TELECOM DISPUTES
SETTLEMENT & APPELLATE TRIBUNAL
Dated 22nd
January, 2010
In
Star (India) Pvt. Ltd. ….Petitioner
Vs.
Bharat Sanchar Nigam Ltd.
…Respondent
BEFORE:
HON’BLE MR.JUSTICE S.B.SINHA,
CHAIRPERSON
HON’BLE MR.G.D. GAIHA, MEMBER
|
For Petitioner |
: |
Mr. Ramji Srinivasan, Senior
Advocate with Mr. Sai Krishna, Mr.Saurabh Srivastava,
Advocates |
|
For Respondent |
: |
Mrs. Prathiba M. Singh,
Mr.Saurabh Mishra, Mr. Arjun Natrajan, Ms.Nitya Thakur, Advocates |
JUDGMENT
Introduction
Whether dispute between a licensee providing telecom
services and another providing for broadcasting services would come within the
purview of the jurisdiction of this Tribunal or Arbitral Tribunal is the core
question involved herein.
Facts
2. The petitioner is a company incorporated
under the Indian Companies Act, 1956 (1956 Act). It claims itself to be a service provider
within the meaning of the provisions of Telecom Regulatory Authority of India
Act, 1997 (the Act). Indisputably, on or about 31st day of March,
2006 it entered into an agreement with the respondent, which is a
Government of India enterprise and a company registered under the 1956 Act, for providing certain services as envisaged
in Clause 1.1 thereof.
The said agreement contained a dispute
settlement clause being 11.1, which reads as under :
“11. Dispute Settlement
11.1 In the event of any question, dispute or difference arising under
this agreement or in connection there-with (except as to the matters, the
decision to which is specifically provided under this agreement), the same
shall be referred to the sole arbitration of the CMD, BSNL, New Delhi or in
case his designation is changed or his office is abolished then in such cases
to the sole arbitration of the officer for the time being entrusted (whether in
addition to his own duties or otherwise) with the functions of the CMD, BSNL or
by whatever designation such an officer may be called (hereinafter referred to
as the said officer) and if the CMD, BSNL or the said officer is unable or
unwilling to act as such, then to the sole arbitration of some other person
appointed by the CMD, BSNL or the said officer.
The agreement to appoint an arbitrator will be in accordance with the
Arbitration & Conciliation Act, 1996.
There
will be no objection to any such appointment on the ground that the arbitrator
is a BSNL Servant or that he has to deal with the matter to which the agreement
relates or that in the course of his duties as a BSNL servant he has expressed
his views on all or any of the matters in dispute. The award of the arbitrator shall be final
and binding on both the parties to the agreement. In the event of such an arbitrator to whom
the matter is originally referred, being transferred or vacating his office or
being unable to act for any reason whatsoever, the CMD, BSNL or the said
officer shall appoint another person to act as an arbitrator in accordance with
terms of the agreement and the person so appointed shall be entitled to proceed
from the stage at which it was left out by his predecessors.”
3. The
petitioner contends that a sum of Rs.1,31,85,184/- is owing and due from the
respondent in terms of three invoices, the details whereof are as under:-
|
Invoice No. |
Date |
Months |
Amount |
|
ST/VAS/01 |
11/12/2006 |
Sep-06 to Nov-06 |
1,18,88,926.00 |
|
ST/VAS/05 |
31/03/2007 |
Dec-06 to Feb-07 |
12,54,381.00 |
|
ST/VAS/10 |
31/03/2007 |
Mar-07 |
41,877.00 |
4. The
present petition has been filed by the petitioner invoking the jurisdiction of
this Tribunal as contained in Sections 14 and 14-A of the Act claiming, inter
alia, the following reliefs:-
“(a) issue a
direction to the Respondent to forthwith pay to the Petitioner a sum of
Rs.1,29,79,591/- (Rupees One Crore Twenty Nine Lakhs Seventy Nine Thousand Five
Hundred Ninety One Only) along with interest @ 18% p.a. i.e. Rs.62,82,982/-
(Rupees Sixty Two Lakhs Eighty Two Thousand Nine Hundred and Eighty Two only)
as on 13th August 2009;
(b) issue a
direction to the Respondent to pay pendente lite and future interest @ 18% till
the date of payment.
(c) issue a
direction to the Respondent to secure the entire amount of the Petitioner’s
claim by depositing it in this Hon’ble Tribunal/ or by furnishing a bank
guarantee for the same;
(d) and pass any
other and further orders in favour of the Petitioner, as this Hon’ble Tribunal
may deem fit and proper.”
5. The respondent,
on appearance, raised a preliminary objection that this Tribunal has no
jurisdiction to entertain this petition in as much as:-
(i)
the
petitioner being not a service provider, Sec. 14 of the Act has no application
to the contract dated 31.3.2006, the supplementary agreement dated 11.9.2006
and the agreement dated 31.5.2007, entered into by and between the parties as
the petitioner merely provides for supply of the contents and not interconnect
service;
(ii)
the petitioner being not a licensee
within the meaning of the provisions of Indian Telegraph Act, 1885 cannot be a
service provider; and
(iii)
in any event, in view of the
arbitration agreement entered into by and between the parties herein and the
same having been invoked by the petitioner itself, this Tribunal cannot
adjudicate upon the dispute between the parties.
Statutory Provisions
6. Jurisdiction of this
Tribunal is governed by Sections 14 and 14-A of the Act; i.e. to adjudicate a dispute: (i) between a
licensor and a licensee; (ii) between two or more service providers; (iii)
between a service provider and a group of consumers.
7. Indisputably, the respondent
is a licensee within the meaning of Section 4 of the Indian Telegraph Act 1885
(hereinafter called and referred to for the sake of brevity as ‘the
Telegraph Act’).
Licensor has been defined in Section 2(ea) of ‘the Telegraph Act’ to
mean Central Government or the Telegraph Authority who grants a license in terms
of Section 4 thereof.
Licensee has been defined in Section 2(e) to mean any person licenced under sub-section (1) of
section 4 of ‘the Telegraph Act’ for providing specified public
telecommunication services.
8. The term ‘Service Provider’
has been defined in Section 2(j) of the Act to mean the Government as a service
provider and includes a licensee. ‘Telecommunication
service’ has been defined in section 2(k) in the following terms:-
“k.
"telecommunication service" means service of any description
(including electronic mail, voice mail, data services, audio tex service, video
tex services, radio paging and cellular mobile telephone services) which is
made available to users by means of any transmission or reception of signs,
signals, writing, images and sounds or intelligence of any nature, by wire,
radio, visual or other electro-magnetic means but shall not include
broadcasting services.
Provided that the Central Government may notify other
service to be telecommunication service including broadcasting services.”
Concedingly that in terms of the proviso, the Central Government by a
notification dated 09.01.2004 has notified ‘broadcasting services and cable
services’ to be a telecommunication services.
Sections 3(1A),
Section 3(3) & Section 3(4) of the Telegraph Act read as follows:
“3.
Definitions.—In this Act, unless there is something
repugnant in the subject or context,—
[(1) …………..
(1A) ‘Universal
Service Obligation’ means the obligation to provide access to basic telegraph
services to people in the rural and remote areas at affordable and reasonable
prices’]
(1AA) ‘telegraph means any appliance,
instrument, material or apparatus used or capable of use for transmission or
reception of signs, signals, writing, images and sounds or intelligence of any
nature by wire, visual or other electro-magnetic emissions, radio wavers or
Hertzian waves, galvanic, electric or magnetic means.
(2)…………….;
9. Telecom Regulatory
Authority of India (TRAI) in exercise of its powers conferred upon it under
Section 36 read with clauses (i), (ii), (iii) & (iv) of sub-section (b) of
Section 11(1) of Telecom Regulatory Authority of India Act, 1997 (as amended in
the year 2000) framed ‘Telecommunication Interconnection Usage Charges
Regulations 2003’, wherein ‘interconnection’ has been defined in Clause 2(viii)
to mean the commercial and technical arrangements under which the service
providers connect their equipment, networks and services to enable their
customers who have access to the customers, services and networks of other
service providers.
It also made similar regulations
in respect of ‘Broadcasting and Cable Services’ known as “The Telecommunication
(Broadcasting and Cable Services) Interconnection Regulation, 2004 (13 of 2004)”. The said Regulations were amended from time
to time.
10. The Arbitration &
Conciliation Act, 1996 (1996 Act) was enacted to consolidate and amend the law
relating to domestic arbitration and international and commercial arbitration
and enforcement of foreign arbitral awards, to define the law relating to
conciliation and for matters connected therewith or incidental thereto.
11. Arbitral Tribunal has been
defined in Section 2(d) of the 1996 Act to mean a sole arbitrator or a panel of
arbitrators.
Section 5 of the 1996 Act provides for the exclusion of the
jurisdiction, stating that notwithstanding contained in any other law for the
time being in force, any matter covered by Part I thereof that no judicial
authority shall intervene except where so provided in that part.
12. Section 8 provides for the
power of the judicial authority to refer the parties to arbitration where an
arbitration agreement exists.
Section 19 of the 1996 Act provides for determining the rules of
procedure. Section 21 specifies
commencement of Arbitral proceedings in the following terms:
“21. Commencement of arbitral proceedings. -Unless otherwise agreed by the
parties, the arbitral proceedings in respect of a particular dispute commence
on the date on which a request for that dispute to be referred to arbitration
is received by the respondent.”
Submissions
13. Mr.Ramji Srinivasan, the
learned senior counsel appearing on behalf of the petitioner urged:
(i) A bare
perusal of the agreement would clearly show that the petitioner provides for ‘telecommunication
service’ within the meaning of Section 2(1)(k) of the TRAI Act as in terms thereof,
voice based value added service is provided to the respondent through its IVR
platform and thus, this Tribunal has the requisite jurisdiction.
(ii) Having
regard to the fact that quality of performance is controlled by TRAI and governed
by the regulations, this Tribunal has the exclusive jurisdiction to adjudicate
on the dispute between the parties hereto.
(iii) As even
a civil court has no jurisdiction to determine such a dispute in terms of
Section 15 of the Act; an Arbitral Tribunal would also have no jurisdiction in
this behalf.
(iv) The
provisions of the agreement would clearly show that there are interconnection
points wherefor exchanges are located at several places and, thus, it would not
be correct to contend that the petitioner provides contents only and not other
services.
(v)
The definition of ‘telecommunication service deserves
to be interpreted broadly keeping in view the advancement of technology as even
signals other than voice also can be provided as a part of service.
(vi) The
nature of content provided to the respondent by the petitioner contains text,
voice, video and image and, thus, the same would fall within the purview of
definition of ‘telecommunication services’ within the meaning of the provisions
of “the Telegraph Act”.
(vii) Although
the petitioner is not a licensee under the Telegraph Act but as violation of
the provisions of the agreement may lead to violations of the conditions of
licence which being penal in nature and being subject to the regulations framed
by TRAI, this Tribunal
being an expert body will have the exclusive jurisdiction in the matter and not
an Arbitral Tribunal.
