Page 1 of 91
TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL
NEW DELHI
DATED : April 19, 2012
Petition No.324 of 2010
Reliance Communications Ltd. … Petitioner
Vs.
Bharat Sanchar Nigam Ltd. … Respondent
Petition No.86 of 2011
Reliance Communications Ltd., U.P.West … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., Mumbai … Respondent
Petition No.87 of 2011
Reliance Communications Ltd., Orissa … Petitioner
Vs.
Bharat Sanchar Nigam Ltd. … Respondent
Petition No.92 of 2011
Reliance Communications Ltd., Mumbai … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.96 of 2011
Reliance Communications Ltd., Mumbai … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … RespondentPage 2 of 91
Petition No.141 of 2011
M/s Reliance Communications Ltd., Navi Mumbai … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.156 of 2011
M/s Reliance Communications Ltd., West Bengal … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.157 of 2011
M/s Reliance Communications Ltd., Maharashtra … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.158 of 2011
M/s Reliance Communications Ltd., Haryana … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.159 of 2011
M/s Reliance Communications Ltd., Karnataka … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … RespondentPage 3 of 91
Petition No.160 of 2011
M/s Reliance Communications Ltd., M.P. … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.161 of 2011
M/s Reliance Communications Ltd., A.P. … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.162 of 2011
M/s Reliance Communications Ltd., Kerala …
Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.163 of 2011
M/s Reliance Communications Ltd., Delhi … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.164 of 2011
M/s Reliance Communications Ltd., Chennai … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.165 of 2011
M/s Reliance Communications Ltd., Jharkhand … PetitionerPage 4 of 91
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.166 of 2011
M/s Reliance Communications Ltd., Tamilnadu … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.167 of 2011
M/s Reliance Communications Ltd., Chhatisgarh … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.168 of 2011
M/s Reliance Communications Ltd., Bihar … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
Petition No.169 of 2011
M/s Reliance Communications Ltd., Punjab … Petitioner
Vs.
Bharat Sanchar Nigam Ltd., New Delhi … Respondent
BEFORE:
HON’BLE MR.JUSTICE S.B. SINHA, CHAIRPERSON
HON’BLE MR. P.K. RASTOGI, MEMBER Page 5 of 91
For Petitioner : Mr.Ramji Srinivasan,Senior Advocate
Ms.Manali Singhal, Advocate
Mr. Santosh Sachin, Advocate
Mr.Sharath Sampath,Advocate
Mr.Manikya Khanna, Advocate
Ms.Shikha Sarin, Advocate
Ms.Swati Sinha, Advocate
For Respondent : Mr.Vikas Singh,Senior Advocate
Ms.Maneesha Dhir, Advocate
Mr.K.P.S.Kohli, Advocate
Ms.Amrita Narayan, Advocate
J U D G M E N T
Background Facts
Petitioner, a UAS Licensee on and from 13.11.2004, has filed this
petition inter-alia questioning the legality and/or validity of some bills raised
by the Respondent, as being illegal, unjust and unfair as also for a direction
that Clause 7.5 of the Addenda VI appended to the Interconnect Agreement
be declared ultra-vires, illegal, unconstitutional and invalid.
2. Petitioner has also prayed for a declaration that the RespondentBSNL cannot use any of the provisions of the Interconnect Agreement for the
purpose of enforcing demands of ADC, being illegal and invalid.
3. The parties in Petition No.324 of 2010, have placed a large
number of documents which will be treated as the lead case.
In the said petition, demands dated 20.12.2006, 21.05.2008,
20.08.2008, 11.06.2010, 30.06.2010 and 07.09.2010 are in question. Page 6 of 91
4. We may for the purpose of appreciating the contention of the
parties notice one of the said bills being dated 20.12.2006.
It was raised for the period 14.11.2004 to 28.02.2006 for a sum
of Rs.9,87,25,798/-.
A bill towards interest on the amount said to be outstanding was
also raised on or about 20.08.2008 for the period 01.07.2005 to February
2006, claiming a sum of Rs.4,83,26,538/-.
Similar bills were raised during the intervening periods.
5. Before, however, proceeding with the matter further, it may be
placed on record that bills for three different periods i.e. (a) 01.02.2004 and
13.11.2004 (hereinafter referred to as P-1), (b) 14.11.2004 and 26.08.2005
(hereinafter referred to as P-2); and (c) 27.08.2005 to 28.02.2006 (herein
after referred to as P-3) are involved in these petitions.
6. During the aforementioned periods, the Telecom Regulatory
Authority of India (TRAI) in exercise of its power conferred upon it under
Section 11 (1) (b) of the Telecom Regulatory Authority of India Act, 1997
(the Act), inter alia, made three Interconnect Usage Charge Regulations
i.e. (a) on 29.10.2003 for the period 01.02.2004 and 31.01.2005; (b) on
06.01.2005 for the period 01.02.2005 and 28.08.2006; and (c) on
23.02.2006 for the period 01.03.2006 and 31.03.2007. Page 7 of 91
7. We may notice the factual matrix involved in these matters in
respect of the Gujarat Circle.
Petitioner entered into an agreement with DoT on or about
18.03.1997 in respect thereof.
Basic Interconnect Agreement was signed between DoT and the
Petitioner for the said Circle on 18.03.2007.
8. Licences were issued to the Petitioner under Section 4 of the
Indian Telegraph Act, 1885 to establish, install, maintain and operate the
Basic Telephone Service in several service areas of the country on or about
20.07.2001.
9. Another Basic Interconnect Agreement was signed between the
parties hereto on or about 21.05.2002.
Petitioner migrated from Basic Service Licence to Unified Access
Service Licence with effect from 14.11.2003.
10. On or about 28.01.2004, a circular letter was issued purported
to be for implementation of the IUC Regulations dated 29.10.2003,
paragraph 11 whereof reads as under :-
―11. The CLI based barring facility shall be activated at the
PoIs wherever technically feasible to ensure that the traffic
handed over to BSNL is in the appropriate trunk groups
only. Wherever it is technically not feasible to activate CLI
based barring, periodic monitoring of the incoming trunk Page 8 of 91
groups shall be done by BSNL to ensure this objective. The
calls received without CLI by BSNL from various operators
shall be charged at the highest slab i.e. as for ISD Calls.
In case such calls are received by BSNL on a trunk group
not meant for such calls then all the traffic received on
such trunk group for that month/billing cycle shall be
charged at the rates applicable for IUC of incoming ISD
Calls.‖
11. On and from 04.03.2005, the TRAI issued a direction to all the
service providers to strictly ensure that terminal use of fixed wireless service
should be confined to the premises of the subscribers. DoT also issued a
direction to that effect on or about 23.03.2005. Similar notices were also
issued to Tata Teleservices (P) Ltd.
12. The legality/validity of the said notices was challenged before
this Tribunal by Tata Teleservices Pvt. Ltd. The said petition was marked as
Petition No.45 of 2005. By reason of a judgment and order dated
09.09.2005, the said petition was dismissed and the demand notice issued
by the Respondent herein was, thus, upheld.
13. We may also place on record that on or about 26.08.2005, the
DoT also issued a circular classifying the Petitioner‘s unlimited cordless
service as WLL(M) phones.
Petitioner also filed a similar petition before this Tribunal, which
was marked as Petition No. 108 of 2005, inter-alia being aggrieved by and
dissatisfied with the demand for a sum of Rs.27,52,717/- said to have beenPage 9 of 91
made pursuant to or in furtherance of purported re-classification of services,
which was also dismissed by an order dated 17.01.2006.
14. Appeals were preferred against the said judgments both by Tata
and the Petitioner before the Supreme Court of India, which were marked as
Civil Appeal No. 5850 of 2005 and Civil Appeal No. 936 of 2006 respectively.
Before the Supreme Court of India, the Respondent herein filed a
chart showing the amount due from the Petitioner for the period November,
2004 and February, 2006.
It reads as under :-
S.N. Circle Period Amount Pending
(In Rs.)
1. Andhra Pradesh Nov’04 to Feb’06 29,69,30,834/-
2. Bihar Nov’04 to Feb’06 99,54,869/-
3. Chattisgarh Nov’04 to Feb’06 1,03,85,730/-
4. Chennai Nov’04 to Feb’06 3,59,35,335/-
5. ETR Nov’04 to Feb’06 3,71,61,084/-
6. Gujarat Nov’04 to Feb’06 20,17,32,597/-
7. Haryana Nov’04 to Feb’06 18,93,04,563/-
8. Himachal Pradesh Nov’04 to Feb’06 4,23,17,605/-
9. Jharkhand Nov’04 to Feb’06 1,22,93,298/-
10. Karnataka Nov’04 to Aug’05 &
Feb’06
16,68,55,340/-
11. Kerala Nov’04 to Feb’06 32,92,00,286/-
12. Kolkata Nov’04 to Feb’06 22,26,67,926/-
13. Madhya Pradesh Nov’04 to Feb’06 7,63,19,349/-
14. Maharashtra Nov’04 to Feb’06 22,20,12,280/-
15. NTR Nov’04 to Feb’06
(except Jan’06 &
June, July, Aug for
17,97,50,150/-Page 10 of 91
Mumbai Optr)
16. Orissa Novb’04 to July’05 &
Feb’06
2,33,11,590/-
17. Punjab Nov’04 to Feb’06 20,75,73,824/-
18. Rajasthan Nov’04 to Feb’06 13,86,58,677/-
19. STR Nov’04 to Feb’06 118,37,21,068/-
20. Tamilnadu Nov’04 to Feb’06 32,93,87,126/-
21. Uttar Pradesh (E) Nov’04 to Nov’05 &
Feb’06
8,12,94,464/-
22. Uttar Pradesh (W) Nov’04 to Feb’06 15,32,77,490/-
23. Uttaranchal Dec’04 to Nov’05 &
Feb’06
2,02,88,817/-
24. West Bengal Nov’04 to Feb’06 6,18,12,781/-
25. WTR Nov’04 to Feb’06 11,75,54,000/-
Total 434,97,01,082/-
15. By reason of two judgments passed on or about 30.4.2008
entitled Tata Teleservices Limited vs. Bharat Sanchar Limited since reported
in (2008) 10 SCC 556 and Reliance Infocom Limited vs. Bharat Sanchar
Nigam Limited reported in 2008(10) SCC 535, the Supreme Court of India
while upholding the demands of the Respondent for the period 14.11.2004
to 26.08.2005 directed that the question with regard to quantification of
claims and counter claims be adjudicated in accordance with law at
appropriate stage by the competent authority.
16. Immediately thereafter, disconnection notices were issued on
03.05.2008. The process of disconnection of the POIs of the Petitioner
started at 5.00 P.M. on the same date. Page 11 of 91
Petitioner with a view to avoid such disconnections made
payments of Rs.225 crores.
17. Respondent, however, disconnected more than 400 POIs of the
Petitioner. For getting the same restored, said to be under duress, the
Petitioner paid a further sum of Rs.287 crores to the Respondent and, thus,
is said to have made about 75% of the total demands of Rs.327 crores.
18. A petition was filed by the Petitioner questioning the said
disconnection of POIs on 26.05.2008 before this Tribunal, which was marked
as Petition No. 109 of 2008.
The said petition was disposed of by an order dated 15.04.2010,
inter-alia, holding:
(a) The effect of dismissal of Petition 108 of 2005 by TDSAT
and its Appeal (CA 936 of 2006) will be that the demands
of BSNL were upheld.
(b) Legality or validity of Clauses 6.4.6 having not been
questioned in Petition 108 of 2005, the principle of
constructive res judicata would be applicable
(c) Petitioner could have raised their bills on BSNL on the
basis of their own CDRs.
(d) It was not open to the Petitioner to question the validity of
the bills and quantum thereof in these proceedings so far
as the same related to the same period.
(e) Respondent BSNL may not be correct to contend that no
challenge whatsoever can be raised in respect of the
demand pertaining to the period 26.8.2005 and
28.2.2006; the judgment of the Hon‘ble Supreme Court of Page 12 of 91
India dated 30.4.2008 being confined to the period
14.11.2004 and 26.8.2005 and its demand was found to
be valid in law for that period only.
The Respondent should raise a revised demand of
ADC for the period other than the one upheld by the
Supreme Court.
19. On or about 14.01.2005, the Respondent is said to have
detected that the Petitioner while extending its WLL(M) services, was in fact
rendering unlimited cordless service and not a fixed one as was being
treated by the parties hereto.
It was stated as under:
―2. Fixed wireless services are being given by M/s RIL
using LG Make CDMA Instrument Model No.LSI-110, but
this instrument can be used as WLL-M throughout the
SDCA. This has also been verified by obtaining one
telephone number of fixed numbering Level-39 with the
above mentioned LG instrument and found that this
instrument works within the whole SDCA of Jaipur like a
WLL-M connection.
3. Since IUC applicable for limited mobile services are
different from fixed line wireless services, there appears to
be an attempt by M/s RIL to evade the IUC charges
including ADC payable to BSNL for limited mobile services
by providing limited mobile services in the disguise of fixed
services.
4. The BSNL calls upon M/s RIL to immediately pay the
entire amount of Interconnect Usage Charges including
ADC as per Clause 6.4.9 of the Interconnect Agreement for
all its calls of Limited Mobile Services through its Unlimited
Cordless Scheme handed-over to BSNL on the BSNL Trunk
Groups meant for fixed line traffic, for the period of last
two months, i.e. from 14.11.2004 to 13.1.2005. Thus,
the difference of the IUC charges including the ADC in this Page 13 of 91
regard should be paid by M/s RIL immediately on receipt
of this communication. Also, the ADC paid by BSNL to M/s
RIL for the calls originated by limited mobile and
cellular/fully mobile subscribers of BSNL and terminated on
the numbering levels of Unlimited Cordless service should
be refunded to BSNL. Further, the traffic information of the
inter circle STD calls originated from/receipt in the
numbering levels of unlimited cordless service and
terminated in/originated from the network of other limited
mobile and fully mobile service providers and the incoming
and outgoing ILD calls to/from the numbering levels of
unlimited cordless service are to be given to the respective
BSNL circle offices for billing of ADC payable to BSNL for
such calls. Your are also called upon to immediately stop
the operation of above mentioned unlimited cordless
service using numbering levels of fixed services, without
paying the IUC charges including ADC which is applicable
for limited mobile service as the same is contrary to the
license conditions, IUC Regulations and to the agreed
terms and conditions of the interconnection agreement.
