Dispute Settlement under TRAI

Introduction:

Telecom Regulatory Authority of India under the TRAI Act was formulated to bring about regulation in the telecom sector and adjudicate disputes and hear appeals to protect the interests of not only service providers but also the users. The TRAI Act was revised on 24 January 2000, which led to the formation of the Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to assume responsibility for the adjudicatory and disputes functions from TRAI. TDSAT was established primarily to adjudicate over disagreements or disputes that arose between a service provider and users, a licensor and a licensee, or between service providers. TDSAT’s responsibility included hearing and disposing of appeals against any direction, decision, or order of TRAI.

History

The advent of private service providers resulted in the realization that there was a growing need to introduce a regulatory body. The creation of the Telecom Regulatory Authority of India began when cellular licenses were allowed under the Telecom Policy, 1994.  The Telecom Regulatory Authority of India (TRAI) was established on 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997 u/s 3 in an effort to regulate telecom services. This also included any change in tariffs which were earlier conferred on the Central Government.

Previously, TRAI had the power to exercise and adjudicate over any disputes that occurred in the telecommunication sector including technical compatibility and interconnection along with revenue sharing arrangement between the service providers and the quality of telecom services and consumer’s interests. But the TRAI’s adjudicatory powers were questioned in Delhi High Court by stating that the TRAI did not have the jurisdiction to issue directions to the Department of Telecom which was a Licensor in this case. The Delhi High Court asserted that TRAI had no adjudicatory powers and could not issue directions to the Department of Telecom. Alternately, there was no independent dispute settlement system to settle disputes between the licensor and the licensee. In 2000, the TRAI Act of 1997 was thus amended and further bifurcated into two separate bodies- the TRAI, which was conferred with recommendatory and regulatory functions whereas the Telecom Dispute Settlement and Appellate Tribunal (TDSAT)was conferred with the power to settle disputes.

Constitution and Functions of TRAI

The body of TRAI comprises of a Chairperson and not more than 4 members out of which half of them work full time and part-time respectively. The Chairman ought to be a sitting or retired judge of any High Court and the members of this body should be well-known and have considerable knowledge and experience in the telecom industry, business, accounting, law, management, and consumer issues.

The functions of TRAI include making recommendations for the introduction of any new service provider, provide terms and conditions of the license to a service provider, ensure compliance, effective management of spectrum, state the quality of service and standard that service providers must adhere to, and conduct frequent surveys of services provided by the service providers to protect consumer’s interests and report the rates at which telecom services are provided to users within India and outside India under this Act.

The TRAI Act promotes the development of the telecom sector. Additionally, TRAI is also required to make recommendations to the Central Government u/s 14A of the Act. While their recommendations are not binding upon the Central Government, nevertheless they must at least be assessed or evaluated for the sake of consumers and service providers. The Central Government must mandatorily ask for the recommendations from the TRAI regarding the need for new service providers and the prerequisites of any license that is to be granted to a service provider. Within 60 days from the date of request of recommendation, the TRAI is obligated to put forth the same. Similarly, before making any suggestions, the TRAI has the authority to ask for essential documentation or information from the Central Government and they should receive a reply within 7 days from the request.

The Central Government can also send the recommendations back to the TRAI if they need any more information or changes or find it unsatisfactory. The TRAI has the authority to provide the service rates in and outside India to the official gazette. The Act also stipulates that the TRAI should ensure maximum transparency when exercising its power and functions. As per Section 12, the TRAI can call for information concerning the function/working of authorities, and u/s 13, it can issue directions.

The Telecom Dispute Settlement and Appellate Tribunal (TDSAT)

There had been a growing requirement to formulate a policy of liberalization in India which would help the Indian Telecom sector to flourish. To achieve this goal, the government gradually allowed the entry of various private sectors into the telecom equipment manufacturing, radio paging, Value-added services, and cellular mobile services. Subsequently, the Vajpayee government constituted the Telecom Dispute Settlement and Appellate Tribunal (hereinafter referred to as “TDSAT”) that came into existence on 29^th May 2000 after the amendment of the TRAI Act.