(viii) As grant of franchisee by way of outsourcing
is permissible and a franchisee is liable to comply with the conditions of
licence, the Arbitral Tribunal cannot be said to have any jurisdiction as it
may not have any specialized knowledge in the subject matter of the dispute.
13. Mr. Maninder
Singh, learned senior counsel appearing on behalf of the respondent, on the
other hand, would contend:
(i) Petitioner admittedly
being not a licensee would not be a service provider within the meaning of
Section 14 of the Act;
(ii) The petitioner, despite
being a party to the decision of this Tribunal in Aircell Digilink India Ltd. Vs. Union
of India and Anr. which was decided in 2005,
having not only entered into an arbitration agreement in the year 2007
with its eyes wide open but also having itself invoked the arbitration clause, is
estopped and precluded from contending that the Arbitral Tribunal will have no
jurisdiction;
(iii) The dispute between the parties is not
covered by the Interconnection
Regulations as the terms “with regard to any service”
must mean a service by a service provider to the customers alone and not to the licensee;
(iv)
There exists a distinction between a provider of service
and a service provider in as much as of provider of all services would not be
service providers and similarly all connections need not be interconnections;
(v)
As all interconnection agreements in terms of 2004
Regulations would require registration and as the parties herein had not made
any application in that behalf, it is evident that the parties were all along
aware that petitioner is not a service provider;
(vi)
The statutory provisions contained in the Telegraph Act having
provided for grant of licence and the petitioner being not a licensee, it cannot
be held to be a service provider.
The
Agreement
14. The agreement
is a franchise agreement. The
petitioner, in terms thereof was to provide value added services which reads as
follows:
“1.1 The voice based services agreed to be
provided under this agreement are as below:
|
Services |
|
Snippets/Jokes from the comedy shows aired on STAR
TV & its associated satellite TV channels or otherwise |
|
Dialogues from the famous TV serials aired on STAR
TV & its associated satellite TV channels or otherwise |
|
Replay of Celebrity chat shows aired on STAR TV
& its associated TV channels or otherwise |
|
Quiz/Contests linked to various programs aired on
STAR TV & its associated satellite
TV channels or otherwise |
|
Cookery tips linked to various programs aired on
STAR TV & its associated satellite
TV channels or otherwise |
|
Amitabh Bachhan’s recital (Soul Curry) |
|
Astrology |
|
Religious content |
|
Interactive chat shows |
|
Topical content |
|
Personalised content (Dedicate a song/dedicate
birthday/ anniversary wishes etc.) |
Additional services can be added on mutually agreed
basis.”
The petitioner was to ensure that the
content to be provided therein was not obscene or offending to the religion,
community or sect or violating any copyright/Intellectual Property Rights of
any third party. The agreement provides
for a set of services in the areas mentioned therein. It is also responsible for the marketing/advertising
of those services at its own costs. The
parties were at liberty to work out special promotion schemes/contests etc,
other than the ones mentioned in clause 6 therein.
Clause 3 provides for quality of
performance which is required to be ensured by the petitioner as prescribed by
TRAI from time to time. It is also
required to operate and maintain network conforming to quality of service
standards to be mutually agreed to and such other directions as the competent
authority may give from time to time.
Part I of the agreement provides for scope
of work which reads as under:
“Agreement Clause 1.
Scope of work Part –I
a.
The
timely provision of services, regular & timely update of content and ready
availability of requisite content from the legal source along with its due
copyright/IPR shall be the essence of this Agreement and shall form the central
factor of this Agreement.
1.2 ***
b.
Content
arrangement: The franchisee shall
be responsible for arranging the required content along with the copyrights/IPRs
at its own cost.
1.4 The
services agreed to be provided under this Agreement shall be defined under
Annexure_II of this Agreement. No
service other than contained in Annexure II of this Agreement is to be provided
to ths subscribers of BSNL either free or for cost without the written approval
of BSNL.”
Part III of the agreement provides for
technical conditions, relevant provisions whereof are as under:
“Technical Conditions
1. The
Applicable System
1.1 The
Applicable system of the Franchisee should be capable of providing services
mentioned under Annexure II of this Agreement and will comprise the IVR
platform besides other elements like service(s) etc.
1.2 The
applicable system shall be able to detect any user mistakes and/or inactivity
so that expected action can be requested.
The applicable system shall be able to release the call following
repeated user mistakes or inactivity.
1.3 The
Answer signal shall be sent to BSNL Network as soon as the system of the
FRANCHISEE responds to the incoming call.
1.4 The
FRANCHISEE shall be responsible for providing the Flow Chart of its services to
the field unit of BSNL at the place where the IVR of franchisee is connected to
the Telephone switch of BSNL who in turn shall ensure that the flow chart is
available in the concerned call centre of BSNL.
1.5 The
callers will have the option to subscribe to receive alerts from the system to
get the latest updates & events. The
alerts will have a number. If the caller
calls this number he/she will be directly taken to the application bypassing
main menu & additional information on alerts will be provided via voice.
1.6 The
applicable system of the Franchisee shall facilitate direct access (bypassing main
menu) to a menu item/sub-menu by means of a support various bearers like
speech, SMS, WAP, etc for enhancing interaction between system & callers
and/or delivery of requested alert/content etc. to callers. The premium pricing of services as mentioned
under Part-II of this Agreement is subject to the availability of above
multimodality of the services & applicable system of the Franchisee.”
2. Interconnection to the network of BSNL
2.1 The
Applicable system of the Franchisee will be allowed to be connected to a
designated Telephone switch of BSNL on E1/PR1 link(s), as available &
feasible, for providing the services agreed under the agreement. The connectivity between BSNL and the
Applicable System of the FRANCHINSEE shall be exclusively utilized for carrying
the traffic of BSNL subscribers only.
2.2 When
the Franchisee installs its setup/equipment in some other building outside the
BSNL exchange, BSNL shall provide the connectivity free of cost if the
Applicable System of the Franchisee is installed within 2.5 kms from the
interconnecting BSNL TAX to enable proper working of EI/PRI. In this case, the line driver or the modern
required for connectivity shall be provided by the Franchisee. BSNL shall charge the FRANCHINSEE for other
telecom resources provided as per the applicable tariffs and/or discounts, if
any.
2.3 The
dimensioning of interconnecting links shall be in accordance with the
requirement of meeting the Grade of Service of 1 in 500.
15. It is beyond
any doubt or dispute that if the petitioner is held to be not a service
provider, this Tribunal will have no jurisdiction to determine the issues
between the parties.
SERVICE
PROVIDER ISSUE
16. The term ‘service
provider’, as noticed heretobefore, has been defined. When the parties enter into an interconnect
agreement, the service providers have to connect their equipments, networks and
services to enable them to have access to their customers, services and
networks of other service providers. The
petitioner for all intent and purport is not only a ringer of the respondent
but also provides a host of other services.
It is true that the petitioner does not provide any service directly to
the customers of the respondent nor raises any bill on them. It may not also have any privity of contract
with the customers of the respondent. It
is not a case where the licensee is bound to provide interconnection. It may also not be a case where the parties
would be governed by an Interconnection Regulation framed by TRAI. The contract between the parties may not have
the statutory flavor. We may, however, notice that the parties were at liberty
to expand the scope of the agreement.
17. The respondent
is a licensee. There is no bar on its
part to enter into agreement with another type of service provider. It was entitled to outsource its activities. Indisputably,
it could also provide such services itself. In this petition we are not concerned with the
validity of the franchise agreement or the terms and conditions thereof. Even otherwise, the validity/justifiability
of the franchise agreement is not in question.
In terms of the contract, the petitioner is to provide ‘value added
service’ to the respondent. It was meant
for revenue generation on its part.
18. The provisions
of the Act must be considered having regard to the purpose and object it seeks
to achieve. For the said purpose a narrow and pendectic approach must be
avoided.
To achieve the said purpose literal
meaning should not be adhered to, in view of this Tribunal recourse to
purposive interpretation is imperative.
The 1997 Act principally deals with the telecommunication services.
Interpretation clauses as also the several relevant provisions are clear
indicators thereof. Even the name of
the Authority shows that initially the broadcasting and cable services were to
be kept outside the purview of the Act.
Section 2(k) as it originally stood explicitly excluded broadcasting
services. Without, however, amending the main provision, a proviso was added to
the section 2(k) of the Act by Telecom Regulatory Authority of India (Amendment)
Act, 2000.
19. Section 11
deals with functions of the Authority.
Clause (a) of Sub-section (1) of Section 11 empowers the Authority to
make recommendations. Sub clause (h) thereof
deals with the ‘telecommunications services’ only. In the event, the term ‘Service Provider’ and
‘Lincence’ are to be attributed the meanings statutorily assigned to them
respectively in terms of the interpretation clause, even clause (b) of
Sub-section (1) of Section 11 referred to the functions which are attributable
to the terms and conditions of licence and various matters relating to the
service providers pertaining to ‘telecommunication services’.
20. Section 36 of
the Act provides for the regulation making power. Subsection (2) thereof principally
refers to the functions of the Authority contained in various clauses of
sub-section (1) of Section 11. If such
strict interpretation is assigned to the provisions of the Act, it is doubtful
as to whether the Authority could make regulations with regard to ‘the broadcasting
services and cable services’, which was, however, done on the premise that by
reason of notification dated 09.01.2004, the Central Government had notified
the same to beTelecommunication Services.
21. The Authority,
therefore, itself has understood that the said notification has created a legal
fiction which cannot be given a narrow meaning.
In a case of
this nature, provision of the Act are required to be considered on the
touchstone of text and context thereof.
The principles of ‘purposive interpretation’ are required to be resorted
to.
The applicability of purposive
construction has been considered by the Supreme Court of India in various
decisions, some of which may be noticed by us.
It is now well accepted
that for understanding the object of the statute recourse to the doctrine of
purposive constriction should be resorted to.
See Yash Ahuja & Ors. Vs.
Medical Council of India [2009(12)SCALE 687].
See also R. Venketi Krishnan Vs. Central Bureau of
Investigation- 2009(11) SCALE 102, Mrs. Jyoti Harshad Mehta Vs. The Custodian –
2009(11) SCALE 62 and Steel Authority of India Ltd. Vs. SUTNJ Sangam & Ors.
– 2009(10) SCALE 416.
In N. Kannadasan Vs. Ajoy Khose
& Ors. – 2009(8) SCALE 351, the
Supreme Court of India held:
“PURPOSIVE INTERPRETATION
65. A case
of this nature is a matter of moment. It concerns public interest. Public
information about independence and impartiality of a judiciary would be in
question. The duty of all organs of the State is that the public trust and
confidence in the judiciary may not go in vain. Construction of a statute would
not necessarily depend upon application of any known formalism. It must be done
having regard to the text and context thereof.