5. It is intimated the details of the amount to be paid by
M/s RIL to BSNL in the terms mentioned above, should
also be furnished enabling the BSNL to confirm and verify
the correctness thereof in terms of the Interconnection
Agreement including its clause 6.4.9.‖
20. Alleging evasion of requisite ADC charges payable to it, the
Respondent by a circular letter dated 10.5.2010 called upon the Petitioner to
pay the amount specified therein for the period 14.11.2004 and 14.01.2005
along with interest accruing thereupon, stating inter-alia as under :-
―6. Broadly, as enumerated under, there are three types of
traffic for which bills of IUC including ADC are to be raised
by BSNL upon Tata and Reliance in respect of their WLL(M)
services. The rates of IUC including ADC to be applied also
stand intimated vide this office letter No.208-20/2003-
Regln dated 28
th
January 2004 and letter No.352-1/2005-
Regln dated 29
th
January 2005 issued for implementation
of IUC Regulations during the relevant period.Page 14 of 91
(a) Calls originated from WLL(M) services of Tata and Reliance
which were handed over by these operators to BSNL on
the trunk groups/ports meant for fixed line services:
(i) As per provisions of Interconnect Agreement executed
with Tata and Reliance, hand over of WLL(M) service
originated calls to BSNL at the ports/trunk groups meant
for fixed line services falls within the category of wrongly
routed calls. Accordingly, Clause 6.4.9/6.4.6 of
interconnect agreement becomes applicable for raising the
bills of IUC including ADC by BSNL upon them.
(ii) Instructions have been issued by this office from time to
time for raising the bills of IUC including ADC upon Tata
and Reliance for this traffic for the period from 14.11.2004
to 28.02.2006. Lastly, such detailed instructions were
issued by this office, vide letter No.332-2/2006-Regln
dated 26.05.2008 after pronouncement of the judgment by
Hon‘ble Supreme Court of India for ensuring that no traffic
scenarios of such traffic remained unbilled/unrealized from
Tata and Reliance.
(iii) As a last opportunity, all call scenarios, for which IUC
including ADC is to be recovered from Tata and Reliance,
are enclosed as Annexure-I. All the field units are
requested to kindly verify that bills are raised upon these
operators for all of these call scenarios and in case
inadvertently bills have not been raised for any of the call
scenarios the bills may immediately be raised upon Tata
and Reliance as per provisions of Interconnect Agreement
along with applicable interest.
(b) Calls terminated by BSNL on the WLL(M) services of Tata
and Reliance treating these services as fixed line services
due to use of fixed line numbering scheme for WLL(M)
services by them:
(iv) Due to use of fixed line numbering scheme for their WLL(M)
services by Tata and Reliance, BSNL, had paid ADC to
these operators for its call terminated on the WLL(M)
services of these operators, which was not payable as per
the provisions of the prevalent IUC Regulations of TRAI.
Tata and Reliance are obliged to refund this ADC illegally
collected by them from BSNL during the period
01.02.2004 to 28.02.2006.Page 15 of 91
(v) Instructions in this behalf have also been issued form this
office many times for raising the bills of refund upon Tata
and Reliance from 14.11.2004 to 28.02.2006. Lastly, such
detailed instructions were contained in this office letter
NO.332-2/2006-Regln dated 26.05.2008.
(vi) Further, bills for refund of ADC may also immediately be
raised for the period 01.02.2004 to 13.11.2004 upon Tata
and Reliance as per instructions issued from this office
from time to time, for all call scenarios.
(vii) As a last opportunity, all call scenarios, for which IUC
including ADC is to be recovered from Tata and Reliance,
are enclosed as Annexure-II. All the field units are
requested to kindly verify that bills are raised upon these
operators for all of these call scenarios and in case
inadvertently bills have not been raised for any of the call
scenario, the bills may immediately be raised upon Tata
and Reliance along with the applicable interest.
(c) Calls originated from/terminated on the WLL(M) services of
Tata and Reliance and terminated on/originated from the
private operators. This also includes traffic within the own
network of Tata and Reliance.
(viii) As per provisions of the prevalent IUC Regulations of TRAI,
ADC was payable to BSNL even for the calls terminated on
the WLL(M) services of Tata and Reliance by private
operators including incoming ILD calls. Further, ADC was
also payable to BSNL for the calls originated form WLL(M)
services of Tata and Reliance and handed over to private
operators including outgoing international calls to ILD
operators.
(ix) ADC bills for this traffic were to be raised by BSNL based
on the declaration of inter-se private operators traffic by
all the private operators to BSNL.
(x) As Tata and Reliance were using fixed line numbering
scheme for their WLL(M) services, correct declaration of
traffic could not be made by the private operators
including Tata and Reliance. Accordingly, due to fault of
Tata and Reliance, BSNL could not recover the requisite
ADC from the private operators for the period from
01.02.2004 to 28.02.2006.Page 16 of 91
(xi) For raising the bills for his component also instructions
have been issued by BSNL from time to time. As this traffic
does not pass through the network of BSNL, therefore, all
the details including CDRs for raising the bills upon Tata
and Reliance for requisite ADC are to be provided by
private operators.
(xii) Detailed instructions for supplying the details including
CDRs have been separately issued from this office to all
the Access Providers, NLDOs and ILDOs including Tata and
Reliance with a copy to BSNL field units for necessary
actions at their end. Copy of these instructions is enclosed
as Annexure-III for ready reference.
(xiii) It is to be ensured that details and CDRs are provided by
each and every Access Provider, NLDO & ILDO to BSNL
within the specified time of 2 weeks. Further, data and
CDRs submitted by Tata & Reliance may be cross checked
with the data and CDRs submitted by other service
providers.
(xiv) Based on these details, bills of ADC alongwith applicable
interest are to be immediately raised on Tata and Reliance
for the period 01.02.2004 to 28.02.2006.‖
(Underlining is ours for emphasis)
21. The field units of the Respondent were thereby directed :-
―(i) The break-up of the arrear bills along with applicable
interest for the component 6(a) may be provided to Tata
and Reliance for the period from 14.11.2004 to
26.08.2005 and 27.08.2005 to 28.02.2006.
(ii) From the demands raised for the above-components 6(a),
6(b) & 6(c), the amounts already paid by Tata and
Reliance may be adjusted. In respect of component 6(a),
demands for the period 14.11.2004 to 26.08.2005 are to
be enforced first and thereafter only the demands for rest
of the period i.e. 27.08.2005 to 28.02.2006 are to be
enforced. However, there is no such restriction for the
components 6(b) and 6(c).
(iii) After adjusting the amounts already paid by Tata and
Reliance, the balance demands may be intimated to these Page 17 of 91
operators and thereafter immediate necessary actions for
recovery of the balance demands may be initiated as per
the provisions of Interconnect Agreements.
(iv) It is pertinent to mention here that Tata has paid an
amount of Rs.20 crores on 13.10.05, Rs.100 crores on
31.08.06, Rs.125 crores on 05.05.08 & Rs.34.35 crores on
11.06.08 and the same have been apportioned by
Corporate Account Cell of BSNL corporate office to the
concerned field units. Similarly, Reliance has paid an
amount of Rs.40 crores on 03.03.2006 & Rs.287 crores on
05.05.2008 and the same have been apportioned by
Corporate Account Cell of BSNL corporate office to the
concerned field units.‖
22. It may be placed on record that Cellular Operators Association of
India (COAI) also filed a petition claiming IUC charges from the Respondent
herein as also Tata and the Petitioner, wherein by an order dated
18.03.2010 reconciliation of accounts inter-se between the parties hereto by
exchange of CDRs were directed.
23. Against the aforementioned judgment dated 18.03.2010, the
Petitioner preferred an appeal before the Supreme Court of India, which has
been marked as Civil Appeal No. 4878 of 2010.
The said appeal is pending adjudication by the Supreme Court.
24. Indisputably, pursuant to the said order dated 15.4.2010,
various circles of the Respondent started raising fresh demands.
These petitions have been filed challenging the same.Page 18 of 91
25. We would also like to place on record that in a case involving
interpretation of Clause 6.4.6 of the Interconnect Agreement, the Supreme
Court of India disagreed with the opinion of this Tribunal that the same
constitutes ‗penalty‘, holding that it is a ‗genuine pre-estimated damages‘.
The said decision has since been reported in Bharat Sanchar
Nigam Ltd. vs. Reliance Communications Ltd. 2011(1) SCC 394.
26. During pendency of these petitions, demands were raised and
various interim orders were passed from time to time.
Various petitions were filed before this Tribunal questioning the
demands made by other circles of the Respondent.
In one of the orders being dated 10.03.2011 passed in Petition
No.141 of 2011, payment of the entire principal amount irrespective of the
fact as to whether the same is barred by limitation or not was directed to be
made, stating:
―Admit.
Mrs. Prathiba M. Singh accepts notice on behalf of
the respondent. Reply may be filed within two weeks.
Rejoinder thereto, if any, may be filed within two weeks
thereafter. Put up the matter on 15.4.2011 for framing of
issues.
As agreed to by Mr. Meet Malhotra, the learned
Senior Counsel appearing on behalf of the petitioner shall
be confined to Kolkata Circle.
So far as other Circles are concerned, the petitioner Page 19 of 91
may file short petitions stating the fact involved in each
case as it is stated that the question which arises for
consideration in all these matters would be the same.
Two principal issues which arise in these matters
are:-
(i) Whether any ADC prior to 2004 is payable; and
(ii) Whether the petitioner is liable to pay interest at the
rate stipulated in the respective agreements.
Keeping in view the orders passed by this Tribunal in
M.A.No.66 of 2011 arising out of Petition No.86 of 2011
and M.A.No.67 of 2011 arising out of Petition No.96 of
2011, it is directed that by way of interim measure the
petitioner shall pay the entire amount towards the principal
irrespective of the fact that as to whether the same, as per
its contention, is barred under the law limitation or not.
The petitioner shall deposit the amount of interest
as per direction of this Tribunal in its order dated 1.3.2011
in the aforementioned M.As.
The adjustment in regard to typographical error said
to have committed by BSNL shall be considered later.
In the event the petitioner deposits the amount as
directed within two weeks from date and subject to the
condition that the petitioner files appropriate petitions
within ten days in relation to the Circles other than the
Kolkata Circle, the impugned demands may not be given
effect to by way of disconnection of Point of
Interconnections.
This order shall be without prejudice to the rights
and contentions of the parties and shall be subject to any
other or further orders which may be passed by the
Tribunal.”Page 20 of 91
27. Pursuant to above order, the Petitioner filed separate Petitions in
respect of other circles, the details whereof are as under:
Petition Demand Total
Demand
@
Principal Interest pg
141/11
(Calcutta Tel)
(Kolkata
Level 1 TAX)
5,52,71,568
5,92,61,658
13,22,94,868
3,28,38,260
18,75,66,436
5,92,61,658
131
135
156/11
(W.Bengal)
7,28,25,016 171
157/11
(Maharashtra)
64,11,51,282 186
158/11
(Haryana)
18,70,15,872 180
159/11
Karnataka
4.90 crs 12.69 crs 17.59 crs 197
160/ 11
(MP)
7,05,83,452 108
161/11
(Andhra P.)
12,96,40,907 188
162/11
(Kerala)
70,16,80,901 166
163/11
(Delhi & NCR)
100,37,26,762 142
143
164/11
(Chennai)
4,89,50,912 5,66,95,289 10,56,46,201 184
165/11
(Jharkhand)
59,21,529 1,17,62,539 1,76,84,068 123
166/11
(Tamil Nadu)
39,96,31,935 28,83,22,923 68,79,54,858 179
167/11
(Chhatishgarh)
98,25,101 85Page 21 of 91
168/11
(Bihar)
98,43,039 2,20,93,124 3,19,36,163
3,24,96,163
(Inc Reconn
Chgs)
136
169/ 11
(Punjab &
NTR)
332490646 38,20,04,323 55,15,14,992 199
28. It has been brought on record that a demand for a sum of Rs.7
crores for the period February 2004 and October 2004 as also interest on
the said amount, subject to verification, was not pressed by the Respondent
in respect of the Punjab circle and a claim for a sum of Rs.65 crores for the
Delhi circle has been withdrawn.
The parties hereto have not adduced any oral evidence.
29. Pursuant to the leave granted by this Tribunal by an order dated
04.08.2011, the Respondent, however, filed additional affidavit in Petition
No.141 of 2011, to which response has been filed by the Petitioner.
30. It may also be placed on record that Addenda VI to the
Interconnect Agreement was inserted in respect of the Gujarat Circle on or
about 28.02.2006 with retrospective effect from 14.11.2003.
31. We may furthermore notice some of the relevant clauses of the
said Addenda, as interpretation of Clause 6.4.6 whereof arises for
consideration herein. Page 22 of 91
“FIXED WLL SERVICE means fixed services using
terminals strictly confined to the premises of the
subscriber where telephone connection is registered, it
shall be the UASL‘s responsibility to ensure that the
subscriber terminal is operated in accordance with terms of
the License for fixed line services including above
restrictions. Separate level within allocated SDCA based
link numbering scheme is to be used for wireline and fixed
wireless services. Wherever such restrictions cannot be
imposed it shall be treated as WLL(M) feature for al
purposes which inter-alia includes Numbering Plan,
Interconnection Usage Charges, Interconnection
arrangement etc.‖
―11. It is further agreed that any kind of breach of any of
the terms of this agreement by the UASL shall entitle BSNL
to levy damages on the UASL. Quantum of damages
assessed and levied by BSNL shall be final and not
challengeable by the UASL.‖
32. Chapter VI of the said Addenda provides for interconnection
charges. Clause 6.4.2 reads as under :-
―6.4.2 Interconnect Usage Charges (IUC) payable by
UASL to BSNL shall be as per details enclosed in Scheduled
I. Similarly, IUC shall be payable by BSNL to UASL as per
Schedule I. This Schedule I may be amended as per
applicable TRAI‘s Regulation or as mutually agreed from
time to time. Interconnect Usage Charges shall not be
linked with any tariff plan provided by BSNL to its own
subscribers or any other categories of service providers.‖
Clause 6.4.6 reads as under :-
6.4.6 WRONGLY ROUTED CALLS
(a) Unauthorised calls i.e. calls other than specified for
that trunk group if detected, for which the applicable IUC
is higher than the IUC applicable for calls prescribed in that
trunk group, then BSNL shall charge the UASL the highest
applicable IUC, as applicable for such unauthorised calls,
for all the calls recorded on this trunk group from the date Page 23 of 91
of provisioning of that POI or for the preceding two months
whichever is less.
