RELIANCE JIO INFOCOMM LTD vs TATA COMMUNICATIONS LTD & ANR on 7 November 2019

ORDER

The petitioner in each of these petitions has filed MA No.270/2019 (in T.P. No.77/2019) and MA No.278/2019 (in T.P. No.78/2019) respectively for interim relief.

2. The facts are not under serious controversy and hence need not be gone into in any detail. For the sake of convenience the facts will be referred to from the records of T.P. No.77/2019 unless indicated otherwise.

3. The two respondents, Tata Communications Ltd. and Bharti Airtel Ltd. are owners of certain facilities which have been described as Cable Landing A circular stamp or seal containing the letter 'R' in a serif font. The stamp is centered at the bottom of the page.

Operations. For these facilities they are entitled to levy three distinct charges i.e. (i) Access Facilitation Charges(AFC), (ii) Co-Location Charges(CLCC) and (iii) Operation and Maintenance Charges (OMC). Prior to 07.06.2007, the charges were based purely on contract between the parties. In 2007, TRAI issued the "International Telecommunication Access to Essential Facilities at Cable Landing Stations Regulations, 2007" (2007 Regulations). This introduced the requirement of framing of Cable Landing Stations – Reference Interconnect Offer(RIO) calculated on cost based method. Such RIOs for all the three charges were required to be submitted to TRAI, the Regulator for approval. This light-touch regulation was operational till the 2007 Regulations were amended by Amendment Regulation, 2012 dated 19.10.2012. This amendment enabled TRAI to fix and specify the actual charges which could be realizable as per agreement between the parties. On 21.12.2012, TRAI fixed all the three charges vide notification which brought into effect the "International Telecommunication Landing Stations Access Facilitation Charges and Co-Location Charges Regulations 2012".

4. It appears that the charges fixed by the TRAI were lower to the earlier charges. The respondents filed writ petitions in Hon'ble Madras High Court in which interim order of stay was passed in their favour. But ultimately the writ petitions were dismissed by the learned Single Judge on 11.11.2016. In appeal the respondents got partial relief through judgment of the Division Bench dated 

02.02.2018. The Division Bench upheld both the Regulations of 2012, thus upholding the power to TRAI to fix the rates but the actual rates/charges indicated in Schedules I, II and III to the Regulation dated 21.12.2012 were quashed on a finding that they had been issued in breach of requirement of transparency and natural justice. The TRAI was directed to redo and reenact the aforesaid three schedules within six months in accordance with relevant principles of law. For the period of six months the Regulations 2007 as well as both the Regulations 2012 were kept in abeyance or till redoing and reenacting the schedules whichever was earlier. The appeals were partly allowed to that extent. The SLP preferred against that judgment by TRAI and two others was dismissed on 08.10.2018 with a direction to TRAI to complete the exercise of determining the charges within six weeks. TRAI started the process by issuing a Consultation Paper on 18.10.2018 and completed the exercise by publication of a notification laying down new rates/charges through three new schedules.

5. The said notification issued on 28.11.2018 is **Annexure P-12**. In Para 1(iii) it clearly mentions that the amendment Regulations of 2018 contained in the notification of 28.11.2018 shall come into force from the date of their publication in the Official Gazette i.e. 28.11.2018. In Para 2(a), (b) and (c), the new Schedules I, II and III were set out with a stipulation that the new schedules shall be substituted for the respective schedules in the relevant Regulations 2012 dated A circular stamp or seal containing a large, stylized letter 'R'. The 'R' is centered within the circle and has a small dot above it. The stamp appears to be a watermark or a formal mark at the bottom of the page.

21.12.2012. It is the admitted position that TRAI has retained the same charges in the Regulations of 2018 which it had prescribed in 2012 but after holding consultation with the stakeholders. It has been shown that Reliance Jio requested the Regulator to make the new schedules of 2018 effective from January 2013 as was the case with the charges fixed through amendment Regulations of 2012. This was opposed on various grounds including lack of statutory power in TRAI to frame Regulations with retrospective effect. Apparently TRAI has made the amendment Regulations of 2018 notified on 28.11.2018 effective from the date of notification dates.