66. For the
aforementioned purpose, it is necessary to take into consideration the
statutory scheme and the purpose and object it seeks to achieve. A construction
of a statute, as is well known, must subserve the tests of justice and reason.
It is a well-settled principle of law that in a given case with a view to give
complete and effective meaning to a statutory provision, some words can be read
into; some words can be subtracted. Provisions of a statute can be read down
(although sparingly and rarely).”
[See also Ahron Barak, Purposive
Interpretation in Law (2007) at Page 87]
22. We would
proceed on the basis that:
(a) no license is required; and in the
alternative
(b) the petitioner is a licensee.
It is
interesting to note that while defining the term ‘service provider’, the
statute does not refer to the Indian Telegraph Act. It refers only to ‘licensor’ and ‘licencee’. It is true that if licensor and licencee are
to be assigned their meanings as provided for in the Act, this Tribunal would
not have any jurisdiction to deal with the cases pertaining to ‘broadcasting
and cable services’, as a broadcaster is not and cannot be granted any license
by the Department of Telecommunication.
It is also of some significance to notice
that terms “Government as a service provider” has lost most of its meaning
after the respondent has taken over all the functions of the Government as a
provider of the Telecommunication Services.
23. The definition
of the term ‘interconnection’, in absence of any ‘Regulation’ operating in this
behalf must be given its natural meaning.
It in no unmistakable terms provides for a privity of contract by and
between a service provider and the customer of the respondent. It may be true that the effect of the
agreement is such that the customer is benefitted ultimately but whatever
functions are to be performed by the petitioner in terms of the provisions of
the agreement, is through the intervention of the respondent, which, in our
opinion, is not decisive.
Interconnection means connecting to one
another, intertwined, connected at multiple points or levels. In the context of telecommunication services,
however, interconnection is the physical linking of a carrier’s network with
equipment or facilities not belonging to that network. There can be acts of interconnecting of wires
or computers also.
In Webster’s
New Twentieth Century Dictionary (Page 956), interconnection is defined as
‘Mutual Union’ or ‘to connect or be connected with each other or one another’.
The agreement, although, does not provide
for levy of any penalty upon the petitioner directly in the event of breach of
the conditions of licence but indisputably it has to suffer civil consequences
thereof. The agreement provides that the
petitioner shall indemnify the respondent for breach of any of the conditions
of the licence.
Penal action arising out of any breach
both de facto and de jure, thus, although has to be suffered by the respondent but
it can reimburse itself to that effect from the petitioner.
The petitioner does not and cannot, in
absence of any licence run a telecommunication service of the nature as is done
by the respondent but it also comes within the purview thereof as a legal
fiction in this behalf has been raised.
We may also place on record that this
Tribunal in M/s Total Telefilms Ltd Vs. M/s Prasar Bharti being Petition No.
183(C) of 2008, disposed of on 15.12.08 held that Prasar Bharti would be
deemed to be a licensee under the Telegraph Act stating that DTH service
provided by it would be a ‘telecommunication service’ and, thus, it would be a
service provider.
24. The petitioner
like Prasar Bharti is a broadcaster. Respondent
has nothing to do with broadcasting. As
a broadcaster the petitioner is a service provider but in terms of the agreement
dated 9.1.04 it facilitates some services to the respondent’s customers as
opposed to services to the customers.
25. We will
consider the effect thereof a little later.
Mr. Singh contended that if any dispute arises between two parties to
the agreement, simply because they are service providers by themselves would not
clothe this Tribunal with jurisdiction if in terms of the agreement one is not
a service provider. As has been noticed
from the discussions made heretobefore that the petitioner is a service
provider and in that view of the matter Section 14 would be attracted.
26. Reliance,
however, has been placed by Mr. Singh on the judgment of this Tribunal in C.H. Entertainment Pvt. Ltd. Vs. Connect Broadband Services
Limited
– Petition 98(C) of 2007 dated 08.05.2007, wherein it has been held as under:
“O R D E R
At the outset,
learned senior counsel for the respondent has raised an objection that the
nature of dispute raised by the petitioner in this petition does not fall
within the ambit of the Telecom Regulatory Authority of India Act and, therefore,
this Tribunal has no jurisdiction to deal with this matter. The broad facts necessary to deal with this
issue are that the petitioner sold its entire network to the respondent for a
consideration. Two agreements were
executed between the parties. One of the
agreements is regarding the sale of network while the other is distributionship
agreement. The agreements are not being
disputed by either party. As per clause
2.3.2 of the distributorship agreement, the petitioner has to provide all
possible support to the respondent in getting the LCOs listed in Schedule – I
of the agreement to enter into direct connection and commercial agreement with
the respondent. This clause further provides that the petitioner “shall also
make best efforts to help the First Party enroll other LCOs in the Operating
Territory in order to expand the total number of subscribers to be covered
under the Project.” In the background of
this clause it has been stated in the affidavit dated 5.5.07 filed by the
respondent before us that all the 41 LCOs
who were mentioned in Schedule – I of the agreement have shifted from
petitioner to the respondent. They have
signed franchisee agreements directly with the respondent. Thus all the erstwhile LCOs of the petitioner
have become direct franchisees under the respondent. The petitioner, however, does not accept
this.
The dispute which
now remains between the parties can at best be about the breach of the said two
agreements. There is no dispute pertaining to telecom service. Therefore, in our view, this petition is not
maintainable in this Tribunal and the same is accordingly dismissed. If the petitioner has any grievance it may
approach the appropriate forum in accordance with law.”
This decision has no application to
the fact of the present case as the petitioner also is a service provider. If the petitioner being a service provider by
reason of a legal fiction raised in this behalf also provides like services, he
would also be a MSO and thus, the dispute between the parties would come within
the purview of Section 14 of the Act.
27. Reliance has also been placed on M/s Tirupati Tele
Services Vs. ZEE
Turner Ltd. - Petition
No.147(C) of 2008 dated 05.08.2008, wherein this Tribunal has held as under:
“The
petitioner is merely a collecting agent for the respondent. Learned counsel for petitioner has drawn our
attention to an agreement, copy whereof has been filed on record. The agreement is titled as dealership
agreement. Firstly, the agreement is not
signed on behalf of the respondent.
Learned counsel for the respondent submits that the respondent does not
have any agreement with the petitioner even for the dealership. He further submits that wherever respondent
has validly executed dealership agreements, the dealer collects payments from
cable operators/MSOs and not from subscribers.
In reply, counsel for the petitioner submits that the petitioner had
executed the agreement and given it to the respondent for signatures. The petitioner had also furnished a Bank
guarantee in pursuance of the agreement.
Therefore, the petitioner was not required to do anything more.
Secondly,
the portion to which our attention has been drawn is the said agreement does
not make out a case that the petitioner is a service provider. The petitioner on its showing is not under
business of transmission or re-transmission of signals. It is only collecting money on account of
subscription fee from the subscriber from the signals supplied by the
respondent. A reference to the prayer
contained in this petition also shows that the controversy raised in the
present petition is in the nature of a civil dispute. Accordingly this petition is not maintainable
and is disposed of. The petitioner will
be free to pursue its remedy in accordance with law elsewhere.”
(Underlining is ours)
It is,
therefore, evident that the factual matrix involved therein was totally
different vis-à-vis the present case.
28. The petitioner
being a licensee under the Telegraph Act and/or even otherwise being entitled
to transmit or retransmit signals is a service provider.
This decision also has, in our considered
opinion, no application to the facts of the present case.
29. We have
noticed heretobefore the notification dated 09.01.2004 in terms whereof a legal
fiction has been created.
We would,
however, consider the effect of the said notification at some details a little
later.
Jurisdiction
30. Jurisdiction
of this Tribunal is very wide. It is
even otherwise a specialized Tribunal.
Its jurisdiction, however, must be confined to Section 14 of the Act.
The Act
provides for special provisions. It has
created TRAI which is an expert body.
This Tribunal is also an expert appellate Tribunal.
31. The Supreme
Court of India in Cellular Operators Association of India vs. The Union of
India reported in 2002(9) SCALE Pg 339, has held as under:
“The regulatory bodies exercise wide
jurisdiction. They lay down the
law. They may prosecute. They may punish. Intrinsically, they act like an internal
audit. They may fix the price, they may
fix the area of operation and so on and so forth. While doing so, they may, as in the present
case, interfere with the existing rights of the licenses.
Statutory recommendations made by
it are normally accepted by the Central Government, as a result of which the
rights and obligations of the parties may seriously be affected. It was in the aforementioned premise the
Parliament thought of creating an independent expert tribunal which, if an
occasion arises therefor, may interfere with the finding of fact, finding of
law or a mixed question of law and fact of the Authority. Succinctly stated the jurisdiction of the
tribunal is not circumscribed in any manner whatsoever.
It was furthermore observed :
“There cannot be any doubt
whatsoever, that when jurisdiction upon a court of a Tribunal is conferred by a
statute, the same has to be construed in terms thereof and not otherwise. The power of this Court as also the High
Court, however stand on a different footing.
The power of this Court as the High Court although is of wide amplitude, certain restrictions
by way of self-discipline are imposed. Ordinarily
the power of judicial review can be exercised only when illegality,
irrationality or impropriety is found in decision making process of the
authority.”
32. The Supreme
Court in Union of
India v. Tata Teleservices (Maharashtra) Ltd. - (2007) 7 SCC 517 has also
construed the jurisdiction of this Tribunal widely. Therein the question which
arose for consideration was as to whether the respondent therein was liable for
default on its part in respect of a contract which could not have been entered
into and the work was not started despite the fact that a letter of intent had
been issued regarding the Karnataka Circle and the respondent had accepted the
same but was trying to negotiate further terms of common interest before a
formal contract could be entered into.
It was in the aforementioned situation the
Supreme Court held that:-
“The Objects and Reasons for
enacting the Act and creating the TDSAT indicate that the TDSAT will consist of
a Chairperson who has been a Judge of the Supreme Court of India or a Chief
Justice of a High Court, and two to four members who have held the post of
Secretary or Additional Secretary to the Government of India or any equivalent
post in the Central Government or the State Government for a minimum period of
three years. The powers and functions of
the Authority, as set out in the Objects and Reasons, include settlement of
disputes between service providers. The
preamble to the Act indicates that it is an Act to provide for the
establishment of the TDSAT to regulate the telecommunication service,
adjudicate disputes, dispose of appeals and to protect the interests of service
providers and consumers of the telecom sector, to promote and ensure orderly
growth of the telecom sector and for matters connected therewith or incidental
thereto.”
