Telecom Disputes Settlement Tribunal
Aircel Digilink India Ltd. vs Union Of India (Uoi) And Anr. on 6 January, 2005
Equivalent citations: (2005)3COMPLJ461(TELECOMDSAT)
ORDER
1. One of the common issues which arises in these matters is: whether arbitration proceedings under the Arbitration and Conciliation Act, 1996 (Arbitration Act, 1996) or that under the Arbitration Act, 1940, are maintainable after the constitution of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT or Appellate Tribunal) under the Telecom Regulatory Authority of India Act, 1997 (for short the Act), after its amendment by Act 2 of 2000 to adjudicate certain category of disputes and also to hear appeals against the order of the Regulator (Telecom Regulatory Authority of India, i.e., TRAI or Authority).
2. Opening his argument on behalf of Star India (P) Limited [Petition No. 39(C) of 2004] Mr. Anil Divan, learned senior counsel, submitted that arbitration is not permissible in respect of disputes which are subject matter of the jurisdiction of TDSAT. He stated that TDSAT has exclusive jurisdiction to decide any dispute between (i) a licensor and a licensee; (ii) two or more service providers; and (iii) a service provider and a group of consumers and to hear and decide appeal against the order of the Authority (TRAI-Telecom Regulatory Authority of India, constituted under the Act). He stressed the word 'any' in 'adjudicating any dispute' as appearing in Section 14 of the Act. He said exclusion of jurisdiction for TDSAT will only be what the proviso to Clause (a) of Section 14 of the Ad provides and these exceptions are--(1) certain matters under the exclusive jurisdiction of the Monopolies and Restrictive Trade Practices Commission (MRTPC); (2) an individual consumer complaint before the authority established under Consumer Protection Act, 1996; and (3) dispute between Telecom Authority and any other person referred to in Sub-section (1) of Section 7B of the Indian Telegraph Act, 1885. Mr. Divan referred to the long title (Preamble) of the Act and said that as the long title would show, TDSAT was constituted to adjudicate disputes, dispose of appeals and to protect the interests of the service providers and consumers of telecom sector. He said that interest of consumers is paramount under the Act as these are the ultimate beneficiaries of telecom services. Reference was then made to Section 15 of the Act which bars the jurisdiction of the Civil Courts in respect of any matter which Appellate Tribunal is empowered by or under the Act to determine. He then referred to Section 18 of the Act which provides for appeal to the Supreme Court against any order, not being an interlocutory order of the TDSAT on one or more of the grounds specified under Section 100 of the Code of Civil Procedure, 1908. Mr. Divan said that in any dispute between stakeholders, it is the interest of the consumers which has to be kept in view and that arbitrator will not be able to do that as he would be only concerned about the terms of contract between the stake-holders. He said the Act is not only for regulating the telecom services, but also for the protection of large body of consumers. He said, if in a dispute between the broad-caster and MSO (Multi Service Operator), or between service providers in telecom service there is disconnection of the service, it is the consumer who ultimately suffers when as a matter of fact it is he who provides the finances for all these services. Viewer is the key in the whole set-up and yet he cannot participate in the arbitration proceedings being outside the terms of the arbitration agreement. Telecom services which include broadcasting and cable TV services have become part of daily lives of individuals all over the country. Mr. Divan stated that it is because of huge amount of investment in the telecom sector and because of significant public interest involved that exclusive jurisdiction has been conferred on TDSAT. It is necessary also for orderly growth of telecom services that disputes are handled by one expert body. Particularly when an arbitrator is only bound by the terms of the contract, he emphasised, group of consumers cannot come to arbitrator in the course of arbitration proceedings if there is disconnection of services and dispute is pending before the arbitrator. Under the Arbitration Act 1996, it is only the party to the arbitration agreement which can move the court for appointment of arbitrator and even for seeking interim relief. Mr. Divan queried as to what will happen in a case where in an agreement between the stakeholders there is no arbitration clause. In that situation he said, aggrieved party cannot go to a Civil Court as Section 15 of the Act bars the jurisdiction of Civil Court. Even after award is given for its execution or challenge, a party has to go to civil court and again that would not be possible in view of Section 15 of the Act. Mr. Divan said situation cannot be different for settlement of disputes when there is an arbitration clause and when there is none. Further if it is held that arbitration is permissible under the Act that would amount to depriving a party of his statutory right of filing appeal to the Supreme Court under Section 18 of the Act. Group of consumers which are aggrieved by disconnection of services in disputes between the stakeholders cannot go to arbitration as they are not party to arbitration agreements. They cannot be sidelined as dominant interest of public is involved which the arbitrator is incapable of handling. In a dispute between stakeholders arbitrator will not be able to give public notice or notice to the consumers of services. Mr. Divan concluded his arguments by saying that statutory jurisdiction conferred on TDSAT cannot be taken away by an arbitrator. In support of his argument, he relied upon a few decisions of the Supreme Court, which we will refer to hereinafter.
