Delhi High Court
Viom Network Ltd vs S Tel Pvt Ltd on 11 November, 2013
Author: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 11th November, 2013
+ ARB.P. 236/2012
VIOM NETWORK LTD ..... Petitioner
Through: Mr. Sanjay Jain, Sr. Adv. with Ms.
Anuradha Mukherjee & Mr. Abhijit
Mittal, Advs.
Versus
S TEL PVT LTD ..... Respondent
Through: Mr. Dayan Krishan with Mr. Gautam
Narayan, Mr. Amit Gupta, Ms.
Asmita Singh, Mr. Nikhil Menon &
Mr. S. Rana, Advs.
AND
+ ARB.P. 9/2013
BHARTI INFRATEL LTD ..... Petitioner
Through: Mr. J.P. Sengh, Sr. Adv. with Mr.
Omar Ahmad & Mr. Manu, Advs.
Versus
S TEL PVT LTD ..... Respondent
Through: Mr. Dayan Krishan with Mr. Gautam
Narayan, Mr. Amit Gupta, Ms.
Asmita Singh, Mr. Nikhil Menon &
Mr. S. Rana, Advs.
AND
+ O.M.P. 206/2012
BHARTI INFRATEL LIMITED ..... Petitioner
Through: Mr. J.P. Sengh, Sr. Adv. with Mr.
Omar Ahmad & Mr. Manu, Advs.
Versus
S TEL PVT LTD ..... Respondent
Through: Mr. Dayan Krishan with Mr. Gautam
Narayan, Mr. Amit Gupta, Ms.
Asmita Singh, Mr. Nikhil Menon &
Mr. S. Rana, Advs.
AND
+ O.M.P. 173/2012, IAs No.12147/2012 (u/O 7 R-11 CPC) &
15653/2012 (u/S 151 CPC)
VIOM NETWORK LTD ..... Petitioner
Through: Mr. Sanjay Jain, Sr. Adv. with Ms.
Anuradha Mukherjee & Mr. Abhijit
Mittal, Advs.
Versus
S TEL PVT LTD ..... Respondent
Through: Mr. Dayan Krishan with Mr. Gautam
Narayan, Mr. Amit Gupta, Ms.
Asmita Singh, Mr. Nikhil Menon &
Mr. S. Rana, Advs.
Mr. Sudhir Nandrajog, Sr. Adv. with
Mr. Sanjay Bhatt & Mr. Abhishek
Anand, Advs. for IDBI.
AND
+ O.M.P. 312/2012, IAs No.12129/2012 (u/O 7 R-11 CPC) &
15715/2012 (u/S 151 CPC)
VIOM NETWORK LTD ..... Petitioner
Through: Mr. Sanjay Jain, Sr. Adv. with Ms.
Anuradha Mukherjee & Mr. Abhijit
Mittal, Advs.
Versus
S TEL PVT LTD ..... Respondent
Through: Mr. Dayan Krishan with Mr. Gautam
Narayan, Mr. Amit Gupta, Ms.
Asmita Singh, Mr. Nikhil Menon &
Mr. S. Rana, Advs.
Mr. Sudhir Nandrajog, Sr. Adv. with
Mr. Sanjay Bhatt & Mr. Abhishek
Anand, Advs. for IDBI.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J
1. The common objection of the respondent S Tel Pvt. Ltd. to all these
petitions is that, notwithstanding the existence of the arbitration clause in the
agreement, subject matter of each of these petitions, between the petitioner /
its predecessor and the respondent, the remedy of arbitration under the
Arbitration and Conciliation Act, 1996 (Arbitration Act) is not available for
the reason of the Telecom Disputes Settlement and Appellate Tribunal
(TDSAT) having the exclusive jurisdiction over the disputes raised, under
Section 14 read with Section 15 of the Telecom Regulatory Authority of
India Act, 1997 (TRAI Act).
2. Both the petitioners i.e. Viom Network Ltd. and Bharti Infratel Ltd.
are a Telecom Infrastructure Service Provider registered as Infrastructure
Provider Category-I (IP-I) with the Department of Telecommunications
(DoT) and are engaged in the business of building, owning or validly
possessing and operating passive infrastructure sites and providing passive
telecom infrastructure service to various telecom operators. The respondent
S Tel Pvt. Ltd. was on the contrary, a telecom operator, having acquired
Unified Access Service Licences to establish, install, operate and maintain
Unified Access Service in the areas / circles of Jammu & Kashmir,
Himachal Pradesh, Bihar, Orissa, Northeast and Assam. The licences of the
respondent S Tel Pvt. Ltd. were however cancelled following the orders of
the Supreme Court.