Referring to Section 14 of the Act,
it was opined:
“The Section indicates that the
TDSAT has been constituted to adjudicate on any dispute between a licensor and
a licensee or between two or more service providers. Though it also includes adjudication on a
dispute between a service provider and a group of consumers, it excludes matters
coming within the jurisdiction of the Monopolies and Restrictive Trade
Practices Act, 1964, the complaint of an individual consumer that is
maintainable before a Consumer Disputes Redressal Forum and a dispute between a
telegraph authority and any person referred to in Section 7B of the Indian
Telegraph Act, 1885. Section 14A of the
Act provides that the Central Government or a State Government or a local
authority or any person may make an application to the Appellate Tribunal for
adjudication of any dispute referred to in Clause (a) of Section 14. Section 14A, therefore, contemplates not only
the filing of a claim before the TDSAT by a licensee or a consumer, but also by
the Central Government or a State Government which could be a licensor or a
service provider. Section 14B deals with
the composition of TDSAT. It is to
consist of a Chairperson and not more than two Members to be appointed, by
notification, by the Central Government.
The selection of the Chairperson and Members of the Appellate Tribunal
shall be made by the Central Government in consultation with the Chief Justice
of India. Section 14C provides the
qualification of the Chairperson and the Members and the Chairperson has either
to be a Judge of the Supreme Court or a retired Chief Justice of the High
Court. A Member has to be one who has
held the post of Secretary to the Government of India or any equivalent post in
the Central Government or the State Government for a period of not less than
two years or a person who is well versed in the field of ‘technology,
telecommunication, industry, commerce or administration.’ Under Section 14 of the Act, the jurisdiction
of the TDSAT has to be exercised by a Bench consisting of one member or two
members and in the case of difference of opinion between two members, the point
of difference has to be referred to the Chairperson, who shall decide the point
himself and the ultimate decision will be according to the majority opinion.”
It was furthermore held:
“The conspectus of the provisions
of the Act clearly indicates that disputes between the licensee or licensor,
between two or more service providers which takes in the Government and
includes a licensee and between a service provider and a group of consumers are
within the purview of the TDSAT. A plain
reading of the relevant provisions of the Act in the light of the preamble to
the Act and the Objects and Reasons for enacting the Act, indicates that
disputes between the concerned parties, which would involve significant
technical aspects, are to be determined by a specialized tribunal constituted
for that purpose. There is also an
ouster of jurisdiction of the civil court to entertain any suit or proceeding
in respect of any matter which the TDSAT is empowered by or under the Act to
determine. The civil court also has no
jurisdiction to grant an injunction in respect of any action taken or to be
taken in pursuance of any power conferred by or under the Act. The constitution of the TDSAT itself
indicates that it is chaired by a sitting or retired Judge of the Supreme Court
or sitting or a retired Chief Justice of the High Court, one of the highest
judicial officers in the hierarchy and the members thereof have to be of the
cadre of secretaries to the Government, obviously well experienced in
administration and administrative matters.
The Act is seen to be a self
contained Code intended to deal with all disputes arising out of
telecommunication services provided in this country in the light of the
National Telecom Policy, 1994. This is
emphasized by the Objects and Reasons also.
Normally, when a specialized
tribunal is constituted for dealing with disputes coming under it of a
particular nature taking in serious technical aspects, the attempt must be to
construe the jurisdiction conferred on it in a manner as not to frustrate the object
sought to be achieved by the Act. In this context,
the ousting of the jurisdiction of the Civil Court contained in Section 15 and
Section 27 of the Act has also to be kept in mind. The subject to be dealt with under the Act,
has considerable technical overtones which normally a civil court, at least as
of now, is ill-equipped to handle and this aspect cannot be ignored while
defining the jurisdiction of the TDSAT.”
(Emphasis
supplied)
The Apex Court concluded:-
“13.
…………….Considering the purpose for which the Act is brought into
force and TDSAT is created, we think that there is no warrant for accepting
such a narrow approach or to adopt such a narrow construction. It will be
appropriate to understand the scope of Section 14(a)(i) of the
Act and for that matter Section 14(a)(ii) of the Act also, as
including those to whom licences were intended to be issued and as taking in
also disputes that commence on the tender or offer of a person being accepted.
In other words, a dispute commencing with the acceptance of a tender leading to
the possible issue of a licence and disputes arising out of the grant of
licence even after the period has expired would all come within the purview of
Section 14(a) of the Act. To put it differently, Section 14 takes within
its sweep disputes following the issue of a letter of intent, pre-grant of
actual licence as also disputes arising out of a licence granted between a
quondam licensee and the licensor.”
In that case,
thus, a dispute has been held to be within the exclusive jurisdiction of this
Tribunal although no concluded contract had been entered into by and between
parties thereto.
33. The definition
of telecom services as contained in Section 2(k) of the Act is ‘exhaustive’ in
character, but a proviso was appended thereto.
In terms of the
proviso, a notification has been issued on or about 9th January,
2004 declaring Broadcasting Services to be a Telecommunication Services.
By reason of the said notification, thus,
a legal fiction has been created.
It is now well known that a legal
fiction created by a statute must be given its full effect. Petitioner, thus, by reason of the said
notification must be held to be rendering telecommunication services. But the same would not mean that it would be
required to obtain license stricto sensu under the Telegraph Act. A permission obtained for broadcasting from
the competent authority of the Union of India would serve the purpose.–
In Bhavnagar University Vs. Palitana
Sugar Mill (P) Ltd.& Ors. – 2003(2) SCC 111, the Supreme Court of India has
held as under:
“33. The purpose and object of creating a legal
fiction in the statute is well known.
When a legal fiction is created, it must be given its full effect. In East End Dwellings Co.Ltd. v. Finsbury
Borough Council Lord Asquith, J. stated the law in the following terms: (All ER
p.599 B-D)
“If
you are bidden to treat an imaginary state of affairs as real, you must surely,
unless prohibited from doing so, also imagine as real the consequences and
incidents which, if the putative state of affair had in fact existed, must
inevitably have flowed from or accompanied it.
One of these in this case is emancipation from the 1939 level of
rents. The statute says that you must
imagine a certain state of affairs; it does not say that having done so, you
must cause or permit your imagination to boggle when it comes to the inevitable
corollaries of that state of affairs.”
The said principle
has been reiterated by this court in M.Venugopal v. Divisional Manager, LIC of
India, [1994(2) SCC 323], Indian Oil Corpn. Ltd. v. Chief Inspector of
Factories, [1998(5) SCC 738], Voltas Ltd. v. Union of India, [1995 Supp. (2)
SCC 498, Harish Tandon v. ADM, Allahabad [1995 (1) SCC 532] and G. Viswanathan
v. Hon’ble Speaker, T.N. Legislative Assembly, [1996(2) SCC 353].
34. It must also be borne in mind that such a
broad definition has been created for certain purposes. Its effect, therefore, must be given for the
said purpose. (See Raj Kumar Khurana Vs State of NCT Delhi
[2009(6)SCC 72] and UCO Bank Vs. Rajinder Lal Kapoor [2008(5)SCC 257].
The jurisdiction of this Tribunal as
stated by the Apex Court is wide in nature.
It having regard to its decision in
Tata Teleservices (supra) is entitled to adjudicate any dispute arising between
two service providers. The word ‘any’ in
this context would mean all. It has to
protect the interest of Service Providers.
This aspect of the matter has been
considered by the Supreme Court of India in Lucknow
Development Authority Vs. M.K. Gupta - AIR1994SC 787 wherein it was held:-
“4. ……………………………….
………………………………
……………………………The words 'any' and 'potential' are significant. Both are of
wide amplitude. The word 'any' dictionary means 'one or same or all'. In
Black's Law Dictionary it is explained thus, word "any" has a
diversity of meaning and may be employed to indicate "all" or
"every" as well as "same" or "one" and its
meaning in a given statute depends upon the context and subject matter of the
statute'. The use of the word 'any' in the context it has been used in Clause
(o) indicates that it has been used in wider sense extending from one to all. …………….”
35. The fact that the petitioner, as a provider
of ‘Broadcasting Service’, is a service provider is beyond any dispute. Admittedly the respondent is also a service
provider within the meaning of the provisions of the Act. The dispute herein is, thus, between two
service providers.
Although ordinarily the nature of
services provided by the parties hereto to the customers are absolutely
different; by reason of the agreement in question, both have agreed to provide
each other services for their own benefits.
See 14 of the Act does not mandate
that the agreement between two service providers must be in accordance with an
interconnect agreement within the purview of 2003 Regulation and 2004
Regulations. They operate in different fields and do not envisage a situation
of this nature.
In fact a dispute between these
service providers need not arise in relation to an interconnect agreement. What is necessary for the purpose of Section
14 of the Act is a dispute simplicitor.
Of course, the dispute must arise in connection with telecommunication
services. The Act does not mandate that
the jurisdiction of this Tribunal will depend upon framing of a subordinate
legislation.
Even otherwise, two service providers
are at liberty to enter into a commercial agreement which need not be governed
by a subordinate legislation. The
respondent neither says nor can say that such agreement is statutorily
prohibited.
Scientific and technological advances
have made it possible that there be some convergence of different types of
services.
36. It is not in controversy that even the
respondent could provide the services, the petitioner has been asked to provide.
Respondent has, thus, outsourced its
activities to the petitioner.
In today’s world, mobile phones are
not used only for transmitting and receiving phone calls.
It can even be used as a computer.
We are in the 3G and 4G age. 3G facilitates growth, increase bandwidth and
support more diverse applications. It
not only delivers voice but also circuit switched data at download rates upto 14.4
kbps.
Some of the applications of 3G
Services are—
(a)
Mobile TV – a provider redirects a TV channel directly to
the subscriber’s phone where it can be watched.
(b)
Video on demand.
(c)
Video conferencing.
(d)
Tele-medicine and Tele Education.
(e)
Location based services including traffic conditions.
37. Telegraph Act and TRAI Act should be
interpreted as ongoing statutes.
With the advent of knowledge and technology
the statutes must be interpreted in broadbased manners.
38. Even ‘telegraph and other works’ have been
given a wide meaning in In re. Regulation and control of Radio Communications
in Canada – 1932 AC 304(PC)
The said decision
has been noticed by the Supreme Court of India in Vishnu Agencies (Pvt.) Ltd v.
Commercial Tax Officer, AIR 1978 SC 449 p. 460 : (1978) 1 SCC 520.
Telegraph line has also been held to
include electric line in R Vs Brislen Ex parte Williams (1935) 54 CLR and
Telstra Corporation Ltd. Vs. Astar Performing Association – 1997 (71) ALRJ 1312
at 1319.
The Supreme Court of India has even
directed holding of trial through video conferencing in Kalyan Chandra Sarkar
Vs. Rajesh Ranjan Yadav [2005(3) SCC 297]
39. In G.P. Singh’s Principle of Statutory
Interpretation (11th Edn.) at page 248 it is inter alia stated.