(b) the CLI based barring facility shall be activated at the
POIs wherever technically feasible to ensure that the traffic
handed over by BSNL is in the appropriate trunk groups
only. Wherever it is technically not feasible to activate CLI
based barring, periodic monitoring of the incoming trunk
group shall be done by BSNL to ensure this objective. The
calls received by BSNL without CLI or modified/tampered
CLI from UASL shall be charged at the highest slab i.e. as
for ISD Calls. In case such calls are received by BSNL on
any trunk group, then all the calls recorded on this trunk
group shall be charged at the rates applicable for IUC of
incoming ISD calls from the date of provisioning of that
POI or for the preceding two months, whichever is less.
(c) When CDR based billing is introduced in BSNL's
network some of the trunk groups shall be merged. In
such cases also, in case unauthorised or Incoming
International Call, without CLI call, call with tampered CLI
is handed over to BSNL at the merged trunk group, then
BSNL shall charge the UASL the highest applicable IUC, as
prescribed in clauses 6.4.6(a) above for unauthorised calls
& 6.4.6(b) above for incoming International call, without
CLI call, call with tampered CLI, for all calls recorded on
this merged trunk group from the date of provisioning of
that POI or for the preceding two months whichever is
less.
(d) In addition, BSNL shall also have the right for taking
other legal actions including disconnection of POIs or
temporary suspension of the interconnection arrangements
under misuse.
33. Clause 6.4.7 provides for furnishing of informations including
outgoing STD and ISD traffic from a limited mobile access network handed
over to each of private NLDO/ILDO separately and incoming STD and ISD
traffic terminated to its network and originated from private NLDO/ILDO‘sPage 24 of 91
network separately. It was, furthermore, provided :-
―6.4.7………….
Similarly, information of intra circle traffic from its limited
mobile/fully mobile/cellular access network to each of fixed
network (including its won) separately and intra circle
traffic to its fixed access network from each of limited
mobile/fully mobile/cellular network (including its own)
separately is also to be given each access provider wise by
UASL to BNSL.‖
34. Clause 6.5.2 provides for billing. It is, however, accepted that at
the relevant point of time CDR based billing system for POIs was not
available at the BSNL‘s network.
35. Mr. Ramji Srinivasan, learned senior counsel appearing on behalf
of the Petitioner, in support of these petitions would urge :-
(i) So far as the claim of the Respondent in respect of P-1 period is
concerned, the same having never been the subject matter of
any petition and no claim having been raised in respect thereof,
the same must be held to be barred by limitation having been
issued in May and June 2010 and in that view of the matter, the
question of paying any interest on the said sum does not arise.
(ii) In the facts and circumstances of the case and in particular,
having regard to the fact that the Respondent had raised bills for
P-1 period in 2010, no interest could be calculated from 2004
onwards being contrary to Clause 7.2.1 of the Agreement. In any Page 25 of 91
event, no compound interest is payable in terms of Clause 7.5 of
the Agreement.
(iii) Respondent having the opportunity to raise claims on the
Petitioner during the pendency of the earlier litigations and it
having chosen to limit it‘s claim only in respect of P-3 period, the
claim for the other period is barred under the principles of
‗Constructive Res-Judicata‘ and/or Order II Rule 2 of the Code of
Civil Procedure;
(iv) Even before the Supreme Court of India, the Respondent only
filed an affidavit stating that their total demand is about Rs.434
crores for the period 14.11.2004 to 28.02.2006 and despite the
fact that the Petitioner had supplied all the requisite data way
back in 2006, it having limited its claim by raising a bill on or
about 11.02.2011 only for P-3 period, it is estopped and
precluded from raising any other or further claim.
(v) Respondent itself having issued a circular letter dated
14.01.2005 contending that the circle offices should not pay ADC
on such calls of those phones and having contended that it
would treat the Petitioner‘s Unlimited Cordless Service as
WLL(M) and not a fixed one, it would not be correct to contend
that it‘s rights with regard thereto crystalised only after the Page 26 of 91
judgment of the Supreme Court of India delivered on
30.04.2008.
(vi) So far as the decision of this Tribunal in COAI Vs. RIL being
Petition No. 140 of 2005 is concerned, even COAI had claimed
refund of ADC only from 14.11.2004 which, thus, covered only
P-2 and P-3 period against the Petitioner and the Respondent
respectively.
(vii) Even the Respondent in Petition Nos. 163 of 2011 and 169 of
2011 confirmed that it had not been seeking any ADC for the P-1
period.
(viii) The IUC charges being only in respect of origination, carriage
and termination of calls, the claim of refund of ADC is beyond
the scope of interconnect agreement.
(ix) Respondent having regard to the provisions contained in the
interconnect agreement, should not have claimed any interest
for any period prior to the date of the judgment of the Supreme
Court of India, wherein only a scheme of ADC for P-2 period had
been upheld. In any event, no valid bill having been raised by
the Respondent, the question of invoking the provisions for
payment of interest under the Interconnect Agreement does not
arise.Page 27 of 91
(x) A claim in terms of Clause 6.4.6 of the Interconnect Agreement,
in view of the decision of the Supreme Court of India in the case
of BSNL (Supra) being in the nature of pre-estimated damages,
the Respondent is not entitled to any other or further amount by
way of interest i.e. damages.
(xi) The claims of the Respondent for the P-3 period, whether for
ADC or pre-estimated damages or interest, are not valid in law,
keeping in view the fact that the question is pending
consideration before the Supreme Court of India in Civil Appeal
No. 4877 of 2011.
(xii) So far as claim of the Respondent for ADC is concerned, no
details in regard to the P-3 period having been provided for, it
must be held to have failed to establish that the same has
correctly been computed or that correct rate has been applied or
correct CDRs or MoUs have been used in calculating the amount
under the bills.
(xiii) Having regard to the fact that this Tribunal in its judgment dated
15.4.2010 had directed the Respondent to raise bills for the P-3
period separately, and it having raised only a consolidated bill,
the Petitioner became disabled to verify the correctness thereof.Page 28 of 91
(xiv) Petitioner was entitled to supply of CDRs by the Respondent
having asked therefor in asmuch as its claim, if any, could be
supported by a detailed Call Data Record for establishing
genuineness/veracity of the demand. Despite receipt of the
Petitioner‘s letters dated 28.7.2010 and 22.7.2010 requesting
the Respondent to supply the CDRs and the same having not
been complied with, it would not be possible for it to verify the
same from its CDRs keeping in view the provisions of the
Interconnect Agreement.
(xv) Clause 6.4.6 of the Interconnect Agreement having been inserted
by way of Addenda VI on or about 28.02.2006 having regard to
the exception contained therein as regards payment of IUC/ADC
charges, interconnection arrangements and associated billing
arrangement, it must be held that the bills which have been
raised by the Respondent, could not have been reopened and/or
supplemented.
(xvi) Even assuming that any bill could be raised in terms of Clause
6.4.6 of the said Addenda, it having not been specified as to
which sub-clause thereof would be applicable in the instant case,
no amount is payable, Page 29 of 91
(xvii) ADC not being a part of IUC, no bill for payment of ADC could
be raised in terms of the provisions of the Interconnect
Agreement having regard to the fact that in view of decision of
this Tribunal as also the Supreme Court of India, it is now trite
that the Respondent does not have any legal right to obtain
ADC.
(xviii) In any event, payment of ADC having been allowed by the TRAI
only by way of a subsidy, the Respondent is not entitled to any
amount by way of unjust enrichment or otherwise in excess of
the amount to which it became entitled to thereunder.
(xix) In view of the decision of the Supreme Court of India as regard
quantification of amount payable to the Respondent, it having
already realised more than Rs.5,335 crores as noticed by this
Tribunal in its Judgment dated 21.9.2005 in Appeal No.7 of 2005
titled COAI & Ors. Vs. TRAI & Ors., it was incumbent on it to
prove that by reason of non-payment of ADC by the Petitioner, it
has suffered any loss.
(xx) Clause 7.5 of the agreement providing for interest must be
struck down as the same is not reciprocal and contrary to the
basic concept of the level playing field between two parties of
the contract. Page 30 of 91
(xxi) The provision for payment of interest as contained in Clause 7.5
being unfair, unreasonable and against the principles of equity,
must be held to be violative of Article 14, 19(i)(g) and 21 of the
Constitution of India as also contrary to the public policy and,
thus, violative of Section 23 of the Indian Contract Act. In any
event, the Respondent cannot claim any interest contrary to
Clause 7.5 of the Addenda read with Clause 7.2.1 of the Basic
Interconnect Agreement without raising a bill and providing for a
due and effective date of payment.
(xxii) Petitioner having paid excess amount in terms of the interim
order passed by this Tribunal, it is entitled to obtain refunds
thereof.
(xxiii) Respondent ought to have filed petitions before this Tribunal for
recovery of money sought to be due from the Petitioner and not
take recourse to the disconnection of POIs in terms of the
Interconnect Agreement or otherwise.
36. Mr. Vikas Singh, learned senior counsel appearing on behalf of
the Respondent, on the other hand, urged:
(a) Petitioner, having not raised any pleadings so far as the nature of ADC
being a subsidy having a cap (upper limit) of 5000 and odd crores, is
concerned, cannot be permitted to urge the same.Page 31 of 91
(b) In any view of the matter ADC having been provided in the
Regulations framed by the TRAI for the benefit of BSNL, the validity of the
Regulations itself should have been challenged by the Petitioner and it
having not done so should not be permitted to raise any question with
regard thereto before this Tribunal and that too without any pleadings in
that behalf whatsoever.
(c) The question as to whether the ADC was payable to BSNL on the
premise that the services rendered by the Petitioner herein was WLL(M)
service and not a fixed service, the Respondent could not and/or did not
raise any bill on the Petitioner as the matter was pending before this
Tribunal and the Supreme Court of India, wherein an order of stay was
passed.
(d) As far as the P-1 period is concerned, the private operators are also
liable for calls made inter se amongst themselves for which ADC was payable
to BSNL.
(e) The private operators including the Petitioner having not supplied the
details which ought to have been done in terms of the interconnect
agreement, the refund of the amount paid to Petitioner by way of IUC
charges could not be claimed.
(f) The Supreme Court of India having held that ADC is a part of IUC, the
Petitioner cannot be heard to say that no ADC was payable. Page 32 of 91
(g) Addenda VI to the inter connect agreement having been given a
retrospective effect on and from 14.11.2003, all the relevant provisions
contained therein, which could not be placed before this Tribunal in the
earlier round of litigation as the same did not come into force by the time
the matter was heard and the judgment was pronounced, but to which
attention of the Supreme court of India could have been but was not drawn,
should be taken into consideration which would include the definition of
`fixed WLL service‘ and Chapter VI and Chapter VII thereof, dealing with the
issues regarding `raising of bills, supply of informations, penal charges, the
terms of payment, `right of disconnection and interest payable on delayed
payment‘.
(h) Clause 7.2.1 of the license agreement as contained in Addenda VI
having provided for raising of bills on mutual basis, the claim of the
Respondent cannot be held to be barred under the law of limitation.
(i) Clause 7.5 of the Interconnect Agreement will clearly go to show that
interest would be payable both in respect of a bill:
1. which has been raised, and
2. the bill which could not be raised on the due date due to non supply of
information by the operatorPage 33 of 91
(j) From a perusal of the Regulations dated 29.10.2003, it would be
evident from the definition of terms including `user charges‘ that ADC in
terms of Clause 4 of the IUC Regulations was one of the components of IUC.
Schedule-I appended t the Regulations providing origination charges
having been confined to 00.30 paise i.e. at an uniform rate and the carriage
charges having been fixed on the basis of distance and thus uniform where
the distance is not in question; the only variable component for NLD and
ILD being ADC and, thus, the rate payable for ILD being Rs.4.25 would be
the highest rate which would be applicable for the purpose of invocation of
Clause 6.4.6 of the agreement for a period of two months.
(k) Respondent became entitled to refund of the amount as it had made
payments treating the services rendered by the Petitioner to be a fixed
service, although in terms of the Regulations it was to make payments when
calls originated from a fixed service and terminated at WLL(M) and to
receive payments when a call originated from WLL(M) was terminated at a
fixed service.
Moreover, for intra circle calls from Cellular to WLL(M), the Respondent
would be entitled to the IUC charges.
(l) From a perusal of the judgment of this Tribunal as also of the Supreme
Court of India, it would be evident that the circular letters issued by the
Respondent herein being 14.1.2003, 19.1.2003 and 9.3.2005 having been Page 34 of 91
upheld, each component contemplated thereby must be held to have
become payable in consequence thereto or as a result thereof.
(m) This Tribunal as also the Supreme Court of India having rejected the
contentions of the Petitioner that the said circular letters issued by the
Respondent either on the ground of unilateralism and/or alteration of
services, the Respondent is entitled to the amounts found to be payable
relying on or on the basis thereof.
(n) From a perusal of the circular letters dated 14.1.2003, 19.1.2003 and
28.1.2004, it would be evident that the Respondent had sought for
informations from the Petitioner as regards the details of the calls made by
the operators inter se and in absence of the details thereof neither any bill
could be raised nor the law of limitation will have any effect with regard
thereto.
(o) This Tribunal and the Supreme Court of India having clearly held that
the main beneficiary of ADC being the Respondent and the payability
thereof being governed by the services capable of being rendered between
SDCA and not solely on the basis of the advertisement issued, it is wholly
inconceivable that it having clearly been held that the advertisement was the
trigger point and withdrawal of the advertisement did not result in
withdrawal of the nature of service and thus, ADC and IUC shall be payable Page 35 of 91
for all the three periods subject of course to the fact that the demand under
Clause 6.4.6 would be restricted only from 14.11.2004 to 13.1.2005.
(p) During pendency of the proceedings before this Tribunal as also before
the Supreme Court of India, subject to certain conditions, orders granting
stay of disconnection notices having been issued, it was not possible for the
Respondent to raise bills.
(q) The Supreme Court of India having arrived at a finding in para 26 of its
judgment, clearly found that the WLL(M) would be a service feature and,
thus no exception can be taken thereto.
(r) By reason of the judgment of the Supreme Court of India, the circular
letters issued by the Respondent having been upheld and it having been
found that the service features provided by the Petitioner were not capable
of being confined to a premise as far as the mobility aspect is concerned and
furthermore the decision of the TRAI dated 4.3.2005 being a clarificatory
one and not an amendatory one, the same must be held to be retrospective
in nature.