Constitution

The TDSAT comprises of a Chairman and 2 members appointed by the Central Government u/s 14B of the Act. The Chairman should be or must have been a judge in the Supreme Court or the Chief Justice of any High Court. Whereas the members must have held the post of secretary to the Government of India or any equivalent post of Secretary to the Government for not less than 2 years and must be well-versed and knowledgeable in the field of technology, telecommunication, industry, commerce, or administration. The Chairperson can occupy the position until he attains the age of 75 or completes 3 years in office, whichever is earlier. Similarly, the members can occupy the position until they attain the age of 65 years or complete 3 years in office, whichever is earlier.

Powers

TDSAT was established on u/s 14 of the Act to adjudicate and settle the disputes and deal with the appeals for the sake of service providers and users. Broadcasting and cable services were also added to the scope of the TRAI Act in January 2004. After the provisions under Finance Act, 2017 in the telecom sector took effect, the TDSAT’s jurisdiction were inclusive of the matters which were already presented to the Cyber Appellate Tribunal and Airport Economic Regulatory Authority Appellate Tribunal.

The cases filed before the Appellate Tribunal relate to interconnection, challenging the license fee by the licensor, wrongful levy and charge of royalty and license fee for frequency allocation, call blocking by a group of service providers, default traffic disputes, tariff challenges decided by TRAI, disputes between broadcasters and so on. The Tribunal can exercise its jurisdiction over Telecom, Broadcasting, Information Technology, and Airport tariff affairs under the TRAI Act of 1997, Information Technology Act of 2000, and the Airport Economic Regulatory Authority of India Act of 2008 respectively. The Tribunal exercises original and appellate jurisdiction for the above matters but in cyber-related cases, the Tribunal exercises only appellate jurisdiction. Nevertheless, the Tribunal cannot adjudicate on issues pertaining to the anti-competitive trade practices or any individual consumer disputes or disputes u/s 7B of Indian Telegraph Act,1885.

Process of Registering a Dispute

The procedure as well as powers of the TDSAT has been laid down u/s 16 of the Act. While the TDSAT has the same powers as vested in a Civil Court under Code of Civil Procedure, 1908 they are not bound by the procedure mandated under the Civil Code as it can follow its process in the best interest of justice. Moreover, any final order passed by the Tribunal can be appealed directly to the Supreme Court u/s 18 of the TRAI Act. But interlocutory order of the Appellate Tribunal cannot be appealed to the Supreme Court. Similarly, if an order has been passed as per mutual settlement between the conflicting parties through mediation or general settlement, no appeal may be made to any court or tribunal.

Process for Appeals

As per Section 14A of the TRAI Act, the Central/State Government, any local authority, or an individual can approach the Tribunal for the adjudication of conflicts between the licensor and licensee, service providers, or between the service provider and group of users. The issues could include-

• The need and timing of any upcoming service provider
• Terms or conditions of the license
• Revocation of license if terms and conditions of the license are not duly followed
• Appropriate measures to enable competition in the market and encourage efficiency and growth in the telecom sector.
• Instruments that should be utilized by Service providers
• Technological upgrades in telecom services.

The Court held in a recent case of Mathrubhumi Publishing and Printing Company Ltd. v. Union of India, 2020 SCC OnLine Ker, stated that TRAI, as the regulating authority, has the authority to create regulations regarding interconnections among service providers whereas TDSAT can consider matters in dispute.  

A person can appeal to the TDSAT when he is aggrieved by the TRAI’s decision. An appeal has to be made within 30 days from the date of which the injured party received a copy of the Court’s judgment or whenever the Tribunal directs to do so. The Tribunal can overlook the delay if an explanation is provided by the injured party as declared in the case of Bharati Telnet v. Union of India, (2005) 4 SCC 72. After hearing the parties and passing the order, a copy of the order must be forwarded to the TRAI. Appeals have to be disposed of by the TDSAT within 90 days of receiving the application of appeal.