3. Mr. C.S. Vaidyanathan, learned senior counsel appearing for the petitioner in Petition No. 6 of 2003 (Aircel Digilink India Ltd.) referred to the provisions of Section 14 of the Act prior to its amendment and stated that now the law is different and exclusive jurisdiction has been conferred on the TDSAT to the exclusion of any court or authority. Mr. Vaidyanathan pointed out that in the licences issued prior to the amendment of the Act in 2000, there was arbitration clause and now in the licences issued after the amendment, the arbitration clause has been omitted. He stated that under Section 14 of the Act the only dispute which can go to an arbitrator is the one under Section 7B of the Indian Telegraph Act 1885 as provided in proviso (C) of Clause (a) thereunder. Mr. Vaidyanathan also pointed out that Section 38 of the Act provides that provision of the Act shall be in addition only to the provisions of the Indian Telegraph Act 1885, and Indian Wireless Telegraphy Act, 1933 and thus, in addition to no other law. He then said that under Section 14M of the Act, all petitions pending before TRAI before the establishment of the TDSAT shall stand transferred to TDSAT. Section 14N provides that all appeals pending before the High Court shall also similarly stand transferred to the TDSAT. Mr. Vaidyanathan pointed out that though there is no provision for transfer of pending proceedings before a civil court to TDSAT but that he said was not necessary as on the establishment of TDSAT, jurisdiction of civil courts stood barred. He queried, however, would TDSAT have jurisdiction if there is a dispute between two service providers regarding the lease of premises. He said the word 'any dispute' would necessarily have to be a dispute under the Act. Mr. Vaidyanathan also referred to Section 894 of the Code of Civil Procedure, which has been introduced by the Amending Act of 1999 (with effect from 1.7.2002). Mr. Vaidyanathan also submitted that the Act being a special law will prevail over the general law which is the Arbitration Act 1996. He also slated that later law prevails over the earlier one. He submitted that the Act incorporates principles of public policy and it overrides the provisions of general law. He submitted that the TDSAT has been established specifically for adjudicating upon disputes in telecom sector and its adjudicatory powers have been well-defined and specifically mentioned in the Act. He stated that the jurisdiction of TDSAT in matters referred to in Section 14 is exclusive and no other Forum/ Authority has jurisdiction over these matters. In support of his submissions he also referred to certain decisions of the Supreme Court.
4. Mr. Chadha, appearing on behalf of the petitioner in Petition No. 9 (DSSE Contact Limited) supported Mr. Divan and Mr. Vaidyanathan in their submission that arbitration is not permissible under the Act. He stated that the Act was a self-contained code and no authority other than TDSAT could have jurisdiction to decide disputes arising under the Act. He also referred to Sections 9 and 17 of the Arbitration Act 1996 to contend that when jurisdiction of court or authority is barred, how interim orders could be issued either by the court or an Arbitral Tribunal. Mr. Chadha, however, had no objection to the application of VSNL under Section 8 of the Arbitration Act, 1996, being allowed if subject dispute could be referred to the solo arbitration of a retired Supreme Court or High Court Judge.