(s) Petitioner having not raised any contention that no refund was
permissible or inter circle charges were not payable, in view of the decision
of this Tribunal dated 18.3.2010 in the case of Cellular Operators
Association of India & Ors. vs. Tata Teleservices Ltd. & Ors., Petition No.74
of 2005 and Cellular Operators Association of India & Ors. vs. Reliance Page 36 of 91
Infocomm Limited & Ors., it would not be correct to say that the judgments
rendered therein as also the Supreme Court of India covered any period,
particularly, having regard to the fact that it has been found therein that the
law was not clear.
Moreover, ADC being payable in terms of the IUC Regulations and the
Respondent having been paying the same from 1.2.2003, the Petitioner has
not made out any case for grant of any relief as has been prayed for in this
petition or otherwise.
(t) Even in Petition No.109 of 2008 (Reliance vs. BSNL), this Tribunal
having considered the nature of demands made by the Respondent and it
having been held that the principles of Constructive Res Judicata as also the
principles of Order II Rule 2 of the Code of Civil Procedure would be
applicable, the Petitioner cannot now be permitted to raise the same
questions once over again.
(u) This Tribunal having granted liberty to the Respondent to raise bills for
the P-3 period, the contention of the Petitioner that no such liberty had
been granted which would clearly demonstrate the hollowness of its claim.
(v) Before the Supreme Court of India, no specific period being in issue and
only the validity of the circulars and the demands raised by the Respondent
being in issue and the same having been upheld, the question of the Page 37 of 91
Supreme Court‘s adjudicating on any issue as regards different periods did
not and could not arise.
(w) From the pleadings of the Petitioner, it would appear that more or less
the petition are confined to the claim of interest by the Respondent.
Keeping in view the fact that in terms of the interconnect agreement
entered into by and between the parties, the accounts maintained by them
was mutual, the provisions of Article 1 of the Schedule appended to the
Limitation Act, 1963 would be attracted in the instant case.
(x) So far as the prayer of the Petitioner relating to validity of the
interest clause as contained in Clause 7.5 is concerned, this Tribunal may
read down the same to provide for a level playing field to the private
operators also.
However, this Tribunal has no jurisdiction to re-write the agreement as
it is not a Court of record but has only a limited jurisdiction.
(y) Clause 6.4.6 of the interconnect agreement as inserted by the
Addenda, the Respondent has not claimed any ADC or IUC for the period of
two months but is entitled to claim refund from the very beginning as
payability thereof was in question before this Tribunal as also the Supreme
Court of India. Page 38 of 91
(z) The Petitioner having not questioned the correctness of any particular
bill, the prayers made by the Petitioner in that behalf must be held to be
completely vague as no case has been made out for setting aside a bill,
either on the basis of any sound reasoning or otherwise. Moreover, the
Petitioner having not made out any case as to why the Respondent‘s claim
for inter circle IUC charges would not be payable, interest of justice would be
subserved if a direction is issued to reconcile the accounts between the
parties as has been done by this Tribunal in Petition No. 109 of 2008
Reliance Communications Ltd. vs. Bharat Sanchar Nigam Limited by an order
dated 15.4.2010.
The Demand
37. We may at the outset notice that three different periods of claim
as indicated heretobefore as P-1 (1.2.2004 to 13.11.2004), P-2 (14.11.2004
to 26.8.2005) and P-3 for the period (27.8.2005 to 28.2.2006) comprised of
three types of claims.
The claim involved in the P-1 period is ADC. The claim involved
in P-2 period involves invocation of Clause 6.4.6 i.e. for IUC.
The claim for the P-3 period is normal IUC plus ADC.
38. The bills for P-1 period was raised in May –June, 2010. The claim
involved in the P-2 period was, however, raised in January, 2005. So far as
the claim for P-3 period is concerned, before the Supreme Court of India,Page 39 of 91
the Respondent filed an affidavit demanding a sum of Rs.434.00 crores for
the period 14.11.2004 to 28.2.2006 i.e. for both the P-2 and P-3 periods.
The said demand also the subject matter of Petition No.109 of 2008.
39. It has been brought to the notice of this Tribunal that despite the
fact that BSNL by a circular dated 10.5.2010 directed its Field Units to raise
bills for the P-1 period but the same were raised in the following manner in
respect of circulars mentioned therein:
Circle Bill
Dated
Period Amount Pgs
Rajasthan
Petition
96/11
19.6.10 P1 464044 40
19.6.10 P1 257998 41
21.7.10 P1 1083855 43
6.7.10 P1 342462 44
6.7.10 P1 190530 45
6.7.10 P1 14491 46
9.12.10 P1 421909 47
9.12.10 P1 266642 48
10.1.11 P1 17813 50
Maharashtra
Petition
157/11
19.1.11 P1 (Consolidated bill for
P1, P2, P3)
339112842 186 of Pet.
141/11Page 40 of 91
40. In this behalf the bill dated 10.1.2011 for the Rajasthan Circle
may be noticed which is as under:
Bill Dated M/s Reliance (Infocomm)
10-1-011 Communication Ltd. E-161 E-170
Road No.12, V.K.I. area
Jaipur
Last date of payment From: Feb 04 To: Jan-05
30-1-011
PAGE-1
PAGE-1
Final supplementary bills to recover IUC including
ADC from M/s Reliance in r/o WLL(M) Services as
per L.No.TR-IUC-Unlimited Cordless/RCL/98 dated
22-5-010
Bill regarding calls terminated by BSNL on the
WLL(M) Service of reliance treating these services as
Fixed Line Service due to use of Fixed Line (6B)
The following Bills were raised for total
Rs.23,361/= as under
B.No. B/Date B/Amt POI
64681173 20-2-07 5488= AJ TAX
64681180 20-2-07 1296= EWSD AJ
64681204 20-2-07 8769= Bear
64681196 20-2-07 7808= MJK
Total
amount
payable
Amount
payable
17813
Karnataka
Pet 159/11
2.8.10 P1 1208257
149884
384952
153508
190 of Pet.
141/11
Delhi & NCR
Pet 163/11
18.2.11 P1 659845895 (W/d
claim)
142 of Pet.
141/11
Punjab Pet
169/11
15.2.11 P1 22,87,20848
(W/d part of
claim)
199-201 & 204
of Pet. 141/11Page 41 of 91
______
23361=For Nov-04 TO
Jan-05 Now
by the
last
date
17813
IUC Regulations
41. The TRAI in exercise of its jurisdiction under 11(1)(b) of the Act
made the first IUC Regulations on or about 24.1.2003, with effect from
29.10.2003. It was valid for the period 1.2.2004 to 31.1.2005.
The Interconnect Usage Charges (IUC) had a limited life,
meaning thereby it ceased to have effect, if forbearance was prescribed or
another IUC Regulation was made.
42. For the purpose of appreciating the submissions made by
learned counsel for the parties, we may at the outset notice some of the
relevant provisions of the IUC Regulations.
43. ADC is defined in Clause 2(ii) of the Regulations to mean Access
Deficit Charges.
The terms `Interconnection‘ and `Interconnection Usage
Charges‘ have been defined in Clause 2(viii) and 2(x), to mean as under:
―2(viii) "Interconnection" means the commercial and
technical arrangements under which service providers
connect their equipment, networks and services to enable Page 42 of 91
their customers to have access to the customers, services
and networks of other service providers.‖
―2(x) ―Interconnection Usage Charge (IUC)‖ means the
charge payable by one service provider to one or more
service providers for usage of the network elements for
origination, transit or termination of the calls.‖
44. Indisputably, in terms of Clause 4 occurring in Section IV of the
said Regulations, the Interconnection Usage Charges were specified in the
Schedules. It reads as under:
―4. Interconnection Usage Charges (IUC)
The Interconnection Usage Charges are specified in
Schedules hereto.
Schedule I – Termination Charges
Schedule II – Carriage Charges
Schedule III – Access Deficit Charge (ADC)‖
Schedule I comprises of three categories of charges.
`Termination charges‘ were prescribed at the rate 0.30 paise per
minute.
`Forbearance‘ was provided for origination charges and Carriage
charges have been specified in Schedule II.
Access deficit charges have been specified in the Schedule III.
45. Access Deficit Charges applicable for the specified category of
calls had been mentioned in Table III. It was payable to basic service Page 43 of 91
operators on a per minute basis by the Basic/Cellular Operators, National
Long Distance Operators and International Long Distance Service Providers.
We may notice Table III of the said Regulation:
TABLE III
Access Deficit Charge application for various types of calls
Access Deficit
charge
Local Intra circle calls Inter circle calls ILD
(in rupees per min) Local 0-50
kms
>50
kms
0-50
kms
50-200
kms
>200
kms
ILD
Fixed-Fixed 0.00 0.00 0.30 0.30 0.50 0.80
Fixed-WLL(M) 0.30 0.30 0.30 0.30 0.50 0.80 4.25
Fixed-Cellular 0.30 0.30 0.30 0.30 0.50 0.80
WLL(M)-Fixed 0.30 0.30 0.30 0.30 0.50 0.80
WLL(M)-WLL(M) 0.00 0.00 0.00 0.30 0.50 0.80 4.25
WLL(M)-Cellular 0.00 0.00 0.00 0.30 0.50 0.80
Cellular-Fixed 0.30 0.30 0.30 0.30 0.50 0.80
Cellular
4.25
-WLL(M) 0.00 0.00 0.00 0.30 0.50 0.80
Cellular- Cellular 0.00 0.00 0.00 0.30 0.50 0.80
It is not in dispute that for the period 2003 and 2008 ADC was
payable by other operators to BSNL.
46. The Explanatory Memorandum of the TRAI appended to the said
Regulations inter alia contains some salient features of the regime. Page 44 of 91
Table I reads as under:
TABLE 1
Illustrative IUC Plus ADC Charges as Applicable Under The IUC Regulation Of
January 2003
(INTRA CIRCLE)
>500 kms 200-500kms 50-200kms 0-50kms
Uniform
ADC
Non
uniform
ADC
Uniform
ADC
Non
uniform
ADC
Uniform
ADC
Non
uniform
ADC
Uniform
ADC
Non
unifo
rm
ADC
F-F 5.10 4.60 4.75 4.25 2.45 2.45 0.70 0.70
F-W 3.60 3.35 3.25 3.00 1.95 1.95 0.95 0.95
F-C 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20
W-F 3.50 3.25 3.15 2.90 1.85 1.85 0.85 0.85
W-W 2.00 2.00 1.65 1.65 1.35 1.35 1.10 1.10
W-C 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
C-F 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20
C-W 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
C-C 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80
47. The question is as to whether having regard to the various
judgments of this Tribunal as also the Supreme Court of India, ADC being
not a part of IUC and, thus, no demand in relation thereto is reasonable
and/or whether by reason thereof the Respondent can unjustly enrich itself?Page 45 of 91
48. We may notice that the Petitioner in paragraph 8.5 of the
petition has quoted an order dated 30.4.008 passed by the Supreme Court
of India in Appeal No.5850 and 5871 of 2005, which is in the following
terms:
―…………It is important to note that ADC does not arise out
of any legal right. It arises out of TRAI‘s consideration of
smoothening the transition process during competition, i.e.
providing support during transition period when costs of
access is not fully recoverable from the revenues from
access line monthly rental under the existing tariff regime
due to competition in the market. In other words, ADC is
a depleting regime for ADC purpose………..‖
49. In Tata Teleservices Ltd. (supra) and Reliance Infocomm Limited
(supra) similar observations of this Tribunal made in Petition No.119 of 2008
and 118 of 2008 being dated 15.4.2010 were noticed by the Apex Court.
This Tribunal in Petition No.166 of 2010 opined as under:
―ADC and IUC charges are, however, separate and distinct,
the former being not part of the later………‖
50. It is also stated that the TRAI also in its Regulation No.2 of 2008
dated 27.3.2008 stated that different principles were used for calculation of
IUC and ADC in the following terms:
―9. Therefore the principle followed by The Authority was
that the every cost of all the elements of the network
required for completion of a call has been accounted for in
IUC and any deficit arising out of rentals and to make calls
affordable as accounted for in ADC. Thus the purpose of
ADC was different from IUC.Page 46 of 91
10. In this regard it may also be noted that in per minute
based ADC regime, in most of the scenarios the ADC was
to be paid to BSNL, even when no IUC is required to be
payable to BSNL as it is not involved in the completion of
the call. As an example, mobile to mobile inter circle calls,
wherein the traffic originated in the mobile network of an
operator in one circle, carried by an NLDO (Other than
BSNL) and terminated on the network of the same
operator in another circle, the ADC was to be paid to
BSNL, irrespective of the fact that it is not involved in the
call and no IUC is required to be paid to it. Similarly in the
percentage of AGR based ADC regime all the NLDOs and
ILDOs are paying ADC to BSNL, even some of them are
not carrying voice traffic and not having interconnection
with BSNL. In view of all above, the Authority found no
merit in the argument that ADC is an integral part of IUC.‖
Similarly, in Appeal No.6 of 2006, this Tribunal in its judgment
dated 2.2.2009 held as under:
―51. We have considered the contentions of both the
counsels. We find that the arguments of the learned
counsel for Respondent are well founded. In fact, this
issue has been set at rest by the Authority itself, which
issued the Regulations. Paragraphs 8 to 10 of the
Explanatory Memorandum to the IUC Regulations, 2008
leave no doubt whatsoever that while the Interconnection
Usage Charges Regulation has been used by TRAI to bring
in ADC, ADC is not an integral part of interconnection.
Clause 2(x) of the IUC Regulations, 2008 reads as follows:
‗Interconnection Usage Charges (IUC) means the charge
payable by one service provider to one or more service
providers for usage of the network elements for
origination, transit and termination of the calls’. Besides,
in the Reliance Infocomm case, cited supra, the Hon‘ble
Supreme Court dealt with IUC and ADC as distinct
elements. It observed that ADC is essentially to
compensate for the difference between the costs and local
calls revenue. The Apex Court also observed that
categorization of services for levying a charge by way of
IUC/ADC is a matter of policy and revenue recognition,
which is the part of the regulatory regime. We therefore Page 47 of 91
hold that while the IUC Regulation may have been used by
TRAI to bring in ADC, ADC is not an integral part of
interconnection and that IUC and ADC are distinct
elements. We hold that the Authority had rightly concluded
that the purpose of ADC was different from IUC and that
ADC is not an integral part of IUC. It follows therefrom
that demand for ADC will have to be on its own merits and
not based on alleged violations of IUC.‖
51. The concept of ADC and IUC having been defined differently and
the rates thereof having been specified in different Schedules they may
have to be dealt with differently. It may also be true that TRAI in its
Explanatory Memorandum dated 24.1.2003 devoted a few paragraphs as to
why those two different charges had been levied.
