Bombay High Court
Cellur Operator Association Of ... vs Competition Commission Of India ... on 21 September, 2017
Bench: Anoop V. Mohta
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INDEX OF JUDGMENT
Sr. No. Particulars Pages
1 Introduction 15 to 17
2 Operative part of impugned order 17 to 18
3 Details of Individual parties 18 to 19
4 The Competition Act 19 to 20
5 Sections of Competition Act 20 to 27
6 The scope & authority of the Commission 27 to 32
7 Telecommunication Services 33 to 37
8 Telecommunication laws-binds all 37 to 49
9 Restricted bundle of facts 50 to 68
10 Maintainability and Entertainability of the Writ 69 to 70
11 Rival contentions of the parties 70 to 105
12 Fundamental reasons to decide Writ Petitions 105 to 109
13 A case for Judicial Review 109 to 112
14 Administrative direction by the Commission 112 to 117
15 Territorial Jurisdiction 117 to 119
16 Objections to entertainability of Writ Petitions in light of 119 to 120
Section 26(1) of Competition Act
17 Power and jurisdiction under the TRAI Act and the 120 to 127
Competition Act
18 TRAI recommendations treated as final 127 to 129
19 Free Subscribers and card holders and the Obligations of 129 to 133
other Service Providers
20 The charts and the details 133 to 135
21 Telecommunication regulations are binding 135 to 141
22 Role of Association (COAI)- "Every majority decision is not 141 to 146
cartelisation"
23 No case of tacit agreement or joint decision 146 to 147
24 Cartelisation 147 to 149
25 Show cause notices issued by DG- 149 to 150
26 The Parties material and/or suppression of material facts 151 to 153
and/or incorrect information
27 Conclusions 153 to 159
28 Order 159 to 160
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8594 OF 2017
Vodafone India Limited
a company registeredcard under
the Companies Act and having its
registered office at Peninsula
Corporate Park, Ganpatrao Kadam
Marg, Lower Parel,
Mumbai 400 013. ....Petitioner.
Vs.
1 The Competition Commission of
India represented by its Secretary
18-20, The Hindustan Times House,
K.G. Marg, Barakhamba Road,
New Delhi-110001.
2 The Additional Director General,
Competition Commission of India,
"B" Wing, HUDCO Vishala,
4 Bhikaji Cama Place,
New Delhi-110 066.
3 CA Rajan Sardana, B-1/350,
JanakPuri, New Delhi-110058.
4 Kantilal Ambalal Puj 2, Neetibaug
Society, Opposite Gujarat High Court,
Ahmedabad-380061.
5 Reliance Jio Infocomm Limited,
9th Floor, Maker Chambers-IV,
Nariman Point, Mumbai 400021.
2/160
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6 Cellular Operators Association of
India, 14, Bhai Veer Singh Marg,
New Delhi 110001.
7 Bharti Airtel Limited,
Plot No. 16, 5th Floor, Udyog Vihar,
Phase IV, Gurgaon, Haryana,
Pin-122015 and also at
Bharti Crescent 1, Nelson Mandela
Road, Vasant Kunj, Phase II,
New Delhi 110070.
8 Bharti Hexacom Limited
Bharti Crescent 1, Nelson Mandela
Road, Vasant Kunj, Phase II,
New Delhi 110070.
9 Idea Cellular Ltd.,
7th Floor, "Konnectus", Bhavbhuti
Marg, Near Minto Bridge,
New Delhi, Pin-110001 and also at
10th Floor, Birla Centurion, Century
Mills Compound, Pandurang
Budhkar Marg, Worli,
Mumbai-400030.
10 Vodafone Mobile Services Limited,
a company registered under the
Companies Act, 1956 and
having its Registered Office at
Peninsula Corporate Park,
Ganpatrao Kadam Marg,
Lower Parel, Mumbai-400 013.
11 Vodafone Group Plc
Vodafone House, the Connection
Newbury, Berkshire RG 14 2FN,
England.
12 Telenor (India) Communication
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Private Ltd., DBS Business Centre,
First Floor, World Trade Tower,
Barakhamba Lane, Connaught Place,
New Delhi 110001.
13 Videocon Telecommunication
Private Limited,
RH No. 2, Pratapnagar
Shahanoorwadi Road,
Aurangabad-431001.
14 Aircel Limited,
Opus Centre, 47, Central Road,
Opposite Tunga Paradise, MIDC,
Andheri (East), Mumbai 400093. ....Respondents.
WITH
WRIT PETITION NO. 8596 OF 2017
Vodafone Mobile Services Limited
a company registered under
the Companies Act I of 1956 and having its
Registered office situate at Peninsula
Corporate Park, Ganpatrao Kadam
Marg, Lower Parel Mumbai 400 013
and its Maharashtra and Goa
Circle Office situate at The Metropolitan
F.P. No. 27, Survey No. 21, Wakdewadi
Old Pune-Mumbai Highway,
Shivajinagar, Pune-411003. ....Petitioner.
Vs.
1 The Competition Commission of
India represented by its Secretary
18-20, The Hindustan Times House,
K.G. Marg, Barakhamba Road,
New Delhi-110001.
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2 The Additional Director General,
Competition Commission of India,
"B" Wing, HUDCO Vishala,
4 Bhikaji Cama Place,
New Delhi-110 066.
3 Reliance Jio Infocomm Limited,
9th Floor, Maker Chambers-IV,
Nariman Point, Mumbai 400021.
4 Cellular Operators Association of
India, 14, Bhai Veer Singh Marg,
New Delhi 110001.
5 Bharti Airtel Limited,
Plot No. 16, 5th Floor, Udyog Vihar,
Phase IV, Gurgaon-122015, Haryana,
and also at Bharti Crescent,
1 Nelson Mandela Road,
Vasant Kunj, Phase II,
New Delhi-110070.
6 Bharti Hexacom Limited
Bharti Crescent 1, Nelson Mandela
Road, Vasant Kunj, Phase II,
New Delhi 110070.
7 Idea Cellular Ltd.,
7th Floor, "Konnectus", Bhavbhuti
Marg, Near Minto Bridge,
New Delhi-110001 and also at
10th Floor, Birla Centurion, Century
Mills Compound, Pandurang
Budhkar Marg, Worli,
Mumbai-400030.
8 Vodafone India Limited,
a company registered under
Companies Act, 1956 and
having its registered Office at
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Peninsula Corporate Park,
Ganpatrao Kadam Marg,
Lower Parel, Mumbai-400 013.
9 Vodafone Group Plc
Vodafone House, The Connection
Newbury, Berkshire RG 14 2FN,
England.
10 CA Rajan Sardana, B-1/350,
JanakPuri, New Delhi-110058.
11 Kantilal Ambalal Puj 2, Neeti Baug
Society, Opposite Gujarat High Court,
Ahmedabad-380061.
12 Telenor (India) Communication
Private Ltd., DBS Business Centre,
First Floor, World Trade Tower,
Barakhamba Lane, Connaught Place,
New Delhi 110001.
13 Videocon Telecommunication
Private Limited,
RH No. 2, Pratapnagar
Shahanoorwadi Road,
Aurangabad-431001.
14 Aircel Limited,
Opus Centre, 47, Central Road,
Opposite Tunga Paradise, MIDC,
Andheri (East), Mumbai 400093. ....Respondents.
WITH
WRIT PETITION NO. 7164 OF 2017
AND
CIVIL APPLICATION (STAMP) NO. 17736 OF 2017
IN
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WRIT PETITION NO. 7164 OF 2017
Idea Cellular Ltd.,
a company incorporated under the
Companies Act, 1956 with its
corporate office at 10th Floor,
Birla Centurion, Century Mills Compound,
Pandurang Budhkar Marg, Worli,
Mumbai-400030 and registered office
at Suman Tower, Plot No. 18, Sector 11,
Gandhinagar-383 011, Gujarat. ....Petitioner.
Vs.
1 The Competition Commission of
India (Through The Secretary),
constituted under the Competition
Act, 2002 (12 of 2003) having
its office at 18-20,
The Hindustan Times House,
K.G. Marg, Barakhamba Road,
New Delhi-110 001.
2 Director General, the investigation
wing of the Competition
Commission of India,
having its office at "B" Wing,
HUDCO Vishala,
14 Bhikaji Cama Place,
New Delhi-110 066.
3 CA Ranjan Sardana,
a citizen of India,
residing at B-1/350,
Janak Puri, New Delhi-110058.
4 Kantilal Ambalal Puj,
a citizen of India
residing at 2, Neetibaug Society,
Opposite Gujarat High Court,
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Ahmedabad-380 061,
Gujarat.
5 Reliance Jio Infocomm Limited,
a company registered under the
Companies Act, 1956 with its
registered office at
9th Floor, Maker Chambers - IV,
Nariman Point, Mumbai 400 021.
6 Cellular Operators Association of
India, an association of cellular
operators in India with its office at
14, Bhai Veer Singh Marg,
New Delhi-110 001.
7 Bharti Airtel Limited,
a company registered under the
Companies Act, 1956 with its
registered office at Bharti Crescent
1, Nelson Mandela Road,
Vasant Kunj, Phase II,
New Delhi-110 070.
8 Bharti Hexacom Limited,
a company registered under the
Companies Act, 1956 with its
registered office at
Bharti Crescent 1, Nelson Mandela
Road, Vasant Kunj, Phase-II,
New Delhi - 110 070.
9 Vodafone India Limited,
a company incorporated under
the Companies Act, 1956 with its
registered office at Peninsula
Corporate Park,
Ganpatrao Kadam Marg,
Lower Parel, Mumbai 400 013.
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10 Vodafone Mobile Services Limited,
a company registered under the
Companies Act, 1956 with its
registered Office at C-48,
Okha Industrial Area, Phase-II,
New Delhi-110 020.
11 Vodafone Group Plc,
a company registered under the
laws of the United Kingdom with
its registered office at
Vodafone House, The Connection
Newbury, Berkshire RG 14 2FN,
England.
12 Telenor (India) Communications
Private Limited, a company
registered under the Companies
Act, 1956 with its registered office
at DBS Business Centre,
First Floor, World Trade Tower,
Barakhamba Lane, Connaught Place,
New Delhi-110 001.
13 Videocon Telecommunications
Private Limited, a company registered
under the Companies Act, 1956 with
its registered office at
R H No. 2, Pratapnagar
Shahanoorwadi Road,
Aurangabad-431001.
14 Aircel Limited, a company registered
under the Companies Act, 1956 with
its registered office at
Opus Centre, 47, Central Road,
Opposite Tunga Paradise, MIDC,
Andheri (East), Mumbai-400 093.
WITH
9/160
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WRIT PETITION NO. 7172 OF 2017
Cellular Operators Association of
India, an Industry Association,
having its registered office address at
14, Bhai Veer Singh Marg,
New Delhi-110 001. ....Petitioner
Vs.
Competition Commission of
India having its office at
Hindustan Times Building,
Kasturba Gandhi Marg,
New Delhi.
CA Ranjan Sardana, Advocate
having his residence at B-1/350,
Janak Puri, New Delhi-110058.
Kantilal Ambalal Puj,
having his residence at
2, Neetibaug Society,
Opposite Gujarat High Court,
Ahmedabad-380 061.
Reliance Jio Infocomm Limited,
having its registered office at
9th Floor, Maker Chambers IV,
222, Nariman Point,
Mumbai 400 021.
Bharti Airtel Limited,
having its nodal office at
7th Floor, Interface Building No.7,
Mindspace, Link Road, Malad West,
Mumbai 400064.
Vodafone India Limited,
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having its registered office at
Peninsular Corporate Park,
Ganpatro Kadam Marg,
Lower Parel, Mumbai - 400 013.
Idea Cellular Limited,
having its registered office at
10th Floor, the Birla Centurion,
Plot No. 794, B-Wing,
Pandurang Budhkar Marg, Worli,
Mumbai-400030. ....Respondents
WITH
WRIT PETITION NO. 7173 OF 2017
1 Bharti Airtel Limited,
Registered Office,
Bharti Crescent 1,
Nelson Mandela Road,
Vasant Kunj, Phase-II,
New Delhi - 110 070.
2 Bharti Hexacom Limited
Registered Office,
Bharti Crescent, 1,
Nelson Mandela Road,
Vasant Kunj, Phase-II,
New Delhi - 110 070. ....Petitioners
Vs.
1 Competition Commission of
India, Through Secretary
18-20, The Hindustan Times House,
KG Marg, Barakhamba Road,
New Delhi-110001.
2 Director General,
Competition Commission of India,
"B" Wing, HUDCO Vishala,
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14 Bhikaji Cama Place,
New Delhi-110 066.
3 Reliance Jio Infocomm Limited,
Registered office,
9th Floor, Maker Chambers-IV,
Nariman Point,
Mumbai - 400 021.
4 CA Ranjan Sardana,
B-1/350, JanakPuri,
New Delhi-110 058.
5 Mr. Kantilal Ambalal Puj
2, Neetibaug Society,
Opposite Gujarat High Court,
Ahmedabad 380 061, Gujarat.
Also at:
103, Tax Lawyers Chambers,
(Chamber of Mr. Shreyas
Mehrotra, Advocate),
DeenDayal Upadhyaya Marg,
New Delhi-110002.
6 Cellular Operators
Association of India,
14, Bhai Veer Singh Marg,
New Delhi 110 001.
7 Idea Cellular Limited,
7th Floor, "Konnectus", Bhavbhuti
Marg, Near Minto Bridge,
New Delhi-110 001.
8 Vodafone India Limited,
Peninsula Corporate Park,
Ganpatrao Kadam Marg,
Lower Parel,
Mumbai - 400 013.
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9 Vodafone Mobile Services Limited,
C-48, Okha Industrial Area,
Phase-II, New Delhi - 110 020
10 Vodafone Group Plc
Vodafone House,
The Connection Newbury,
Berkshira RG 14 2FN,
England. ....Respondents
(1) W.P. No.8594/2017
Mr. Iqbal M. Chagla, Senior Advocate along with Ms. Pallavi Shroff,
Mr. Aashish Gupta, Mr. Ameya Gokhale, Ms. Meghana Rajadhyaksha,
Mr. Vaibhav Singh, Ms. Sukriti Jaiswal i/by M/s. Shardul Amarchand
Mangaldas & Co. for the Petitioner.
(2) W.P.Nos. 8594/2017, 8596/2017, 7172/2017, 7173/2017 and
WP No. 7164/2017
Mr. Iqbal M. Chagla, Senior Advocate along with Mr. Punit B. Anand &
Siddharth Rajamohan for the Petitioner in WP No.8596 of 2017 and
for Respondent No.6 in WP No.7172/2017, for Respondent Nos. 8 & 9
in WP No.7173/2017, for Respondent Nos. 9 & 10 in WP
No.7164/2017 and for Respondent No.10 in WP No.8594/2017.
(3) W.P. No. 8594 and 8596/2017
Mr. Amit Sibal, Senior Advocate a/w Mr. Sachin Mandlik, Ms.
Avaantika Kakkar, Mr. Ritin Rai, Mr. Raghav Shankar, Mr. Dhruv,
Rajain, Ms. Sakshi Aagarwal, Mr. Zacarias Joseph, Mr. Abhas
Kshetarpal, Mr. Kanwar Vivasan, Ms. Anvita Mishra, Mr. Rajagopal
Venkatakrishnan, Mr. Bhavuk Agarwal, Mr. Hiten Sampat i/by Khaitan
& Co. in W.P. No.8594 for Respondent No.5, for Respondent No.3 in
W.P.No.8596/17 i.e. Reliance Jio Infocomm Ltd.
(4) W.P. No.7172/2017
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Mr. Aspi Chinoy, Sr.Advocate a/w Mr. Jafar Alam, Mr. Gautam Shahi,
Mr. Siddharth Ranade i/by Trilegal Advocates for the Petitioner.
(5) W.P. No. 7173 of 2017
Mr. Janak Dwarkadas, Senior Advocate with Mr. Navroz Seervai,
Senior Advocate with Mr. Harsh Kaushik, Ms. Kunal Dwarkadas, Mr.
Ankush Walia, Mr. Param Tandon, i/by Seth Dua & Associates for the
Petitioner.
(6) W.P. No.7172/2017 and 7173/2017
Mr. Ramji Srinivasan, Senior Advocate a/w Mr. Sachin Mandlik, Ms.
Avaantika Kakkar, Mr. Ritin Rai, Mr. Raghav Shankar, Mr. Dhruv Rajai,
Ms. Sakshi Agarwal, Mr. Zacarias Joseph, Mr. Aabas Kshetarpal, Mr.
Kanwar Vivasan, Ms. Anvita Mishra, Mr. Rajagopal Venkatakrishnan,
Mr. Bhavuk Agarwal, Mr. Hiten Sampat i/by Khaitan & Co. for
Respondent No.4 in W.P.No. 7172/2017, for Respondent No.3 in
W.P.No.7173/17 i.e. Reliance Jio Infocomm Ltd.
(7) W.P. No.7164/2017 a/w CAWST No. 17736 of 2017 in W.P.
No.7164/2017-
Mr. Darius Khambata, Senior Advocate with Mr. Soli Cooper, Senior
Advocate along with Ms. Alka Bharucha, Ms. Swathi Girimaji, Mr.
Areen De, Advocates i/by M/s. Bharucha & Partners for the Petitioner
and for the Applicant in CAWST 17736 of 2017.
Mr. Harish Salve, Senior Advocate a/w Dr. Milind Sathe, Senior
Advocate a/w Mr. Sachin Mandlik, Ms. Avaantika Kakkar, Ritin Rai,
Mr. Raghav Shankar, Mr. Dhruv Rajain, Ms.Sakshi Agarwal, Mr.
Zacarias Joseph, Mr. Abhas Ksheterpal with Mr. Kanwar Singh, Ms.
Anvita Mishra, Mr. Rajgopal Venkatakrishnan, Mr. Bhavuk Agarwal,
with Mr. Hiten Sampat i/by Khaitan & Co. for Respondent No.5 in
W.P.No.7164/17 i.e. Reliance Jio Infocomm Ltd.
(8)W.P. NO. 8594/2017, 8596/2017 and 7164 of 2017
Mr. Shrihari Aney, Senior Advocate a/w Mr. Prateek Pai, Ritika Gadoya
i/by Key Stone Partners for Respondent Nos. 1 and 2 i.e. CCI.
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(9) W.P. No. 7172/2017 and 7173/2017
Mr. Naushad R. Engineer, a/w Mr. Prateek Pai, Ritika Gadoya i/by
Keystone Partners for Respondent Nos. 1 and 2 i.e. CCI.
(10) W.P. No. 8594/2017, 8596/2017, 7172/2017, 7173/2017 and
7164/2017.
Ms. Shruti Tulpule a/w Indrajeet Bhosale i/by Abhineet Pange for
Respondent No.3 in WP 7172 of 2017, for Respondent No.4 in WP No.
7164 of 2017 and WP No. 8594 of 2017, for Respondent No.5 in WP
No. 7173 of 2017 and for Respondent No.11 in WP No. 8596 of 2017.
CORAM : ANOOP V. MOHTA AND
SMT. BHARATI H. DANGRE, JJ.
DATE : 21 SEPTEMBER 2017.
ORAL JUDGMENT (PER ANOOP V. MOHTA, J.):-
Introduction-
Rule. Rule made returnable forthwith. Heard finally by
consent of the parties.
2 The Petitioners ("Service Providers") have challenged
common impugned order/direction dated 21 April 2017 passed by the
Competition Commission of India (CCI) ("the Commission") under
Section 26(1) of the Competition Act, 2002 ("Competition Act"),
pending the Complaints under Section 19(1) of the same Act, by the
informants/Complainants/Respondents, thereby directing an inquiry
against them. The consequent show cause notices issued by the
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Director General ("DG"), are also challenged.
3 We are disposing of all these Writ Petitions finally, by
consent of the parties, by this common Judgment/Order as the issues
are common and they are based on identical facts and position, so the
related laws, except few individual details.
4 The Complaints before the Commission (Case No. 81 of
2016 and Case No. 83 of 2016) have been filed by CA Ranjan Sardana
and Mr. Kantilal Ambalal Puj, against the Petitioners (Opposite Parties
(OPs), Cellular Operators Association of India (COAI), OP-1, Vodafone
India Limited (VIL), OP-2, Bharti Airtel Limited (BAL), OP-3, Idea
Cellular Limited (ICL), OP-4, Telenor (India) Communications Private
Limited (TICPL), OP-5, Videocon Telecommunications Private Limited
(VTPL), OP-6, Aircel Limited (AL), OP-7, (TSPs) and Reliance Jio
Infocomm Limited ("RJIL"), OP-8. Reliance Jio Infocomm Limited
("RJIL") (Respondent) (Case No. 95 of 2016) has filed similar such
information against the TSPS/OPS.
5 The allegations against all the Petitioners-TSPs, are of
"cartelisation" by "action in concert" by delaying and denying adequate
Point of Interconnections (POIs), even during the test phase/period,
thereby attempting and thwarting the RJIL's new project/entry in the
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telecom market, as that action resulted into failures of calls of RJIL, on
others Networks.
Operative part of impugned order-
6 The operative part/directions of impugned order dated 21
April 2017 is as under-
By Majority-
"24 In view of the forgoing, the Commission directs the
DG to cause an investigation into the matter under
the provisions of Section 26(1) of the Act.
Considering the substantial similarity of allegations
in all the informations, the Commission clubs them
in terms of the proviso to Section 26(1) of the Act
read with Regulation 27 of the Competition
Commission of India (General) Regulations, 2009.
The DG is directed to complete the investigation and
submit investigation report within a period of 60
days from the date of receipt of this Order. If the DG
finds contravention, he shall also investigate the role
of the persons who at the time of such contravention
were in-charge of the responsible for the conduct of
the business of the contravening entity/entities.
During the course of investigation, if involvement of
any other party is found, DG shall investigate the
conduct of such other parties also who may have
indulged in the said contravention. In case the DG
finds the conduct of the Opposite Parties in violation
of the Act, the DG shall also investigate the role of
the persons who were responsible for the conduct of
the Opposite Parties so as to proceed against them in
accordance with Section 48 of the Act.
25 The Commission makes it clear that nothing stated
in this order shall tantamount to final expression of
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opinion on the merits of the case and DG shall
conduct the investigation without being swayed in
any manner whatsoever by the observations made
herein.
