Telecom Disputes Settlement Tribunal
Data Access (India) Limited vs Mahanagar Telephone Nigam Limited on 10 March, 2003
ORDER
1. This is a petition filed under Section 14A(1) read with Section 14(a)(i) of the Telecom Regulatory Authority of India Act, 1997 by M/s Data Access (India) Limited against Mahanagar Telephone Nigam Limited (MTNL), New Delhi. The Petitioner has alleged that the Respondent has wrongly charged a sum of Rs. 8,70,00,000/- in violation of the terms of the interconnection agreement signed by both the parties.
2. The facts of the case are briefly as under. The Petitioner holds a licence issued by the Department of Telecommunications in March 2002 to provide international long distance carrier services in India. The International Long Distance (ILD) service is basically a network carriage service providing international connectivity to the network operated by Foreign Carriers. The ILD Service Providers, like the Petitioner in the instant case, are expected to provide bearer services so that end-to-end tele-services such as voice, data, fax, video and multi-media etc. can be provided by Access Providers to the customers. Since the Petitioner is not an Access Provider it has to establish interconnection with the networks of Access Provider for the purpose of reaching international calls to the end customer. The Petitioner has therefore reached an interconnection agreement with MTNL which is an Access Provider providing Fixed Services in Delhi and Mumbai. The dispute, which is the subject matter of this petition has arisen out of this interconnection agreement.
3. Under the Interconnect Agreement signed between the Petitioner and the Respondent it was agreed between the parties that commencing from the fourth month of the start of service, the Petitioner shall guarantee the handover of at least 20 million minutes of the incoming traffic volume to MTNL. Sub-clause (iv) of Clause 6.3.2 of the Interconnect Agreement, which is relevant in this context, reads as under:
"Minimum Monthly Guaranteed I/c Traffic: ILDO shall guarantee MTNL 20 million minutes on send or pay basis except for the initial 3 months of the date of start of service where the minimum guaranteed traffic condition would not apply."
The dispute centres around the interpretation of the term "Incoming Traffic". It is the contention of the Petitioner that "Incoming Traffic" includes both traffic terminating with MTNL as well as traffic transiting through MTNL and terminating with other service providers. The Respondent firmly denies this contention and affirms that a proper reading and construction of the Interconnected Agreement would clearly show that "Incoming Traffic", in the context of the minimum guarantee clause, mens necessarily traffic which comes into the network of MTNL and terminates within that network.
4. Clause 6.3.2 lays down the details relating to payment for the incoming International Subscriber Dialing (ISD) calls. Since the dispute relates to the interpretation of this particular clause along with its sub-clauses, it would be useful to reproduce this clause in toto:
"6.3.2: Payment for Termination of Incoming ISD Calls
(i) for incoming international calls,ILDO shall pay to MTNL a minimum charge on per minute basis for termination as per details given below:
a. there shall not be any peak or off peak rates. The above rates shall apply for all 24 hours of the day for all days of the year.
b. The applicable pulse rate for measurement of said minutes shall be 1 second rounded off to next higher minute on total calls in a month.
c. The charges are independent of origination points of calls.
(ii) ILDO shall deliver the incoming calls at POIs# at all the Tandems of MTNL, and further carriage from the POI to final destination shall be done by MTNL.
(iii) In case higher rates for termination and carriage are offered by another ILDO to MTNL, ILDO shall have to pay at higher rate. Similarly, if MTNL contracts lower rates for termination and carriage with another ILDO, such lower rates shall apply with ILDO also. On the same lines, if ILDO offers higher charge to another BSO/CMSP or NLDO,# the same shall apply to MTNL as well. These revised rates for termination shall apply from the dates they are applied for another carrier, under the identical terms and conditions.
(iv) Minimum monthly guaranteed I/C traffic: ILDO shall guarantee MTNL 20 million minutes on send or pay basis except for the initial 3 months of the date of start of service where the minimum guaranteed traffic condition would not apply.
(v) It is agreed that ILDO shall pay MTNL @ 50% of the settlement rate/minute for termination of calls in MTNL's network subject to a minimum as specified in Clause 6.3.2 (i). ILDO agrees to regularly provide copies of the latest applicable agreements with international carriers as filed with TRAI#. Before the launch of the commercial services, ILDO shall supply copy of latest applicable revenue sharing agreement to the Corporate Office of MTNL as well as to the designated billing authority of MTNL. ILDO agrees to provide copy of latest applicable agreements with international carriers within 7-days of signing of such agreement.
