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2016 Supreme(SC) 733
SUPREME COURT OF INDIA
RANJAN GOGOI, PRAFULLA C. PANT, JJ.
Bharat Sanchar Nigam Limited – Appellant
Versus
Vodafone Essar Gujarat Limited – Respondent
Civil Appeal Nos. 8107, 8108, 8269 of 2010 & 1105 of 2013
Decided On : 23-09-2016
IMPORTANT POINTS
An executive authority cannot act in violation of prohibitory direction issued to it by a competent quasi judicial forum.
Clause 6.4.6 of Interconnect Agreement is not a penal clause.
Demand cannot be raised on the basis of an addendum to an agreement, which is prospective, for the period prior to its coming into effect.
Headnote:(a) Law of contract – Interconnect Agreement – Could be modified upon direction from the licensor or any other competent authority – Circular dated 28.01.2004 – Not pursuant to any direction from the licensor but unilaterally issued – Not becoming part of the Interconnect Agreement. (Para 7)
(b) Telecommunications – BSNL claiming that Vodafone had landed long distance calls on its networks – Not showing as to how Vodafone, even by tampering with its network, could wrongly receive and route international calls when it did not have an International Long Distance Operator Licence – Claim of BSNL not tenable. (Para 8, 9)
(c) Telecommunication – TRAI forbidding BSNL from accepting calls without CLI – BSNL accepting calls without CLI and charging at the highest rate – Violation of TRAI’s direction. (Para 14)
(d) Original Interconnect Agreement – Clause 6.4.6 – Prospective – Coming into effect from 19.07.2005 – BSNL demanding charges for the period upto June 2005 – TRAI rejecting BSNL claim also in view of Siemens’ certificate – Demand not sustainable. (Para 22)
(e) Telecommunication – BSNL raising demand on respondent vide bill dated 23.07.2008 for the period May, 2003 to January, 2004 – Cl. 6.4.6 of Addenda to Interconnect Agreement being prospective and taking effect from 01.7.2005, this bill would be inadmissible – Second bill dated 30.06.2009 for the period February, 2004 to November, 2004 – A consolidated bill for non-CLI calls as well as trunk group violation – This being prior to Cl. 6.4.6 of addenda to Interconnect Agreement dated 21.07.2004, would be admissible. (Para 24)
(f) Telecommunication – Clause 6.4.6 of Interconnect Agreement – Not a penal clause. (Para 31)
Facts of the case:
In the year 1996 a license was granted to one M/s. Fascel Limited (predecessor-in-interest of the respondent Vodafone). As the successor-in-interest of Fascel Limited, the respondent entered into an Interconnect Agreement with BSNL. Under the aforesaid Agreement, the respondent was liable to pay access charges to BSNL for calls originating from its network and terminating in the BSNL’s network. Under the Agreement there was an obligation on the part of the respondent to transmit the authentic CLI for the purpose of levy of charges in terms of Agreement.
According to the appellant BSNL, monitoring of the incoming traffic from Vodafone’s network from various exchanges at Vododara Trunk Automatic Exchange revealed that many incoming calls were actually international calls which were routed on the BSNL’s network as national calls. According to the appellant this was done by Vodafone by tampering with the CLI and thereby violating the terms and conditions of the Interconnect Agreement.
On the said facts relying on the circular dated 28.01.2004 particularly clause 11 thereof, the appellant raised a bill of Rs.3,54,94,916/-on Vodafone at the rate of Rs.5.65 per minute for the period between July, 2004 to September, 2004.
BSNL issued a disconnection notice dated 5.03.2009 prompting the respondent to move the Tribunal challenging the demand raised by the BSNL which was allowed.
Finding of the Court:
Demand cannot be raised on the basis of a circular which is prospective for period prior to its coming into effect.
Result: Civil Appeal No. 8107 of 2010 allowed. Civil Appeal No. 8108 of 2010 dismissed. Civil Appeal No. 1105 of 2013 allowed. Civil Appeal No. 8269 of 2010 partly allowed.
JUDGMENT :
Ranjan Gogoi, J.
Civil Appeal No. 8107 of 2010
1. The challenge in this appeal is to a judgment dated 11.02.2010 passed by the Telecom Disputes Settlement and Appellate Tribunal, New Delhi (hereinafter referred to as the ‘Tribunal’) by which the demand raised by the appellant BSNL on the respondent, Vodafone Essar Gujarat Limited, for alleged tampering with the Caller Line Identification (CLI) has been set aside by the learned Tribunal.
2. The facts in brief may be noticed at the outset. In the year 1996 the competent authority granted a license to one M/s. Fascel Limited (predecessor-in-interest of the respondent Vodafone) under Section 4(1) of the Telegraph Act, 1885. As the successor-in-interest of Fascel Limited, the respondent entered into an Interconnect Agreement with BSNL for the purpose of interconnecting its network with the BSNL. Under the aforesaid Agreement, the respondent was liable to pay access charges to BSNL for calls originating from its network and terminating in the BSNL’s network. Under the Agreement there was an obligation on the part of the respondent to transmit the authentic CLI for the purpose of levy of charges in terms of Agreement. CLI essentially is the information generated by the network which identifies and forwards the calling number. It must be mentioned, at this stage, that it is during this period of time that the telecommunication sector was undergoing revolutionary changes and witnessing innovations to deal with which both the Department of Telecommunication (DoT) and the regulatory body i.e. Telecom Regulatory Authority of India (TRAI) had issued a series of advisories and regulatory measures some of which are being indicated hereinafter.
3. To the issues arising in the present case would be relevant the circular dated 23.06.2003 issued by the DoT specifying that CLI cannot be tampered in any circumstances. By the same circular the DoT also gave directions to service providers on how to prevent tampering of CLI. The Telecom Regulatory Authority of India (TRAI) had issued a directive dated 24.11.2003 to BSNL not to tamper with CLI of any call; not to offer calls without CLI and also not to accept any calls without CLI. This was followed by a circular dated 20.01.2004 reiterating the above directions. In exercise of powers under Section 36 of the TRAI Act, 1997 the Regulatory Body also made a set of Regulations known as the Interconnect Usage Charge Regulations, 2003 (IUC Regulations). In terms of the IUC Regulations, the service providers were to raise bills on the basis of Call Detail Records (CDR). Under the CDR based platform in place of the earlier prevailing system of metered calls in which call duration in number of minutes was multiplied by the pulse rate per minute applicable for the trunk group, under the new regime, reliance was on the CLI to identify the type of call and apply the appropriate rates/charges. The BSNL by circular dated 28.01.2004 implemented the aforesaid circular dated 23.06.2003 of the DOT alongwith IUC the Regulations of 2003. Clause 11 of the aforesaid circular which states that calls received without CLI by BSNL would be charged at the highest slab i.e. at the rate of ISD calls, being relevant to the issues arising, may be noticed below :-
“The CLI based barring facility shall be activated at the Pols 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 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 month/billing cycle shall be charged at the rates applicable for IUC of incoming ISD Calls.”
4. According to the appellant B