26 The Secretary is directed to send a copy of this order
to the DG, along with the informations and other
submissions filed by the parties.
By Minority-
"28 In view of the forgoing, we are of the considered
opinion that on the basis of the material available
with the Commission, it is difficult to say that there
is a prima facie case to hold that the ITOs OP2, OP5
and OP7 alongwith COAI had acted in a concerted
manner to restrict RJIL's entry into the market or to
limit or control supply, technical development of
provisions of services provided by RJIL. Hence, in
our humble opinion, the instant cases ought to be
closed under Section 26(2) of the Act.
Details of individual parties-
7 The COAI is a premier Telecom industry association in the
telecom Sector. It is a society registered under the Societies
Registration Act, 1860 with the Registrar of Societies at Delhi in July
1996. It is an important interface between its member TSPs and the
Government, regulators policy and opinion makers, financial
institutions and technical bodies for formulation of policies and
regulations and addressing the common problems of the telecom
sector. Mr. C.A. Ranjan Sardana and Mr. Kantilal Ambalal Puj
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(informants) are the public spirited person and subscribers of telecom
Service Provider RJIL. The Petitioners are the recognized service
providers/operators in the Telecom market. CCI is an autonomous
statutory authority established under Section 7 of the Competition
Act.
The Competition Act.
8 The object and purpose of the Competition Act is to
prevent the practice having adverse affect on competition, to promote
and sustain the competition in markets; to protect the interest of the
consumers and to ensure freedom of trade. Various regulations and
rules are framed under it. Its importance is recognized at national
and international market by all the concerned. The "freedom of
trade" is also recognized concept revolving around the Constitution of
India. Any "Commercial/Business/Service activities" and/or "practice"
or "trade" "Custom and Wages" of any nature, need to be based upon
the "contract" and "agreement" within the framework of governing
laws of the respective market. "Every person" and/or "enterprise",
"consumer", needs to work in the "relevant market", within the ambit
of laws. There is no issue that, different statutory/regulatory
authorities/tribunals are to regulate and control its market subjects,
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within the defined power and jurisdiction. The authorities/tribunals
under the Competition Act, being fact finding authority in nature, is
no exception to it.
9 Sections of Competition Act-
Section 2- Definitions-
"2 (b) "agreement" includes any arrangement or
understanding or action in concert,-
(i) whether or not, such arrangement, understanding
or action is formal or in writing; or
(ii) whether or not such arrangement,
understanding or action is intended to be
enforceable by legal proceedings;"
"2 (c) "cartel" includes an association of producers,
sellers, distributors, traders or service providers who,
by agreement amongst themselves, limit control or
attempt to control the production, distribution, sale or
price of, or, trade in goods or provision of services;"
"2 (g) "Director General" means the Director-
General appointed under sub-section (1) of section 16
and includes any Additional, Joint, Deputy or
Assistant Directors General appointed under that
section;"
"2 (m) "practice" includes any practice relating to the
carrying on of any trade by a person or an
enterprise;"
"2 (u) "service" means service of any description which
is made available to potential users and includes the
provision of services in connection with business of
any industrial or commercial matters such as
ssm 21 Judgment-Voda-wp8594.17gp.sxw
banking, communication, education, financing,
insurance, chit funds, real estate, transport, storage,
material treatment, processing, supply of electrical or
other energy, boarding, lodging, entertainment,
amusement, construction, repair, conveying of news or
information and advertising;"
"Section 3- Anti-competitive agreements,- (1) No enterprise
or association of enterprises or person or association of
persons shall enter into any agreement in respect of
production, supply, distribution, storage, acquisition or
control of goods or provision of services, which causes or is
likely to cause an appreciable adverse effect on competition
within India.
(2) Any agreement entered into in contravention of the
provisions contained in sub-section (1) shall be void.
(3) Any agreement entered into between enterprises or
associations of enterprises or persons or associations of
persons or between any person and enterprise or practice
carried on, or decision taken by, any association of
enterprises or association of persons, including cartels,
engaged in identical or similar trade of goods or provision of
services, which-
(a) directly or indirectly determines purchase or sale
prices;
(b) limits or controls production, supply, markets,
technical development, investment or provision of
services;
(c) shares the market or source of production or provision
of services by way of allocation of geographical area of
market, or type of goods or services, or number of
customers in the market or any other similar way;
(d) directly or indirectly results in bid rigging or collusive
bidding, shall be presumed to have an appreciable
adverse effect on competition:
Provided that nothing contained in this sub-section
shall apply to any agreement entered into by way of joint
ssm 22 Judgment-Voda-wp8594.17gp.sxw
ventures if such agreement increases efficiency in production,
supply, distribution, storage, acquisition or control of goods
or provision of services.
Explanation.-For the purposes of this sub-section,"bid
rigging" means any agreement, between enterprises or
persons referred to in sub-section (3) engaged in identical or
similar production or trading of goods or provision of
services, which has the effect of eliminating or reducing
competition for bids or adversely affecting or manipulating
the process for bidding."..........
"Section 19- Inquiry into certain agreements and dominant
position of enterprise.-
(1) The Commission may inquire into any alleged
contravention of the provisions contained in sub-section (1)
of section 3 or sub-section (1) of section 4 either on its own
motion or on-
(a) 1[receipt of any information, in such manner and],
accompanied by such fee as may be determined by
regulations, from any person, consumer or their
association or trade association; or
(b) a reference made to it by the Central Government or
a State Government or a statutory authority.
(2) Without prejudice to the provisions contained in sub-
section (1), the powers and functions of the Commission
shall include the powers and functions specified in sub-
sections (3) to (7).
(3) The Commission shall, while determining whether an
agreement has an appreciable adverse effect on competition
under section 3, have due regard to all or any of the
following factors, namely:-
(a) creation of barriers to new entrants in the
market;
(b) driving existing competitors out of the market;
(c) foreclosure of competition by hindering entry into
the market;
ssm 23 Judgment-Voda-wp8594.17gp.sxw
(d) accrual of benefits to consumers;
(e) improvements in production or distribution of
goods or provision of services;
(f) promotion of technical, scientific and economic
development by means of production or
distribution of goods or provision of services.
Section 21A- Reference by Commission.- (1) Where in the
course of a proceeding before the Commission an issue is
raised by any party that any decision which, the Commission
has taken during such proceeding or proposes to take, is or
would be contrary to any provision of this Act whose
implementation is entrusted to a statutory authority, then
the Commission may make a reference in respect of such
issue to the statutory authority:
Provided that the Commission, may, suo motu, make
such a reference to the statutory authority.
(2) On receipt of a reference under sub-section (1), the
statutory authority shall give its opinion, within sixty days
of receipt of such reference, to the Commission which shall
consider the opinion of the statutory authority, and
thereafter give its findings recording reasons therefore on the
issues referred to in the said opinion.]
Section 26 - Procedure for inquiry under Section 19.-(1) On
receipt of a reference from the Central Government or a
State Government or a statutory authority or on its own
knowledge or information received under section 19, if the
Commission is of the opinion that there exists a prima facie
case, it shall direct the Director General to cause an
investigation to be made into the matter:
Provided that if the subject matter of an information
received is, in the opinion of the Commission, substantially
the same as or has been covered by any previous information
received, then the new information may be clubbed with the
previous information.
(2) Where on receipt of a reference from the Central
Government or a State Government or a statutory authority
ssm 24 Judgment-Voda-wp8594.17gp.sxw
or information received under section 19, the Commission is
of the opinion that there exists no prima facie case, it shall
close the matter forthwith and pass such orders as it deems
fit and send a copy of its order to the Central Government or
the State Government or the statutory authority or the
parties concerned, as the case may be.
(3) The Director General shall, on receipt of direction
under sub-section (1), submit a report on his findings within
such period as may be specified by the Commission.
(4) The Commission may forward a copy of the report
referred to in sub-section (3) to the parties concerned:
Provided that in case the investigation is caused to be
made based on a reference received from the Central
Government or the State Government or the statutory
authority, the Commission shall forward a copy of the report
referred to in sub-section (3) to the Central Government or
the State Government or the statutory authority, as the case
may be.
(5) If the report of the Director General referred to in sub-
section (3) recommends that there is no contravention of the
provisions of this Act, the Commission shall invite objections
or suggestions from the Central Government or the State
Government or the statutory authority or the parties
concerned, as the case may be, on such report of the Director
General.
(6) If, after consideration of the objections or suggestions
referred to in sub-section (5), if any, the Commission agrees
with the recommendation of the Director General, it shall
close the matter forthwith and pass such orders as it deems
fit and communicate its order to the Central Government or
the State Government or the statutory authority or the
parties concerned, as the case may be.
(7) If, after consideration of the objections or suggestions
referred to in sub-section (5), if any, the Commission is of
the opinion that further investigation is called for, it may
direct further investigation in the matter by the Director
General or cause further inquiry to be made in the matter or
ssm 25 Judgment-Voda-wp8594.17gp.sxw
itself proceed with further inquiry in the matter in
accordance with the provisions of this Act.
(8) If the report of the Director General referred to in sub-
section (3) recommends that there is contravention of any of
the provisions of this Act, and the Commission is of the
opinion that further inquiry is called for, it shall inquire into
such contravention in accordance with the provisions of this
Act.]
Section 36- Power of Commission to regulate its own
procedure.-
(1) .....
(2) The Commission shall have, for the purposes of
discharging its functions under this Act, the same powers as
are vested in a Civil Court under the Code of Civil Procedure,
1908 (5 of 1908), while trying a suit, in respect of the
following matters, namely:-
(a) summoning and enforcing the attendance of any
person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) issuing commissions for the examination of
witnesses or documents;
(e) requisitioning, subject to the provisions of sections
123 and 124 of the Indian Evidence Act, 1872 (1 of
1972), any public record or document or copy of
such record or document from any office.
Section 41- Director General to investigate contraventions.-
(1)The Director General shall, when so directed by the
Commission, assist the Commission in investigating into any
contravention of the provisions of this Act or any rules or
regulations made thereunder.
(2) The Director General shall have all the powers as are
conferred upon the Commission under sub-section (2) of
section 36.
(3) Without prejudice to the provisions of sub-section (2),
ssm 26 Judgment-Voda-wp8594.17gp.sxw
sections 240 and 240A of the Companies Act, 1956 (1 of
1956), so far as may be, shall apply to an investigation
made by the Director General or any other person
investigating under his authority, as they apply to an
inspector appointed under that Act.
Explanation.-- For the purposes of this section,
(a) the words "the Central Government" under section
240 of the Companies Act, 1956(1 of 1956) shall
be construed as "the Commission";
(b) the word "Magistrate" under section 240A of the
Companies Act, 1956(1 of 1956) shall be
construed as "the Chief Metropolitan Magistrate,
Delhi"]
Section 45 - Penalty for offences in relation to furnishing of
information.-(1) Without prejudice to the provisions of
section 44, if a person, who furnishes or is required to
furnish under this Act any particulars, documents or any
information,-
(a) makes any statement or furnishes any document
which he knows or has reason to believe to be false in
any material particular; or
(b) omits to state any material fact knowing it to be
material; or
(c) willfully alters, suppresses or destroys any
document which is required to be furnished as
aforesaid,
such person shall be punishable with fine which may extend
to rupees one crore as may be determined by the
Commission.]
(2) Without prejudice to the provisions of sub-section(1), the
Commission may also pass such other order as it deems fit.
Section 60. Act to have overriding effect.- The provisions of
this Act shall have effect notwithstanding anything
inconsistent therewith contained in any other law for the
time being in force.
ssm 27 Judgment-Voda-wp8594.17gp.sxw
Section 61- Exclusion of jurisdiction of civil courts-No civil
court shall have jurisdiction to entertain any suit or
proceeding in respect of any matter which the [Commission
or the Appellate Tribunal] is empowered by or under this Act
to determine and no injunction shall be granted by any court
or other authority in respect of any action taken or to be
taken in pursuance of any power conferred by or under this
Act.
Section 62 -Application of other laws not barred.-The
provisions of this Act shall be in addition to, and not in
derogation of, the provisions of any other law for the time
being in force.
10 The Competition Commission of India (General) Regulations,
2009-
"Rule 17. Preliminary conference -(1)The Commission may,
if it deems necessary, call for a preliminary conference to
form an opinion whether a prima facie case exists.
(2) The Commission may invite the information provider
and such other person as is necessary for the preliminary
conference.
(3) A preliminary conference need not follow formal rules
of procedure."
"Rule 18. Issue of direction to cause investigation on prima
facie case.- (1) Where the Commission is of the opinion that
a prima facie case exists, the Secretary shall convey the
directions of the commission [within seven days] to the
Director General to investigate the matter.
(2) A direction of investigation to the Director General
shall be deemed to be the commencement of an inquiry
under section 26 of the Act."
The scope and authority of the Commission-
11 The "Commission" established under Sub-section (1) of
ssm 28 Judgment-Voda-wp8594.17gp.sxw
Section 7 has been entrusted with duties, power and functions to deal
with the issues like eliminating such practices, having adverse effect
on the competition, to promote and sustain competition and to Protect
the interest of the consumer and ensure freedom of trade, carried on
by other participants in market, in India. For that, Sections 7 and 19
contemplate power of the Commission to inquire into alleged
contravention of the provisions contained in Sub-section (1) of Section
3 or Sub-section (1) of Section 4, relating to Anti Competitive
Agreement and abuse of dominant position, keeping in mind various
elements for determining adverse effect on competition in the relevant
markets. On the basis of own motion and/or on a receipt of
information from any person/consumer, the Competition Commission
of India (General) Regulations 2009 ("the Regulations") and its
relevant clauses, provide the procedure to be followed by the
Commission. The facts, documents, materials, affidavits, evidence in
support with details of stated contravention of the provisions of the
Act and reliefs sought, should be complete and duly verified by the
informant. As per the procedure of scrutiny contents of information
are required to be verified by the authority/secretary. The Commission
has power to join multiple information and/or to amend the
ssm 29 Judgment-Voda-wp8594.17gp.sxw
information. The Commission shall maintain the confidentiality of the
identity of the informant and the documents contained, except the
public documents.
12 The regulations are applicable for the Director-General
(DG), so contemplated under Section 41 (2) and 36(2) read with
Section 240 and 240A of the Companies Act, 1956. The elements
which are required to determine as to whether the direct or indirect
agreement has an adverse effect on the Competition under Section 3
and/or 4. The elements so provided under Sections 3, 4 read with
Section 19 (3) of the Act are required to be noted and/or kept in mind
by the Commission at the time of passing "prima facie opinion" for
directing the inquiry, as contemplated under Section 19 read with
Section 26(1) of the Competition Act. This is in the background that
the Section nowhere contemplates to give personal hearing to the
informant or to the affected person and/or any other person.
However, the scheme of the Act and the regulations so read, including
the Rules, the Commission in its discretion may call any such person
for rendering assistance and/or to produce the record/material for
arriving at, even the prima facie opinion. Therefore, there is no
prohibition/restriction on the Commission from not calling material
ssm 30 Judgment-Voda-wp8594.17gp.sxw
documents and assistance from any person. The Commission,
therefore, has discretionary power and/or power to call for material
documents, affidavits, even by permitting them to file amended
information, materials, data and details. The Commission also has
power, in view of the Regulations to hold conferences with the
concerned person/parties including their advocates/authorized
person.
13 The direction under Section 26 (1), after formation of the
prima facie opinion to cause and investigate into the matter is to the
DG, which is an another Authority under the Competition Act. Both
are quasi-judicial Authorities.
14 If the Commission is of the opinion that no prima facie
case exists, it may close the case as contemplated under Section 26(2)
of the Competition Act. The aggrieved person and/or parties,
including informant may invoke the provisions of Appeal under
Section 53(A) of the Competition Act. The Appeal, against the
directions so issued under Section 26(1) on the basis of prima facie
opinion by the Commission is not maintainable. However, the
aggrieved party cannot be remediless. Therefore, the Writ Petition, as
an alternative and effective remedy is only available.
15 As per the scheme of the Competition Act, the Director
ssm 31 Judgment-Voda-wp8594.17gp.sxw
General is empowered to make further investigation, as contemplated
under Section 26(3) in respect of reference made by the
Central/State/Statutory Authority. The Director General's power and
authority has been elaborated in Section 41(2) read with Section 37
of the Act and the Regulations so referred above. The power so
provided to the DG includes the power to record the evidence on oath,
including permission to cross-examine the informant or claimant.
Therefore, based upon the prima facie opinion given by the
Commission, the DG is empowered to commence further inquiry by
even calling witnesses with documents and/or material. The power of
DG and the nature of inquiry and trial, so permitted, on various
aspects is even more than the power of the Commission. The
Commission, as noted above, is not required to give show cause notice
and/or hearing to the informant and the aggrieved party. Whereas, the DG
is empowered to call the witnesses and permit the parties to file affidavit on
oath and give opportunity to the other side to cross-examine the same.
Thus, effect is that the investigation by the DG partakes a trial and inquiry
like a quasi-judicial body, on the basis of prima facie opinion. The DG
and/or the Commission is empowered to add and/or permit to add
more information and material. The Commission is empowered to
ssm 32 Judgment-Voda-wp8594.17gp.sxw
direct the DG to make further investigation. Therefore, even pending
the final order by CCI, the DG may be directed and required to
investigate and inquire into the affairs so referred. The
Commission/DG in view of other provisions of Section 26, is required
to proceed with the matter for further trial, which may result into the
final order in favour of the informant and against the stated enterprise
or vice versa. The final adverse order of Commission is subject to
Appeal. It may further lead to claiming the compensation by the
informant and/or claimant, as provided under Section 53-N of the Act.
We have to consider, therefore, the impact of initiation of inquiry by
the Commission at this stage itself, if the case is made out.
16 In the wake of globalisation and keeping in view the
Economic Development of the country, responding to opening of its
economy and resorting to liberalization, need was felt to enact a law
ensuring fair competition in India by prohibiting trade practices which
cause an appreciable adverse effect of competition within markets in
India and for establishment of a quasi judicial body in the form of
Competition Commission of India which would discharge the duty of
curbing negative aspects of competition, the Competition Act, was
enacted by the Parliament.
ssm 33 Judgment-Voda-wp8594.17gp.sxw
Telecommunication Services-
17 We are dealing with the telecom market and its dealings,
based upon the contract between the service providers, in question.
The telecom/mobile market is under the control/supervision and the
guidance of a Telecom Regulatory Authority of India, ("TRAI")
established under the Telecom Regulatory Authority of India and the
Rules and Regulations, so made thereunder. They are also governed
by license agreements to provide such telephone/telecommunication
services to the customers/subscribers, in pursuance to the statutory
agreement and the licenses are so issued under Section 4 of the
Telephone Act.
18 The Telecom Regulatory Authority of India Act, 1997.
Section-11 Functions of Authority-[(1) Notwithstanding
anything contained in the Indian Telegraph Act, 1885 (13 of
1885), the functions of the Authority shall be to-
(a) make recommendations, either suo moto or on a
request from the licensor, on the following matters, namely:-
(i) to (iii) ........
(iv) measures to facilitate competition and promote
efficiency in the operation of telecommunication
services so as to facilitate growth in such services;
(v) .....
(b) discharge the following functions, namely:-
(i) ensure compliance of terms and conditions of
licence;
ssm 34 Judgment-Voda-wp8594.17gp.sxw
(ii) notwithstanding anything contained in the terms
and conditions of the licence granted before the
commencement of the Telecom Regulatory Authority
of India (Amendment) Act,2000, fix the terms and
conditions of inter-connectivity between the service
providers;
(iii) ensure technical compatibility and effective inter-
connection between different service providers;
(iv) regulate arrangement amongst service providers of
sharing their revenue derived from providing
telecommunication services;
(v) lay-down the standards of quality of service to be
provided by the service providers and ensure the
quality of service and conduct the periodical survey
of such service provided by the service providers so
as to protect interest of the consumers of
telecommunication service;
(vi) lay-down and ensure the time period for providing
local and long distance circuits of
telecommunication between different service
providers;
(vii) maintain register of interconnect agreements and of
all such other matters as may be provided in the
regulations;
(viii) keep register maintained under clause (vii) open for
inspection to any member of public on payment of
such fee and compliance of such other requirement
as may be provided in the regulations;
(ix) ensure effective compliance of universal service
obligations;
(c) levy fees and other charges at such rates and in respect of
such services as may be determined by regulations;
(d) perform such other functions including such
administrative and financial functions as may be entrusted
to it by the Central Government or as may be necessary to
carry out the provisions of this Act:
ssm 35 Judgment-Voda-wp8594.17gp.sxw
Provided that the recommendations of the Authority
specified in clause (a) of this sub-section shall not be binding
upon the Central Government:
Section 14- Establishment of Appellate Tribunal-The Central
Government shall, by notification, establish an Appellate
Tribunal to be known as the Telecom Disputes Settlement
and Appellate Tribunal to-
(a) adjudicate any 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:
Provided that nothing in this clause shall
apply in respect of matters relating to-
(A) the monopolistic trade practice,
restrictive trade practice and unfair trade practice
which are subject to the jurisdiction of the
Monopolies and Restrictive Trade Practices
Commission established under sub-section (1) of
section 5 of the Monopolies and Restrictive Trade
Practices Act, 1969 (54 of 1969);
(B) the complaint of an individual
consumer maintainable before a Consumer
Disputes Redressal Forum or a Consumer Disputes
Redressal Commission or the National Consumer
Redressal Commission established under section 9
of the Consumer Protection Act, 1986 (68 of
1986);
(C) the dispute between telegraph authority
and any other person referred to in sub-section
(1) of section 7-B of the Indian Telegraph Act,
1885 (13 of 1885);
(b) hear and dispose of appeal against any direction,
decision or order of the Authority under this Act.
Section 16- Procedure and powers of Appellate Tribunal- (1)
ssm 36 Judgment-Voda-wp8594.17gp.sxw
The Appellate Tribunal shall not be bound by the procedure
laid down by the Code of Civil Procedure, 1908 (5 of 1908),
but shall be guided by the principles of natural justice and,
subject to the other provisions of this Act, the Appellate
Tribunal shall have powers to regulate its own procedure.
