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2017 (9) TMI 1926 - HC - Indian LawsMaintainability of petition - Territorial Jurisdiction - Anti-competitive arrangements - cartelisation by action in concert - delaying and denying adequate Point of Interconnections (POIs), even during the test phase/period, thereby attempting and thwarting the RJIL's new project/entry in the telecom market - HELD THAT:- There is no total bar in entertaining such Writ Petition, specifically when the case is made out of great injustice, perversity, illegality, hardship and prejudice to the legal rights of the service providers or the enterprises, apart from non-application of mind to the telecommunication laws. This is specifically keeping in mind the consequences of this opinion, so expressed and the investigation so contemplated followed by the final order of compensation under the Competition Act. Territorial Jurisdiction - HELD THAT:- There is no issue and/or denial to the facts that the part of cause of action arose in Mumbai and/or the State of Maharashtra. The parties have placed material on record including the affidavits and the averments so made in the Petition, which supports the fact that the part cause of action arose in Maharashtra, including in Mumbai. The relevant averments in this regard of the respective Petitioners, in the Petitions are read and referred by the Senior Counsel - substantial client/consumer base is in State of Maharashtra. The Respondents/service providers Officers' are at Mumbai. The affidavits and averments and the documents so placed on record, show that the various correspondences/the documents have been exchanged by and between the parties, within the jurisdiction of Maharashtra State including Mumbai. Both the parties have substantially argued the matter by referring to the affidavit and the documents/charts, which are necessary to adjudicate the issues so raised. The Senior Counsel appearing for the CCI has not agitated issue about maintainability or entertainability of the Writ Petitions in this Court - the present Writ Petitions, are maintainable and entertainable in this High Court. Maintainability of Writ Petitions in light of Section 26(1) of Competition Act - HELD THAT:- The impugned order/even if of impugned majority order and/or minority order, no way can be stated to be administrative order/directions and/or not adjudicatory in nature and without any Civil consequences, as submitted by the counsel appearing for the Respondents Jio and CCI. This impugned majority order, in fact, has decided several issues and elements though stated to be in prima facie nature, ultimately entail into the DG to inquire and investigate with clear adverse consequences, so recorded revolving around the Competition Act, by overlooking the provisions of TRAI Act/Contracts, between parties. Power and jurisdiction under the TRAI Act and the Competition Act - HELD THAT:- The Authorities/Tribunals under the TRAI Act, provide for various measures to facilitate the competition and to promote efficiently in the operation in telecommunication services, including aspects of technical compatibility. All are bound by their respective rights and obligations, arising out of the contracts, they enter into under the prescribed contract terms and under the supervision of the authorities under the TRAI Act. Therefore, if any dispute and/or issue and/or any question of interpretation arises in respect of any terms and conditions and/or policy decision and/or of any rights and obligations of the respective service providers, it is the authorities under the TRAI Act, which is specifically empowered to deal and decide the same - The interest of all the service providers and consumers, is required to be treated equally, fairly, keeping in mind new technology, the supply and the developing telecom market. The Commission independently without keeping in mind the provisions of the TRAI Act in fact by overlooking it, on presumption and assumption, proceeded and initiated the stated inquiry. The scope and power of the Commission to initiate investigation by giving prima facie opinion, inspite of pendency of the issues and existing provisions of telecommunication laws, therefore, is perverse, illegal and impermissible. TRAI recommendations treated as final - HELD THAT:- The majority decision has wrongly relied upon the recommendations and proceeded upon it. The reliance of recommendation was impermissible to initiate the inquiry. In any way, the impugned order/decision cannot be explained by additional reasons and/or by the oral submission, during the course of the arguments. The market complexity because of lack of clarity revolving around these important issues be left for final decision with the High Court or the Authority under the Telecommunication laws. Free Subscribers and card holders and the Obligations of other Service Providers - HELD THAT:- The free service, as announced and/or declared by one provider, if has direct communication and or it required to link with the other providers, both the parties are required to act within the framework of agreement, but there is no such agreement and/or clause made out and/or pointed out and certainly not referred in the majority decision. The Commission is required to wait for the decision of the authorities/tribunals based upon the policy and/or circular already declared for the telecom market. The distribution of millions of test cards to the general public though may be a business strategy, but if the issue is raised about its feasibility in the terms of contract and regulation on the date of such action, then there existed a confusion and the clarification as sought by the service providers independently and/or through the Association, in no way can be stated to be action within the purview of Section 3 of the Competition Act. Telecommunication regulations are binding - HELD THAT:- Admittedly, the concern Respondent launched with 2.2 million subscribers, which was unprecedented, specifically because it offers free services, as a business strategy. Everything