We are, however, not concerned therewith.
52. Having regard to the decision of the Supreme Court of India in
the cases of Tata Teleservices (supra) and Reliance (Supra), if a call
originated from WLL(M) and terminated in a fixed phone or vice-versa, ADC
@ 0.30 paise becomes payable apart from intercircle calls and ILD charges,
whereas for making calls from WLL(M) to WLL(M) no ADC is payable.
53. Similarly, if a call originated from a fixed telephone and
terminated in a Cellular one and vice-versa, ADC at the rate of 0.30 paise
became payable. Page 48 of 91
54. The Supreme Court of India in the case of Tata Teleservices
(supra) noticed that the charges claimed by the Respondent herein were
towards ADC.
Paragraphs 12 and 13 of the said judgment read as under:
Meaning of Interconnection Usage Charges
("IUC")/ADC:
12. On 29.10.2003, TRAI notified IUC. ADC is a part of
IUC. ADC is a percentage of the revenue. The framework
of IUC regime was established by TRAI through its
Regulation dated 24.1.2003 which was subsequently
reviewed on 29.10.2003 and 6.1.2005. IUC has to be
determined based on minutes of usage for various network
elements and the cost of these elements.
13. ADC, on the other hand, is based on the consideration
of cost based rent, local call charges, low rental in rural
areas, free calls etc. to make the basic telecom services
affordable to the common man, to promote universal
service and universal access as required by NTP, 1999. It
is important to note that ADC does not arise out of
any legal right. It arises out of TRAI's consideration
of smoothening the transition process during
competition, i.e., providing support during transition period
when costs of access is not fully recoverable from the
revenues from access line monthly rental under the
existing tariff regime due to competition in the market. In
other words, ADC is a depleting regime for ADC purpose.
Calls to/from WLL(F) is similar to calls to/from fixed
lines. It is important to note that fixed wireless
services, provided by fixed service providers, and unified
access service licences are classified as Fixed
Services. However, fixed wireless services for all
purposes tantamounts to full cellular services and
can be offered seamlessly throughout the SDCA
which created a non level playing field for cellular
operators vis-a-vis the fixed wireless service providers,
which has led to the present dispute, which is primarily
concerned with the "range of mobility" of Fixed Wireless Page 49 of 91
Terminals provided by appellants herein and Reliance
Infocomm and not with the size of the instrument "Walky"
provided by appellants (Handset provided by Reliance
Infocomm) or the technology used therein, viz, wireless or
wireline, in the context of levy of ADC.
55. It was held that walky services if treated to be WLL(M) service
for the purposes including numbering plain, interconnection user charges,
ADC etc. as clarified by the DoT in its Circular letter dated 23.3.2005 would
be payable. It was held that `levy of ADC would depend upon the service
which is rendered to the user by the access provider.‘
It was opined:
―49. Before concluding, one aspect needs to be mentioned.
It is alleged by the appellants and also by Reliance
Infocomm Ltd. in the conjoint appeal which we will
separately deal with in the subsequent judgment that
BSNL have also not disclosed their numbering levels for
their fixed wireless service and for their WLL(M) services
which they have been providing during the relevant period
in the name of "Tarang", which according to the
appellants, would now constitute WLL(M) service.
According to the appellants, BSNL has also been providing
fixed wireless phone services which has limited mobility.
This is a matter of quantification. That stage has not yet
arrived. However, Mr. Gopal Subramanium, learned senior
counsel appearing on behalf of BSNL, has fairly stated that
BSNL would abide by the parameters laid down in our
judgment and whatever adjustments required to be made
in that regard in the context of claims and counter claims,
the same shall be worked out in near future. Be that as it
may, we express no opinion on the point of quantification
which question did not arise even before TDSAT in this
case. Suffice it to state that the services of the appellants
vide the instrument Walky falls in the category of WLL(M)
service and, accordingly, the appellants would be liable to Page 50 of 91
pay ADC in that regard during the relevant period
14.11.2004 to 26.8.2005.‖
56. Similar observations were made in the case of Reliance
Infocomm (supra) at paragraph 39 of the judgment in the following terms:
―39……………………………….The test to be applied to
distinguish WLL(F) from WLL(M) is that if the impugned
service cannot be restricted to the place of the subscriber
then such service has to be classified as WLL(M) for the
purposes of ADC. In the present case, the impugned
service cannot be technically confined to the premises of
the subscriber. The impugned service cannot comply with
PSR. Therefore, it has to be classified as WLL(M) service
for ADC purposes.‖
It was also held:
42. The important thing to be noted in this case is we are
basically concerned with the levy of ADC charge on a given
call. The identity of the call and the caller is checked not
by the base station but by the MSC. The Numbering plan is
also in MSC and not in the BTS. In this case, we are not
concerned with the communication linkage between MSC
and BTS. In this case, we are essentially concerned with
the existing service in MSC on the basis of which a charge
could be levied depending on the type of the originating
call. If a Walky call is to be classified as FWA service then
the integrity of the Numbering plan would stand infringed.
The Numbering plan is co-related to the Database in the
MSC. It is for this reason that we have examined the
differences in the services, namely, cellular, cordless, FWA
etc. It is for this reason that we have analysed the types of
devices, namely, fixed device, nomadic device, low
mobility, high mobility etc.
57. We may also notice that while considering the matter relating to
payability of ADC, it was observed that both in terms of technology as also Page 51 of 91
policy framework, the classification of wireless services into three categories
in the matter of payability of ADC was well known to the service provider.
A bare perusal of the relevant provisions of the Regulations as
indicated heretobefore would clearly go to show that IUC and Access Deficit
Charges had been mentioned in different schedules.
58. Be that as it may, in our opinion, it is incorrect to contend that
the right of the Respondent to receive ADC although may not be a legal one
as a concept but it is difficult to ignore that the same emanates from the IUC
Regulations.
59. It must be borne in mind that the TRAI assigned no reason as to
why ADC would be payable to the Respondent. But the same would not
mean that right of the Respondent to receive ADC from other operators can
be totally ignored.
60 Such a case, in our view, could not have been made out as the
basis thereof has been upheld in both the first and second round of the
litigation.
61. In the first round of litigation, the validity of the bills have been
upheld; in the second round, the Petitioner was given to liberty to question
the correctness of the bills and not the right of the Respondent to claim ADC.
The respective rights and obligations of the parties having been determined,
to our mind, the basic question cannot be permitted to be reopened again. Page 52 of 91
62. It is well settled what cannot be done directly, cannot be
permitted to be done indirectly.
63. It may not be a legal right to charge ADC while claiming IUC.
ADC is payable, albeit separately, by the Respondent both under the
interconnect agreement as also under the Regulations.
64. IUC Regulations remained valid for different periods. So long the
said Regulations remained operative, it is difficult to conceive as to how a
cap thereupon was possible to be put.
65. It is not the case of the Petitioner that the IUC Regulations
although stricto sensu may not be a Regulation made in terms of Section 36
of the Act and come within the purview of a `Direction‘ issued by the TRAI
in exercise of its power under Section 11(1)(b) thereof, has no force of law.
66. This Tribunal time and again has held that the Regulations made
by the TRAI in exercise of its jurisdiction under Section 11(1)(b) of the Act
would be law within the meaning of Article 13 of the Constitution of India.
Unjust Enrichment Issue
67. From para 47 of the judgment dated 12.5.2009 passed by the
Tribunal in Appeal No.6 of 2006 as also from the judgment dated 15.4.2010
passed in Petition No.166 of 2006 Reliance vs. BSNL, it would appear that Page 53 of 91
the question with regard to interpretation of 6.4.6 had not been pleaded in
those proceedings.
68. In any event on a bare perusal of Clause 6.4.6 of the
Interconnect Agreement it would appear that the same deals with the calls
which terminates at the BSNL‘s Trunk Group and, thus, has nothing to do
with the intercircle calls.
69. No pleading in this behalf having been raised, the contentions
raised by Mr. Srinivasan cannot be entertained.
70. If a contention like the present one was to be raised, it was
obligatory on the part of the Petitioner to raise requisite pleadings with
regard thereto in its petition.
71. In case of this nature, the importance of pleadings cannot be
minimized. (See paragraphs 67-70 of Maria Margarida Sequeria Fernades
and Others vs. Erasmo Jack DE Sequeria (Dead) Through L.Rs. 2012(3)
SCALE 550). It was held that apart from pleadings the court must insist on
documentary proof in support of the pleadings.
72 Submissions of Mr. Srinivasan, that the Respondent, having
realized a huge amount that is more than Rs.5000 crores and odd from
different private operators including Tata Teleservices, cannot enrich itself
unjustly, would have required consideration, if requisite pleadings were
raised in that behalf and evidence to the effect was brought on record. Page 54 of 91
No evidence whatsoever in that behalf has been adduced.
In absence of any pleading or proof, we are afraid, such a
question cannot be determined.
73. Strong reliance has been placed by Mr. Srinivasan on Kumari
Shrilekha Vidyarthi & Ors. vs. State of UP & Ors. (1991) 1 SCC 212 wherein
it was held that the concept of fairness, justness and reasonableness would
apply also in contractual matters, where the State is a party.
74. In that case the Apex Court was considering the doctrine of
―Spoils System‖ being the practice of giving public offices to adherants of a
political party on assumption of power which was held to be ultra vires
Article 14 of the Constitution of India.
75. The observations made in paragraphs 24, 27, 33, 35 and 36 of
the said judgment to which our attention has been drawn by Mr. Srinivasan
refer to a situation where the relationship between the parties is although
governed by contract, but where the action on the part of the `State‘ was
found to be arbitrary.
76. Action of a `State‘ no doubt should be fair as recently opined in
NOIDA Entrepreneurs Association vs. Noida & Ors., 2011(6) SCC 508 (59)
but when a statute confers a special benefit, it must be held to be
reasonable unless declared otherwise. Page 55 of 91
77. The law (in this case the IUC Regulations) issued from time to
time by the TRAI cannot be held to have conferred an unjust benefit on the
Respondent. If that was so, it was obligatory on the part of the Petitioner to
question the validity thereof at the appropriate stage. It should have
furnished the requisite data therefor.
78. For the said purpose whether a judicial review would have been
maintainable or an original petition would have been maintainable against
the TRAI is a different question.
79. But what needs to be emphasised is that in absence of such a
challenge and that too in absence of the TRAI being a party in these
proceedings, no credence can be given thereto.
80. Reliance has also been placed by Mr. Srinivasan in LIC of India &
Anr. vs. Consumer Education & Research Centre & Ors. reported in (1995) 5
SCC 482, wherein upon taking into consideration the relative bargaining
power of the contracting parties thereto, the Apex Court held that if a
contract or a clause contained therein is found to be unreasonable or unfair
or irrational, the same cannot be acted upon.
81. For the aforementioned reasons the decision of the Apex Court in
LIC (supra) also has no application to the fact of the present case.
82. A large number of judgments of the Apex Court have also been
cited by Mr. Srinivasan to contend that equity principles should be applied to Page 56 of 91
hold that a party to a lis cannot unjustly enrich itself viz. State of
Maharashtra & Ors. vs. Swanstone Multiplex Cinema Pvt. Ltd. 2009 (8) SCC
235, Canbank Financial Services. Ltd. vs. Custodian & Ors 2004 (8) SCC
355, K.T. Venkatagiri & Ors. vs. State of Karnataka & Ors. 2003(9) SCC 1,
Indian Banks' Association, Bombay and Ors. v. Devkala Consultancy Service
and Ors. (2004) 11 SCC 1 and Mumbai Agricultural Produce Market
Committee & Anr. vs. Hindustan Lever Limited & Ors. (2008) 5 SCC 575.
83. There can be no quarrel with the said legal proposition, but in
our considered view, such a case has to be made out.
84. We may also notice a recent decision of the Supreme Court of
India in Indian Council for Enviro-Legal Action vs. Union of India, (2011 ) 8
SCC 161. That case involved degradation of ecology vis-à-vis the benefit
earned by a violater of a series of orders passed by the Supreme Court of
India. It was stated:
―162. We may add that restitution and unjust enrichment,
along with an overlap, have to be viewed with reference to
the two stages i.e. pre-suit and post-suit. In the former
case, it becomes a substantive law (or common law) right
that the court will consider; but in the latter case, when
the parties are before the court and any act/omission, or
simply passage of time, results in deprivation of one, or
unjust enrichment of the other, the jurisdiction of the court
to levelise and do justice is independent and must be
readily wielded, otherwise it will be allowing the court's
own process, along with time delay, to do injustice.‖Page 57 of 91
85. Thus, in a case invoking pre-suit right, the claim has to be
established keeping in view the provisions of substantive law.
In State of Maharashtra & Ors. (Supra) the Apex Court, following
several other decisions, opined as under:
―36. It may be true that here at we are not concerned with
refund of tax but then for enforcement of legal principles,
this Court may direct a party to divest itself of the money
or benefits, which in justice, equity and good conscience
belongs to someone else. It must be directed to restitute
that part of the benefit to which it was not entitled to.‖
86. We may however, add that the application of said principle would
arise if a finding of fact is arrived at that a party had obtained undue
advantage and thus cannot be permitted to retain the same.
For the said purpose the principles of restitution may be applied.
Recently in State of Gujarat vs. Essar Oil Ltd. reported in 2012(3) SCC
522, the Apex Court opined:
―61. The concept of restitution is virtually a common law
principle and it is a remedy against unjust enrichment or
unjust benefit. The core of the concept lies in the
conscience of the court which prevents a party from
retaining money or some benefit derived from another
which it has received by way of an erroneous decree of
court. Such remedy in English Law is generally different
from a remedy in contract or in tort and falls within a third
category of common law remedy which is called quasicontract or restitution.
62. If we analyse the concept of restitution one thing
emerges clearly that the obligation to restitute lies on the
person or the authority that has received unjust
enrichment or unjust benefit (see Halsbury's Laws of
England, 4th Edn., Vol. 9, p. 434).Page 58 of 91
63. If we look at Restatement of the Law of Restitution by
American Law Institute (1937 American Law Institute
Publishers, St Paul) we get that a person is enriched if he
has received a benefit and similarly a person is unjustly
enriched if the retention of the benefit would be unjust.
Now the question is what constitutes a benefit. A person
confers benefit upon another if he gives to the other
possession of or some other interest in money, land,
chattels, or performs services beneficial to or at the
request of the other, satisfies a debt or a duty of the other
or in a way adds to the other's security or advantage. He
confers a benefit not only where he adds to the property of
another but also where he saves the other from expense
or loss. Thus the word ―benefit‖ therefore denotes any
form of advantage (p. 12 of the Restatement of the Law of
Restitution by American Law Institute).
