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THE NEED FOR A SEPARATE TRIBUNAL FOR SETTLEMENT OF DISPUTES IN THE TELECOM SECTOR

Abstract

The telecom sector in India has witnessed a mammoth change in infrastructure and policy decisions, which has largely been responsible for its development and success in the right direction. Not only has the government’s conduct made the telecom sector a viable one, but also created the need for stringent regulation. In wake of the supreme and subordinate legislation prevailing in the sector, the need for a robust yet efficient dispute-adjudication body was met almost 2 decades back.

The blog analyses the efficacy of the tribunal, as well as its necessity amidst the operation of the regulatory honcho, TRAI. The discussion covers the various powers and functions entrusted with the regulator and its shortcomings, emphasising upon the role of the tribunal and the urgency of its activism towards the progress of the telecom sector. 

Introduction

India boasts of the world’s largest telecom sector with more than a billion subscribers, and some of the most sophisticated and stringent regulatory policies. The liberal reformation policies of the Indian government provided impetus to investors and other stakeholders, leading to the development of the sector.[1] The government undertook a proactive approach in initiating the reforms in the sector, which entailed the passing of several legislations. Another significant development in this regard was the establishment of a statutory body, as the growing presence of private entities in the telecom sector, made a pressing need for an independent regulatory authority. With the above intent, the Telecom Regulatory Authority of India (hereinafter, TRAI) was established by Section 3 of the Telecom Regulatory Authority of India Act, 1997 (hereinafter, Act).[2]

As the seams of the telecom sector transgressed multi-dimensionally, a need was felt to have an independent authority with adjudication powers over telecom disputes. This demand was since the TRAI was not vested with any jurisdiction over telecom disputes, as inferred from the provisions of the Act. Thus, the Telecom Dispute Settlement and Appellate Tribunal (hereinafter, TDSAT) came into existence.

The paper seeks to analyse the key areas of TRAI’s functioning and scope of its powers, and the establishment of the TDSAT amidst the demand for another adjudicating authority.

TRAI- Establishment, Powers and Challenges

The establishment of the TRAI is provided under Section 3 of the Act, consisting of a Chairperson, two whole-time members and two part-time members. Section 11 of the Act provides for the functions of the TRAI, encompassing its ambit of making recommendations on matters related to service providers and telecommunication licensing. Other general functions include the development of telecommunication in the nation and its efficient management.

As reckoned above, the TRAI has recommending powers upon request of the licensor, or suo-moto on specific matters.[3] However, the Central Government reserves the power to amend the above functions to add or delete any function(s) to the above. TRAI is entrusted with technical functions, to recommend policies or issue directions in interest of the telecom industry.[4]

A glance at the functions enumerated under Section 11 is evidence that the TRAI was not entrusted with any adjudicatory machinery or mechanism for dispute resolution, arising in the telecom industry. As per sub-clause (d), sub-section (1) of Section 11, the expansion of the TRAI’s functions does not involve its encroachment upon adjudicatory powers. Thus, the power of the Central Government to amend the functions of the TRAI is limited only to administrative and financial boundaries. A perusal of the section leads to the realization that the functions of TRAI are merely technical in nature, by virtue of its very composition and the qualifications of its members. Thus, even if the Central Government were to amend TRAI’s powers, they would not be capable of adjudication of sector-specific disputes.[5]

Further, TRAI is vested with specific powers under Section 12 of the Act, which entails the power to call for information and conduct investigations. Where it considers necessary, it may pass a written order and call for further information and records to aid its investigation into matters of misconduct or any other discrepancy in the operation of telecommunication services.

Perusal of the above section indicates that the TRAI was intended to be the regulatory arm of the Central Government in the telecom sector, exercising its control and autonomy over the various players in the industry. The TRAI was not given any teeth to adjudicate disputes or provide any relief to parties in a dispute. Furthermore, the very nature of disputes in the telecom sector is such, that they require a separate entity to hear the parties and provide adequate relief. TRAI as an independent authority is not the correct forum for the said purpose.

Dispute Resolution Powers of the TRAI

Under the ambit of TRAI’s powers, certain adjudicatory powers were impliedly assumed by it over the course of its functioning, as a regulatory and tariff setting body. The power of TRAI to call for records, other information, and books of accounts as an aid to its own investigation into licensing disputes, coupled with the power to issue constructed an adjudicating mechanism of a kind. The adjudicatory intent of the TRAI was evident in decisions, such as Aircel Digilink v. Union of India, where the TRAI ruled that the DoT must provide private intercellular licenses.[6] It is imperative to state that the decision was in sync with the recommendation powers of the TRAI under the Act.

Establishment of the TDSAT- Jurisdiction and Scope of Powers

Section 14 of the Act provides for the establishment of the TDSAT by the Central Government.[7] The provision confers power upon the tribunal to adjudicate any dispute arising between licensor and licensee, between two or more service providers, and between a service provider and a group of consumers. The Chapter IV of the Act was inserted vide an amendment in the year 2000. The proviso of Section 14 is of significance as it mandates that the jurisdiction of TDSAT is not applicable to disputes regarding any monopolistic or restrictive trade practices between parties, or an individual consumer complaint that can be dealt with by the Consumer Disputes Redressal Forum under Section 9 of the Consumer Protection Act, 1986, or disputes between the telegraph authority and any other person. Further, the TDSAT is empowered to hear appeals by those aggrieved from the directions or orders issued by the TRAI. As per Section 14A, the central Government, State Government or any local authority can file an application before the TDSAT for redressal of its grievances.[8]

The intent behind the establishment of TDSAT was to strengthen the existing regulatory regime, in the presence of Department of Telecommunications (hereinafter, DoT) and the TRAI. The jurisdictional umbrella of the TDSAT was extended to subsume broadcasting and cable services in 2004. Further, by virtue of relevant provisions of the Finance Act of 2017, disputes that lay before the Cyber Appellate Tribunal and the Airport Economic Regulatory Authority Appellate Tribunal, were also included within the purview of the TDSAT’s jurisdiction. Thus, the TDSAT possesses both original and appellate jurisdiction.