5. Mr. Naqvi, learned counsel for VSNL, however, struck a different note. He said that though under the Act, TDSAT has jurisdiction to adjudicate the dispute in the subject of the present petition but there is no bar to arbitration being held when there is arbitration agreement between the parties, particularly, when Mr. Chadha has no objection to such a course being adopted. He referred to his application MA No. 169 of 2004 in Petition No. 9 of 2003 filed under Section 8 of the Arbitration Act 1996 contending that the disputes be referred to arbitration in terms of the agreement between the parties. Mr. Naqvi said that Arbitration Act, 1996, now provides a speedy remedy and the award made by the arbitrator is itself a decree. But he was unable to tell us how the award would be enforced without the assistance of a court or could not the award be challenged under any other ground specified in the Arbitration Act, 1996, before a court? Will not, in that case, the court be doing something indirectly which it cannot do directly when its jurisdiction is barred under Section 15 of the Act?
6. Union of India took the opinion of Ministry of Law and has stated that arbitration is barred under the Act. It was submitted that the opinion was rendered by the learned Solicitor General of India. Before we discuss the various decisions referred to in the course of arguments, we may note that TRAI has issued regulations called the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation, 2004. In that, regulation 4 deals with disconnection of TV channel signals. Regulation 4.2 would be relevant which we quote:
"4.2 Broadcaster/multi system operator shall inform the consumers about the dispute to enable them to protect their interests. Accordingly, the notice to discontinue signal shall also be given in two local newspapers in case the distributor of TV channels is operating in local area and in two national papers in case the distributor of TV channels is providing services in a wide area. Alternatively, consumers can be informed through scroll on the concerned channel(s). Where a broadcaster or a multi system operator decides to give this notice through a scroll the multi system operator or the cable operator, as the case may be, must carry the scroll in the concerned channel(s).
7. We also note that Supreme Court has taken the consistent view that when it is a question of public interest, jurisdiction of arbitrator could be barred by statute either directly or by necessary implication:
8. In Natraj Studios (P) Ltd. v. Navrang Studios and Anr. (1982) 2 Comp LJ 551 (SC): (1981) 1 SCC 523, Supreme Court was considering the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, Bombay Rent Act) with reference to the Arbitration Act, 1940. Section 285 of the Bombay Rent Act bars jurisdiction of courts in respect of any dispute between a landlord and tenant and exclusive jurisdiction was conferred on a small causes court. This is how the Supreme Court considered the aforesaid provision of the Bombay Rent Act (para 9 at page 559 of Comp LJ):
"We may now proceed to consider the submission that the Court of Small Causes alone has exclusive jurisdiction to resolve the dispute between the parties. Section 28(1) of the Bombay Rent Act, positively, confers jurisdiction on the Court of Small Causes to entertain and try any suit or proceeding between a landlord and tenant relating to the recovery of rent or possession of any premises or between a licensor and a licensee relating to the recovery of licence fee or charge and to decide any application made under the Act and to deal with any claim or question arising out of the Act or any of its provisions, and negatively, it excludes the jurisdiction of any other court from, entertaining any such suit, proceeding or application or dealing with such claim or question arising out of the Act or any of its provisions, and negatively, it excludes the jurisdiction of any other court from entertaining any such suit, proceeding or application or dealing with such claim or question." (para 16).