(2) The Appellate Tribunal shall have, for the purposes
of discharging its functions under this Act, the same powers
as are vested in a Civil Court under the Code of Civil
Procedure, 1908 (5 of 1908), while trying a suit, in respect
of the following matters, namely:-
(a) summoning and enforcing the attendance
of any person and examining him on oath;
(b) requiring the discovery and production of
documents;
(c) receiving evidence on affidavits;
(d) subject to the provisions of sections 123 and 124
of the Indian Evidence Act, 1872 (1 of 1872),
requisitioning any public record or document or a
copy of such record or document, from any office;
(e) issuing commissions for the examination of
witnesses or documents;
(f) reviewing its decisions;
(g) dismissing an application for default or deciding
it, ex prate;
(h) setting aside any order of dismissal of any
application for default or any order passed by it, ex
prate; and
(i) any other matter which may be prescribed.
(3) Every proceeding before the Appellate Tribunal
shall be deemed to be a judicial proceeding within the
meaning of sections 193 and 228, and for the purposes of
section 196 of the Indian Penal Code (45 of 1860) and the
Appellate Tribunal shall be deemed to be a Civil Court for
the purposes of section 195 and Chapter XXVI of the Code of
ssm 37 Judgment-Voda-wp8594.17gp.sxw
Criminal Procedure, 1973 (2 of 1974)."
Telecommunication laws-binds all-
19 The relevant licences-
Unified Lincese (UL)- The UL issued by Department of
Telecommunications, Government of India ("DoT") for providing
telecommunication services on a pan India basis. License under
Section 4 of Indian Telegraph Act, 1885 therefore they become
Telecom Service Provider ("TSP"). Relevant clauses of the UL (UASL)
are-
(a) Clause 16 of Part - I: Other Conditions: The Licensee
is bound by all TRAI Orders / Directions /
Regulations;
(b) Clause 27 of Part - I: Network Interconnection,
particularly, Clause 27.4, which requires a Licensee to
interconnect subject to compliance with prevailing
regulations and determinations issued by TRAI, and
contemplates the execution of ICAs to establish
interconnection in sufficient capacity and number to
enable transmission and reception of messages
between the interconnected systems;
(c) Clause 29 of Part - I, requiring a Licensee to ensure
QoS Standards as may be prescribed by DoT/TRAI.
Specifically, Clause 29.4, empowers DoT/TRAI to
evaluate Quality of Service parameters prior to grant
of permission for commencement of services; and
(d) Clause 6.2 of Part - II, which requires a licensee to
provide interconnection to all TSPs to ensure that
calls are completed to all destinations.
ssm 38 Judgment-Voda-wp8594.17gp.sxw
20 Inter-connection Agreements-
Similar separate Interconnection Cgreements (ICAs) are
executed between the parties. The relevant clauses of ICAs are as
under:-
Clause 2.4: "...RJIL will be required to establish
Interconnection at the Switches of IDEA as listed in
Schedule 1. In addition to these specified locations, the
Parties may further agree to interconnect at an additional
location(s) as mutually agreed to by and between the
Parties during the term of this Agreement..." (emphasis
supplied)
Clause 5.7: "...At the end of two years, the Parties shall
convert the total E1s existing at the PoIs into one-way E1s
for the Outgoing Traffic of each Party on the basis of the
traffic ratio existing 3 months prior to the expiry of the
initial period of two years. These E1s shall thereafter be
continued as one-way E1s for the remaining term of the
Agreement at the cost of RJIL..."
Clause 9.1: "...A minimum notice of 4 weeks has to be
given by either Party for augmentations of Interconnect
Links..."
Clause 9.2: "...Augmentation shall be completed within 90
days of receipt of requisite charges specified in Schedule 2
from RJIL..."
Clause 9.3: "...Any request for augmentation of capacity
shall be in writing with Performance reports as prescribed
in Schedule 4..."
Clause 9.4: "...Traffic measurements for 7 days shall be
taken by both the Parties during agreed busy route hours,
every 6 months after commencement of traffic at the POIs
to determine further capacity requirements..."
ssm 39 Judgment-Voda-wp8594.17gp.sxw
Clause 9.5: "...RJIL shall provide a forecast in writing in
advance for its requirement of port capacity for
Telephony Traffic for the next 6 months to enable IDEA to
dimension the required capacity in its network..."
21 The relevant clauses of the ICAs are-
a) Clause 2 makes clear that the ICA will be applicable
and in effect from the date of execution;
b) Clause 2.10 makes clear that the interconnection
facilities at each POI will conform to the applicable
QoS standards prescribed by TRAI;
c) Clause 3 - Terms and Amendments - again makes
clear that the ICA becomes applicable, effective and
operational from the date of execution and is valid
until both parties hold a valid licence for providing
access services;
d) Clause 4 - Applicability and Providing Services -
reiterates that the ICA becomes applicable on signing
and is subject to the terms and conditions of the
telecom licence;
e) Clause 5.2 specifically provides that for the initial
two years, provision and augmentation of
transmission links shall be at the cost of RJIL;
f) Clause 5.7 contemplates conversion of two-way E1s
into one-way E1s only after two years, which in
other words mean that for two years all E1s must be
two-way E1s;
g) Clause 9 provides modalities for enhancement of
ports; and
ssm 40 Judgment-Voda-wp8594.17gp.sxw
h) Clause 10.7 again reiterates that Idea is bound to
maintain QoS standards prescribed by TRAI.
22 Quality of Service Regulations, 2009-
Quality of Service Regulations ("QoS Regulations, 2009")
issued by TRAI under Section 36 read with Section 11 of the TRAI Act.
Clause 5(iv) and Clause 14, as relevant, are reproduced as under-
a) Clause 5(iv) prescribes that the congestion at each
individual POI cannot exceed 0.5% over a period of
one month (no more than 5 out of every 1000 calls
can fail).
b) Clause 14 provides that in the event of any doubt
regarding interpretation of any of the provisions of the
QoS regulations, the view of the TRAI shall be final
and binding.
23 The relevant clauses of the Standards of Quality of Service
of Basic Telephone Service (wireline) and Cellular Mobile Telephone
Service Regulations, 2009 includes, Cellular Mobile Telephone
Services. The term "Point of Interconnection (POI)", "Quality of Service
(QoS)", "Service Provider, Telecommunication services" have been
defined in the Regulations. The term POI congestion is also described
in 3.12 and 4.7 of POI.
24 Being the member of the Association of the parties,
including the Petitioners and the Respondents, the service providers
ssm 41 Judgment-Voda-wp8594.17gp.sxw
are aware of the exclusive provisions and power of the Authority
under the TRAI Act and Regulations. Therefore, any subject related to
augmentation of POI and providing NLD services, cannot falls within
the ambit of any authority under any other Act, including the
Competition Act, in question.
25 Before adverting to the facts in hand and the law
applicable to the facts, we would like to reproduce the existing regime
governing the telecommunication industry.
(i) To protect the interest of the service providers and
consumers of the Telecom Sector and to permit and
ensure technical compatibility and effective inter
relationship between different service providers and for
ensuring compliance of licence conditions by all the
service providers, Telecom Regulatory Authority of
India (TRAI) was constituted under the Telecom
Regulatory Act of 1998. The TRAI is
recommendatory / advisory and regulatory body,
discharging the functions envisaged under sub-section
(1) of Section 11 of the Act. The TRAI inter-alia is
charged with ensuring fair competition amongst service
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providers including fixing the terms and conditions of
entire activity between service provides and laying
down the standards of quality of service (QOS) to be
provided by service provider. In exercise of its
function TRAI has issued detail Regulations for
Telecom Services including fixation and revision of
tariffs (Tariff Order), fixation of inter connect usage
charges (IUC), prescription of quality of service
standards etc.
(ii) The Telecom Regulators which include the petitioners
namely Idea Cellular, Bharati Airtel, Vodafone Ltd. as
well as the respondent Reliance Jio Infocom provides
Telecommunication Access Service and are PAN India
Telecom Service Providers. The Service Providers are
governed by the Cellular Mobile Telephone Service
(CMTS)/ Unified Access Service Licence (UASL) issued
by Tele Communication Department, Government of
India under Section 4 of the Indian Telegraph Act.
(iii) The Central Government has exclusive privilege of
establishing, maintaining and working telegraphs
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under the Indian Telegraphs Act and the Central
Government is authorised to grant licence on such
terms and conditions and in consideration of such
payment as it thinks fit to any person to establish,
maintain or work as telegraph within any part of the
country. By virtue of Section 4 of the Indian Telegraph
Act a service provider is duty bound to enter into a
licence agreement with the former for unified licence,
with authorisation for provision of services, as per
terms and conditions prescribed in the Schedule. As a
condition of the said licence the licensee agrees and
unequivocally undertakes to fully comply with terms
and conditions stipulated in the licence agreement
without any deviation or reservation of any kind. The
licence is governed by the provisions of Indian
Telegraph Act, the Indian Wireless Telegraphy Act,
1933 and TRAI Act and the Information Technology
Act, 2000 ("IT Act") as modified or regulated from time
to time.
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As per clause 27.4 of part I of the Schedule
to the unified licence, the licensee is duty bound to
interconnect with other Telecom Service Providers on
the Points of interconnection (POI) subject to
compliance of regulation / directions issued by the
TRAI. The interconnection agreement inter-alia
provides for the following clauses:-
a) To meet all reasonable demand for the
transmission and reception of messages
between the interconnect systems;
b) To establish and maintain such one or more
Points of interconnect as are reasonably
required and are of sufficient capacity and in
sufficient numbers to enable transmission and
reception of the messages by means of
Applicable Systems;
c) To connect and keep connected, to the
Applicable Systems;
Some of other clauses of the interconnection
agreement are enumerated below:-
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A minimum Four weeks written notice has to
be given by either party for augmentation of
Interconnect Links;
Augmentation shall be completed within 90
days of receipt of requisite charges specified
in Schedule.
Either party shall provide a forecast in
writing, in advance for its requirements of
port capacity for "Telephony Traffic" for the
next 6 months to enable the other Party to
dimension the required capacity in its
network.
The Interconnection tests for each and every
interface will be carried out by mutual
arrangement between signatories of the
agreement.
By virtue of the licence, the licencee is obligated to ensure
quality of service as prescribed by the licensor or TRAI and failure on
their part to adhere to the quality of service stipulations by TRAI,
licensor is liable to be treated for breach of terms and conditions of
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licence.
In order to render effective services, it is mandatory for the
licensee to interconnect/provide points of interconnection to all
eligible telecom service providers to ensure that calls are completed to
all destinations and interconnection agreement is entered into
between the different service providers which mandates each of the
party to the agreement to provide to the other, interconnection traffic
carriage and all the technical and operational quality service and time
lines i.e., the equivalent to that which the party provides to itself. The
interconnection agreement separately entered into different service
providers, is based on the format prescribed in the Telecommunication
Interconnection (Reference Interconnect Offer) Regulation 2002.
Provisions of points of interconnect is the pivotal point around
the present litigation.
26 On 7 June 2005, the direction was issued under Section
13 read with sub-clause (i), (ii), (iii), (iv) and (v) of sub-clause (b) of
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Section 11 of the TRAI Act which provides as follows:-
"In exercise of the powers vested in it under section 13
read with section 11 (1)(b)(i),(ii),(iii), (iv) and (v) of the
Telecom Regulatory Authority of India Act, 1997 and in
order to ensure compliance of terms and conditions of
licence and effective interconnection between service
providers and to protect consumer interest, the Authority
hereby directs all service providers to provide
interconnection on the request of the interconnection
seeker within 90 days of the applicable payments made
by the interconnection seeker. Further there is a direction
issued by the Government of India, Ministry of
Telecommunication dated 29th August, 2005 by which
directions have been issued to provide data of subscribers
in the prescribed format."
Note is also required to be taken of certain terms
used in the agreement.
Points of Interconnection:- (POI) are those points between two
network operators which allow voice call originating from the
work of one operator to terminate on the network by other
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operator.
Special Identity Module (SIM card) which is fitted into mobile
station after is the mobile station can be activated to make or
receive telephone calls.
Subscriber : Means any personal or legal entity which subscribe
service from the licensee.
27 It is clear, therefore, taking overall view of above
provisions, clauses and the related documents including notifications
and circulars, the TRAI has been monitoring the quality of services
laid down under the TRAI Regulations to achieve the quality of
services, and apart from technology and capacity subject to the
region/area, it is required to take the note of network design, the
projected traffic and consumer base. This includes, the act of network
elements, the service repair and the service level management of all
existing and new customers which requires constant attention and
continuous monitoring. The Authority, is therefore, required to review
the existing service parameters, considering the emerging technology,
new services and requirements, apart from setting standards and
designing of network. There is ample material on record of the stake-
holders including the Petitioners and the Respondents service
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providers that they have been endeavouring and meeting to develop
the telecom sector in the interest of public and consumers. The crux
is, the TRAI is the authority under TRAI Act and regulates the quality
of service and deal with its every aspects, keeping in mind the
competitive market therefore, it is necessary for the TRAI to take into
account the interest of the existing providers and the new competitors
and also the interest of the consumers. The authority is therefore,
required to consider and keep in mind the marketing strategy of the
service providers, existing or new, in the interest of the consumers and
the market itself. The balance needs to be struck by the Authority, by
keeping constant monitoring and making rules and regulations and
implementing them effectively.
28 Therefore, taking overall view of the provisions of the
TRAI Act and the authority so provided, keeping in mind their
obligations and being of regulatory authority in the telecom sector, no
other authority and/or Act takes away and/or override the power and
the authority of the specified authority and its jurisdiction to deal and
decide the aspect of "Quality of Service", in the telecommunication
service sectors and the respective obligations of service providers.
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Restricted bundle of facts to understand the controversy and to decide the
Writ Petitions (Noted from Idea Petition)-
29 By notification dated 7 June 2005, TRAI issued directions
under Section 13 read with Section 11 of TRAI Act to all the Service
Providers to provide interconnection on the request of the
interconnection seeker within 90 days of the applicable payments
made by the interconnection seeker. The DoT clarified on 25 August
2005 that test subscribers may include business partners and
employees only. TRAI issued the standard of quality of service of Basic
Telephone Service (Wireline) and Cellular Mobile Telephone Service
Regulations 2009 ("QOS Regulations"), prescribed the quality of
service parameters to be maintained with all the TSPs (Telephone
Service Providers). Rule 3(1)(v) mandates that the point of
interconnection (POI) congestion should not exceed 0.5% on an
average in a month. DoT provides various telecommunication licenses
(unified license). RJIL is granted license for 22 circles/areas in India.
As per the unified license terms all the TSPs executed interconnection
Agreement. RJIL executed IC Agreement with various TSPs including
Bharti Airtel Limited (Airtel), IDEA Cellular Limited (Idea), Vodafone
India Limited (Vodafone). It is specified that each TSPs is required to
meet "reasonable" demands for POIs from each other.
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30 The COAI on 11 December 2014 itself in response to
TRAI's consultation paper dated 19 November 2014 on
Interconnection Usage Charges (IUC) suggested the methodology of
computation of IUC based on international standards. On 23 February
2015, the TRAI vide Telecommunication Interconnect Usage Charges
(Eleventh) Amendment Regulations, 2015 fixed IUC for wire line to
wireless at 0 paise and for wireless to wireless at 0.14 paise per
minute with effect from 1 March 2015. The Petitioners/Respondents
RJIL entered into interconnection agreements pursuant to their
respective licences.
31 On 22 December 2015, RJIL intimated TRAI & DoT about
commencement of test launch. On 18 January 2016, RJIL's letter to
Airtel requesting augmentation of POIs. On 21 January 2016, Airtel's
reply to RJIL's letter dated 18 January 2016, undertaking
augmentation of PoIs at 70% utilization. On 7 April 2016, RJIL
addressed letter to Idea requesting immediate augmentation of POIs.
In May-June 2016, call failures were observed during test phase due
to inadequate POIs allocation by ITO's. On 21 June 2016, RJIL issued
a letter to the Petitioner informing them that:-
"...RJIL is currently conducting test trials of its services
before its commercial launch..." and that "...RJIL, on
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reasonable grounds, is expecting over 100 million
subscribers in the first year post launch of services. This
combined with the initial pent-up demand for services
may result in upwards or 25 million subscribers coming
on the network within the first quarter post launch. In
order to help provide seamless connectivity to the
targeted subscribers, RJIL will require sufficient
interconnect capacity for inter-operator traffic at the
Points of Interconnection ("POIs")..."
32 RJIL provided a forecast for POIs based on inter alia an
assumption of "...an average call duration of 54 seconds...": 3,281 POIs
(i.e. 2,586 Access POIs and 695 NLD POIs) for initial scenario of 22
million subscribers ("...for which number series is already allotted...")
expected in the first quarter after launch. "Immediate demand" for
POIs; Demand for 7,056 POIs (i.e. 5,703 Access POIs and 1,353 NLD
POIs) for 50 million subscribers at the end of 3 months; Demand for
9,064 POIs (i.e. 7,326 Access POIs and 1,738 NLD POIs) for 75 million
subscribers at the end of 6 months; and Demand for 10,070 POIs (i.e.
8,140 Access POIs and 1,930 NLD POIs) for 100 million subscribers at
the end of 9 months. RJIL asked the Petitioner (Idea Cellular) to treat
its letter as a "firm demand". The similar demands were made by
other providers.
33 On 13 July 2016, Voda's reply to RJIL's Letter dated 21
June 2016, (5 July 16, 8 July 16, 9 July 16, 11 July 16 & 12 July 16)
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stating that "subject to technical feasibility, we endeavor to complete
the augmentation in the most expeditious manner." On 13 July 2016,
Airtel's reply to RJIL's letter dated 21 June 16, (5 July 16, 8 July 16, 9
July 16, 11 July 16 and 12 July 16) for the first time stating that
relevant circle teams had been advised for argumentation of POIs. On
14 July 2016, RJIL issued a letter to the TRAI and the DoT stating that
the POIs provided by the Petitioner and others were substantially
inadequate and leading to congestion in all circles. Accordingly, RJIL
requested:-
"...the Authority to immediately intervene and instruct
these service providers, namely Airtel, Idea, Vodafone,
Aircel and Tata to augment the POI E1 capacities as per
the firm demands made by RJIL..."
34 On 15 July 2016, the Economic Times Telecom published a
news report stating that the RJIL had already achieved 1.5 million
subscribers during the test phase.
35 On 19 July 2016, The TRAI issued a letter to the Petitioner
and others requesting them to "...do the needful action and furnish
your response on the issues raised by M/s RJIL within seven days of the
issue of this letter..." On 26 July 2016, The Petitioner issued a letter to
RJIL stating:-
"...even though RJIO has still not communicated any
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expected Launch date to start commercial Subscriber
traffic on these POIs, IDEA is continuing to fully support
RJIO and we have accordingly instructed our Circle
teams to augment further E1s on the basis of traffic
congestion..."
36 On 26 July 2016, the Petitioner issued a letter to the TRAI
enclosing a copy of the Petitioner's response to RJIL and stating:
"...At the initial stage itself, we had provided RJIO with
85 E1s across all Circles, and in the period April-July
2016, additional 205 E1s have been augmented and 38
more E1s are in process of augmentation across all circles
to support RJIO test traffic..."
"...IDEA is continuing to fully support RJIO and we have
accordingly instructed our Circle teams to augment
further E1s on the basis of traffic congestion as per the
agreement clauses..."
37 On 3 August 2016, Airtel (as leader of IDOs) (deliberately
delayed & misleading) reply to TRAI's letter dated 19 July 16 (after 2
weeks), stating that necessary action has already been taken for
augmentation of POIs for meeting. On 4 August 2016, RJIL wrote
letter to TRAI indicating extreme situation of denial of POIs, giving
figures of insufficient POIs. On 8 August 2016, 11 August 2016 and 22
August 2016, Cellular Operators Association of India ("COAI") issued
a letter to the DoT stating inter alia that RJIL was providing "...full-
blown and full-fledged services, masquerading as tests, which bypass
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Regulations and can potentially game policy features like the IUC regime,
non-predatory pricing, fair competition, etc..." and requesting the DoT's
urgent intervention in the matter to ensure compliance to licence
conditions and to the TRAI regulations and guidelines. COAI's letters
dated 11 August 2016 to the DoT and the TRAI stated that:-
"...COAI has not solicited RIL Jio in this response.
However, the points made herein represent the views of
the majority of the members of COAI..."
COAI's August 22, 2016 letter to DoT stated that "...Reliance Jio,
which is also a member of COAI, has a divergent opinion on this matter
which they have communicated separately to the DoT and TRAI..." On
10 August 2016, RJIL's 3rd Letter to TRAI in response to COAI's Letter
dt. 08.08.16 & failure of IDOs to comply. On 11 August 2016, COAI's
2nd letter to DoT & TRAI on RJIL's provisioning of full-fledged services.
On 12 August 2016, COAI's 3rd meeting with Government w/o RJIL,
RJIL came to know only via media reports. On 19 August 2016,
Voda's (deliberately delayed) reply to TRAI's letter dated 19 July 16,
after 1 month instead of 1 week, stating necessary action has already
been taken for augmentation of POIs. On 19 August 2016, the
Petitioner issued a letter to RJIL stating that:-
"...till date, no clear or specific response has been
received by us on the issues highlighted vide Idea letter
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dated 26.07.2016..."
38 On 31 August 2016, RJIL provided data to TRAI in which
it stated that it had "nil" subscribers as on August 31, 2016. On 2
September 2016, COAI wrote to the DoT and the TRAI stating that the
media release by RJIL created:-
"...a grave situation warranting urgent redressal..." and
requested "...the authorities to intervene as they deem fit
to restore competition..."
"...The issues and views indicated below are the views of
the majority of members of COAI and relate to the issue
of the financial impact on majority incumbent operators.
They may not represent the views of the minority
members of COAI, whose views have not been solicited on
this issue..."
On the same day, COAI wrote to the Hon'ble Union Minister of
Finance requesting intervention of the authorities and clarifying that:-
"...The issues and views indicated below are the views of
the majority members of COAI and relate to the issue of
the financial impact on majority incumbent operators.
They may not represent the views of the minority members
of COAI, whose views have not been solicited on this
issue..."; and
"...The views of Reliance Jio, Aircel and Telenor, who are
also members of COAI but may hold a minority opinion,
are not reflected in this letter and they may represent
separately in the matter..."
