PTI
New Delhi
The Supreme Court on Wednesday struck down TRAI's regulation making it mandatory for telecom companies to compensate subscribers for call drops saying it was “manifestly arbitrary” and an “unreasonable restriction” on the fundamental rights of telcos to carry on the business.
The apex court said the regulation was “ultra vires” the Telecom Regulatory Authority of India (TRAI) Act as imposition of penal liability was on an “erroneous basis” that the fault of call drop was entirely with the service provider.
“We, therefore, hold that a strict penal liability laid down on the erroneous basis that the fault is entirely with the service provider is manifestly arbitrary and unreasonable.
“Also, the payment of such penalty to a consumer who may himself be at fault, and which gives an unjustifiable windfall to such consumer, is also manifestly arbitrary and unreasonable,” a bench comprising justices Kurian Joseph and R F Nariman said.
“As a result, therefore, we set aside the judgement of the Delhi High Court and allow these appeals, declaring that the impugned regulation is ultra vires the TRAI Act and violative of the appellant's fundamental rights under Articles 14 and 19(1)(g) of the Constitution,” it said.
Referring to submissions made by Attorney General Mukul Rohatgi, the bench noted that cause for call drops was twofold - one owing to the fault of the consumer, and the other owing to the fault of the service provider.
“If this is so, the impugned regulation's very basis is destroyed: the regulation is based on the fact that the service provider is 100 per cent at fault,” the bench said in its 99-page judgement.
It further said, “...It is clear that the service provider is made to pay for call drops that may not be attributable to his fault, and the consumer receives compensation for a call drop that may be attributable to the fault of the consumer himself, and that makes the impugned regulation a regulation framed without intelligent care and deliberation.” The apex court passed the judgement on the appeals filed by COAI, a body of Unified Telecom Service Providers of India and various telecom operators, challenging Delhi High Court order which had upheld the TRAI's decision making it mandatory for them to compensate subscribers for call drops from this January.