The Bombay Rent Act is a welfare legislation aimed at the definite social objective of protection of tenants against harassment by landlords in various ways. It is a matter of public policy. The scheme of the Act shows that the conferment of exclusive jurisdiction on certain courts is pursuant to the social objective at which the legislation aims. Public policy requires that contracts to the contrary which nullify the rights conferred on tenants by the Act cannot be permitted. Therefore, public policy requires that parties cannot also be permitted to contract out of the legislative mandate which requires certain kind of disputes to be settled by Special Courts constituted by the Act. It follows that arbitration agreements between parties whose rights are regulated by the Bombay Rents Act cannot be recognised by a court of law." (para 17) 8.1 The Supreme Court in the case of Natraj Studios (P) Ltd. v. Navrang Studios and Anr. (1982) 2 Comp LJ 551 (SC): (1981) 1 SCC 523 has relied on its earlier decision in the case of Deccan Merchants Cooperative Bank v. Dalichand Jugraj Jain (1969) 1 SCR 887, where the Supreme Court observed as under:
"21. Wherein the conflict was between the jurisdiction of the Registrar of Co-operative Societies under the Maharashtra Cooperative Societies Act and the jurisdiction of the Court of Small Causes under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the court held that whether or not the Registrar of Cooperative Societies was a court, whose jurisdiction, was ousted under Section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the jurisdiction of the Registrar was surely ousted on broader considerations of public policy. The court pointed out that the Rent Act had a specific social objective in view and for the achievement that objective, it was necessary that the court set up under the Rent Act alone should deal with a dispute between a landlord and a tenant and that in accordance with the provisions of the Rent Act. Necessarily, the jurisdiction of the Registrar was ousted."
8.2 The Supreme Court also noticed that similar exclusive jurisdiction has been conferred on other bodies under other regulatory laws like Monopolies and Restrictive Trade Practices Act, 1969, Securities and Exchange Board of India Act, Recovery of Debts Due to Banks and Financial Institutions Act, 1993, etc.
9. In Maddada Chayanna v. Karnam Narayana and Anr. (1979) 3 SCC 42, the Supreme Court quoted with approval the following observations of Subba Rao, Chief justice (the then Chief Justice of Andhra Pradesh High Court) in Appanna v. Sriramamunty (1958) Andh WB 420--
"Where Special Tribunal, out of the ordinary course is appointed by an Act to determine questions as to rights which are the creation of that Act, then except so far as is otherwise expressly provided or necessarily implied, that Tribunal's jurisdiction to determine those questions is exclusive....."
10. The ratio of the Punjab State Electricity Board v. Bassi Cold Storage, Kharar and Anr. (1994) Supp 2 SCC 124 is also applicable. In the said judgment, while dealing with Electricity Act, 1910, and Arbitration Act, 1899, the Court held:
"The Indian Arbitration Act of 1899 being a general provision relating to settlement of disputes by arbitration and the Act having carved out certain matters only as available for determination by arbitration, we are of the view that on the principle of generalia specialibus non derogant, what has been provided in the Act would override the general provision contained in the Indian Arbitration Act of 1899 (which subsequently came to be repealed by Arbitration Act of 1940 because of which in Section 52 as it stood at the relevant time reference has been made to Arbitration Act of 1940). So, the matters relating to which there is direction in the Act required to be determined by arbitration cannot be the subject matter of arbitration. This is for the reason of the Act being not only a Special Act on the subject of which disputes covered by the Act could be decided by arbitration, but also because it is a later Act than the Indian Arbitration Act 1899...." (para 11)
11. In Chairman, Thiruvalluvar Transport Corporation v. Consumer Protection Council (1995) 2 Comp LJ 535 (SC): (1995) 2 SCC 479 while dealing with Motor Vehicles Act, 1988 and Consumer Protection Act, 1986 (where Section 3 of the Consumer Protection Act provided that provision of the Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force), it was held that (para 8 at page 539 of Comp LJ):
"... The 1988 Act can be said to be Special Act in relation to claims of compensation arising out of the use of a motor vehicle. The 1986 Act being a law dealing with the question of extending protection to consumers in general, could, therefore, be said to be a general law in relation to the specific provisions concerning accidents arising out of the use of motor vehicles found in Chapter XII of the 1988 Act. Ordinarily, the general law must yield to the special law.... As pointed out earlier, the 1988 Act and, in particular, the provisions in Chapter XII thereof creates a forum before which the claim can be laid if it arises out of an accident caused by the use of a motor vehicle. That being a special law would prevail over the relevant general law such as the 1986 Act....." (para 8)