3. Under each agreement, titled „Master Services Agreement‟,
containing the arbitration clause, the petitioners Viom Network Ltd. and
Bharti Infratel Ltd. had agreed to, i) make available and provide to the
respondent S Tel Pvt. Ltd. access to their passive infrastructure sites to
install S Tel‟s equipment and to operate and maintain the same; and ii)
provide specified operation and maintenance services at each of the said
sites.
4. Disputes and differences have arisen between the petitioners and the
respondent under the said Agreements, which contained a clause for lock in
period, with the petitioners claiming monies from the respondent under the
Agreements. The petitioners have accordingly invoked the arbitration clause
in the agreement subject matter of each petition and have sought interim
relief with respect to the active infrastructure equipment of the respondent
installed at the sites of the petitioners and upon the failure of the respondent
to appoint Arbitrator / join in appointment of Arbitrator, also sought
appointment of Arbitrator. The petitioners, in the OMPs under Section 9 of
the Arbitration Act, seek to restrain the respondent from removing, selling,
encumbering the said equipment and also receivership of the said equipment
to settle their dues for which award is sought in the arbitration proceedings.
5. M/s IDBI Trusteeship Ltd. applied for intervention in the OMPs
preferred by M/s Viom Pvt. Ltd., claiming first charge over the said
equipment.
6. Finding, that owing to the telecom licences of the respondent having
been cancelled and the respondent being now no longer in need of the said
active infrastructure equipment and further that the said equipment may with
the passage of time deteriorate and become obsolete, vide order dated
18.04.2013, without prejudice to the respective contentions, provision was
made for auction thereof and deposit of the sale proceeds with the Registrar
General of this Court. Subsequent orders dated 6th August, 2013 and 24th
September, 2013 were also made in this regard.
7. The counsel for the respondent has contended that the petitioners as
well as the respondent are „service providers‟ within the meaning thereof in
the TRAI Act and therefore it is the TDSAT which has exclusive jurisdiction
to entertain and adjudicate the disputes between the two service providers.
Reliance is placed on judgment of the TDSAT in Reliance Infratel Ltd. Vs.
Etsalat DB Telecom P. Ltd. MANU/TD/0056/2012 holding that entities
registered with DoT as Infrastructure Provider Category-I are service
providers within the meaning of TRAI Act and Section 14 of the TRAI Act
vests TDSAT with the jurisdiction to adjudicate disputes between service
providers and that with regard to matters covered by Section 14 of the TRAI
Act, only TDSAT has jurisdiction, notwithstanding the existence of an
arbitration clause in a contract between two service providers. Reference is
also made to Booz Allen & Hamilton Inc. Vs. SBI Home Finance Ltd.
(2011) 5 SCC 532 in paras 35 to 37 whereof it was inter alia held that the
Arbitral Tribunals are private fora chosen voluntarily by the parties to the
dispute to adjudicate their dispute in place of Courts and per contra the
Tribunals constituted under the laws of the country are public fora and that
adjudication of certain categories of proceedings is reserved by the
legislature exclusively for public fora as a matter of public policy.
Reference in this regard is also made to the judgment dated 15.03.1940 of
the Privy Council in The Secretary of State Vs. Mask & Co. and to Modi
Rubbers Ltd. Vs. Union of India MANU/DE/1148/2002 (DB). It is further
contended that though the respondent had before the TDSAT and in the
appeal against the judgment of TDSAT before the Supreme Court argued to
the contrary but has now accepted the judgment of the TDSAT. It is yet
further contended that though the appeal against the judgment of the TDSAT
is pending but there is no stay therein. Attention is invited to Section 3 (1-
AA) of The Indian Telegraph Act, 1885, (Telegraph Act) to contend that all
appliances, instruments, apparatus, not only used but even capable of use for
transmission and reception of signals, are included in the definition of
„Telegraph‟ and it is contended that the instruments and equipments of
petitioners are so capable and thus „telegraph‟ within the meaning of
Telegraph Act and thus the need for petitioners to be within the jurisdiction
of TDSAT. It is yet further contended that the services provided by
petitioners are not akin to providing or letting office space. After the orders
were reserved, copy of order dated 02.09.2013 of an Arbitral Tribunal in
arbitration between Vodafone Spacetel Ltd., a infrastructure provider as the
petitioners herein and the respondent S Tel Pvt. Ltd. allowing the application
of respondent S Tel Pvt. Ltd. under Section 16 of the Arbitration Act for the
reason of the dispute being not arbitrable was also handed over.