6. The petitioners have prayed for interim relief against demands made by the respondents or against imminent demands by one of them on the ground that if the amendment Regulations of 2018 prescribing the same rate of charges which were applicable earlier from 01.01.2013 are treated as retroactive and effective from 01.01.2013, the petitioners would be entitled to refund of extra charges paid by them to the respondents during the pendency of the litigation.

7. During the pendency of the litigation, for some period there was a stay and subsequently there was no stay but admittedly parties were guided by their business interests and maintained contractual relationship under which charges were paid on the basis of rate prevailing earlier to amendments of 2012.

A circular stamp or seal containing the letters 'RR' in a stylized font. The stamp is centered at the bottom of the page.

8. Although learned Senior Counsel for both the parties as well as other counsel have filed several judgments but learned Senior Counsel for the petitioner has mainly relied upon judgment in the case of **Zile Singh Vs. State of Haryana & Ors.; (2004) 8 SCC 1** to submit that since the amendment Regulations of 2018 have used the word "substitute" for replacing the schedules of 2012 with that of 2018, this will show that the intention of the Regulator was to give effect to the new schedules from 01.01.2013. To clarify the correct legal position when rules are framed by a delegated authority, learned Senior Counsel for Respondent have placed reliance on various judgments but it is sufficient to notice the judgment in the case of **The Income Tax Officer, Alleppy Vs. M.C. Ponnoose & Ors. Etc.; 1969(2) SCC 351**. This judgment appears to be more apt in the facts of this case. According to respondents, the word "substitute" will not make any difference, in view of law laid down in the case of **Sri Vijayalakshmi Rice Mills, New Contractors Co. Ltd. & Ors. Vs. State of Andhra Pradesh; (1976) 3 SCC 37**. He has also referred to Section 36 of the TRAI Act to point out that there is nothing in the said provision to vest TRAI with power to frame Regulations with retrospective effect. This submission appears to be correct and TRAI being a delegatee, cannot exercise power of framing regulations with retrospective effective in absence of any specific provision to that effect or unless such power is A circular stamp or seal containing the letter 'R' is positioned at the bottom center of the page. The 'R' is stylized and centered within the circle.

found by way of necessary implications flowing from the relevant statutory provision. On this parameter, Section 36 does not help the petitioners.

9. At this interim stage it is not deemed necessary to discuss the entire case law and other relevant aspects till the parties complete their pleadings and the matter is heard at length. However, it is noted that on behalf of petitioners an argument was advanced that redoing the exercise of fixing the charges through new schedules is only a procedural matter akin to procedure for quantification of taxes and not at all like charging provision and therefore, no rights are involved even if it is done later. Judgments were also cited but the plea is found unacceptable. The exercise of determining the charges by TRAI is like determination of the tariffs and not procedural. It creates rights and liabilities for the concerned service providers and hence can not be retrospective in absence of provisions to that effect in the TRAI Act.

10. *Prima facie* there appears no good reason to uphold that the amendment Regulations of 2018 dated 28.11.2018 have retrospective/retroactive operation. In that view of the matter, it is not deemed proper to grant any interim relief to the petitioners. The prayers in M.As. Nos.270/2019 and 278/2019 are declined and these MAs are disposed of accordingly. However, it is made clear that payments if A circular stamp with a large, serif capital letter 'R' in the center. The stamp is slightly faded and appears to be a watermark or a seal.

made by the petitioners pursuant to the impugned demands shall be subject to result of these petitions.

11. For considering a pending MA and to ensure completion of pleadings at an early date, post the matter on 10.12.2019.

..... (S.K. Singh) Chairperson

sk

A circular stamp with a thin border. Inside the circle is a large, serif capital letter 'R'. The stamp appears to be a watermark or a placeholder mark.