12. In Allahabad Bank v. Canara Bank and Anr. (2000) 2 Comp LJ 170 (SC); (2000) 4 SCC 406, the Supreme Court considered the question of special law vis-a-vis general law and special law vis-a-vis special law. In this case, the issue before the court was if permission of the Company Court where winding up proceedings were pending, was required for filing a petition for recovery of money before the Debt Recovery Tribunal under the Recovery of Debts Dues to Banks and Financial Institutions Act, 1993 (RDB Act, 1993). After examining the provisions of the said Act, the court was of the view that the jurisdiction of the Debt Recovery Tribunal was exclusive and no permission was required from the Company Court. The Supreme Court referred to its earlier decision in the case of Life Insurance Corporation of India v. D.J. Bahadur and Ors. (1981) 1 SCC 315 and said as under--
"There can be a situation in law where the same statute is treated as a special statute vis-a-vis one legislation and again as a general statute vis-a-vis yet another legislation. Such situations do arise as held in Life Insurance Corporation of India v. D.J. Bahadur and Ors. (1981) 1 SCC 315. It was there observed :
'..... for certain cases, an Act may be general and for certain other purposes, it may be special and the court cannot blur a distinction when dealing with the finer points of law.' For example, a Rent Control Act may be a special statute as compared to the Code of Civil Procedure. But vis-a-vis a Act permitting eviction from public premises or some special class of buildings, the Rent Control Act may be a general statute. In fact, in Damji Valji Shah v. LIC of India (1965) 2 Comp LJ 90 (SC) (already referred to), this court has observed that vis-a-vis the LIC Act, 1956, the Companies Act 1956, can be treated as a general statute. This is clear from para 19 of that judgment. It was observed:
'Further, the provisions of the special Act, i.e., the LIC Act, will override the provisions of the general Act, viz., the Companies Act which is an Act relating to companied in general.' Thus some High Courts rightly treated the Companies Act as a general statute, and the RDB Act as a special statue overriding the general statute."
13. On the question of special law vis-a-vis special law--the court said that both the Companies Act and RDB Act 1993 can be treated as special laws, and the principle that when there arc two special laws, the latter will normally prevail over the former if there is provision in the latter special Act giving it overriding effect. The Supreme Court also referred to its earlier decision in the case of Damji Valji Shah v. LIC of India (1965) 2 Comp LJ 90 (SC): AIR 1966 SC 135: (1965) 3 SCR 665. In this case, a similar objection was raised before the Tribunal constituted under the Life Insurance Corporation of India Act, 1956 (LIC Act) that leave of the Company Court was required under Section 446(1) of the Companies Act, 1956. LIC Act enabled LIC to file a case before a Tribunal and recover various amounts from the erstwhile Life Insurance Companies in certain respects. The Supreme Court rejected the contention so raised before it and observed as under (page 95 of Comp LJ):
"In view of Section 41 of the LIC Act, the Company Court has no jurisdiction to entertain and adjudicate upon any matter which the Tribunal is empowered to decide or determine under that Act. It is not disputed that the Tribunal has jurisdiction under the Act to entertain and decide matters raised in the petition filed by the Corporation under Section 15 of the LIC Act. It must follow that the consequential provisions of Sub-section (1) of Section 446 of the Companies Act will not operate on the proceedings which be pending before the Tribunal or which may be sought to be commenced before it".
14. In Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. (1999) 3 Comp LJ 161 (SC): (1999) 5 SCC 688, the Supreme Court was considering the maintainability of an application filed under Section 8 of the Arbitration Act 1996 in a winding-up petition before the High Court. The court observed as under (para 4 at page 162 of Comp LJ):
"4. Sub-section (1) of Section 8 provides that where the judicial authority before whom an action is brought in a matter, will refer the parties to arbitration, the said matter in accordance with the arbitration agreement. This, however, postulates, in our opinion, that what can be referred to the arbitrator is only that dispute or matter which the arbitrator is competent or empowered to decide.