8. Per contra the senior counsels for the petitioners have contended:
(i) that the services being provided by the petitioners are not
telecommunication services within the meaning of Section
2(1)(k) of the TRAI Act and thus the petitioners are not service
providers within the meaning of Section 2 (1) (j) of the said Act
and the TDSAT has no jurisdiction over the petitioners; reliance
is placed on paras 3.7 and 3.8 of the Recommendations dated
12th April, 2011 of the Telecom Regulatory Authority of India
(TRAI) to show that the same also does not treat the IP-I
certificate holders as licencees;
(ii) that the petitioners are neither a licensor or a licensee nor a
service provider within the meaning of Section 14 of the TRAI
Act;
(iii) that no consumer is affected at least today by the action of the
petitioners inasmuch as the telecom licence of the respondent
stands cancelled;
(iv) that today even the respondent is not a service provider;
however on enquiry it was conceded that Section 14 may
include an ex-service provider;
(v) that the petitioners are not „Licensee‟ within the meaning of
Section 2(1)(e) of the TRAI Act;
(vi) that the petitioners are akin to a landlord; reference is made to
the judgment of TDSAT in Aircel Digilink India Ltd. Vs.
Union of India MANU/TD/0001/2005;
(vii) that the certificate obtained by the petitioners from DoT was in
pursuance to the clause in the agreements with the respondent
and the said certificate, by no stretch of imagination can be
construed as a licence;
(viii) attention is invited to HDFC Bank Ltd. vs. Satpal Singh Bakshi
193 (2012) DLT 203 where a full Bench of this Court in para
12 held that, all disputes relating to right in personam are
arbitrable; on the other hand those relating to right in rem
having inherent public interest are not arbitrable and the parties
choice to choose forum of arbitration is ousted, and on the basis
thereof it is contended that there is no public interest involved
here as the respondent is dysfunctional and its licence has been
revoked / cancelled and it is no longer engaged in telecom
business and its customers have shifted to some other licensee;
(ix) with reference to the IP-I certificate issued to the petitioners by
DoT, it is contended that the petitioners thereunder also are
specifically prohibited from providing telecom services;
(x) that the registration of the petitioners with DoT is independent
of the agreement with the respondent; and,
(xi) that the Telegraph Authority under Section 3(6) of the
Telegraph Act is the Director General of Posts and Telegraph
and is different from DoT which has issued the IP-I certificate
to the petitioners; and
(xii) that the Supreme Court itself vide order dated 6th January, 2012
in Civil Appeal No.10076/2011 titled UOI Vs. M/s. Computer
Science Corporation of India Pvt. Ltd. has directed the parties
to arbitration provided under the agreement.
9. I have considered the rival contentions and perused the records.
10. The Master Service Agreement subject matter of Arbitration
Petition No.236/2012 contains an arbitration clause as under:
"16.1 Any dispute arising between Service Provider and S
Tel in connection with this Master Agreement and / or any
IP Service orders, including any disputes in respect of the
validity thereof, shall be settled by arbitration. Such
disputes or differences shall be referred to a sole
arbitrator to be mutually appointed by the Parties, and if
the Parties shall not agree on a single arbitrator, then
each Party shall nominate an arbitrator, and the two
arbitrators shall nominate the arbitrator that shall preside
over the arbitration procedures. The arbitration shall be
held at Delhi and the arbitration proceedings shall be
carried out under Indian law and in accordance with the
Arbitration and Conciliation Act, 1996 or any statutory
modification or re-enactment thereto. The arbitration
proceedings shall be conducted in the English language
and the award shall be written and final, conclusive and
binding upon the Parties whether on questions of law or
fact;
16.2 The courts of Delhi shall have exclusive jurisdiction
regarding any issue arising out of the arbitration process
above and with respect to injunctive relief, all in
accordance with the Arbitration and Conciliation Act,
1996.