“On
the same principles, general words are construed to include new inventions and
technological advances not known at the time when the Act was passed. It has, accordingly, been held that telephone
is ‘telegraph’ within the meaning of that word in the Telegraph Acts, 1863 and
1869 although telephone was not invented in 1869; that a photographic copy is
‘copy’ under the Engraving Copyright Act, 1734; and that an electric tram car
is a stage carriage within the meaning of the State Carriage Act, 1832. Similarly, ‘broadcasting’ has been held to
be covered by the word ‘telegraph’ as used in the phrase ‘Telegraph & other
works and undertaking’ in Section 92(1)(a) of the British North America Act,
1867; and radio broadcasting has been held to be included in the expression
‘postal telegraphic, telephonic and other like services’ under section 51(5) of
the Australian Constitution. Following the
same principle, it has been held by the Supreme Court that the definition of
‘telegraph line’ in the Indian Telegraph Act, 1885, which is included by
reference in the Indian Electricity Act, 1910, is wide enough to take in
electric lines used for the purpose of wireless telegraph; the definition of
‘cinematograph’ contained in section 2(e) of the Cinematograph Act, 1952 and in
Cinema Regulation Acts enacted by the States in 1952 will cover video cassette
recorders/players (developed in 1970s) for representation of motion pictures on
a television screen; the word ‘handwriting’ in section 45 of the Evidence Act,
1872 will embrace typewriting although it was only in 1874 that the first
practical typewriter was marketed and evidence taken of a witness in America by
video conferencing in India where the accused is being tried will satisfy the
requirement of evidence taken in presence of the accused under section 273 of
the Criminal Procedure Code enacted in 1973 when the technique of video
conferencing had not developed.
Similarly the provision in section 14 of the Punjab General Sales Tax,
1948 authorising the officers to seize account books and return the same after
putting their signature and seal was also held to apply when the account books
were contained in a hard disk. It was
pointed out that the provision could be complied with by seizing the hard
disk. It was pointed out that the
provision could be complied with by seizing the hard disk. The officers could make out copies of the
said hard disk or obtain a hard copy and fix their signature and official seal
in physical form thereupon and furnish a copy thereof to the dealer.
When
the new technological advances becoming known after the passing of the statute
fall within the same genus covered by it and when its purpose would be defeated
unless extension were made, the court may even be willing to strain the
language a bit to cover the new advances.
On these considerations section 1(1) of the Human Fertilisation and
Embryology Act, 1990 which defines ‘embryo’ to mean ‘a live human embryo where
fertilization is complete’ was construed to cover even an embryo produced not
by fertilization but by cell nuclear replacement (CNR, a method developed by
scientists after 1990, by reading the definition of embryo to mean ‘a live
human embryo where if it is produced by fertilization fertilization is
complete’.
With a view to meet a situation of the
present nature, creative interpretation of statute which would advance the
cause would be permissible in law. A
statute must be read reasonably. It must
be so read so that it may become workable.
It is trite that
the same word may mean one thing in one context and another in another
context. (See D.N. Banerjee Vs.
S.N.Mukherjee, AIR 1958 SC page 1 at page 10).
Plainest term, it is well settled, may
be controlled by the context. (See Manik
Lal Mazumdar & Ors Vs Gauranga
Chandra Dey & Ors. 2005 (2) SCC 400 at page 407).
40. Parliament of India of course has amended
the Telegraph Act on a few occasions but amendments have not been carried out
for meeting these types of contingencies.
We may, however, must notice that amendment of the definition of term
‘telegraph’ in the year 2002 by Act 8 of 2004 with retrospective effect from
1.4.2002 is of great significance to which we would refer to a little later.
Telecommunication Services and
Broadcasting services are governed by two different statutes. Controls over the two types of services are
with two different ministries of the Central Government viz. Telecommunication
and Information & Broadcasting.
Bill No.89 of 2001 titled “The
Communication Convergence Bill 2001” was laid before the Parliament.
For some unknown reasons, the said
Bill has not been made an Act.
Telegraph Act ipso facto does not
envisage grant of licence to a broadcaster although the definition of ‘telegraph’
is very wide in nature.
A licence granted by the Department of
Telecommunication would not be applicable in relation to Broadcasting Services,
if the purpose and object of the Act is given liberal meaning, but as noticed
heretobefore, permission granted by the Government of India may also be construed
to be a license. Such a service even
otherwise may not require license under ‘the Telegraph Act’.
41. In Total Telefilm Vs. Prasar Bharti, this
Tribunal, as noticed supra, has held that license granted by any other Ministry
by way of ‘permission’ would also amount to grant of a license within the
meaning of the provisions of Telegraph Act.
We, however,
intend to assign additional reasons in support of our conclusion. The Telegraph Act is a 19th
Century statute. The term ‘Telegraph’,
however, was amended by Act No. 8 of 2004 which means an appliance, instrument,
material or apparatus used or capable of use for transmission or reception of
signs, signals, images or sounds, by way of visual or other electro-magnetic
emission, radio waves etc. It is,
however, not in dispute that broadcasting is governed by another statute. It is in the aforementioned premise, the Central
Government has enacted the Act. The
definition of telecommunication service, keeping in view the fact that the Act
is a latter statute, should be held to have provided for a different meaning to
the terms ‘telecommunication services, and ‘broadcasting services’. It is only by reason of the proviso appended
to Section 2(k) of the Act that the Central Government has issued the
aforementioned notification bringing the ‘broadcasting services’ within the
purview of the ‘telecommunication services’.
For the said purpose, and in particular, for giving harmonious
construction to the provisions of all the connected statutes in order to
determine the jurisdiction of this Tribunal, the same should he read
conjointly.
The provisions of
the Act would prevail over other statutes.
However, there cannot be any doubt that Section 2(j) read with Section
2(e) prima facie gives rise to some confusions, which must be considered having
regard to the proviso appended to Section 2(k) thereof. It is in the aforementioned context, this
Tribunal must consider that the interpretation clause contained in Section 2 of
the Act, contains the words, “unless the context otherwise requires”.
In Mukesh K. Tripathi Vs. Sr. Divisional Manager,
L.I.C. and Ors. – 2004(8) SCC 387, the Supreme Court of India held:
“39. The interpretation clause contained in a
statute although may deserve a broader meaning having employed the word
'includes' but therefore also it is necessary to keep in view the scheme of the
object and purport of the statute which takes him out of the said definition.
Furthermore, the interpretation section begins with the words "unless the
context otherwise requires".”
40. In Ramesh Mehta v. Sanwal Chand Singhvi and Ors.
– AIR 2004 SC 2258 , it was noticed :
"A definition is not to
be read in isolation. It must be read in the context of the phrase which would
define it. It should not be vague or ambiguous. The definition of words must be
given a meaningful application; where the context makes the definition given in
the interpretation clause inapplicable, the same meaning cannot be assigned.
In State of Maharashtra v.
Indian Medical Assn. one of us (V.N. Khare, C.J.) stated that the definition
given in the interpretation clause having regard to the contents would not be
applicable. It was stated :
"8. A bare perusal of
Section 2 of the Act shows that it
starts with the words in this Act unless the context otherwise requires...'.
Let us find out whether in the context of the provisions of Section 64 of the
Act the defined meaning of the expression 'management' can be assigned to the
word 'management' in Section 64 of the Act. In para 3 of the Regulation, the
Essentiality Certificate is required to be given by the State Government and
permission to establish a new medical college is to be given by the State
Government under Section 64 of the Act. If we give the defined meaning to the
expression 'management' occurring in Section 64 of the Act it would mean the
State Government is required to apply to itself for grant of permission to set
up a government medical college through the University. Similarly it would also
mean the State Government applying to itself for grant of Essentiality
Certificate under para 3 of the Regulation. We are afraid the defined meaning
of the expression 'management' cannot be assigned to the expression
'management' occurring in Section 64 of the Act. In the present case, the
context does not permit or requires to apply the defined meaning to the word
'management' occurring in Section 64 of the Act."
42. In Sea TV Network
Vs. Star India Ltd. [Petition No.41(C) of 2005] disposed of on 24.08.2005 this
Tribunal held:
Section 2(j) of
the TRAI Act defines service provider as under:-
“2(1) In this
Act, unless the context otherwise requires,- …..(j) “service provider” means
the [Government as a service provider] and includes a licensee;” (emphasis
supplied)
It is based on
the plain language of this Section, respondent has raised the above preliminary
objection. But what the respondent has failed to notice is the beginning words
of the Section 2(1) of the TRAI Act, which reads: “In this Act, unless the
context otherwise requires……”. The use of this phraseology, in our opinion,
does not limit the definition of service provider only to Government and
licensee. In our opinion, the phraseology “In this Act, unless the context
otherwise requires” is wide enough to accommodate other categories of persons
or parties also as service providers if the context of the Act so requires it
to be done. It is so held by the apex Court of this country in a catena of
decisions. We may, at this juncture, place reliance on a judgment of the apex
court in the case of N.K. Jain versus C.K. Shah [(1991) 2 SCC 498] wherein
considering an argument requiring a restricted interpretation of a definition
clause which starts with the words “unless the context otherwise requires”, it
was held thus:-
“The opening
words in Section 2 viz. “In this Act, unless the context otherwise requires”
must be examined in the light of the context, the title, the preamble and all
the other enacting parts of the statute. Due weight ought to be given to the
opening words. The subject matter and the context in which a particular word is
used are of great importance and it is axiomatic that the object underlying the
Act must always be kept in view in constructing the context in which a
particular word is used. So construed there is much in the context to show that
the restricted meaning in the definitions should not be applied. It, therefore,
follows that the words ‘contribution’, ‘scheme’, ‘fund’ occurring in the said
section should in the “context” be otherwise interpreted as to apply to a
private scheme also and if there is a default in “contribution” by the exempted
establishment, the same amounts to contravention of Section 6 punishable under
section 14(1-A)”.
43. The Supreme Court of India in Star India(P)
Ltd. Vs. Sea TV Network & Anr. – 2006(4) SCC 130 has opined that in view of
the nature of controversy and its likely impact in the broadcasting/TV as a
whole, it is necessary to give an opportunity to all the concerned
stakeholders. It was said so evidently
upon taking into consideration the wide amplitude of the Act.
44. This Tribunal having regard to its nature
of functions has to keep in mind the interest of the consumers. It is, indisputably, only one of the factors
for determination of disputes between the parties. No court far less an Arbitral Tribunal can
exercise such a jurisdiction.
Interpretation of the Act as also the
regulations framed by TRAI is also within the exclusive jurisdiction of this
Tribunal.
As a ‘Broadcaster’, the petitioner
provides multimedia service.
45. The parties have entered into a franchise
agreement.
In Black’s Law
Dictionary, the words ‘Franchise, ‘Franchise Agreement’, ‘Franchisee’ and
‘Franchisor’ have been defined as under:
“Franchise, vs. To
grant (to another) the sole right of engaging in a certain business or in a
business using a particular trademark in a certain area.
Franchise agreement.
The contract between a franchisor and franchisee establishing the terms and
conditions of the franchise relationship.
State and federal laws regulate franchise agreements.
Franchisee. One who
is granted a franchise.
Franchiser. One who grants a franchise – Also spelled franchisor.”