5. The claim in a petition for winding up is not for money. The petition filed under the Companies Act would be to the effect, in a matter like this, that the company has become commercially insolvent and, therefore, should be wound up. The power to order winding up of a company is contained under the Companies Act and is conferred on the court. An arbitrator, notwithstanding any agreement between the parties, would have no jurisdiction to order winding up of a company. The matter which is pending before the High Court in which the application was filed by the petitioner herein was relating to winding up of the company. That could obviously not be referred to the arbitration and, therefore, the High Court, in our opinion was right in rejecting the application."
15. In Chimnjilal Shrilal Goenka (deceased) through LRs. v. Jasjit Singh and Ors. JT 1993 (2) SC 34, the Supreme Court was considering whether an arbitrator could decide on the validity of the Will. The question of the probate of a Will was referred by the consent of the parties for arbitration to a retired Chief Justice of the Bombay High Court. As some proceedings with regard to the probate were also pending in court, the question arose as to whether the arbitrator could decide the validity of the Will. The Supreme Court observed that it was only the probate court whose order was appealable, which could decide this question and more so such decision of the arbitrator would deprive the losing party's statutory right of appeal vide Section 229 of the Indian Succession Act. The Supreme Court also observed that the arguments that as the parties had consented to the reference of the dispute to the arbitration, no interference was called for--could be of no avail as the consent could not have conferred jurisdiction nor there was any estoppel against the statute.
16. This has also been a consistent view of the High Courts that proceedings under Sections 397 and 398 read with Sections 402 and 403 of the Companies Act are amenable to the jurisdiction only of the Company Law Board and jurisdiction of the arbitrator is barred.
17. Applying the ratio in the above cases, it is clear that the special law, i.e. TRAI Act, will prevail over general law, i.e., Arbitration Act, 1996, and, therefore, TDSAT has the exclusive jurisdiction to adjudicate upon all disputes that arise between the parties and those specified under the Act. TRAI Act being a later statute and having been specially enacted for the telecom sector will certainly prevail over the Arbitration Act, 1996. The TRAI Act was enacted in the year 1997 whereas the Arbitration Act was enacted in 1996. When the TRAI Act was enacted, the Parliament was aware of the remedy of arbitration available under the Arbitration and Conciliation Act, 1996, even then it chose not to bring arbitration within the ambit of Act and that too after amendment in the year 2000 since it desired to vest exclusive jurisdiction in the TDSAT. In fact, it is a well-known rule of interpretation that the later law prevails over the earlier. In the case of Ajoy Kumar Banerjee and Ors. v. Union of India and Ors. (1984) 3 SCC 127, while dealing with General Insurance Business (Nationalisation) Act, 1972, and Industrial Disputes Act, 1947, Supreme Court dealt with the rule of interpretation with regard to the earlier law and later law and held, inter alia, that --
"The general rule to be followed in case of conflict between two statutes is that the later abrogates the earlier one..."
17.1 The Act is not only a later legislation but is also a special legislation aiming to protect the interests of the service providers and the consumers of the telecom sector and to promote and ensure the orderly growth of telecom sector. Speedier adjudication of disputes by a specialised Tribunal having requisite knowledge and expertise of the sector is necessary for the growth of the sector in the long run. Therefore, to uphold the fabric of the Act, the jurisdiction vested in the TDSAT is and ought to be exclusive, which will also be in consonance with public policy.
