Different rates to private Telecom Service Providers & that to BSNL/MTNL, Held to be violative of Article 14 : Supreme Court

The Supreme Court on Friday dismissed an appeal filed by 9 Private GSM Cellular Companies licenced in India (namely Aircel, BMCL, Bharti Cellular, Idea Cellular, Hutchinson Essar, Reliance Telecom & their allies) & their association against TDSAT, Delhi's judgment affirming that the appellant service providers discriminated between subscribers of the same class; one on the ground that the call ended with the private parties and another on the ground that the call ended with BSNL/MTNL. The appellants had also preferred a writ petition in the High Court during pendency of the matter before tribunal for interim relief which had disposed it off directing TDSAT that no coercive actions till the final judgment by TDSAT should be taken.The judgment authored by a bench of Justices S.J.Mukhopadhyaya & P.C.Pant held that the classification of subscribers into two categories on the basis of calls made by them from one private network to another and from a private network to BSNL/MTNL network is violative of Art 14 of the Constitution of India & does not sustain the judicial scrutiny of reasonable classification test laid down in State of West Bengal v. Anwar Ali Sarkar & Anr.Brief factsWith the advent of telecom technology in the Country, for grant of telecom licences, India was divided into four metro service areas of Delhi, Mumbai, Kolkata and Chennai and various other telecom circles which were roughly contiguous to the State of India. In the first phase, licences were granted for the four metro service areas in 1994 and thereafter in the Circles/States in 1995 defining the geographical limits within which the licensee may operate and offer the services. For Mumbai, Chennai, Kolkata and Delhi, in the aforesaid manner, separate licences were issued by the Department of Telecommunication (DoT). Separate and distinct licences were issued for the States of Maharashtra, Tamil Nadu and West Bengal excluding the three metropolitan cities of Mumbai, Chennai and Kolkata respectively for which licences were given to MTNL. The state of Uttar Pradesh was divided into two Telecom circles, i.e., U.P. (East) and U.P.(West) with separate licences for both.TRAI (Telecom Regulatory Authority of India, Resp 1) laid down Inter Connection Usage Charges (IUC) with respect to the changing for the use of network elements of other operators. These charges for inter-circle calls are different from those for intra-circle calls. On 20/5/2005, the Government of India notified that the inter-service area connectivity between access providers within - 1.) Mumbai Metro and Maharasthra Telecom Circle,2.) Chennai Metro and Tamil Nadu Telecom Circle,3.) Kolkata Metro and West Bengal Telecom Circle &4.) U.P.(East) and U.P.(West) Telecom Circleservice areas respectively, is permitted subject to condition that the access provider will operate within the existing licensed service area and shall not be permitted to create infrastructure outside its licensed service area for the purpose of inter-service area connectivity. With the above arrangement, calls within a State in the above mentioned four states were treated as intra-service area calls for the purposes of routing as well as ADC. The final result of this notification was that the metros were merged with the respective State circles and the calls from metros to the remaining areas of the respective States and in case of U.P.(East) and U.P.(West) circles from one to the other, were treated as intra-circle calls. TRAI further issued another directive dated 27/2/2006 wherein appellants in these four States were directed to discontinue differential tariffs levied for calls terminating in the network of BSNL/MTNL as compared to calls terminating in the network of other private operators in another, citing it to be discriminatory and inconsistent with the amended licence condition notified by the DoT on 20/5/2005. The appellants complied with the directive dated 27/2/2006 and submitted a compliance report to the Authority. Subsequently, by its directive dated 22/3/2007, TRAI directed the appellants to assess the total excess amount charged from the subscribers; keep the entire amount in a separate Bank Account and intimate to it the names of the Banks in which such amount has been kept. After receipt of this notice the appellants challenged the directive dated 27/2/2006 on the ground that it was discriminatory and inconsistent with the amended licence conditions notified by the DoT on 20/5/2005.TDSATThe main plea raised by the appellants justifying the differential half of calls from private operator to another private operator vis-à-vis calls from private operator to BSNL network was that direct connectivity could be achieved between networks of private operators but it could not be achieved between private operators and BSNL network. After hearing the parties, the Tribunal passed the impugned order dismissing the appeal holding that the appellants were charging higher tariff for calls made from their...

Different rates to private Telecom Service Providers & that to BSNL/MTNL, Held to be violative of Article 14 : Supreme Court

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