Limitations of TRAI as a Dispute Resolution Authority and the Need for TDSAT

The TRAI is primarily a regulatory authority controlled by the Central Government. The Central Government exercises control over TRAI in several ways-

  1. Financial control- TRAI operates through the funding provided by the Central Government.[9] Thus, a strong financial hold is imposed over TRAI by the Central Government.
  2. Central Government has the power to impose directions on TRAI in certain matters, in pursuance of the protection of sovereignty and security of the State, friendly relations with other states, and national security.[10]
  3. A certain degree of immunity is granted to officials of the Central Government against any legal proceedings or prosecution in respect of any action carried out in good faith.[11]

A perusal of the above limitations on the powers of the TRAI makes it evident that the TRAI does not stand as a truly independent authority. Section 25 of the Act inherently affects the independence of TRAI as it gives unfettered discretion to the Central Government, to dictate terms to the TRAI for issuing directions or suitable orders.[12]

Further, the tussle between the DoT and TRAI is an exhausting and harrowing one, involving the overlap of boundaries and powers of the two. The two bodies often disagree on matters such as licensing and policy making, often defeating the very intent of their establishment, harmful for a healthy decision-making regime in the telecom sector. Recently, the two disagreed over the exemption of registration for internet-based captive contact centers.[13] While TRAI suggested that such exemption from detailed registration should be provided to boost the development of such entities, DoT disagreed with the same, citing that proper registration shall enable good record-keeping and allow scrutiny of information.

The continuous tussle between the two regulatory authorities and the overlap in their functioning hampers the adjudication of disputes that arise in the sector.[14] In such a scenario, it is only logical that another entity is established to exclusively deal with disputes. Such dispute resolution entity must always be entrusted with adjudication machinery and related powers, so that the core functions of TRAI can be undertaken solemnly.

It is pertinent to mention that since the birth of the TDSAT in 2000, TRAI lost its adjudicatory powers. Now, the TRAI is mandatorily required to refer any dispute to the TDSAT for its redressal. A perusal of Chapter IV of the Act also indicates that the dispute-resolution powers of the TDSAT are much wider and enhanced than that of the TRAI. Thus, the TDSAT has emerged as the sole adjudicating forum in the telecom sector.

Conclusion

The independence of TRAI had always been challenged by the stakeholders of the telecom industry. Further, it was unreasonable to entrust one entity with several classes of functions at once. The functioning of TRAI and DoT in conjunction with one another, as well as the exercise of powers by the TRAI made it evident that its dispute resolution capabilities were not efficient.

Further, the technical nature of disputes and the plethora of issues within the telecom sector made the need for a separate adjudicating authority imminent. It was noticed that the TRAI and DoT cannot function as co-operative entities, thus putting the telecom sector at a disadvantage. The essence of TRAI’s powers and functions under the Act, prima facie led to the inference that it operates as a regulatory arm,issuing directions and orders on purely technical matters. Thus, the scope of its regulation and redressal should only be limited to the extent of the Central Government’s interference and dictation of its powers.

Thus, the TDSAT is an essential arm of the regulatory regime in the telecom sector, providing the quintessential adjudicatory machinery for the resolution of a variety of disputes. Its powers and jurisdiction are well enumerated in the Act and encompass a wider spectrum of issues plaguing the telecom sector. It is anticipated that the TDSAT shall expand its ambit by way of judicial interpretation of its powers and jurisdiction, which shall enable the speedy resolution of disputes in the telecom sector.


[1]India Brand Equity Foundation, Telecom Industry in India, IBEF.ORG,

https://www.ibef.org/industry/telecommunications.aspx (last updated Aug. 19, 2021)

[2]Section 3- Establishment and incorporation of Authority

[3]Section 2(ea) defines “licensor” as “the Central Government or the telegraph authority who grants a license under Section 4 of the Indian Telegraph Act, 1885”

[4]Section 13- Power of Authority to issue directions

[5]Shreya Mazumdar, Telecommunication Laws in India and its Drawbacks, LEGALSERVICESINDIA.COM, http://www.legalservicesindia.com/article/1670/Telecommunication-laws-in-India-and-its-drawbacks.html (last visited Aug. 15, 2021)

[6][2005] TDSAT 71

[7]Section 14- Establishment of the Appellate Tribunal

[8]Section 14A- Application for settlement of disputes and appeals to the appellate tribunal

[9]Section 21- Grants by the Central Government

[10]Section 25- Power of Central Government to issue directions

[11]Section 28- Protection of action taken in good faith

[12]Diva Rai, Dispute Settlement under TRAI, IPLEADERS.IN (Jul. 27, 2020), https://blog.ipleaders.in/dispute-settlement-under-trai/ 

[13]Ishita Guha, TRAI, DoT Differ on Registration of Voice-Based Other Service Providers, LIVEMINT.COM (Sep. 28, 2020), https://www.livemint.com/industry/telecom/trai-dot-differ-on-registration-of-voice-based-other-service-providers-11601290032094.html

[14]BW Online Bureau, TRAI Vs DoT, BUSINESSWORLD.IN (Nov. 8, 2014), http://www.businessworld.in/article/Trai-Vs-DoT/08-11-2014-60291/

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