39 On 1 September 2016, RJIL made public announcement of
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the commercial launch on 5 September 2016. On 2 September 2016,
COI's 5th letter to Dot, TRAI, PMO, Mof & MoC about launch of RJIL's
services, stating that they are in no position to provide POIs requested
by RJIL. The RJIL wrote to the Petitioner informing them that it
would be commencing commercial operations on 5 September 2016.
On 5 September 2016, RJIL launched commercial operations. On 6
September 2016, COAI issued letters to the DoT and the TRAI stating
that despite the commercial launch of services by RJIL, there was no
change from the pre-launch situation. The letter states:
"...The issues indicated below are the views of the
majority members of COAI. They may not represent the
views of one or our members namely RJio, whose views
have not been solicited on this issue..."
Further, "...Every member of COAI unanimously agrees
with this letter except for RJio and RJio may represent
separately in the matter..."
On 9 September 2016, The TRAI convened a meeting of service
providers (including the Petitioner and RJIL) to look into RJIL's
complaints of inadequate POIs. Between 12 September 2016 to 20
September 2016, the Petitioner, RJIL and the TRAI exchanged 7 letters
regarding POI allocation. On 15 September 2016, RJIL's 4th letter to TRAI
informing that more than 10.2 Cr calls are still failing every day due to lack
of adequate POIs (as per data enclosed) & requests compliance by IDOs
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with its Firm Demand dated 21 June 2016. On 19 September 2016,
(T3), TRAI's letter to IDOs seeking Info wrt provisioning of POIs &
traffic, post meeting dated 9 September 2016. On 20 September
2016, the Petitioner and other telecom service providers jointly issued
a letter to the TRAI requesting them to "...intervene immediately to
stop the illegal service offering..." of RJIL and to "...ensure compliance
of the TRAI Telecommunication Tariffs..."
40 On 21 September 2016, CA Ranjan Sardana and Kantilal
Ambalal Puj filed information under Section 19(1)(a) of the
Competition Act, 2002 before Respondent-1 against the Petitioner and
others in Cases 81/2016 and 83/2016 respectively for violation of
Sections 3 and 4 of the Competition Act. On 27 September 2016, The
TRAI issued a show cause notice to the Petitioner to show cause
within 10 days from the date of receipt of the notice, as to why action
under the provisions of the Telecom Regulatory Authority of India Act,
1997 should not be initiated against the Petitioner for violation of the
Standards of Quality of Service of Basic Telephone Service (Wireline)
and Cellular Mobile Telephone Service Regulations, 2009 as well as
for breach of its licence. On 30 September 2016, RJIL's subscribers
totalled 16 million according to TRAI's records. On 27 September
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2016 to 20 October 2016, The Petitioner and RJIL exchanged 20
letters regarding POI allocation. On 3 October 2016 (T6), TRAI
issued letter to ITOs informing provisioning of POIs post TRAI's
meeting dated 9 September 2016 and letter dated 19 September
2016.
41 On 5 October 2016, TRAI issued a show cause notices to
the Petitioners to provide reasons for rejection of requests for mobile
number portability ("MNP") to RJIL's network between 5 September
2016 and 22 September 2016. On 6 October 2016, the service
providers filed their reply to the same. TRAI's Direction u/s 13 r/w
S. 11(1)(b) to all TSPs to ensure compliance qua ICA & Qos. On 12
October 2016, RJIL's letter to IDOs seeking requisite POIs, pursuant
to TRAI's direction dated 7 September 2016. On 18 October 2016,
RJIL's 5th letter to TRAI providing traffic and congestion data for 15
October 2016, pursuant TRAII's meeting dated 30 September 2016.
On 20 October 2016, the TRAI issued a letter to the Petitioner and
other telecom service providers informing them that RJIL's offer of free
services is, inter alia:-
"...consistent with the guidelines on promotional
offers..." and "...the tariff plans filed with TRAI cannot
be considered as IUC non-compliant, predatory and
discriminatory at present..." ("TRAI Tariff Order").
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42 On 21 October 2016, TRAI recommended to the DoT to
impose a penalty of INR 950 crore on contesting service providers.
"...non-compliance of the terms and conditions of license
and denial of Interconnection to RJIL..." ("TRAI
Recommendation").
On 22 October 2016, the Petitioner provided RJIL with 1,300
dedicated one-way NLD POIs for RJIL's outgoing traffic. On 2
November 2016, The Petitioner provided RJIL with: (a) 6,000
dedicated one-way Access POIs; and (b) 1,865 dedicated one-way
NLD POIs, for RJIL's outgoing traffic. On 3 November 2016, Airtel's
letter to RJIL allocating addl. E1s after more than 5 months (re:RJIL's
letter dated 21 June 2016 and 12 October 2016) w/o any explanation
for the delay; whereas, Airtel accepted to provide 75 million POIs
ahead of time in November to meet the projections of December (Acts
as virtuous). On 4 November 2016, the TRAI issued a letter to the
Petitioner seeking further clarifications regarding rejection of requests
for MNP. On 5 November 2016, the Petitioner provided RJIL with (a)
7,500 dedicated one-way Access POIs; and (b) 1,940 dedicated one-
way NLD POIs, for RJIL's outgoing traffic. On 8 November, 2016, RJIL
filed information under Section 19(1)(a) of the Competition Act
before Respondent-1 against the Petitioner and others in Case
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95/2016 for violation of Sections 3 and 4 of the Competition Act. On
10 November 2016, The Petitioner provided RJIL with 8,098
dedicated one-way Access POIs for RJIL's outgoing traffic. On 16
November 2016, RJIL issued a fresh location-wise cumulative
requirement of POIs without providing any justification for their
demand. On 29 November 2016, the Petitioner issued a letter to RJIL
rejecting its fresh demand dated November 16, 2016 as the same was
inter alia, not as per the terms of their Interconnection Agreement,
unreasonable and without any basis or rationale for seeking additional
POIs.
43 On 14 December 2016, Vodafone filed WP (C) 11740 of
2016 before Delhi HC against TRAI's Recommendation dated 21
October 2016. On 16 December 2016, the Petitioner provided RJIL
with (a) 10,050 dedicated one-way Access POIs; and (b) 3,350
dedicated one-way NLD POIs for RJIL's outgoing traffic. On 19 January
2017,Idea filed WP(C) 685/2017 before Delhi High Court against
TRAI's Recommendation dated 21 October 2016 & Cl. 5 of QoS
Regulations. On 21 December 2016 to 31 January 2017, thereafter,
RJIL issued 22 letters to the Petitioner admitting that-
"...We acknowledge that you have allocated sufficient E1s
vide your various e-mails in last two months to meet the
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requirements of current traffic levels, however we submit
that in view of the rapidly growing traffic more E1s need
to be allocated in order to meet QoS benchmarks on POI
congestion, at all times..."
44 On 23 December, 2016, The Petitioner provided RJIL with
(a) 10,250 dedicated one-way Access POIs; and (b) 3,450 dedicated
one-way NLD POIs for RJIL's outgoing traffic. On 16 January 2017,
The Petitioner (Idea) filed Appeal No. 1 before the Telecom Disputes
Settlement and Appellate Tribunal ("TDSAT") against the TRAI Tariff
Order. On 17 January 2017, TRAI, after accepting most of the
Petitioner's reasons in its letters dated October 12, 2016 and
November 9, 2016, issued an order imposing a nominal penalty of INR
1,90,000 for rejection of MNP requests for 19 numbers only. On 19
January 2017, The Petitioner filed Writ Petition (Civil) No. 685 of
2017 before the Delhi High Court against the TRAI Recommendation.
On 27 January 2017, the Petitioner provided RJIL with (a) 11,515
dedicated one-way Access POIs; and (b) 3,960 dedicated one-way
NLD POIs for RJIL's outgoing traffic. On 28 January 2017, for the first
time since the Petitioner's letter dated November 29, 2016, RJIL
issued a letter to the Petitioner providing them with the assumptions
behind their demand for additional POIs dated November 16, 2016
inter alia on the assumption of "...an average call duration of 180
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seconds..." Further, demonstrating a complete change in its stance,
RJIL stated that:-
"...the E1s provided by Idea are significantly less than
RJIL's requirement of the E1s to meet the expected traffic.
The current number of E1s is also falling short of the
actual requirements to meet the QoS requirements..."
45 On 31 January 2017, Bharti Airtel filed an Application
under Section 45 of the Competition Act read with Regulation 48 of
the Competition Commission of India (General) Regulations, 2009
and prayed for initiative penalty proceedings against the Informant,
mainly on the ground of willful suppression and representation of the
facts, data, and material documents. On 9 February 2017, the
Commission heard the Applicant in the said Application. By order
dated 24 August 2017, after the impugned order, pending the
representations, communicated the rejection of the said Application to
the Applicant. No decision taken on this Application, prior to passing
the impugned order.
46 On 31 January 2017, 8 February 2017 and 9 February
2017, Respondent-1 held a preliminary conference with all the parties
in Cases 81/2016, 83/2016 and 95/2016. On 5 April 2017, the DoT
returned the recommendation to the TRAI for reconsideration. On 21
April 2017, Respondent-1, relying primarily on COAI's letters dated
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August 8, 2016 and September 2, 2016 as well as the
recommendation dated October 21, 2016, passed the majority order
under Section 26(1) of the Competition Act and directed the Director
General to cause an investigation into the matter ("Impugned Order").
Two members of Respondent-1, dissented from the Impugned Order
and held inter alia that:-
"...As stated above, from the various charts placed on
record by the ITOs showing the number of POIs provided
by them to RJIL, the respective learned senior counsel for
OPs have tried to show that the number of POIs provided
to RJIL by 08.11.2016 i.e. within the first quarter itself,
were much more than what was demanded. In fact, the
charts filed by RJIL itself corroborate this fact. The charts
show that even if some of the POIs provided (one-way
POIs for connecting outgoing calls from ITOs to RJIL) are
not taken into consideration, the number of POIs
provided by OP-5 and OP-7 were much more than what
was demanded by RJIL. Even in case of OP-2, the same
were approximately 64% (NLD POIs) and 85.53%
(Access POIs) as on 08.11.2016. However, as we have
already observed above, we are not expected to go into
the question of providing adequate number of POIs. Yet
there is ample material on record to show that RJIL was
more to be blamed for congestion in its traffic than the
ITOs..."
"...we are of the considered opinion that on the basis of
material available with the Commission, it is difficult to
say that there is a prima facie case..." made out against
the Petitioner and others and accordingly, "...the
instant cases ought to be closed under Section 26(2) of
the Act..." (hereafter "Dissent Note").
47 On 24 May 2017, the TRAI responded to the DoT's
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reference dated April 5, 2017 and reiterated its position in the TRAI
Recommendation, including inter alia recommending to the DoT to
impose a penalty of about INR 950 crore (Approximately) on the each
Petitioners/Service providers.
48 On 8 June 2017, Respondent-2 issued a letter of
investigation to the Petitioner seeking call data records in respect of
certain identified mobile numbers by 19 June 2017. On 19 June 2017,
Respondent-2 issued a letter of investigation to the Petitioner seeking
detailed information/ documents to be furnished by June 30, 2017.
On 20 June 2017, the Petitioner filed Civil Writ Petition No. 7164 of
2017 before the Bombay High Court seeking inter alia to quash the
Impugned Order. On 21 June 2017, DG issued notices to Idea and
COAI for information/documents. On 27 June 2017, the Petitioner
issued a letter to Respondent-2 requesting for an extension of time
until August 31, 2017 to furnish the information/ documents sought
by Respondent-2 vide its letter dated June 19, 2017.
49 On 30 June 2017, the Bombay High Court heard the
matter where the counsel for Respondent-1 and Respondent-2 made a
statement that they-"...shall not proceed with the investigation up to
next date of hearing..." The matter was listed for 28 July 2017. On
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3 July 2017, the Petitioner issued a letter to Respondent-2 informing
them that pursuant to the order of the Bombay High Court on June
30, 2017, the Petitioner shall- "...not be taking any further steps in
respect of your Notice until further orders of the Court..."
50 On 17 July 2017, RJIL served its Affidavit-in-Reply dated
July 15, 2017 on the Petitioner. On 20 July 2017, Respondent-1 and
Respondent-2 served their Affidavit-in-Reply dated July 19, 2017 on
the Petitioner. On 27 July 2017, Respondent-4 served a copy of his
Affidavit-in-Reply dated 21 July 2017 on the Petitioner. On 28 July
2017, the Petitioner issued a letter to RJIL calling upon them to
submit revised charts demonstrating POI allocation by the Petitioner
to RJIL that was tendered by RJIL to Respondent-1 during the
preliminary conference on February 8, 2017 as these were not a part
Annexure 3 of its Affidavit-in-Reply containing "...Copy of the material
tendered during the course of hearing..." On 29 July 2017, the
Petitioner received a reply from RJIL stating that:-
"...Please note that while we circulated copies of the
revised charts to all the parties, at the end of the
proceedings of the preliminary conference on 8-9
February 2017, however the Hon'ble Competition
Commission of India declined to take on record any
further documents including those attempted to the
tendered by Vodafone India Limited, Vodafone Mobile
Services Limited and Bharti Airtel Limited.
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All documents forming a part of the proceedings have
already been annexed by us to our Affidavit in Reply with
copies served upon you on 17 July 2017..."
(emphasis supplied)
51 On 31 July 2017, the Petitioner issued a letter to
Respondent-1 requesting them to confirm that the revised charts
tendered by RJIL were not taken on record. On 1 August 2017, RJIL
replied to the Petitioner's letter dated July 31, 2017 suggesting that
the Petitioner undertake an inspection of files of Respondent-1 to
confirm that the revised charts were not taken on record. On 2
August 2017, the Petitioner filed its Affidavits-in-Rejoinder to the
Affidavits-in-Reply of RJIL, Respondent-1 and Respondent-2 and
Respondent-4. On 3 August 2017, the Petitioner received a letter from
Respondent-1 confirming that:-
"...the revised charts do not form a part of the record in
respect of Case No. 81 of 2016, and/ or Case No. 83 of
2016 and/ or Case No. 95 of 2016..."
On 28 July 2017, the Petitioner mentioned the matter before the High
Court out of turn to seek time for filing its Affidavits-in-Rejoinder. The
High Court was pleased to grant the Petitioner time till 3 August
2017. The order passed by the Hon'ble High Court also recorded that:
"...the statement made on June 30, 2017 by the learned counsel
appearing for the respondent nos. 1 and 2 shall continue till next date of
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hearing..."
52 On 4 August 2017, RJIL served its Further Affidavit-in-
Reply dated August 3, 2017 on the Petitioner. On 7 August 2017, the
High Court was pleased to grant the Petitioner time to file its Further
Affidavit-in-Rejoinder to RJIL's Further Affidavit-in-Reply. The High
Court also recorded that the statement made by Counsel for
Respondents 1 and 2 will continue till the next date of hearing. On 8
August 2016, COAI's letter to DOT and TRAI stating that "our member
operators should no longer be expected to provide POIs while this
charade of tests is being played out." The matter was listed for August
11, 2017. On 10 August 2017, the Petitioner served its further
Affidavit-in-Rejoinder to RJIL's Further Affidavit-in-Reply dated August
3, 2017 on the Respondents. The matter was to be listed High on
Board on 7 August 2017.
53 The learned Senior Counsel appearing for the parties have filed
their respective reply affidavit, rejoinder. They have also filed their
respective written submissions and convenience compilations. Various
Judgments are placed on record in support of their respective rival
contentions. This Bench, by consent, heard these matters on day to day
basis after admission board, since 11 August 2017 upto 19 September 2017.
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Maintainability and Entertainability of the Writ Petitions and Judicial
Review-
54 The Competition Commission of India received three
complaints in the form of information, one filed by CA Rajnan
Sardana and another filed by Kantilal Puj against the COAI,
attributing anti - competitive conduct to it and its leading members.
In the complaint filed by RJIL against the COAI, Vodafone, Airtel and
Idea, the allegations were made that there was contravention of
provisions of Section 3 and 4 of the Act. The Commission forwarded
the copies to the opposite parties in the complaint and had
preliminary conference with the said parties who filed written
submissions. The Commission heard all the parties on 31 st January,
2017, 8th February, 2017 and 19th February, 2017. The Commission
was pleased to pass an order which is impugned in the present writ
petition under Section 26 (1) of the Competition Act, 2002. It is to be
noted that the order of the Commission is split into two parts, one
being the majority finding recorded by four members of the
Commission including the Chairperson, and the dissent note was
delivered by two members of the Commission. The majority members
arrived at the conclusion that there is prima facie contravention of
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Section 3 (iii) (b) of the Competition Act, 2002 as ITO's appeared to
have entered into an agreement amongst themselves through the
platform of COAI to deny the POI to the RGIL. The Commission was
further convinced that the impugned conduct of the ITO's and the
Commission was not an unilateral action by each of the ITO's. The
Commission therefore directed the DG to cause investigation into the
matter as per the provision of Section 26 (1) of the Act and the
Director-General was directed to complete the investigation within
period of 60 days. The dissent note / minority view, however, was of
the opinion that on the basis of material available with the
Commission, it was difficult to say that there is a prima facie case to
hold that the ITO'S along with COAI had acted in a concerted manner
to restrict RGIL's entry into market or to limit or control supply,
technical development of provision of services provided by RJIL.
According to the opinion of minority the instant cases ought to have
been closed under Section 26 (2) of the Act.
Rival contentions of the parties-
55 Learned Senior Counsel Shri Harish Salve appearing on
behalf of RJIL raised a preliminary objection on three counts namely:
i) Maintainability of the writ petition in the light of the
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judgment in case of Competition Commission of India
Vs. Steel Authority of India Ltd. 1.
ii) Territorial Jurisdiction of the Bombay High Court to
entertain the petition;
iii) Forum convenience.
56 As regards the objection of territorial jurisdiction of the
Bombay High Court, reliance was placed by Shri Salve in case of
Union of India Vs. Adani Exports 2 to demonstrate that the cause of
action could not have arisen in Maharashtra on the basis that the
"ultimate effect of the impugned order" is felt on the business of the
petitioner in Maharashtra and there has to be an immediate effect.
57 It is also argued by learned Senior Counsel Shri Salve that
the purport of the Order passed under Section 26 (1) of the Act is no
more res-integra and the Hon'ble Apex Court in the judgment of Steel
Authority of India (cited supra) in unequivocal terms has made the
position of law clear and he has taken us through the judgment in
detail. According to him, the proceedings under Section 26 (1) are
administrative in nature and did not entail any civil consequence and
the Commission has to only form a "prima facie opinion". He also
1 2010(10) SCC 744
2 2002 (1) SCC 567
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took us to the Scheme of Section 26 to demonstrate that at the stage
of Section 26 (2) the Legislature has made a provision for appeal since
a finality is reached at that stage and according to him, there are
several further stages which reflect different shades of adjudication.
However, according to him, Section 26 (1) stage is not adjudicatory
and according to the judgment of the Apex Court bare minimum
reasons to express "prima facie opinion" are sufficient. According to
him, the High Court in exercise of writ jurisdiction cannot substitute
the prima facie opinion of the Commission unless and until it is found
to be suffering from perversity or arbitrariness.
58 Learned senior counsel Shri Salve also argued that the
territorial jurisdiction to assail the impugned order would be that the
Delhi High Court, if at all a writ petition is to be entertained and not
the Bombay High Court. According to him, Vodafone is having his
office at Delhi, Airtel is having its office at Gurgaon and Cellular
Operators Association India is also stationed in Delhi and, further the
investigation is to be ordered in Delhi and the Director-General is
stationed in Delhi. Therefore, the appropriate Forum would be the
High Court of Delhi. On the point of forum convenience the learned
Senior Counsel argued that the respondent had approached the Delhi
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High Court being aggrieved by the order passed by the TRAI imposing
penalty upon them for non supply of points of interconnect, however,
since they did not secure any relief there, they have approached this
Court.
59 We have heard the respective senior counsel representing
the petitioners in response to the said preliminary objection. Shri
Khambatta, learned Senior Counsel invited our attention to the fact
that the Petitioner Telecom operators provide service in the State of
Maharashtra and the effect of the impugned order would be felt in the
State of Maharashtra. He argued that since the points of interconnect
were to be provide connectivity in the State of Maharashtra, a part of
cause of action leading to the filing of the present writ petition has
arisen in the State of Maharashtra and therefore the Bombay High
Court would definitely have jurisdiction to entertain the present
petition. He relied upon the following judgments to support his
contention.
(i) In Navinchandra N. Majithia Vs. State of
Maharashtra & Ors.3 (Also see Rajendran
Chingaravelu Vs. R.K. Mishra, Add. Commissioner of
Income Tax & Ors 4, (paragraphs 44 and 45), the
Supreme Court held that in case of a writ petition
against an order for investigation, the cause of action
3 (2000) 7 SCC 640
4 (2010) 1 SCC 457
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will arise in the place where a part of the investigation
is to be conducted. Consequently, a writ petition
against the order would lie in the High Court within
whose territories a part of the investigation is being
conducted.
(ii) In Barpeta District Drug Dealers Association &
Anr. Vs. Union of India & Ors. 5 (paragraphs 27 and
29), the Hon'ble Gauhati High Court held that a writ
petition against an order of the Competition
Commission of India was maintainable before it since
a part of the cause of action i.e. the underlying alleged
contravention of the Competition Act had arisen in
Assam.
(iii) In Kusum Ingots & Alloys Ltd. Vs. Union of India
& Anr. 6 (paragraph 30), the Hon'ble Supreme Court of
India held that even if a small part of the cause of
action has arisen within the territorial jurisdiction of a
court, such court will be competent to entertain a writ
petition.
(iv) In Nawal Kishore Sharma Vs. Union of India 7
(paragraphs 16 to 19), the Supreme Court found that
a small part of the cause of action against an order of
a department of the Government of India situated in
Mumbai had arisen within the jurisdiction of the
Patna High Court and, consequently, held that the
Patna High Court could entertain the matter.
(v) In Damomal Kauromal Raisingani Vs. Union of
India 8 (paragraph 5) the Bombay High Court, relying
on its decision in W. W. Joshi Vs. State of Bombay
9,
held that the High Court within whose jurisdiction the
effect of an order of an authority is felt will also have
5 2013 (5) GLT 30
6 AIR 2004 SC 2321
7 (2014) 9 SCC 329
8 (1965) SCC Bom. 129
9 AIR 1959 Bom 363
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jurisdiction to entertain a writ petition challenging the
order.