(vi) The per minute termination and carriage charges as above are based on the RBI reference exchange rate of US$ = Rs. 49. In case the exchange rate for 1US$ is more/less than Rs. 49/- on the last day of previous month, the charges payable to MTNL shall be suitably enhanced/reduced for the incoming traffic of the following month. For example if on 30th November 2002, the exchange rate is 1US$ = Rs. 50.225, the charge in the lowest slab shall be Rs. 4.51 per minute for December 2002.
(vii) In case of use of MTNL's TAX## switches by ILDO for transiting traffic to other BSO/CMSP/NLDO network, ILDO shall pay MTNL a sum of Rs. 0.50 per minute of traffic passed through such transit switch. The settlement with the NLD operator & terminating service providers shall be done by ILDO. For the purpose of such transit traffic, the ILDO shall take separate group of junctions."
The Petitioner has contended that use of the word "Incoming Traffic" in Clause 6.3.2 (iv) necessarily includes the transit traffic. In this context the Petitioner has also relied on Clause 2.1.2.1 of the interconnect agreement which provides that interconnectivity with MTNL's network shall be for incoming calls to India which are meant for terminating in the "Network of the Licensed Telecom Service Providers in India". The Petitioner therefore has urged that the agreement clearly recognizes that the incoming calls includes not only the calls terminating in the network of MTNL, but also the networks of other Licensed Telecom Service Providers in India.
It has also been urged that Clause 6.3.5 (ii) of the agreement provides for review if the total Incoming Traffic volume in any month exceeds 180 million minutes. Attention has been drawn to the fact that the reference is to total Incoming traffic and not only to termination traffic. It has been argued that wherever it was decided to distinguish the "Incoming Traffic" from "Terminating Traffic" the contract has used the word "Terminating", as has been done in Sub-clause 2.1.6 of the agreement.
5. The Petitioner has pointed out that the MTNL has been raising a combined bill on a monthly basis for the whole of the Incoming Traffic volume which includes both terminating as well as transiting traffic. In all these bills which were raised from the month of August 2002 onwards both terminating traffic and transit traffic have been shown as Incoming Traffic. However, they have been shown separately as the rates chargeable with respect to these two kinds of traffic are different. The Petitioner had intimated the Respondent on 29 th November, 2002 that the traffic commitments made by it had been exceeded. This statement was made after taking into account all incoming traffic - terminating as well as transiting.
The Petitioner has also drawn attention to the fact that the provisional bill for the month of November 2002 sent by the Respondent on 6th December 2002 had also included both transiting and terminating calls as incoming calls, even though they were classified separately within the overall category of incoming tariff. Subsequently, however, on 10th December 2002 the Respondent raised another bill in which only the terminating tariff was taken into account and the minimum guarantee clause was invoked since the terminating tariff was less than 20 million in minutes. Letters were exchanged and meetings took place between the parties with both the parties reiterating their own interpretations about the minimum guarantee clause. Finally the Petitioner has approached this Tribunal with its petition when the Respondent initiated action to encash the bank guarantee of the Petitioner for non-payment of the impugned bill. In its order dated 20th January 2003 the Tribunal stayed the impugned demand in the light of the express assurance given by the learned Counsel of the Petitioner that the bank guarantee, already furnished, will be kept alive till further orders.
6. We have already noted the contention of the Petitioner that the minimum guarantee clause applies to the total volume of incoming traffic which includes both calls transiting through MTNL and those terminating with MTNL. The Respondent has urged, on the other hand, that the interconnected agreement is very clear that the minimum guarantee clause is specifically linked to the incoming traffic coming into and terminating into the network of MTNL. According to the Respondent, a transit call is not an incoming call qua the network of the Respondent as it is merely transmitted from the network of the Respondent by using the gateway which is a Trunk Automatic Exchange (TAX). This gateway or TAX is a single exchange which is designated as a transit switch which is handed over to the concerned network (other than MTNL) where it is to be terminated. Thus there is no carriage in a transit call. Incoming calls, according to the Respondent, refer to only those calls which come into the network of the Respondent, are carried in the network of the Respondent and which terminate in the network of the Respondent. The Respondent has further argued that a base reading of the Clauses 6.3.2(i), (ii), (iii) and (iv) would clearly indicate that these are organically linked to traffic coming into and terminating in the network of the Respondent and the Minimum Guarantee Clause is inextricably linked with this. Clause 6.3.2(vii) which provides for the charges to be paid for transiting traffic is in fact a stand-alone clause dealing with an ancillary/allied matter and has to be read divorced from the preceding provisions of Article 6. The respondent has also drawn attention to the fact that Article 2.1.6 of the Agreement provides that unless otherwise expressly agreed between the parties, the scope of the agreement is limited only to such traffic that originates ir terminates in the network of the Respondent In other words, transiting calls are necessarily allied matters, not coming within the ambit of incoming calls to which minimum guarantee clause is applicable.