64. Ordinarily in cases of restitution if there is a benefit to
one, there is a corresponding loss to other and in such
cases, the benefiting party is also under a duty to give to
the losing party, the amount by which he has been
enriched.
65. We find that a person who has conferred a benefit
upon another in compliance with a judgment or whose
property has been taken thereunder, is entitled to
restitution if the judgment is reversed or set aside, unless
restitution would be inequitable (p. 302 of the Restatement
of the Law of Restitution by American Law Institute).
66. Equity demands that if one party has not been unjustly
enriched, no order of recovery can be made against that
party. Other situation would be when a party acquires
benefits lawfully, which are not conferred by the party
claiming restitution, court cannot order restitution.‖
87. In Mumbai Agriculture Produce Market (supra) while considering
the question of `fee‘, applying the principles of quid-pro-quo it was held as
under:Page 59 of 91
―14. The quantum of recovery, however, need not be
based on mathematical exactitude as such cost is levied
having regard to the liability of all the licensees or a
section of them. It would, however, require some
calculation.‖
88. We, therefore, in absence of any pleading or proof are not in a
position to accede to the submissions of Mr. Srinivasan that the final object
of prescribing ADC was by way of an ad-hoc arrangement and the
Regulations were merely supervening in nature.
89. On the question of unjust enrichment Mr. Srinivasan has also
relied upon the decision of the Supreme Court in Sahakari Khand Udyog
Mandal Ltd. vs. Commissioner of Central Excise & Customs reported in
(2005) 3 SCC pages, wherein it has been held as under:
―31. Stated simply, 'Unjust enrichment' means retention of
a benefit by a person that is unjust or inequitable. 'Unjust
enrichment' occurs when a person retains money or
benefits which in justice, equity and good conscience,
belong to someone else.
32. The doctrine of 'unjust enrichment', therefore, is that
no person can be allowed to enrich inequitably at the
expense of another. A right of recovery under the doctrine
of 'unjust enrichment' arises where retention of a benefit is
considered contrary to justice or against equity.
33. The juristic basis of the obligation is not founded upon
any contract or tort but upon a third category of law,
namely, quasi-contract or the doctrine of restitution.
………………………..
45. From the above discussion, it is clear that the doctrine
of 'unjust enrichment' is based on equity and has been
accepted and applied in several cases. In our opinion, Page 60 of 91
therefore, irrespective of applicability of Section 11B of the
Act, the doctrine can be invoked to deny the benefit to
which a person is not otherwise entitled. Section 11B of
the Act or similar provision merely gives legislative
recognition to this doctrine. That, however, does not mean
that in absence of statutory provision, a person can claim
or retain undue benefit. Before claiming a relief of refund,
it is necessary for the Petitioner/appellant to show that he
has paid the amount for which relief is sought, he has not
passed on the burden on consumers and if such relief is
not granted, he would suffer loss.‖
90. Whatever be the nature of the said impost, unless the TRAI itself
had restricted its applicability, it is difficult for this Tribunal to arrive at the
conclusion that the Respondent could not recover any amount beyond a
certain point having regard to the fact that the same was payable as it had
expended a huge sum in laying cables in rural areas which the other
operators did not.
91. We, therefore, have no hesitation to reject the said contention
of the Petitioner.
Interconnect Usage Charges whether includes ADC.
92. Clause 6.4.1 and Clause 6.4.2 which are relevant, read as
under:-
―6.4.1 Interconnect Usage Charges (IUC) shall be payable
by UASL to BSNL for the calls originating in UASL
network and handed over to BSNL network. Likewise
Interconnect Usage Charges shall be payable by
BSNL to UASL for the calls handed over by BSNL
network and terminating in UASL network.
Interconnect Usage Charges include termination Page 61 of 91
charge, carriage charge transit charge and access
deficit charge (ADC) as applicable.
6.4.2 Interconnect Usage Charges (IUC) payable by UASL
to BSNL shall be as per details enclosed in Schedule
I. Similarly, IUC shall be payable by BSNL to UASL as
per Schedule I. This Schedule I may be amended as
per applicable TRAI‘s Regulation or as mutually
agreed from time to time. Interconnect Usage
Charges shall not be linked with any tariff plan
provided by BSNL to its own subscribers or any other
categories of service providers.‖
[Emphasis supplied]
93. ADC is not only, thus, payable under the Regulations, but also in
terms of the said agreement in terms whereof IUC would include ADC as
applicable.
Both by reason of a statute as also the agreement, therefore,
ADC was payable to the Respondent herein.
94. Chapter VI provides for interconnection charges. A definition of
‗interconnection charges‘ and ‗Access Deficit Charges‘ in terms of the
Regulations may be different, but as indicated heretobefore Clause 6.4
clearly provides therefor.
Disconnection of POI
95. The right of the parties to disconnect the Points of
Interconnection in the event of non-payment of dues is not in dispute. The
contention of the Petitioner however, is that the Respondent can disconnect
POIs only for realization of IUC and not for ADC. Page 62 of 91
96. However, as by reason of an expansive definition, IUC would
include ADC, we fail to see any reason as to why disconnection of a POI
would not be permissible for non-payment of ADC also.
Constructive Res Judicata and Order II Rule 2 of the Code of Civil
Procedure-Issue.
97. The contention of the Petitioner is that the defence of the
Respondent is barred under the principles of constructive res judicata as also
Order II Rule 2 of the CPC is stated to be rejected.
98. Respondent has drawn our attention to a letter dated 25.1.2004
wherein the Corporate office directed the circle offices to raise bills for the P-
1 period i.e.1.3.2004 to 31.11.2004. But only because the Respondent in
the earlier round of litigation raised the claim only for the P-2 and P-3
period, the same would not mean that it would not be permitted to do so for
the P-1 period in the present proceeding, even if it was otherwise entitled
thereto.
99. What was in issue therein was the right of the Respondent to
raise the said claim. If the Respondent had paid a huge amount to the
Petitioner by way of IUC charges which has subsequently been held to be
not payable, it is difficult to hold that the claim with regard thereto would be
barred under the principles of Constructive Res Judicata and/or Order II Rule
2 of the Code. Page 63 of 91
100. Moreover, there is nothing on record to show that the
Respondent at any point of time has given a go bye to its claim. Even
according to the Petitioner the claim for each of the three periods is to be
considered separately. We thus, fail to see any reason as to why the claim
of refund of ADC would be barred under the said principles.
101. We may notice the decisions on which reliance has been placed
by Mr. Srinivasan.
102. In Hope Plantations Ltd. v. Taluk Land Board, (1999) 5 SCC 590,
at page 611 the Apex Court stated the law thus:
―31. Law on res judicata and estoppel is well understood in
India and there are ample authoritative pronouncements
by various courts on these subjects. As noted above, the
plea of res judicata, though technical, is based on public
policy in order to put an end to litigation. It is, however,
different if an issue which had been decided in an earlier
litigation again arises for determination between the same
parties in a suit based on a fresh cause of action or where
there is continuous cause of action. The parties then may
not be bound by the determination made earlier if in the
meanwhile, law has changed or has been interpreted
differently by a higher forum. But that situation does not
exist here. Principles of constructive res judicata apply with
full force. It is the subsequent stage of the same
proceedings. If we refer to Order XLVII of the Code
(Explanation to Rule 1) review is not permissible on the
ground
―that the decision on a question of law on which the
judgment of the Court is based has been reversed or
modified by the subsequent decision of a superior court in
any other case, shall not be a ground for the review of
such judgment‖.‖Page 64 of 91
103. In Ramadhar Shrivas v. Bhagwandas, (2005) 13 SCC 1, at page
9 it is stated as under:
―21. In our opinion, the learned counsel for the appellant is
also right in submitting that the rule of constructive res
judicata applies to the present case. The expression
―matter in issue‖ under Section 11 of the Code of Civil
Procedure, 1908 connotes the matter directly and
substantially in issue actually or constructively. A matter is
actually in issue when it is in issue directly and
substantially and a competent court decides it on merits. A
matter is constructively in issue when it ―might and ought‖
to have been made a ground of defence or attack in the
former suit. Explanation IV to Section 11 of the Code by a
deeming provision lays down that any matter which ―might
and ought‖ to have been made a ground of defence or
attack in the former suit, but which has not been made a
ground of defence or attack, shall be deemed to have been
a matter directly and substantially in issue in such suit.
22. The principle underlying Explanation IV is that where
the parties have had an opportunity of controverting a
matter, that should be taken to be the same thing as if the
matter had been actually controverted and decided. The
object of Explanation IV is to compel the plaintiff or the
defendant to take all the grounds of attack or defence in
one and the same suit.‖
104. In Dadu Dayalu Mahasabha, Jaipur (Trust) v. Mahant Ram
Niwas, (2008) 11 SCC 753 it was opined:
―25. Explanation IV of Section 11 of the Code extends the
principle of res judicata stating that the reliefs which could
have been or ought to have been prayed for even if it was
not prayed for would operate as res judicata. Section 12
thereof bars filing of such suit at the instance of a person
who is found to be otherwise bound by the decision in the
earlier round of litigation and in a case where the principle
of res judicata shall apply.
26. We, however, are not unmindful of the principles of
estoppel, waiver and res judicata are procedural in nature Page 65 of 91
and, thus, the same will have no application in a case
where judgment has been rendered wholly without
jurisdiction or issues involve only pure questions of law.
Even in such cases, the principle of issue estoppel will have
no role to play.
27. However, once it is held that the issues which arise in
the subsequent suit were directly and substantial in issue
in the earlier suit, indisputably Section 11 of the Code
would apply.
28. Similarly the provisions of Order 2 Rule 2 bars the
jurisdiction of the court in entertaining a second suit where
the plaintiff could have but failed to claim the entire relief
in the first one. We need not go into the legal philosophy
underlying the said principle as we are concerned with the
applicability thereof.‖
105. None of the aforementioned decisions assist the Petitioner in as
much as the claim of the Respondent towards refund of IUC Charges were
not and need not have been put up as a defence to the contentions of
Petitioners in the earlier case.
106. A separate claim of the Respondent an original petition is not a
defence. Even according to the Petitioner the bills raised by the Respondent
in the earlier round of litigation were not in issue.
107. The said claim is independent of the claims raised for the P2 and
P3 period. Principles of Constructive Res Judicata, therefore, has no
application in the present proceeding.
For the self serve reasons, Order II Rule 2 of the CPC has also
no application. Page 66 of 91
Limitation Issue
108. The period in question is 1.3.2004 to 30.11.2004.
Bills for the said period have been raised in 2010 and 2011.
We may notice the different dates of the bills so far as the claim
for the said period is concerned.
It has been noticed heretobefore that the Respondent by a
letter dated 14.1.2005 not only stopped payment of ADC on calls made from
or to the WLL(M) phones, but also by reason thereof, the circle offices were
instructed to treat the Petitioner‘s unlimited cordless service as WLL(M).
109. Mr. Vikas Singh, however, would contend that in a situation of
this nature Article I of the Schedule appended to the Limitation Act, 1963
shall apply.
Article 1 of the Limitation Act reads as under:-
―Description of suit Period of
limitation
Time from which period
begins to run
(1) For the balance due on
a mutual, and current
account, there have
been reciprocal
demands between the
parties.
Three
years.
The close of the year in
which the last item
admitted or proved is
entered in the account;
such year to be
computed as in the
account.‖
110. A bare perusal of the said provision would clearly go to show
that for attracting the same, the accounts maintained by the parties not Page 67 of 91
only must be mutual but also open and current. All the three ingredients
must be fulfilled so as to attract the provision of Article I of the Limitation
Act, 1963.
111. This Tribunal in a judgment in Idea Cellular Ltd. vs. Mahanagar
Telephone Nigam Ltd. Petition No. 33 of 2009 disposed of on 26.7.2010
relying inter alia on Era Constructions (India) Ltd v. D.K. Sharma reported in
2008(1) Arb. L.R. 205(Delhi) clearly held:
―24. To create an open, mutual and current account,
there must be an intention. Such intention must be
deducible from the course of dealings, to have mutual
dealings, create the reciprocal obligations which are
independent of each other, with the intention that these
transactions are to continue and are not so closed until the
parties decide to close their accounts. In this case parties
were not maintaining any common account. The petitioner
has claimed a money decree for non-payment of the
roaming charges for particular month(s). The dues of the
month(s) in question were not to be carried forward to the
next month as interest was to be paid on the invoiced
amount of the creditor minus the invoiced amount of the
debtor and, thus, the transaction must be held to have
come to a close on the happening of the said event. This
Petition is not based on account but on invoice.
25. In any event, the agreement was terminated in April,
2005. Once it was terminated, the account between the
parties would not be current. Thereafter, there would be
no transaction. There would be no expectation of any
transaction.‖
It was also, inter alia, noticed:
―27. A division Bench comprising of Braumont, C.J. and
Rangnekar, J., in Karsondas v. Surajbhan [AIR 1933 Page 68 of 91
Bombay 450] considered a case where a suit has been
filed by a principal against an agent for accounts and for
money that may be found due. Holding that Article 85 will
have no application, the learned Judges held as under:-
―In determining whether the suit falls within Art. 85,
the first question to be decided is whether there was at
any time a mutual, open and current account between the
parties, and if so, when it was closed. As I have already
said I think that at any rate down to April 1997 there was
a mutual, open and current account between the parties,
but, there being no general agency agreement, it would
only remain an open and current account with the consent
of both the parties. Whether that consent was withdrawn
or not at any particular time is a question of fact. In my
opinion the fact that all dealings between the parties
ceased from April, 1992, coupled with the fact that in the
following July the defendants sent in an account showing
the amount due and made an unconditional offer to pay
that amount, shows that it was the intention of the
defendants to close the account, and I hold as a matter
fact that the account was closed at any rate from
28.7.1922.
