Telecom Disputes Settlement Tribunal
Hfcl Satellite Communications Limited vs Union Of India (Uoi), Department Of ... on 6 April, 2005
ORDER
1. A preliminary objection has been raised by the respondent, Department of Telecommunications (DoT) that TDSAT in exercise of its power and judicial review cannot go into the facts of the case. Various decisions of the Supreme Court have been cited as to the scope of judicial review. We think this objection was raised in mistaken view of the jurisdiction of this Tribunal. In one of the earlier matters before this Tribunal a view was taken that jurisdiction of TDSAT is limited or is akin to the power of judicial review.
2. Supreme Court in the case of Cellular Operators Association of India and Ors. v. Union of India and Ors. - (2003) 3 SCC 186, has held that such a view by the TDSAT is wholly unsustainable. DoT is a licensor and the petitioner a service provider. There is a dispute between service provider, the petitioner and the respondent as a licensor. TDSAT has to adjudicate this dispute under Section 14 of the Telecom Regulatory of India Act, 1997 (for short the 'Act'). As to how the dispute was to be settled, procedure is prescribed under Section 14A of the Act. Though, the Tribunal is not bound by the procedure laid down by the Code of Civil Procedure, 1908, but has power to regulate its own procedure. However, TDSAT is to be guided by the principles of natural justice subject, of course, to various provisions of the Act. Under sub-section 2 of the Section 16 of the Act, TDSAT for the purposes of discharging its functions, has the same powers as are vested in a civil court under the Code of Civil Procedure 1908 while trying a dispute in respect of the matters mentioned in sub-section. Following observations of the Supreme Court in the aforesaid case is a complete answer to the objection raised by the DoT. We quote Para 27 of concurring judgment of S.B. Sinha, J:-
"TDSAT was required to exercise its jurisdiction in terms of Section 14-A of the Act. TDSAT itself is an expert body and its jurisdiction is wide having regard to sub-section (7) of Section 14-A thereof. Its jurisdiction extends to examining the legality, propriety or correctness of a direction/order or decision of the authority in terms of sub-section (2) of Section 14 as also the dispute made in an application under sub-section (1) thereof. The approach of the learned TDSAT, being on the premise that its jurisdiction is limited or akin to the power of judicial review is, therefore, wholly unsustainable. The extent of jurisdiction of a court or a tribunal depends upon the relevant statute. TDSAT is a creature of a statute. Its jurisdiction is also conferred by a statute. The purpose of creation of TDSAT has expressly been stated by Parliament in the amending Act of 2000. TDSAT, thus, failed to take into consideration the amplitude of its jurisdiction and thus misdirected itself in law." (Para 27) Pattanaik, C.J. who delivered the judgment along with H.K. Sema, J observed :-
"At the outset, it may be stated that the Tribunal committed an error by holding that it exercises supervisory jurisdiction. As has been stated earlier, the jurisdiction of the Tribunal under Section 14 cannot be held to be a supervisory jurisdiction, in view of the language of the statute as well as the fact that it is the only forum for redressing the grievance of an aggrieved party inasmuch as the appellate jurisdiction to this Court is only on a substantial question of law and the jurisdiction of a civil court for filing a suit is also ousted. It has already been held by us that the Tribunal has the power to adjudicate any dispute but while answering the dispute, due weight has to be given to the recommendation of TRAI, which consists of experts. The Tribunal also committed yet another error in holding that the jurisdiction of the Appellate Tribunal cannot be wider than that of the Supreme Court. A bare comparison of the provisions of Section 14, which confers jurisdiction on the Tribunal and Section 18, which confers jurisdiction on the Supreme Court, would unequivocally indicate that the Tribunal has much wider jurisdiction than the jurisdiction of this Court under Section 18, as this Court would be entitled to interfere only on the substantial question of law, which arises from the judgment of the Tribunal and not otherwise." (Para 11) It is rather unfortunate that in view of clear statement of law as laid by the Supreme Court in the case in which DoT itself was a party, such a preliminary objection should have been raised.
3. The Petitioner, M/s. HFCL Satellite Communications Limited is a company incorporated under the provisions of the Companies Act, 1956. The Petitioner is a service provider with a subscriber base of approximately 100 clients for the provision of Very Small Aperture Terminal (VSAT)1 services. They were granted a non-exclusive license to establish, maintain and operate for Closed User Group (CUG)2 domestic 64-KBPS3 data network via INSAT satellite system in extended C-Band frequency assigned from time to time using VSAT throughout India.
4. In the present petition, the Petitioner is challenging the impugned order dated 2nd January 2005 of the Department of Telecommunication (DoT), Government of India (the Respondent) thereby terminating its license valid up to 30.1.2005 with effect from 30.1.2005. The Petitioner has prayed for the following:-
(i) Direction/Order to the Respondent to forthwith execute and revise the agreement thereby permitting the migration of the Petitioner from the earlier license regime to the Revenue Sharing Regime under the National Telecom Policy, 1999 (NTP 99).