7. During the course of the arguments, Mr. C.S. Vaidyanathan, the learned Counsel for the Petitioner submitted that even though Article 1 of the Interconnect Agreement deals specifically with definitions to make the interpretations of the terms used in the Agreement explicit and clear, nowhere does it define "incoming traffic" or state that incoming traffic excludes transiting traffic; therefore in the plain and ordinary meaning of the term, it includes all kinds of incoming traffic, whether it is transiting through or terminating in the network of the Respondent. The other points urged by the learned Counsel for the Petitioner were as under:
a) The current level of total terminating traffic in the network of the Respondent is about 25 million minutes provided by two International long Distance Operators (ILDO-s). It is therefore inconceivable that these two independent ILDO-s would have or could have guaranteed a volume of 20 million minutes each of terminating traffic per month;
b) In another carrier agreement of the Respondent, the "send or pay" terms has been specifically and exclusively confined to terminating traffic which has not been done in the agreement signed between the Petitioner and Respondent. The clear implication therefore is that there was no intention to segregate and exclude transit traffic from the total volume of incoming traffic in the Agreement signed between the Petitioner and the Respondent; and
c) The contracting parties have restricted Sub-clauses (iii), (v) and (vi) of Clause 6.3.2 to terminating traffic and Sub-clause (vii) thereof to transit traffic. However, there has been no such restriction, either way, in Sub-clause (iv) of Clause 6.3.2 which deals specifically with minimum guarantee. The clear inference is that Sub-clause (iv) refers to all odes of incoming traffic.
8. Mr. Arun Kathpalia, the learned Counsel for the Respondent emphasized during his arguments that the Interconnect Agreement very clearly visualizes that there could be various types of incoming calls. Hence Article 2.1.6 very clearly laid down: "Unless otherwise expressly agreed between the parties the scope of this Interconnect Agreement is limited only to such traffic that originates or terminates in the network of MTNL." It was therefore argued that calls which terminate in the network of MTNL only could be considered as incoming calls for the purposes of the Agreement. The learned Counsel also drew attention to Article 2.3.2 of the Agreement which provides: "Transit calls which ILDO desires to transit through MTNL and meant for termination in network of any other service provider will be allowed as per terms and conditions given in this Agreement, subject to Agreement for the same between 3 parties, i.e., ILDO, MTNL and Terminating Service Provider to be recorded in writing." According to him, the stand-alone Sub-clause (vii) of Article 6.3.2 deals with transit calls as visualized under Article 2.3.2, and Article 6.3.2(iv) deals with incoming calls as visualized under Article 2.1.6 and Article 6.3.2(i). It was also urged that the very fact that there were different rates prescribed for the terminating traffic and the transiting traffic indicated that one was the core of the Agreement and the other only incidental to it. as regards MTNL having a different agreement with another party where the minimum guarantee clause has been specifically restricted to terminating traffic, Mr. Kathpalia stated that the terms and conditions of the Agreement between that party and MTNL were substantially different from those in the Agreement between the Petitioner and MTNL. In terms of Article 6.3.2 (iii) of the Agreement between the Petitioner and MTNL, the parties can seek a review of rates on the lines agreed to between MTNL and a third party only if the terms and conditions of the Agreement with the third party are otherwise identical.
9. On a critical analysis of the averments and arguments made by both the parties it is clear that while the drafting of the Agreement could doubtlessly be better and more explicit, the minimum guarantee clause in Article 6.3.2 (iv) is relatable to incoming traffic coming into and terminating in the network of the Respondent. Article 2.1.6 which lays down clearly the scope and parameters of the Interconnect Agreement signed by the Petitioner and the Respondent is unambiguous that the "agreement is limited only to such traffic that originates of terminates in the network of MTNL." We agree with the contention of Mr. Kathpalia, the learned Counsel of the Respondent that incoming transit traffic is ancillary/allied to the main Agreement.
10. As a result of what we have discussed and stated above, the petition fails is dismissed with costs. Counsel fee Rs. 10,000/-.
During the pendency of this Petition we had granted stay of recovery of the amount of the impugned bill and since we have dismissed the Petition, Respondent would also be entitled to interest for the period from 20th January, 2003 till recovery at the rate 10.25 per cent per annum.