RELIANCE TELECOM LTD Vs IDEA CELLULAR LTD.

The respondent vide its letter dated 14.11.2012 has demanded an amount of Rs. 59,644,086/- for SMS termination charges for the period 1.7.2012 to 31.10.2012. Vide its letter dated 28.11.2012, it further called upon the petitioner to pay the said sum latest by 6th

December 2012 and execute an agreement for SMS termination, in case the petitioner wish to continue availing SMS termination facility, latest by 6th December 2012. Again, vide its letter dated 3.12.2012, the respondent informed the petitioner that in the event of failure to make payment of the said amount and / or execute the agreement for SMS termination, the SMS termination facility shall be withdrawn by 7th December 2012.

2. The petitioner has challenged these letters of the respondent. It also prayed for an interim relief in terms of :

(a) Staying the operation of the impugned letters dated 14.11.2012, 28.11.2012 and 03.12.2012 during the pending of the present case, directing the respondent to continue with and abide by the existing agreements/ arrangement of bill and keep between the parties. (b) Directing the respondent not to take any coercive action against the petitioner including discontinuation of the SMS termination service with the petitioner’s networks in any service area, pending adjudication of the present case.

3. Mr. Ramji Srinivasan, learned senior counsel appeared on behalf of the petitioner and has pointed out that in 11 circles, namely, Himachal Pradesh, Rajasthan and UP(East), Bihar, Mumbai, Orissa, Tamil Nadu, Chennai, Kolkata, Jammu and Kashmir and West Bengal, there exists a clause 1(iii) of the Schedule 1 to the Interconnect Agreement specifically mentioning that no termination charge for SMS originated from either party’s network and terminated on other party’s network shall be payable.

In 9 circles, there was no clause relating to the SMS termination charges but the parties were allowing the SMS services on each other’s network without collecting or paying any SMS termination charges to each other.

In 5 circles Gujarat, Maharashtra, Andhra Pradesh, Delhi and Madhya Pradesh, out of nine circles mentioned above, interconnection agreement was amended on 26.10.2003 which provided the SMS termination charges at the rate of 30 p /40 p. Even in these circles, no amount was ever paid or received by any party. Mr. Ramji Srinivasan contends that the existing status of payment of SMS termination charges by any party should not be disturbed at this stage by way of an interim order.

4. Mr. Gopal Jain, the learned counsel appearing on behalf the respondent has stated that the same party in Petition No. 823 of 2012 on 12.11.2012 agreed to pay @ 10 p to Vodafone as an interim measure.

He further pointed out that para 28 and 36 of the judgment of this Tribunal in Petition No. 130 of 2012 dated 24.09.2012, which are reproduced below:

“28. We have considered the meaning of „transparent‟, „reciprocal‟ and „non-discriminatory‟ in the judgment dated 30.08.2012 in Petition No. 430 of 2011. We have held that the transparency does not mean that it has to be cost based. Similarly, the non-discrimination means the application of the same principle among the persons similarly situated and the word „reciprocal‟ does not mean both the operators must agree but it means that the parties to the contractual should charge each other. 36. It is seen that no agreement has been executed between the parties for interconnection charges for SMS. The SMS services between the parties are based on unwritten understanding. If one party doest not want to continue the arrangement, without charges, we cannot force that party to continue with the arrangement. Therefore, in the present case, it is for the respondent to terminate the existing arrangement, if it so wishes. Applying the aforementioned principle, the standard for determining the amount of compensation by way of restitution would be that the Respondent shall be entitled to a reasonable amount. Such a reasonable amount as has been noticed by the learned Member should be priced at 10 paise per SMS, being the prevalent market rate.”

In view of the above findings of this Tribunal, Mr. Jain contends that the respondent is at liberty to terminate the services of the petitioner as the petitioner is not willing to sign the SMS agreement.

5. Mr. Ramji Srinivasan pointed out that although there was termination clause in earlier agreements in 2003 (clause 20.1 at page no. 212) wherein it was provided that any party may terminate the agreement by sending a 90 days notice to the other party, the clause was deleted in agreements executed after 2006 and is substituted by :

“20.1 This agreement shall continue for the period in this Agreement unless either party ceases to hold a license under section 4 of the Indian Telegraph Act. In which case this Agreement shall immediately be terminated.”

The agreement may be terminated by party in case of only certain breach of this agreement or otherwise as provided under clause 20.2. 6. It is indisputed that there is a written agreement between the parties in respect of 15 circles namely, Himachal Pradesh, Rajasthan and U.P.(East), Bihar, Mumbai, Orissa, Tamil Nadu, Chennai, Kolkata, Jammu and Kashmir and West Bengal, Gujarat, Maharashtra, Andhra

Pradesh, Delhi and Madhya Pradesh, wherein it is provided that no termination charge for SMS originating from either party’s network and terminated on other party’s network shall be payable. Again the parties do not have right to terminate the agreement except in the circumstances as provided in the agreement itself. The agreement provides that the termination can be done only in case of breach of certain conditions as provided in clause 20.2. The respondent has not made out any case of any breach of contract.

7. In the circumstances, prima facie, I am of the view that parties do not have right to change the terms of the agreement unilaterally. Both the parties are bound by the terms and conditions of the contract. Further, I am of the view the clause 1(iii) relating to interconnection usage charge at Schedule 1 of the interconnect agreement does not seems to violate the Interconnection Usage Charges Regulation, 2009.

Therefore, it is directed that the respondent shall not disconnect the signals of the petitioner in respect of 15 circles aforementioned and no termination charge will be payable by any party to other party during pendency of these petitions.

8. In respect of other circles where there is no agreement for SMS interconnection usage charges or there is an agreement for payment of certain amount and no amount is being paid by any party, I am of the view that the end of justice will be sub-served, if similar direction as in Petition No. 843 of 2012 is issued.

Accordingly, it is directed that in respect of circles namely, Kerala, U.P.(West), Haryana, Punjab, Karnataka, Andhra Pradesh, Delhi Madhya Pradesh, Maharashtra the SMS services of the petitioner shall not be disconnected and wherever disconnection has taken place, the same will be restored immediately subject to the condition that petitioner will start paying 50% of the amount demanded by the respondent @ 10 paise per SMS on net inflow of traffic basis. This amount will be calculated and paid with effect from the date of filing of this petition.

9. This order is without prejudice to the rights and contentions of the parties and subject to any other or further order passed by this Tribunal.

10. Reply may be filed within three weeks. Rejoinder thereto, if any, may be filed within two weeks thereafter.

11. Put up the matter for framing of issues on 5.2.2013.

……………….. (P.K.Rastogi) Member /NC/