IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO.1758 OF 2006
SUIT NO. 965 OF 2005
Tata Communications Limited ...Plaintiff Vs.
Union of India ...Defendant
Mr. Janak Dwarkadas, Sr. Counsel with Mr. Girish Kulkarni, Mr. Sharad Abhyankar, Mr. Mehul Shah i/b. ANS Law Assoc., for Plaintiff Mr. S.R. Rajguru i/b. S.S. Sarkar for Defendant
CORAM : SMT. ROSHAN DALVI, J.
DATED : 7TH JULY, 2010
1. The Defendant's Notice of Motion is for determining the preliminary issue regarding inherent jurisdiction of this Court. The application is shown to be taken out under Order 14 Rules 1 & 2 r.w. Section 9A and 151 of the C.P The written statement is not filed. Hence Order 14 cannot be .C.
invoked. No interim application is taken out by the Plaintiff. Hence Section 9A cannot be invoked. However the issue of jurisdiction is required to be tried since it is the Defendant's case that the Civil Court's inherent jurisdiction is barred under Section 15 of the Telecom Regulatory Authority of India Act 1997 (Telecom Act).
2. In essence what would have to be determined is whether this Court has jurisdiction to proceed with and try this Suit. If the Court's inherent jurisdiction is barred it would be in the interest of both the parties that the Suit be filed in the Court having competent jurisdiction rather than the Suit be simplicitor kept on the files of this Court until after the written statement is filed and the issues framed. Under Order 7 Rule 11(d) of the C.P.C the question relating to the bar created by any law would be required to be seen by the Court upon the averments in the plaint and if the Suit is barred the plaint itself has to be rejected.
3. The purpose and object of all these Sections as also the action required to be taken is essentially the same - if the Suit is barred by any law the plaint itself can be rejected, the jurisdiction of the Court can be considered pending the interim application and/or the issue with regard to the bar be tried as a preliminary issue; the Suit need not be kept pending.
4. It may be mentioned that the wording of Order 7 Rule 11 is in the passive voice. The plaint is liable to be rejected in the cases enumerated under that rule. The rule, therefore, does not require essentially any application to be made by any party. The Court itself can reject the plaint if any one of the six cases enumerated in the said rule is seen.
5. Consequently, the application by way of a Notice of Motion titled "application for raising preliminary issue regarding jurisdiction of this Court" can be considered under any of the aforesaid provisions to meet the 3
object and purpose of the provision, its title in the affidavit in support of the Notice of Motion notwithstanding.
6. It may at once be stated that Mr. Dwarkadas drew my attention to my order in an application taken out in Suit No.3091/2008. In that case the Plaintiff took out an interim application for certain interim reliefs. Some of the Defendants took out another application for determining the issue of limitation as a jurisdictional issue under Section 9A of the C.P The .C.
Plaintiff withdrew the interim application. The application under Section 9A technically would not survive because that issue was to be decided as a preliminary issue before granting or setting aside the order granting the interim relief. It would, therefore, essentially be decided pending the decision on the interim application taken out by the Plaintiff and even before that application is decided. Hence the application under Section 9A was observed not to have survived. However in that case another Notice of Motion for rejection of the plaint as being barred by the law of limitation under Order 7 Rule 11 of the C.P.C was also taken out. In view thereof the application under Section 9A, which is essentially for the same relief, was not seriously pressed. In this case no application for interim relief is taken out. No written statement is filed. Upon the Suit as filed, a plea that the Court's inherent jurisdiction is barred under Section 15 & 27 of the Telecom Act is raised. Essentially, therefore, the issue relating to the jurisdiction of this Court has to be determined. That would be the preliminary issue. For want of written statement in essence the Court would have to consider whether or not to reject the plaint itself under Order 7 Rule 11(d) of the C.P The application taken out by the .C.
Defendant would, therefore, have to be considered in this light and the merits of the claim of the parties only relating to the bar of this Court's jurisdiction shall have to be considered at present. If the Court is held to have jurisdiction, the Suit shall proceed and the Defendants would then file their written statement on merits. The Defendants would not then be entitled to take up this issue at all. If the Court's jurisdiction is held to be barred the Suit itself need not proceed. In that case the Plaintiff would be entitled to sue in the correct Court upon taking recourse to save the bar of limitation, if any, under Section 14 of the Limitation Act. Consequently, it will be too technical to drive the Defendant to file the written statement upon the entire dispute with regard to the jurisdiction of this Court and then try it under Order 14 Rule 2 of the C.P.C. It will be in the interest of both the parties to determine this question at present.
7. The Plaintiff is the licencee of the Defendant in respect of providing International Long Distance Telecommunication (ILDT) Services to and from India. The Plaintiff has been granted a licence by the department of Telecommunications, Government of India on 22nd January 1999 valid until 31st March 2004.