The Master Service Agreement subject matter of Arbitration Petition
No.9/2013 contains an arbitration clause as under:-
"21.3 Arbitration
21.3.1 The arbitration shall be conducted as
follows:-
(i) all Disputes between the Parties arising out
of or in connection with this Agreement
shall be referred to or submitted for
arbitration in New Delhi;
(ii) the arbitration shall be conducted in English
by an arbitral tribunal consisting of three
arbitrators. For the purpose of such
arbitration, each Party shall appoint one
arbitrator and the third arbitrator shall be
appointed by mutual agreement by the two
arbitrators so appointed (the "Arbitration
Panel");
(iii) the Arbitration Panel shall have the power
to award interest on any sums awarded;
(iv) notwithstanding the power of the Arbitration
Panel to grant interim relief, the Parties
shall have the power to seek appropriate
interim relief from the Courts of New Delhi;
(v) the arbitration award shall be final and
binding on the Parties and the Parties agree
to be bound thereby and to act accordingly.
(vi) the Arbitration Panel may award to a Party
that substantially prevails on the merits, its
costs and expenses (including fees of its
counsel);
(vii) the Parties shall bear their respective costs
incurred in the arbitration unless otherwise
awarded or fixed by the Arbitration Panel;
and
(viii) the Parties shall co-operate in good faith to
expedite, to the maximum extent practicable,
the conduct of any arbitral proceedings
commenced pursuant to this Agreement.
21.3.2 The Parties agree that arbitration is the
most appropriate and convenient forum to
settle any Dispute and, accordingly, that
they will not argue to the contrary.
21.3.3 Notwithstanding anything to the contrary in
the Agreement, either Party shall be entitled
at any time to seek injunctive or other urgent
relief in any court that has jurisdiction over
the Dispute or in connection with the
Agreement.
21.3.4 The Parties agree that the documents which
start any proceedings and any other
documents required to be served in relation
to those legal proceedings may be served to
the addresses specified in the notice
provisions set out in the Agreement. These
documents shall be served in any manner
allowed by Law."
11. Section 14 of the TRAI Act, providing for the establishment of
TDSAT, prescribes its jurisdiction as under:-
"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 or
1986);
(C) disputes between telegraph authority and any
other person referred to in sub-section (1) of
section 7B 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."
12. The counsels have addressed their arguments on the premise:
(a). That the respondent S Tel Pvt. Ltd. was a „service provider‟ and
notwithstanding the cancellation of its license to establish,
install, operate and maintain unified access service, continues to
be a service provider within the meaning of the TRAI Act.
(b). That the only clause under which the dispute can be within the
jurisdiction of TDSAT is sub-clause (ii) of Clause (a) of
Section 14 of the TRAI Act.
(c). That if the adjudication of the dispute between the parties is
within the jurisdiction of TDSAT, the same shall not be subject
to adjudication by arbitration provided for in the Master Service
Agreement.
(d). That notwithstanding there being no bar in the TRAI Act to
arbitration and the bar under Section 15 being confined to the
jurisdiction of Civil Court only, in the event of TDSAT having
jurisdiction, arbitration under the Arbitration Act would also be
barred.
13. Thus the only controversy for adjudication is whether the petitioners
as Infrastructure Providers Category-I are a „service provider‟ under the
TRAI Act. If the petitioners are to be so held to be a service providers, then
the disputes which have arisen between the petitioners and the respondent S
Tel Pvt. Ltd. would be between two service providers as envisaged under
Section 14(a)(ii) of TRAI Act. However if the petitioners were to be held to
be not a „service provider‟ within the meaning of Section 14(a)(ii), then the
adjudication of the said dispute would be as per the arbitration agreement
between the parties.
14. Section 2(1)(j) of the TRAI Act defines service provider as meaning
the "government as a service provider" and including "a licensee". A
licensee is defined in Section 2(1)(e) as meaning "any person licensed under
sub-section (1) of Section 4 of the Indian Telegraph Act, 1885 (13 of 1885)
for providing specified public telecommunication services". Section 2(2) of
the TRAI Act provides that words and expressions used and not defined in
the said Act but defined in the Telegraph Act or in the Indian Wireless
Telegraphy Act, 1933 shall have the meanings respectively assigned to them
in those Acts.