Now whether an account is mutual, open and current
so as to attract the application of Art. 85 is a pure question
of fact and must depend upon the nature of the dealings
between the parties, nature of the entries and other
relevant circumstances. In order that an account should
be mutual there must be dealings between the parties and
such dealings must be capable of giving rise to
independent obligations on each side of the account at any
given period or stage. One test commonly applied is the
possibility of shifting balances sometimes in favour of one
party and sometimes in favour of the other. But as
observed in several reported decisions that the test is not
decisive or conclusive of the matter. The real test is
whether the dealings between the parties are of such a
nature that the balance might so shift. An account current
means a running account, that is an account which is
continued and not stopped or closed. If the account is
running, that is to say if it is unclosed, then it is open and
current. It is open either because the balance remains to
be drawn or struck, or because it is to be carried forward Page 69 of 91
because of some contemplated future dealings between
the parties. If the account is not closed by settlement or
otherwise, it is open. Of course mere cessation of the
dealings between the parties does not mean that the
account is closed. The real question in each case would be
what is the intention of the parties, and that must be
inferred from the surrounding circumstances.
Suppose there is a mutual, open and current account
between the parties and the dealings close in July and the
plaintiffs draw a balance against the defendants and then
demand the sum from them intimating that no further
dealings will take place between them, I am unable to see
how it can be said that after July the account still remained
a mutual, open and current account and continued to bear
that character right up to the end of the year. There is
nothing in law which prevents a party from saying to the
other, ―I am closing your account today. This is what is
due to you. I shall have nothing to do with you in future.‖
It is difficult to see how it can be contended after
this that the account still remained open and current.‖
It was furthermore observed—
―It must follow therefore that if the account in
question was closed prior to the suit, the suit cannot be
said to be for the balance of an open and current account.
In order to bring the case under Art. 85, it is in my opinion
necessary for the plaintiff to show that he is suing for the
balance due on a mutual and open account. If at the time
the suit was brought the account was closed, then I think
the article would not apply. In other words, the account
must be open down to the suit.‖
This decision applies to the fact of the present case in all fours.
Respondent has not filed a suit for accounts. Page 70 of 91
112. If from 14.1.2005 it had stopped making any payment of ADC, it
is difficult to hold that the account of the parties continued to be mutual,
open and current.
Whether ADC was payable or not for the said period was itself in
dispute.
Moreover, the Respondent has not raised any pleading in this behalf.
Any benefit claimed in terms of Article I of the Scheduled appended to
the Limitation Act was required to be supported by pleadings.
113. An issue was required to be framed. The parties were required to
produce their books of account to show that how and in what manner the
same were being maintained.
Article 1 of the Schedule appended to the Limitation Act, 1963,
therefore, in our opinion has no application in the instant case.
114. Clause 7.2.1 reads as under:
―7.2.1 Bills for IUC will be issued on monthly basis by the
designated unit of BSNL to the UASL and such bills shall be
payable within 15 days from the date of issue. The UASL
for the IUC, if any, due to it, may also issue similar bills.‖
Bills were, thus, required to be raised on a monthly basis.
115. Questions of interest as provided for in 7.13, 7.14, 7.2.1, 7.3.2,
7.5, 7.32, 7.5 are required to be considered in the context in which they
have been made. Page 71 of 91
Bills have been raised by the Respondent during the period
19.6.2010 and 18.2.2011.
116. In Tata Communications Ltd. vs. BSNL & Anr. Petition No. 186 of
2010 disposed of on 27.1.2011, this Tribunal has opined that the period of
limitation would be three years, despite a judgment of a learned single
judge of the Andhra Pradesh High Court holding that the period of limitation
so far as BSNL is concerned would be 30 years. .
117. At no point of time, any order of injunction or prohibition on the
part of the BSNL to raise bills towards refund of ADC was passed by any
competent court of law. Respondent was, thus, entitled to raise the bills.
Keeping in view the aforementioned position by reason of the circular letter
dated 14.1.2005 it itself called upon the circle offices to raise bills.
118. If the circle offices of the Respondent did not carry out the said
instructions, the period of limitation would not be saved.
119. The question of limitation having regard to the provisions
Section 3 of the Limitation Act, 1963, being a jurisdictional question, even a
court of law is not entitled to extend the period of limitation, subject of
course to exclusion of the periods specified in Sections 4 to 14 thereof.
Reliance has been placed by Mr. Srinivasan on P.K.
Ramchandran vs. State of Kerala & Anr. (1997) 7 SCC 556 wherein it has
been held: Page 72 of 91
―6. Law of limitation may harshly effect a particular party
but it has to be applied with all its rigour when the statute
so prescribes and the Courts have no power to extend the
period of limitation on equitable grounds. The discretion
exercised by the High Court was, thus, neither proper nor
judicious. The order condoning the delay cannot be
sustained. This appeal, therefore, succeeds and the
impugned order is set aside. Consequently, the application
for condonation of delay filed in the High Court would
stand rejected and the Miscellaneous First Appeal shall
stand dismissed as barred by time. No. costs.‖
[See also I.T.C. Ltd. v. George Joseph Fernandes , (1989) 2 SCC 1 and
DDA v. Ram Prakash , (2011) 4 SCC 180.]
120. In Petition No.211 of 2010 Reliance vs. BSNL disposed of
21.1.2011, this Tribunal opined:
―This Tribunal inter alia exercises original jurisdiction. It
cannot even otherwise, having regard to the provisions
contained in Section 3 of the Limitation Act, extend the
period of limitation.
Section 3, as is well known is imperative in character. The
Limitation Act is a statute of repose. A right accrues in
favour of another person if an action is not brought within
the period prescribed under the law of limitation. Proper
explanation therefore, is required to be given if a valuable
right of another is sought to be defeated (See Ashish
Kumar Hazra Vs. Ruby Park Cooperative Housing Society,
AIR 1997 SC 2724).
It was observed:
―Even no case in regard to exclusion of time has been
made out.
In Sudhir Kumar Pandey v. Bank of India and Ors.
reported in AIR 1991 Pat 267 it was held that:Page 73 of 91
―As to what are those subsequent dates have not been
disclosed and the plaint is blissfully vague on this point. As
noticed above, Rule 6 of Order VII clearly goes to show
that the grounds of exemption from the law of limitation, if
the suit is instituted after the expiration of the period
prescribed by the law should be stated in the plaint. In the
present case no such ground appears to have been stated
in the plaint.‖
In Ramaswamy Chetti v. Anaiya Padayachi and Ors.
reported in AIR 1936 Mad 545, it was held:
4. …. Where the suit is instituted after the expiration of the
period prescribed by the law of limitation, the plaint shall
show the ground upon which exemption from such law is
claimed.
We may also refer to ―Law of Limitation & Prescription‖ by
R.N.Chodhry at page 475 where the learned author opines
as follows:
―No lack of bona fides. – Section 14 of the Limitation Act
provides for exclusion of time of proceeding bona fide in a
court without jurisdiction. The provisions in the section lay
down, inter alia, that in computing the period of limitation
for any suit the time during which the plaintiff has been
prosecuting with due diligence another civil proceeding,
whether in a court of first instance or of appeal or revision,
against the defendant shall be excluded, where the
proceeding relates to the same matter in issue and is
prosecuted in good faith in a court which, from defect of
jurisdiction or other cause of a like nature, is unable to
entertain it.‖
We are not oblivious of the fact that the Limitation
Act although takes away the remedy of a person to bring
an action before a Court of Law, the claim itself does not
come to an end. We cannot, however, ignore the same.
No person can be granted any relief, if he is not entitled
thereto in law. If a statute bars a remedy, a court of law
cannot provide the same to a suitor.
Interim stay granted in the earlier round of litigation
would not, in our opinion, save the period of limitation. For
the said purpose, even Section 14 of the Limitation Act,
1963 will have no application.‖Page 74 of 91
121. In Tata Communication Ltd. vs. BSNL, Petition No.423 of 2010
disposed of on 16.11.2011 it was held:
―22. The bills are to be settled on a monthly basis but if
such a situation is there, how the bills related to period as
old as July 2005 can be raised with a delay of more than 5
years by the respondent. These are covered by limitation
period of 3 years. This Tribunal in Petition No. 186 of 2010
between the same parties has held on 27.01.2011 :
―36. However, when the petitioner questioned the
impugned letter threatening withdrawal of inter connection
services, evidently the question has to be considered
keeping in view the provisions of Section 28 of the Indian
Contract Act and not for the purpose of lodging a claim.
Mr. Bhatia, however, would contend that the agreement
being of inter connection and both the parties having been
raising bills on each other, the provisions of Article 1 of the
Schedule appended to the Limitation Act, 1963 shall apply
37. The aforementioned contention of Mr.Bhatia, in our
opinion, is wholly without any basis.
38. BSNL has not filed any suit for accounts. Indisputably,
it was to raise the bill either within a period of six months
or file a suit for recovery of interconnection charges within
a period of three years. It cannot raise a bill after the
period of limitation is over, seeking to enforce its
contractual right to disconnect the POIs. The bill has been
raised for the months of April and May, 2004.
39. The said bill has been raised only during the pendency
of these proceedings. The respondent, as was accepted in
this case, had been raising bills on a wrong premise.
40. If it was maintaining the records electronically, the
billing advice should have been contained all the
informations relating to the digital number plan of the
receiver of services. The respondent could not have, in any Page 75 of 91
event, invoked a penal clause without any rhyme or
reason.
41. The instance given by Mr.Hazarika, namely,
Malleswaran POI at Bangalore should have been an eye
opener for the respondent.
42. The provisions of the agreement clearly state the bills
raised by the parties hereto be settled within a period of
one month. It is, therefore, not a case where the account
between the parties is not only mutual but also open and
current.‖
122. There is nothing on record to show that any change in the
situation took place. It may be true that the question as to whether the
services by the Respondent was in the nature of mobile services had been
crystallized by reason of the judgment of the Supreme Court of India on or
about 30.4.2008 but the same has nothing to do with the question of
limitation as the Respondent at all material times was aware that it was
entitled to refund of IUC Charges from the Petitioner. We, therefore, are of
the opinion that the claim of the respondent for the P-1 period is barred
under the law of limitation.
Validity of Clause 7.5
123. Clause 7.5 of the Interconnect Agreement provides for payment
of interest. Page 76 of 91
It reads as under :-
―7.5 (i) In the event of delayed payment by the UASL,
interest will be charged on the due amount at the following
rates:
Period of Delay Interest Rate
(per annum)
a. For delay upto 15 days 3.5% above the PLR
b. For delays beyond 15 days 6.% above the PLR
but upto 30 days
(e.g. In case of delay of 18 days in making the payment to
BSNL, for the period of first 15 days interest shall be charged @
3.5% above the PLR and for balance 3 days interest shall be
charged @ 6.5% above the PLR.)
* Note: The above mentioned interest rate shall be
applicable for the entire period of delay. No claim shall be
entertained for lower rate of interest for the part period of the
delay.
(ii) The interest charges referred above will also be applicable
in case the bill is disputed by UASL but subsequently the
billing is found to be in order by the appropriate authority
i.e. the dispute raised was not correct. Delay in this case
shall be calculated from due date to date of actual
payment to BSNL by UASL of the outstanding amount.
Interest rate to be charged to UASL for this delay period
shall be calculated on the outstanding amount received
beyond due date and shall be @ 6.5% above the PLR upto
30 days and @ 24% beyond 30 days from due date.
(iii) In case of disputed and delayed bills, where it is found that
billing dispute raised is correct then interest shall be
charged to UASL at the specified interest rate for the entire
period of delay from the due date of bill on the undisputed
portion only of the outstanding amount. This specified
interest rate being @ 3.5% above the PLR upto 15 days @
6.5% above the PLR beyond 15 days but upto 30 days and
@ 24% beyond 30 days from due date. However, no Page 77 of 91
interest shall be applicable on the disputed portion of the
outstanding amount till the dispute is settled.
In case UASL fails to pay the amended/balance
disputed portion of the bill as settled within the new due
date prescribed after settlement of billing dispute interest
will be applicable on such amended/balance disputed
portion of the bill amount from the specified new date of
payment to the actual date of payment at rates as
applicable in case of delay in payment of a fresh bill as
detailed above.‖
124. Mr. Vikas Singh very fairly stated that the said provision may be
read down so as to provide for a level playing field.
Parties to an agreement would otherwise be entitled to a level
playing field having regard to the decision of the Supreme Court of India in
Reliance Vs. Maharashtra State Electricity Board reported in (2007) 8 SCC 1,
wherein the law has been laid down in the following terms :-
―36. We find merit in this civil appeal. Standards applied
by courts in judicial review must be justified by
constitutional principles which govern the proper exercise
of public power in a democracy. Article 14 of the
Constitution embodies the principle of ―nondiscrimination‖. However, it is not a free-standing
provision. It has to be read in conjunction with rights
conferred by other articles like Article 21 of the
Constitution. The said Article 21 refers to ―right to life‖. It
includes ―opportunity‖. In our view, as held in the latest
judgment of the Constitution Bench of nine Judges in I.R.
Coelho v. State of T.N., Articles 21/14 are the heart of the
chapter on fundamental rights. They cover various aspects
of life. ―Level playing field‖ is an important concept while
construing Article 19(1)(g) of the Constitution. It is this
doctrine which is invoked by REL/HDEC in the present
case. When Article 19(1)(g) confers fundamental right to
carry on business to a company, it is entitled to invoke the Page 78 of 91
said doctrine of ―level playing field‖. We may clarify that
this doctrine is, however, subject to public interest. In the
world of globalisation, competition is an important factor to
be kept in mind. The doctrine of ―level playing field‖ is an
important doctrine which is embodied in Article 19(1)(g) of
the Constitution. This is because the said doctrine provides
space within which equally placed competitors are allowed
to bid so as to subserve the larger public interest.
―Globalisation‖, in essence, is liberalisation of trade. Today
India has dismantled licence raj. The economic reforms
introduced after 1992 have brought in the concept of
―globalisation‖. Decisions or acts which result in unequal
and discriminatory treatment, would violate the doctrine of
―level playing field‖ embodied in Article 19(1)(g). Time has
come, therefore, to say that Article 14 which refers to the
principle of ―equality‖ should not be read as a stand alone
item but it should be read in conjunction with Article 21
which embodies several aspects of life. There is one more
aspect which needs to be mentioned in the matter of
implementation of the aforestated doctrine of ―level
playing field‖. According to Lord Goldsmith, commitment to
the ―rule of law‖ is the heart of parliamentary democracy.
One of the important elements of the ―rule of law‖ is legal
certainty. Article 14 applies to government policies and if
the policy or act of the Government, even in contractual
matters, fails to satisfy the test of ―reasonableness‖, then
such an act or decision would be unconstitutional.‖
125. Mr. Vikas Singh, however, would contend that this Tribunal
cannot re-write the contract. It is ordinarily so.
But, in our opinion, the submissions of Mr. Vikas Singh are selfcontradictory.