8. The licence dated 22nd February 1999 is issued under Section 4 of the Indian Telegraph Act, 1885 (Telegraph Act). Under Clause 5 of the licence the defendant as the telegraph authority reserved to itself the right to modify at any time the terms and conditions of the licence covered under Schedules A & B of the licence upon notice to the Plaintiff as the licencee in that behalf in the interest of general public or for a proper conduct of 5
telegraphs. Schedule-A to the licence specified the various telecommunication services which the Plaintiff could provide. Schedule B of the licence showed the terms and conditions for such services. One of the terms contained in clause 8 thereof was relating to the reference to arbitration in case of any dispute between the parties. Clause 19 of the terms and conditions gave the Defendant as the Telegraph Authority the right to finality of the decisions in licence matters.
9. It is the Plaintiff's case that the Plaintiff had a monopoly in telecommunication services which was to prevail until March 2004. The monopoly was stated to be de hors the licence in respect of ILDT services. It is the Plaintiff's case that based upon the representations of the defendant the Plaintiff acted in respect of investments in its share holding pattern upon disinvestments by the Government therein.
10.Soon after the grant of the licence in January 1999 in March 1999 Government of India announced a new Telecom Policy 1999 setting out the road map for reforms in telecommunications.
11.In September 1999 in one of the representations made by the Plaintiff to its shareholders in a public issue the Plaintiff informed them about the monopoly granted by the Government of India to it in respect of International Telecom Services in India until March 2004 with rider that the department of Telecommunications (DoT) retained certain rights with respect to the Company's licence.
12.Under its new Telecom Policy of 1999 there was inter alia to be a "demonopolisation" of the Plaintiff. The Plaintiff received a fax on 28th July 2000 relating to preponing of the demonopolisation of the Plaintiff. Under the Government Policy upon preponing the Plaintiff's licence, it was to expire on 31st March 2002 instead of 31st March 2004 as per the licence initially granted.
13.The Plaintiff contends that it tentamounts to wrongful termination of the Plaintiff's licence. The termination/preponement of de-monopolisation was in terms of a package offered by the Defendant to the Plaintiff constituting the consideration for the termination/preponement.
14.The Plaintiff contends that this tentamounts to a breach of contract between the parties. The Plaintiff has, therefore, sued for additional compensation of Rs.2560.72 crores with interest thereon and for the ancillary relief of the cancellation of the termination of bank guarantee of Rs.400 crores given by the Plaintiff itself to the Defendant for the due performance of its contract under the licence.
15.The Plaintiff got a monetary evaluation of the package offered by the Government for the preponement of its monopoly done by experts. The Plaintiff contends that the compensation so offered is far less than the loss that would be suffered by the Plaintiff for having invested in its infrastructure upon the promise made by the Defendant of its monopoly until March 2004. The Plaintiff, therefore, requires to be compensated for 7
the additional amount of the loss that the Plaintiff would suffer upon the withdrawal of the monopoly prematurely.
16.The Plaintiff's Suit is under, pursuant to and consequent upon the licence granted to the Plaintiff in 1999, Exhibit-A to the plaint. It need hardly be stated that there would have been no question of any compensation or any package being offered to the Plaintiff, had the Plaintiff not been the Defendant's licencee. The Defendant had the right to modify the licence under Clause 5 of the licence itself. The Defendant sought to modify the licence by preponement of monopolisation granted to the Plaintiff. That was not without consideration. The defendant offered certain compensation. The Plaintiff considers it inadequate compensation and has sued for additional compensation. The Plaintiff, therefore, has essentially sued for a better package. That package can be given only consequent upon the premature termination of the licence. The Plaintiff's rights as a licencee flow under the Telegraph Act and the Telecom Act.
17.Under Section 4 of the Telegraph Act the Central Government has the exclusive privilege of the establishment and maintaining and working telegraphs. Under the provisos to the section the Central Government grants a licence on such conditions and in consideration of such payment to any person to establish, maintain or work a telegraph within India. The Plaintiff's licence was under section 4 of the Telegraph Act. The Plaintiff is a licencee as defined under Section 2( c ) of the Telecom Act. As such licencee under Section 4 (1) of the Telegraph Act the Plaintiff provided specified public telecommunication services. The licence is, therefore, 8
granted under the Telegraph Act to the licencee defined under the Telecom Act. The Plaintiff's rights as a licencee are governed by the Telecom Act.
18.Under Section 14(a) the Appellate Tribunal established under the Telecom Act is required to adjudicate any dispute inter alia between the licencor and a licencee. The Plaintiff has made out a dispute as a licencee of the Defendant under the licence dated 22nd January 1999. The Plaintiff's dispute is with regard to the preponement of monopolisation under the licence. The Plaintiff's dispute is also with regard to the extent and content of the package offered by the Government in consideration of such preponement which the Plaintiff claims is insufficient compensation for the loss suffered by the Plaintiff upon having acted pursuant to the promise by the Defendant. The case of the promissory estoppel made out by the Plaintiff is sought to be compensated by additional compensation claimed in addition to the package offered by the Government. It would have to be seen whether the Defendant was without its rights to have modified licence of the Plaintiff by preponement of its monopolistion under the package and whether such modification was in the interest of general public or for the proper conduct of telegraphs. The Court adjudicating upon such a dispute would require to bear in mind the worldwide technical advances in the field of telecommunications as well as the economic development of India in that regard to determine how much, if at all, the package to be given by the Government would be required to be enhanced or compensation of a particular extent be awarded to the Plaintiff.