15. The first question which thus arises is whether the petitioners can be
said to be „licensee‟ within the meaning of Section 2(1)(e) of TRAI Act in as
much as if it were to be so, they would axiomatically fall under the
definition of service provider in Section 2(1)(j) which as noticed above,
includes a licensee. That takes us to the Telegraph Act. The said Act, by
Section 4 thereof vests the privilege of establishing, maintaining and
working telegraphs, exclusively in the Central Government. However the
proviso to Section 4(1) enables the Central Government to grant a license to
any person to establish, maintain or work a telegraph. The petitioners,
notwithstanding being registered as a Infrastructure Provider Category-I,
cannot be said to be having a license, at least to work a telegraph in as much
as the Registration Certificate of the petitioners itself contains a clause as
under:-
"In no case the company shall work and operate or
provide telegraph service including end to end bandwidth
as defined in Indian Telegraph Act, 1885 either to any
service provider or any other customer".
16. It next has to be considered whether the petitioners have been
licensed, if not to work a telegraph, to establish or maintain a telegraph.
The proviso to Section 4(1) of the Telegraph Act, as aforesaid, enables
the Central Government to grant a license not only to work a telegraph
but also to establish or maintain a telegraph. A connected question would
also arise whether the license under Section 4(1) of the Telegraph Act can
be either to only establish or to only maintain or only work a telegraph or
only to establish, maintain and work a telegraph. However, need is not
felt to answer the said question as Section 2(1)(e) of the TRAI Act though
refers to a license under Section 4 of the Telegraph Act but only to a
license „for providing specified public telecommunication services‟.
Telecommunication Services are defined in Section 2(1)(k) as
„service...which is made available to users by means of any transmission
or reception of signs or signals...‟. The reference thus in Section 2(1)(e)
of the TRAI Act to a licensee is to only such a licensee who is providing
transmission or reception services to „users‟ who are members of „public‟
i.e. to consumers of such service and not to an intermediary or to a
licensee providing public telecommunication services. In this view of the
matter, the petitioners even if a licensee under Section 4(1) of the
Telegraph Act for the reason of having a license to establish or maintain a
telegraph are not a licensee within the meaning of Section 2(1)(e) of the
TRAI Act.
17. The next question which arises is whether the definition in Section
2(1)(j) of the TRAI Act of a service provider meaning the Government as
a service provider and including a licensee is an exhaustive one inasmuch
as if it is not found to be an exhaustive definition, it will still have to be
seen whether the petitioners inspite of being neither the Government or a
licensee can still be considered as a service provider.
18. The said question is however found to be no longer res integra.
The Supreme Court in Mahalakshmi Oil Mills Vs. State of Andhra
Pradesh (1989) 1 SCC 164 was concerned with the definition of tobacco
in Item No.4 of the First Schedule of the Central Excise and Salt Act,
1944 and which was as under:
"Tobacco means any form of tobacco, whether cured or
uncured and whether manufactured or not, and includes the
leaf, stalks and stems of the tobacco plant, but does not
include any part of a tobacco plant while still attached to the
earth".
It was held that definition which consists of two separate parts which
specify what the expression means and what it includes is obviously
meant to be exhaustive. Similarly in Karnataka Power Transmission
Corporation Vs. Ashok Iron Works Pvt. Ltd. (2009) 3 SCC 240 it was
held that though the resort to the word „includes‟ by the legislature often
shows the intention of the legislature that it wanted to give an extensive
and enlarged meaning to such expression but sometimes the context may
suggest that the word „includes‟ may have been designed to mean
„means‟. The setting, context and object of an enactment were held to be
a guiding factor in this regard.
19. The Supreme Court recently in Kotak Mahindra Bank Vs. Hindustan
National Glass and Industries Ltd. (2013) 7 SCC 369 has also held that
words in a statute are to be interpreted in the context or subject matter in
which the words are used and not according to their literal meaning. It was
held that what is meant by saying that the words are to be understood first in
their natural, ordinary or popular sense, is that the words must be ascribed
that natural, ordinary or popular meaning which they have in relation to the
subject-matter with reference to which and the context in which they have
been used in the statute. The context, in the construction of statutes was held
to mean the statute as a whole, the previous state of the law, other statutes in
pari materia, the general scope of the statute and the mischief that it was
intended to remedy.