60 Learned senior counsel Shri Khambata argued that the
Petitioners have a largest subscriber base in the Maharashtra Circle
and the order of investigation in the affairs of the Petitioners for an
alleged cartel to deny POIs to RJIL was spread throughout the country
and the investigation will also have to be conducted in the State of
Maharashtra. According to him, the impugned order will have
immediate effect in the State of Maharashtra and looking to the
bundle of facts necessitating the filing of the petition as well as the
reliefs sought in the petition make it clear that a part of the cause of
action has arisen in the State of Maharashtra and, therefore, the
Bombay High Court will have jurisdiction to deal with the present writ
petitions.
61 As regards the meeting, the argument of the learned
Senior Counsel Shri Salve of Forum Convenience, he submits that it is
the party who is "dominus litus" and he has to choose amongst the
jurisdiction if both the courts have jurisdiction and they have chosen
jurisdiction of this Court.
62 In support Shri Khambata relied upon the judgment in
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the case of Nasiruddin Vs. State Transport Appellate Tribunal . Para
37 of the said judgment reads as follows :
"It would be open to the litigant who is the dominus lits to
have his forum conveniens. The litigant has the right to go
to a court where part of his cause of action arises. In such
cases, it is incorrect to say that the litigant chooses any
particular court. The choice is by reason of the jurisdiction
of the court being attracted by part of cause of action arising
within the jurisdiction of the court."
63 Responding to the preliminary objections of learned
senior counsel Shri Harish Salve, learned senior counsel Shri Janak
Dwarkadas appearing for the Petitioner in WP No. 7173 of 2017 has
argued that the affidavit of RJIL did not raise a ground of lack of
territorial jurisdiction in its affidavit-in-reply and according to him this
objection is raised for the first time on 03.08.2017. He places
reliance upon Section 21 (1) of the Civil Procedure Code to the effect
that objection about the territorial jurisdiction can be waived by a
party, who is entitled to object in any proceedings. He submits that
the judgment relied upon by the learned senior counsel Shri Salve in
case of Union of India & Ors. Vs. Adani Export Limited & Anr. (supra)
has been, in fact, considered in two subsequent decisions of the
Bombay High Court, wherein it has been held that a writ petition
under Article 226 of the Constitution of India is maintainable in the
10 1975 (2) SCC 671
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Bombay High Court, even if the seat of the authority concerned is
outside Maharashtra, provided that the effect of decision of such
authority falls within the territorial limits of the jurisdiction of this
Hon'ble Court. He places reliance on the judgments in the case of R.
K. Singh Vs. Union of India & Ors. and Wills India Insurance Brokers
Pvt. Ltd. Vs. Insurance Regulatory and Development Authority 12.
64 In reply to the preliminary objections of learned senior
counsel Shri Salve about the maintainability of the writ petition, in
the light of the judgments of the Apex Court in the case of SAIL
(Supra), learned senior counsel Shri. Dwarkadas has submitted that
the judgment of the Apex Court does lay down no law contrary to the
settled position namely, be it the administrative or quasi judicial order
in exercise of statutory powers or in exercise of jurisdiction conferred
on instrumentalities of the State, it is open to judicial review under
Article 226 of the Constitution of India and it can always be tested
on the parameters of being arbitrary, perverse, unreasonable or in
excess of jurisdiction. According to learned senior counsel, the
Supreme Court was examining the question as to whether, looking
to the nature of findings and powers conferred on the Competition
11 2002 (4) Bombay Law Reporter 246
12 2012 (1) BCR 204
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Commission under section 26(1) of the Competition Act, it is
obligatory to afford in all cases and in all events, the right to notice
and hearing. According to him the Supreme Court also examined the
question as to whether it is obligatory for the Competition
Commission to record reasons for formation of a prima facie opinion
in terms of section 26(1) of the Competition Act. According to the
learned Senior Counsel recording the minimum reasons
substantiating the formation of opinion is a safeguard and it has
been so observed by the Apex court in para 97 of the said judgment
and thus it is always open to the judicial review. It is vehemently
argued that the Supreme Court in the said judgment was neither
concerned with nor it has opined - either in the form of obiter or by
way of passing a reference - an order recording "minimum reasons" by
which a prima facie opinion is formed under section 26(1) of the
Competition Act, is not amenable to judicial review even if the same
was arbitrary, unreasonable, perverse without application of mind and
in excess of jurisdiction. According to the learned senior counsel the
order of investigation of the nature contemplated by the Competition
Act would amount to an unreasonable restriction on the petitioners'
fundamental right to carry on business guaranteed by the Article 19
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(1) (g) of the Constitution of India and hence, this court in exercise of
powers under Article 226 would review such a decision. Learned
senior counsel Shri Chagla also advanced his arguments of the similar
nature to rebut the preliminary objections raised by the learned
counsel for the RJIL. He further argued that the argument of "forum
Convenience" is offensive qua the Petitioners. No case is made out to
justify the submission of forum shopping in the facts and
circumstances of the case. It is unsustainable contention.
65 The petitions before us are filed by the three Cellular
Operators and one petition is filed by the Association and all the
petitions assailed the impugned order on more or less same grounds.
We will be dealing those arguments collectively. We have extensively
heard learned senior counsel Shri Khambata appearing on behalf of
the Idea Cellular, learned senior counsel Shri Dwarkadas appearing
on behalf of the Bharati Airtel and learned senior counsel Shri Iqbal
Chagla appearing on behalf of the Vodafone Ltd.. We have also heard
learned senior counsel Shri Aspi Chinoy, representating the Cellular
Operator Association of India.
66 The impugned order passed by the Competition
Commission is assailed by the learned counsels for the Petitioners on
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the ground that the said order is perverse and arbitrary. According to
the learned senior counsels appearing for the Petitioner that by
applying the test in Barium Chemicals' case, it is necessary to test the
order of Commission on the parameters as to whether the
subjective satisfaction has been reached by taking into consideration
the objective facts. It was argued before us that since there is no
provision of an appeal against the order passed under section 26(1)
and an appeal is provided against the order passed under section
26(2) of the Competition Act, the minimum safeguard available is
power of judicial review. It is submitted that the order passed by the
Commission which is quasi judicial authority is to be judged on the
basic provisions of administrative law.
67 On merits, learned senior counsel Shri Khambata
appearing on behalf of the Idea Cellular Ltd. Submitted before us that
the lis between the parties is the points of interconnection. He
contended that Idea is providing telecommunication services in India
pursuant to CMTS/UASL/ unified licence granted by the Department
of telecommunication, Government of India. According to him, there
is obligation flowing from the licence to provide POIs and according
to him, on 14/6/2014 an interconnect agreement was executed with
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RJIL which contain the following important clauses:-
a. For the first two years, RJIL is responsible for the
provision and augmentation of transmission links
interconnecting RJIL's network to Idea's existing
switches as specified in Schedule 1 to the
interconnection agreement;
b. RJIL is obliged to provide to Idea a forecast six
months in advance to enable Idea to augment the
required capacity on its network;
c. In case any further POIs apart from switch
locations set forth in Schedule 1 is agreed and
established between the parties during the initial
period of 2 years, the cost is to be borne by RJIL;
and
d. Traffic measurement for 7 days during busy hour
every six months has to be taken to determine
further capacity requirements.
68 According to Senior Counsel, the TRAI fixes Usage
Charges under the Telecommunication Interconnection Usage Charges
(IUC) Regulation 2003" (The Regulation). According to him, the RJIL
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started its operation in December, 2015 and on 21 st June, 2016 they
addressed a letter to the opposite parties informing that RJIL is
conducting test trial of its services before its Commercial launch ..."
and that RJIL, on reasonable grounds, is expecting over hundred
million subscribers in the first year post launch of services. He refers
to the particular portion of the said letter which we reproduce as
follows:-
"...RJIL is currently conducting test trials of its services
before its commercial launch..." and that "...RJIL, on
reasonable grounds, is expecting over 100 million
subscribers in the first year post launch of services. This
combined with the initial pent-up demand for services
may result in upwards or 25 million subscribers coming
on the network within the first quarter post launch. In
order to help provide seamless connectivity to the
targeted subscribers, RJIL will require sufficient
interconnect capacity for inter-operator traffic at the
Points of Interconnection ("POIs") ..."
69 The grievance of the learned Senior Counsel is that RJIL
did not announce its date of commercial launch and in pursuance to
the demand raised on 21st June, 2016 the Idea Cellular arranged for
POI's from time to time and RJIL had in their 22 letters acknowledged
the said fact in its various letters and according to the learned Senior
Counsel, the petitioner was only conducting test trials and according
to the existing regime of Regulation, it was sufficient to provide the
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points of interconnect for testing. According to him, it was not
necessary to augment the entire demand raised by RJIL since they
were in test phase. It was not permissible to create subscriber base
before its commercial launch and RJIL did not declare its data of
commercial launched till 2nd September, 2016 when they declared that
they are going to commercially launch on 5th September,2016. The
liability to provide POIs commensurates with the demand from the
point of commercial launching and not during test phase. It is
contended by him that the demand was to be made within a period of
90 days and not immediately as claimed by RJIL and it was only a
forecast demand which was not based on the actual subscriber base.
He argued that when RJIL approached the Commission being
aggrieved by the conduct of the Cellular operators and the COAI
attempted to canvass that the operators through the platform of COAI
had attempted to prevent the entry of the petitioner into the market
by entering into a tacit agreement which was clear violation of Section
3 of the Competition Act, 2002. The order passed by the Commission
suffers from grave perversity. He contends that the Commission had
permitted them to file their written submissions and invited them for
conference of three dates and the Cellular operators have placed
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material before the Commission. Once the said course was adopted by
the Commission it was mandatory on the part of the Commission to
look into the said material and before arriving at a prima facie case it
had to apply its mind to the material in hand and form a prima facie
opinion on the basis of the said material. The learned Senior Counsel
argued that the Commission arrived at a finding which is not based on
the material placed before the Commission and in fact the very
relevant material was kept out of consideration before forming a
prima facie opinion and one of the relevant material being the chart
submitted by Idea as well as the Cellular Operators before the
Commission demonstrating that the demand raised by RJIL for points
of interconnect was met by the Operators from time to time and in
fact more points of interconnect were supplied than they were
demanded. However, the majority decision of the Commission did
not even advert to the said charts. According to him, the non-
consideration of relevant material leads to perversity and he relies
upon the judgment in the case of Barium Chemicals Limited & Anr. Vs.
Company Law Board & Ors. 13 wherein the Apex Court observed as
follows:-
"27. .....No doubt, the formation of opinion is subjective but
13 AIR 1967 SC 295
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the existence of circumstances relevant to the inference as the
sine qua non for action must be demonstrable. If the action is
questioned on the ground that no circumstance leading to an
inference of the kind contemplated by the section exists, the
action might be exposed to interference unless the existence of
the circumstances is made out."
He also relies on the judgment of Apex Court in the case of Rohtas
Industries Vs. S.D. Agarwal & Ors. in support of his contentions that
the impugned order is vitiated in law on the following grounds:
(a) It disregards relevant undisputed and conclusive
material;
(b) Is based on irrelevant consideration;
(c) On account of perversity/ on being unreasonable by
applying Wednusbury's Principle of Reasonableness.
70 Shri Khambatta argued that formation of prima facie
opinion means based on material placed before it and though Section
26 (1) of the Act permits the Commission to pass an order without
hearing and record the minimum bare reasons, however, once the
Commission has chosen to give hearing and recorded reasons for its
decision, the same can be judicially scrutinized to determine whether
a writ of certiorari will lie or to apply the Wednusbury's test of
reasonableness. He placed reliance upon the Classic Statement of
14 AIR 1969 SC 707
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Law of Denning, J. in Rex Vs. Northumberland Compensation Appeal
Tribunal at 349 wherein, it has been held that if Justices of a
tribunal choose to give reasons even when they were not bound to,
the court of King's Bench would on certiorari inquire into the
correctness of those reasons, and, if the reasons were wrong, would
quash the decision. He also relies on Lord Sumner in his classic
16 at 155 where held that:-
formulation in Rex Vs. Nat Bell Liquors
"...If justices state more than they are bound to state, it may,
so to speak, be used against them, and out of their own
mouths they may be condemned, but there is no suggestion
that, apart from questions of jurisdiction, a party may state
further matters to the Court, either by new affidavits or by
producing anything that is not on or part of the record..."
(emphasis supplied)
71 In regard to the maintainability of the writ petition in the
light of the judgment in the case of SAIL (Supra), the learned Senior
Counsel submitted that the jurisdiction of the Court is not ousted if
the Court finds that the finding recorded by the Commission in
forming of "Prima facie opinion" is found to be perverse.
72 According to him the order of the Commission speak for
itself since two members have recorded a dissent finding and
whatever was not considered by the majority members have been
15 (1952) 1 KB 338 (CA)
16 1922 2 AC 128
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reflected in the order of the minority and on consideration of the said
material the minority had arrived at a conclusion that no prima facie
case exists.
73 The learned senior counsel Shri Dwarkadas submitted
that a Telecom Industry is well regulated and the contract is a
statutory contract entered into between the service providers. The
terms of the contract mandate provision of POIs and the manner, the
number, the time at which it is to be provided is stipulated under the
Agreement. The grievance is about denial or the delay in provisions
of POIs, which is nothing but alleged breach of the contract/
agreement between the telecom service providers and there is a
forum in the form of Telecom Disputes Settlement and Appellate
Tribunal (TDSAT) under the Telecom Regulatory Authority of India
Act, 1997. By virtue of Section 14 of the TRAI Act, 1997 the said
Tribunal is empowered to adjudicate disputes between two or more
service providers and since the ultimate issue around which the
complaint is filed by the RJIL revolves around POIs, the forum exists
in the form of TDSAT and the Competition Commission has no
jurisdiction to enquire as to whether there was breach of the
agreement / licence's conditions in not providing POIs under the
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guise that it was an attempt, resulting into anti-competition phase to
stall RJIL's entry in the market. It is also contended that though the
issue of jurisdiction of the Competition Commission in the light of the
alternate remedy in the form of TDSAT was raised before the
Commission but the same was not dealt with at all and thus the
Commission has fallen into a jurisdictional error.
74 It is also argued by the learned counsel for the Petitioner
that on a careful reading of the complaint filed before the Competition
Commission, the RJIL had made grievance about the delay and denial
of POIs in terms of the interconnect agreement and by using the
platform of Cellular Operators Association of India (COAI) and it was,
therefore, prayed before the Commission to cause an investigation
into the matter by exercising the power under section 26(1) of the
Competition Act and directing the OPs to discontinue their test of
dominance, to provide adequate interconnection capacity to RJIL and
to provide adequate interconnect capacities when ever it is required
in terms of the interconnect agreement. By way of interim directions
under section 33, it was prayed that the directions be issued to the
OPs (opposite party) to comply with the binding obligations under
the QOS regulations by making the provisions for POIs. The
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complaint necessarily, therefore, revolves around the commissioning
of POIs which is necessarily a matter of contract between the two
telecom service providers and it is argued that the necessary required
POIs were submitted and relevant material produced before the
Commission in the form of chart being not disputed, the Commission
did not refer to the material placed by the OPs during the hearing
before the Commission.
75 As regards the contention that the platform of COAI was
used which amounted to cartelisation, our attention was drawn to
the complaints made by the COAI and it is argued that it is not an
unreasonable complaint as the COAI's was making the grievance to
the telecom regulator by pointing out the manner in which the RJIL
was functioning and creating the subscriber base in the test phase
when it had not commercially launched its services. It is argued
before us that it is most appropriate for the COAI to approach the
Service Regulator with their grievance and in any sense it can
amount to cartelisation. Not only that a representation was also
made to the Finance Minister, raising the grievance.
76 The impugned order of the Competition Commission is
also assailed on the ground that it takes into consideration irrelevant
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material like the recommendations of TRAI dated 22.10.2011. It is
argued by the learned senior counsel that the Competition
Commission, with the majority judgments of the Competition
Commission, adheres great importance to the findings of TRAI as a
sectoral regulator. The Commission in paragraph 9 of its order
refers to the information available on TRAI's Web-site that on
21.10.2016 the TRAI had recommended to the department of
Telecom of imposing of penalty of Rs.50 Crores per license service
area (LSA) against the Airtel, Vodafone and Idea, who have made
violation of the provisions of the license agreement and standards of
quality of service of basic telephone service (wire-line) and Cellular
Mobile Telephone Service Regulation 2009. It is observed by the
Commission that TRAI has held the said conduct of the ITO, in
violation of relevant TRAI regulations, and recommended penal
action against them. According to the learned senior counsel the
recommendations of TRAI were heavily relied upon by the
Commission and the Commission was greatly influenced by the said
recommendations when it observed that the penalty recommended
had held that the ITOs "have jointly through their associations (COAI)
declined the points of interconnection to RJIL" and that the TRAI had
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observed that RTO's denial of interconnection was with ulterior
motive to stifle its production and is anti-consumer. According to the
learned senior counsel the majority view of the Commission fail to
take into consideration the fact that the recommendations of TRAI
had not attained finality since they were only forwarded to the DOT
and as the minority opinion recorded that the DOT thereafter had
sought comments of TRAI on the said recommendations. After its
report on the said recommendations and therefore, the same is not
of any consequence and not concerned as far as the competition
issues. It is, therefore, argued that the Commission has relied upon
the irrelevant material in the form of recommendations of TRAI.
77 Learned Senior Counsel Shri. Iqbal Chagla argued that the
Commission had issued notices to the Petitioner Service Providers
and called for material from them which they had submitted during
the preliminary conference and in this backdrop it was necessary for
the Commission to consider the said material placed before it.
According to Shri Chagla as per regulation No. 17 of the Competition
Commission of India (General Regulations 2009), the Commission
can call for a preliminary conference to form an opinion whether a
prima facie case exists. According to him, non-consideration of the
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said material amounted to perversity and he relied upon the
judgment of the Apex Court in the case of Achutananda Baidya Vs.
Prafullya Kumar Gayen & Ors. and Atlas Cycle Haryana Limited Vs.
Kitab Singh . According to him the malice in fact is reflected from
the order of Commission in view of the non-consideration of the
material in the form of the chart in which the petitioner service
providers have demonstrated that they had applied for POIs more
than what was demanded by the RJIL. According to him, the
Commission before arriving at a prima facie case and forming an
opinion to make an enquiry into the existence of anti- competitive
agreement, ought to have focused whether an agreement exists on
the basis of any material submitted before it and whether such an
agreement which had effect of delaying/denying POIs to RJIL was
anti-competitive and likely to cause an apprehensible adverse effect
on competition. However, the Commission has placed reliance on
TRAIs' recommendations dated 22.10.2016 though they had not
attend finality,without adverting to the effect whether the demand
raised by the RJIL was "reasonable demand" and whether there was
application on the part of the Petitioners to satisfy the said demand
17 (1997) 5 SCC 76
18 2013 (12) SCC 573
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when RJIL was in itself test phase and had not yet commercially
launched. According to the learned senior counsel the area as to test
phase was a gray area and this fact is established in view of the fact
that TRAI itself had called for a consultation paper of network testing
before commercially launched service on 01.05.2017. Thus according
to learned senior counsel it was not even the arena of jurisdiction of
the competition Commission to form a prima facie opinion that the
agreement between the parties was anti-competitive when the
sectoral regulator was itself not clear on its application between the
parties in the test phase period, prior to commercial launch of the
services.
78 We have also heard the learned senior counsel Shri Aspi
Chinoy appearing on behalf of the petitioner in a petition filed by the
Cellular Operators Association of India. He specifically made a
reference to para 19 of the order of the Commission, impugned in the
petition, wherein the Commission has observed that COIS has
facilitated the joint conduct of the RTOs to collectively decide to
prevent a successful entry of RJIL into telecom market. He took us
through letters addressed by the Association to the TRAI and it is his
contention that as an association they had took up the cause of its
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members and the findings of the Commission that COAI in its letter
dated 08.08.2016 and 02.09.2016 has only protected the interest of
its majority members, which was demonstrative of the fact that the
TIOS were using the platforms of COAI to collectively refuse to
provide POIs to RJIL's is an erroneous finding. According to Shri
Chinoy such an observation of the Commission against an association
is nothing but a attempt to emasculate the association who represents
the interest of its members and though CCI is a market regulator.
According to Shri Chinoy it is not a telecom regulator and therefore,
CCI could not have passed such an order which is perverse and
insists its jurisdiction. It is also the submission of the learned counsel
that before 05.09.2016, I.e. is the date of commercial launch of RJIL,
the RJIL was not a market subscriber. According to him letters
written by RJIL referred the test phase and there was no market of
RJIL before 05.09.2016. According to him section 19, clause (3) the
parameters of competition Act which mandate the Commission to
have regard to certain factors while determining whether the
agreement has an apprehensible adverse effect on competition
under section 3 pre-supposses an existence of a market. According
to Shri Chinoy, the RJIL was not a telecom service provider prior
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to 05.09.2016 and it had become a service provider only on
05.09.2016 on its commercial launch and in fact he also submitted
that the RJIL is also submitted its report of subscriber base and QOS
as per the regulations only after 05.09.2016. He attempted to draw
distinction between the terms "subscriber" and "customer" and
according to him mere acceptance of KYC forms from the consumer
do not make them subscriber. As per Shri Chinoy since the said issue
of existence of market goes to the root of the matter, the order passed
by the competition Commission, declaring the conduct of COAI as
anti competitive is totally perverse since it pre-supposes the market.
