RELIANCE COMMUNICATION LTD vs BHARTI AIRTEL LIMITED on 3 December 2012

ORDER

The Respondent vide its letter dated 8th October, 2012 requested the Petitioner to:-

“(a) Amend the existing interconnect agreement for SMS termination charges at the rate of 10 paisa per SMS.

(b) Execute fresh interconnect agreement for those circles where agreement is currently not in place for IUC on SMS @ 10 paisa per SMS.

(c) Settle the SMS termination charges with effect from 1st April, 2011 till 31st August 2012 on an immediate basis and thereafter on an ongoing basis for all circles of RCL and RTL.

(d) Release payments of Rs.11.86 crores on net basis towards SMS termination services availed for the period 1st April 2011 till date for all circles of RCL and RTL”.

The Respondent further requested the Petitioner to confirm and take necessary steps for giving effect to the above actions within 7 days from the date of that letter. Any failure on the part of the Petitioner may lead to withdrawal of interconnection for SMS services.

The SMS services of the Petitioner’s network were also disconnected in Mumbai circle on 10.11.2012 and Bihar and Madhya Pradesh circles on 11.11.2012.

2. The Petitioner has filed this petition against this letter of the Respondent and prayed for the following relief:- “a) Declare and hold the demand of Rs.11.86 crores (excluding service tax) raised upon the Petitioner by the Respondent as arbitrary, illegal, wrong, unilateral and without any basis; and quash/set aside the same; b) Declare and hold that the Respondent cannot unilaterally and arbitrarily change the terms and conditions of the existing agreement of IUC of „Bill and Keep‟ for SMS services currently existing between the parties; c) Declare and hold that the action of the Respondent in disconnecting the SMS point of interconnection for Mumbai, Bihar and Madhya Pradesh circles is illegal and contrary to the terms and conditions of the existing agreements of IUC of „Bill and Keep‟ for SMS services currently existing between the parties; d) Set aside the impugned letter dated 08.10.2012; e) Direct the Respondents to restore the SMS termination service with the Petitioner‟s network in Mumbai, Bihar and Madhya Pradesh services areas;

f) Direct the Respondent not to withdraw the interconnection for SMS services with the Petitioner‟s networks in other service areas for non-payment of the unilaterally imposed demand for SMS termination.”

3. In its interim prayer, the Petitioner has requested for:- “a) Staying the operation of the impugned letter dated 08.10.2012 during the pendency of the present case; b) directing the Respondents to restore the SMS termination service with the Petitioner‟s network in Mumbai, Bihar and Madhya Pradesh services areas pending adjudication of the present case; c) directing the Respondent not to take any coercive action against the Petitioners including not withdrawing the SMS termination service with the Petitioner‟s networks in other service areas, pending adjudication of the present case.”

4. From the pleadings, it is clear that the interconnect agreement existed between the parties for 15 service areas prescribing a charge of Rs.40 paise and 30 paisa per SMS. However, according to the Petitioner these were never acted upon by either of the parties and later modified by the arrangement agreed between the parties not to make payment for SMS

termination service and instead only follow ‘Bill and Keep’ method. According to the Petitioner both the parties agreed to continue to raise bill on each other for exchange of SMS between the two networks. However, no payment shall be made by either party till such consensus is reached on the issue within the industry.

5. The Respondent in its reply denied that there was any agreement between the parties prescribing for ‘Bill and Keep’ method for SMS termination charges. The Petitioner in its rejoinder has submitted copies of the minutes of the meetings dated 19.8.2004 and 04.1.2006. Copies of these minutes submitted by the Petitioner are not signed by any of the party.

6. It is indisputed that SMS termination charges were not paid by any party to the other party any time. It is also seen that no invoices have been raised by any party to the other party anytime.

7. In other circles, there is no agreement for SMS termination charges between the parties. However, the SMS services are being provided by both the parties to each other in these circles also.