Cases

The majority of cases filed at TDSAT include consumer cases in connection with cable, telecom, and broadcast matters. The most prominent case in Telecommunications is the 2G Spectrum Case which was deemed to be the biggest scam in India. In 2008, 122 new second-generation 2G (UAS) licenses were granted to telecom companies on a first-come, first-served basis at the 2001 price under the A. Raja, the then Minister of Communications & IT from 2007 to 2009.  Several laws were breached and hush-money was paid to give preference to certain firms for granting 2G spectrum licenses.

According to a CAG audit headed by Vinod Rai, licenses were approved for ineligible corporations by submitted fraudulent documents. Corporations with no background in the telecom sector or those who had concealed relevant information were also given licenses. These licenses were granted at throw-away prices which led the exchequer to suffer a loss of Rs. 1.76 lakh crore. Subsequently, the Supreme Court in Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1 ruled and deemed the allotment of spectrum as arbitrary and unconstitutional and canceled the 122 licenses that were granted in 2008 under A. Rai.

Similarly, there have been some recent controversies such as TRAI bending the rules to let Jio, a subsidiary of Reliance Industries Ltd, become the market leader in the telecom sector. The controversy started when Jio stepped into the telecom sector in September 2016 and declared a ‘welcome offer’ to its users by offering them free data and voice for 3 months starting from 5 September 2016. It then declared the extension of these complimentary services till 31 March 2017 under its ‘happy new year’ offer.

Service operators such as Idea and Bharti Airtel stated that the current regulations provided that any promotional offer by a telecom operator should be restricted to 90 days. TRAI ruled that Jio’s plans were not in breach of the existing regulations but the service operators moved the TDSAT against TRAI and Jio over the extension of complementary services by Jio. After almost year-long proceedings, in the case of Bharti Airtel Limited v. TRAI and Anr, Telecommunication Appeal No. 2 of 2017, the TDSAT also ruled that these two offers were distinct and not in breach of the norms.

Currently, the TDSAT is probing into Vodafone Idea and Airtel’s premium plans and has suspended these offers until an inquiry has been duly completed.

Conclusion

India’s experiment with separating regulatory and adjudication functions is an interesting development in telecom dispute resolution. Regarding the regulation of telecommunication in India, the Telecom Regulatory Authority of India plays a pivotal role. But what is essential is the underlying transparency and predictability of the process and its results. Also important is the scope in the regime for employing or allowing resources where they have the potential to become increasingly needed, as disputes increase in volume and complexity.

As TDSAT is still at a pretty nascent stage, consumers must be duly informed and made aware of such Tribunals. Existing telecom users need to recognize the advantages of TDSAT. With TDSAT being enacted to address the concerns of consumers coupled with their speedy disposal of cases, it will be the consumers who will be benefitted the most. With a steady rise in private service providers, Telecommunication authorities need to work efficiently and as transparently as possible for the welfare of users and service providers. While the Act is sufficient to address the problems concerning the telecom sector, the Court has insisted on better implementation of the Act in a few cases. Therefore, with the evolving times, the authorities should also constantly evolve and govern accordingly.

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References:

1. https://dot.gov.in/act-rules-content/2426
2. https://www.trai.gov.in/about-us/history
3. Rory Macmillan, “Reflections on Regulation and Dispute Resolution in the Indian Telecommunication Sector” (Oct. 18, 2020) http://www.macmillankeck.pro/media/pdf/1a%20Dispute%20resolution%20in%20India’s%20telecom%20sector.pdf
4. Diva Rai, “Dispute Settlement under TRAI”, (Oct. 19, 2020), https://blog.ipleaders.in/dispute-settlement-under-trai/