18. It is a matter of public policy laid in the public interest that telecom, broadcasting and cable services dispute which affect a large body of consumers all over the country should be amenable to one expert body. What will happen if in a dispute between two service providers in telecom sector arising out of an interconnection agreement, a service provider revokes the interconnection agreement. For these two, it may be dispute of recovery of money or damages or of technical nature but disconnection deprives consumers of access of one network to the other network. Consequences are not limited to the two service providers only but are of far reaching nature not difficult to imagine. Similarly, if in cable industry, a broadcaster and a multi-service operator sever their relations under alloyed breach of agreement, it affects again a large body of consumers who would not be able to avail the signals for various channels and yet having made payment. An arbitrator will find himself lacking jurisdiction to give relief to hapless consumers.
19. The Act is a complete code. TDSAT has exclusive jurisdiction to adjudicate any dispute between the parties and also exercises exclusive appellate jurisdiction against any direction, decision or order of the TRAI. Sections 14 to 20 in Chapter IV of the Act deal with the jurisdiction and procedure of the TDSAT. Section 14M and 14N provides for transfer of pending cases before TRAI and appeals in the High Court to TDSAT after its constitution by the amending Act 2 of 2000 which carne into force on 21.2.2002. Jurisdiction of civil courts is barred in respect of any matter which TDSAT is empowered by or under the Act to determine and no injunction shall be granted by any court or any authority which includes arbitrator in respect of any action taken or to be taken in pursuance of the powers conferred by this Act on TDSAT. Orders passed by the TDSAT are executable as a decree and provision also exists for imposition of penalty for wilful failure to comply with the orders of the TDSAT. Under Section 18 of the Act, appeal lies to the Supreme Court against any order not being an interlocutory order of TDSAT on one or more of the grounds specified in the Section 100 of the Civil Procedure Code. The Supreme Court in the case of Cellular Operators Association of India v. Union of India (2003) 1 Comp LJ 1 (SC): (2003) 3 SCC 186 has observed that appeal lies to the Supreme Court against the order of TDSAT only on the substantial question of law. The Preamble of the Act discloses as well the intent and object of the Legislature to confer exclusive jurisdiction to TDSAT to the exclusion of any court or authority.
20. The Arbitration Act, 1996, is a general Act and it will apply to all the arbitration agreements but the Act, i.e., TRAI Act is Special Act and applies to telecom sector and by notification issued on 9 January, 2004, also applies to broadcasting and cable services. The intention of the Legislature in ousting the jurisdiction of all other courts and all other authorities is quite apparent and it is to ensure and enable one single authority, i.e., TDSAT, to uniformly regulate this vital telecom sector which includes broadcasting and cable TV sector. Proper functioning of various stakeholders in this telecom sector is vital to the development and to safeguard interest of the consumers at large who are the beneficiaries of these services. It may also be noticed that telecom sector is subject to various regulations issued by TRAI which even monitors the interconnection between various service providers. In the Cellular Operators Association of India v. Union of India (2003) 1 Comp LJ 1 (SC): (2003) 3 SCC 186, the Supreme Court has held that jurisdiction of TDSAT under Section 14 cannot be held merely to be supervisory jurisdiction and that it is the only forum for addressing the grievances of aggrieved party inasmuch as the appellate jurisdiction to the Supreme Court is only on the substantial question of law and jurisdiction of Civil Courts for filing a suit is ousted. TDSAT has power to adjudicate any dispute. The Supreme Court in the case of West Bengal [Telecom] Regulatory Commission v. CESE Ltd. (2002) 8 SCC 715 has even recommended the establishment of a similar expert Tribunal like TDSAT in telecom sector in other similar regulatory bodies. The question of exclusive jurisdiction of an expert body like TDSAT has recently been discussed in a decision of Supreme Court in the case of Clariant International Ltd. and Anr. v. Securities and Exchange Board of India (2004) 4 Comp LJ 52 (SC): (2004) 8 SCC 524 (paras 64 to 82).