126. The rules of interpretation of a document would embrace within
its fold the reasonableness thereof. Page 79 of 91
In Persimmon Homes (South Coast) Ltd. v. Hall Aggregates
(South Coast) Ltd. and Cemex UK Properties [2008] EWHC 2379 (TCC) it
was held:-
―THE PROPER CONSTRUCTION OF THE SALE AGREEMENT
The Relevant Principles of Construction
46. There appeared to be little between the parties as to
the principles of construction of commercial contracts
relevant to this dispute. In my judgment, those which are
most applicable to the present dispute are the following:
a) The proper construction of a contractual clause must not
consider that clause in isolation, but must consider the
clause in the context of the contract as a whole: see for
example, The Apostolis (No 2) [2000] 2 Lloyds Rep 337 at
348;
b) An express term in a contract excludes the possibility of
implying any term dealing with the same subject-matter as
the express term: see Miller v Emcer Products Limited
[1956] Ch 304;
c) Where a particular construction may produce an unfair
result, the court will often require clear words to support
the construction in question: see BCCI v Ali and Stocznia
Gdanska v Latvian Shipping Co [1998] 1 WLR 574, HL.
127. By applying the rule of reading down as suggested by Mr. Vikas
Singh himself, the provision of the contract is held to be applicable to both
the parties.
We do not see any reason as to why the principle of level playing
field may not be applied keeping in view the submissions made by learned
counsel himself, which would otherwise be in consonance with the decision
of the Supreme Court of India as indicated heretobefore. Page 80 of 91
128. We may notice that Kim Lewison in his Interpretation of Contract
(5
th
Edition 2012) in paragraphs 7.18 opined that where a construction does
not produce an unfair result, the Court will often require clear words to
support the construction in question.
129. It may also be placed on record that this Tribunal in Cellular
Operators Association of India vs. BSNL & Ors. Petition No. 48 of 2004,
disposed of on 11.11.2005 has granted the same rate of interest to the
operator as was claimed by BSNL therein, stating :-
―52(c) Reciprocity in Interest – The petitioners have
pointed out that large amounts of bills are not paid in time
by the respondents and when paid after considerable delay
there is no payment of interest whereas an interest of 24%
per annum compounded quarterly is charged from them on
their dues. We direct that this should be on reciprocal
basis. Both parties are directed to enter into agreement
regarding the rate of interest which will be applicable for
both the parties on reciprocal basis. ―
130. However, that decision, we must place on record, has not been
universally followed.
We, therefore, accept the submissions of Mr. Vikas Singh and
opine that the rate of interest provided in Clause 7.5 would be applicable in
the case of both the parties. Page 81 of 91
Interpretation of Clause 7.2.1 Issue
131. What would be the effect of Clause 7.2.1 may now be
considered. Chapter VII of the interconnect agreement as inserted by the
Addenda VI which came into force with effect from 28.2.2006 in respect of
the circle of Gujarat reads as under:
―7.2.1 Bills for IUC will be issued on monthly basis by the
designated unit of BSNL to the UASL and such bills shall be
payable within 15 days from the date of issue. The UASL
for the IUC, if any, due to it, may also issue similar bills.‖
The provision of interest should not be read as a stand alone
clause but should be read with the other Clauses in the Chapter dealing with
billing.
The bills were to be raised on a monthly basis.
Clause 7.2.1 provided for raising of such bills by either party. The
demands raised by one party on the other would depend upon the number of
calls which have passed through each other‘s exchanges.
132. The bills were required to be issued in respect of the dues and
claims receivable by each of the parties.
IUC charges as specified by the TRAI indisputably was payable
depending upon the calculation of the number of minutes of traffic
exchanged between the parties in the previous months. Page 82 of 91
133. The amounts specified in such bills were required to be paid
within fifteen days from the date of raising thereof or on or before the `due
date‘ or `pay by date‘ specified in each one of the them.
Any payment made beyond the specified date would be subject to
payment of interest as specified in Clause 7.5.
134. The same would not, however, mean that even if successive bills
are raised, the amount of interest would be calculated only on the basis of
the date specified in the last bill. For the said purpose the dates specified in
each of the bills must be taken into consideration and the first of such dates
shall be the date from which the interest shall be payable.
135. Agreement between the parties subject to applicability of a
statute including the rate of interest is the decisive factor. The parties may
not only specify the rate of interest but also the nature thereof i.e. whether
the same would be simple or compound.
136. Payability of interest would, thus, depend upon the terms of the
contract or a law. If there does not exist any provision in the agreement for
payment of compound interest, the same would not be payable. A provision
for payment of such compound interest in respect of a bill shall be
calculated only after such a clause in that behalf is brought into the contract. Page 83 of 91
137. Interest, at the rate provided for in the interconnect agreement
would thus, be payable, provided the amount has become due and payable.
For that purpose only bills are required to be raised.
The payability would, however, depend upon the terms of the
contract. If a cause of action arises in terms whereof some amount becomes
due to the other party to a contract, the same would be payable.
138. We may notice that in Marine Trade SA vs. Pioneer Freight
Futures Company Ltd. 2010 1 Loyd‘s Rep. 631, it was held:
―22. I have no doubt that Mr. Baker‘s construction of the
provision in Section 2(c) is the correct one. As a matter of
ordinary language, ―payable‖ clearly means now due and
owing, for immediate payment and not only payable if and
when some suspensive condition for which Mr. Tselentis
contends is satisfied. Quite apart from the ordinary
meaning of language, when the agreement is considered
as a whole, the word ―payable‘ in Section 2(c) clearly
means that there is a current enforceable obligation to
pay. This is clear form the fact that, having talked about
―amounts which would otherwise be payable‖, the
provision goes on to talk about ―each party‘s obligation to
make payment‖ being automatically satisfied and
discharged‖ by payment of the balance after netting.
However, where Pioneer is affected by an Event of Default,
as a consequence of Section 2(a)(iii) Marine Trade has no
obligation to make payment to Pioneer at all.
58. Applying recognized principles of contractual
construction, where a contractual obligation (and
corresponding contractual right in favour of the other
party) has accrued, it would require clear words in the
contract to remove that obligation and corresponding right
at some later stage. There are no such clear words in
these agreements. Pioneer relied upon the words ―is
continuing‖ in Section 2(a)(iii)(1) in support of the Page 84 of 91
argument that Marine Trade had to continue to comply
with the condition precedent after February 2009 for the
obligation to pay to continue. However, in my judgment,
the words ―has occurred and is continuing‖ are focusing on
whether there is an Event of Default at the time that the
obligation to pay accrued, i.e. on 6 February 2009. Once
the obligation accrued on 6 February 2009 because there
was no Event of Default at that date, Pioneer remained
under an obligation to discharge that debt, irrespective of
whether Marine Trade became affected at a alter date by
an Event of Default, at least unless and until Pioneer
served a Section 6 Notice and designated Early
Termination.‖
Interpretation of Clause 6.4.6
139. Clause 6.4.6 was inserted in the Interconnection Agreement on
or about February, 2006 with retrospective effect from 14.11.2003.
One of the questions, which arises for consideration, is as to whether
the said provision could be given a retrospective effect.
Paragraph 1 of the Addenda VI to the Interconnect Agreement read as
under :-
―1. Each party i.e. BSNL as well as the UASL, does hereby
agree to the terms & conditions as described herein which
shall append as Addenda to the original agreement and the
combined agreement, hereinafter called ―AGREEMENT‖ will
become effective from 14
th
November 2003 except the
applicable Interconnection Usage Charges (IUC) including
ADC, Interconnection arrangements and associated billing
arrangements as prescribed by BSNL Corporate Office,
during this intervening period till date of signing of this
Addenda.‖Page 85 of 91
140. The parties clearly agreed that the same should be given effect
to on and from 14.11.2003 i.e. with a retrospective effect. Some
exceptions, however, were provided therein. The exception contained in the
said paragraph refers to the quantum of IUC including ADC during the
intervening period i.e. till the date of signing of the addenda.
141. It, however, does not postulate that Clause 6.4.6 cannot be
given a retrospective effect in so far as it provides for a pre-estimated
reasonable amount of damages, which has been suffered by the Respondent
by acts of omissions and commissions on the part of the operator to avoid
payment of IUC including ADC.
142. Petitioner, as noticed heretobefore, had filed petitions before this
Tribunal on at least two occasions. It, neither in those proceedings nor in the
present proceeding, has questioned the validity of the said clause. It did not
say that the said provision must be given a prospective effect.
143. In Petition No. 109 of 2008, this Tribunal has clearly held that so
far as the claim of the Petitioner is concerned, so far as interpretation of
Clause 6.4.6 is concerned, the same was barred under the principles of ResJudicata and/or Order II Rule 2 of the Code of Civil Procedure.
144. Petitioner had been granted liberty on various occasions to
question the validity of the said provision, but it has failed and/or neglected Page 86 of 91
to do so. It may be noticed that it has, in this proceeding questioned the
validity of Clause 7.5.
145. The parties entered into the Interconnect Agreement with effect
from 14.11.2003. The subsequent events show that a consensus was arrived
at that the Addenda will have a retrospective effect.
We do not see any reason as to why the same is not permissible
in law.
146. Question of the validity and/or applicability of Clause 6.4.6 has
been raised only for the P-2 period. We have noticed heretobefore that in
Petition No. 109 of 2008, so far as the claim relating to P-2 period is
concerned, the same was upheld in the judgment dated 15.4.2010.
147. In view of the aforementioned categorical finding, we are of the
considered opinion that Clause 6.4.6 of the Interconnect Agreement in these
proceedings cannot be held to be invalid in law.
Re-application of Clause 6.4.6
148. It is true that interconnection arrangements and Associated
Billing Arrangements as contained in Chapter VI of the interconnect
agreement provide for the mode and manner in which the bills in terms of
Clause 6.4.6 will have to be raised.
149. Submission of Mr. Srinivasan that the bills having not been
raised against the specific subclauses of Clause 6.4.6 of the interconnect Page 87 of 91
agreement, the same are not payable. We fail to persuade ourselves to
agree to the aforementioned submissions.
150. Even in the case where a statutory authority passes an order in
terms of the provisions of statute, the source of the power is not required to
be disclosed. Validity of an order would depend on the power of the
authority in this behalf and not on mentioning of the source thereof.
151. So far as enforcement of the terms of a contract is concerned,
we are not in a position to hold that therefor specific subclause contained in
a clause was required to be referred to, failing which the amount claimed
shall not be payable at all.
The said contention of Mr. Srinivasan is rejected.
Claim for P-2 period (14.11.2004 to 26.8.2005)
152. The bills raised by the respondent were subject matter of the
judgment of this Tribunal as also the Supreme Court of India. We see no
reason as to how a different view can now be taken.
Claim of the P-3 period
153. Respondent herein raised the claim for P-3 period i.e. for the
period 27.8.2005 and 28.2.2006. Pending adjudication of the appeal
preferred by the Petitioner before the Supreme Court of India. Neither the Page 88 of 91
principal amount nor the interest accrued thereon according to Mr.
Srinivasan is payable.
154. The Hon‘ble Supreme Court of India has not passed any order of
stay. It is one thing to say that the claim of the Respondent is not legally
justified, but it is another thing to say that the same would not be payable at
all. There cannot, however, be any doubt or dispute that any order passed
in this petition is subject to any order passed by Supreme Court of India in
this behalf.
155. The main grievance of the Petitioner, however, appears to be
that the Respondent has not complied with the directions issued by this
Tribunal in its judgment dated 15.4.2010 passed in Petition No.109 of 2010.
It is said to have raised consolidated bills.
156. According to the petitioner, it had been protesting against raising
of such bills particularly with regard to the payability thereof. By way of
example it is contended that the Respondent has withdrawn a bill for a sum
of Rs.65.00 crores issued in respect of the Delhi circle and has also
withdrawn a part of the bill in respect of the Punjab circle for a sum of
Rs.7.00 crores.
157. The same in our opinion, however, would not mean that the
amount has not become payable. We are, however, of the opinion that in Page 89 of 91
regard to the exact amount payable in terms of the aforementioned bill, the
parties may reconcile their accounts so as to arrive at a correct finding.
158. Moreover the Supreme Court in its 2008 judgment held that the
quantification of the amount due from each of the parties hereto against the
other must be determined by this Tribunal.
Refund Issue
159 Mr. Srinivasan would contend that the amount paid by the
Respondent pursuant to or in furtherance of the interim orders passed by
this Tribunal, it is entitled to a huge refund. We fail to appreciate this
contention. It will depend on reconciliation of accounts between the parties
required to be carried out in terms of the order of the Tribunal.
Such a plea ought to have been established. No account has
been filed. No calculation sheet has been produced before us.
160. We, therefore, are not in a position to accede to the said
contention.
Incidental to the aforementioned question we may also consider
a submission made by Mr. Srinivasan that the Respondent herein ought to Page 90 of 91
have filed a separate petition. A party to a contract may have several
remedies, one of them being a harsher one.
161. If, however, one of the two remedies resorted to by a party to
the contract does not offend the provisions of the Constitution of India or
Section 23 of the Indian Contract Act or in any other manner held to be
wholly unreasonable, the same can be applied.
162. It is difficult to conceive as to how for each and every claim the
Respondent in stead and in place of taking recourse to its power of
disconnection of POI, must be asked to file petition to recover the amount.
Summary of findings
(1) The disconnection notice issued by the Respondent in respect of P-1
period cannot be upheld as its claim for recovery of ADC was barred under
the law of limitation.
(2) So far as the claim of the Respondent in respect of P-2 period is
concerned, the same being covered by earlier judgment of this Tribunal and
the Supreme Court of India, no relief in regard thereto can be granted in
favour of the petitioner.Page 91 of 91
However, the parties should reconcile their accounts with regard
to P-3 period.
(3) Article I contained in Schedule appended to the Limitation Act, 1963 is
not applicable in the instant case.
(4) Clause 6.4.6 of the interconnect agreement, having regard to the
prayers made by the Petitioner cannot be declared ultra vires.
(5) Keeping in view the contention raised by the learned counsel for the
Respondent that with a view to achieve `level playing field‘ Clause 7.5 of the
agreement should be read down and so read, both the parties would be
entitled to the same rate of interest subject to just exceptions, and in that
view of the matter Clause 7.5 of the interconnect agreement need not be
struck down.
163. This petition is allowed in part and to the extent mentioned
hereinbefore.
164. But in the facts and circumstances of this case, the parties shall
pay and bear their own costs.
(S.B. Sinha)
Chairperson
(P.K. Rastogi)
Member
April 19, 2012
`anu’