20. Applying the ratio of the aforesaid two judgments also,
notwithstanding the law unequivocally laid down in Mahalakshmi Oil
Mills supra, I am of the view that the word „includes‟ in Section 2(1)(j) of
the TRAI Act is not intended to give a meaning beyond „licensee‟ to a
service provider. Had the legislature intended a licensee under Section
2(1)(e) of the TRAI Act to be a licensee under the proviso to Section 4(1)
of the Telegraph Act and which as aforesaid includes a license not only to
work but also to establish or maintain a telegraph, the legislature would
have not qualified a licensee further as only that licensed for providing
„public‟ telecommunication services. Similarly, in that case the definition
of telecommunication service in Section 2(1)(k) of the TRAI Act would
not be further qualified as a service made available to users.
21. Notwithstanding my interpretation, to enquire whether the Central
Government itself is treating Infrastructure Service Providers as the
petitioners to be licensees, I have visited the website of TRAI
(www.trai.gov.in) and which reveals a Consultation Paper No.I of 2011
dated 14th January, 2011 having been prepared on "Issues related to
Telecommunication Infrastructure Policy" and "Recommendations" dated
12th April, 2011 having been made by TRAI on "Telecommunications
Infrastructure Policy" with the intent of meeting the infrastructure
requirements of the service providers (thereby carving out a difference
between infrastructure providers and service providers) and to encourage
sharing by service providers of infrastructure with the infrastructure
providers to reduce transaction costs and for the sake of providing
standardization of towers and improving aesthetics and preventing hazard
from such towers. While making such recommendations, TRAI has in
para 3.7, to which attention was drawn by the senior counsel for the
petitioners also, expressly opined that since the infrastructure providers
have not been issued licenses under Section 4 (of the Telegraph Act) they
cannot seek Right of Way as provided in the Telegraph Act and suggested
bringing the infrastructure providers under the licensing regime so that
the infrastructure providers are also able to seek Right of Way for
deployment of infrastructure.
22. The website of TRAI does not show the aforesaid recommendations to
have been accepted by the Government or by the Telegraph Authority or of
the infrastructure providers having been otherwise brought under the
licensing regime.
23. It would be an anomaly if this Court were to hold that the
infrastructure providers are licensees under Section 4 of the Telegraph Act
when neither the TRAI nor the Telegraph Authority or the Government are
treating them to be so.
24. Rather, the nomenclature evolved itself furnishes the answer to the
question under adjudication. The petitioners have been classified not as
service provider but as infrastructure provider. The word „service‟, on a
conjoint reading of the definitions of licensee, service provider and
telecommunication services in Section 2(1) of the TRAI Act is service to
users who are members of the public and not providing service to another
who in turn may be providing such services to users who are members of the
public. Providing a service to users who are members of public will
necessarily entail establishment of an infrastructure and a service provider
may on its own establish the entire infrastructure required for providing the
service or may avail of the infrastructure of another. However merely
because infrastructure of such another is being used to provide service to
users who are members of the public would not make such another also a
service provider under the TRAI Act.
25. I must admit that it had troubled me that if the petitioners were to be
not considered as service providers and were to be thus outside the ambit of
the TRAI Act, it may come in the way of the Government, in case of public
emergency or in the interest of public safety, taking over the
telegraph/telecommunication services. However, I find the powers of the
Government as contained in Section 5 of the Telegraph Act in this regard to
be encompassing all licensees, not only those who may be working the
telegraph but also those who have established or are maintaining a telegraph.
Thus, the Government would be entitled to take over the business also of
those who are licenced merely to establish or maintain telegraph and who
may not be service provider under the TRAI Act. The IP-I Registration itself
is also found to provide for the Government taking over the equipment of the
infrastructure provider in public interest in the case of emergency or in
public interest. Thus non-inclusion of the infrastructure provider as a service
provider would not pose any handicap in that respect also.