79 We have heard learned senior counsel Shri Aney, who was
ably assisted by Advocate Shri Naushad Engineer appearing on behalf
of the competition Commission of India. Learned counsel Shri Aney
does not dispute the proposition canvassed by the learned counsel for
the petitioner that the court in exercise of its writ jurisdiction would
interfere only when a demonstrable perversity is pointed out. No
issue about the territorial jurisdiction also. He highlighted the
functioning of the Commission enumerated under section 18 of the
Competition Act, 2002 and according to him it is the duty of the
Commission to eliminate practices having adverse effect on
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competition in market and to protect the interest of the consumers
and ensure freedom of trade carried on by the participants in the
markets in India. Shri Anney vehemently argued that the impugned
order directs the investigation against the petitioners may cause
hardship to them, however, if the law permits such a course, the
consequence of the action could not debar the authority from
following the mandate of the statute. According to him, the order
passed by the Commission only discloses a prima facie opinion and he
heavily relies upon the judgment of the Apex court in the case of
SAIL (Supra). He contends that the order passed under section 26(1)
is an administrative order and the nature of the powers exercised by
the Commission are inquisitorial and not adjudicatory and do not
entail any civil consequences. He relies upon the findings of the
Apex Court cited supra to canvass that the Commission is expected to
record some reasons while forming a prima facie view and it may
pass a speaking order but Section 26(1) did not contemplate passing
of an order of adjudication but a mere prima facie opinion without
following the mandate of "principles of natural justice" in a strict
sense. He also places reliance on the judgment of the Bombay High
Court in case of Kingfisher Airlines Ltd. Vs. Competition Commission
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of India 19 to contend that the purpose of investigation is collection of
evidence and as per the scheme of the Act, when an order is passed
under section 26(1) a prima facie case being made out, it is never a
conclusion of breach or otherwise. According to him, the law is well
settled that the court could not stifle investigation at all except for
compelling reasons. He also places reliance on the Madras High
Court Judgment in the case of Chettinad International Coal Vs.
Competition Commission of India . According to Shri Aney the
Commission has based its case on looking into the five relevant
points namely, (1) the delay/ denial of POI, type of (2) types of POI
conversion into new way POI (3) conduct of ITOs similar in nature
even before the letters from COAI (4) parallel action on behalf of
the ITOs and COAIs in the manner of allotment of POI. According to
Shri Aney the telecom regulatory authority has already concluded
that the denial of POI was in violation of interconnect agreement
and fine has been levied. According to him, the COAI has taken a
stand on the issue and has not only written communication to the
regulatory authority. According to him the qualitative and
quantitative aspects of the chart was looked into by the
19 2010 SCC OnLine Bombay 2186
20 2016 SCC OnLine Madras 14805
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Commission, which lead to an irresistible conclusion that there was
breach of terms and conditions of agreement by the petitioners
operators and it passed an order on 22 October 2016. The supply of
POI was minimal and it increased only after the order of TRAI and
according to him the Commission has to look into the conspectus of
matters with a view point of consumer and thus there is no perversity
in the order passed by the Commission. According to him though the
Commission was not a duty bound to call the opposite party for
hearing and afford them an opportunity or look into the material, the
Commission has looked into the material and arrived at a conclusion
since there was sufficient material to order an investigation in
exercise of powers under section 26(1). According to him in exercise
of powers under Article 226 this court would not substitute the view
of Commission.
80 Dr. Sathe, learned Senior Counsel appeared on behalf of
RJIL and he supported the order passed by the Commission.
According to him, RJIL holds a unified licence issued by the
Department of Telecommunication and according to him, the unified
licence and unified access services licence entered into by the
petitioners and the RJIL governs the rights and obligations of the
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TSPS. He canvassed that in the event of any conflict between the
terms of interconnect agreement (ICA) and the provisions of quality of
service (QOS) Regulations, the provisions of QOS Regulations will
prevail. According to him, there is no distinction between the "test
phase" and "phase before commercial launch" as the recitals in the
agreement contained in ICA are effective from the date on which the
agreement is entered into.
81 According to Shri. Sathe the ICA defines the term
"subscriber" in a inclusive manner and since there is a contractual
relationship between RJIL and its test phase users, it cannot be said
that they are not subscribers. He took us through various clauses in
the ICA and also through the Quality Of Service (QOS) Regulation,
2009. Shri. Sathe also argued that QOS Regulation prescribes that
congestion at each individual POI, cannot exceed 0.5% over a period
of one month and RJIL experienced call failures far in excess of QOS
standards of congestion.
82 Learned Senior Counsel argued that the Regulations do
not create any distinction between obligations of TSP during the test
phase and the commencement of services and moresoever when
during test phase RJIL made payments of approximately Rs.10.3
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Crores to the petitioners towards charges for terminating calls on their
network, made by its test users on the network of the petitioners and
the payment has been accepted without any demur. According to
RJIL, the petitioners also understood their obligation and therefore
they never denied the RJIL request for augmentation on account that
it was during "test phase" and contemplated augmentation after 70%
utilization levels were reached. He also argued, that reliance on
"Consultation Paper of network testing before commercial launch of
services" misplaced and merely because consultation paper has been
issued did not mean that there was any ambiguity or any gray area in
the Regulatory regime. It is also contended that the extensive test
phase was necessitated for RJIL since it was using a unique technology
in the form of LTE data and office video messaging (OVM) and it
wanted to test a new category of device that supported its VVITE
technology and therefore there were no definite benchmarks to follow
the requirement of testing. According to RJIL, it was deploying
cutting edge technology on an unprecedented scale, which would
have effect of making high-speed voice and data access available to
customer across the country at prices that were a fraction of those
offered by competitors and in this background they demanded the POI
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based on its forecast from time to time which was not timely provided.
83 Shri. Sathe also contended that the Commission was duty
bound to find whether there was any agreement in any form
whatsoever which was likely to cause an appreciable adverse effect on
competition and the complaint of RJIL made to the Commission was
that the ITOS with the COAI had entered into such agreement into
which had appreciable adverse effect on the competition under
Section 3 and formed the prima facie opinion under Section 26 (1)
and has not adjudicated in any manner. According to the learned
Senior Counsel, if the argument of the petitioner is to be accepted
then this Court would be passing an order under Section 26 (2) of the
Competition Act thereby closing the matter. He also placed reliance on
the judgment in the case of SAIL (Supra) along with other Judgments.
He placed heavy reliance on the TRAI Recommendations dated 22
October 2016 from which four facts had emerged, namely, (a) on
recommendations of TRAI there was spike in supply of POI on 29
October onwards, (b) there was no technical difficulty in augmenting
the POIs nor there was any financial constrains since the money was
paid by RJIL and (c) 90 days was the minimum time and prescribed
for augmentation but that was maximum time the petitioners need not
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have waited till 90th day, (d) There was parallel action and behaviour
on part of all the Telecom Operators. According to him, the
Competition Commission did not solely rely upon the
recommendations but only accepted it as facts. He placed reliance on
the judgment in the case of Excel Crop Care Limited v/s. Competition
Commission of India & Anr. and Grasim Industries Limited v/s.
Competition Commission of India .
Learned Senior Counsel Shri Shrinivasan also represented RJIL
and took us through the Scheme of the Competition Act, in a great
detail. According to him, the independent decision of the ITOs got
converted into a decision in concert with the association supporting
the ITOS. According to him, the Competition Act aims at the
economic development of the country and prevent practices having
adverse effect on competition since anti-competitive agreement affects
"economic well being". According to him, it was the existing players
who did not welcome the entry of RJIL into the market and he
rebutted the contention advanced on behalf of the petitioners that the
dispute is between service providers and TDSAT can look into the
same. He demonstrated that the Scheme of CCT Act is different and
21 2017 SCC Online SC 609
22 2013 SCC Online Delhi 5109
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the role to be played by the TRAI as a sectoral regulator under the
Telecom Regulatory Authority of India Act, 1997 is different.
According to him, in terms of Section 14 that the TRAI can make
Regulations and Licencee is bound to follow the Regulations without
any reservation and it is not permissible for any Telecom Operator to
arrogate the Regulator. Further, according to the learned Senior
Counsel, demand was made for POIs since RJIL was ready for launch
and the petitioners have refused to provide such POIs and thereby
attempted to stop the entry of RJIL into the market when RJIL was
ready to arrange for all the expenses. As regards the test phase
argument of the Counsel for the petitioners, learned Senior Counsel
responded that it was the choice of the TSP to load his network with
testers to test the load factor and when he had 22 million subscribers
on 21st June,2017, it was approximately one lakh testors for each
State. Moresoever, according to him, the petitioners did not make any
grievance with RJIL in respect of test period. Shri Ramji Shrinivasan
has bifurcated the period schedule involved in the matter into four
periods, first period being from December, 2015 to 21 June 2016,
second period from the date of demand on 21 June 2016 till 1
September 2016 i.e. the date of prelaunch, between 1 September
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2016 to 8 November 2016 when RJIL had commercially launched and
a period 8 November 2016 i.e. after completion of RJIL to the
Commission. He took us through various communications extended
between the parties during the aforesaid period to demonstrate that
the whole attempt of the petitioners was to stifle the competition by
RJIL.
84 Shri Amit Sibbal, learned Senior Counsel also advanced his
arguments in support of case of RJIL and according to him, causing
loss of market by colliding either in person or quality is violative of
Section 33 (b) of the Competition Act. According to Shri. Sibbal, the
petitioners ought to have taken independent decision and by their
decisions which were in concert, all of them had caused loss of
competition amongst themselves. He heavily relied upon the decision
of ITOS not to supply POIs which was not of independent of each
other but as action in concert. According to the learned Senior
Counsel, the spike in the POIs after the TRAI Recommendations
clearly reflected such action in concert and according to him, this
finding of Commission is not parasite of TRAI's Recommendations and
in fact arranging one way POIs at similar point of time and following
the same pattern of shifting from two way to one way POIs is
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reflecting an Anti-Competitive Agreement amongst the parties and
demonstrate collusion. He also argued that the action of the
Commission is an "action in rem" and is anti-competitive in nature
that the jurisdiction of the Competition Commission is exclusive in
view Sections 60 to 62 of the Competition Act.
Fundamental reasons to decide Writ Petitions:-
85 Strikingly, the Supreme Court Judgment in SAIL (Supra)
has been read and referred by both the side Senior Counsel in support
of their rival contentions. The relevant paragraphs are-
"31. .....
(2) However, the Commission, being a statutory
body exercising, inter alia, regulatory jurisdiction,
even at that stage, in its discretion and in
appropriate cases may call upon the concerned
party(s) to render required assistance or produce
requisite information, as per its directive. The
Commission is expected to form such prima facie
view without entering upon any adjudicatory or
determinative process. The Commission is entitled to
form its opinion without any assistance from any
quarter or even with assistance of experts or others.
The Commission has the power in terms of
Regulation 17(2) of the Regulations to invite not
only the information provider but even 'such other
person' which would include all persons, even the
affected parties, as it may deem necessary. In that
event it shall be 'preliminary conference', for whose
conduct of business the Commission is entitled to
evolve its own procedure.
(3) (4) ....
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(5) In consonance with the settled principles
of administrative jurisprudence, the Commission is
expected to record at least some reason even while
forming a prima facie view. However, while passing
directions and orders dealing with the rights of the
parties in its adjudicatory and determinative
capacity, it is required of the Commission to pass
speaking orders, upon due application of mind,
responding to all the contentions raised before it by
the rival parties."
87. Now, let us examine what kind of function
the Commission is called upon to discharge while forming
an opinion under Section 26(1) of the Act. At the face of
it, this is an inquisitorial and regulatory power. A
Constitution Bench of this Court in the case of Krishna
Swami v. Union of India (1992) 4 SCC 605 explained the
expression 'inquisitorial'. The Court held that the
investigating power granted to the administrative
agencies normally is inquisitorial in nature. The scope of
such investigation has to be examined with reference to
the statutory powers. In that case the Court found that
the proceedings, before the High Power Judicial
Committee constituted, were neither civil nor criminal
but sui generis.
"91. The jurisdiction of the Commission, to act
under this provision, does not contemplate any
adjudicatory function. The Commission is not expected to
give notice to the parties, i.e. the informant or the
affected parties and hear them at length, before forming
its opinion. The function is of a very preliminary nature
and in fact, in common parlance, it is a departmental
function. At that stage, it does not condemn any person
and therefore, application of audi alteram partem is not
called for. Formation of a prima facie opinion
departmentally (Director General, being appointed by the
Central Government to assist the Commission, is one of
the wings of the Commission itself) does not amount to
an adjudicatory function but is merely of administrative
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nature......."
"97. .............At the stage of forming a prima
facie view, as required under Section 26(1) of the Act, the
Commission may not really record detailed reasons, but
must express its mind in no uncertain terms that it is of
the view that prima facie case exists, requiring issuance
of direction for investigation to the Director General.
Such view should be recorded with reference to the
information furnished to the Commission. Such opinion
should be formed on the basis of the records, including
the information furnished and reference made to the
Commission under the various provisions of the Act, as
afore-referred. However, other decisions and orders,
which are not directions simpliciter and determining the
rights of the parties, should be well reasoned analyzing
and deciding the rival contentions raised before the
Commission by the parties. In other words, the
Commission is expected to express prima facie view in
terms of Section 26(1) of the Act, without entering into
any adjudicatory or determinative process and by
recording minimum reasons substantiating the formation
of such opinion, while all its other orders and decisions
should be well reasoned.
"119. ............The Commission, while
recording a reasoned order, inter alia, should: (a) record
its satisfaction (which has to be of much higher degree
than formation of a prima facie view under Section
26(1) of the Act) in clear terms that an act in
contravention of the stated provisions has been
committed and continues to be committed or is about to
be committed; (b) it is necessary to issue order of
restraint and (c) from the record before the Commission,
there is every likelihood that the party to the lis would
suffer irreparable and irretrievable damage, or there is
definite apprehension that it would have adverse effect on
competition in the market."
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This Judgment has been followed in following other cases.
(a) Kingfisher Airlines (Supra)-
"24. ......There could therefore be no impediment in
taking any action under the new Act. Even
otherwise, the provisions of the M.R.T.P. Act and the
Competition Act are not identical. Since no action
whatsoever is taken or proposed to be taken by the
M.R.T.P. Commission, there could be no question of
the petitioners being subjected to double jeopardy.
Further, the M.R.T.P. Commission now stands
abolished w.e.f. 14th October, 2009. There is,
therefore, no question of M.R.T.P. Commission now
taking any action against the petitioners. This
ground of challenge has no substance at all.
(b) Chettinad International Coal (Supra):-
"35. ....This Court refrains from entering into the
factual controversy, as the entire issue is at a
preliminary stage before the Commission and the
Commission has only formed a prima facie view and it
would not be the interest of parties to dwell into facts
and therefore, this Court has not ventured into
examining the merits of the factual contentions raised by
the contesting parties."
(c) Aamir Khan Productions Pvt. Ltd. & Anr. v/s Union of India &
Ors.
"15. The question whether the Competition Commission
has jurisdiction to initiate the proceedings in the fact
situation of these cases is a mixed question of law and
fact which the Competition Commission is competent to
decide. The matter is still at the stage of further inquiry.
The Commission is yet to take a decision in the matter.
There is no reason to believe that the Competition
23 (2011) 1 BomCR 802
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Commission will not consider all the contentions sought
to be raised by the petitioners in these petitions including
the contention based on Sub-section (5) of Section 3 of
the Competition Act.
86 In case in hand, the Commission (majority decision) has
given reasons by overlooking the law and the record. The parties and
their counsel have participated before the Commission with huge
number of documents and charts. This is not a case of "administrative
order" only. It is a reasoned order/direction, therefore, Judicial
review is permissible.
A case for Judicial Review-
87 The Writ Petitions are maintainable also for the following
reasons.
(a) Union of India vs. Gunasekaran
"12. .......In disciplinary proceedings, the High
Court is not and cannot act as a second court of first
appeal. The High Court, in exercise of its powers Under
Articles 226/227 of the Constitution of India, shall not
venture into re-appreciation of the evidence. The High
Court can only see whether:
a) the enquiry is held by a competent authority;
b) the enquiry is held according to the procedure
prescribed in that behalf;
c) there is violation of the principles of natural justice
in conducting the proceedings;
d) the authorities have disabled themselves from
24 (2015) 2 SCC 610
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reaching a fair conclusion by some considerations
extraneous to the evidence and merits of the case;
e) the authorities have allowed themselves to be
influenced by irrelevant or extraneous
considerations;
f) the conclusion, on the very face of it, is so wholly
arbitrary and capricious that no reasonable person
could ever have arrived at such conclusion;
g) the disciplinary authority had erroneously failed to
admit the admissible and material evidence;
h) the disciplinary authority had erroneously
admitted inadmissible evidence which influenced
the finding;
i) the finding of fact is based on no evidence.
The case in hand falls within the ambit of above clauses itself.
Therefore, a case for judicial review.
88 The following Judgments of Supreme Court on
interpretation of Competition Act required no discussion as it is settled
position of law, but we have to consider the facts and circumstances of
the case in hand.
(a) Excel Crop Care Limited (Supra)
"45. ............Even when the CCI forms prima facie
opinion on receipt of a complaint which is recorded in the
order passed Under Section 26(1) of the Act and directs the
DG to conduct the investigation, at the said initial stage, it
cannot foresee and predict whether any violation of the Act
would be found upon investigation and what would be the
nature of the violation revealed through investigation. If
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the investigation process is to be restricted in the manner
projected by the Appellants, it would defeat the very
purpose of the Act which is to prevent practices having
appreciable adverse effect on the competition. We, therefore,
reject this argument of the Appellants as well touching
upon the jurisdiction of the DG."
(b) Grasim Industries Limited (Supra)
16. It is also stated in the written submissions of
the respondents that violations of provisions of Section 3
may also result in violation of Section 4 of the Act as well.
In my view, what is material in this regard is as to what
was the information which was considered by the
Commission, while forming its opinion and not whether
such an information constituted violation of the provisions
of Section 3 or Section 4 of the Act."
(c) Google Inc. & Ors. Vs. Competition Commission of India and Anr.
18 ....
"L) However, a petition under Article 226 of the
Constitution of India against an order under Section 26(1)
of the Act would lie on the same parameters as prescribed
by the Supreme Court in Bhajan Lal (supra) i.e. where
treating the allegations in the reference/information
/complaint to be correct, still no case of contravention of
Section 3(1) or Section 4(1) of the Act would be made out
or where the said allegations are absurd and inherently
improbable or where there is an express legal bar to the
institution and continuance of the investigation or where
the information/reference/complaint is manifestly attended
with mala fide and has been made/filed with ulterior
motive or the like."
89 This is a case for judicial review, also in view of the rival
contentions so raised by the Senior Counsel for the parties on various
25 2015 SCC OnLine Del 8992 : (2015) 150 DRJ 192 (DB)
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controversy as contended. Therefore, we are going further into the
depth of the matters, as even contended by the Senior Counsel for the
parties.
90 Admittedly, no Appeal lies against the order passed under
Section 26(1) of the Act, expressing prima facie opinion (SAIL Supra).
There is no dispute on the said issue. Therefore, the remedy available
to the Petitioners and/or like persons is to invoke Article 226 of the
Constitution of India. There is no issue about the maintainability of
such Writ Petition against the impugned decision as there is no
alternate remedy available.
Administrative direction/or reasoned decision by the quasi judicial
authority or Executive Authority-
91 In the present case for the reasons so recorded by the
Commission after considering the compilation of documents, charts,
filed by the rival parties, the Commission has called the parties for the
conferences by exercising its discretion and permitted the counsel to
explain the respective charts/case. Such impugned order cannot be
treated and/or termed as "administrative order" and/or direction as
observed in SAIL (Supra). The principle and interpretation given by
the Supreme Court and other High Courts needs no discussion. But at
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the same time the High Court, under Article 226 of the Constitution of
India and/or even otherwise, is required to consider the rival
contentions so raised, based upon the records and the law. It is settled
that the validity of administrative order is required to be judged by the
reasons mentioned therein, and it cannot be supplemented by the
additional reasons, through the affidavit and oral and written
submissions, in subsequent proceedings. In T.P. Senkumar, IPS Vs.
Union of India & Ors. the Apex Court, though in service matter, has
considered the nature of "administrative order", as under:-
80. In this context the following passages from M.A. Rasheed
Vs. State of Kerala , are quite telling on the issue of
"satisfaction" of an executive authority:
"8. Where powers are conferred on public
authorities to exercise the same when "they are
satisfied" or when "it appears to them", or when "in
their opinion" a certain state of affairs exists; or when
powers enable public authorities to take "such action as
they think fit" in relation to a subject matter, the courts
will not readily defer to the conclusiveness of an
executive authority's opinion as to the existence of a
matter of law or fact upon which the validity of the
exercise of the power is predicated.
9. Where reasonable conduct is expected the
criterion of reasonableness is not subjective, but
objective. Lord Atkin in Liversidge Vs. Anderson
, said:
"....If there are reasonable grounds, the
Judge has no further duty of deciding whether
26 (2017) 6 SCC 801
27 (1974) 2 SCC 687
28 1942 AC 206 (HL)
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he would have formed the same belief any more
than, if there is reasonable evidence to go to a
jury, the Judge is concerned with whether he
would have come to the same verdict."
The onus of establishing unreasonableness, however,
rests upon the person challenging the validity of the
acts.
10. Administrative decisions in exercise of
powers even if conferred in subjective terms are to be
made in good faith on relevant consideration. The
courts inquire whether a reasonable man could have
come to the decision in question without misdirecting
himself on the law or the facts in a material respect.
The standard of reasonableness to which the
administrative body is required to conform may range
from the courts' own opinion of what is reasonable to
the criterion of what a reasonable body might have
decided. The courts will find out whether conditions
precedent to the formation of the opinion have a factual
basis."
(Emphasis added)
"85. The law has been well-settled for many
years now that when an order is passed in exercise of a
statutory power on certain grounds, its validity must be
judged by the reasons mentioned in the order. Those
reasons cannot be supplemented by other reasons
through an affidavit or otherwise. Were this not so, an
order otherwise bad in law at the very outset may get
validated through additional grounds later brought out
in the form of an affidavit.
86. In this context it is worth referring to
Commissioner of Police v. Gordhandas Bhanji , in
which it was said:-
"9......Public orders, publicly made, in
exercise of a statutory authority cannot be
construed in the light of explanations
29 AIR 1952 SC 16
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subsequently given by the officer making the
order of what he meant, or of what was in his
mind, or what he intended to do. Public orders
made by public authorities are meant to have
public effect and are intended to affect the
acting and conduct of those to whom they are
addressed and must be construed objectively
with reference to the language used in the
order itself.
This view was affirmed by the Constitution Bench of
this Court in Mohinder Singh Gill v. Chief Election
Commissioner ."