19.The Defendant contends that these would involve significant technical aspects which could be better determined by a specialised Tribunal constituted for that purpose and consequently, under Section 15 of the Telecom Act the Civil Court's jurisdiction would stand barred for determination of the dispute between the parties.
20.Mr. Rajguru on behalf of the Defendant has drawn my attention to the judgment of Supreme Court in the case of Union of India Vs. Tata Teleservices (Maharshtra) Ltd. (2007) 7 SCC 517. The question of jurisdiction in a case involving a licence claimed by a person having a letter of intent came to be considered. That was not the case of a clear licencee as the Plaintiff's. Yet it was held that the application under Section 14(a) of the Telecom Act does not exclude a person who had a letter of intent even without a licence. The application of the jurisdiction of the Appellate Tribunal was held even in the case of claims made under the Telecom Act by a party in a position of a licencee. In that case the Petition came to be filed in respect of a declaration that the claim made by the Government for recovery of the amount was void and was required to be set aside and that a declaration of set off invoking condition 19 of the licence was illegal. The Apex Court considered the jurisdiction of the Appellate Tribunal and the bar of jurisdiction of the Civil Courts. It has been held that the Telecom Act is a self-contained Code intended to deal with all disputes arising out of telecommunication services provided in this country. It referred to the statement of objects and reasons under the Act and a plain reading of the relevant provisions of the Act in the light of the preamble to the Act. It held 10
that disputes between parties under any such licence would involve significant technical aspects which are required to be determined by a specialised tribunal constituted for that purpose. It, therefore, held that the grant of jurisdiction to the tribunal under the Telecom Act must be construed as not to frustrate the objects sought to be achieved by the Act. Consequently, the bar of jurisdiction of Civil Courts under Sections 15 and 27 of the Telecom Act was to be construed in that light. It observed that the subject to be dealt with under the Act had considerable technical overtones which normally a Civil Court was ill equipped to handle. That aspect was not to be ignored while deciding the dispute under the Act. It further observed that the summary nature of the jurisdiction of the Appellate Tribunal which, under Section 16 of the Act allowed it not to follow the procedure laid down in the C.P but be guided by the .C,
principles of natural justice. This is observed to be the right given to the Appellate Tribunal to go outside the procedural shackles while dealing with the dispute before it. In that case the counter claim filed before the Appellate Tribunal which was not allowed by the Tribunal on the ground that C.P did not apply to it was also allowed to be considered by the .C
Tribunal upon curing the defect, if any, therein.
21.The statements of objects and reasons of the Telecom Act shows its establishment "to regulate the telecommunication services, adjudicate disputes, dispose of appeals and to protect the interests of service providers and consumers of the telecom sector, to promote and ensure orderly growth of the telecom sector and for matters connected therewith or incidental thereto". The object is, therefore, to promote and ensure orderly growth of the 11
telecom sector as also the matters connected therewith.
22.The introduction to the Act shows that "due to tremendous growth in the services it was considered essential to regulate the telecommunication services by a statutory body which should be fully improved to control the services, in the best interest of the country as well as the service providers. To create such a body with all the statutory powers the Telecom Regulatory Authority of India Bill was introduced in the Parliament". Hence consequent upon the worldwide demand and introduction of telecom services throughout India the Appellate Tribunal itself was constituted as a statutory body in the interest of the country as well as the service providers.
23.It may be mentioned that the arbitration clause in the terms and conditions of the licence agreement can also be invoked by the parties so as to have their dispute decided by a skilled adjudicator who would take into consideration the causes and effects of the policy of the Defendant resulting in preponement of the monopolisation of the Plaintiff. It may also be mentioned that the rejection of the package offered by the Defendant as insufficient compensation by the Plaintiff itself requires creation of further options in the interest of both the parties to mitigate the loss, if any, by the demonopolisation of the Plaintiff which can be achieved best by the mode of mediation. This itself shows and suggests that the dispute between the parties if adjudicated upon would require its adjudication by a specialised tribunal which will be better equipped to handle various aspects for considering the adequacy or otherwise of the additional compensation 12
claimed by the Plaintiff. It is for such cases that the jurisdiction of the Civil Courts is expressly barred under Sections 15 and 27 of the Telecom Act.
24.Consequent upon the bar created by and under the law relating to telecom services under the Telecom Act the plaint itself shall have to be rejected.
25.Order accordingly. Suit is disposed off accordingly.
(SMT. ROSHAN DALVI, J.)