Skip to main content

SC ruling cannot bar consumer forum from deciding on telecom disputes

 Most consumer fora have been dismissing telecom complaints since September 1, 2009, by mechanically referring to the SC ruling in general manager, telecom v/s M Krishnan that says disputes must be resolved through arbitration under the Indian Telegraph Act. This is not correct.

Case Study: The Meghalaya state commission, while considering this issue, observed that the ratio of a decision must be understood in the background of the facts of that case. So it would not be proper to blindly place reliance on a decision without considering the differences between the cases.

Section 7B of the Telegraph Act provides that a dispute relating to telegraph line, appliance or apparatus, between the consumer and the Telegraph Authority (viz the director general of posts and telegraphs or any officer empowered by him/her), must be resolved through arbitration. In 1985, the ministry bifurcated, so the director, posts & telegraphs, ceased being concerned with telecommunications. So it may be assumed that "Telegraph Authority" would be the head of the department of telecommunications (DoT). But a licensee or a service provider would not be telegraph authority.

In Krishnan's case, the SC was dealing with a dispute between a consumer and the general manager, telecom, who is a "telegraph authority", being DoT officer. So it held that the dispute will not be maintainable under Consumer Protection Act (CPA) and the remedy was through arbitration under the Telegraph Act.

The commission observed that times had changed, with the telecom sector undergoing a metamorphosis. Services are no longer provided directly by the DoT, but by licensed public or private sector companies. Even though BSNL claimed that in the changed environment it had stepped into the shoes of the director general of posts and telegraphs and would be deemed to be a telegraph authority, it failed to substantiate its claim with documentary evidence. The commission concluded that BSNL or its officers are not "telegraph authority". The commission observed that definitions of licensee, licensor and service provider under the TRAI Act of 1997 also made it clear that BSNL is merely a service provider and not a telegraph authority.

The commission noted that after Krishan's case, the association of telecom service providers had sought a clarification from DoT. In its reply dated October 19, 2009, DoT clarified that private and public service providers are not telegraph authority, and they cannot appoint an arbitrator (which power vests only in the central government).

The commission also differentiated between mobile and landline phones. The arbitration under the Telegraph Act is in respect of any telegraph line, appliance or apparatus, but these are not provided to a cellphone consumer. Hence, it concluded that cellphone disputes would be outside the purview of arbitration. It also noted there were several rulings, even by larger SC benches, where the trend has been to broadly interpret the CPA. So unless there is a specific bar by law, consumer fora provide an additional remedy for redressal of grievances. Even an arbitration clause would not oust their jurisdiction. The commission concluded the SC judgment in the Krishan case did not correctly lay down the law as it was not in consonance with the decision rendered by larger three-judge benches.

The commission also pointed out that Section 14 of the TRAI Act of 1997 specifically vested the consumer fora with jurisdiction to adjudicate the complaint of any individual consumer against his service provider, which had been overlooked.

In a ruling on February 25, 2014, by Ramesh Bawri, for the bench with Justice P K Musahary, the Meghalaya state commission held that telecom disputes could be adjudicated by consumer fora.

Impact: This clear thinking and consume-oriented judgment will help telecom consumers.

Article referred: http://timesofindia.indiatimes.com/city/mumbai/SC-ruling-cannot-bar-consumer-for-from-deciding-on-telecom-disputes/articleshow/31755527.cms

Comments

Most viewed this month

Right of pre-emption under West Bengal Land Reform Act

In Rabindra Nath Kundu & Anr vs Sudhir Hira, Bijoy Krishna Hira being the owner in the suit plot, gifted to Santosh Kumar Hira demarcated 11 decimals of land vide deed of gift dated 27.4.2004 and the latter sold 9 decimals out of 11 decimals of land to Sudhir Hira the preemptor/opposite party no. 1 and well demarcated 1.65 decimals of land in the said plot along with several other plots were sold, transferred and conveyed to the preemptees/petitioners herein by a registered deed of sale dated 10.8.2010, the subject matter of preemption. It is argued on behalf of the preemptees that  the present opposite party no. 1/preemptor Sudhir Hira has no relationship of co-sharership with Santosh Kumar Hira opposite party no. 2 as the demarcated portion of land has been purchased. It is settled principle of law that partial preemption is not permissible and this was what the view adopted by this Hon'ble High Court is Surendra Vs. Abhimannu reported in (1980) 1 Cal LJ 135 whe...

Merits and the terms of contract are irrelevant for invoking of the bank guarantees

In Sabarkantha Annuity Pvt. Ltd. Vs. NHAI and Ors, the Petitioner filed before the Delhi High Court  petition under Section 9 of the Arbitration and Conciliation (Amendment) Act, 2015 with a prayer that, Respondents be restrained from acting upon the letter dated 15th September, 2017 or from invoking the Bid securities of the Petitioner to the tune of Rs. 10.93 Crores and also restraining the banks from honouring the invocation of said bank guarantees on behalf of Respondent No. 1 acting in terms of letter dated 3rd November, 2007. Petitioner has relied upon Clauses Nos. 9.1.1, 9.1.2 and 4.3 of the agreement dated 28th April, 2017 entered into between the parties to say the claim for damages since is not a claim for a sum presently due and payable and the respondent would be entitled to damages only on proof of loss, per Clause 4.3 of the agreement and hence is not entitle to the entire sum of bid security.  The Court found that Clause No. 9.1.2 speaks of an exclusiv...

Supreme Court clarified on how to determine if an allegation of fraud falls under “Fraud Exception” to Arbitrability

In AVITEL POST STUDIOZ LIMITED & ORS. vs HSBC PI HOLDINGS (MAURITIUS) LIMITED, the Supreme Court was hearing an appeal from the interlocutory judgment and order passed in the appeal under section 9 of the Arbitration and Conciliation Act, 1996 by the Bombay High Court in a dispute between HSBC and Avitel India. HSBC had alleged that the Appellants had committed fraud by siphoning off the funds provided by them. As the agreement entered into by HSBC and the Appellants contained arbitration clause, HSBC approached the Singapore Arbitration Centre and the arbitration committee so formed executed award in favour of HSBC who filed application before the Bombay High Court for execution of the award. The Appellants contended objected to the award on various grounds and further argued that as fraud has been alleged, the dispute cannot be arbitrated.  The Supreme Court has held that “serious allegations of fraud” as a ground for exemption from arbitral proceedings arise only if either o...