is required a pre-contract, pre-notice, specific pre-agreements/clauses and reasonable phase-wise demand in the existing telecom market. The conduct of Respondents was noted in the dissent note, but not in majority decision. Having once offered free services, and even if there are call failures that itself ought not to have been reason to hold that it was only due to deficiency of POIs. The various issues of informants, network and/or operationalization of POIs, non-utilization of POIs and various other technical factors apart from match and/or mismatch of new technology with the existing technology may be the relevant factors. All these aspects unless settled and decided by the Competent Authority/Tribunal under the TRAI Act, the prima facie majority decision is unsustainable and unacceptable even for issuance of any direction - all these disputes where there is delay and denial in providing reasonable POIs; whether there is an obligation to provide one way POI instead of two 2 way POIs; whether there is breach of such obligations; whether the test phase extends only to business partners or employees; whether cards could be supplied for testing quality of network and not for testing the market and; whether this amounts to creation of subscriber base,- all these are issues to be decided by the authorities and tribunals (TDSTD) and not by the High Court and definitely not by the Commission under the Competition Act. Role of Association (COAI)- "Every majority decision is not cartelisation" - HELD THAT:- No case is made out that the action of the Association was aimed at boycotting the new entrant, or such conduct could be presumed to be anti-competitive. The judgments cited by the RJIL, are of no assistance to accept the case of collusion and/or conspiracy. The failure to provide "unreasonable demands" and/or the "reasonable demands", for want of conditions in the respective licenses (Unified licenses) and the clarification sought, in no way, can be stated to be with intent to stifle the launching by RJIL. Some Petitioners/service providers have shown the charts to demonstrate that from time to time they had supplied the sufficient POIs, keeping in mind the terms of the contract to provide "reasonable POIs on demand" - Merely because the telecom service providers adopted the similar approach to split the trunk groups, that cannot be stated to be a collusive approach and/or treated as an anti competitive agreement. At the appropriate stage, even RJIL has not recorded any objection on the provisions of one way E1S, as reflected from the letters submitted by the RJIL - The Commission (majority) decision, based upon the media report and allegations of RJIL by overlooking the above position cannot fall within the ambit of requisite ingredients of Section 3 of the Act. No case of tacit agreement or joint decision and/or attempt to hamper the RJIL commercial launching - HELD THAT:- The RJIL conduct and free services, as stated to be a business strategy, was an issue concerning the telecom market itself and therefore, the steps and the representations so made by COAI, in no way can be concluded as a "cartelisation". The Respondent's reproach of interdiction in the stated supply by the Petitioners and its Association is unjust, unreasonable and unsustainable and also premature. Cartelisation - HELD THAT:- The role of the COAI, of making representations, even for some members but, in view of the uncleared position of the market, cannot be termed as stated "cartelisation". It cannot be treated/read to mean the deliberate, collusive action, only to thwart and/or to scuttle the new entry. The whole action of COIA is bonafide within their power and the authority, in the interest of telecom market and the consumers. The findings, based upon these action of COIA that it breaches the provisions or falls within the ambit of Section 3(2) of the Competition Act, is unjust and untenable. Show cause notices issued by DG - HELD THAT:- The rights and obligations to provide POIs arise under the terms of the license, granted by the DOT and the terms of supply are governed by the interconnection agreements entered into by service providers with each other. It is relevant to note that the consultation paper of TRAI on these issues, further reiterates the fact of confusion and the controversy so agitated by the service providers and the COAI. Such grievances are genuine and bonafide. Therefore, no case is made out of any cartelisation by and through the COAI. The Parties material and/or suppression of material facts and/or incorrect information - HELD THAT:- The observation of the Commission that the service providers/Petitioners had an understanding, agreement and acted in concert to deny or delay the provision of POIs, and they as individual members, through their Association have breached the provisions of Section 3(3)(b), ought not to have been opined, even prima facie, unless their respective rights and obligations under the Telecommunication laws are clarified and/or decided by the Regulatory authorities/Tribunal and the High Court. The initiation of enquiry, at this stage, by the Commission by holding that the alleged parallel conduct of individual members and Association establishes prima facie, that there is a collusive conduct that limits provision of services and the technical development as per Section 3(3)(b) is unacceptable, including further action of investigation so ordered, being without jurisdiction, illegal and perverse - It is unacceptable to permit the Commission to collect the facts and/or information when it has not itself concluded the controversy about the rights and obligations of the parties based upon statutory agreements/regulatory authority's guidance/circulars. The stated conduct and/or cartel could not have been tested or inquired into unless their rights and obligations based upon the governing laws in the market are clear and settled, as the same binds all the respective service providers of the telecom sectors. Petitions allowed.
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