21. The principles laid in various decisions of the Supreme Court cited above are quite explicit. TRAI Act is a special law, which will govern, and it overtakes general law, i.e., Arbitration Act, 1996. Also, TRAI Act, being the later Act (TDSAT was constituted by the Amending Act of 2000) has precedence over the earlier Act which is the Arbitration Act, 1996. The principle of generalia specialibus non derogant has been referred to in a judgment of Supreme Court in Talcher Municipality v. Talcher Regulated Market Committee and Anr. (2004) 6 SCC 178. Consent cannot confer jurisdiction when there is none. Dominant public interest requires that all disputes in telecom sector which includes broadcasting and cable TV should be within the exclusive jurisdiction of TDSAT. In these circumstances, public policy demands that jurisdiction of Tribunal like TDSAT should be exclusive and arbitration agreement not to have any applicability.
22. If we refer to the provisions of the Act, particularly, Section 15, it is quite clear that the only exception is when there is arbitration under Section 7B of the Indian Telegraph Act, 1885, and in no other dispute within the jurisdiction of TDSAT the matter can go to the arbitration. Statute is clear. By judicial pronouncement no further proviso can be added taking away jurisdiction of TDSAT except MRTP, individual consumer disputes and dispute falling under Section 7B of the Indian Telegraph Act, 1885. Even otherwise jurisdiction of arbitration is barred by necessary implication. Provisions of Section 89 of the Code of Civil Procedure has no application inasmuch as jurisdiction of Civil Court to try any dispute under the Act is barred. A court, therefore, cannot, frame question arising out of the dispute in telecom sector and refer the same to arbitration. Only two other provisions which are to be read along with the Act are those under the Indian Telegraph Act, 1885, and the Indian Wireless Telegraphy Act, 1933. TDSAT will have jurisdiction in respect of any dispute as mentioned in Section 14 of the Act. It will also have the jurisdiction if dispute arises in respect of direct activities in telecom sector i.e. those relating to the telecom services. Dispute between two service providers as landlord and tenant would certainly be outside the ambit of the Act. Those disputes over which TDSAT has no exclusive jurisdiction and where the third party's interest like the consumers is not in issue or where there does not exist any public interest, the domestic forums chosen by the parties by way of an arbitration agreement may be held to be valid.
23. We must, therefore, hold that arbitration is barred in respect of the matters which are Within the exclusive jurisdiction of the TDSAT under the provisions of Telecom Regulatory Authority of India Act, 1997.
24. M.A. No. 169 of 2004 in Petition No. 9 of 2003 has been filed by the respondent VSNL under Section 8 of the Arbitration Act, 1996. One of the conditions for applicability of Section 8 is that the party seeking to refer to the dispute for arbitration should file the application before it submits its first statement on the substance of the dispute. Respondent has already filed its statement before filing the present petition.
25. In P. Anand Gajapathi Raju v. P.V.G. Raju (dead) and Ors. (2001) 4 Comp LJ 219 (SC): (2000) 4 SCC 539, the Supreme Court while examining the conditions under which Section 8 (1) and (2) of the Act could be enforced, observed as under (para 5 at page 221 of Comp LJ):
"The conditions which are required to be satisfied under Sub-sections (1) and (2) of Section 8 before the Court can exercise its powers are:
(1) there is an arbitration agreement;
(2) a party to the agreement brings an action in the court against the other party;
(3) subject matter of the action is the same as the subject matter of the arbitration agreement;
(4) the other party moves the court for referring the parties to arbitration before it submits his first statement on the substance of the dispute.
This last provision creates a right in the person bringing the action to have the dispute adjudicated by the court, once the other party has submitted his first statement of defence. But, if the party, who wants the matter to be referred to arbitration applies to the court after submission of his statement and the party who has brought the action does not object, as is the case before us, there is no bar on the court referring the parties to arbitration."
26. In view of the clear statement of law laid down by the Supreme Court, application under Section 8 of the Arbitration Act is not maintainable. It is, therefore, rejected. We hold that arbitration is not permissible under the provisions of the Telecom Regulatory Authority of India Act, 1997.