Telecom companies will no longer be penalised for call drops. In a major setback to the Centre, the Supreme Court on Wednesday struck down a Telecom Regulatory Authority of India (TRAI) regulation allowing consumers to get one rupee for every call drop up to a maximum of three call drops in a day.
The move, intended to rein in telecom companies, backfired after the apex court found serious flaws in the preparation by the Government to introduce a law for penalising the service providers for no fault of theirs.
The Bench of Justices Kurian Joseph and RF Nariman said that the TRAI regulation of October 16, 2015 was manifestly arbitrary and erroneous, as TRAI’s own records showed that at least for one-third of call drops, consumers are to be blamed and not service providers. Further, as per the regulation, if a consumer has to claim compensation up to three rupees in a day, there is no way by which he/she can prove that the call drop is on account of the service provider’s fault. The court quashed the regulation as it violated the fundamental rights of service providers under Article 14 (right to equality) and right to practice profession under Article 19(1)(g).
The court even urged the Parliament to consider framing a law on the lines of an American law, US Administrative Procedure Act to ensure that all laws in form of executive policy and regulations are subject to a transparent process, which encourages due consultations with all stakeholders before the rule or regulation-making power is exercised. “Not only would such legislation reduce arbitrariness in subordinate legislation-making, but it would also be conducive to openness in governance, the Bench said.
The Bench in its 99-page order said, “The present is a case in which we are not informed as to how rupee one is computed, how three call drops per day has been arrived at, or why the calling party alone is provided compensation. These matters go out of mere guess work, and into the realm of unreasonableness, as obviously, as has been held by us, there was no intelligent care and deliberation before any of these parameters have been fixed…. 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.”
This, however, does not mean that telecom companies can continue to have their way. The October 2015 Regulation introduced by TRAI was meant to benefit consumers. But telcos are also guided by what is known as Quality of Service Regulations 2009 which makes 2 per cent call drop permissible for operators. This regulation also has penal provisions. The company will be liable to pay Rs 1 lakh fine for crossing the 2 per cent benchmark in a day and this fine will increase to Rs two lakh for subsequent violations in the same day.
Interestingly, the TRAI conducted a study on call drops and found that the two companies at fault were BSNl and Aircel while the rest were complying with the above set standard. This study prepared on November 13, 2015, almost a month after the Regulation in question, recognised that 36.9 per cent of call drops take place because of consumer’s fault.
For TRAI, Attorney General Mukul Rohatgi took the plea that telecom companies should not shy away from paying the penalty which is pittance compared to their earnings, considering the large consumer base. But the companies said that call drops can be related to lesser mobile towers and companies are not given permission to set up towers on grounds of health hazards.
As telecom operators heaved a sigh of relief, Communications Minister Ravi Shankar Prasad said the Government will continue to keep a check on service providers. “Consumers expect the mobile operators to provide good services, and as a Minister I will keep a check that they are getting it,” the Minister told reporters outside Parliament.