It has not been contended that the respondent
was not entitled to enter into such franchise agreement with the petitioner.
46. It is performing the functions of the ‘licensee’
in the capacity of a ‘service provider’ vis-à-vis the respondent who is also a
service provider.
47. The power of the State vis-à-vis the
statutory bodies like the respondent, has been considered in Delhi Science
Forum Vs. Union of India – 1996(2) SCC 405.
Referring to Section 11 of the Ordinance (as it then was), it was
observed:
Sub-section (2) of Section 11 has also a non-obstante
clause giving overriding effects to said sub-section over anything contained in
the Indian Telegraph Act, 1885. In view of the aforesaid sub-section, the
Authority may from time to time by order notify the rates at which
telecommunication services within India and outside India shall be provided.
Sub-section (3) of Section 11 enjoins the Authority not
to act against the interest of the sovereignty, integrity of India, the
security of the State, friendly relations with foreign States, public order,
decency or morality. In view of Section 12 if the Authority considers
it expedient so to do, it may by order in writing call upon any service
provider at any time to furnish in writing such information or explanation
relating to its affairs as the Authority may require. It can also appoint one
or more persons to make enquiry in relation to the affairs of any service
provider. The Authority can also direct any of its officers or employees to
inspect the books of accounts or other documents of any service provider. The
Authority has been vested with the powers to issue such directions to service
providers 'as it may consider necessary', for proper functioning by the service
provider. Section 13 also reiterates the said
power of the Authority by saying that for its functions under Sub-section (1)
of Section 11, the Authority can issue
such directions from time to time to service provider as it may consider
necessary. Chapter IV contains provision in respect of settlement of disputes.
Section 29 provides for penalty if any
person violates the directions of the Authority and Section 30 prescribes for punishment
if the offence is alleged to have been committed by a Company. With the
establishment of the Telecom Regulatory Authority of India, it can be said that
an independent Telecom Regulatory Authority is to supervise the functioning of
different Telecom service providers and their activities can be regulated in
accordance with the provisions of the said Ordinance.
30. The new
Telecom Policy is not only a commercial venture of the Central Government, but
the object of the policy is also to improve the service so that the said
service should reach the common man and should be within his reach. The
different licensees should not be left to implement the said Telecom Policy
according to their perception. It has rightly been urged that while
implementing the Telecom Policy the security aspect cannot be overlooked. The
existence of a Telecom Regulatory Authority with the appropriate powers is
essential for introduction of plurality in the Telecom Sector. The National
Telecom Policy is a historic departure from the practice followed during the
past century. Since the private sector will have to contribute more to the
development of the telecom network than DOT/MTNL in the next few years, the
role of an independent Telecom Regulatory Authority with appropriate powers
need not be impressed, which can harness the individual appetite for private
gains, for social ends. The Central Government and the Telecom Regulatory
Authority have not to behave like sleeping trustees, but have to function as
active trustees for the public good.
48. The Act is a
complete code in itself. By reason of
the notification dated 9th January 2004, broadcasting and cable
services have been brought within the purview of the jurisdiction of this
Tribunal. We, therefore, fail to understand as to why a dispute by and between
a telecom service provider and a broadcasting service provider cannot be
determined by it.
It can even decide any dispute arising
out of an order by TRAI (See TRAI Vs. TDSAT, WP(C) No.2838 of 2005 of the Delhi
High Court) disposed of on 23.12.2005.
In a given case, it can exercise the same power as that of TRAI.
It can regulate its own procedure. It is to be guided only by the principles of
natural justice. It can exercise some
powers vested in the Civil Court in respect of the matters specifically
provided for. It’s orders are executable
as a decree of a civil court. This
Tribunal being the appellate authority of TRAI, if any occasion arises may
exercise the same jurisdiction.
It is, therefore, in our considered
view idle to contend that the jurisdiction of this Tribunal in a matter like
the present one would be a limited one.
49. IUC
Regulations
This brings us to the question as to
whether IUC Regulations 2003, would be applicable in this case.
The said Regulations were framed by
TRAI in exercise of its powers under clause (ii), (iii) and (iv) of sub-section
(b) of Section 11(1) of the Act, which provides for its functions relating to
fixation of the terms and conditions of interconnectivity between the service
providers, ensure technical compatibility and effective interconnection, and
regulate arrangement amongst service providers of sharing their revenue.
A statute as is well known must be
read in its entirety. Its interpretation
would depend upon its text and context.
The purpose and object for which it has been enacted must be looked
into.
In Municipal Corporation of Delhi v. Qimat Rai Gupta
and Ors. – 2007(7) SCC 309, it has been held:
“21. The meaning of a word, it is
trite, would depend upon its text and context. It will also depend upon the
purport and object it seeks to achieve. With a view to understand the proper
meaning of the said word, we may notice the decisions cited at the Bar.”
50. Applying the principles of interpretation
of a Statute including the principles of purposive interpretation as referred
to hereinbefore, we are of the opinion that IUC Regulations govern those cases
where only telecom services are being provided by the service providers.
It applies to
those who provide services like Basic Operator’s and/or other telecom services.
It does not deal with this type of a
case where two service providers provide different nature of services in
ordinary course of their business. The
agreement between them, however, provides for some sort of convergence.
IUC has been defined in clause (ix) of
Regulation 2 to mean the charge payable by one service provider to one or more
service providers for usage of the network elements for origination, transmit
and termination of calls.
Petitioner
has nothing to do therewith.
We therefore, are
of the firm opinion that the provisions of the IUC Regulations do not restrict
the exercise of jurisdiction of this Tribunal to adjudicate a dispute of the
present nature.
We have furthermore noticed that TRAI
has framed different nature of regulation in relation to ‘Broadcasting as Cable
Services’. The nature of interconnection
regulations framed by TRAI clearly suggest that the same would have no
application.
Arbitration
51 The
arbitration clause contained in the agreement, it is true, is of wide
import. The petitioner itself has
invoked the arbitration agreement by a letter dated 13th April, 2009
pursuant whereto and in furtherance whereof Mr.Rakesh Kumar was appointed by
the respondent as an arbitrator.
The
petitioner however, has filed this application contending that invocation of the
said arbitration clause was erroneous.
The
question, which, thus, arises for our consideration is as to whether
jurisdiction of this Arbitral Tribunal could have been invoked, when the
arbitration clause has already been resorted to. In terms of Section 16 of the 1996 Act, ordinarily
it is for the Arbitral Tribunal to determine its jurisdiction. But if its jurisdiction is found to be ousted,
this Tribunal can entertain the petition.
A question, furthermore, arises as to when
the petitioner itself invoked the arbitration clause, should it be permitted to
turn around and contend that the arbitrator had no jurisdiction to decide its
own dispute. We will advert to this
question a little later.
We may at the outset notice some decisions of the Supreme Court of
India on which the learned counsel for the parties have placed reliance.
In SBP & Co. v. Patel Engg. Ltd.- (2005) 8 SCC 618, it was held:-
“16. We
may at this stage notice the complementary nature of Sections 8 and 11. Where
there is an arbitration agreement between the parties and one of the parties,
ignoring it, files an action before a judicial authority and the other party
raises the objection that there is an arbitration clause, the judicial
authority has to consider that objection and if the objection is found
sustainable to refer the parties to arbitration. The expression used in
this section is “shall” and this Court in P. Anand Gajapathi Raju v. P.V.G.
Raju and in Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway
Petroleums has held that the judicial authority is bound to refer the
matter to arbitration once the existence of a valid arbitration clause is
established. Thus, the judicial authority is entitled to, has to and is
bound to decide the jurisdictional issue raised before it, before making or
declining to make a reference. (emphasis supplied).
It was
observed:
19. It is also
not possible to accept the argument that there is an exclusive conferment of
jurisdiction on the Arbitral Tribunal, to decide on the existence or validity
of the arbitration agreement. Section 8 of the Act contemplates a judicial
authority before which an action is brought in a matter which is the subject of
an arbitration agreement, on the terms specified therein, to refer the dispute
to arbitration. A judicial authority as such is not defined in the Act. It
would certainly include the court as defined in Section 2(e) of the Act
and would also, in our opinion, include other courts and may even include a
special tribunal like the Consumer Forum (see Fair Air Engineers (P) Ltd.
v. N.K. Modi). When the defendant to an action before a judicial
authority raises the plea that there is an arbitration agreement and the
subject-matter of the claim is covered by the agreement and the plaintiff or
the person who has approached the judicial authority for relief, disputes the
same, the judicial authority, in the absence of any restriction in the Act, has
necessarily to decide whether, in fact, there is in existence a valid
arbitration agreement and whether the dispute that is sought to be raised
before it, is covered by the arbitration clause. It is difficult to contemplate
that the judicial authority has also to act mechanically or has merely to see
the original arbitration agreement produced before it, and mechanically refer
the parties to an arbitration. (see R.M.A.R.A. Adaikappa Chettiar v. R.
Chandrasekhara Thevar).
Referring to Section 16 of the Act,
the court held:
20. Section
16 is said to be the recognition of the principle of Kompetenz-Kompetenz.
The fact that the Arbitral Tribunal has the competence to rule on its own
jurisdiction and to define the contours of its jurisdiction, only means that
when such issues arise before it, the Tribunal can, and possibly, ought to
decide them. This can happen when the parties have gone to the Arbitral
Tribunal without recourse to Section 8 or 11 of the Act. But where the
jurisdictional issues are decided under these sections, before a reference is
made, Section 16 cannot be held to empower the Arbitral Tribunal to ignore the
decision given by the judicial authority or the Chief Justice before the
reference to it was made. The competence to decide does not enable the Arbitral
Tribunal to get over the finality conferred on an order passed prior to its
entering upon the reference by the very statute that creates it. That is the
position arising out of Section 11(7) of the Act read with Section 16 thereof.
The finality given to the order of the Chief Justice on the matters within his
competence under Section 11 of the Act are incapable of being reopened before
the Arbitral Tribunal.
52. Yet again in Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums - (2003)
6 SCC 503, it was held as under:
“16. It is clear from the language of
the section, as interpreted by the Constitution Bench judgment in Konkan
Rly. that if there is any objection as to the applicability of the
arbitration clause to the facts of the case, the same will have to be raised
before the Arbitral Tribunal concerned. Therefore, in our opinion, in this case
the courts below ought not to have proceeded to examine the applicability of
the arbitration clause to the facts of the case in hand but ought to have left
that issue to be determined by the Arbitral Tribunal as contemplated in clause
40 of the Dealership Agreement and as required under Sections 8 and 16 of the
Act.”
The question as to
whether this Tribunal has exclusive jurisdiction which would exclude the
jurisdiction of the Arbitral Tribunal, is required to be decided herein.