(ii) Refund of the excess license fee paid by the Petitioner till date along with interest.
(iii) Preventing the Respondent from disrupting the existing services which is being provided by the Petitioner to his clients.
(iv) Quashing the impugned orders sent by the Respondent to the bank of the Petitioner for invoking the two Bank Guarantees of Rs. 75 lakh and Rs. 50 lakh respectively.
5. The Petitioner was granted a license by the Respondent for a period of 10 years with effect from 30.1.1995. Clause-2 of the License Agreement provided for extension of the license period beyond 10 years by one year at a time at the discretion of the Authority. As per Clause 7.1 of the License Agreement, the licensee could give a 365 days notice to the licensor to terminate the license.
6. While initiating the case, Mr. Rakesh Tiku, learned counsel for the Petitioner, pleaded that these provisions pre-suppose a level of continuity and stated that the clause of extension by one year beyond 10 years gives a hope to the licensee of continuation of the services. It was also stated by him that as per Clause 8.1 of the License Agreement, the Authority could terminate the license by giving a notice of 90 days subject to the condition as mentioned in Clause 8.2 of the above License Agreement. He continued to state that `no notice' to the Petitioner meant virtually continuance of the license and therefore the unilateral termination of the license by the Respondent at the expiry of 10 years period was arbitrary and in violation of principles of natural justice. To justify his stand the learned counsel for the Petitioner stated that there was a logic behind the Clauses incorporated in the License Agreement for both the parties. He went on to add that 90 days notice to be given under Clause 8.1 of the License Agreement was to benefit the Petitioner enabling him to make alternative arrangements for provision of the service for which he would have created a large infrastructure. He stated that the notice of termination was left at the company's office at about 9.00 P.M. on 30th January 2005. He went on to state that this manner of giving termination letter amounted to virtual death and was in contravention of natural justice.
7. At the outset, a question was posed to the Petitioner about his status on the date of filing the petition since he was no more a licensee on termination of his license by the licensor. The learned counsel stated that since he was not aggrieved till 30th January 2005, there was no question of his knocking at the doors of this Tribunal for relief before this date. It was only on receipt of this letter that he has filed this petition and requested the Tribunal to consider the case in order to give natural justice to the Petitioner company who otherwise will have to bear a very heavy loss. After giving due thought and keeping in mind that if the Petitioner's case was accepted and consequently if the license is continued, he will continue to be a licensee and therefore the petition was admitted for hearing.
8. The extension of license beyond the period of the license i.e. 10 years and termination of license are two different issues. Extension is the prerogative of the licensor at the expiry of the period of the license for which no notice or intimation is required whereas termination means termination within the period of total duration of the license granted i.e. before 30th January 2005 in the instant case. Since the licensor did not stop/terminate the license before this date the question of their giving notice for termination does not arise. The licensor is well within his powers not to extend the license and let it lapse on termination of the stipulated period.
9. On the second issue, the learned counsel for the Petitioner stated that they were granted license under the National Telecom Policy 1994 (NTP 94). However, since some of the objectives of the NTP 94 could not be fulfilled the Government announced a new National Telecom Policy 1999 (NTP 99). In terms of para 3.9.1 of the NTP 99 provisions were made for the VSAT service providers who were granted separate license on non-exclusive basis for an initial period of 20 years and additional period of 10 years thereafter. In accordance with the provisions contained in para 3.1.1. of the NTP 99 learned counsel for the Petitioner contended that the Government on 11th June 2001 issued a communication to all existing licensees including the Petitioner company. As per this letter the government decided to allow the existing VSAT licensees to migrate to the new licensing regime with effect from 1.7.2001. In terms of the Clause 2 (iii) all dues up to 30th July 2001 along with other charges and the late payments etc. were to be paid before the existing licensee was to migrate. He stated that the speed of data transmission was also enhanced to 512 KPBS. This was an option given for migration and if the existing licensee did not accept the migration package or did not fulfill the conditions of the Migration Package he was free to continue with the old license until its validity. Mr. Tiku stated that his company had given an unconditional acceptance to the Respondent vide their communication dated 31st July 2001. He further stated that there were some misgivings about the exact quantum of dues payable by his company due to some disputed and delayed charges having been raised. The Petitioner's company was not allowed to migrate to the Revenue Sharing Regime because of dispute about the dues. He further stated that he communicated to the Respondent vide his letter dated 31st March 2003 and that all outstanding dues payable till March 2003 had been cleared and there was no dues/legal case pending between the licensee and the licensor.
