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2015 Supreme(Online)(TDSAT) 41
TELECOM DISPUTES SETTLEMENT AND APPELLATE TRIBUNAL
Aftab Alam, CJ, Kuldip Singh, J, B. Ipain Bihari Srivastava, J
Reliance Telecom Limited – Appellant
Versus
Union of India – Respondent
Petition No.24 of 2013
For the Appellants/Petitioners:Mr. Navin Chawla, Advocate, Mr. Anurup Narula, Advocate
For the Respondents:Mr. S.S. Shamshery, Advocate, Ms. Aparajita Sharma, Advocate
The tribunal established that procedural delays in submitting Customer Application Forms should not automatically result in penalties, emphasizing the importance of reviewing the merits of submissions when valid reasons are provided.
Headnote:(A) Telecom Regulatory Authority of India Act, 1997 - Clause 41.14 of the License Agreement - Penalty for breach of norms for Customer Application Forms - Penalties amounting to Rs.1,09,20,000/- imposed on service provider for non-compliance due to operational issues and consolidation of data management. Court emphasizes on the objective of CAF verification linked to national security and suggests a more lenient approach to procedural lapses. (Paras 1, 2, 13, 14)
(B) National security consideration - The Tribunal asserts that delayed submission of CAFs should be examined irrespective of procedural timelines if valid reasons are presented. Rigid adherence to timelines may not serve security goals and could lead to unjust penalties. (Paras 26, 27)
Facts of the case:
The petitioner sought to challenge penalties imposed for non-submission of Customer Application Forms during an operational transition. The Tribunal noted that reasons given for the delays were substantiated by inspection and previous compliance history.
Findings of Court:
The Tribunal holds that the service provider must be allowed to submit the CAf and that penalties can be proportionate to procedural lapses rather than substantive violations.
Issues: The main issue addressed was whether penalties should apply rigidly despite valid reasons for delays in submitting CAFs.
Ratio Decidendi: The court ruled that if valid circumstances prevent timely submission of CAFs, the TERM Cell should review submissions on their merits, subjecting to lower penalties for procedural lapses. The goal remains ensuring national security rather than generating revenue.
Result: The demands for penalty are set aside; however, a procedural lapse penalty is directed with a conditional provision for submitting late CAFs.
ORDER
By Aftab Alam, Chairperson –
Reliance Telecom Ltd. is a telecom service provider. It has filed this petition seeking to challenge the imposition of penalty of Rs.1,09,20,000/- by the TERM Cell, Madhya Pradesh for breach of the norms for verification of the Customer Application Forms (CAFs). The penalties pertain to the audit for the months of July, August, September and October, 2012. The TERM Cell asked the petitioner to submit certain number of CAFs as samples for audit for those months. The petitioner was unable to submit a large number of CAFs from among the samples asked for from it. Resultantly, the TERM Cell imposed penalties, presuming all the CAFs that were not submitted before it as non-compliant with the prescribed guidelines and hence, liable to attract penalty. Given below is a table showing the number of CAFs demanded by the TERM Cell in each of the months in question, the number of CAFs which the petitioner was unable to submit and the amounts of penalty imposed, holding those CAFs to be non-compliant with the guidelines.
| Sr. No. | Period | Total number of CAFs requisitioned by TERM Cell | Number of CAFs which the petitioner was unable to submit | Penalty |
| 1. | July 2012 | 920 | 648 | 33,85,000 |
| 2. | August 2012 | 731 | 401 | 20,71,000 |
| 3. | September 2012 | 823 | 301 | 26,95,000 |
| 4 | October 2012 | 887 | 452 | 39,69,000 |
It needs to be clarified here that even among the CAFs that the petitioner submitted before the authorities, a few were found non-compliant with the verification guidelines and penalties were imposed in respect of those CAFs as well. The number of such CAFs, however, is quite small and those CAFs are not the subject matter of the present petition which is confined only in respect of CAFs that the petitioner was unable to produce before the TERM Cell as shown in the above table.
From the materials on record, it is not clear whether or not the petitioner intimated the TERM Cell the reason for its inability to submit the CAFs within time. However, after the issuance of demand notices by the TERM Cell (vide letters dated 26.12.2012), the petitioner made representations before the DDG(TERM), Bhopal on 28 December 2012. In its representations it explained that all the (mobile phone) numbers (relating to the CAFs not submitted before the TERM Cell) were activated only after procuring all necessary documents as per the guidelines issued by the DoT from time to time. It was further stated in the representation that “due to shifting and consolidation of Warehouse from Chattisgarh to Bhopal, we could not retrieve the CAFs within timelines set by your good office. These CAFs were always with us and now ready to be submitted to your office”. It was further stated in the representation that the transfer of CAFs to the new warehouse was completed successfully and from November 2012 the petitioner was able to submit all the CAFs asked for by the TERM Cell.
The representations were rejected by the DDG(TERM Cell) by four separate, though identical orders, passed on 16 January 2013. The gist of the orders in regard to the non-submitted CAFs is that the CAF audit is a time bound exercise and the CAFs in question could no longer be taken into consideration as the petitioner failed to submit them in time.
The petitioner then came to the Tribunal in this petition which was filed on 22 January 2013. In this petition the reason for its inability to submit the CAFs in question in time is stated in greater detail. In paragraph 3 of the petition, it is stated as under:
“3. It is pertinent to mention that during May 2012, Petitioner initiated consolidation of CAF vendors and warehouse from Chattisgarh to Bhopal. This involved transportation of approximately 25 Lacs CAFs. In the course of transportation, the boxes carrying CAFs got damaged resulting thereby in severe disturbance in indexation of those CAFs. Due to aforesaid disturbed indexation, the Petitioner was unable to locate the CAFs for the relevant period as sought by Respondent DOT and as such Petitioner due to such unforeseen circum
