The Appellate Tribunal rejected Reliance Communications' petition to set aside an Rs. 88.5 lakh penalty for subscriber verification lapses. It dismissed the plea for an interim stay and held the matter required trial for disputed facts.
Petition dismissed; prayer for interim order rejected; penalty remains unchanged.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL
NEW DELHI
DATED 03RD FEBRUARY, 2012
Petition No.42 of 2012
Reliance Communications Ltd. … Petitioner Vs. Union of India … Respondent
BEFORE:
HON’BLE MR. JUSTICE S.B. SINHA, CHAIRPERSON HON’BLE MR.P.K. RASTOGI, MEMBER
For Petitioner : Mr. Navin Chawla, Advocate Ms.Nidhi Parashar, Advocate For Respondent : Ms. Maneesha Dhir, Advocate Mr.K.P.S. Kohli, Advocate Mr. Abhishek Kumar, Advocate
O R D E R
Petitioner, a licensee of the respondent herein, has filed this petition questioning bills dated 25.11.2011 and 30.12.2011; whereby and whereunder penalty for a sum of Rs.88.50 lakhs was levied on the following premise :-
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“4. AND WHEREAS it is observed from the investigation report of TERM Cell, Rajasthan that M/s. Reliance Communications Ltd. had activated the SIMs without proper verification of the customers as detected during the surprise visit on 19th Aug. 2011 at M/s. Arihant Trading Company, Bharatpur. The Team of TERM Cell issued 186 CAFs from the premises of M/s Arihant Trading Company, Bharatpur in the presence of Sh. Nikhil Gupta, Territory Manager RCL. However Sh. Nikhil Gupta refused to sign the seizure memo as witness. The details of irregularities made in the subject case are annexed with this letter. It is clear from the TERM Cell’s report that proper verification has not been carried out by the Service provider at the time of provisioning of service to the subscribers as 177 CAFs out of the total 186 CAFs investigated are non-compliant. Hence, M/s. Reliance Communications Ltd. has violated the terms and condition of License Agreement and the instructions issued from time to time by the Licensor on the subject by providing mobile connection without proper verification. The percentage of correct subscriber verification of M/s. Reliance Communications Ltd. for the case investigated in Rajasthan Service area has been ascertained based upon the audit report jointly signed by your authorized representative and TERM Cell, Rajasthan. M/s. Reliance Communications Ltd. subsequently submitted the physical verification report in respect of the 139 CAFs out of the 177 CAFs found non compliant. It was mentioned in the physical verification report that the customer has owned the information filled in and signature made on the CAF. But it was found that CAF of these 139 customers are incompletely filled/blank and/or unsigned. As such the statement made by the customer during physical verification has no significance and the DoT instruction issued vide 800-4/98-VAS (Vol.VI) dated July 31, 2000 stands violated as mentioned in the joint audit report. Therefore, the financial penalty of an amount of
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Rs.88,50,000/- (In words Rs. Eighty Eight Lakhs & Fifty Thousands only) has been circulated as per the letter No. 800-52/2008-VAS-III (Pt.) dated 24th Dec 2008 and 800-20/2010-VAS dated 18th Nov 2010 from AS cell of DoT. This letter is being e-mailed at the address [email protected]. Chetan [email protected].”
Petitioner entered into a Distributorship Agreement with one M/s. Arihant Trading Co. for the town of Bharatpur in the State of Rajasthan.
Indisputably, the respondent had issued guidelines from time to time with regard to the mode and manner of subscriber verification before grant of connection (both pre-paid and post paid), issued by the licensee prohibiting providing of mobile connection without proper documents.
It was furthermore directed that in absence of any proper document, the concerned telephones be disconnected.
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Nodal Officer of the petitioner at Bharatpur was informed with regard to the said inspection, who nominated one Sanjiva Nand Sinha for the said purpose.
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13.10.2011, it sought for sixty days time to carry out its part of the contractual obligations, but only fifteen days time had been granted to it by the respondent in terms of its letter dated 14.10.2011.
By another letter dated 11.11.2011, the respondent was informed that it had found 33 other cases to be bonafide.
By a letter dated 11.11.2011, the petitioner prayed for fifteen days further time.
10. Respondent, by its letter dated 18.11.2010, stated :-
“This is with reference to audit conducted by TERM Cells related to subscriber verifications cases other than monthly sample CAF Audit, such as cases referred from LEAs, cases of complaints, cases discovered during investigation of bulk cases, surprise checks etc. Issues have been raised about imposition of financial penalty for the cases found non-compliant in respect of subscriber verification for such cases.
In this regard, it is clarified that such cases reported separately may not be combined with the monthly sample CAF audit
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for the purpose of calculating overall percentage compliance. These cases may be separately investigated/audited. For the subscriber verification failure cases of these cases also, the financial penalty as prescribed in the DOT letter No. 800-52/2008-VAS-III(Part) Dated 24.12.2008 shall be applicable. The sample size may be taken as total number of reported cases or cases taken for investigation/ surprise check and compliance percentage may be calculated out of these samples only. The other conditions related to disconnection etc. as applicable in case of other CAF Audit shall also be applicable. Since the referred instruction dated 24.12.2008 is applicable w.e.f. 01.04.2009, for cases reported prior to 01.04.2009 the financial penalty may be imposed at the rate of Rs.1000/- per non-compliant case.”
4. Hence, in accordance to para (X) of DoT (AS Cell) letter No. 800-20/2010-VAS dated 4th Nov. 2010, the financial penalty
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imposed vide letter No. TERM-RAJ/11-14/2011/199 dated Nov. 25, 2011, hereby remain unchanged. This financial penalty of amount Rs.88,50,000/- (Rupees eighty eight lakhs and fifty thousand only) hall be deposited within one week from the date of issue of this order through a demand draft or pay order drawn on any schedule bank in favour of CAO (Cash), O/o CCA Jaipur failing which the amount of the penalty shall be recovered with applicable interest (2% above the Prime Lending Rate (PLR) of State Bank of India existing as on 01.04.2011) as per terms and conditions of the license agreement for non-payment of dues. Further, the Licensor shall be at liberty to encash the Financial Bank Guarantee in case of non-payment of above mentioned amount without any further notice to the Licensee.”
This Petition has been filed on or about 19.01.2012 praying, inter-alia, for the following reliefs :-
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It is also difficult to accept at this stage that there has been a complete violation of the principles of natural justice.
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……………… (S.B. Sinha) Chairperson
……………..
rkc
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2 issues framed by the court
Whether the petitioner was entitled to an interim order staying the demand notice and penalty?
Whether the principles of natural justice were violated in the imposition of the penalty?
2 provisions across 1 enactments
Reliance Communications Ltd.
Union of India
S.B. Sinha
P.K. Rastogi
As recorded by the court registry
A petition before TDSAT in a dispute between a licensor, a licensee or a service provider under the TRAI Act.
2 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
