CELLULAR OPERATORS ASSOCIATION OF INDIA Vs DEPARTMENT OF TELECOMMUNICATIONS

S.B. Sinha

By an order dated 18.5.2011, an interim order was passed in favour of the petitioners on the following conditions :- “(i) The operators shall pay the penalty at the same rate which they have been paying so long immediately before 3.2.2011. (ii) In the event the operators are intimated about the suspicious identity of any of the customers, his connection shall be withdrawn.

(iii) In the event the DoT issues any instructions in this behalf the compliance thereof shall be intimated to DoT within three days thereafter.

(iv) For the aforementioned purpose even a prima facie finding of the DoT shall sub-serve the purpose.”

Pursuant to the leave granted in terms of the said order, the respondent has filed a short affidavit. A rejoinder thereto has been filed by the respondent herein.

Ms.Manisha Dhir, learned counsel appearing on behalf of respondent would contend:- (a) Petitioners having not questioned the validity of the circular letter dated 24.12.2008 and the impugned order dated 3.2.2011 being a mere reiteration of the earlier circular, no case has been made out for passing an interim order.

(b) The petitioners have not been taking into consideration the security aspect of the matter which is of utmost importance to the country wherefor the impugned circular letters have been issued to provide for a deterrent punishment.

(c) Even different operators have been complying with the said circular letters differently and in that view of the matter too, the interim order passed by this Tribunal should be recalled.

(d) In any event, as the matter is pending before the Supreme Court of India, this Tribunal should not interfere with the impugned circular.

Dr.A.M. Singhvi, learned Senior Counsel appearing on behalf of petitioner, on the other hand, would submit:- (i) The question which arises for consideration before this Tribunal relates to the monetary aspect of the matter and not the security aspect and in that view of the matter having regard to the fact that hearing of this petition has been expedited, the interim order needs no modification.

(ii) The petitioners in the petition have raised many important questions. They have produced various documents to show that it is not possible for them to comply with all the directions and in particular some of the unacceptable ones as would appear from the DoT’s circular letter dated 1.9.2008 and 24.10.2008; from a perusal whereof it would appear the “TERM Cell” intends one operator to verify/audit other service providers.

(iii) In fact the DoT itself has been violating the security provisions insofar as on the one hand it has written letters/ e-mails to the service providers to ensure that information may be transmitted to Law Enforcement Agencies and officers of Government of India on e-mail with e-mail ID of NIC.IN or ERNET or with their own corporate domain servers housed in India, it had itself been sending e-mails without keeping the security aspect on shelf even in sensational crime cases. The E-mail I.D. used is dirvtmd@gmail.com whose server is located abroad. Reference in this behalf has been made to the e-mail dated 4.2.2011, sent by one Mr.P.K. Singh and e-mail dated 23.5.2011 sent by the Director (VTM) Jharkhand to Mr.Rajiv Katiyar of AIRTEL.

The principal question which arises for consideration in the petition is the interpretation of the circular letter dated 24.12.2008 vis-à-vis the circular letter dated 3.2.2011.

It is true that all possible steps are required to be taken for enforcing the security of the country.

The question, which, however, arises for consideration is as to whether by reason of the impugned order dated 3.2.2011, in the name of a clarification, a different interpretation is sought to be effected or not.

For the aforementioned purpose, we would notice paras 2 and 4 of the aforementioned letter dated 24.12.2008 :- “… In spite of the above provisions/ instructions regarding subscriber verification, it has been observed from the report of TERM Cells that the service providers are not complying with the requirement of subscriber verification fully. Accordingly, the matter has been reviewed and it has been decided to introduce a scheme of penalty for subscriber verification failure cases at graded scales w.e.f 1st April, 2009, so that it works as a deterrent. The graded scales are based on correct subscriber verification percentage i.e. correct subscriber verification percentage of a service provider in any service area will be ascertained and based on this percentage, a financial penalty of corresponding amount for each detected case of unverified subscriber shall be levied on account of violation in detected case of unverified subscriber shall be levied on account of violation in respect of subscriber verification failures from the service provider in that service area. According to the said scheme, the correct subscriber verification percentage vis-à-vis financial penalty per unverified subscriber shall be as per table below :

