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2014 Supreme(Online)(TDSAT) 45
TELECOM DISPUTES SETTLEMENT AND APPELLATE TRIBUNAL
Aftab Alam, Chairperson, Mr. Kuldip Singh, Member
Reliance Telecom Ltd. – Appellant
Versus
Union of India – Respondent
Petition No. 273 of 2012 | Petition No. 274 of 2012
For the Appellants/Petitioners: Mr. Navin Chawla, Mr. Pranav Sarthi
For the Respondents: Mr. K.P.S. Kohli, Mr. Prashant Jain, Ms. Maneesha Dhir
Licensees must verify subscribers as stipulated under the Indian Telegraph Act and cannot activate SIM cards unless requirements are met.
Headnote:(A) Indian Telegraph Act, 1885 - Section 4 - Unified Access Services License Agreement - Licensees must adequately verify subscribers and ensure compliance with security protocols. The petitioners contested penalties imposed for violations, arguing lack of opportunity and due process. (Paras 1-12)
(B) Natural Justice - The court held that failure to observe natural justice is excusable if no different conclusion could have been reached based on undisputed facts. (Para 10)
Facts of the case:
Penalties of Rs.58 lacs and Rs.9 lacs were imposed due to non-compliance with the verification procedures, stemming from the activation of pre-activated SIM cards.
Findings of Court:
Under the license agreement, penalties for non-compliance were clearly defined, justifying the imposed fines.
Issues: The core issue was whether proper verification was conducted prior to SIM card activation and adherence to guidelines.
Ratio Decidendi: The court affirmed the imposition of penalties based on the obligation to follow verification protocols as outlined in the license agreement.
Result: Petitions dismissed.
| Table of Content |
|---|
| 1. verification and compliance with licensing agreements are critical. (Para 1 , 3 , 4) |
| 2. penalties are imposed for failures in subscriber verification compliance. (Para 2 , 5 , 6 , 7 , 8 , 9) |
| 3. the principles of natural justice must be adhered to unless no different outcome is plausible. (Para 10 , 11) |
| 4. court upheld penalties based on non-compliance with verification protocols. (Para 12) |
JUDGMENT
Kuldip Singh:
In these petitions, penalties imposed by the respondent – Union of India, for violation of terms & conditions of license agreement with regard to verification of subscribers and failure to comply with clause 41.14 of the same, have been challenged.
2. Petitioners – M/s. Reliance Telecom Ltd. (Petition No. 273 of 2012) and M/s. Reliance Communications Ltd. (Petition No. 274 of 2012) have been granted Unified Access Services License (UASL) under Section 4 of the Indian Telegraph Act, 1885 for Madhya Pradesh Service area.
3. Before going into the facts of the case, we give a brief background of the customer verification process and its objective.
As per clause 41.14 [Part VI] of the UAS License Agreement, licensees are required, inter-alia, to do the following:-
(i) make a complete list of their subscribers available on their website so that the authorized Intelligence Agencies can obtain the same at any time;
(ii) Ensure adequate verification of each and every customer before enrolling it as a subscriber;
(iii) Follow the instructions issued by the licensor in this regard from time to time. Clause 41.14 of the UAS Licences reads as under :-
“The complete list of subscribers shall be made available by the LICENSEE on their website (having password controlled access), so that authorized Intelligence Agencies are able to obtain the subscriber list at any time, as per their convenience with the help of the password. The list should be updated on regular basis. Hard copy as and when required by security agencies shall also be furnished. The LICENSEE shall ensure adequate verification of each and every customer before enrolling him as a subscriber; instructions issued by the licensor in this regard from time to time shall be scrupulously followed. The SIM Card used in the User terminal shall be registered against each subscriber for his bonafide use. The LICENSEE shall make it clear to the subscriber that the SIM Card used in the user terminal against him is non-transferable and that he alone will be responsible for proper and bonafide personal use of the service.”
On 31.7.2008, the UAS License was amended to incorporate the following clause :-
”The Licensor shall have the right to direct the Licensee to warn, penalize or terminate the franchisee or agent or distributor or servant, after considering any report of conduct or antecedents detrimental to the security of the nation. The decision of the Licensor in this regard shall be final and binding and in any case the Licensee shall bear all liabilities in the matter and keep the Licensor indemnified for all claims, cost, charges or damages in this respect.”
4. Clause 41.14 of the License Agreement is a part of security considerations.
The objective of this clause is that the identity as well as address details of any subscriber subscribing to the services of the licensee company should be readily available in case of need. We may note that in case of a fixed phone service, the premises where the phone is installed is well known in contrast to mobile service where the subscriber can be anywhere. It is more so in case of prepaid service for which the phone bill is not required to be issued to the subscriber and the subscriber can avail the services by purchasing prepaid vouchers and charging his account. In case of any need by a security agency, the details of such subscribers must be readily and correctly available. Since the matter may involve the security of the country, the importance of these details cannot be over- emphasized.
5. Department of Teleco