10. Mr. Rajeeve Mehra, learned counsel for the Respondent, stated that the Petitioner was a defaulting company in terms of payment as well as had violated the provisions of the License Agreement. He quoted a complaint received from a Member of Parliament stating that Fortune Media Company of Chennai, which was owned by Martin Lottery Group, was illegally using a VSAT Network for Video uplink. He further stated that the DoT directed the Network Operations Control Centre (NOCC) for investigation of the complaint. The NOCC is responsible for regulation, coordination, monitoring of Satellite Services in India and authorized to grant permission to VSAT operators for starting uplinking on INSAT Satellite System. The NOCC obtained a confidential report from the Master Control Facility (MCF), Hassan, Department of Space (DOS), which proved that the Petitioner had uplinked the Live Video Carrier for Nagaland State Lottery. He also mentioned about another complaint from M/s. Subhag Video Corporation (SVC) dated 20th July 2003 by the Department against the Petitioner company for uplinking video channels without permission. The learned counsel for the Respondent said that the Petitioner company was in the habit of misusing the provisions of the License Agreement and therefore was not considered fit for the migration. The Petitioner's company was issued a Show Cause Notice no. 813-12/03-LR(9) on 28.8.2003. In essence, the Petitioner was put on notice of its illegalities. The so-called illegalities i.e. violation of the terms of licence, as communicated in the Show Cause Notice issued by DoT, were briefly submitted by the learned counsel for DoT, as under:-
(a) The petitioner used 18 MHz of Transponder Space in Transponder-16 on INSAT-3A without any clearance from the Wireless Planning Commission (WPC) and NOCC (violation of condition 5 & 21 of the licence). The learned counsel for the respondent stated that the petitioner in reply to the notice had stated that they were not aware whether any clearance was required and they had used it only for trial purposes. The petitioner later vacated this Transponder space. He said that the contention of the petitioner was wrong since bare reading of the condition 5 & 21 of the licence makes it amply clear that mandatory performance verification of the VSAT was required to be carried out by NOCC for which the petitioner should have given proper application for such clearance. Similar is the case for condition no. 21 of the licence where WPC's clearance is required.
(b) The petitioner was using 2 Mbps unauthorized carrier in its allocated bandwidth in INSAT-3B. However, as per the licence agreement, maximum data rate allowed to uplink is not more than 64 Kbps per VSAT. Thus the petitioner had increased its data rate from the permitted 64 Kbps to 2000 Kbps i.e 2 Mbps, thereby increasing to about more than 30 times of the permitted capacity as per terms of licence agreement.
(c) The petitioner was using 3.8 M Satellite antenna operating in VSAT network without performance verification testing and NOCC clearance in breach of condition no. 5. In the Petitioner's reply it was claimed that it had obtained NOCC clearance for the hub and certain remote sites had been taken earlier but there are still a few remote sites which were not cleared by NOCC.
(d) The petitioner was using antenna of 2.4 M/1.8 M in mesh configuration whereas minimum size antenna should be 3.8 M in mesh connectivity. The petitioner responded to this by saying that they were not using any 2.4 M/1.8 M antenna in their network.
11. The Petitioner company vide its letter dated 10.9.2003 replied to the Show Cause Notice. According to the learned counsel for the Respondent the said reply of the Petitioner was vague, evasive, untenable and unacceptable to the Respondent.
12. Mr. Mehra, learned counsel for the Respondent, informed that the Chairman, Telecom Commission, in November 2003 constituted a Committee comprising (i) Sr. DDG (Vig.), DoT; (ii) Sr. DDG (PP), DoT; (iii) Wireless Advisor, DoT; (iv) Sr. DDG (TEC), DoT; (v) DDG (LR), DoT, (vi) GM (OP), MCF Hassan, DoS; (vii) Jt. DDG (NOCC), BSNL, for examining the complaints received by the Respondent against the Petitioner company and also to suggest further course of action in the said matter.
13. The aforesaid Committee examined the reply of the Petitioner company and found it unsatisfactory and after various meetings and detailed deliberations recommended for the cancellation of license issued to the Petitioner. The recommendations after examination were accept by the respondent.
14. The learned counsel for the Petitioner submitted that each notice issued by the Respondent bringing out the allegations against the Petitioner directed the Petitioner to reply within a specific period of time. He submitted that in every case the reply was sent within the stipulated date and time stating that his client had rectified the faults indicated to him in the Show Cause notices issued to him and confirmed it within the due time. He further no Show Cause Notice was given to him for termination of license. Therefore, his client was satisfied that since all the complaints had been rectified and as the replies were also given within the due date, there was no case pending against him. He clarified that some of the allegations made by the Respondent were totally false since:-
(a) The Petitioner company never used Satellite INSAT for unlinking Live Video Career since the transponders in the Satellite cater for Ku-Band only whereas his company has only C-Band VSATs. This, therefore, could not have been uplinked as alleged by the Respondent.