8. The cause of action in the present disputes seems to have arisen after the judgement of this Tribunal in Petition No. 430 of 2011 between Tata

Teleservices Ltd. and Bharti Airtel Ltd. and in Petition No. 130 of 2012 between Aircel Cellular Ltd. and Bharti Airtel Ltd. In Petition No. 130 of 2012 there was no agreement between the parties for the interconnection charges for SMS but in Petition No. 430 of 2011, there existed an agreement between the parties.

9. Mr. Maninder Singh, learned senior counsel appearing on behalf of the Respondent has brought to our notice para 36 of the TRAI judgement dated 24.9.2012 in Petition No. 130 of 2012 which reads as under:- “36. It is seen that no agreement has been executed between the parties for interconnection charges for SMS. The SMS services between the parties are based on unwritten understanding. If one party does not want to continue the arrangement, without charges, we cannot force that party to continue with the arrangement. Therefore, in the present case, it is for the respondent to terminate the existing arrangement, if it so wishes.”

10. The counsel submitted that this Tribunal order was appealed by the Petitioners in that petition in the Hon’ble Supreme Court but the order of this Tribunal was not stayed. Therefore, the findings in that judgement are still valid. He further brought to my notice the interim order in Petition No. 823 of 2012 wherein the same Petitioner agreed to pay the amount of 10 paisa per SMS for interim period for other operator.

11. Mr. Maninder Singh stated that if any interim relief is to be given to the Petitioner, a part payment of the outstanding amount and 10 paisa per SMS for future period should be paid by the Petitioner to the Respondent.

12. Mr. Ramji Srinivasan, learned senior counsel appearing on behalf of the Petitioner requested that the ad-interim order issued on 12.11.2012 in this petition, should be made absolute. This Tribunal should not provide any charges to be paid to the Respondent for SMS services during pendency of this petition.

He further contended that the court should not create the contract between the parties as the courts are not in a position to say at this stage whether there should be 25 % amount or 50% amount of the rate asked by the Respondent.

13. There are two issues for our consideration:- (a) Whether the Respondent is entitled for setting a SMS charges based on the agreement for IUC for SMS existing between the parties for which the invoices have not been raised; (b) Whether the Petitioner can be allowed to continue to have the services of Interconnection of the Respondent network without paying any charges although Respondent wants to continue the

interconnection only when the Petitioner is ready to pay the SMS termination charges @ 10 paisa per SMS.

14. In Petitions No. 430 of 2011 and 130 of 2011, this Tribunal has given certain legal findings on the interpretation of the existing Regulation relating to IUC for SMS. However, the factual aspect regarding the existence of the IUC agreement for SMS between the parties vary from each other.

15. There is need to examine the factual aspects regarding the agreement/arrangement between the parties about SMS services and whether the demand raised by the Respondent through its letter dated 05.10.2012 is in accordance with the Telecommunication Interconnection Usage Charges Regulations 2009. Further it is to be examined whether the charges raised by one party fulfils the criteria of reciprocity, transparency and non-discrimination. Therefore, keeping in view the rival contention of the parties, the factual and legal aspects have to be gone into detail for determining the claim of the parties.

16. However, it is not in the interest of the consumers or any of the parties herein to discontinue the interconnectivity of SMS services. I am of the view that end of justice would be sub-served if during the pendency of this petition, a direction is given on the lines of the Petition No. 826 of 2012 and 843 of 2012.

17. It is directed that the SMS services of the Petitioner shall not be disconnected and if disconnection has taken place in any circle, the same shall be restored with immediate effect, subject to the condition that Petitioner will start paying 50 % of the amount demanded by the Respondent @ 10 paisa per SMS on net inflow of traffic basis. This amount will be calculated and paid with effect from the date of filling of this petition.

This payment will be without prejudice to the rights and contention of the parties and equities will be adjusted between the parties at the time of final hearing.

18. Reply may be filed within three weeks. Rejoinder thereto, if any, may be filed within two weeks, thereafter.

19. Put up the matter for framing of issues on 11th January, 2013.

…..……….. (P.K. Rastogi) Member

HKC/