26. TRAI not only in the Consultation Paper and Recommendations on
Telecommunication Infrastructure Policy aforesaid but also in
Recommendations dated 11th May, 2010 on Spectrum Management and
Licensing Framework has clearly admitted the infrastructure providers to be
currently not covered under any license but holding only a registration and
recommended to bring such infrastructure providers into the fold of
licensing regime. Para 2.75 of the said Recommendations further, while
noticing the various licenses issued by the Government, expressly notices
that Infrastructure Provider Category-I requires registration only and that
there is no license fee and only registration fee for such Infrastructure
Providers. Rather with respect to IP-I Registration, para 2.96 of the said
Recommendations notices that (i) IP-I Registration was opened to private
sector with effect from 13th August, 2000 to encourage growth in
infrastructure and bandwidth capacity; (ii) all Indian registered companies
are eligible to apply; (iii) there is no restriction on foreign equity and number
of entrants; (iv) there is no entry fee and no bank guarantee; (v) the applicant
company is required to pay Rs. 5000/- as processing fee along with the
application; and (vi) the applicant companies are only required to be
registered and no licence is issued. In fact the reason given in yet another
document of TRAI i.e. Recommendations dated 16th April, 2012 on
Guidelines for Unified Licence/Class Licence and Migration of Existing
Licences links recommendations to bring infrastructure providers in the
licensing regime to the need to permit hitherto before passive infrastructure
providers to provide active infrastructure apparatus/equipment also with a
view to enable quicker roll-out of services by the licensees of
telecommunication services. However the same axiomatically means that till
the infrastructure provided is passive and not active, the infrastructure
provider cannot be said to be providing any service to the public or to the
user and which alone in the context of TRAI Act is a service provider.
27. I therefore hold the petitioners as infrastructure providers to be not
service providers within the meaning of the TRAI Act. Resultantly, TDSAT
would not have jurisdiction over disputes between the petitioners on the one
hand and respondent on the other hand. Axiomatically, the remedy of
arbitration under the Arbitration Act is not ousted.
28. Having held so, it is essential to notice the reasoning which prevailed
with the TDSAT in Reliance Infratel Ltd. supra to hold such infrastructure
providers to be service providers within the meaning of Section 2(1)(j) of the
TRAI Act. An analysis of the said judgment shows the following reasons to
have prevailed with the TDSAT. I have against each of the said reasons also
given my own reasons for not agreeing therewith.
(A). The restrictions contained in the Registration Certificate could
have been imposed only by way of a license envisaged under
proviso to Section 4 of the Telegraph Act and not otherwise.
I have already held above that an infrastructure provider though
may be licensed under Section 4(1) of the Telegraph Act to
establish and maintain a telegraph, if not licensed to provide
telecommunication services to users who are members of the
public, would not be a service provider under the TRAI Act.
The TDSAT has presumed a licensee under the Telegraph Act
and a service provider under the TRAI Act to be one and the
same without noticing that only such licensees who are licensed
for providing public telecommunication services to users have
been made service providers under the TRAI Act. Moreover,
restrictions in the Registration Certificate can also be
contractual and merely because of the petitioners having agreed
to such restrictions, they cannot be made service providers
when under the TRAI Act they are not.
(B). The service need not be provided to customers only and it may
be provided to other service providers as well.
Undoubtedly so but the said reasoning does not take notice that
a licensee included in the definition of a service provider is not
merely a licensee who may be licensed to establish, maintain or
operate telegraph but also a licensee to provide "public"
telecommunication services and telecommunication services
itself is defined as services being made available to "users" as
distinct from other service providers and by means of
transmission or reception of signals and not by providing
infrastructure, particularly passive.
(C). The rendition of services can be affected at different stages.
This again loses sight of the service being required to be to the
public and to actual users; and,
(D). The need for purposive interpretation of the word „service
provider‟ in the TRAI Act to bring the infrastructure provider
within the regulatory regime of TRAI.
The Supreme Court in Nahar Industrial Enterprises Vs. Hong
Kong & Shanghai Banking Corporation (2009) 8 SCC 646
has held that though the doctrine of purposive construction is a
salutary principle, the same cannot be extended to a case which
would lead to an anomaly; it can inter-alia be resorted to when
difficulty or doubt arises on account of ambiguity and in the
guise of purposive interpretation the Courts cannot rewrite a
statute. It was yet further held that the Courts cannot legislate
and enact the provision either creating or taking away
substantial rights by stretching or straining a piece of
legislation. Similarly in Commissioner of Income Tax, Orissa
Vs. N.C. Budharaja & Company 1994 Supp (1) SCC 280, it
was held that the principle of interpretation which advances the
purpose or object underlying the provisions cannot be carried to
the extent of doing violence to the plain and simple language
used in the enactment in the name of giving effect to the
supposed underlying object.