(b) As regards uplinking of Mobile Vans is concerned, he stated that no Mobile Van had their own VSAT.
15. Therefore, in view of the above, he stated that due to ignorance or in terms of the enhanced data rate permission as per provisions of NTP99 some mistakes were made by the company but there were no gross violations and the mistakes so committed were rectified within the time given by the Respondent. He also submitted that they were always in dark about the outcome since the Respondent never replied back after receiving replies to their Show Cause notices.
16. The learned counsel for the Petitioner accepted the violations but pleaded that these should not be the cause for terminating his license since he had corrected the violations when pointed out. But then the conduct of the petitioner, as rightly consented by the petitioner, would show it would violate the terms of the licence as and when it found profitable. It is not possible for any Authority to keep on monitoring the conduct of the petitioner throughout the license period.
17. Having heard both the counsels in detail, we are not in a position to understand as to why the petitioner had to violate the terms of the licence at the initial stage itself. During the arguments it came out amply clearly that some VSAT Terminals were operated without the clearance of SACFA. The learned counsel for the petitioner accepted the grave consequences of such an action because such transmission can endanger the other electronic transmitters/receivers/systems present in the same location. That is the very purpose of taking clearance from SACFA so that such interference can be avoided and all the transmitters permitted under the licence can function without any interference to other co-located electronic systems. The learned counsel for petitioner did accept the other violations also. We feel that no licensee should expect that the department of the licensor should continue monitoring its activities and point out the violations time and again. In the instant case the violations were committed and accepted by the petitioner and also in response to the notices we find that they informed the DoT that the violations had been rectified. But this continued again and again.
It will not be out of place to mention that the DoT also kept quite on the replies to the Show Cause Notices. Not only that despite repeated letters and requests by the petitioner for consideration of migration to Revenue Sharing Regime, the DoT maintained silence.
18. We feel that the Petitioner was well within his means and rights to come to this Tribunal when he felt that the Migration Package for him was not accepted by the Government. Bringing it to our notice now, when we see that the license has already lapsed/terminated, this matter suffers from limitations. It appears to us that the Petitioner was quite satisfied with the existing license continuing or at the most extension at the end of the period of 10 years i.e. with effect from 30th January 2005. At this stage, therefore, there is no case for migration to revenue sharing regime and, therefore, prayer (i) of the petitioner is rejected.
19. In view of the above, para (ii) of the Petitioner's prayer for refund of excess license fee falls through.
20. After having gone through the charges of breach and misuse of the License Agreement by the Petitioner and also the deliberations of the High Level Committee which were accept by the Respondent, we do not find a case in favour of the Petitioner for extension of licence and hence the question of disruption of services as stated in the petitioner's prayer (iii) has no meaning.
21. As far as prayer (iv) is concerned, we leave it to the Respondent to encash the Bank Guarantees in case there are still some arrears of the licence fee to be paid by the petitioner to the licensor.
22. In view of the above, the petition fails and is dismissed. M.A. No. 35 of 2005 also stands disposed off. Parties to bear their own costs.
1. Very Small Aperture Terminal (VSAT) services refer to communication services provided using Satellite as the medium and VSAT as the terminals. A typical satellite communication link comprises of a ground segment, which is a Satellite Terminal (VSAT Terminal), a hub which acts as a switch to route & connect these terminals, which is also on ground and the space segment i.e. the satellite. For satellite based communication, the link is established from the ground segment by using Very Small Aperture Terminal (VSAT), which is uplinked to satellite where one of the transponders sends back the signal to the hub which in turn again sends back the signal to the transponder from where it is sent to the receiving VSAT terminal. This is called two hop communication. There are hub less terminals also where function of hub i.e. switching is done at the satellite itself. This is called Single hop communication. This way a network of VSAT Terminal can be created. The technical parameters to establish a link specify the frequencies of operation for uplink and downlink, the size of the Dish Antenna, the location of VSAT terminal, permissible bandwidth for the communication links and permissible power output by each Terminal. The location of Terminals is to be approved by Standing Advisory Committee on Frequency Allocation (SACFA). This Committee gives approval for frequency of operation, location of hub and the VSAT Terminals and also the maximum permissible power output of the Terminal. Clearance is required for each site before a Terminal can establish link.
2. A number of terminals communicating with each other with no outside communication to another network are termed as a Closed User Group (CUG).
3. KBPS stands for Kilo bits per second. This is the bandwidth parameter which a Satellite link is permitted to use. More the bandwidth more will be the speed of communication and capacity of the communication link. 1000 Kbps is 1 Mbps i.e. 1 Mega bit per second.