Delhi High Court declines relief to Vodafone on TRAI penalty

Delhi High Court declines relief to Vodafone on TRAI penalty

The telecom company has been imposed with a fine of Rs.1,050 crores

The Delhi High Court has refused to grant relief to Vodafone Idea in a matter related to a penalty recommended by the Telecom Regulatory Authority of India (TRAI).

The telecom company had challenged TRAI's recommendation for imposition of the penalty for failing to fulfil an Interconnection Agreement with Reliance Jio Infocom Ltd. Vodafone had entered into an agreement to provide interconnectivity service to Reliance Jio.

Earlier, Vodafone had challenged the September 2021 Central government's order, which imposed a penalty of Rs.950 crores, and TRAI's October 2016 recommendation, before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) stayed the two orders.

On noting the facts, the division bench, headed by Chief Justice Satish Chandra Sharma, refused to interfere with the recommendations. It observed that TDSAT was empowered to deal with all disputes arising out of the Telecom Regulatory Authority of India Act.

The bench held, "After the tribunal gives the conclusion that the order dated 29.09.2021 passed by Respondent No.2 is not sustainable in law, then automatically the recommendation dated 21.10.2016 which is under challenge in the writ petitions, would be set aside."

Chief Justice Sharma further stated, "In view of the pronouncements of the apex court, the tribunals, which are expert bodies and were constituted to decide the disputes arising under that statute, then the courts must not interfere with Article 226 of the Constitution of India.”

The court also made it clear that it was open for the tribunal to decide the issues on merits, including the 2016 recom

mendation. The TRAI had made a recommendation for penal action of Rs.50 crores per Licensed Service Area (LSA) for all 21 LSAs on Vodafone.

In June 2014, Reliance Jio entered into an Interconnection Agreement with the petitioner, for the purpose of interconnecting their networks and exchanging telecommunications traffic. Two years late, Reliance Jio sent a letter to TRAI to instruct service providers, including the petitioners to augment/increase point of interconnection (POI) as it was conducting test trials of its network services before its full-fledged commercial launch.

Reliance Jio maintained that increasing/augmenting the POI was required to provide immaculate quality and sufficient interconnection capacity for inter-operator traffic at the POI, in accordance with TRAI regulations.

In July 2016, TRAI wrote to the petitioner and other service providers seeking a response to Reliance Jio’s request for intervention by TRAI, but none responded. In August 2016, Reliance Jio once again raised the issue.

This time, the petitioners responded with a letter to the TRAI stating that Reliance Jio's request for augmentation of POI for its 'test users', even before its commercial launch, was incongruous. They mentioned the June 2014 interconnection agreement, signed between the petitioners and Reliance Jio.

In September 2016, TRAI issued a show-cause notice to the petitioners for violation of TRAI regulations and Unified Service licenses, as the percentage of failed call attempts during busy hours with Reliance Jio was extremely high. It led to the petitioners failing to meet the benchmark of 0.5 percent for POI congestion prescribed in QOS regulations.

In October 2016, the petitioners responded to the show-cause notice. However, TRAI issued a direction under Section 13 of the TRAI Act to all service providers to comply with the regulations and furnish a compliance report.

Later, the petitioners provided information on traffic and congestion on POI.

Thereafter, TRAI issued the recommendation stating that the petitioners were at fault for not providing POIs to Reliance Jio. It imposed a penalty of Rs.50 crores per circle for 21 Licensed Service Areas where POI congestion exceeded the allowable limit of 0.5 percent.

The petitioners requested TRAI to withdraw the impugned recommendation, but it was declined.