Call drop charges as penalty on the telecom Service providers violative of Arts. 14 and 19(1)(g) of the Constitution

Supreme Court: In the matter where the validity of the Telecom Consumers Protection (Ninth Amendment) Regulations, 2015 was in question, the Court held that the Impugned Regulation is ultra vires the Telecom Regulatory Authority of India Act, 1997 (TRAI Act) and violative of fundamental rights under Articles 14 and 19(1)(g) of the Constitution.

The impugned Regulation states that every originating service provider who provides cellular mobile telephone services is made liable to credit only the calling consumer (and not the receiving consumer) with one rupee for each call drop (as defined), which takes place within its network, upto a maximum of three call drops per day. The Delhi High Court had upheld the said Regulation and held that the Impugned Regulation has attempted to balance the interest of service providers by limiting call drops to be compensated to only three and by limiting compensation to only the calling and not the receiving consumer. The Court said that the High Court’s order was flawed as a penalty that is imposed without any reason either as to the number of call drops made being 3, and only to the calling consumer, far from balancing the interest of consumers and service providers, is manifestly arbitrary, not being based on any factual data or reason.

Considering the fact that the Quality of Service Regulation, 2009 provides for a call drop rate of 2% averaged over a period of one month, the Court held that it was unable to appreciate the reasoning given by the High Court when it said that 2% is a quality parameter for the entire network as opposed to payment of compensation to an individual consumer. The Court further said that the Regulation, in assuming that every call drop is a deficiency of service on the part of the service provider, is plainly incorrect and hence, unconstitutional. [CELLULAR OPERATORS ASSOCIATION OF INDIA v. TELECOM REGULATORY AUTHORITY OF INDIA, 2016 SCC OnLine SC 486, decided on 11.05.2016]

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