Correct subscriber Amount of financial verification penalty per unverified percentage in a subscriber service area Above 95% Rs.1000/- 90%-95% Rs.5000/- 85%-90% Rs.10000/- 80%-85% Rs.20000/- Below 80% Rs.50000/- xxx

The present provision of financial penalty @ Rs.1000/= per unverified subscriber shall continue till 31st March, 2009.”

The petitioners have made submissions that they have been paying the penalty levied on them on graded scales. The words “graded scales” are to be ascertained and “would base on this percentage” and “financial penalty of corresponding amount for each detected case on “verified subscriber”, assume importance as in terms of the table appended to para 2 of the said circular letter dated 24.12.2008, in a case where the correct verification was to the extent of 91% the penalty amount used to be deposited @ Rs.1000/- for 5% and for the rest 4% @ Rs.5000/- per unverified subscriber. What would be the correct interpretation of the said provisions is required to be considered at the final hearing.

In terms of the aforementioned circular dated 3.2.2011, the amount of Rs.5000/- will have to be paid for the entire 9% of the detected case of unverified subscriber.

Prima facie, we are of the opinion that the term “graded scales” have a definite connotation, particularly, in view of the fact that the percentage sofar as verification of a subscriber is concerned is required to be ascertained and “based on the percentage” referred to therein, so as to enable the respondents to `impose financial penalty of corresponding amount’.

If that be so, the question of each service provider paying penalty at different rates will not arise. The members of the Petitioners Association and in particular the service providers before us have to comply therewith and only in the event any deviation or departure is made therefrom, an appropriate action may be taken by DoT. In this petition we are only concerned with the monetary aspect of the matter.

However, in our interim order dated 18.5.2011, security aspect of the matter has also been taken into consideration.

We may place on record the statement made at Bar that the members of the petitioners Associations shall disconnect the connection of any person as may be proposed by DoT in certain cases. Such disconnection may also be effected on ‘persons’ by the members of the petitioners Associations if DoT issues any direction in that regard. It is stated that for the said purpose the petitioners shall also take the risk of facing litigations at the instance of such affected persons, if any.

In this petition as has been pointed out by Dr.Singhvi, the penalty issue vis-à-vis the subscriber verification issue is not before the Hon’ble Supreme Court of India and in that view of the matter subject to any order which may be passed by it, we are of the opinion that disputes between the parties being between a licensor and licensee, this Tribunal has the requisite jurisdiction to determine the same.

Although, a lot has been argued on the laxity on the part of the respondent itself so far as the security aspect is concerned as also its unreasonable conduct in issuing certain directions keeping in view the fact the hearing of this petition has been directed to be expedited, we need not go into the aforementioned questions.

The petitioners, in our opinion, have made out a prima facie case for grant of an order of injunction. In the event this petition is dismissed, the respondents can be compensated on monetary terms. Even otherwise this Tribunal in terms of its order dated 18.5.2011 as also this order have issued certain directions which are only operate to the benefit of respondent DoT only.

For the aforementioned reasons, the interim order dated 18.5.2011 is made absolute. The petitioners are directed to pay the amount in accordance with the circular dated 24.12.2008, if not already paid. This order is subject to the final order of this Tribunal.

The petitioners have filed MA No.160/2011 wherein it has prayed for withdrawing from the records two documents stated to have been wrongly placed.

Petitioners have prayed for grant of leave under Order II Rule 2 CPC being M.A. No.159/2011. Let both the matters appear for hearing on 4.7.2011. Reply to the said MAs, if any, be filed in the meantime.

(S.B. Sinha) Chairperson (G.D. Gaiha) Member (P.K. Rastogi) Member June 3, 2011 `ns’