Mobile phone users will not be compensated for call drops as the Supreme Court on Wednesday quashed the government’s regulation, which mandated the telecom companies to pay for the deficiency in services.
The apex court held the Telecom Regulatory Authority of India (Trai) regulation to be “manifestly arbitrary and unreasonable” since the compensation could in fact be a “unjustifiable windfall” for the consumers who could themselves be at fault. The regulation that had come into force on January 1 provided for Re 1 for every call drop subject to an upper limit of Rs 3 per day.
Allowing a batch of appeals by the telcos, a bench of Justices Kurian Joseph and Rohinton F Nariman noted that the Trai had no empirical evidence to corroborate that call drops were attributable to deficiency in services by the service providers, especially when its own technical paper had in 2015 showed that an average of 36.9 per cent can be call drops owing to the fault of the consumer. “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,” held the bench.
It further said that the impugned regulation must be held to be manifestly arbitrary and an “unreasonable restriction on the telecom firms’ fundamental rights to carry on business, and is therefore struck down as such.” Lending credence to the Trai’s technical paper, the court said that the service provider is sought to be 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.
“… that makes the Impugned Regulation a regulation framed without intelligent care and deliberation … we are afraid that the orderly growth of the telecom sector cannot be ensured or promoted by a manifestly arbitrary or unreasonable regulation which makes a service provider pay a penalty without it being necessarily at fault,” added the bench. The regulation, it said, also fell foul of the objective of the Trai Act which stipulated for an orderly growth of the telecom sector and must be held to be ultra vires the Act on this score too.
Further, Quality of Service Regulations allowed service providers a 2 per cent allowance of call drops on the basis of averaging call drops per month and therefore, the companies cannot be penalised when they were complaint with this norm, said the court. It turned down Attorney General Mukul Rohatgi’s request to read down the regulation for saving it from getting quashed, holding “the Authority framing the regulation must ensure that its means are as pure as its ends — only then will regulations made by it pass constitutional muster.”