"94. The subjective satisfaction of the State
Government must be based on some credible material,
which this Court might not analyze but which can
certainly be looked into. Having looked into the record
placed before us we find that there is no material
adverse to the interests of the Appellant except an
expression of opinion and views formed, as far as he is
concerned, as late as on 26-5-2016. This make-believe
prima facie satisfaction by itself cannot take out
judicial review of administrative action in the garb of
subjective satisfaction of the State Government."
92 We are convinced for the reasons recorded above and the
ones to follow that case is made out by the Petitioners to interfere with
the impugned majority decision/orders. The impugned order, in no
way, can be said to be purely an administrative order. We are of the
view that judicial review, if the case is made out, is permissible even
against the orders passed by the Authority like the Commission,
specifically in the facts and circumstances of the case. [Mangalam
30 (1978) 1 SCC 405
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Organics Limited Vs. Union of India. ]
93 The objection so raised by the learned counsel who are
supporting the impugned order that the present Writ Petition under
Article 226 read with Article 227 of the Constitution of India need not
be entertained, as the said decision and the directions are not
adjudicatory in nature, but merely the administrative and it not entail
any civil consequences, is unacceptable. The prima facie opinion,
leading to a direction for investigation does not determine any of the
rights of the parties is also untenable. There is no adjudication in
respect of any dispute by and between the parties, is also not a correct
submission. The Judgments so cited by the CCI and RJIL are required
to be considered on the facts and circumstances of the case. The
position of law needs no further discussion. The judgments, so cited,
are distinguishable on facts and the law for the above reasons itself.
94 In view of the same Supreme Court Judgments and
reading the provisions of the Act and the regulations, in fact the
Commission has collected the detailed information by holding the
conferences, calling material details, documents, affidavits and by
recording the opinion and referred the matters for further inquiry and
31 (2017) 7 SCC 221
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investigation to DG. The impugned order/direction so passed cannot
be treated as just "administrative order" and/or "not adjudicatory in
nature."
95 There is no total bar in entertaining such Writ Petition,
specifically when the case is made out of great injustice, perversity,
illegality, hardship and prejudice to the legal rights of the service
providers or the enterprises, apart from non-application of mind to the
telecommunication laws. This is specifically keeping in mind the
consequences of this opinion, so expressed and the investigation so
contemplated followed by the final order of compensation under the
Competition Act.
Territorial Jurisdiction-
96 The preliminary objection raised that the Petition is not
entertainable /maintainable in this High Court of Judicature at
Bombay, is also devoid of any merit. There is no issue and/or denial to
the facts that the part of cause of action arose in Mumbai and/or the
State of Maharashtra. The parties have placed material on record
including the affidavits and the averments so made in the Petition,
which supports the fact that the part cause of action arose in
Maharashtra, including in Mumbai. The relevant averments in this
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regard of the respective Petitioners, in the Petitions are read and
referred by the Senior Counsel.
97 The substantial client/consumer base is in State of
Maharashtra. The Respondents/service providers Officers' are at
Mumbai. The affidavits and averments and the documents so placed
on record, show that the various correspondences/the documents
have been exchanged by and between the parties, within the
jurisdiction of Maharashtra State including Mumbai. Both the parties
have substantially argued the matter by referring to the affidavit and
the documents/charts, which are necessary to adjudicate the issues so
raised. The Senior Counsel appearing for the CCI has not agitated
issue about maintainability or entertainability of the Writ Petitions in
this Court. We are inclined to hold that the present Writ Petitions, are
maintainable and entertainable in this High Court.
98 We are inclined to accept the submissions/contentions so
raised by the learned senior counsel appearing for the service
providers/petitioners. The defence/supporting submissions revolving
around the majority decision by the senior counsel appearing for the
Respondents (RJIL and CCI) are not acceptable. [Kranti Associates Pvt
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Ltd v. Masood Ahmed Khan & ors and Telefonaktiebolaget LM Ericsson
(PUBL) v. Competition Commission of India & Anr ].
Objections to entertainability of Writ Petitions in light of Section 26(1)
of Competition Act-
99 Another factor/objection was that these Writ Petitions are
not maintainable against such administrative order/direction under
Section 26(1) of the Competition Act is also unacceptable. The
Supreme Court Judgment (SAIL supra) and/or others nowhere dealt
with this aspect of entertaining and/or maintaining of Writ Petitions
against such order.
100 The impugned decision is by majority five members. The
dissent note is of two members. The reasons are given by the majority
members in support of the information/complaint so lodged, by two
individual persons, including Reliance Jio. The dissent note, rejecting
the information/complaint also reflects various reasons based upon
the documents/charts placed on record by the parties. In totality, the
Commission members have read and referred the respective
documents, material, charts and written submissions and pass the
32(2010) 9 SCC 497
33(2016) 4 Comp LJ 122
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reasoned order, including the reason for dissent. The Petitioners are
relying upon the dissent note in support of their contentions, in
addition to their oral, as well as, written submissions. The
Respondents however, supporting the majority opinion in addition to
their rival contention and the supporting documents and/or oral
and/or written submissions. Therefore, in the facts and
circumstances, the impugned order/even if of impugned majority
order and/or minority order, no way can be stated to be
administrative order/directions and/or not adjudicatory in nature and
without any Civil consequences, as submitted by the counsel
appearing for the Respondents Jio and CCI. This impugned majority
order, in fact, has decided several issues and elements though stated
to be in prima facie nature, ultimately entail into the DG to inquire
and investigate with clear adverse consequences, so recorded
revolving around the Competition Act, by overlooking the provisions
of TRAI Act/Contracts, between parties.
Power and jurisdiction under the TRAI Act and the Competition Act:-
101 The information is filed based upon the averments around
the various breaches committed by the Petitioners-service providers
under the agreement by not providing timely POI, though demanded
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from time to time, that as stated resulted into failure of calls of
Jio/consumers. The stated deliberate "delay", "denial" had resulted
into "congestion", as alleged, was with collusive attempt to thwart the
launch and/or entry of Respondent-RJIL into the telecom market.
This alleged action in concert falls within the ambit of Sections 3 and
4 of the Competition Act. These averments itself make position clear
that the parties have entered into the various agreements/contracts, as
required under the TRAI Act. Thus, the agreement clauses and its
interpretation is necessary for further adjudication of the controversy
so raised, as it has direct connection and link with the allegations so
made. Therefore, unless these contract conditions are defined clearly,
the rights and obligations of the parties by the Authority under the
TRAI Act, the Commission, would not be in a position to decide
finally the stated tacit or indirect agreements, by the service providers
and its association to scuttle the progress and/or launching of RJIL.
We have read the impugned decision and referred to the record to
ascertain the bundle of the facts which are required to deal with the
rival contentions. All these alleged facts and data have direct link and
are interwined with the commercial contract clauses between the
parties/service providers under the telecommunication laws. The
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parties are bound to comply with their respective rights and
obligations. If there is non-compliance and/or breach of clauses,
directly or indirectly, the grievance required to be redressed before the
Authority/Tribunal under whose supervision and control such rights
and obligations are crystallized. The case of deliberate collusive delay
and laches, that resulted into the alleged congestion, certainly falls
within the ambit of such binding agreements and it is appropriate that
the Competent Authority/Tribunal define their rights and obligations,
in the telecom market under the governing laws. The Commission
may initiate inquiry later on, if still the case is made out, but not
otherwise. Once the points are settled, the parties may also settle
their disputes and the grievances. The elements of commercial
settlements are very much available in the matters. No one can be
individually blamed for any default or delay.
102 In the present case, as noted, there are no such clear terms
and obligations provided and/or crystallized at any earlier point of
time. No agreement clauses have provided and dealt with the situation
where new entrant, being its business strategy, supply or gives free
offer/cards to the millions of "potential Consumers" in six months
advance, before commercial launching of its project. Its effect on the
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existing service providers, who have been running their business,
based upon the existing policy and the technology, required to be
noted by all the concerns. The free supply of cards to the employees
and/or to distributors during test period, is understandable situation.
If party or person, service providers, having business understanding in
the market, willing to provide as and when demanded the IPOs of any
numbers, the Court and/or third person will not be in a position to
interfere with it. The parties can sit and settle even such disputes at
any point of time. But when the controversy is raised, considering the
facts and circumstances, the authority/Tribunal and/or the Court is
required to decide it in accordance with law of the market. The
Association role, in view of uncleared position in the market or
vagueness about the rights and obligations, in such situation, is
important. We are considering the power and jurisdiction of the
respective statutory authorities under the respective Acts.
103 The Competition Act, in view of the scheme so elaborated
in earlier paragraphs, empowered the Commission and/or authorities
to exercise functions of prohibitive and constructive in nature. It is
vested with inquisitorial investigation, regulatory and adjudicatory
and as stated some extent advisory jurisdiction. The Competition Act
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is entertained to ensure fair competition in India by providing trade
practice, which causes appreciable facts in the competition, in the
market of India. The Authority, under the Competition Act is basically
a fact finding Authority and not empowered to decide the question of
law and/or any decision contrary to the other laws. The TRAI Act
regulates the telecommunication services, adjudicate the disputes and
protect the interest of the service providers and the consumers, of the
telecom service. The source of TRAI Act, is Entry 31 of the Union list
and source of Competition Act is from Entry 21 of the concurrent list
of the Constitution of India. The service providers required to enter
into and/or execute the similar type of authority, guided
agreements/contracts, for providing and/or getting telecom services.
104 This is further elaborated by Section 21(A) of the
Competition Act itself, which is a provision whereby, in case of doubt
and/or for the clarification of any issues, the Commission may refer
the matter to the experts/authorities pending the inquiry/
investigation. Therefore, the Commission ought to have invoked this
provision before initiating the proceedings, but has not been done in
the present matter. We are not curtailing the power of the
Commission to exercise the jurisdiction over the enterprise or person,
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that are regulated by other Sectoral authorities/Tribunals. The crux is
of usurping the jurisdiction to decide the contractual terms and rights
and obligations of service providers, who are governed and regulated
by the TRAI Act, specially when the controversy, admittedly is pending
before the High Court/The Government/Competent Authority under
the TRAI Act. The Commission, in such situation, pending the
litigation between the parties could not have proceeded further, even
for inquiry and investigation, by expressing "prima facie opinion"
under Section 26(1) of the Act, unless the position of governing law
and the regulations of the concerned market are clear. Sections 60 to
62 of the Competition Act, in the facts and circumstances, are of no
assistance.
105 The Authorities/Tribunals under the TRAI Act, provide for
various measures to facilitate the competition and to promote
efficiently in the operation in telecommunication services, including
aspects of technical compatibility. All are bound by their respective
rights and obligations, arising out of the contracts, they enter into
under the prescribed contract terms and under the supervision of the
authorities under the TRAI Act. Therefore, if any dispute and/or issue
and/or any question of interpretation arises in respect of any terms
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and conditions and/or policy decision and/or of any rights and
obligations of the respective service providers, it is the authorities
under the TRAI Act, which is specifically empowered to deal and
decide the same. The Government and the concerned department, in
the interest of development of such market, keeping in mind the
technology and need, made it compulsory for every service providers
to work and run their respective telecom business in the concern
market within the framework of guided principles. The TRAI Act,
Section 11(1)(a)(b), empowers to make recommendation on the
specified subjects so provided. The same is recommendatory and has
no binding effect on the Central Government being executive
power/decision. But, this by itself, is no reason for other authorities,
like the Commission under the Competition Act, to treat the same, as
final and binding. Admittedly, the recommendation is under challenge
and the matters are pending in the High Court. The informant, in fact
has asked for the specific performance of the contracts. The
Commission under the Competition Act provides and permits to check
the stated anti-competition, cartelisation and adverse effect on the
new project/entry, but under the TRAI Act, also the concerned
Authority is empowered and considered to see the market
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development and to facilitate the competition and prompt efficiency,
based upon the existing policy. The interest of all the service providers
and consumers, is required to be treated equally, fairly, keeping in
mind new technology, the supply and the developing telecom market.
The Commission independently without keeping in mind the
provisions of the TRAI Act in fact by overlooking it, on presumption
and assumption, proceeded and initiated the stated inquiry. The scope
and power of the Commission to initiate investigation by giving prima
facie opinion, inspite of pendency of the issues and existing provisions
of telecommunication laws, therefore, is perverse, illegal and
impermissible.
TRAI recommendations treated as final-
106 The majority decision reflects the reliance on TRAI
recommendation dated 21 October 2016 (the recommendation),
which is the subject matter pending in the High Court Writ Petition.
Department of Telecommunication (DOT) had, returned the same for
further clarification. The recommendations are not binding, unless it is
settled and decided by the Competition Authority finally. The
observation by the TRAI that "other ITOs have jointly, through their
Association, declined the interconnection to RJIL, appears to be
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ulterior motive to stifle the competition and is anti-consumer", this
itself is contested and disputed by the Petitioners/Service Providers,
throughout. The reasons of actual congestion at POI required to be
dealt with finally by the High Court and/or Authorities under the TRAI
Act. The submission that the recommendations are only noted but not
relied upon, is unsustainable. The decision of the majority itself
reflects that the Commission (majority), has proceeded to initiate the
inquiry, as if the law in this regard is settled by the recommendations.
The imposition of penalty by the TRAI has also influenced the
Commission to pass the impugned order. The service providers have
challenge to the recommendation in Writ Petition on various grounds,
including the ground of natural justice and non-consideration of
detailed letters dated 11 July 2016, in response to the show cause
notice, still required final adjudication. The recommendation also
could not have been used as a material evidence and/or the settled
position of controversy arising out of the agreements. The dissent
note expressly observed that the recommendation cannot be relied
upon. Though subsequently, the TRAI has reiterated its
recommendation, but the DOT- the licensor , has not yet acted upon it.
The fact of the pending challenge in the high Court against the order
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recommendations also is relevant factor in favour of the Petitioners'
submission. The submission that the TRAI, in any way, cannot
determine the service providers' collusion and cartelisation, is wrong
approach, unless the contractual terms of ICAs and respective rights
and obligations are finalized. Definitely, the Commission has no
jurisdiction to decide it. It is therefore, clear that the majority decision
has wrongly relied upon the recommendations and proceeded upon it.
The reliance of recommendation was impermissible to initiate the
inquiry. In any way, the impugned order/decision cannot be explained
by additional reasons and/or by the oral submission, during the course
of the arguments. The market complexity because of lack of clarity
revolving around these important issues be left for final decision with
the High Court or the Authority under the Telecommunication laws.
Free Subscribers and card holders and the Obligations of other Service
Providers-
107 The majority decision and the submission of RJIL that
RJIL's demand for "POI" during the testing phase was legitimate and
therefore, augment of POI has to start from 21 June 2016. This was
treated as a possible view even in their CCI's submission. This is on
the foundation that "obligation to provide POI is only on the date of
commencement of launch i.e. 5 September 2016 is prima facie
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disputed fact that needs to be gone into." This is with emphasis that
there is a material to indicate the same. Such disputed issue
pertaining to the obligation arising in the test phase and or the
commercial phase are required to be determined before any issue
pertaining to the anti-competitive activity action and/or initiation of
any proceedings. Such controversy cannot be adjudicated by the
Competition Authority. The words "test phase" and/or "test users",
"subscribers", "test service cards" "employees" and its meaning and
purpose are the part of the clauses of various agreements between the
parties. The license fees as required to be shared during the test fee
with the licensor DOT was not discussed and/or shared. The tariff
plan was required to be filed only after commercial launch. No QoS
reports available on TRAI's website before announcement of launch
which is stated to be statutory requirement as per regulation 10 of
PoS. All these aspects were not considered in majority decision. The
dissent note however, recorded the issues around the same. The
interpretation given by the RJIL to the definition of "subscriber"
thereby stating that it includes any legal person or entity, therefore, it
falls within the ambit of "subscriber" even during the test phase to
include test phase users is not acceptable. At the same stroke, it is
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further stated by the RJIL that the test users seamlessly de-migrated as
RJIL subscribers. On 31 August, 2016, RJIL reported approximately
5.3 million test users to the TMRL Cell. Therefore, this is by treating
the test phase user after announcement of service as "subscribers".
This justification is not specifically provided and mentioned anywhere
in the agreement clauses and/or not even recorded in the majority
decision.
108 DOT circular dated 29 August 2005 provides that "test
service card" can be given to the business partners or employees. The
circular clarifies that the test/service cards and cards given to the
employees are to be deducted in order to arrive at "subscriber" of the
TSP. The test user, therefore, cannot be treated as subscriber. The
majority view no way dealt with and decided the said important issue
and has not even made any observation, rightly so, for want of
jurisdiction in itself. It is clear from the explanation to the said
circular that this test/service cards are required to be given free of
costs to business partners including the operator to check the quality
of service from time to time, so is the position that of the cards given
to the employees, on which no revenue is generated. These persons,
therefore, are test trial users during this test period and cannot be
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treated as "subscriber". Whether this circular and/or the clauses
revolving around the same covered the case and situation of test
phase or period is itself another issue which the Commission even
after collecting the information could not have decided. The TRAI,
while in penalty recommendation referred to congestion data of post
launch from 15 September 2016 to 19 September 2016 and 3 October
2016 onwards. The circular further makes position clear that the
utility of the test phase appears to be only to test the network and its
quality. It cannot be used and utilized to test the market. The free
service, as announced and/or declared by one provider, if has direct
communication and or it required to link with the other providers,
both the parties are required to act within the framework of
agreement, but there is no such agreement and/or clause made out
and/or pointed out and certainly not referred in the majority decision.
The Commission is required to wait for the decision of the
authorities/tribunals based upon the policy and/or circular already
declared for the telecom market. The distribution of millions of test
cards to the general public though may be a business strategy, but if
the issue is raised about its feasibility in the terms of contract and
regulation on the date of such action, then there existed a confusion
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and the clarification as sought by the service providers independently
and/or through the Association, in no way can be stated to be action
within the purview of Section 3 of the Competition Act.
The charts and the details-
109 All the Senior Counsel read their respective charts
referring to access to POIs and NLD POIs. The charts of call failure
also part of record. More we read these charts and correspondence,
more we also felt the importance of the interpretation and the
clarifications of this complex issues. We have also noted, after hearing
the parties at length and after noting the charts so submitted by the
rival parties that even at the end after collecting the
information/investigation by the Director General, the Commission for
want of specific power and jurisdiction could not have dealt with such
telecommunication laws and terms and conditions and interpretations.
The Commission could not have proceeded further to pass any final
effective and executable order for want of clarification on the issues.
The Commission, ought not to have invoked general provisions of law
of cartelisation and anti-competitive law, without waiting for final
decision of the TRAI recommendations. The submission that the
Commission's order and directions are of administrative nature and
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decides no legal rights and effects, is unacceptable in the facts and
circumstances of the case.
110 We are not inclined to accept the situation that both the
Authorities, under the respective Acts to continue the proceeding and
after final decision by the TRAI Authority, the Commission will pass
final order under the Competition Act. The Commission ought not to
have proceeded with inquiry in view of pendency of the litigation in
High Court, arising out of the same terms and conditions and rights
and obligations of the service providers from same agreements.
111 The collection of information, pending legal issues before
the Competent Authority in advance, is impermissible and
unjustifiable. It definitely, cause injustice, and affect the rights of
reputation, name and fame in the market.
112 As scope and challenge is limited, we are not dealing the
merits of the matters, arising out of it. But definitely, considering the
scope and object of the Competition Act and the power of Authorities,
keeping in mind the telecom sector markets, governing law and the
government policy. The Judgments so cited by the
Respondents/CCIA/RJIL, are distinguishable on the facts and the law
itself. No case has decided the situation and the fact like one in hand.
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There were no such parallel proceedings pending, dealing with the
same contract conditions and its interpretation under telecom
communication laws, in these Judgments.
113 The submission that the CCI has also power of a Civil
Court, while conducting any inquiry/investigation and penalty can be
levied and/or compensation for cartelisation, that itself is no reason to
usurp the jurisdiction to decide the rights and obligations of the
parties, arising out of the contracts under the TRAI Act.
Telecommunication regulations are binding-
114 Under he TRAI Act, as recorded, there are various
regulations, including (i) Telecommunication Interconnection (Port
Charges) Regulations, 2001 (TIPCR, 2001) to ensure effective
interconnection arrangement between the service providers and to
claim the charges. (ii) The TRAI (Levy of Fees and other Charges for
Tariff Plans) Regulation, 2002 (TRAI Fees Regulation, 2002) provides
and deals with the levy of fees and other charges, as per the rate
determination. (iii) The Telecommunication Interconnection Usage
Charges Regulation, 2003 (TIUC Regulation 2003) also fixed the
terms and conditions of interconnectivity between the service
providers and for sharing the revenue between the providers, (iv)
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Standards of Quality of Service of Basic Telephone Service (Wireline)
and Cellular Mobile Telephone Service Regulations, 2009, further set
aside the quality of services mechanism. The issue is that the
Commission cannot adjudicate and/or decide, in any manner, the
breaches of terms and conditions/regulations and interpret any policy
decisions and/or even provide any guidelines, in case of doubts
and/or confusion in the telecom market. The TRAI, being the Sectoral
regulator, has all technical expertized to deal and decide of the issues
required for the telecom Sector. The TRAI Act and the Regulations
read together is complete code. [Union of India Vs. Tata Teleservices
(Maharashtra) Ltd. ].
We are not observing in any manner that the
existence of Commission and its power to curb the abusive and anti-
competitive conduct is curtailed. The existence of Commission cannot
be stated to be redundant, otiose and nugatory, merely because we are
interfering the order so passed, in the circumstances so recorded.
115 Section 14 of the TRAI Act, as defined the jurisdiction of
Telecom Dispute Settlement and Appellate Tribunal "TDSAT", by
excluding the Monopolies and Restrictive Trade Practices Act, 1969
(MRTP Act) Tata Teleservice (Supra), the Consumer Protection Act.
There is no issue that under the TRAI Act, as per the provisions of the
34 (2007) 7 SCC 517
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Competition Act, related orders/actions/compensation cannot be
awarded. There is no question of conflict of laws, in view of above
position. The Judgment of Telefonakiebolaget LM Ericsson (PUBL)
(Supra) para 168 and 175 are of no assistance. Above all, the
supporting submissions so read/made by the learned counsel
appearing for the Respondents, including CCI, not dealt and decided
and/or even touched by the CCI in the impugned majority order. It is
settled that the authorities cannot act and/or substitute the reasons,
through their submissions and/or affidavit for the first time while
defending such orders. The law is settled in this regard.
