order was not an issue before this Tribunal and Hon’ble Supreme Court and is
not under challenge in any forum.
Finally, the learned counsel for respondent concluded by saying that
judgments may have the effect of justifying the increase in tariff, but the
same is not an authority for ignoring the regulatory principles governing the
actual implementation of the increase in tariff. |
|
13. |
The learned counsel of respondent
has also brought to our notice the following case law supporting its
contention that the object of TTO is beneficial and protects a certain class
of consumers from any kind of increase in tariff for first six months. The provision is mandatory and an absolute
bar with no exceptions. The words
being clear and unambiguous and being a tariff order, the same needs to be
given a literal meaning. (a)
Nathi
Devi v. Radha Devi Gupta,(2005) 2 SCC 271, at page 277 para 13-18; courts are not
concerned with the policy involved or that the results are injurious or
otherwise, which may follow for giving effect to the language used. If the words used are capable of one
construction only, then it would not be open to the courts to adopt any other
hypothetical construction on the ground that such construction is more
consistent with the alleged object and policy of the act. (b)
Nasiruddin
v. Sita Ram Agarwal, 9 SCC page 589 para 37; the court’s
jurisdiction to interpret a statute can be invoked when the same is
ambiguous. It is well known that in a
given case the court can iron out the fabric but it cannot change the texture
of the fabric. It cannot enlarge the
scope of legislation or intention when the language of the provision is clean
and unambiguous. (c)
Easland
Combines v. CCE (2003) 3 SCC 410 at page 421 para 18. It is well
settled law that merely because a law causes hardship, it cannot be
interpreted in a manner so as to defeat its object. |
|
14. |
(i) The first issue is related to the
classification of service in the category of WLL(M). In our opinion the directive/communication
dated 4th March, 2005 issued by TRAI only re-emphasizes the
position mentioned in the IUC Regulation dated 29th Oct, 2003,
namely that a fixed wireless terminal, if not confined to the premises of
subscriber, will invite mobility within Short Distance Charging Area(SDCA),
which in turn would attract ADC charges on such services. The definition of the WLL(M) is provided
for, in the IUC Regulation of 29th Oct, 2003 in clause 2 (xxviii)
which classifies the limited mobility telephone service to operate within a
short distance charging area by using the wireless technology in the local
loop. The implication, thereafter, is
to increase the tariff. The contention of the counsel for respondent is that
the classification of subscriber as per the TTO is well within the powers of
the respondent under Section 11(2) of the TRAI Act. It was argued that the
classification has also been created to protect the interest of subscriber in
a multi operator scenario in which the subscriber has to choose the most
beneficial tariff plan, before taking services from any operator and to
remain unaffected for a period of atleast six months. The change in category
of a service, having consequential liability like ADC etc., should protect
the subscriber as well as the operator.
In the present circumstances we find that the categorization of
service from WWL(F) to WWL(M) is on an immediate basis without envisaging any
protection to a particular class of subscriber as per TTO who have not
completed their tenure of six months
period in their adopted tariff
plan. We are, therefore, of the view
that the action taken by the appellant is appropriate. (ii) We have gone through the provisions of the
TTO alongwith the explanatory memorandum. The objective of the 31st
Amendment is to achieve transparency in publishing and implementing the tariff
and in billing the subscribers, which is necessary to be ensured because of
the multiplicity of the plans in a multi-operator scenario. The respondent has also not tried to
regulate the number of tariff packages offered by the Access Provider, in view
of the dynamic situation in the market on account of intense
competition. The purpose for which,
this amendment in the TTO has been issued, is laudable and, is in the
interest of the subscriber, however, the instructions of the licensor and the
categorization of service by the respondent in the instant case, have not
kept in view a particular class of subscribers to be immune to any change of
tariff. This aspect, if mentioned
while issuing the change in classification of service by the licensor would have
given the necessary protection to the subscriber and thereby maintaining the
provisions of the TTO. In the present circumstances, we consider that there
was no other option with the appellant except the action taken by it. (iii) It is a fact that the Interconnect Usage
Charges Regulation dated 29th Oct, 2003 envisages the payment of
ADC after classification of the service in WLL(M) category. The methodology of collection of ADC has
also changed from per minute basis to a simple 1.5% of Adjusted Gross Revenue
(AGR) of the operator in March 2006.
In any case, the call charges have, therefore, to accommodate the ADC
payment until and unless, the operator decides to absorb it as a business
preposition. The decision about fixing
tariff normally takes care of all such charges which are payable as per the
prevailing regulations and, therefore, as soon as this service is classified
as mobile service, the charging of ADC as a component of tariff is a normal
practice adopted by all the operators.