53. We may at this juncture notice the decision
of this Tribunal in Aircel Digilink India Ltd. Vs. Union of India & Anr. –
2005(3) Comp. L.J.461:-
It was succinctly held therein
“20. The Arbitration Act, 1996, is a general Act and
it will apply to all the arbitration agreements but the Act, i.e., TRAI Act is
Special Act and applies to telecom sector and by notification issued on 9
January, 2004, also applies to broadcasting and cable services. The intention
of the Legislature in ousting the jurisdiction of all other courts and all
other authorities is quite apparent and it is to ensure and enable one single
authority, i.e., TDSAT, to uniformly regulate this vital telecom sector which
includes broadcasting and cable TV sector. Proper functioning of various
stakeholders in this telecom sector is vital to the development and to safeguard
interest of the consumers at large who are the beneficiaries of these services.
It may also be noticed that telecom sector is subject to various regulations
issued by TRAI which even monitors the interconnection between various service
providers. In the Cellular Operators Association of India v. Union of India
(2003) 1 Comp LJ 1 (SC): (2003) 3 SCC 186, the Supreme Court has held that
jurisdiction of TDSAT under Section 14 cannot be held merely to be supervisory
jurisdiction and that it is the only forum for addressing the grievances of
aggrieved party inasmuch as the appellate jurisdiction to the Supreme Court is
only on the substantial question of law and jurisdiction of Civil Courts for
filing a suit is ousted. TDSAT has power to adjudicate any dispute. The Supreme
Court in the case of West Bengal [Telecom] Regulatory Commission v. CESE Ltd.
(2002) 8 SCC 715 has even recommended the establishment of a similar expert
Tribunal like TDSAT in telecom sector in other similar regulatory bodies. The
question of exclusive jurisdiction of an expert body like TDSAT has recently
been discussed in a decision of Supreme Court in the case of Clariant
International Ltd. and Anr. v. Securities and Exchange Board of India (2004) 4
Comp LJ 52 (SC): (2004) 8 SCC 524 (paras 64 to 82).
21. The principles laid in various decisions of the
Supreme Court cited above are quite explicit. TRAI Act is a special law, which
will govern, and it overtakes general law, i.e., Arbitration Act, 1996. Also,
TRAI Act, being the later Act (TDSAT was constituted by the Amending Act of
2000) has precedence over the earlier Act which is the Arbitration Act, 1996.
The principle of generalia specialibus non derogant has been referred to in a
judgment of Supreme Court in Talcher Municipality v. Talcher Regulated Market
Committee and Anr. (2004) 6 SCC 178. Consent cannot confer jurisdiction when
there is none. Dominant public interest requires that all disputes in telecom
sector which includes broadcasting and cable TV should be within the exclusive
jurisdiction of TDSAT. In these circumstances, public policy demands that
jurisdiction of Tribunal like TDSAT should be exclusive and arbitration
agreement not to have any applicability.
22. If we refer to the provisions of the Act,
particularly, Section 15, it is quite clear that the only exception is when
there is arbitration under Section 7B of the Indian Telegraph Act, 1885, and in
no other dispute within the jurisdiction of TDSAT the matter can go to the
arbitration. Statute is clear. By judicial pronouncement no further proviso can
be added taking away jurisdiction of TDSAT except MRTP, individual consumer
disputes and dispute falling under Section 7B of the Indian Telegraph Act,
1885. Even otherwise jurisdiction of arbitration is barred by necessary
implication. Provisions of Section 89 of the Code of Civil Procedure has no
application inasmuch as jurisdiction of Civil Court to try any dispute under
the Act is barred. A court, therefore, cannot, frame question arising out of
the dispute in telecom sector and refer the same to arbitration. Only two other
provisions which are to be read along with the Act are those under the Indian
Telegraph Act, 1885, and the Indian Wireless Telegraphy Act, 1933. TDSAT will
have jurisdiction in respect of any dispute as mentioned in Section 14 of the
Act. It will also have the jurisdiction if dispute arises in respect of direct
activities in telecom sector i.e. those relating to the telecom services.
Dispute between two service providers as landlord and tenant would certainly be
outside the ambit of the Act. Those disputes over which TDSAT has no exclusive
jurisdiction and where the third party's interest like the consumers is not in
issue or where there does not exist any public interest, the domestic forums
chosen by the parties by way of an arbitration agreement may be held to be
valid.
23. We must, therefore, hold that arbitration is barred in respect of the matters which are within the exclusive jurisdiction of the TDSAT under the provisions of Telecom Regulatory Authority of India Act, 1997.”
54. Mr. Maninder Singh
the learned senior counsel categorically stated that he did not intend to
question the correctness of the said decision.
If that be so, there cannot be any
doubt or dispute that only this Tribunal will have jurisdiction to determine
the dispute and not the Arbitral Tribunal.
So long the correctness of the
decision in Aircel Digilink(supra) is not in question, it would be binding on
us.
We may also notice that a division
bench of the Delhi High Court speaking through Dr.M.K. Sharma CJ (as His
Lordship then was) in ITPO Vs. International Amusement Ltd. reported in
142(2007) DLT 342 while interpreting the provisions of Public Premises
(Eviction of Unauthorized Occupants) Act, 1971 held that it being a special
statute, an Arbitral Tribunal would have no jurisdiction to decide a dispute
which would fall for consideration of an Estate Officer in terms of Section 7
thereof, stating:
“31. The second submission of Mr. Arun Jaitley that
the provisions of Arbitration and Conciliation Act would over-ride the
provisions of PP Act also cannot be accepted. The aforesaid position is
apparent when we make a reference to the provisions of Clauses 27 and 28 of the
license agreement. In Clause 27 of the license agreement it is clearly
stipulated that the license given to the IAL would be subject to the
jurisdiction of the Estate Officer of ITPO who would have the power to exercise
jurisdiction under the PP Act. Clause 28 of the agreement is an arbitration
clause. It is a settled principle of interpretation of documents that
harmonious construction should be adopted so as to reconcile all clauses and to
give effect to them. It is also settled principle of interpretation of
documents that in case of irreconcilable conflict between two clauses, the
clause which is earlier should be given preference over a clause which is
subsequent.
32. If we apply the above principles in the present
case, then we have to harmoniously read Clauses 27 and 28 of the license deed
to give effect to both of them. Harmonious reading of the two clauses is
possible if we hold that provisions of PP Act will apply to all matters
referred to and specified by the special enactments and provisions of
Arbitration Act including arbitration clause will apply to matters and disputes
that cannot be subject matter of proceedings under the PP Act. Thus the
arbitrator is entitled to adjudicate and decide claims other than those pending
before the Estate Officer or raised under the PP Act. Disputes under the PP Act
can be decided and adjudicated upon by the Estate Officer in terms of Clause
27. If we hold that the two clauses are irreconcilable, then in terms of the
second principle mentioned above, Clause 27 will apply.
33. It cannot be said that proceedings under the PP Act
and arbitration Act for the same dispute can be resorted to and permitted under
the license deed. No such argument was in fact raised. It is also not
permissible to raise any such argument and there cannot be an arbitration
clause which gives option to a parties to have resort to arbitration and also
have right and option to resort to proceedings under the PP Act. The two
clauses have to harmoniously interpreted. The intention of the parties as
disclosed from the aforesaid clauses in the license agreement is that wherever
and whenever the provisions of PP Act are applicable the same would apply.
Matters that can be made subject matter under the PP Act and decided therein
can be made subject matter of Arbitration. Consequently, we hold that the
jurisdiction to be exercised by he Estate Officer cannot be said to be subject
to the order to be passed by the Arbitrator in the arbitration proceedings.
It was also observed:
“37. Section 15 read with Sections 5 and 7 of the PP Act confers
exclusive jurisdiction on the Estate Officer appointed under Section 3 of the aforesaid Act to
deal with the applications under Sections 5 and 7. Section 15 of the PP Act bars and
prohibits any Court from entertaining any suit or proceeding for eviction etc.
as provided under Clauses (a) to (e) therein. The general power of the Court
under Section 9 of the Code of Civil
Procedure, 1908 to entertain suit or proceedings is therefore ousted if a
dispute raised falls in Clauses (a) to (e) of the aforesaid Section. Sections 5 and 7 of the PP Act empowers an
Estate Officer appointed under Section 3 to deal with applications
for eviction of unauthorised occupants and applications for payment of rent and
damages in respect of public premises. The Act also prescribes a procedure for
filing an appeal by a person aggrieved by an order passed by the Estate Officer
under Section 9 of the PP Act. The
aforesaid Act is, therefore, a special Act which also prescribes complete
procedure for adjudication of proceeding under the PP Act. The said Act is a
complete code in itself. We do not think that proceedings under Sections 5 and 7 of the PP Act can be made
subject matter of arbitration. The said enactment is a special legislation,
whereby specific powers have been conferred on an Estate Officer to adjudicate
and decide applications under Section 5 and 7 of the PP Act. Courts have
been prohibited and restrained from exercising jurisdiction over matters
mentioned in Section 5 and 7 of PP Act in view of
Section 15 of the PP Act. Reading of
Section 5 and 7 makes it clear that it is
the Estate Officer alone who has the sole and exclusive jurisdiction to decide
applications under Sections 5 and 7 of the Said Act. The said
jurisdiction conferred by the statute cannot by a contract be conferred upon an
arbitrator or made subject matter of reference before an arbitrator. PP Act has
given exclusive jurisdiction to an Estate Officer, who alone has authority to
determine the specified disputes and matters and, thereforee, these are not
matters that can be referred to an Arbitrator. There cannot be waiver of
statutory provisions. Contract must be within the legal framework. Parties
cannot contract out of the statute. The matters on which an Estate officer has
exclusive jurisdiction are not arbitrable and parties by a contract cannot
agree to refer matters on which jurisdiction has been conferred and given to
Estate Officer. Arbitrability of the claims covered by Sections 5 and 7 of PP Act is therefore
excluded. We are fortified in our conclusion by the judgment of the Supreme
Court in the case of Ashoka Marketing Limited and Anr. v. Punjab National Bank and
Ors. MANU/SC/0198/1991 : [1990]3SCR649 . In the said case the question arose whether the Rent
Control Act which also a special Act will over-ride the provisions of PP Act.
It was held that the PP Act is a special statute relating to eviction of
unauthorised occupants from public premises and will prevail over Delhi Rent
Control legislation which is intended to deal with the general relationship of
landlords and tenants in respect of premises other than government premises.
Rent Control legislation, it was held is also a special statute but was enacted
earlier in point of time. However, both enactments are special statutes in
relation to the matters dealt with therein and in such circumstances, it is the
objective and purpose behind the two enactments, that determines which
enactment will apply and given preference.
The purpose and objective underlying the two Acts
and intentment are conveyed by the language of the relevant provisions. See:
Shri Ram Narain v. The Simla Banking and
Industrial Co. Limited [1956]1SCR603 . Applying the said principles in Ashoka Marketing
(supra) it has been held that PP Act was enacted to control the rampant
unauthorised occupation of public premises by providing machinery for eviction
of persons in unauthorised occupation. The said enactment has a public purpose
and interest. Special powers in this regard have been conferred under the
enactment on the Estate Officer to deal with the problem of unauthorised
occupation in premises belonging to government, public companies and
corporations controlled and owned by the Central Government. Same reasoning
will equally apply to PP Act and Arbitration and Conciliation Act.”