116 Once the aspect of jurisdiction goes to the root of the
matter, non-challenge of earlier decision in other matters that itself, no
way, empower the Commission to have a jurisdiction to deal with the
controversy in hand. In the present case, we are not inclined to accept
the submission that, to initiate the proceedings, is a mixed question of
law and the fact. The Judgments cited by the learned counsel
appearing for the CCI and RJIL, even arising out of the Competition
Act, are distinct and distinguishable on facts reflected in this
Judgment. The Supreme Court Judgment in Aires Rodrigues Vs.
Vishwajeet P. Rane & Ors. are of no assistance, being the matter
35 2017 SCC OnLine SC 219
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arising out of the distinguishable Criminal proceedings. Section 8 of
the General Clauses Act 1897 is of no assistance. The submission of
CCI that there are sufficient material for issuing such directions, is
unacceptable. There is no question of prima facie opinion on
assumption and/or presumption on a foundation that the governing
law of the telecom market is settled on the issues so raised. (1) Aamir
Khan Productions Pvt. Ltd. (Supra), Shri Niraj Malhotra Vs. North Delhi
Power Limited & Ors. and Mr. P.K. Krishnan Proprietor, Vinayaka
Pharma Vs. Mr. Paul Madavana, Divisional Sales Manager M/s. Alkem
Laboratories Limited .
All these judgments are revolving around the
respective Acts of the concerned market. The Acts involved are the
Copyright Act, 1956 Aamir Khan Productions Pvt. Ltd. (Supra), The
Patents Act, 1970 Telefonaktiebolaget LM Ericsson (PUBL) (Supra), The
Electricity Regulatory Commission, Shri Niraj Malhotra (Supra) and
The Drugs (Prices Control) Regulation, Mr. P.K. Krishnan Proprietor,
Vinayaka Pharma (Supra). All these Acts governed their respective
area but not regulated by statutoy authority like under the
telecommunication laws. The Commission has jurisdiction if any, once
the position of law and the terms and conditions between the parties
36 2011 SCC OnLine CCI 20
37 2015 SCC OnLine CCI 187
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are clear and settled by the telecommunication Authority and the High
Court and not otherwise. "The underlying principle is that by
erroneously assuming existence of such jurisdictional fact, no
Authority can confer upon its jurisdiction which it otherwise does not
)
possess." (Arun Kumar Vs. Union of India
117 The contesting Respondents, in any way, unable to take
note of the position of the law at relevant time, cannot be permitted to
give any clarification and/or explanation and/or justification for the
first time in the High Court by placing on record the explanation
through the charts, data and material and the Affidavits. The law is
settled in this regard (T.P. Senkumar, IPS (Supra). We are dealing with,
as contended, the majority decision. There was no specific challenge
raised by the Respondents to the decision given by the minority
members of the Commission. The other Respondents, therefore,
cannot be permitted to challenge in argument, for the first time, the
minority decision. The majority decision for the reasons so recorded
in the Judgment, is without jurisdiction. The majority decision/
action/order is liable to be quashed and set aside, being perverse.
[Atlas Cycle Haryana Limited (Supra)]. The Supreme Court has
reiterated the position that a finding, by overlooking the material on
38 (2007) 1 SCC 732
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record would amounts to perversity and in Writ jurisdiction it can be
interfered with. [Achutananda Baidya (Supra)].
118 The Co-operation and co-ordination if volunteered by one
provider to other, irrespective of such demand, and if both the parties
act accordingly with adjustment and settlement, there is no issue
which is required to be considered by the Authorities under both the
Acts. However, when the issues are raised and created because of a
new practice and in absence of precedent, it required to be settled by
the competent Court/Tribunal under the market governing laws.
119 Admittedly, the concern Respondent launched with 2.2
million subscribers, which was unprecedented, specifically because it
offers free services, as a business strategy. Everything is required a
pre-contract, pre-notice, specific pre-agreements/ clauses and
reasonable phase-wise demand in the existing telecom market. The
conduct of Respondents was noted in the dissent note, but not in
majority decision. Having once offered free services, and even if there
are call failures that itself ought not to have been reason to hold that
it was only due to deficiency of POIs. The various issues of
informants, network and/or operationalization of POIs, non-utilization
of POIs and various other technical factors apart from match and/or
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mismatch of new technology with the existing technology may be the
relevant factors. All these aspects unless settled and decided by the
Competent Authority/Tribunal under the TRAI Act, the prima facie
majority decision is unsustainable and unacceptable even for issuance
of any direction. We are reiterating that all these disputes where
there is delay and denial in providing reasonable POIs; whether there
is an obligation to provide one way POI instead of two 2 way POIs;
whether there is breach of such obligations; whether the test phase
extends only to business partners or employees; whether cards could
be supplied for testing quality of network and not for testing the
market and; whether this amounts to creation of subscriber base,- all
these are issues to be decided by the authorities and tribunals
(TDSTD) and not by the High Court and definitely not by the
Commission under the Competition Act.
Role of Association (COAI)- "Every majority decision is not cartelisation"-
120 The TRAI's recommendation and observations against the
role of COAI, in the facts and circumstances, for above reasons itself
are untenable and unsustainable. Every majority decision by the
Association and/or its members, cannot be termed and/or stated to be
"cartelisation". Heavy reliance was placed by the Commission on
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letters of COAI which forming its prima facie opinion. The
representation made by the COAI to the DOT and the TRAI, referred
to the issue about RJIL's conduct of providing full-fledged services to
more than 1.5 million subscribers on its network and that the traffic
between the RJIL and other service providers was one sided due to its
free services. The Reliance's free services/offer during the test phase
period in huge number, was the issue in the telecom market, since it
was unprecedented. The commercial innovation of one service
provider, based upon the new technology is always welcome, but, it is
also depend upon the others' connectivity and/or interconnection and
the concerned authorities are required to deal and facilitate the
solution for all. There was admittedly no agreed specific clause
and/or provisions and/or agreement entered into by and between the
service providers, in question. The confused/gray area is required to
be dealt with and handled by such Association, in representative
capacity. Therefore, any representation made in this background
commenting upon huge "Free Service/cards" not only to the employees
and/or close relatives, but to the millions new potential consumers in
test phase period, who were not prescribed "Subscribers" cannot be
treated as an attempt to thwart the progress of new Entrant. The co-
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ordination and co-operation and the guidance are needed, as it has
direct bearing on the interconnection and/or interlinked with other
existing service providers as a part of commerce. It cannot be said to
be one sided and unilateral decision. The representations made to the
Government or regulatory Authorities, cannot be stated to be with
intention to thwart the entry of RJIL. The whole purpose and object
of the Association, is always in the interest of the members and the
market development. Any members' representation for clarification
for want of specific clause, just cannot be overlooked, if it directly or
indirectly affect the other members. The concerned statutory
authorities, based upon the existing policies, even otherwise, are
required to deal with the same, keeping in mind the new technology
based project and old technology of existing service providers and the
basic implementable effective service. The Competition Act, nowhere
debar and/or prevent such Association from acting in the interest of
the members and the concerned telecom market within the framework
of their law. The Judgment, so sited by the Respondents in the case of
Competition Commission of India Vs. Coordination Committee of Artistes
and Technicians of West Bengal Film and Television & Ors. is
distinguishable on the facts. In the present case, the representation
39 (2017) 5 SCC 17
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was to the statutory Authority, as there was apparent doubt and
confusion in the market and as those authorities are controlling and
supervising the telecom market in every aspects. The judgments cited
by the learned counsel appearing for the CCI, as well as, RJIL in this
regard, are distinguishable on the facts and circumstances of the case
itself. The concepts of "Judgment in rem" and/or "in personam" itself
means serious consideration of the subject by the competent Authority
within the framework of the respected laws and the proved facts.
There is no case of inconsistency or conflict between two Acts. The
provision of Competition Act is additional and not in derogation of
any law.
121 We have gone through the CCIA's letters and
communications and its contents. It nowhere can be read to mean that
the intention was to thwart the progress of the RJIL. No case is made
out that the action of the Association was aimed at boycotting the new
entrant, or such conduct could be presumed to be anti-competitive.
The judgments cited by the RJIL, are of no assistance to accept the
case of collusion and/or conspiracy. The failure to provide
"unreasonable demands" and/or the "reasonable demands", for want
of conditions in the respective licenses (Unified licenses) and the
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clarification sought, in no way, can be stated to be with intent to stifle
the launching by RJIL. Some Petitioners/service providers have shown
the charts to demonstrate that from time to time they had supplied the
sufficient POIs, keeping in mind the terms of the contract to provide
"reasonable POIs on demand".
122 The unreasonable demand, if objected and clarification
sought from the Department/Government through the Association, in
no way can be stated to be in breach of any provisions. RJIL
information itself has shown there existed doubt and the issue
revolving around the respective rights and obligations of the parties
interse. The recommendation was based upon the
complaint/representation. Strikingly, as recorded and conceded that
on 31 August 2016, RJIL has "nil subscribers". Nothing is pointed out
either in form of any practice, obligation and/or circulars and/or
regulations, to provide such huge demand of POIs, in the "test phase".
The issuance of consultation paper by TRAI on this controversy of
POIs during the test phase, supports the case of the
Petitioners/providers . The splitting of E1's on the foundation of the
recommendation that there is an embargo on the splitting the trunk
groups under the interconnection agreement for a period of two years,
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is again an issue. As there is no specific bar under the interconnection
agreement that restricts the parties from splitting the trunk groups
even before the expiry of such period. Therefore, for the traffic
management, is to be based on the custom and practice and not on
the basis of averments made by one party. Merely because the
telecom service providers adopted the similar approach to split the
trunk groups, that cannot be stated to be a collusive approach and/or
treated as an anti competitive agreement. At the appropriate stage,
even RJIL has not recorded any objection on the provisions of one way
E1S, as reflected from the letters submitted by the RJIL. The dissent
note, even recorded that "....it appears it was not any concerted action
of the ITOs but the situation created by RJIL itself which seems to have
led to huge congestion on its network....". The percentage of
satisfaction of the demand so set out in the RJIL information, just
cannot be relied in the above background. The Commission
(majority) decision, based upon the media report and allegations of
RJIL by overlooking the above position cannot fall within the ambit of
requisite ingredients of Section 3 of the Act.
No case of tacit agreement or joint decision and/or attempt to hamper
the RJIL commercial launching. -
123 There is no material, except the correspondence so
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referred against the COAI. There is no other evidence or material to
justify that all the Petitioners/service providers, excluding the
Respondents and other two, formed any internal and discrete
Association directly or indirectly attempting to thwart the progress of
the RJIL. Every parallel conduct will be regarded and/or presumed to
be action in concert and/or in collusion, specially in a oligopolistic
market. The RJIL conduct and free services, as stated to be a business
strategy, was an issue concerning the telecom market itself and
therefore, the steps and the representations so made by COAI, in no
way can be concluded as a "cartelisation". The Respondent's reproach
of interdiction in the stated supply by the Petitioners and its
Association is unjust, unreasonable and unsustainable and also
premature.
"Cartelisation"
124 The concept of "cartelisation" is not new in any national
or international, and/or commercial transaction and the market. The
concept of "cartel" and "agreement" are defined under the
Competition Act. There is no direct and/or written agreement on
record to justify such impugned agreement/cartel. The Authorities
are required to consider the facts and circumstances and such
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allegations, based upon the supporting material and the documents.
The Apex Court in Competition Commission of India Vs. Coordination
Committee of Artistes and Technicians of West Bengal Film and Television
& Ors.(Supra) has considered the aspects of stated cartelisation,
though based upon the facts and circumstances of the given case. All
in all, the Authorities are required to consider the facts and
circumstances of the case and the stated agreements by and between
the parties. The individual member and/or majority members and/or
through Association attempted to control and/or thwart the progress
of new entry is again a matter of evidence. Every majority decision of
any Association cannot be treated and/or declared as cartelisation.
The presumption of cartelisation and/or action in concert cannot be,
opined, by overlooking the governing laws, regulations of the
respective market. (Union of India Vs. Hindustan Development
Corporation ).
125 The role of the COAI, of making representations, even for
some members but, in view of the uncleared position of the market,
cannot be termed as stated "cartelisation". It cannot be treated/read
to mean the deliberate, collusive action, only to thwart and/or to
scuttle the new entry. The whole action of COIA is bonafide within
40 (1993) 3 SCC 499
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their power and the authority, in the interest of telecom market and
the consumers. The findings, based upon these action of COIA that it
breaches the provisions or falls within the ambit of Section 3(2) of the
Competition Act, is unjust and untenable.
Show cause notices issued by DG-
126 For the reasons so recorded above, the issuance of notice
and asking for various details by the DG, not only for the elements
under Section 3, but the stated contravention itself is impermissible
and contrary to the scheme of the Competition Act. The impugned
majority order itself is unjust, without jurisdiction therefore, such
inquiry and investigation and the show cause notices issued by the DG
are also unsustainable. As the investigation will definitely cause
irreparable and immense damage to the Petitioner's name and fame
and reputation, specifically when they are in the market for long time
and having huge areawise customers base. Service providers
business depends upon its credibility in the national and international
market, including the global lenders, investors, suppliers and the
partners. Such investigation/inquiry, at the instance of the rival
competitor, will affect their business and reputation. The Supreme
Court in Rohtas (Supra) has recorded, "the adverse effect of
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investigation on the companies". The Apex Court in Sri Ramdas Motor
Transport Ltd. & Ors. Vs. Tadi Adhinarayana Reddy & Ors. has
recorded that unless proper grounds exist for investigation, such
investigation will not be undertaken. The Bombay High Court in
Parmeshwar Das Agarwal and Ors. Vs. The Additional Director
(Investigation) Serious Fraud Investigation Office, Ministry of Corporate
Affairs and Ors. , has observed that, if there is lack of requisite
material to arrive at the requisite opinion and record the necessary
satisfaction, then, in exercise of such powers is subject to the judicial
review.
127 Therefore, taking overall view of the matter, we are also of
the view that the rights and obligations to provide POIs arise under
the terms of the license, granted by the DOT and the terms of supply
are governed by the interconnection agreements entered into by
service providers with each other. It is relevant to note that the the
consultation paper of TRAI on these issues, further reiterates the fact
of confusion and the controversy so agitated by the service providers
and the COAI. Such grievances are genuine and bonafide. Therefore,
no case is made out of any cartelisation by and through the COAI.
41 AIR 1997 SC 2187
42 [2016] 199 Comp. Cas 353 Bom.
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The Parties material and/or suppression of material facts and/or
incorrect information.
128 We have gone through the material placed on record. The
controversy regarding denial/delay of POIs and/or correctness and/or
suppression of facts and/or information and/or non-consideration of
material information in the majority decision on merits, though we
have heard substantially, as submitted by the parties to consider the
bundle of facts, as necessary to decide the case in hand, but
considering the reasons we are mainly dealing with the jurisdictional
aspects of the matter. Therefore, we are not recording any further
reasons on the rival contentions of the parties on the merits of the
same, keeping in mind the scope and jurisdiction of this Court under
Article 226 of the Constitution when it comes to deciding the disputed
questions of fact and since we do not intend to substitute the decision
by our own. We are inclined to accept the basic submission of
jurisdiction and power of Commission and of the TRAI authorities as
submitted by the senior counsel appearing for the Petitioners. We are
not accepting the submissions, counter submissions/defences of the
senior counsel appearing for the RJIL and the Commission, on the
aspects of respective powers and jurisdiction under the Acts.
Therefore, for the reason so recorded above, we are inclined to quash
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and set aside the majority decision given by the Commission and the
consequential action of issuance of notices by the D.G under the
Competition Act and all further actions arising out of it, in the facts
and circumstances of the case.
129 We are of the view that, the observation of the Commission
that the service providers/Petitioners had an understanding,
agreement and acted in concert to deny or delay the provision of POIs,
and they as individual members, through their Association have
breached the provisions of Section 3(3)(b), ought not to have been
opined, even prima facie, unless their respective rights and obligations
under the Telecommunication laws are clarified and/or decided by
the Regulatory authorities/Tribunal and the High Court. The initiation
of enquiry, at this stage, by the Commission by holding that the
alleged parallel conduct of individual members and Association
establishes prima facie, that there is a collusive conduct that limits
provision of services and the technical development as per Section 3(3)(b)
is unacceptable, including further action of investigation so ordered, being
without jurisdiction, illegal and perverse. This is also for the reason that the
clarification/justification revolving around jurisdiction and power of
Commission though not specifically discussed and decided in majority
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decision is attempted to be justified by affidavits or contentions, for
the first time raised in writ jurisdiction, in reply, is also unacceptable
and impermissible to maintain the impugned majority decision. The
order of Commission cannot be explained/clarified in such manner.
The Commission should speak through its order and initiate the
proceedings if case is made out to collect the stated facts and
information. It is unacceptable to permit the Commission to collect
the facts and/or information when it has not itself concluded the
controversy about the rights and obligations of the parties based upon
statutory agreements/regulatory authority's guidance/circulars. The
stated conduct and/or cartel could not have been tested or inquired
into unless their rights and obligations based upon the governing laws
in the market are clear and settled, as the same binds all the
respective service providers of the telecom sectors.
130 conclusions-
a) All the Writ Petitions are maintainable and
entertainable. This Court has territorial
jurisdiction to deal and decide the challenges so
raised against impugned order (majority decision)
dated 21 April 2017, passed by the Competition
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Commission of India (CCI) under the provisions of
Section 26(1) of the Competition Act, 2002 in case
Nos. 81 of 2016, 83 of 2016 and 95 of 2016 and
all the consequential actions/notices of the
Director General under Section 41 of the
Competition Act arising out of it.
b) The telecommunication Sector/Industry/Market is
governed, regulated, controlled and developed by
the Authorities under the Telegraph Act, the
Telecom Regulatory Authority of India Act (TRAI
Act) and related Regulations, Rules, Circulars,
including all government policies. All the
"parties", "persons", "stakeholders", "service
providers", "consumers" and "enterprise" are
bound by the statutory agreements/contracts,
apart from related policy, usage, custom, practice
so announced by the Government/Authority, from
time to time.
c) The question of interpretation or clarification of
any "contract clauses", "unified license"
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"interconnection agreements", "quality of service
regulations", "rights and obligations of TSP
between and related to the above provisions", are
to be settled by the Authorities/TDSAT and not by
the Authorities under the Competition Act.
d) The concepts of "subscriber", "test period",
"reasonable demand", "test phase and commercial
phase rights and obligations", "reciprocal
obligations of service providers" or "breaches of any
contract and/or practice", arising out of TRAI Act
and the policy so declared, are the matters within
the jurisdiction of the Authority/ TDSAT under the
TRAI Act only.
e) The Competition Act and the TRAI Act are
independent statutes. The statutory authorities
under the respective Acts are to discharge their
power and jurisdiction in the light of the object,
for which they are established. There is no conflict
of the jurisdiction to be exercised by them. But
the Competition Act itself is not sufficient to
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decide and deal with the issues, arising out of the
provisions of the TRAI Act and the contract
conditions, under the Regulations.
f) The Competition Act governs the anti-competitive
agreements and its effect- the issues about "abuse
of dominant position and combinations". It cannot
be used and utilized to interpret the contract
conditions/policies of telecom Sector/Industry/
Market, arising out of the Telegraph Act and the
TRAI Act.
g) The Authority under the Competition Act, has no
jurisdiction to decide and deal with the various
statutory agreements, contracts, including the rival
rights/obligations, of its own. Every aspects of
development of telecommunication market are to
be regulated and controlled by the concerned
Department/ Government, based upon the policy
so declared from time to time, keeping in mind the
need and the technology, under the TRAI Act.
h) Impugned order dated 21 April 2017, passed by
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the Competition Commission of India (CCI) under
the provisions of Section 26(1) of the Competition
Act, 2002 and all the consequential
actions/notices of the Director General under
Section 41 of the Competition Act proceeded on
wrong presumption of law and usurpation of
jurisdiction, unless the contract agreements, terms
and clauses and/or the related issues are settled by
the Authority under the TRAI Act, there is no
question to initiating any proceedings under the
Competition Act as contracts/agreements go to the
root of the alleged controversy, even under the
Competition Act.
i) The Authority like the Commission and/or
Director General, has no power to deal and decide
the stated breaches including of "delay", "denial",
and "congestion" of POIs unless settled finally by
the Authorities/TDSAT under the TRAI Act.
Therefore, there is no question to initiate any
inquiry and investigations under Section 26(1) of
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the Competition Act. It is without jurisdiction.
Even at the time of passing of final order, the
Commission and the Authority, will not be in a
position to deal with the contractual terms and
conditions and/or any breaches, if any. The
uncleared and vague information are not sufficient
to initiate inquiry and/or investigation under the
Competition Act, unless the governing law and the
policy of the concerned "market" has clearly
defined the respective rights and obligations of the
concerned parties/persons.
j) Impugned order dated 21 April 2017 and all the
consequential actions/notices of the Director
General under the Competition Act, therefore, in
the present facts and circumstances, are not mere
"administrative directions".
k) Impugned order dated 21 April 2017 and all the
consequential actions/notices of the Director
General under the Competition Act, are therefore,
illegal, perverse and also in view of the fact that it
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takes into consideration irrelevant material and
ignores the relevant material and the law.
l) Every majority decision cannot be termed as
"cartelisation". Even ex-facie service providers and
its Association COAI, have not committed any
breaches of any provisions of the Competition Act.
131 Hence the following order-
ORDER
a) Impugned order dated 21 April 2017, passed by
the Competition Commission of India (CCI) under
the provisions of Section 26(1) of the Competition
Act, 2002 in case Nos. 81 of 2016, 83 of 2016 and
95 of 2016 and all the consequential
actions/notices of the Director General under
Section 41 of the Competition Act, are liable to be
quashed and set aside, in exercise of power under
Article 226 of the Constitution of India. Order
accordingly.
b) All the Writ Petitions are allowed.
c) There shall be no order as to costs.
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d) In view of the above, nothing survives in Civil
Application (Stamp) No. 17736 of 2017 in Writ
Petition No. 7164 of 2017 and the same is also
disposed of. No costs.
(BHARATI H. DANGRE, J.) (ANOOP V. MOHTA, J.)