Once it is found that the legislature in the definition of licensee
in the TRAI Act has not included all licensees under Section
4(1) of the Telegraph Act but only such licensees who are
providing public telecommunication services, inclusion in the
name of purposive interpretation of other licensees not
providing public telecommunication services to users would in
my opinion tantamount to violating the express language of the
statute. Surprisingly the TDSAT did not take the view of TRAI
or of the Government while forming such an opinion and also
did not notice that TRAI in its various Consultation Papers and
Recommendations has itself held infrastructure providers to be
not licensees and IP-I Registrations to be not licenses under
Section 4(1) of the Telegraph Act. The TDSAT thus could not
have thrust infrastructure providers into the regulatory regime
of TRAI without consulting TRAI and without TRAI itself
claiming so. The recommendations of TRAI to bring IP-I
registrants in the license regime is indicative of the TRAI,
without the same, having no control or regulatory powers over
such registrants.
I have also wondered that if the purposive interpretation
adopted by TDSAT were to be accepted, then why others who
may be providing various services essential for the licensees
under the Telegraph Act, should be excluded. On that parity of
reasoning, the companies supplying electricity or manpower or
fuel for DG Set to the infrastructure providers and licensees
would also become service providers and fall within the ambit
of the TRAI and which certainly does not appear to be the
position and has not been claimed so by TRAI itself.
29. As far as the Order dated 02.09.2013 supra of the Ld. Arbitrator in the
arbitration between Vodafone Spacetel and the respondent is concerned, the
same at the outset records „there is no dispute with respect to the fact that
both the parties to the present dispute are / were service providers at the time
when the dispute arose and the fact that the respondent subsequently ceased
to be a service provider thus would not affect the dispute which arose during
the period when the respondent was a service provider‟ and is thus an order
on admissions and can have no persuasive value also. Otherwise the said
Order merely follows the judgment of TDSAT in Reliance Infratel supra.
30. I therefore am unable to accept the objection of the respondent S Tel
Pvt. Ltd. that the petitioners as infrastructure providers are service providers
within the meaning of Section 2(1)(j) of the TRAI Act and that the disputes
which have arisen between the petitioners and the respondent S Tel Pvt. Ltd.
are within the jurisdiction of TDSAT.
31. Once that is so, OMPs No.206/2012, 173/2012 & 312/2012 are held to
be maintainable and no further orders are necessary therein, the interim
protection sought having already been granted as aforesaid.
32. As far as Arbitration Petitions No.236/2012 & 9/2013 are concerned,
the same have been filed upon the failure of the respondent S Tel Pvt. Ltd. to
appoint its arbitrator inspite of being called upon to do so and seeking
appointment of an arbitrator on behalf of the respondent S Tel Pvt. Ltd.
33. The respondent S Tel Pvt. Ltd. of course did not appoint the arbitrator
contending the jurisdiction to be of TDSAT.
34. It cannot be lost sight of that TDSAT in Reliance Infratel Ltd. had
held that notwithstanding the arbitration clause in such agreements, the
resolution of disputes between infrastructure provider and a telecom licensee
is to be before TDSAT and not by the agreed arbitral tribunal. In the light of
the said judgment of TDSAT which held the fray at the time when the
respondent S Tel Pvt. Ltd. was called upon to appoint/nominate its
arbitrator, the conduct of the respondent S Tel Pvt. Ltd. in not
nominating/appointing its arbitrator cannot be found fault with. In this light
of the matter, when this Court has differed with the view of TDSAT, it is not
deemed appropriate to thrust an arbitrator on S Tel Pvt. Ltd. without giving
them an opportunity to now appoint / nominate an arbitrator.
35. Accordingly, Arbitration Petitions No.236/2012 & 9/2013 are
disposed of by granting an opportunity to S Tel Pvt. Ltd. to now within 30
days appoint / nominate its arbitrator. If it fails to do so, the petitioners shall
be entitled to apply in these very petitions for appointment of an arbitrator
on behalf of the respondent S Tel Pvt. Ltd.
In the circumstances, no costs.
RAJIV SAHAI ENDLAW, J
NOVEMBER 11, 2013
Gsr/pp