55. We may also notice
that recently the Supreme Court of India in Gujrat Urja Vikash Nigam Ltd. Vs.
Essar Power Ltd – 2008(4) SCC 755, opined:
“56. In the present case we have already noted that
there an implied conflict between Section 86(1)(f) of the Electricity Act,
2003 and Section 11 of the Arbitration and
Conciliation Act, 1996 since under Section 86(1)(f) the dispute between
licensees and generating companies is to be decided by the State Commission or
the arbitrator nominated by it, whereas under Section 11 of the Arbitrary and
Conciliation Act, 1996, the Court can refer such disputes to an arbitrator
appointed by it. Hence on harmonious construction of the provisions of the
Electricity Act, 2003 and the Arbitration and Conciliation Act, 1996 we are of
the opinion that whenever there is a dispute between a licensee and the
generating companies only the State Commission or Central Commission (as the
case may be) or arbitrator (or arbitrators) nominated by it can resolve such a
dispute, whereas all other disputes (unless there is some other provision in
the Electricity Act, 2003) would be decided in accordance with Section 11 of the Arbitration and
Conciliation Act, 1996. This is also evident from Section 158 of the Electricity Act,
2003. However, except for Section 11 all other provisions of the
Arbitration and Conciliation Act, 1996 will apply to arbitrations under Section
86(1)(f) of the Electricity Act,
2003 (unless there is a conflicting provision in the Electricity Act, 2003, in
which case such provision will prevail.)
57. In the present case, it is true that there is a
provision for arbitration in the agreement between the parties dtd. 30.5.1996.
Had the Electricity Act, 2003 not been enacted, there could be no doubt that
the arbitration would have to be done in accordance with the Arbitration and
Conciliation Act, 1996. However, since the Electricity Act, 2003 has come into
force w.e.f. 10.6.2003, after this date all adjudication of disputes between
licensees and generating companies can only be done by the State Commission or
the arbitrator (or arbitrators) appointed by it. After 10.6.2003 there can be
no adjudication of dispute between licensees and generating companies by anyone
other than the State Commission or the arbitrator (or arbitrators) nominated by
it. We further clarify that all disputes, and not merely those pertaining to
matters referred to in Clauses (a) to (e) and (g) to (k) in Section 86(1), between the licensee and
generating companies can only be resolved by the Commission or an arbitrator
appointed by it. This is because there is no restriction in Section 86(1)(f) about the nature of the
dispute.
58. We make it clear that it is only with regard to
the authority which can adjudicate or arbitrate disputes that the Electricity
Act, 2003 will prevail over Section 11 of the Arbitration and Conciliation
Act, 1996. However, as regards, the procedure to be followed by the State
Commission (or the arbitrator nominated by it) and other matters related to
arbitration (other than appointment of the arbitrator) the Arbitration and
Conciliation Act, 1996 will apply (except if there is a conflicting provision
in the Act of 2003). In other words, Section 86(1)(f) is only restricted to the
authority which is to adjudicate or arbitrate between licensees and generating
companies. Procedural and other matters relating to such proceedings will of
course be governed by Arbitration and Conciliation Act, 1996, unless there is a
conflicting provision in the Act of 2003.”
The Act, however,
does not contain such a provision like Section 158 of the Electricity Act,
2003.
56. It is of some interest to notice that the
Delhi High Court in FAO(OS) 232 of 2004 – M/s Reliance Infocomm Ltd. Vs. Bharat
Sanchar Nigam Ltd. allowed withdrawal of a writ petition filed before it, stating:
“Some disputes arose
between the parties and in view of the arbitration clause contained in the
agreement, the appellant here invoked the said arbitration. As the appellant wanted some interim
directions, it filed the petition under Section 9 of the Arbitration and
Conciliation Act, i.e. OMP No.398/2004 on the original side of this Court. The respondent appeared and, inter alia, took
the objection to the effect that the arbitration proceedings were not
maintainable on the ground that the dispute raised was covered by the
provisions of Telecom Regulatory Authority of India Act, 1997 (in short ‘the
TRAI Act’) for which special forum is provided under the said Act. However, the learned Single Judge dismissed
the said OMP vide impugned judgment dated 4.11.2004 on merits and did not go
into the question of jurisdiction.
Challenging that order, present appeal is filed.
We may note at this
stage that in this appeal the respondents had again pressed the issue of
jurisdiction and the matter was taken to Supreme court on few occasions. It would be sufficient to mention that vide
order dated 29.1.2008 the Supreme Court directed this Court to first decide the
question of jurisdiction as a preliminary issue.
Mr.Mukul Rohtagi,
learned senior counsel appearing for the appellant, very fairly states that in
view of recent judgment of the Supreme Court in Gujarat Urja Vikas Nigam Ltd.
Vs. Essar Power Ltd. – (2008) 4 SCC 755, he would concede that the TRAI Act
would prevail over the Arbitration and Conciliation Act, being a special
statute and therefore, the matter needs to be examined by Telecom Disputes
Settlement and Appellate Tribunal (in short ‘the TDSAT’). It is thus accepted that the learned Single Judge
had no jurisdiction to entertain the petition under Section 9 of the
Arbitration and Conciliation Act. In
these circumstances, he wants to withdraw this appeal with liberty to pursue
the remedy before the TDSAT. Liberty, as
prayed for, is granted and this appeal is dismissed as withdrawn.
The arbitration
application filed under Section 11 of the Arbitration and Conciliation Act,
i.e. A.A. No.187/2006 is also taken on board with the consent of the parties
and is dismissed as withdrawn.
It is accepted by the
counsel for the parties that in view of the legal position that OMP No.398/2004
as filed by the appellant was not maintainable, any observations made in the
order of the learned Single Judge would not come in the way of the appellant in
the petition filed before the TDSAT and TDSAT shall be at liberty to deal with
the said petition without being influenced by the order of the learned Single
Judge.”
Effect of Section 21 of 1996 Act
57. Section 21 of the 1996 Act no doubt
provides for commencement of the Arbitral proceedings, however, the same by
itself, in our opinion, would be no use as we have arrived at a finding that
the Arbitral Tribunal did not have any jurisdiction to enter into a
reference. If the Arbitral Tribunal had
no jurisdiction, the entire proceeding initiated before it was ‘Coram Non
Judice’; it being illegal, commencement of Arbitration proceedings by itself
would not clothe it with a jurisdiction to proceed in the matter and
consequently deny exercise of its jurisdiction by this Tribunal.
Estoppel
58. This brings us to the question of estoppel.
Rule of estoppel is procedural in
nature. The said rule will have no
application in a case where the Arbitral Tribunal has no jurisdiction.
It is well settled that an order
passed by a court/Tribunal without jurisdiction would be a nullity. It is coram non judice.
It is trite that these can be no estoppel
against statute. It will certainly have
no application in a case involving jurisdiction.
59. In Chiranjilal Shrilal Goenka(Deceased)
though Lrs. Vs. Jasjit Singh & Ors. – 1993(2) SCC 507 the Supreme Court
held:
“17. We agree with
Mr. Chidambaram that the applicant had consented to refer the dispute for
arbitration of dispute in the pending probate proceedings, but consent cannot
confer jurisdiction nor an estoppel against statute. The other legatees in the
will were not parties to it. In A.R. Antulay v. R.S. Naik – 1988CriLJ1661 when a Constitution
Bench directed the High Court Judge to try the offences under the Prevention of
Corruption Act with which the petitioner therein was charged and the trial was
being proceeded with, he questioned by way of writ petition the jurisdiction of
this Court to give such a direction. A Bench of seven judges per majority
construed meaning of the word 'jurisdiction', Mukherjee, J. as he then was,
speaking per himself. Oza and Natarajan, JJ. held that the power to create or
enlarge jurisdiction is legislative in character. So also the power to confer a
right of appeal or to take away a right of appeal. The Parliament alone can do
it by law and no Court, whether superior or inferior or both combine, can
enlarge the jurisdiction of a Court and divest a person of his rights of appeal
or revision. Ranganath Misra, J. as he then was, held that jurisdiction comes
solely from the law of the land and cannot be exercised otherwise, in this
country, jurisdiction can be exercised only when provided for either in the
Constitution or in the laws made by the Legislature. Jurisdiction is thus the
authority or power of the Court to deal with a matter and make an order
carrying binding force in the facts. Oza, J. supplementing the question held
that the jurisdiction to try a case could only be conferred by law enacted by
the legislature. The Supreme Court could not confer jurisdiction if it does not
exist in law. Ray, J. held that the Court cannot confer a jurisdiction on
itself which is not provided in the law. In the dissenting opinion
Venkatachaliah (sic) he then was to lay down that the expression jurisdiction
or prior to determination is a "verb; I coal of many colours". In the
case of a Tribunal, an error of law might become not merely an error in
jurisdiction but might partake of the character of an error of jurisdiction.
But, otherwise, jurisdiction is a 'legal shelter' and a power to bind despite a
possible error in the decision. The existence of jurisdiction does not depend
on the correctness of its exercise. The authority to decide embodies a
privilege to bind despite error, a privilege which is inherent in and
indispensable to every judicial function. The characteristic attribute of a
judicial act is that it binds whether it be right or it be wrong. Thus this
Court laid down as an authoritative proposition of law that the jurisdiction
could be conferred by statute and this Court cannot confer jurisdiction or an
authority on a tribunal. In that case this Court held that Constitution Bench
has no power to give direction contrary to Criminal Law Amendment Act, 1952.
The direction per majority was held to be void. 18. It. is settled law that a
decree passed by a court without jurisdiction on the subject matter or on the
grounds on which the decree made which goes to the root of its jurisdiction or
lacks inherent jurisdiction is a corum non judice.”
60. Yet again a Chief Justice Andhra Pradesh Vs. LVA Dixitulu & Ors.
– 1979(2) SCC 34, it was held:
“Moreover, this is a pure question
of law depending upon the interpretation of Article 371-D. If the argument holds good, it
will make the decision of the Tribunal as having been given by an authority
suffering from inherent lack of jurisdiction. Such a decision cannot be
sustained merely by the doctrine of res judicata or estoppel as urged in this
case.”
61. Having
regard to the consideration of preliminary objections raised on behalf of the
respondent from various angles, we are of the opinion that the same have no
force.
62. This
Tribunal, in absence of any challenge thrown to the decision of this Tribunal,
feel bound by them. In this view of the
matter, we have no hesitation in holding that this Tribunal has jurisdiction to
entertain the present petition. It is
decided accordingly. Costs of this
petition shall abide by the result of the main petition.
…………....., J
(S.B.Sinha)
Chairperson
…………….....
(G. D. Gaiha)
Member