It is a fact that liability of each operator for its subscriber for
payment of IUC/ADC is inevitable until and unless there is a specific
provision made for the subscribers who become immune to change in tariff
because of the TTO. (iv) The directions issued by the respondent in the present circumstances are in
conflict with its own instructions of classifying the service in WLL(M)
category without making any exception to the class of subscriber created in
the TTO for providing protection against change in tariff plan before the
expiry of six months and, therefore, in the instant case the direction issued
by respondent is not tenable. |
|
15. |
We uphol We uphold that the classification of
service as WLL(M) (Wireless Local Loop Limited Mobile Service) according to the
direction of licensor resulting into the application of pulse rate is as per
the prevailing orders of the licensor as well as the respondent. As per the TTO the respondent has created a
class of subscribers, who have not completed the six months duration in a
particular tariff plan. This
classification is well within the powers of the respondent under section
11(2) of the TRAI Act. The intention
of making such classification is to protect the interest of the subscriber in
a multi-operator scenario, offering several options, which requires a
concerted effort on the part of the subscriber to choose the most beneficial
plan, before taking services under a particular tariff plan. The subscriber does not expect to be hurt
atleast for a period of six months after adopting a particular tariff
plan. This implies that, the
subscriber belonging to this class should be protected by change in tariff on
account of the instructions of the respondent as well as the licensor, and,
therefore, while issuing the orders for effecting a change in the category of
service, having consequential liability like ADC etc., there should be a
specific mention that, as per the TTO, the class of subscriber which is
within the period of six months time, after adopting a particular tariff
plan, is insulated from these changes.
In the present circumstances, however, we find that the instructions
of the licensor and the respondent are to implement its decision immediately. There is no specific reference to exempt a
class of subscribers who have not completed the period of 6 months. |
|
16. |
We find that the Appellant has
changed the tariff and it had done so to accommodate the ADC Charges as
stipulated in the Interconnect Usage Regulation issued by the
Respondent. This exercise has been carried
out by the Appellant as per the direction of the licensor. The instructions of the Respondent which
inter-alia required the licensee of the
Fixed Wireless Service Provider to strictly confine to the premises of
the subscriber and not to give any misleading advertisement in the electronic
and print media to publicise their service as mobile or limited mobile
service has also not been followed. In
the present case, the Appellant has advertised its service to be limited
mobile service in the Short Distance Charging Area by using the wireless
access and has, therefore, attracted the classification of being a limited
mobile service operator as per the judgment of the Tribunal as well as the
respondent. Had it not changed the
tariff to accommodate the payment of ADC, the Appellant would have attracted
the charge of not levying the proper tariff and, thereby depriving the
Government of license fee/taxes on Adjusted Gross Revenue (AGR) as well as
defaulting on ADC payments. We,
therefore, hold that this is a peculiar case where the Appellant was obliged
to change over to the tariff plan to accommodate to pay the ADC charges and
any other payment as per the license conditions. It could
have not done anything otherwise in these circumstances, than what it did. The Appellant has also informed to its
consumers the revised tariff plan which were to be implemented in view of the
changed regulatory conditions whereby the services of TTSL were reclassified
WLL(M). The Appellant in this case has
also sought directions to allow the modification of the tariff plan from the Respondent on the ground that the
services of the appellant has been reclassified from fixed category to WLL(M)
category and the change in tariff is
inevitable and thus, involuntary due to change in regulatory/license
conditions. But, it would have not
been possible for the Appellant to wait for six months, even in respect of a
restricted number of subscribers, which fell in the category to enjoy the immunity
of any change in the tariff as per the TTO.
It would have only resulted in avoidable confusion. We, therefore, direct that no further
action is necessary in pursuance of the Respondent’s Direction dated 18.1.2008. |
|
17. |
The qu The
question remains whether the Direction itself was valid. In normal circumstance, such a Direction
would be valid, since, as maintained by the counsel for Respondent, the
Tariff Order is the only protection for the consumer. But this is an extraordinary situation and
we, therefore, feel that, in this case, further action is not called
for. In this case the Appellant has
already deposited Rs. 1,73,37,535/- in a separate account as per the
directions of the Respondent. We
direct that the Appellant need not disburse this money to the subscribers,
however, it must meet the obligation as per Regulations in regard to
Interconnect Usage Charges i.e. the payment of ADC etc. The The appeal is disposed of accordingly
with no costs. M.A. is also disposed
of. |
…………………….J
(Arun Kumar)
Chairperson
………………….
(J.S. Sarma)
Member
………………….
(G.D. Gaiha)
Member